“Under federal and New York law, an account stated ‘refers to a promise by a debtor to pay a stated sum of money which the parties had agreed upon as the amount due.’ ” National Econ. Research Assocs., Inc. v. Purolite “C” Corp., No. 08 Civ. 7600, 2011 U.S. Dist. LEXIS 24458, at *6 (S.D.N.Y. Mar. 10, 2011) (citations omitted); accord Lankler Siffert & Wohl, LLP v. Rossi, 287 F. Supp. 2d 398, 407 (S.D.N.Y. 2003); Ally & Gargano, Inc. v. Comprehensive Accounting Corp., 615 F. Supp. 426, 429 (S.D.N.Y. 1985).
In New York, “[t]o state a claim for an account stated, the plaintiff must plead that: ‘(1) an account was presented; (2) it was accepted as correct; and (3) debtor promised to pay the amount stated.’ ” National Econ. Research Assocs., Inc., 2011 U.S. Dist. LEXIS 24458, at *6 (citations omitted); accord IMG Fragrance Brands, LLC v. Houbigant, Inc., 679 F. Supp. 2d 395, 411 (S.D.N.Y. 2009).
“The second and third elements ‘may be implied if ‘a party receiving a statement of account keeps it without objecting to it within a reasonable time or if the debtor makes partial payment.’ ‘ ” National Econ. Research Assocs., Inc., 2011 U.S. Dist. LEXIS 24458, at *6 (citations omitted); accord IMG Fragrance Brands, LLC, 679 F. Supp. 2d at 411.
New York’s Appellate Division, Second Department has held that, for purposes of a cause of action for an account stated, a debtor’s failure to object to invoices for a period of five months is unreasonable. R.A. Associates v. Lerner, 245 A.D.2d 437, 666 N.Y.S.2d 665, 666 (2d Dep’t 1997); see also Shea & Gould v. Burr, 194 A.D.2d 369, 371, 598 N.Y.S.2d 261 (1st Dep’t 1993) (“The failure to object to the unitemized bill for a period of five months suffices to give rise to an account stated, especially in view of the partial payment made.”); Sieratzki v. Sei Global, Inc., No. 600183/09, 2009 WL 4009128 (N.Y. Sup. Ct. N.Y. County Nov. 10, 2009) (granting summary judgment for the plaintiff, a lawyer, in action for an account stated; holding that the defendant client’s delay of five months in objecting to plaintiff’s invoices was unreasonable).
“As to timing, ‘[a]n objection made for the first time upon commencement of proceedings will not suffice.’ ” National Econ. Research Assocs., Inc., 2011 U.S. Dist. LEXIS 24458, at *6 (citation omitted); see also O’Connell & Aronowitz v. Gullo, 229 A.D.2d 637, 644 N.Y.S.2d 870, 871-872 (3d Dep’t 1996) (affirming Supreme Court’s judgment, issued after a non-jury trial, in favor of the plaintiff, an attorney, for an account stated; holding that, because the defendant client did not object to the plaintiff’s statement of account until the plaintiff sued to recover legal fees, the client’s objection was insufficient).
If your company wants to bring, or needs a lawyer to defend it in, business litigation and you are located in the New York City area, call Attorney David S. Rich at (212) 209-3972.