Allegations of Account Stated Insufficient to Support Summary Judgment in Lieu of Complaint

On August 20, 2018, Justice Scarpulla of the New York County Commercial Division issued a decision in Swatch Group (U.S.) v. 3rd Ave. Jewels Inc., 2018 NY Slip Op. 32046(U), holding that allegations of an account stated were insufficient to support a motion for summary judgment in lieu of complaint, explaining:

A plaintiff may commence an action by summary judgement in lieu of complaint when an action is based upon an instrument for the payment of money only. A document comes within CPLR § 3213 if a prima facia case would be made out by the instrument and a failure to make the payments called for by its terms. The instrument does not qualify if outside proof is needed, other than simple proof of nonpayment or a similar de minimis deviation from the face of the document.

SGUS argues that because the Defendants never objected to the invoices it sent and made partial payments on some of the invoices prior to the commencement of this action, Defendants are obligated to pay the remaining debt, which constitutes an account stated and entitles SGUS to relief under CPLR § 3213.

However, SGUS's motion fails to satisfy CPLR 3213's threshold requirement as it is not based upon an instrument for the payment of money only. Cases within CPLR § 3213 have dealt primarily with some variety of commercial paper in which the party to be charged has formally and explicitly acknowledged an indebtedness. The unsigned invoices and Terms and Conditions are insufficient to invoke CPLR § 3213 (even when considered together) because neither demonstrates that defendants have expressly obligated themselves to make payments on the accounts in question for a sum certain. Because the documents SGUS submits do not come within CPLR § 3213, SGUS failed to make a prima facia case based upon an instrument for the payment of money only, and I deny SGUS's motion.

SGUS's assertions demonstrate, at most, that an implied account stated exists between SGUS and Defendants. However, an implied account stated is not sufficient to entitle SGUS to avail itself of the procedural device provided by CPLR 3213.

(Internal quotations and citations omitted).

Cases in the Commercial Division of the New York courts usually involve a motion to dismiss at the outset and then a motion for summary judgment at the close of discovery, so such motions are a big part of our practice. The decision above is about a special procedure in New York for quickly resolving claims relating to unpaid notes or similar documents allowing the plaintiff to move for summary judgment at the beginning of an action. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions about seeking or opposing a motion for pre-trial dismissal or judgment of a commercial lawsuit.