• DYE CULIK PC | Consumer Protection Division

What is a Claim for “Account Stated” in a Debt Collection Lawsuit and How To Defend Against It

Updated: Jan 22

What is an “account stated” claim in a debt-collection lawsuit in North Carolina, and how do you defend against it? This post answers these questions.

Almost every lawsuit, whether for debt collection or otherwise, states the legal basis for the case, such as a claim for “breach of contract.”

Debt collection lawsuits filed in North Carolina usually include another claim, however, called “account stated.” A claim for account stated is lesser known and deserves an explanation because it does not necessarily require a formal contract.

An account stated “is an agreement between parties that an account rendered by one of them to the other is correct.” Mahaffey v. Sodero, 38 N.C. App. 349 (1978).

To bring a claim for account stated, four things must be proven, according to another case, Channel Group v. Cooper, 691 S.E.2d 133 (N.C. Ct. App. 2010):

(1) A calculation of the account balance due;

(2) Submission of a statement to the person allegedly liable for the account;

(3) Acknowledgment that the statement is correct; and

(4) A promise, express or implied, to pay the balance due.

The jury’s role is to determine whether the mere delivery of the account statement to the consumer by the creditor is the same as “a promise ... to pay the balance due.”

If you sent a dispute there is no promise, naturally.

But what if you did like most people do and you filed or threw away the statement? Debt collectors will argue that by not objecting, you made an implied promise to pay, and that you should thus be held liable.

Not so fast – the courts disagree. Judges reviewing debt-collection cases say that it’s a question for the jury as to whether the failure to object constitutes an agreement to pay.

Debt collectors often file a motion for “summary judgment.” This is a motion asking for a decision in their favor without having to go to trial. This strategy may save them time but it does not comport with the law. The jury’s role is to decide what the facts are, and whether the failure to object to a statement is the same as admitting liability is question the jury is supposed to answer.

The North Carolina Court of Appeals overturned one case whether a judgment was granted for a debt collector based on account stated. The debt collector said the consumer’s failure to deny liability after receiving an account statement satisfied the requirements for an account stated.

Overturning one lower court’s decision in favor of a debt collector, the North Carolina Court of Appeals wrote that summary judgment for the account stated claim was inappropriate:

In this case, reasonable minds could differ as to whether the [consumer’s] objection to the account rendered was made so long after the receipt of the initial statement that the delay warranted an implied acknowledgment of its correctness and an implied promise to pay. Therefore, [the debt collector] was not entitled to judgment as a matter of law. Accordingly, the trial court's order allowing summary judgment for [the debt collector] must be reversed.

North Carolina has even issued official jury instructions on a claim for account stated. Jury instructions are the directives a judge gives to the jurors deciding an account stated claim. These provide additional information on the legal requirements for an account stated.

Account stated jury instructions: https://www.sog.unc.edu/sites/www.sog.unc.edu/files/pji-master-2019/civil/c635.35.pdf

These jury instructions explain that when considering whether a consumer should have objected to an account statement (thereby creating an implied agreement to pay), the jurors may consider “the nature of the transaction, the relationship of the parties, their distance from one another, the means of communication between them, their business capacity, their intelligence or lack of intelligence and the usual course of their business.”

In short, it may be reasonable for a consumer not to object to an account if the person is not sophisticated in business, or if there isn’t usually communication of this nature with the debt collector, or if there isn’t a business relationship conducive to communication. One or all of these factors may be present in most debt-collection cases.

A debt-collection lawsuit in North Carolina has many facets, and all of them should be evaluated when deciding whether to litigate or settle. Our office has handled numerous debt-collection lawsuits, including claims for breach of contract and account stated. If you are dealing with a debt in collection in North Carolina, contact us to see how we can help.