Page:S.O.S. v. Payday.pdf/11

 Payday asserts three grounds for reversal. First, it argues that since there was no dispute or settlement concerning the amount, and the parties were still transacting business, there is a triable issue of fact unresolvable by summary judgment. This argument confuses an account stated with accord and satisfaction. “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, 69 Cal.Rptr. 568, 573, 442 P.2d 648, 653 (1968). Payday’s agreement with S.O.S.’s letter was all that was required to create an account stated.

Payday next asserts that S.O.S.’s alleged breach of contract in refusing to give it an unprotected copy of the software should relieve Payday of the obligation to pay. However, even assuming arguendo that S.O.S. breached the contract, this would not affect the result. Under California law, an account stated is a new contract, and an action on it is not based on the original contract, but on the balance confirmed by the parties. Gleason v. Klamer, 103 Cal.App.3d 782, 786–87, 163 Cal.Rptr. 483, 485 (1980). An account stated may be attacked only by proof of “fraud, duress, mistake, or other grounds cognizable in equity for the avoidance of an instrument.” Id. Although an account stated is dependent on a valid underlying liability which accrued before rendering the account, Trafton, 69 Cal.Rptr. at 574, “it is not open to a defendant to attempt to defeat the legal effect of [an account stated] by showing a lack of consideration in any other way. Thus, it is not open to a defendant in such a case merely to show that the account stated was based upon a disputed claim of the plaintiff’s, which claim subsequently proved to be invalid…. All such evidence going to total or partial lack of consideration is forever debarred by the convention and agreement of the parties, for this is of the very essence of an account stated.” Gardner v. Watson, 170 Cal. 570, 577, 150 P. 994, 996 (1915). A party who consents to an account stated has agreed that it has become liable for that amount by the other party’s performance. Payday is claiming only that S.O.S.’s subsequent breach affected its previous liability. This defense to an account stated is not recognized in California law.

Payday’s final argument is that there is no pendent jurisdiction, because an account stated is distinct from the underlying contract. This argument lacks merit. The state law account stated claim and federal law copyright claims “derive from a common nucleus of operative fact,” “such that [the parties} would ordinarily be expected to try them all in one judicial proceeding.” United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966). Summary judgment in favor of S.O.S. on the account stated claim was proper and is affirmed.

''IV. Abuse of Process''

On November 22, 1985, S.O.S. sought and obtained an ex parte writ for the seizure of the computer programs in possession of Payday. Shortly after, Payday obtained a modification of the writ. In its counterclaim for abuse of process, Payday asserts that S.O.S.’s writ of seizure was obtained through misrepresentations including exaggeration of the scope of S.O.S.’s copyright and denial of Payday’s license. Because Payday was able to obtain a prompt modification of the writ, it has not claimed damages other than its attorneys’ fees incurred in its efforts to modify and vacate the writ. The district court granted summary judgment for S.O.S. on several grounds, only one of which is necessary for affirmance.

Even if Payday’s claims of misrepresentation are true, it has pleaded the wrong cause of action:

"[W]hile a defendant’s act of improperly instituting or maintaining an action may, in an appropriate case, give rise to a cause of action for malicious prosecution, the mere filing or maintenance of a lawsuit—even for an improper purpose—is not a proper basis for an abuse of process action."