Your Deposition (as a Defendant) in a Fraud Case
Attorney Bradley Bailyn Explains Commercial Contracts & Litigation
in New York City
My Client Hasn't Paid My Invoice In Months.
Accelerating A Judgment With An Account Stated Action
Practical insights from powerhouse attorney, author and speaker Bradley Bailyn.
You’ve sold your goods; you performed your work, labor and services for your customer/client. You’ve billed him regularly, but he hasn’t paid you, and he hasn’t uttered a word of complaint either.
He’s done nothing.
You recognize that he’s breached his contract with you, and you have a right to sue for that breach. You also recognize that in the course of litigation of a breach of contract, it can take a significantly long time to obtain a judgment, and at significant expense.
Might there be another cause of action related to your problem that could speed things up, be less costly and that could possibly get you your judgment more quickly?
There might, and there is.
In this post, we will be talking about an action for an “account stated,” and how that can increase your chances (but not guarantee them) of getting a relatively quick judgment in your favor from the court.
This might be a term you’re not familiar with, so let’s look at what set of circumstances can give rise to this account stated action in New York.
First, you present an account for goods/services provided or performed. That is your invoice. For example, “January 1, 2019, Fix leaky kitchen sink $300.00.” You send that bill to your customer.
Now, and this is very important, it is a BEST PRACTICE to send that bill in a manner where you can prove receipt and/or delivery. Priority mail, or certified mail, (not registered mail because it is unnecessarily expensive).
The little extra expense of mailing your invoice in this manner can save you a significant amount of potential legal fees. It is recommended, that if you invoice by email, you additionally use USPS in the form suggested above.
Being able to prove delivery via priority mail tracking (available on the USPS site) or even better, proving receipt of the invoice via certified mail, return receipt requested, is crucial to your account stated action and using it to accelerate obtaining a judgment.
It doesn’t hurt to stamp on your invoices “Second Request,” “Third Request,” etc. This shows multiple invoices having been sent, and coupled with proof of receipt/delivery of those invoices goes a long way to making your account stated case.
The next most important element of an account stated action is of course, the client didn’t pay after receiving multiple invoices, even though circumstances show he promised to pay them. Of course you’re asking, just how many invoices do I have to send and not be paid for to have this account stated action?
There is a definite answer here: it depends.
There are appellate court cases that say five months of invoicing are sufficient. But it is really going to depend on the trial court judge you get, on his commercial case experience, his level of intelligence, and his bias, if any one way or the other to commercial plaintiffs and defendants.
(If he decides against you, you can appeal of course, but that is not always commercially reasonable under the individual circumstances of the case. Also, a denial of a summary judgment motion is NOT a determination of your case, it merely proceeds to trial in the regular manner for eventual determination.)
The next element is that the recipient of your invoices did not complain about the quality of your goods and services. It is from this that circumstances can be shown that your customer promised to pay the invoices. Sometimes he may send an email saying he will pay them, he just needs time. Then he doesn’t pay. Sometimes he makes a partial payment, which is another circumstance showing promise to pay.
So to recap the elements, you send out multiple invoices, you can prove receipt/delivery of those invoices, the customer hasn’t complained about your contractual performance. He hasn’t paid.
Let’s say you have all of that, how can your attorney use it to obtain an accelerated judgment for you?
In procedural law, there is a remedy called “Summary Judgment.”
In simple terms, it is an accelerated method, via a motion to the court, of obtaining a judgment without all of the normal intermediate proceedings involved in a fully litigated case.
You are basically providing to the court on papers, proof that there is no need for a trial; an assessment of the facts, because the facts are clear and indisputable. No question about it.
In an account stated action, your attorney would provide with his motion as exhibits, copies of the invoices sent, documentary proof of receipt/delivery, and your affidavit that no complaints were received regarding your performance.
Unless the defendant, your debtor can show there is a question as to the accuracy of those elements, you are likely (but not definitely) to obtain a summary judgment, a court determination that yes; the debtor owes you the money.
Now, a wily debtor can of course allege that he has complained about the quality of your goods or services, and it is possible on the mere allegation, a judge will not grant summary judgment. On the other hand, unless the debtor can show some kind of documentary proof of having made a complaint, he just might lose the motion.
Unsubstantiated oral complaints are not likely to cut it, and won’t defeat a summary judgment motion on an account stated.
Thus, by proper billing procedures, by proper record keeping, you can help your attorney help you obtain a judgment more quickly against a non-paying customer when the circumstances give rise to an account stated action.
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Bradley R. Bailyn, Esq. , Founder
Bradley R. Bailyn, Esq., is a New York City-based attorney, author and speaker with practice area expertise in commercial real estate and bankruptcy law. Prior to founding The Bailyn Law Firm, Mr. Bailyn served as in-house counsel for multiple companies, where he advised on all legal aspects of major business and financial transactions including private equity, spin-offs, real estate, and restructuring transactions, for more than thirteen years.
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