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socrateaser
socrateaser, Attorney
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Experience:  Retired (mostly)
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ATTN: SOCRATEASER

Customer Question

What does New York and Indiana case law/statute say regarding "Account Stated" on a written lease agreement for equipment rental (with option to buy for $1 at the end of satisfied payments). Financing Company based in Indiana. Is the "Account Stated" the creditor's loop-hole? If I received a bill, can that bill restart the statute of limitations in Indiana or New York?

Submitted: 1 year ago.
Category: Business Law
Expert:  socrateaser replied 1 year ago.
Hello,

I'm really frustrated. I wrote a long, heavily cited answer to your question, posted it, and now I see that the answer has completely disappeared!

Now I have to research the answer again to find the citations to legal authority (not your problem, but extremely annoying -- this website's bugs drive me nuts).

"[T]he parties must view the account as a final adjustment of the respective demands between them, for the account to be an “account stated,” and an account rendered for some other purpose will not be given the force and effect of an account that can be converted to an account stated." B.E.I., Inc. v. Newcomer Lumber & Supply Co., Inc., 745 N.E.2d 233 (IN Ct. App. 2001). See, also, Sandock v. Taylor Constr. (1981), Ind.App., 416 N.E.2d 882, 886 (failure to deny liability or object to invoices until after suit filed was failure to object within reasonable time and created account stated to permit award of prejudgment interest).

However, "An account stated amounts to more than an admission of an amount due. It is a new cause of action and in a suit upon such an account, the inquiry is not directed to the original transaction out of which the account arose, but is directed to the questions of whether the parties had in fact agreed upon the amount due and whether the same was unpaid. The account stated arose originally out of transactions between merchants and persons engaged in commercial transactions, and the rule was evolved that the receipt by one of the parties of an account showing a balance against him and the retention thereof for a reasonable length of time sufficient to examine the same and make objections thereto, and a failure so to do, amounted to an approval of the statement rendered, and it thereby became an account stated." Bosson v. Brash (1916), 63 Ind.App. 86.

The Indiana statute of limitations on an account stated is six years (NY same). Troyer v. Cowles Products Co., Inc., 732 N.E.2d 246 (IN Ct. App. 2000).

In order to use account stated, the plaintiff must show that statements were routinely sent to the defendant and defendant never complained about the amounts claimed due and payable. So, if you were routinely receiving statements throughout the lease period, then the court may conclude that the statute of limitations did not start to run until the most recent statement was sent. But, if the statements stopped in the distant passed, you did not conceal your address from the lessor, and lessor simply decided to not sue you to enforce the debt, then I doubt that the account stated claim would prevail.

Hope this helps.
socrateaser, Attorney
Category: Business Law
Satisfied Customers: 34636
Experience: Retired (mostly)
socrateaser and 5 other Business Law Specialists are ready to help you
Customer: replied 1 year ago.

Does the statement have to come from FF leasing company?


Would a letter or email from an attorney be defined as a statement?


Would a letter or email from a creditor be defined as a statement?

Expert:  socrateaser replied 1 year ago.

Does the statement have to come from FF leasing company?


Would a letter or email from an attorney be defined as a statement?


Would a letter or email from a creditor be defined as a statement?

 

A: All of the answers are uncertain. The account stated was originally intended for use by merchants in commercial transactions who had various transactions between them, and the statement is intended to clarify the amount due, unless an objection is made. Nothing like that appears from your stated facts.

 

Hope this helps.

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