In any civil action in the district court, small claims court or magistrate court to recover on an open account, the prevailing party may be allowed a reasonable attorney fee set by the court, and taxed and collected as costs.

History: 1953 Comp., § 18-1-37, enacted by Laws 1965, ch. 125, § 1; 1967, ch. 164, § 1; 1975, ch. 147, § 1; 1978 Comp., § 36-2-39, recompiled as 1978 Comp. § 39-2-2.1.

Recompilations. — Former 36-2-39 NMSA 1978 was recompiled as this section pursuant to an order of the New Mexico compilation commission.

Section was designed to prevent the threat of litigation as a tactic either to avoid paying just debts or to enforce false claims. Cutter Flying Serv., Inc. v. Straughan Chevrolet, Inc., 1969-NMSC-132, 80 N.M. 646, 459 P.2d 350.

"Open account" defined. — As used in this section, "open account" does not mean an amount owed on a single transaction or an account stated. It is a written account concerning a related series of debit and credit entries of reciprocal charges and allowances kept upon until it shall suit the convenience of either party to settle and close the account. It gives rise to a single liability determined at the time of settlement. S. Union Exploration Co. v. Wynn Exploration Co., 1981-NMCA-006, 95 N.M. 594, 624 P.2d 536, cert. denied, 95 N.M. 593, 624 P.2d 535 (1981), and cert. denied, 455 U.S. 920, 102 S. Ct. 1276, 71 L. Ed. 2d 461 (1982); Martinez v. Albuquerque Collection Servs., Inc., 867 F. Supp. 1495 (D.N.M. 1994).

Breaking continuity of open account. — The continuity of an open account is broken if the relationship of the parties changes or if the account has remained dormant. Martinez v. Albuquerque Collection Servs., Inc., 867 F. Supp. 1495 (D.N.M. 1994).

"Account stated" and "open account" distinguished. — Where the evidence shows a single transaction and that one party made a partial payment while acknowledging, in writing, the remaining amount owed, this is a finding of an "account stated" and not an "open account," which requires evidence of a connected series of debit and credit entries or a continuation of a related series of transactions; therefore, attorney's fees are not recoverable under this section. Tabet Lumber Co. v. Chalamidas, 1971-NMCA-140, 83 N.M. 172, 489 P.2d 885, distinguished in Hunt Process Co. v. Anderson, 455 F.2d 700 (10th Cir. 1972).

No attorney's fees for defending counterclaim on "account stated". — While this section clearly authorized attorney's fees to an attorney if he prevailed in his action on an open account, this section did not authorize attorney's fees for defending against counterclaims that were resolved on the basis of "account stated". Hinkle, Cox, Eaton, Coffield & Hensley v. Cadle Co. of Ohio, Inc., 1993-NMSC-010, 115 N.M. 152, 848 P.2d 1079.

Retrospective application of section. — Because action was filed after the effective date of the statute, the statute applied to the parties only propspectively. Cutter Flying Serv., Inc., v. Straughan Chevrolet, Inc., 1969-NMSC-132, 80 N.M. 646, 459 P.2d 350.

Professional surveyor not entitled to attorney's fees. — A professional surveyor, hired to survey an entire ranch perimeter, to establish a new boundary on one side of the ranch and to survey an 80-acre parcel in one corner of the tract, entered into a single transaction composed of three parts and not an "open account," which would involve a connected series of debit and credit entries or a series of related transactions, and, therefore, was not entitled to attorney's fees upon recovery of the amount owed him. Lujan v. Merhege, 1974-NMSC-014, 86 N.M. 26, 519 P.2d 122.

Section is discretionary in nature, not mandatory, even assuming that the claim be one to recover on an open account. Audio-Visual Mktg. Corp. v. Omni Corp., 545 F.2d 715 (10th Cir. 1976).

Awarding of an attorney's fee is a matter for the court, and not one to be resolved by a jury. Audio-Visual Mktg. Corp. v. Omni Corp., 545 F.2d 715 (10th Cir. 1976); Leon, Ltd. v. Carver, 1986-NMSC-015, 104 N.M. 29, 715 P.2d 1080.

Reasonableness of fee amount not questioned to trial court. — Where the question of reasonableness of the amount of attorney fees was not brought to the attention of the trial court, it cannot be raised on appeal. N.M. Feeding Co. v. Keck, 1981-NMSC-034, 95 N.M. 615, 624 P.2d 1012.

Section allows fees on appeal. — This section allows reasonable attorney fees to the prevailing party on appeal as well as at trial. Superior Concrete Pumping, Inc. v. David Montoya Constr., Inc., 1989-NMSC-023, 108 N.M. 401, 773 P.2d 346, overruling Otis Engg'r Corp. v. Grace, 1974-NMSC-076, 86 N.M. 727, 527 P.2d 322, and Sw. Portland Cement v. Beavers, 1970-NMSC-164, 82 N.M. 218, 478 P.2d 546.

Am. Jur. 2d, A.L.R. and C.J.S. references. — Fee collection practices as ground for disciplinary action, 91 A.L.R.3d 583.

Limitation to quantum meruit recovery, where attorney employed under contingent fee contract is discharged without cause, 92 A.L.R.3d 690.

Priority between attorney's lien for fees against a judgment and lien of creditor against same judgment, 34 A.L.R.4th 665.

Attorney's retaining lien as affected by action to collect legal fees, 45 A.L.R.4th 198.

Right of prevailing defendant to recover attorney's fees under § 706 (k) of Civil Rights Act of 1964 (42 USCS § 2000e-5 (k)), 134 A.L.R. Fed. 1161.