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Monmouth Medical Center v. Sainvilus

A-3662-03T2 (N.J. Super. App. Div. 2005) (Unpublished)

STATUTE OF LIMITATIONS—Payments upon a book account serve merely to reduce the balance owing on the account, not to toll or restart the statute of limitations.

A hospital center billed its patient, but no payments were made within the six years after the initial billing other than two that had been made by the patient’s insurer. More than six years after the initial billing, the hospital sued its patient for a balance due. The patient successfully argued that the statute of limitations barred the action. The hospital, “relying on cases concerning ‘open’ accounts, argued that the statute of limitations, which accrued when services were performed, was tolled by the two insurance payments made on [its patient’s] behalf.” The lower court rejected the hospital’s argument on the basis that “a partial payment tolls the statute of limitations only on a revolving charge account, not on a fixed obligation.” The hospital appealed, but lost. According to the Appellate Division, a series of “modern” cases beginning in 1952 addressed the applicability of the statutes of limitation and the Uniform Commercial Code, and had made distinctions between a “‘mutual,’ ‘running,’ or ‘open current’ account and a book account.” It found that “payments upon a book account serve merely to reduce the balance owing on the account, not to toll or restart the statute of limitations” as the hospital suggested.


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