On May 14, 2024, the First Department issued a decision in Aronson Mayefsky & Sloan, LLP v. Praeger, 2024 NY Slip Op. 02657https://www.nycourts.gov/reporter//3dseries/2024/2024_02657.htm, holding that a law firm is allowed to bring both breach of contract and account stated claims regarding unpaid bills, explaining:
The primary argument raised by defendant on this appeal is that the court erred in failing to dismiss plaintiffs’ account stated claims as duplicative of their breach of contract claims. Although it has long been the rule that a plaintiff may simultaneously assert both an account stated claim and a breach of contract claim arising from the same contractual relationship, there have been some recent decisions from the First Department that have suggested that an account stated claim is duplicative of a breach of contract claim. As a result of these inconsistencies in our decisions, there has been some confusion in the trial courts as to what rule should be applied. As will be explained more fully below, the purpose of this decision is to make clear that the rule in the First Department is that an account stated claim is an independent cause of action that is not duplicative of a claim for breach of contract.
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Some background regarding a claim for account stated will be helpful in understanding why an account stated claim is not duplicative of a claim for breach of contract, whereas some other claims are routinely dismissed as being duplicative of a breach of contract claim. An account stated has long been defined as an “account balanced and rendered, with an assent to the balance express or implied; so that the demand is essentially the same as if a promissory note had been given for the balance. It is an agreement, independent of the underlying agreement, regarding the amount due on past transactions. A defendant’s receipt and retention of the plaintiff law firm’s invoices seeking payment for professional services rendered, without objection within a reasonable time, gives rise to an actionable account stated, thereby entitling the plaintiff to summary judgment in its favor. When a law firm is asserting an account stated claim, it does not have to establish the reasonableness of its fee because the client’s act of retaining the invoice without objection will be considered acquiescence as to its correctness.
Based on the application of these rules, this Court has issued numerous decisions where we granted summary judgment to attorneys on their claims for an account stated based on their clients having received and retained invoices for professional services rendered, and having failed to object within a reasonable time. We granted summary judgment on account stated claims in these actions despite the fact that there was a retainer agreement entered into by the parties that could have been the basis for a breach of contract claim. This Court did not hold in any of these decisions that an attorney cannot recover on its account stated claim because it was duplicative of a claim to recover for breach of a retainer agreement.
There has been a very narrow exception to the long-established rule that a plaintiff may assert both an account stated claim and a claim for breach of contract, where the plaintiff is attempting to use a claim for an account stated simply as another means to attempt to collect under a disputed contract. In these exception cases, we did not hold that the account stated claim was duplicative of the breach of contract claim. Rather, we found that it was not a sustainable claim because a contractual relationship had not been established whereby the defendant agreed to pay for the services or goods provided by plaintiff.
However, as mentioned above, some recent decisions from the First Department have not applied the established rule that an account stated claim is an independent cause of action and therefore not duplicative of a breach of contract claim. To the contrary, these cases each held that an account stated claim should be dismissed on the ground that it was duplicative of a breach of contract claim. As a result of these inconsistencies in our decisions, there has been some confusion in the trial courts as to whether an account stated claim can be asserted simultaneously with a breach of contract claim.
Therefore, this Court wants to make clear that an account stated is an independent cause of action that can be asserted simultaneously with a breach of contract claim and that an account stated claim should not be dismissed as duplicative of a breach of contract claim. This case falls squarely within our well-established precedent that an attorney can be granted summary judgment on an account stated claim based on the defendant’s receipt and retention of a plaintiff law firm’s invoices seeking payment for professional services rendered, without objection within a reasonable time, even where there is a retainer agreement. As a result, the court properly granted summary judgment to plaintiffs on their account stated claims.
(Internal quotations and citations omitted).