Opinion ID: 2038458
Heading Depth: 1
Heading Rank: 3

Heading: Whether Suit on an Open Account is a Discrete Cause of Action With Fixed Elements.

Text: In concluding that suit on an open account is a discrete cause of action with fixed elements, the court of appeals relied on two lines of authority neither of which provide a satisfactory resolution of the issue. First, the court of appeals relied on the statements in Griffith v. Portlock, 233 Iowa 492, 7 N.W.2d 199 (1942), and Tucker v. Quimby, 37 Iowa 17 (1873), indicating that [a] continuous, open, current account is one which is not interrupted or broken, not closed by settlement or otherwise, and is a running, connected series of transactions. Griffith, 233 Iowa at 498, 7 N.W.2d at 202 (quoting Tucker, 37 Iowa at 19). The Griffith and Tucker cases were not concerned with establishing the elements for recovery in an action on an open account. Rather, these cases dealt with the requirements to show that an open account existed for purposes of establishing the statute of limitations set forth in Iowa Code section 614.5 and its statutory predecessors. Consequently, we find these cases to be inapposite. The court of appeals further described an open account as involving an agreement between parties who have monetary transactions that all the items of the account representing such transactions, and the balance struck, are correct, together with a promise, express or implied, to pay such balance. (Citing Weaver Constr. Co. v. Farmers Nat'l Bank, 253 Iowa 1280, 1287, 115 N.W.2d 804, 808 (1962)). The cited language from the Weaver Construction case did not purport to describe the elements of an action on an open account in all situations. It was directed at the common-law cause of action for an account stated. Although a suit on an open account may be based on a legal theory of account stated, it may also be premised on other theories, which do not require the showing of a balance struck. Although an account in its narrow sense envisions something evidenced by book records, in a general sense, it encompasses any claim or demand based on a transaction creating a debtor-creditor relationship. In re Stratman's Estate, 231 Iowa 480, 489, 1 N.W.2d 636, 643 (1942). We have held that, when the evidence fails to establish the elements of an account stated, the creditor may nevertheless recover by proving a contractual obligation for the individual items in the account and the fair and reasonable value of the amounts claimed. St. Luke's Med. Ctr. v. Rosengartner, 231 N.W.2d 601, 602 (Iowa 1975); Jewett Lumber Co. v. Anderson Coal Co., 181 Iowa 950, 952, 165 N.W. 211, 212 (1917). In the Rosengartner case, we stated: Maurice [the defendant] also contends that St. Luke's pleaded an account stated but did not prove one. The petition is broad enough, however, to encompass an action on account. In view of the parties' stipulation that St. Luke's furnished the services shown on the account and that the charges for her care are reasonable, the trial court found as a fact that Theresa [defendant's wife] was a patient in plaintiff's hospital and she incurred charges for hospital services in the amount of $3161.25, which charges were fair and reasonable. St. Luke's is thus entitled to recover on the account, whether or not it established an account stated. Rosengartner, 231 N.W.2d at 602 (quoting Jewett Lumber Co., 181 Iowa at 952, 165 N.W. at 212). The establishment of an account in this manner was similarly approved in McIntire v. Muller, 522 N.W.2d 329, 331 (Iowa Ct.App.1994).