An “account stated” is a statement between a creditor and a debtor that settles the total amount of debt owed to the creditor. Establishment of an “account stated” by a creditor is helpful to defeat objections that are fabricated by the debtor after a lawsuit is commenced to collect the debt. The Court of Appeals recently held that express agreement by the debtor is not necessary to establish an “account stated”. In Szymanski v. Eldridge, 2017 Mich App LEXIS 481, *6 (2017), the Court held that Plaintiff could establish an account stated claim for attorney fees against the Defendant where he established that Defendant was sent bills for the fees and did not object to the fees.
Plaintiff claims that he repeatedly sent Defendant bills and letters which highlighted the amount owed by Defendant. Defendant argued that Plaintiff never sent him the bills and that he never agreed to the amount stated. The Court rejected the Defendant’s arguments that he did not receive the bills. The Court also held that Defendant’s failure to respond and contest the bills mailed to him constituted assent by inaction. An implied contract was thereby formed, making the amount to be paid by Defendant equal to the amount stated in the mailed bills.
The Court further held that Plaintiff’s admittance of mistake in calculating the billing was not at issue, as even mistakes could be held against the Defendant, so long as he failed to contest the amount. In short, Defendant lost money because of a failure to act.
The important lesson learned here is that ignoring an incorrect bill or invoice will not make it go away. Even worse, by failing to respond, you could be found to have agreed to pay the erroneous amount stated in the bill.
This article was written by Nezar Habhab, Law Clerk.
