Key Takeaway
Essential account stated claim requirements in NY after Cutler decision. Why failure to annex billing statements requires automatic denial. Expert legal analysis.
In New York civil litigation, particularly in personal injury protection (PIP) cases and medical billing disputes, understanding the requirements for account stated claims is crucial for both prosecutors and defendants. A significant 2011 Second Department decision illustrates why proper documentation can make or break your case.
The Foundation of Account Stated Claims in New York Law
Account stated claims represent one of the most common theories of liability in medical billing and insurance disputes throughout Long Island and New York City. However, many attorneys and litigants fail to understand the strict evidentiary requirements that must be met to establish a prima facie case.
American Express Centurion Bank v Cutler, 2011 NY Slip Op 01227 (2d Dept. 2011)
“Here, the plaintiff failed to make a prima facie showing of its entitlement to judgment as a matter of law on the cause of action to recover on an account stated. The plaintiff’s evidentiary submissions did not include the monthly credit card billing statements which form the basis of its cause of action to recover on an account stated, and the affidavit of the plaintiff’s employee contained no facts showing that the defendant retained the subject billing statements for an unreasonable period of time without objecting to them, or that he made partial payment on the billing statements”
Assuming you are prosecuting a PIP case outside the Second Department (or a hospital case that begins in the Supreme Court in the Second Department) and the Court applies an account stated theory of liability, see the above.
Essential Elements of an Account Stated Claim
What Courts Require for Prima Facie Proof
To establish an account stated claim in New York, plaintiffs must demonstrate several key elements:
- Presentation of the account – The actual billing statements must be provided
- Retention without objection – Evidence that defendant kept bills for an unreasonable period without dispute
- Acceptance of liability – Either express or implied acknowledgment of the debt
- Partial payments – Evidence of payments that acknowledge the debt’s validity
The Cutler decision emphasizes that these aren’t merely procedural formalities – they’re substantive requirements that, when missing, mandate dismissal.
The Critical Importance of Documentary Evidence
Unlike many other areas of law where testimony can substitute for missing documents, account stated claims require the actual billing statements. Courts cannot infer the existence or content of these documents from other evidence.
Key documentation requirements include:
- Original monthly billing statements
- Payment records showing partial acceptance
- Communication records regarding disputed charges
- Evidence of reasonable time periods for objection
Practical Applications in PIP and Medical Billing Cases
Personal Injury Protection (PIP) Claims
In New York’s no-fault insurance system, medical providers frequently pursue account stated theories when seeking payment from insurance carriers. The Cutler precedent has significant implications for these cases:
For Medical Providers:
- Must maintain complete billing records from initial treatment
- Cannot rely solely on summary affidavits from billing departments
- Must demonstrate patient or insurer receipt of detailed statements
- Need evidence of time periods allowed for objections
For Insurance Carriers:
- Can move for dismissal when providers fail to annex actual bills
- Should scrutinize affidavits for compliance with Cutler requirements
- Can challenge cases lacking proper foundational documentation
Hospital and Medical Facility Claims
Large medical institutions often struggle with account stated requirements because their billing systems generate thousands of statements. The Cutler decision requires that even high-volume providers maintain individualized documentation for litigation.
Common problems include:
- Generic affidavits not specific to individual accounts
- Failure to produce actual statements sent to patients
- Inadequate proof of mailing or delivery
- Missing documentation of payment terms and objection periods
Strategic Considerations for Different Judicial Departments
Second Department Specifics
The Second Department, covering Long Island and parts of New York City, has been particularly strict about account stated requirements. Following Cutler, courts in Nassau, Suffolk, Kings, Queens, and Richmond counties have consistently required:
- Actual billing statements, not summaries
- Specific evidence of delivery methods
- Clear documentation of objection periods
- Detailed payment histories
Practice Outside the Second Department
Jason’s observation about prosecuting PIP cases “outside the Second Department” reflects important jurisdictional variations. While Cutler is persuasive authority in other departments, local practices may vary:
First Department (Manhattan, Bronx):
- Generally follows Second Department precedent
- May have different local rules regarding motion practice
- Commercial Division may have specialized requirements
Third and Fourth Departments:
- More lenient approach to documentary requirements in some contexts
- Still bound by fundamental account stated elements
- May allow more flexibility in proof methods
Common Pitfalls and How to Avoid Them
For Plaintiffs Pursuing Account Stated Claims
Documentation Failures:
- Failing to maintain original billing statements
- Relying on computer-generated summaries
- Inadequate proof of delivery to defendants
- Missing evidence of objection time periods
Affidavit Problems:
- Generic affidavits not specific to the case
- Affiants without personal knowledge
- Failure to establish business records foundation
- Missing details about billing procedures
For Defendants Challenging Claims
Effective Defense Strategies:
- Demand production of actual billing statements
- Challenge generic or conclusory affidavits
- Scrutinize proof of delivery methods
- Examine compliance with objection period requirements
Motion Practice:
- Move early for dismissal when documentation is inadequate
- Focus on specific Cutler requirements
- Distinguish cases that don’t involve true account stated theories
- Emphasize burden of prima facie proof
Frequently Asked Questions
Q: Can plaintiffs cure defective account stated claims by amending pleadings?
A: While amendments are generally allowed, the underlying documentary requirements remain. If the actual billing statements don’t exist, amendment won’t solve the problem.
Q: What happens if billing statements were lost or destroyed?
A: Plaintiffs may need to pursue alternative theories of liability. Account stated claims require the actual statements – there’s no substitute for this requirement.
Q: Can email statements satisfy the billing statement requirement?
A: Yes, if properly authenticated and if there’s evidence the defendant received and retained them for an unreasonable period without objection.
Q: How long must a defendant retain statements before objection is waived?
A: This varies by context, but generally 30-90 days is considered reasonable for most billing situations. Medical bills may have different time frames.
Q: Can partial payments alone establish an account stated?
A: Partial payments are strong evidence but must be coupled with proof that actual billing statements were provided and retained without objection.
Working with Experienced New York Litigation Attorneys
Account stated claims require careful attention to procedural details that can make or break your case. Whether you’re a medical provider seeking payment or a defendant challenging inadequate documentation, understanding Cutler’s requirements is essential.
The Law Office of Jason Tenenbaum has extensive experience with account stated claims in PIP cases, hospital billing disputes, and commercial litigation throughout Long Island and New York City. Our team understands the nuances of New York’s documentary requirements and can help you either establish a strong account stated claim or defend against inadequately supported ones.
Don’t let procedural defects undermine your case or expose you to unnecessary liability. Contact our experienced legal team at 516-750-0595 to discuss your account stated claim or defense strategy.
We work with healthcare providers, insurance companies, and individual clients to ensure compliance with New York’s strict account stated requirements. Our thorough approach to documentation and evidence helps clients achieve favorable outcomes whether pursuing or defending these common but complex claims.
