Commercial Division Blog

Posted: November 15, 2021 / Written by: Jeffrey M. Eilender, Samuel L. Butt, Christopher R. Dyess, Joshua Wurtzel, Hillary S. Zilz /

Oral Objections Insufficient to Defeat Account Stated Claim

On October 26, 2021, the First Department issued a decision in Katsky Korins LLP v. Moskovits, 2021 N.Y. Slip Op. 05815, granting summary judgment to plaintiff law firm on its account stated claim and holding that defendant's oral objections to plaintiff's invoices were insufficient to raise a triable issue of fact, explaining:

Plaintiff law firm Katsky Korins LLP established entitlement to summary judgment on its claim for an account stated with respect to its June invoices by production of documentary evidence showing defendants received the June invoices and defendants' admissions in their answer that they made partial payments for those invoices (LePatner Project Solutions LLC v 320 W. 115 St., 192 AD3d 507, 508 [1st Dept 2021]; Law Off. of Mark S. Helweil v Karambelas, 190 AD3d 560, 560 [1st Dept 2021]).

Plaintiff also established entitlement to summary judgment on its account stated claim with respect to the July invoices. The documentary evidence established that defendant received the July invoices on August 8, 2019 and the Mark Walfish affidavit established that defendants retained those invoices without making any specific objection to them (Schulte Roth & Zabel, LLP v Kassover, 80 AD3d 500, 501 [1st Dept 2011], lv denied 17 NY3d 702 [2011]; see also Morrison Cohen Singer & Weinstein v Ackerman, 280 AD2d 355, 356 [1st Dept 2001]).

Defendant Moskovits's self-serving, bald allegations of oral protests made prior to receipt of the July invoices are insufficient to raise a triable issue of fact as to the existence of an account stated (Darby & Darby v VSI Intl., 95 NY2d 308, 315 [2000]; Thelen LLP v Omni Contr. Co., Inc., 79 AD3d 605, 606 [1st Dept 2010], lv denied 17 NY3d 713 [2011]). In addition, plaintiff's termination does not prohibit its recovery under an account stated theory, and the law firm may recover for pretermination legal services billed to defendants at the agreed upon hourly rate, which defendants retained without objection (see Salans Hertzfeld Heilbronn Christy & Viener v Between Bread E., 290 AD2d 381, 381-382 [1st Dept 2002]; see also Glazer v Falberg, 85 AD2d 938, 939 [1st Dept 1981]). While the parties dispute the circumstances surrounding the courtesy discount in the July invoices, defendants have not presented any evidence that they objected specifically to those invoices or indicated the discount was unacceptable. As such, they are deemed to have acquiesced to the July invoices.

Generally, when a client receives an invoice and retains it without objecting, the invoice will be deemed accepted by the client. But as shown in this case, making objections only verbally--rather than in writing--is also insufficient to defeat an account stated claim. The attorneys at Schlam Stone & Dolan LLP regularly litigate account stated claims. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning an account stated claim.

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