Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_14-cv-01395/USCOURTS-caed-2_14-cv-01395-3/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-(Citizenship)

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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF CALIFORNIA 

DAVID W. CALFEE, III,

Plaintiff, 

v. 

WILLIAM K. GRAHAM aka BILLY 

GRAHAM, THOMAS P. CHURCH aka 

TOM CHURCH, MICHELE A. 

CHURCH, MICHAEL U. SBROCCO 

III aka MIKE SBROCCO and DOES 

1 through 10, Inclusive, 

Defendants. 

No. 2:14-cv-01395-JAM-AC

ORDER DENYING DEFENDANTS’ MOTION 

FOR SUMMARY JUDGMENT 

This matter is before the Court on a motion for summary 

judgment submitted by defendants William K. Graham (“Graham”), 

Thomas P. Church (“Thomas Church”), Michele A. Church (“Michele 

Church”), and Michael U. Sbrocco III (“Sbrocco”) (collectively 

“Defendants”) (Doc. #26). Plaintiff David W. Calfee, III 

(“Calfee”) opposes the motion (Doc. #30).1

/// 

 

1 This motion was determined to be suitable for decision without 

oral argument. E.D. Cal. L.R. 230(g). The hearing was 

scheduled for November 18, 2015. 

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I. FACTUAL BACKGROUND 

In late June 2009, Defendants hired the law firm Calfee 

Konwinski (“the firm”) to represent Defendants in Paik v. Treon, 

Yolo County Superior Court No. PT 09-320 (“underlying action”), a 

case filed against them for malicious prosecution in California 

state court. Mot., Exh. B; Opp., Exh. 2. Calfee was the 

attorney at the firm primarily responsible for the work in the 

underlying action. Id. Calfee presented Defendants with a 

written fee agreement (“Agreement”). Undisputed Material Fact 

(“UMF”) #3. Under the terms of the Agreement, Defendants were 

expected to maintain a deposit of $10,000.00, from which the firm 

was to bill monthly charges. UMF #4. Statements for services 

were due upon presentation. Id. Defendants were required to pay 

within thirty days of the receipt of an invoice. UMF ## 4-5. 

Calfee submitted five invoices to Defendants over the course 

of his representation, each of which notified Defendants that 

balances were due upon receipt of the statement and that unpaid 

balances would accrue interest after thirty days from the billing 

date. UMF ## 6-7. Each invoice provided a description of 

Calfee’s professional services, as well as the date and the 

number of hours he spent on each task. Mot., Exh. D. 

Defendants never paid an invoice in full. The firm only 

received a $5,000.00 “payment from account” on July 28, 2009, a 

$2,500.00 payment from Graham on August 6, 2009, and a $2,500.00 

payment from Church on August 7, 2009. Id. The final invoice, 

dated August 5, 2010, stated that there was a balance due of 

$91,602.48. Id. This amount included fees for professional 

services rendered from late March to late June, an overdue 

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balance of $88,604.87, and interest on that overdue balance in 

the amount of $2,125.11. Id. 

In connection with the overdue balance, Calfee sent a letter 

to Defendants on October 27, 2009. UMF #10. The letter notified 

Defendants that there was a substantial overdue balance and that 

the firm would withdraw from the underlying action if a payment 

plan was not agreed to by Defendants. Mot., Exh. E. The letter 

also notified Defendants that the firm was required to continue 

representing Defendants until Defendants signed a substitution of 

attorney form or the court authorized the firm’s withdrawal. Id. 

Calfee eventually filed a motion to withdraw as counsel of record 

for Defendants in the underlying action. Calfee’s Request for 

Judicial Notice (RJN); Opp., Exh. 3. The motion was granted on 

June 24, 2010. Id. 

Calfee received a transfer and assignment of the firm’s 

“right, title, and interest in and to any and all causes of 

action” against Defendants on June 9, 2014. Opp., Exh. 4. 

Calfee then filed this lawsuit on June 11, 2014, seeking damages 

in the amount of the unpaid balance of $91,602.48 (Doc. #1). 

Calfee alleged two causes of action: book account and account 

stated. Compl. at 1. Defendants answered the Complaint and 

subsequently filed this motion for summary judgment (Doc. #26). 

II. OPINION 

A. Judicial Notice 

Calfee seeks judicial notice pursuant to Federal Rule of 

Evidence 201 of the fact that the Court of Appeal of the State 

of California, Third Appellate District granted Calfee’s motion 

to withdraw from the underlying case on June 24, 2010 (Doc. #30-

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4). RJN; Opp., Exh. 3. 

A court may take judicial notice of a fact that is not 

reasonably disputed if it “can be accurately and readily 

determined from sources whose accuracy cannot reasonably be 

questioned.” Fed. R. Evid. 201(b)(2). On a motion to dismiss, 

courts are allowed to consider “matters of public record.” 

Northstar Fin. Advisors Inc. v. Schwab Investments, 779 F.3d 

1036, 1042 (9th Cir. 2015) (quoting Coto Settlement v. 

Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010)). 

The fact submitted by Calfee is in the public record and is 

not subject to reasonable dispute. As such, the Court takes 

judicial notice of the fact that the Third Appellate District 

granted Calfee’s motion to withdraw as counsel in the underlying 

action on June 24, 2010. 

B. Analysis 

Defendants are seeking summary judgment based on their 

factual contention that the “full terms and conditions of [the 

agreement] were established by an express written contract.” 

Mot. at 7. Defendants further contend that the law prohibits 

plaintiffs from turning such an express contract into a book 

account or account stated cause of action. Mot. at 5. Given 

these two contentions, Defendants argue that summary judgment is 

appropriate because there is no genuine issue of material fact 

and no reasonable jury could return a verdict in favor of 

Calfee. 

In opposition, Calfee objects to Defendants’ factual 

contention that the full terms and conditions of the agreement 

were established by the contract, as well as to Defendants’ 

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legal contention that an express contract cannot be a book 

account or account stated. Regarding the factual issue, Calfee 

argues that facts exist that demonstrate the parties agreed 

implicitly and explicitly to a book account arrangement. Opp. 

at 3. Regarding the legal issue, Calfee argues that the law 

allows a party to recover money under a book account and/or 

account stated theory even when a contractual relationship 

exists. Id. Calfee specifically contends “there is a triable 

issue of fact as to whether Defendants [explicitly or 

implicitly] agreed to a book account.” Opp. at 5. 

Book account and account stated causes of action are 

considered to be “common counts” under California law. 

Fagelbaum & Heller LLP v. Smylie, 174 Cal.App.4th 1351, 1355 

(2009). Common counts are proper when a party is seeking the 

payment of money they are owed due to a debt or due to providing 

services or goods. Kawasho Internat., U.S.A. Inc. v. Lakewood 

Pipe Serv., Inc., 152 Cal.App.3d 785, 793 (1983). Common counts 

are used to recover a certain sum of money “without necessarily 

specifying the nature of the claim.” Martini E Ricci Iamino 

S.P.A.--Consortile Societa Agricola v. Trinity Fruit Sales Co., 

30 F.Supp.3d 954, 975 (E.D. Cal. 2014) [hereinafter “M&R v. 

Trinity 1”]. 

1. Book Account 

A book account is defined in California by statute as: 

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 

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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. 

Cal. Civ. Proc. Code § 337a. 

Here, the arrangement at issue meets the statutory 

definition of a book account. The billing statements provided 

detailed statements of the transactions between Calfee and the 

Defendants. The billing statements formed the principal record 

of the parties’ debits and credits. And the billing statements 

were made in the course of regular business and were kept in a 

reasonably permanent form and manner. Defendants do not contest 

any of these findings. Instead, Defendants argue that the 

parties never agreed to form a book account and, therefore, 

Calfee cannot now bring a book account cause of action. 

A book account is created by an agreement by words or 

conduct of the parties in a commercial transaction. M&R v. 

Trinity 1, 30 F.Supp.3d at 975 (quoting H. Russell Taylor's Fire 

Prevention Serv., Inc. v. Coca Cola Bottling Corp., 99 Cal.App.3d 

711, 728 (1979)). Thus, “in deciding whether a book account 

exists the court must examine the agreement, or lack of 

agreement, between the parties and their conduct in the context 

of their commercial dealing.” Maggio, Inc. v. Neal, 196 

Cal.App.3d 745, 752 (1987). Though express contracts, as a 

general rule, are not considered book accounts, parties can 

overcome this presumption by treating the contract as a book 

account. Costello v. Bank of Am. Nat. Trust & Sav. Ass'n, 246 

F.2d 807, 812 (9th Cir. 1957); see also Tsemetzin v. Coast Fed. 

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Sav. & Loan Assn., 57 Cal.App.4th 1334, 1343 (1997) (“It seems to 

be well settled that monies which become due under an express

contract . . . cannot, in the absence of a contrary agreement 

between the parties, be treated as items under an open book 

account.”) (emphasis in original). An express agreement to form 

a book account is not required for contracts that do not specify 

in advance the time and amount of payment. In re Roberts Farms 

Inc., 980 F.2d 1248, 1253 n.3 (9th Cir. 1992) [hereinafter 

“Roberts Farms”] (“California courts only require that the 

parties expressly intend to be bound by an open book account when 

there is an express contract that sets the time and amount of 

payment.”). “The mere incidental keeping of accounts does not 

alone create a book account.” Maggio, 196 Cal.App.3d at 752. 

In a motion for summary judgment, the moving party bears the 

initial responsibility of identifying evidence that demonstrates 

“there is no genuine dispute as to any material fact,” thereby 

showing that the moving party is “entitled to judgment as a 

matter of law.” Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 

477 U.S. 317, 323-24 (1986). Here, Defendants argue that the 

undisputed material fact that entitles them to summary judgment 

is that the parties agreed to place the full terms of their 

agreement into an express written contract. In support of this 

argument, Defendants allege that Calfee provided Defendants with 

a written fee agreement that included specific terms that 

governed, among other things, the payment amount, payment 

deadlines, and minimum deposits. Mot. at 1-2; UMF ## 3-4. 

In a summary judgment motion, once the movant demonstrates, 

as Defendants did here, an absence of evidence supporting the 

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nonmoving party’s case, the burden shifts to the opposing party 

to “set forth specific facts showing that there is a genuine 

issue for trial.” Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th 

Cir. 2001) (quoting Fed. R. Civ. P. 56(e)). Here, Calfee objects 

to Defendants’ characterization of the written contract as 

indisputably containing the full terms of their agreement. 

Calfee points out that the Agreement contained fourteen variable

factors that were used to calculate the amount due. Opp. at 4-5. 

Calfee contends that these variable factors, as well as the 

billing statements provided an explanation for the sums owed and 

indicate an explicit or implicit agreement to form a book 

account. Id. at 7. 

The variable factors in the Agreement are evidence that the 

parties implicitly agreed to form a book account arrangement. 

Calfee submitted to the Defendants detailed billing statements 

that summarized and described the work completed and the number 

of hours billed. Mot., Exh. D. Calfee identifies fourteen 

variable factors in the Agreement that were used to calculate the 

amount due. Opp. at 4-5; Opp., Exh. 2. The amount due on any 

billing statement depended entirely on these variable factors, as 

well as on what services the firm had performed during the 

billing period. As such, the billing statements did not charge 

identical amounts. For example, the July 28, 2009 invoice 

charged $29,000.75, while the September 18, 2009 invoice charged 

$33,057.75 for the services provided during the respective 

billing periods. Mot., Exh. D. Since these billing statements 

were the only record of services performed by the firm, they were 

not merely incidental. Instead, the invoices were the only and 

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official source for determining what amount Defendants owed 

Calfee. 

The variable factors in the Agreement render this 

arrangement nearly identical to the contract at issue in Roberts 

Farms. There, the court denied summary judgment after pointing 

out that the contract at issue was for legal services and that 

“no set amount was determined to be due each month.” Roberts 

Farms, 980 F.2d at 1253. Moreover, the court considered the 

billing statements to be “detailed permanent records that reflect 

the ongoing relationship between [the parties].” Id. As the 

court explained, because the express contract did not set the 

“time and amount of payment,” neither party needed to expressly 

intend to be bound by the records in order to create a book 

account. Id. at 1252 n.3. In Roberts Farms, just as in this 

case, “the only source available to determine what and when [the 

defendant] owed payment” was the plaintiff’s records. Id. 

The contracts at issue here and in Roberts Farms are 

significantly different than the arrangements at issue in cases 

in which summary judgment was ultimately granted. For example, 

in Martini E Ricci Iamino S.P.A.--Consortile Societa Agricola v. 

W. Fresh Mktg. Servs., Inc., 54 F.Supp.3d 1094 (E.D. Cal. 

2014)[hereinafter “M&R v. Fresh”], the court granted summary 

judgment in favor of the defendant on a book account cause of 

action based on a consignment agreement. In granting the motion, 

the court reasoned that “no documents have been produced that 

would fit the description of a book account” and that M&R did 

“not address or defend this [book account] cause of action.” M&R 

v. Fresh, 54 F.Supp.2d at 1106-09. In a related case the court 

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first denied summary judgment because it found that an email 

containing a statement of debt allegedly owed along with various 

deductions “might constitute an account stated” and that the 

parties “could have agreed to maintain a book account.” M&R v. 

Trinity 1, 30 F.Supp.3d at 977. After allowing the parties to 

submit a second summary judgment motion with further fact 

development and briefing, the court concluded that there was no 

evidence that the parties agreed to a book account. Martini E 

Ricci Iamino S.P.A. v. Trinity Fruit Sales Co., No. 1:13-CV-276 

AWI SAB, 2014 WL 4446293, at *10 (E.D. Cal. Sept. 9, 2014) 

[hereinafter “M&R v. Trinity 2”]. Key to the court’s reasoning 

was the fact that the defendant had not accepted bookkeeping from 

the plaintiff and that any recordkeeping was therefore 

incidental. Id. 

The instant case contrasts with the series of cases 

involving M&R. Unlike in M&R v. Fresh, Calfee has alleged and 

defended a book account cause of action. Also unlike M&R v. 

Fresh, the parties have identified a document — the billing 

statement — that could fit the description of a book account. 

Finally, unlike M&R v. Trinity 2, there is evidence supporting 

the notion that Defendants agreed to have Calfee’s bookkeeping 

establish the amount of money due. Thus, this case is more 

similar to Robert Farms than to M&R v. Fresh, M&R v. Trinity 1, 

and M&R v. Trinity 2. 

As the case law makes clear, in determining whether a book 

account exists, courts are directed to examine both the agreement 

and the parties’ conduct. Maggio, 196 Cal.App.3d at 752. As 

another court in this district stated, “simply because there was 

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an express agreement between the parties . . . does not mean that 

no book account claim can be pursued.” M&R v. Trinity 1, 30 

F.Supp.3d at 978. Defendants’ contention that contracts simply 

cannot be interpreted as book accounts does not account for the 

facts of this case or for the established law in this area. 

Though Defendants may well prevail at trial, at this point the 

court finds that Calfee has carried his burden of rebutting the 

motion for summary judgment. Calfee has identified specific 

facts, such as the variable terms in the agreement and a detailed 

and authoritative billing statement, that show there is a genuine 

issue as to whether the parties implicitly or explicitly agreed 

to form a book account arrangement. 

2. Account Stated 

Calfee contends that an account was stated in writing on 

August 5, 2010, in the amount of $91,602.48. Compl. ¶ 25. 

Calfee further argues that Defendants impliedly agreed to pay 

this balance by not disputing the amount. Id. Defendants moved 

for summary judgment on the account stated cause of action for 

much the same reason as they did for the book account cause of 

action. Defendants argue that Calfee “cannot establish the 

elements” of an account stated cause of action because “it is 

undisputed that the full terms and conditions of his agreement 

with defendants were established by an express written contract.” 

Mot. at 7. Calfee concedes that the dismissal of the book 

account cause of action would automatically result in the 

dismissal of the account stated cause of action. Opp. at 7. But 

Calfee maintains that the August 5, 2010 billing statement 

represented an account stated and that Defendants’ silence with 

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respect to that statement constituted implied assent. Id. at 8. 

At the very least, Calfee argues, the issue of whether Defendants 

objected to the billing statements is a disputed fact that 

renders summary judgment inappropriate with respect to the 

account stated cause of action. Id. 

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.” S.O.S., Inc. v. Payday, Inc., 886 F.2d 

1081, 1091 (9th Cir. 1989) (quoting Trafton v. Youngblood, 69 

Cal.2d 17, 25 (1968)). An account stated “constitutes a new 

contract which supersedes and extinguishes the original 

obligation.” Zinn v. Fred R. Bright Co., 271 Cal.App.2d 597, 604 

(1969). There are three essential elements to an account stated 

cause of action: “(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.” Id. at 600. Both 

parties must agree to the new amount owed, but assent can be 

implied from the circumstances. Hansen v. Fresno Jersey Farm 

Dairy Co., 220 Cal. 402, 408 (1934). Importantly for this case, 

“[w]hen 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, 196 Cal.App.3d at 753. 

Here, Calfee has sufficiently shown that the August 5, 2010 

billing statement met the requirements of an account stated. 

Previous transactions between the Defendants and Calfee — 

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including the July 28, 2009, September 18, 2009, December 23, 

2009, and May 19, 2009 billing statements, as well as the payment 

of $5,000.00 on July 28, 2009, $2,500.00 on August 6, 2009, and 

$2,500.00 on August 7, 2009 — demonstrate that prior to August 5, 

2010, there existed a debtor-creditor relationship. Mot., Exh. D. 

Additionally, the Court finds that there is a genuine issue of 

material fact as to (1) whether the Defendants impliedly agreed 

on the amount they owed to Calfee and (2) whether Defendants 

impliedly agreed to pay the amount stated on the August 5, 2010 

invoice. Since “the law implies an agreement that the account is 

correct as rendered” when a statement is provided to a debtor and 

“no reply is made in a reasonable time,” Maggio, 196 Cal.App.3d 

at 753, Calfee need not provide evidence of an explicit agreement 

to be bound by the alleged account stated. Given that Defendants 

have submitted no evidence that they objected to the amount of 

the final invoice or refused to pay the amount due, Defendants 

have failed to meet their burden of showing the absence of a 

genuine dispute as to any material fact. Thus, the Court denies 

Defendants’ motion for summary judgment of Calfee’s account 

stated cause of action. 

3. Leave to Amend 

Since the Court has denied the motion for summary judgment, 

it need not take up Calfee’s request to “set a date for hearing 

on the issue of whether the scheduling order should be set aside 

to allow plaintiff to seek leave to amend the complaint to state 

a cause of action for breach of written contract.” Opp. at 10. 

 

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III. ORDER 

For the reasons set forth above, the Court DENIES WITH 

PREJUDICE Defendants’ Motion for Summary Judgment of Calfee’s 

book account and account stated causes of action. 

IT IS SO ORDERED. 

Dated: December 17, 2015 

 

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