Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:
Opinion Marilyn Kelly Michael F. Cavanagh
Elizabeth A. Weaver
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman
Diane M. Hathaway
FILED JULY 17, 2009
SEYBURN, KAHN, GINN, BESS, DEITCH
AND SERLIN, P.C.,
Plaintiff-Appellant,
v No. 136436
KIRIT BAKSHI,
Defendant-Appellee.
BEFORE THE ENTIRE BENCH
WEAVER, J.
In this case we must decide the proper date of accrual in a breach of
contract action for the recovery of unpaid legal fees. Specifically, this Court has
been asked to consider whether the parties’ obligations are governed by a contract
or a mutual and open account current.1 We also consider whether a claim by an
attorney against a client for unpaid legal fees accrues on the date that the attorney-
client relationship is terminated.
We conclude that the relationship between plaintiff and defendant is
governed by the explicit terms of their contract and is not a mutual and open
1
The term “mutual and open account current” comes directly from MCL
600.5831, which governs accrual for actions involving a mutual and open account.
1
account current. We also hold that plaintiff’s breach of contract claim to recover
the unpaid legal fees under the original contract accrued on September 30, 1993,
which is the date that the Court of Appeals granted the motion to terminate the
attorney-client relationship. In addition, we conclude that plaintiff’s acts of
reviewing, copying, and returning defendant’s file do not extend the accrual date
beyond the date that the attorney-client relationship was terminated. Because
plaintiff did not file this claim until October 8, 1999,2 we hold that, pursuant to
MCL 600.5807(8), the breach of contract action to recover the unpaid legal fees
under the original contract is barred by the six-year statute of limitations. Finally,
we hold that the costs attributed to the file-review services effectively arose from a
separate contract, and the claim for those costs was filed timely and is not outside
the statute of limitations.
We therefore affirm the Court of Appeals in part, reverse in part, and
remand to the trial court for entry of judgment in favor of plaintiff in the amount
of $442, with no interest to be assessed under the contract.
I. Facts and Procedural History
The facts and procedural history of this case are quite extensive and were
well set forth by the Court of Appeals as follows:
In 1989, [defendant] Bakshi retained [plaintiff] Seyburn to
represent him and his two corporations in a legal action (underlying
2
The Court of Appeals opinion states that plaintiff filed this claim on
October 9, 1999; however, the complaint in the Oakland Circuit Court file is date-
stamped October 8, 1999.
2
litigation) and other legal matters. Bakshi was unsuccessful in the
underlying litigation: the trial court dismissed the action on October
17, 1991, and [the Court of Appeals] affirmed the trial court’s
judgment. Interface Electronics v Minicomp Private Ltd,
unpublished opinion per curiam of the Court of Appeals, issued
October 10, 1994 (Docket No. 146262). (Circuit court records
indicate that Seyburn also represented Bakshi in at least one other
lawsuit in the circuit court while the Interface Electronics appeal
was pending.)
Bakshi ceased paying Seyburn’s legal bills in November
1992, while the appeal in the underlying litigation was pending. At
that time, Bakshi had already paid $92,000, and his remaining
balance was $50,603. Apparently, his refusal to pay initially arose
from a dispute with Seyburn over an amount he believed should
have been credited to the account. The parties continued to dispute
this matter over the next several months. On March 3, 1993,
Seyburn argued a motion in the trial court on Bakshi’s behalf. This
was the last date on which Seyburn performed a service for Bakshi
that was not related to the dissolution of the attorney-client
relationship. On April 27, 1993, Seyburn drafted a motion to
withdraw as Bakshi’s counsel and charged him for that task.
On June 8, 1993, Bakshi notified Seyburn that he believed
that “our attorney client relationship must be terminated or
substantially modified.” He gave Seyburn two “options”: Seyburn
could refund the fees already paid and enable Bakshi to retain
substitute counsel with the refunded money, or Seyburn could refund
75 percent of the fees paid, file an appeal, and withdraw. Bakshi
also stated that he had no financial resources to pay for the litigation.
On July 30, 1993, Seyburn moved in [the Court of Appeals]
to withdraw as Bakshi’s counsel. It stated that Bakshi was “indebted
to counsel for fees and costs incurred at the trial court level as well
as fees associated with the appeal,” and that he “has indicated that it
[sic: he] is not willing to pay the outstanding fees or costs.” Seyburn
also alleged in the withdrawal motion that the attorney-client
relationship between itself and Bakshi was “subject to irreconcilable
differences and has broken down to such an extent that counsel can
not effectively represent [Bakshi’s] interest in this appeal.” [The
Court of Appeals] granted the motion to withdraw on September 30,
1993.
3
In October 1993, Bakshi requested his file from Seyburn.
Seyburn’s paralegal reviewed the file to determine which materials
would be provided to Bakshi. On November 12, 1993, Seyburn sent
Bakshi a bill, which included charges for those activities, as follows:
10/10/93 Review file to determine what to keep
and what to return to client; draft
memorandum regarding same;
10/11/93 Complete review of file to determine
what to send back to client; copy
pleading indexes and correspondence;
10/12/93 Review and revise memorandum
regarding file . . . .
Seyburn charged Bakshi $182 [sic: $192][3] for these activities, plus
$250 for photocopying. Bakshi did not pay this bill, and the unpaid
balance on Bakshi’s account was then $55,723.
In 1995, Bakshi brought a legal malpractice action against
Seyburn, claiming, among other things, that he should be relieved of
his obligation to pay Seyburn for negligently performed legal
services in the prior unsuccessful litigation. In a motion for
summary disposition, Seyburn argued that Bakshi’s action was
barred in part by the two-year statute of limitations for malpractice
claims, MCL 600.5805(5) (now MCL 600.5805[6]). Contrary to the
position that it takes in this litigation, Seyburn stated in an affidavit
that it last performed legal services for Bakshi on March 3, 1993,
and that it “discontinued” providing legal services to Bakshi on
April 27, 1993 (the latter date refers to the date it drafted its motion
to withdraw as counsel). The trial court commented in its opinion
that “[Seyburn was] hired for the particular purpose of representing
[Bakshi] and did not discontinue serving [Bakshi] with respect to
those matters until October 1993 . . . .” The trial court dismissed the
malpractice action in 1999, and [the Court of Appeals] affirmed the
dismissal in Bakshi v Gold, unpublished opinion per curiam of the
Court of Appeals, issued August 10, 2001 (Docket No. 220867).
3
The Court of Appeals opinion states that plaintiff charged defendant $182
for the file-review services; however, the charges on the actual invoice for the
October 10-12, 1993, activities total $192.
4
Our Supreme Court denied leave to appeal. Bakshi v Gold, 467
Mich 851 (2002).
Seyburn filed its complaint in the instant action for unpaid
legal fees on October 9 [sic: 8], 1999, while Bakshi’s malpractice
action was pending. Bakshi moved for summary disposition
pursuant to MCR 2.116(C)(7), arguing that the six-year statute of
limitations, MCL 600.5807(7) (now MCL 600.5807[8]), had
expired. He maintained that Seyburn’s claim accrued in November
1992, when he last paid for legal services. In response, again
contrary to the position it took in the malpractice case, Seyburn
argued that it last performed legal services on October 12, 1993,
when it complied with Bakshi’s request to be provided with a copy
of his file. It asserted that the trial court in the malpractice action
had already determined that its services ended in October 1993.
In 2001, the trial court granted Bakshi’s motion for summary
disposition based on the statute of limitations, and held that
Seyburn’s action accrued in 1992, when Bakshi stopped paying
Seyburn’s legal fees. Seyburn appealed that decision to [the Court
of Appeals], which, in a split decision, reversed the trial court’s
decision. The majority agreed with Seyburn that its action was
timely filed because its claim accrued on October 12, 1993, the last
date it performed a properly billable service. Seyburn, Kahn, Ginn,
Bess, Deitch and Serlin, PC v Bakshi, unpublished opinion per
curiam of the Court of Appeals, issued March 13, 2003 (Docket No.
238697). One judge, however, issued a separate partially dissenting
opinion, which agreed with the majority’s conclusion that summary
disposition was improperly granted to Bakshi. However, that judge
wrote that the matter should be remanded to the trial court to
determine whether “there was a proper action on an open account”
and, if so, the date of the last proper billable entry. In this regard,
the partially dissenting judge opined that the trial court should have
considered whether Seyburn could ethically and legally charge
Bakshi for the tasks it performed in October 1993 in relation to his
request for a copy of his file. However, she also commented that the
October dates were not necessarily dispositive of the question of
when Seyburn’s claim accrued. Id., slip op at 1-2 (White, J.,
concurring in part and dissenting in part).
Bakshi thereafter filed an application for leave to appeal in
the Michigan Supreme Court. In lieu of granting leave to appeal, the
Supreme Court vacated [the Court of Appeals] judgment and
5
remanded the case to the trial court for further proceedings for the
reasons stated in the partially dissenting opinion. Seyburn, Kahn,
Ginn, Bess, Deitch and Serlin, PC v Bakshi, 469 Mich 958 (2003).
On remand, the trial court held a hearing on the statute of
limitations issue. It determined that Seyburn performed the
additional work in October 1993, at Bakshi’s request and for his
benefit, and that Seyburn could ethically charge Bakshi for those
services. From this, the court reasoned that the limitations period
did not begin to run until October 12, 1993, and thus held that
Seyburn’s action, filed on October 9 [sic: 8], 1999, was timely filed
within the six-year period of limitations. MCL 600.5807(8)
(formerly MCL 600.5807[7]). Thus, the trial court determined that
Bakshi was liable for legal fees of $62,763, and that Seyburn was
entitled to interest of $510,405.07, as of August 16, 2006.6 It issued
judgment ordering Bakshi to pay Seyburn $573,168.07.
_____________________________________________________________________________________________________
6
Seyburn charged 18 percent annual interest on unpaid balances;
thus, Bakshi’s outstanding balance grew from $62,763 in 1993 to
$573,168 in 2006.[4]
__________________________________________________________________
Defendant appealed the trial court’s decision. On April 1, 2008, the Court
of Appeals majority, in a published opinion, reversed and remanded to the trial
court to enter judgment in favor of defendant.5 The majority held that plaintiff’s
claim accrued on September 30, 1993, which is the date that the Court of Appeals
terminated the underlying attorney-client relationship. The majority also held that
plaintiff’s October 1993 acts of copying and returning defendant’s file did not
extend the accrual date under MCL 600.5807(8). In reversing the trial court, the
majority articulated that in the context of litigation, where the attorney is no longer
4
Seyburn, Kahn, Ginn, Bess, Seitch and Serlin, PC v Bakshi, 278 Mich
App 486, 489-493; 750 NW2d 633 (2008).
5
Id. at 501.
6
providing services to the client but a dispute exists over legal fees, a claim for
unpaid legal fees accrues on the date that the attorney-client relationship is
terminated. In reaching its decision, the majority reasoned that the law governing
a mutual and open account, MCL 600.5831, does not apply in this case because
the law specifically governing the termination of the attorney-client relationship
has precedence over a statute of general applicability.6
Judge Jansen fully concurred in the result but would have decided the case
more simply; specifically, by holding that the attorney-client relationship
terminated on September 30, 1993, and that the subsequent acts of copying and
returning defendant’s file did not extend the relationship beyond the date of the
court-granted termination. Therefore, the breach of contract action for the
recovery of unpaid legal fees also accrued on the termination date. This Court
granted leave to appeal.7
II. Standard of Review
The question whether a cause of action is barred by the applicable statute of
limitations is one of law,8 which this Court reviews de novo. This Court also
reviews de novo a trial court’s decision regarding a summary disposition motion.9
6
Id. at 500 n 10.
7
Seyburn, Kahn, Ginn, Bess, Seitch and Serlin, PC v Bakshi, 482 Mich
1077 (2008).
8
Moll v Abbott Laboratories, 444 Mich 1, 26; 506 NW2d 816 (1993).
9
Mayberry v Gen Orthopedics, PC, 474 Mich 1, 5; 704 NW2d 69 (2005).
7
III. Analysis
At issue in this case is the proper accrual date for a claim by an attorney
against his client for unpaid legal fees. In order to address this question, we must
first discern whether this case is governed by contract theory or whether there was
a mutual and open account between plaintiff and defendant.
A. Breach of Contract Claim
Under the rules governing claims alleging breach of contract, the statute of
limitations for bringing a cause of action is six years.10 A claim accrues, and the
limitations period begins to run, when the claim may be brought.11 For a breach of
contract action, the limitations period generally begins to run on the date that the
breach occurs.12
Under a mutual and open account theory, the date of accrual is calculated
differently than it is under a contract for services. The language of MCL
600.5831, which is the statutory provision governing a mutual and open account
current, provides: “In actions brought to recover the balance due upon a mutual
and open account current, the claim accrues at the time of the last item proved in
the account.”
10
MCL 600.5807(8).
11
MCL 600.5827.
12
AFSCME v Highland Park Bd of Ed, 457 Mich 74, 90; 577 NW2d 79
(1998); Harris v Allen Park, 193 Mich App 103, 106; 483 NW2d 434 (1992).
8
A “mutual account” is defined as “[a]n account showing mutual
transactions between parties, as by showing debits and credits on both sides of the
account.”13 The definition of an “open account” is: “1. An unpaid or unsettled
account. 2. An account that is left open for ongoing debit and credit entries and
that has a fluctuating balance until either party finds it convenient to settle and
close, at which time there is a single liability.”14
The definitions for a “mutual account” and an “open account” have been
used together to classify certain accounts as mutual and open accounts current.15
This Court has held that for an account to be considered a mutual and open
account current, it is necessary for the account to be “mutual as well as open.”16
This “means a course of dealing where each party furnishes credit to the other on
the reliance that upon settlement the accounts will be allowed, so that one will
reduce the balance due on the other.”17
Applying these principles to the facts of the present case, we conclude that
the parties do not have a mutual and open account current because there was no
longer a mutual relationship between the parties and also because plaintiff and
defendant had an express contract with one another. For a mutual and open
account current to exist, there must be a mutual relationship. We stated this exact
13
Black’s Law Dictionary (7th ed).
14
Id.
15
See MCL 600.5831.
16
In re Hiscock’s Estate, 79 Mich 536, 538; 44 NW 947 (1890).
17
Id.
9
principle in Fuerbringer v Herman:18 “It is essential to a mutual account that there
be reciprocity of dealing; the items must not be all on one side; there must be
mutuality.”19 In the present case, defendant made his last payment to plaintiff in
November 1992 and informed plaintiff that he would not make any further
payments. Where there is no longer a reciprocal relationship, as is the case here, it
would be contrary to hold that a mutual and open account current exists between
the parties.
Moreover, despite the lack of mutuality between the parties, there is
additional authority to support our holding that a mutual and open account does
not exist between the parties. This Court has previously recognized that the
existence of a contract rules out the existence of a mutual and open account
“where the dealings of the parties relate entirely to and are governed by a special
contract for the payment of money . . . .”20 Similarly, in A Krolik & Co v
Ossowski,21 this Court acknowledged a comparable proposition when defining an
open account:
“An open account is one which consists of a series of
transactions and is continuous or current, and not closed or stated.
However, all accounts which are not stated or reduced to writing are
not necessarily open accounts. Thus, cases of bailment, or express
contract defining the liabilities of the parties, whether evidenced by
18
Fuerbringer v Herman, 225 Mich 76; 195 NW 693 (1923).
19
Id. at 78.
20
Goodsole v Jeffery, 202 Mich 201, 203; 168 NW 461 (1918).
21
A Krolik & Co v Ossowski, 213 Mich 1; 180 NW 499 (1920).
10
writings or not, are not as a general rule open accounts . . . .” 1 C.J.
p. 601. [Emphasis added.][22]
In the present case, it is undisputed that plaintiff and defendant entered into
a signed contract containing specific terms. The contract stated that plaintiff
agreed to provide legal services to defendant and, in turn, defendant would make
payments of money to plaintiff. Specifically, the contract provided for plaintiff to
send a billing statement by the 20th of each month, using hourly billing at an
established rate, and also required defendant to pay within 10 days of the date of
the statement. In addition, the contract defined the liabilities of both parties.
Because it is clear that a contract existed between the parties, we do not conclude
that there is a mutual and open account in the present situation.
Furthermore, when the trial court inquired whether there was an open
account between plaintiff and defendant, plaintiff’s counsel answered that there
was not: “I’m going to answer the Court’s question no . . . . [T]here’s one count
in the complaint which is for breach of contract.” In addition, plaintiff’s
complaint contained one count, labeled “Breach of Contract.” The complaint
neither cited the mutual and open account statute, MCL 600.5831, nor used the
phrase “mutual and open account.”
Accordingly, because there was no longer a mutual relationship between
the parties and because plaintiff and defendant had an express contract with one
22
Id. at 7.
11
another, we hold that the parties’ obligations to one another are governed by the
explicit terms of their contract and not a mutual and open account current.
B. Statute of Limitations
Because we conclude that the parties’ obligations in the present case are
governed by contract rather than a mutual and open account current, we must now
consider the proper accrual date for purposes of the statute of limitations.23 As we
stated earlier, in a breach of contract action, the statutory period generally begins
to run on the date that the breach occurs.24 However, we conclude that a narrow
exception exists in the litigation context where the client breaches the agreement
during the course of the attorney’s representation.
A contract is breached when one party fails to perform its portion of the
contract.25 Thus, under general contract principles, an attorney’s cause of action to
recover attorney fees would accrue on the date the client breached the parties’
agreement by failing to pay in accordance with its terms. We conclude that, in the
context of litigation, the special features of the attorney-client relationship
necessitate an exception to the general rule where the client breaches the
agreement during the representation. Once litigation has commenced, an attorney
23
Although we conclude that the parties’ obligations are governed by
contract rather than a mutual and open account, we do not agree with the Court of
Appeals opinion suggesting that there is an attorney-litigation exception to the
mutual and open account statute.
24
See Highland Park Bd of Ed, supra at 90; Harris, supra at 106.
25
HJ Tucker & Assoc, Inc v Allied Chucker & Engineering Co, 234 Mich
App 550, 562; 595 NW2d 176 (1999).
12
cannot discontinue serving his or her client without an order of the court because
an attorney’s ability to terminate the representation may be limited by his or her
responsibilities to the client.26 Although the client may have ceased making
payments to the attorney, the attorney’s representation of the client continues until
the court has permitted the termination.27
In the present case, defendant had stopped making payments to plaintiff in
late 1992, but defendant never terminated the attorney-client relationship. It was
plaintiff that filed a motion in the Court of Appeals seeking to withdraw from the
case. Withdrawal was finally granted on September 30, 1993, and the attorney-
client relationship was then terminated.28 Because plaintiff’s obligations to
defendant continued until the Court of Appeals terminated the relationship, we
hold that plaintiff’s cause of action to recover attorney fees accrued on the date
that the attorney-client relationship was terminated: September 30, 1993.29
26
MRPC 1.16(b) and (c); also see White v Sadler, 350 Mich 511, 526; 87
NW2d 192 (1957), which stated:
[W]hen an attorney once enters an appearance for a client and
for any reason later finds he cannot or does not intend to continue to
represent that client, he owes a clear duty to his client and opposing
counsel and to the court to take timely affirmative steps in the
pending case to be relieved of his retainer and have his appearance
withdrawn. [Emphasis in the original.]
See also Mitchell v Dougherty, 249 Mich App 668, 683; 644 NW2d 391
(2002); Stroud v Ward, 169 Mich App 1, 6; 425 NW2d 490 (1988).
27
See Mitchell, supra at 683.
28
Maddox v Burlingame, 205 Mich App 446, 450; 517 NW2d 816 (1994);
Stroud, supra at 6.
29
Where an attorney and a client have an agreement that requires the client
to pay on a date after the termination of the attorney-client relationship, breach of
13
Finally, plaintiff contends that the accrual date can be extended beyond the
termination of the attorney-client relationship if the attorney performs follow-up or
ministerial services for the client, such as copying and returning the client’s file.
We hold that the tasks of reviewing, copying, and returning a client’s file do not
extend the date of accrual beyond the termination date of the attorney-client
relationship.
The Court of Appeals has opined on this issue. In a case for legal
malpractice, the Court of Appeals held: “In general, once an attorney has
discontinued serving the plaintiff-client, additional acts by the attorney will not
delay or postpone the accrual of a legal malpractice claim.”30 In another case, the
Court of Appeals reasoned that to extend the date of accrual for follow-up
activities to otherwise completed matters would give attorneys a powerful
advantage over former clients.31 Although this Court is not bound by the decisions
of the Court of Appeals, we find the Court of Appeals’ reasoning on this issue
persuasive for our holding on this question. Thus, we hold that plaintiff’s acts of
reviewing, copying, and returning the file to defendant do not extend the accrual
date in this matter past the termination date of the attorney-client relationship.
contract rules apply and the cause of action for unpaid legal fees accrues on the
date payment is due and the client fails to pay.
30
Kloian v Schwartz, 272 Mich App 232, 238 n 2; 725 NW2d 671 (2006).
31
See Bauer v Ferriby & Houston, PC, 235 Mich App 536, 539; 599
NW2d 493 (1999).
14
While the plaintiff’s acts of reviewing, copying, and returning the file to
defendant do not extend the accrual date of the claim regarding the earlier unpaid
legal fees, we hold that the minimal costs associated with the file-review services
are timely and must be paid. We reach this conclusion because the additional
services rendered after the termination equate to a separate contract apart from the
parties’ original contract. This separate contract is not governed by the terms
included in the original contract because the original contract was dissolved when
the Court of Appeals granted the motion to terminate the attorney-client
relationship. After the termination was granted, defendant requested a copy of his
file from plaintiff. Plaintiff acquiesced to the request and then billed defendant on
November 12, 1993, for the additional services performed in October 1993.
According to plaintiff’s invoice, payment for the October 1993 services was due
on November 23, 1993. Plaintiff filed its claim on October 8, 1999. Thus,
plaintiff’s claim to recover the fees associated with the file-review services is
timely and is not outside the statute of limitations.
Although the file-review services effectively constituted a separate contract,
there were no specific contractual terms governing the costs and fees to review the
file. Under MRPC 1.5(a), an attorney must charge a reasonable fee for services
rendered to a client. In the current case, plaintiff charged $442 to review and copy
the defendant’s file. The reasonableness of the costs assessed for the file-review
services were not contested. Therefore, we conclude that the fees charged for the
15
file-review services are a reasonable charge, and defendant must pay $442 to
plaintiff.
To summarize, because we hold that the proper date of accrual in this case
is September 30, 1993, the statute of limitations bars the plaintiff’s claim for
recovery of the earlier, unpaid legal fees. The plaintiff filed the present cause of
action in the trial court on October 8, 1999, which is more than six years from the
date that the claim accrued on the earlier fees. Moreover, plaintiff’s acts of
copying and returning defendant’s file do not extend the accrual date beyond the
date that the attorney-client relationship was terminated. However, we conclude
that the minimal costs associated with the file-review services is a separate
contract, and the claim to recover those fees is timely and is not barred by the
statute of limitations.
C. In re Dei’s Estate32
Plaintiff asserts that if this Court holds that there is not a mutual and open
account in the present case, then we will have to overrule In re Dei’s Estate. We
disagree. In Dei’s Estate, an attorney performed legal services for his client from
early 1925 to May 1933. The client made only two payments on the account in
1925. In 1935 the client died; however, the attorney was not made aware of the
death until 1938, at which time he filed suit to collect the unpaid legal fees. This
Court held that the attorney’s cause of action on the mutual and open account did
32
In re Dei’s Estate, 293 Mich 651; 292 NW 513 (1940).
16
not accrue until the date of the last item of services that the attorney had
performed for the client.33
The central issue in Dei’s Estate was whether the attorney’s claim was
barred by the statute of limitations, which required this Court to first determine
whether the account was a mutual and open account current. This Court
determined that, pursuant to 1929 CL 13977 (now codified as MCL 600.5831),
there was a mutual and open account. Therefore, the attorney’s claim for unpaid
legal fees accrued on the last date that services were rendered.
Contrary to plaintiff’s contentions, we conclude that both the facts and the
issues in Dei’s Estate are distinguishable from those in the present case. In Dei’s
Estate, there was no contract between the attorney and the client, and there
apparently was no agreement regarding the rate that the attorney would charge or
when payment was due. Rather, the attorney would simply make entries in his day
book after deciding on the value of his services. Furthermore, it was clear that the
end of the attorney’s services coincided with the termination of the attorney-client
relationship. There was never a lack of mutuality between attorney and client, and
the attorney-client relationship only terminated because the attorney’s services
ceased. Therefore, in Dei’s Estate, this Court did not focus on the nature of the
attorney-client relationship. Rather, it addressed the general issue whether the
statute of limitations barred an attorney from recovering unpaid legal fees on what
33
Id. at 656-658.
17
was clearly a mutual and open account. In contrast, it is apparent that the parties
in the present case had a written agreement detailing rates and time for payment,
and plaintiff brought this action to recover amounts it had charged defendant under
the terms of that contract. Thus, it is apparent that Dei’s Estate is distinguishable
from the present case, and our decision today does not overrule settled precedent.
IV. Conclusion
We hold that the parties’ obligations to one another are governed by the
explicit terms of their contract rather than by the laws governing mutual and open
accounts current because the parties did not have a mutual relationship and
because plaintiff and defendant had an express contract detailing the specific terms
of their agreement. Moreover, we also hold that plaintiff’s breach of contract
claim to recover the unpaid legal fees under the original contract accrued on
September 30, 1993, which is the date that the attorney-client relationship was
terminated. Furthermore, we do not extend the accrual date beyond the date of the
attorney-client termination for plaintiff’s acts of reviewing, copying, and returning
defendant’s file. Because plaintiff did not file this claim until October 8, 1999, we
hold that, pursuant to MCL 600.5807(8), the breach of contract action to recover
the unpaid legal fees under the original contract is barred by the six-year statute of
limitations. Finally, we hold that the costs and fees attributed to the file-review
services effectively constituted a separate contract, which presents a timely and
actionable claim.
18
We therefore affirm the Court of Appeals in part, reverse in part, and
remand to the trial court for entry of judgment in favor of plaintiff in the amount
of $442, with no interest to be assessed under the contract.
Elizabeth A. Weaver
Marilyn Kelly
Michael F. Cavanagh
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman
Diane M. Hathaway
19