A. Section 1692e: Account Stated
Plaintiff first seeks summary judgment on its claim that Defendant made a false, misleading, or deceptive representation in connection with the collection of a debt in violation of § 1692e when it alleged an account stated claim in its state court action.
"An account stated is an agreement, based on prior transactions between the parties, that all items of the account are true and that the balance struck is due and owing from one party to the other." Trafton v. Youngblood, 69 Cal.2d 17, 25 (1968). It "exhibits the state of account between parties, and the balance owing from one to the other." Coffee v. Williams, 103 Cal. 550, 556 (1894). "The theory upon which the action on an account stated is allowed is that transactions have occurred between the parties from which the relation of debtor and creditor has arisen, that thereafter one or both have rendered or made statements or declarations specifying definitely the amount due on account thereof, and thereupon there has been an agreement, express or implied, by the one who is the debtor, to the other, that a certain sum is due from him on such account, together with an express or implied promise to pay the same." Bennett v. Potter, 180 Cal. 736, 745 (1919).
An account stated claim has three elements: "(1) previous transactions between the parties establishing the relationship of debtor and creditor; (2) an agreement between the parties, express or implied, on the amount due from the debtor to the creditor; (3) a promise by the debtor, express or implied, to pay the amount due." Zinn v. Fred R. Bright Co., 271 Cal. App. 2d 597, 600 (1969). "The action upon an account stated is not upon the original dealings and transactions of the parties. Inquiry may not be had into those matters at all. It is upon the new contract by and under which the parties have adjusted their differences and reached an agreement." Gardner v. Watson, 170 Cal. 570, 574 (1915).
"Consent of the parties is essential to the existence of a contract." Roth v. Malson, 67 Cal. App. 4th 552, 557 (1998) (citing Cal. Code Civ. P. § 1550). "A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting." Binder v. Aetna Life Ins. Co., 75 Cal. App. 4th 832, 851 (1999). However, "[c]ontract formation is governed by objective manifestations, not subjective intent of any individual involved." Id.
"The agreement necessary to establish an account stated need not be express and is frequently implied from the circumstances. When a statement is rendered to a debtor and no reply is made in a reasonable time, the law implies an agreement that the account is correct as rendered." Maggio, Inc. v. Neal, 196 Cal. App. 3d 745, 753 (1987); see also Trafton, 69 Cal.2d at 25. "In the usual situation [when an account stated is implied from the circumstances], it comes about by the creditor rendering a statement of the account to the debtor. If the debtor fails to object to the statement within a reasonable time, the law implies his agreement that the account is correct as rendered." Zinn, 271 Cal. App. 2d at 600.
Plaintiff argues that Defendant falsely represented the legal status of the debt by suing under a theory of account stated, when in fact an account stated never existed. [Doc. No. 18, FAC.] Plaintiff argues that an account stated requires the parties negotiate a new, replacement contract, and that the parties never did in this case.[Doc. No. 27-1, Pl.'s Mot. at 5-6.] Plaintiff states that he never formed a new contract with Capital One, other than the modified, written contract in March 2005. [Id. at 6; Doc. No. 27-6, Decl. of O'Bryne ¶¶ 20-30.]Plaintiff also states that Capital One "[did] not dispute that there was no further modification after March 2005 and further testifie[d] that the March 2005 written contract was in effect at the time of charge off in November 2009." [Doc. No. 27-1, Pl.'s Mot. at 6; Doc. No. 27-8, Decl. of Richard Napolitano, Senior Extended Operations Associate, Capital One Bank (USA) N.A. ("Napolitano") at 52, 57-58.]Therefore, Plaintiff argues that "[w]ith no intent by [Plaintiff] or Capital One to form a new contract, it is impossible for an account stated to have formed between [Plaintiff] and Capital One." [Doc. No. 27-1, Pl.'s Mot. at 6.] Plaintiff argues that, therefore, Defendant misrepresented the legal status of the debt in violation of the FDCPA. [Id.]
However, other courts, on similar facts, have found that there was in fact an account stated and dismissed the plaintiff's claims. Benedict v. CACH, LLC, 2012 WL 5382255, at *5 (S.D. Cal. Nov. 1, 2012); Odish v. CACH, LLC, 2012 WL 5382260, at *5 (S.D. Cal. Nov. 1, 2012); Jackson v. CACH, LLC, 2012 WL 5382257, at *5 (S.D. Cal. Oct. 31, 2012); Hashimi v. CACH, LLC, 2012 WL 3637383 (S.D. Cal. Aug. 22, 2012).
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n Hashimi, for example, the verified complaint stated that the lending institution issued a credit card to the borrower, and then stated the account in a final billing statement issued to the borrower. The verified complaint also stated that the borrower did not dispute the billing statement, which constituted an admission of the balance due. Id. at *5. The Hashimi court found that the issuance of the final billing statement was tender of the account in writing, and that the borrower's failure to object to the statement was the implied promise to pay the stated amount. Id. The court found that these actions gave rise to "a new agreement enforceable by the [collector] independent of the underlying transactions giving rise to the balance due." Id. Accordingly, the court found that the collector clearly alleged the elements of an accounted stated claim in his state court complaint, and dismissed the borrower's FDCPA action with prejudice.
Similarly, the elements of an account stated claim are satisfied in the instant case. Plaintiff does not dispute that there was a relationship between himself and Capital One of debtor and creditor. Capital One's sending of the final billing statement [Doc. No. 27-8, Ex. A, Account Statement at 84] and Plaintiff's implicit acceptance of it by not timely objecting constitute an agreement by the parties of the amount due, and an implicit promise by Plaintiff to pay the amount on the final billing statement. See Maggio, 196 Cal. App. 3d at 753; Zinn, 271 Cal. App. 2d at 600. Although Plaintiff now claims he never agreed to enter into an account stated, a party's intent at the time of contracting controls the formation of a contract. Binder, 75 Cal. App. 4th at 851. Plaintiff's lack of objection to the final billing statement "implies an agreement that the account [was] correct as rendered." Maggio, 196 Cal. App. 3d at 753. As Plaintiff is therefore unable to demonstrate that Defendant made a false, misleading, or deceptive representation in connection with its account stated claim, the Court DENIES his motion for summary judgment as to this portion of the FDCPA claim.