The Guide is an invaluable online tool for litigation and transactional attorneys. The Guide provides for more than 70 common law causes of action:

- Each action’s elements;
- The most recent state and federal cases that cite the actions’ elements;
- The applicable statute of limitations for each action; and
- Defenses to each cause of action.
- AND, The Guide is updated annually.

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Open Book Account

1 Elements and Case Citations

Cal. Code Civ. Proc. § 337a defines “Book Account””

The term “book account” means a detailed statement which constitutes the principal record of one or more transactions between a debtor and a creditor arising out of a contract or some fiduciary relation, and shows the debits and credits in connection therewith, and against whom and in favor of whom entries are made, is entered in the regular course of business as conducted by such creditor or fiduciary, and is kept in a reasonably permanent form and manner and is (1) in a bound book, or (2) on a sheet or sheets fastened in a book or to backing but detachable therefrom, or (3) on a card or cards of a permanent character, or is kept in any other reasonably permanent form and manner.

“This section creates a ‘three-part statutory test’ for the existence of a book account:

(1) the existence of ‘the principal record of one or more transactions’ between the plaintiff/creditor and defendant/debtor;
(2) entries in the record that were made in the plaintiff/creditor’s regular course of business; and
(3) the record was kept in a reasonably permanent form and manner.”

W. Oilfields Supply Co. v. Goodwin, No. CV F 07-1863 AWI DLB, 2008 U.S. Dist. LEXIS 41234, at *10-11 (E.D. Cal. May 12, 2008).

“A book account is created by the agreement or conduct of the parties in a commercial transaction. Nonetheless, the mere recording in a book of transactions or the incidental keeping of accounts under an express contract does not of itself create a book account.” H. Russell Taylor’s Fire Prevention Service, Inc. v. Coca Cola Bottling Corp., 99 Cal. App. 3d 711, 728 (1979).

“[W]hether a book account is open or closed is a question of fact. ‘While an “open” book account has been defined as “‘[a]n account with one or more items unsettled,’” it also includes “‘an account with dealings still continuing.’” [Citation.] By contrast, a “closed” account is, according to Black's Law Dictionary, one “to which no further additions can be made on either side. . . .” Thus, it is clear that the “open” or “closed” nature of a book account turns not on the account balance per se, but on the parties’ expectations of possible future transactions between them.’” Cochran v. Rubens, 42 Cal. App. 4th 481, 485 (1996).

For form pleading see California Judicial Council form No. PLD-C-001(2) (“Common Counts”).

CALIFORNIA STATE COURTS

Supreme Court of California: Imperial Merchant Services, Inc. v. Hunt, 47 Cal. 4th 381, 397 (2009).

California 1st District: Interstate Group Administrators v. Cravens, 174 Cal. App. 3d 700, 708 (1985).

California 2d District: Filmservice Labs. v. Harvey Bernhard Enters.,
208 Cal. App. 3d 1297, 1307-08 (1989).

California 3d District: Gardner v. Rutherford, 57 Cal. App. 2d 874, 882-83 (1943).

California 4th District: Cochran v. Rubens, 42 Cal. App. 4th 481, 485 (1996).

California 5th District: H. Russell Taylor’s Fire Prevention Service, Inc. v. Coca Cola Bottling Corp., 99 Cal. App. 3d 711, 728 (1979).

California 6th District: None.

CALIFORNIA FEDERAL COURTS

United States Court of Appeal for the 9th Circuit: In re Roberts Farms, Inc., 980 F.2d 1248, 1252 (9th Cir. 1992).

Central District: Xerox Corp. v. A & M Printing, No. CV 12-00043 MMM (Ex), 2013 U.S. Dist. LEXIS 74179, at *12 (C.D. Cal. May 20, 2013).

Eastern District: Sierra Kiwi, Inc. v. Rui Wen, Inc., No. 2:13-cv-1334-LKK-EFB, 2013 U.S. Dist. LEXIS 160404, at *9-11 (E.D. Cal. Nov. 7, 2013); W. Oilfields Supply Co. v. Goodwin, No. CV F 07-1863 AWI DLB, 2008 U.S. Dist. LEXIS 41234, at *10-11 (E.D. Cal. May 12, 2008).

Northern District: ERTEC Envtl. Sys. v. RiverValley EcoServs., Inc., No. 13-01907-KAW,, 2013 U.S. Dist. LEXIS 149810, at *8 (N.D. Cal. Sept. 20, 2013); Starnet International AMC Inc. v. Kafash, No. 09-CV-04301-LHK, 2011 U.S. Dist. LEXIS 25062, at *26-28 (N.D. Cal. Mar. 8, 2011).

Southern District: Boon v. Professional Collection Consultants, No. 12-CV-03081-H (WMC), 2013 U.S. Dist. LEXIS 151719, at *9 (S.D. Cal. Oct. 17, 2013).

2 Issues and Defenses to Claim for Open Book Account

(1) Cal. Code Civ. Proc. § 431.30(b)(2) (pleading affirmative defenses), and other standard defenses. See Chapter 1 for all defenses.

(2) Statute of Limitations: Four years. Cal. Code Civ. Proc. § 337(2); but see Collection Bureau of San Jose v. Rumsey, 24 Cal. 4th 301, 313 (2000) (where creditor is a deceased spouse, the claims are covered by the one-year statute of limitations at Probate Code § 13554).

(3) “Theory of Continuous Accrual:” The theory of “continuous accrual” determines how far back a plaintiff can seek funds in an open book account. See Aryeh v. Canon Business Solutions, Inc., 55 Cal. 4th 1185, 1199-1200 (2013). “‘[T]he continuing accrual rule effectively limits the amount of retroactive relief a plaintiff or petitioner can obtain to the benefits or obligations which came due within the limitations period.’ . . . [where applicable], the theory . . . permit[s the plaintiff] to sue, but only for those discrete acts occurring within the four years immediately preceding the filing of his suit.” Id.

(4) Same Grounds for Demurrer as Related Specific Claims: “When a common count is used as an alternative way of seeking the same recovery demanded in a specific cause of action, and is based on the same facts, the common count is demurrable if the cause of action is demurrable.” McBride v. Boughton, 123 Cal. App. 4th 379, 394-95 (2004).

(5) Production of “Account:” Pursuant to California Code of Civil Procedure section 454, “[i]t is not necessary for a party to set forth in a pleading the items of an account therein alleged, but he must deliver to the adverse party, within ten days after a demand thereof in writing, a copy of the account, or be precluded from giving evidence thereof. The court or judge thereof may order a further account when the one delivered is too general, or is defective in any particular.”

(6) Existence of Express Contract Bars Use: “It seems to be well settled that monies which become due under an express contract (such as rent due under a lease) cannot, in the absence of a contrary agreement between the parties, be treated as items under an open book account so as to allow the unpaid creditor to evade or extend the statutory limitations period.” Tsemetzin v. Coast Federal Savings & Loan Assn., 57 Cal. App. 4th 1334, 1343 (1997) (italics in original).

(7) Open Book Extinguished by Proof of Account Stated: “Actions on accounts stated frequently arise from a series of transactions which also constitute an open book account.” Maggio, Inc. v. Neal, 196 Cal. App. 3d 745, 753 (1987). However, “[t]he ruling that an account stated was properly proved makes unnecessary any discussion concerning the open book account. An account stated constitutes a new contract which supersedes and extinguishes the original obligation. If a book account existed by reason of defendant's records, it merged into and was superceded [stet] by the account stated.” Zinn v. Fred R. Bright Co., 271 Cal. App. 2d 597, 604 (1969).

(8) Limitations on Need to Plead Affirmative Defenses to Common Counts: Because “Open Book Account” is one of the “common counts” there are limitations on the requirements to plead affirmative defenses:

“The common count is a general pleading which seeks recovery of money without specifying the nature of the claim . . .. Because of the uninformative character of the complaint, it has been held that the typical answer, a general denial, is sufficient to raise almost any kind of defense, including some which ordinarily require special pleading.” . . . However, even where the plaintiff has pleaded in the form of a common count, the defendant must raise in the answer any new matter, that is, anything he or she relies on that is not put in issue by the plaintiff.

Title Insurance Co. v. State Bd. of Equalization, 4 Cal. 4th 715, 731 (1992).

(9) Medical Arbitration Agreement: Where the patient was required to sign an arbitration agreement in connection with medical services, the agreement covers any attempts to collect on an open book account relating to medical services provided to the patient under the agreement. Cal. Code Civ. Proc. § 1295(c).