What Is Estoppel! We've learned a lot since this thread was created. Try this: Go to Google.com and click on "Advanced Search" In the exact phrase window type; "account stated" Account Stated is the situation CA's attempt to create by sending you dunning letters which you DON'T rebutt. It's an Estoppel concept. Michigan Appellate Digest Contracts http://courtofappeals.mijud.net/Digest/newHTML/22911721.htm#22911721006 Contracts - Account Stated When the mutual dealings which have occurred between two parties have been adjusted and settled, and a balance struck, the law implies a promise to pay that balance. To establish a claim for account stated, a plaintiff must prove that the defendant expressly accepted bills tendered by paying them or failed to object to them within a reasonable time. In this case, the plaintiff law firm sent monthly bills to the defendants which itemized the costs and hourly fees incurred. The defendant partially paid the bills without objection to them until the amounts billed reached $50,000, which they understood to be the maximum fees to be charged, but the defendants continued to make payments on further costs incurred. Except for a few minor matters, the defendants did not challenge the validity of the costs and fees charged, and during a deposition in the underlying litigation one of the plaintiffs testified that he owed in excess of $250,000 in fees not subject to contingency. Under the circumstances, there was a factual issue whether the plaintiff had established a claim for account stated, and thus the trial court improperly dismissed the claim. http://courtofappeals.mijud.net/Digest/newHTML/24311221.htm#24311221009 Contracts - Account Stated - Affidavit - Effect The creation of an account stated requires the assent of both parties to the account. If an account stated exists, an unanswered affidavit creates a prima facie case that the party failing to respond owes the other party the amount stated. In this case, the defendant submitted an affidavit of account stated, as provided in statute, and asserted that the affidavit created a factual issue which precluded summary disposition for the plaintiff. However, the affidavit could not create a factual issue regarding the agency authority of the plaintiff's employee, and thus no factual issue existed which precluded summary disposition. http://courtofappeals.mijud.net/Digest/newHTML/24311221.htm#24311221003 Contracts - Account Stated - Definition An account stated consists of a balance struck between the parties on a settlement. If a plaintiff is able to show that the mutual dealings which have occurred between two parties have been adjusted and settled, and a balance struck, the law implies a promise to pay that balance. Contracts - Account Stated - Determination - Standard The conversion of an open account into an account stated occurs when the parties assent to the sum as the correct balance due from one to the other, and whether this has occurred depends upon the facts. That an account stated has occurred may appear from evidence of an express understanding, or of words and acts, and the necessary and proper inferences from that. When accomplished, it does not necessarily exclude all inquiry into the rectitude of the account. Enjoy
What Is Estoppel! "when the parties assent" The language is similar to that creating a contract. It implies a "meeting of the minds", and some evidence that such an "agreement" actually occurred, such as a payment (consideration). This is not created by a CA unknown to the debtor sending a dunning letter to an old address that the debtor never sees, or only belatedly gets. Where is the "assent" between the parties? The CAs are deceptively misusing this argument to convince unsophisticated debtors that they have no right to dispute. (I am not an attorney.)
What Is Estoppel! The example of "account stated" differs from the misuse of the term by CAs, in that the legal firm was doing work for their client, with periodic billing for this work. There was an on-going business relationship, that both parties chose to enter in to, with services presumably of value to the client, and some accounting sent periodically for the amount due. At any time, the client could have said that was enough, and paid the bill currently due, or disputed whether the amounts being billed were as agreed. The CA is not providing services to a consumer they are dunning. The consumer has not entered into an agreement with the CA to provide something of value. Failure to dispute is not the same as entering into a contract, in the absence of any other evidence of a contract. Consider a similar case: A "merchant" sends a business some supplies they didn't order, followed by an invoice implying the business agreed to the order, possibly listing an employee name to try to slip the invoice into Accounts Payable (deception). Does this create a contract, or is this simply attempted mail fraud? Is it only mail fraud if and when the business disputes, or was it mail fraud when the "merchant" sent the invoice, knowing no merchandise had been ordered? If it was mail fraud from the beginning, does failure of the business to dispute create an "account stated"?
What Is Estoppel! Great points, one and all Ontrack. I think the law does presume a few things. Notably, if one receives an invoice, (as in your example) one wouldn't be so dumb as to simply ignore it. Ultimately the invoicer may be called upon to prove a transaction, (meeting of the minds occurred) but if the invoicee has failed to dispute several attempts to assert the bill he may have trouble defending his argument. This highlights the critical importance of rebutting IN WRITING, all assertions made by a CA. But this concept works in our favor too. Suppose you get a phone call and the collector calls you names. The most important thing to do is to memorialize the conversation, in writing with proof of delivery. The CA's failure to rebutt your phone calll transcript could be construed as an "assent" to it's validity.
What Is Estoppel! I think the use of "account stated" by CAs is a complete snow job, in the same manner as an "affidavit" with no actual account information is a snow job in reply to a request for validation. In each case, the reply has been crafted with care, based on the intended target, but generally not taylored to the specific individual request. The target is not an attorney, nor is this being presented in court in front of a judge (although some CAs appear to have done this). Instead, it is a reply to a request for validation directed at a consumer who is presumed to be unsophisticated. Since it is a reply to a request for validation, it is being represented by the CA as legal validation in compliance with FDCPA. (i.e. "This is all we have to give you. You don't have the right to request anything else.") The goal is to deflect requests for validation at low cost, while continuing collection pressure by implying that the consumer has waived, lost, or never had the very rights to dispute that the FDCPA states they have, whether or not the debt is theirs, or the amount is correct. Implying the consumer has no right to request validation under FDCPA, when he does have such rights, is deceptive on its face. The assertion of an "account stated" to an unsophisticated consumer, where there is not, and never has been, an on-going business relationship between the two parties, is a deceptive FDCPA violation, whether understood as such by the consumer or not. In fact, the anti-deception violations in the FDCPA exist for the cases where the unsophisticated consumer does not recognize the illegality of the CAs actions.
What Is Estoppel! "Businesses", such as shadey CAs or mail scams, do not always conduct their affairs in a manner to make written disputes easy or even possible. Non-disclosure of mailing addresses, rection of CRRR mail, use of aliases in all phone calls, contorted voice-mail systems designed to discourage opting out of negative option scams, or other attempts to block any documentable reply are common. The company has crafted its manner of conducting business with care, and the presumption that they act in good faith cannot be assumed. Legitimate businesses choose, and illegitimate businesses could have chosen, to conduct their affairs differently.
What Is Estoppel! The invoicer, in many cases, is never called to support their claimed invoice. Instead the "account" is sold to a CA, who not being involved in the original transaction, claims to have no liability arising from it, and it is the implication that this account is now presumed legitimate that is the problem. It is the threat that an illegitimate account will nonetheless be subject to collection that allows the collection of "debts" from consumers, or businesses, who do not owe them.
