I got sued in California for an open book account and an account stated. In the invoice that was sent there are over $5,000 of finance charges--not interest charges--finance charges imposed on my bill. There is nothing in the original contract that gave anyone the right to impose finance charges. Can they recover these finance charges as part of the recovery?
Not likely. If you did not agree to pay "finance charges", you should not be held liable for such.
Are you saying that there was an invoice attached to the complaint setting forth these finance charges, or that you separately received an invoice?
You must respond to the complaint within 30 days after you were served. It is possible that you might be able to settle the lawsuit before the time you have to respond. It is best to have an attorney negotiate a settlement, including a waiver of any alleged finance charges, on your behalf.
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Lawsuit / Dispute Attorney
I respectfully disagree with my colleague. Cal. Civil Code Sec. 3288 provides for interest to be awarded as damages for breach of an obligation, in the court or jury's discretion. Cal. Civil Code Sec. 3289 provides for an award of interest for any contract that does not specify a rate of interest at the legal rate of 10% if entered after Jan. 1, 1986.
Also, please be aware that an action on a book account may entitled the prevailing party to reasonable attorney's fees, under Cal. Code of Civil Procedure Sec.1717.5.
I have posted a link to my blog posting, below, on what steps to take when you are served with a summons and complaint, to make good use of the time and explore your options.