[roybean]

TOWERRAT writes:

H & H DESIGN BUILDERS, INC., Appellant, v. TRAVELERS' INDEMNITY COMPANY, Appellee. CASE No. 93-2503 COURT OF APPEAL OF FLORIDA, FIFTH DISTRICT 639 So. 2d 697; 1994 Fla. App. LEXIS 6996; 19 Fla. L. Weekly D 1527

It is not as easy as it should be to identify what does - or does not - constitute a cause of action for "open [**8] account." Central Ins. Underwriters, Inc. v. National Ins. Finance Co., 599 So. 2d 1371, (Fla. 3d DCA 1992), Robert W. Gottfried, Inc. v. Cole, 454 So. 2d 695 (Fla. 4th DCA 1984). In commercial transactions, an "open account" should refer to an unsettled debt, arising from items of work or labor, goods sold and other open transactions not reduced to writing, the sole record of which is usually the account books of the owner of the demand. It should not include express contracts or other obligations that have been reduced to writing. Los Angeles County v. Continental Corp., 113 Cal. App. 2d 207, 248 P.2d 157 (Cal. Ct. App. 1952) (quoting People v. Magee, 183 P. 289 (Cal. Ct. App. 1919). This was an action based on a written contract. Liberty Mutual Ins. Co. v. Scalise, 627 So. 2d 87, (Fla. 1st DCA 1993). An obligation does not become an "open account" simply because the amount due under a contract requires calculation. An obligee under a contract cannot avoid the requirement of pleading and proving a cause of action based on a contract [**9] by placing its demand on a "statement of account" and mailing it to the obligor. We conclude, therefore, that H & H was correct in asserting the affirmative defense that Travelers' complaint failed to state a cause of action because the "statement" relied upon does not meet the requirements of an "open account."

By inference, a revolving account does not become an installment account just because the CA/JDB is suing on an account stated or intends to sue on an account stated, or because they are calculating the debt in a different manner.

From the same case one paragraph later:

In order to state a valid claim on an open account, the claimant must attach an "itemized" copy of the account. Moore v. Boyd, 62 So. 2d 427 (Fla. 1952). The statement of account attached to the complaint involved in this case stated only the lump-sum balance due claimed for each policy period, not the items on which the claim was based.

What is "verification" in FL? It is not a lump sum balance. It is an itemized copy of the account.


In case you missed this part:

Typically, when purchasing accounts receivable, factoring companies verify the accounts receivable with the alleged debtors. Additionally, factoring companies such as Platinum follow up on debt verification by sending letters known as "no offset" letters to the debtors

Arrow should have sent you verification without you demanding it. And under FL case law, we know what verification is.

If you dispute again, be specific. "This is not a factoring company account and it is not a commerical account." Dispute it like that or something specific as to why it is not a factoring company account. "I do not have commerical accounts". "I am not a business" etc.

15 USC 1681i(a)(4) Consideration of consumer information. In conducting any reinvestigation under paragraph (1) with respect to disputed information in the file of any consumer, the consumer reporting agency shall review and consider all relevant information submitted by the consumer in the period described in paragraph (1)(A) with respect to such disputed information.

Factoring companies are finance companies. If you need cash, you can borrow money from a bank, but then you would be taking on more debt and it would be expensive. Not only that, but the bank would look at your books and if they didn't like what they saw, you wouldn't get a loan. One thing you could do, is sell your receivables to a factoring company. You sell $1,000,000 worth of receivables at 60%-80% of face value and come up with $600,000 to $800,000 in cash. The factoring company would collect the receivables and come up with $200,000 to $400,000, that's how they make their money. These are usually commercial, not consumer accounts.

The thing is, this is good debt, not defaulted debt. Defaulted debt is not receiveable becuase under Rule 5000, the company has charged it off as preceisely because it has been determined to be uncollectible.

By claiming to be a factoring company, Arrow is alleging that it purchased the debt when it was not in default, meaning that Arrow is an innocent purchaser. Under most state laws, an innocent purchaser is one of the tests to determine if one is a "holder." A holder has different rights.