Earlier this week, in a case entitled, Emery Celli Brinkerhoff & Abady, LLP v. Michael Rose, Manhattan Supreme Court Justice Joan Madden sided with a law firm in a fee dispute with a client who began paying the firm, but never completed all of the payments.
According to a New York Law Journal article about the case, the judge's opinion cited the "account stated rule;" since the client paid part of the bill, the client was deemed to have accepted the entire billing as valid.
The opinion notes that during the first year the firm represented Rose, monthly bills were regularly paid, but that those regular payments ended in January 2006, following which sporadic partial payments were made up until August 2009.
Notably, the firm contends that Rose did not contest any portion of any outstanding bill until late in November 2009, when minimal objections were made for a total of less than $3,000, which the firm subtracted from the amount it sought to recover from Rose in the suit. Once the suit was commenced, Rose did not assert in his answer that there was any malpractice or misconduct on the part of the firm, however, these allegations were raised subseqently when the firm attempted to assert a charging lien against the proceeds of the settlement previously negotiated by the firm on Rose's behalf. Rose was subsequently provided a number of opportunities to amend his answer to assert claims of malpractice, but never did so.
The court found that there was an implicit agreement that Rose would pay the firm's outstanding bills, stating that an implicit agreement to pay can be the result of either "the absence of any objection to a bill within a reasonable time or a partial payment of the outstanding bills.” (citing additional cases). The court noted that the client claimed to have objected orally to the bills earlier, but these undocumented assertions, without specifics about when the objections were made, to whom, which invoices and specific charges were objected to, and what the substance of the conversation with the firm was, were insufficient to defeat the firm's claim of account stated.
In this case, one of the saving graces for the law firm was the level of detail contained in their bills. This, coupled with the late (and extremely vague) objections from the client about the outstanding charges, served the firm well. Word to the wise: document the work done for your clients well, and be sure to keep good records of oral communications, too.
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