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Cannabis Litigation Common Counts: Alternatives to a Breach of Contract Claim

by Jihee Ahn, Attorney at harris Bricken

In almost every litigation webinar we’ve done, and in many of our past posts discussing breach of contract (the general breakdown of this claim is here), we’ve stressed the importance of memorializing agreements in writing to save yourself from potential or protracted litigation down the line. Unfortunately though, we still get quite a few prospective clients who just don’t have this principle down (whether because of prior industry norms or otherwise) and find themselves in a bind. In California, that’s where “common counts” might help. The common count is a general pleading which seeks recovery of money without specifying the nature of the claim. In today’s post, we’re going to discuss the four common counts that might save your breach of contract claim.

  1. Money Had and Received

The common count of “money had and received” may be brought “wherever one person has received money which belongs to another, and which … in justice and right, should be returned. … The plaintiff’s right to recover is governed by principles of equity, although the action is one at law.” Mains v. City Title Ins. Co. (1949) 34 Cal.2d 580, 586. As provided by CACI Jury Instruction No. 370, the plaintiff must prove that the defendant received money ‘intended to be used for the benefit of the plaintiff,’ that the money was not used for the plaintiff’s benefit, and that the defendant has not given the money to the plaintiff.”

  1. Goods and Services Rendered

The common count of “goods and services rendered” encapsulates the concept of quantum meruit. To recover in quantum meruit, instead of proving the existence of a contract, the plaintiff must show the circumstances were such that services were rendered under some mutual understanding or expectation that compensation for the same was to be made. “The underlying idea behind quantum meruit is the law’s distaste for unjust enrichment. If one has received a benefit which one may not justly retain, one should ‘restore the aggrieved party to his [or her] former position by return of the thing or its equivalent in money.’” E. J. Franks Construction, Inc. v. Sahota (2014) 226 Cal.App.4th1123, 1127-1128. The plaintiff’s recovery in quantum meruit is the reasonable value of the services rendered. “To recover on a claim for the reasonable value of services under a quantum meruit theory, a plaintiff must establish both that he or she was acting pursuant to either an express or implied request for services from the defendant and that the services rendered were intended to and did benefit the defendant.” Ochs v. PacifiCare of California (2004) 115 Cal.App.4th 782, 794; CACI Jury Instruction No. 371.

  1. Open Book Account

“A book account may furnish the basis for an action on a common count ‘… when it contains a statement of the debits and credits of the transactions involved completely enough to supply evidence from which it can be reasonably determined what amount is due to the claimant.’” Interstate Group Administrators, Inc. v. Cravens, Dargan & Co. (1985) 174 Cal.App.3d 700, 708. CACI Jury Instruction 372 provides the plaintiff must establish plaintiff and defendant had financial transactions with each other, that plaintiff kept an account of the debits and credits involved in these transactions, that defendant owes plaintiff money on the account, and the amount of money.

Specifically, “a book account is defined … as ‘a detailed statement, kept in a book [written or electronic], in the nature of debit and credit, arising out of contract or some fiduciary relation.’ It is, of course, necessary for the book to show against whom the charges are made. It must also be made to appear in whose favor the charges run. This may be shown by the production of the book from the possession of the plaintiff and his identification of it as the book in which he kept the account between him and the debtor. An open book account may consist of a single entry reflecting the establishment of an account between the parties, and may contain charges alone if there are no credits to enter. Money loaned is the proper subject of an open book account.” Joslin v. Gertz (1957) 155Cal.App.2d 62, 65-66.

  1. Account Stated

“The essential elements of an account stated are: (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.” Zinn v. Fred R. Bright Co. (1969) 271 Cal.App.2d 597, 600; CACI Jury Instruction 373. The account stated common counted is a little special in that it can be established passively: the creditor may render a statement of the account to the debtor, and if the debtor fails to object to the statement within a reasonable time, the law implies his agreement that the account is correct as rendered.” When the account is impliedly agreed to, it becomes a new contract for the balance agreed to by the parties.

While these are helpful when you’re backed into a corner, these common counts still aren’t ideal claims to make for several reasons (but mostly because you may be limiting your remedies). So our number one recommendation to memorialize everything and keep your records in order still stands.

Re-published with the permission of Harris Bricken and The Canna Law Blog

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