to reserve three minutes for about oakley's very good that's fine you may proceed thank you your honor and may please this court my name is thomas allen and i represent oakland or stone staffing solutions incorporate was don't you have to prove a deviation from the standard of care your honor we know we do not and we must remember that this is all the application of the statute is viewed through the corey  jersey supreme court's functional test what is the crux of the alegate what is the crux of the claim here this is a case about creating two separate sets of books you know you also got one you say that mister allen but your allegations include the following that they overstated revenue and understated expenses and form the basis for if lot i p a calculation had the expenses been properly accounted for in monthly income statements gives rise to serious questions about their accounting principles and later paragraph thirty two rather than correct these gross accounting errors how are you going to show that they made errors from an accounting standpoint that the overstated revenue understated expenses without saying what they should have done to prove how these were gross accounting errors i don't see how you can get there well you but these are factual of are these are vermins as to a set of facts not as to legal principles absolutely your honor i don't believe we have to we will necessarily have to prove all of those factual allegations in order to prevail on our claims and that gets back to our complaint renie because this is really about two sets of books that the defendant financials that's what they gave us we relied on that universe of information we needed to make our business decision there was another set of books showing a vastly different picture about the health of this entity and our  side comparison between that necessarily going to be you say two sets of books and they say the difference between six hundred and seventeen thousand positive and a minus three hundred and four thousand was certain in company expenses which under gender gap you don't have to show certain things they're using their overstating revenue when understating expenses i thought these things that are going to be guided into turman by principles of accounting not just oh you know we had you know another set of books like like people do you know i had a situation jewelers row or they had literally had two sets of books for tax purposes i can't believe that these sophisticated people that all it mystery we asked that's what that's what i was going to ask you about i was going to ask you about materiality because of how can you prove whether something's with cereal or not without the help of the expert testimony i guess i'm not an accountant but in reading the briefs i i couldn't tell you exactly what was material and what wasn't well your honor i'm not an accountant but i don't think you need an account sorry i don't think we need an accountant testimony to explain that in the materiality isn't measured by compliance with or asked and that's where this case is really different from this to this court's opinion the new  here this is a determination we would we would submit evidence the importance of the discrepancy between the two properties or the figures who are directly on our business making a decision that's in sealed information for us that hamper our ability to make this determination about whether to buy this unit or not if we had known that there was a nd set of books showing fast differen standard is that is it that you should not make broad isn't that you should not keep a separate set of books that we ledge are false it's not the inquiry is not how they be in policy even though we do offer an explanation of that in the calculate it we submit no it's not the calculation of it it's not how they did it it's that they and c o o x from us well it has to be how they did it because that's what they're going to contend that they did it for this purpose and that's allowed to do it for this purpose and then perhaps it was after wired information which then they can add into the later calculations i mean this is it's not going to just i mean you say it's two sets of books but as you fast forward and imagine what the trial is going to be like they're going to have a contention as to as to why there were different figures and those those reasons why you know unless you know they get up and say ok we had two sets of books but those reasons for why presumably are based upon certain principles that they were applying and obviously if if this is based on that then you're going to succeed but i can't imagine they're not going to put up a defense based on that they would put up its offense there is nothing i would assume there is nothing  that mean they are or it doesn't mean therefore that in order to prove your case if the standard of care is is essential to the proof of the case i don't believe so your honor simply nature of the trial be very straightforward this isn't simply a case of trying to get into the mechanics of how they did it it is the fact that there were two sets of documents one showing the company was in the red one showing that the company was in black showed us one may conceal the other in it if we had had both during that period we would have made a different decision then i you look at the fraud you lost the fraud case in texas correct yes ma'am and that was affirmed on appeal the judgment was affirmed on you yes where there are allegations there that the same allegations here well there weren't allegations against the accountants the accountants were not parties or defendants different case the applied here we submit that nuveen supports reversal not affirm the crux of the claims and again the only reason they need accountants did what they did created the documents the way they did was because they violated if you look at the complaint it is quote gap to ask what if they had followed those standards they would have known better here our case is nothing like nothing there is no suggestion the defendants would have honour's it should be helpful here to go back to the case law that explains the reason for the affidavit of merit statute in new jersey which is obviously been the subject of a lot of little litigation over a number of years now and this a o m statute was passed according to the case law in order to allow some sort of independent verification to take place at afternoon the beginning of a case alleging malpractise or wrongful conduct by a professional in their professional capacity and the idea of taking a close look to make sure that the case is meritorious really comes home in this particular case and while this isn't the issue before your honor's it bears noting  came out in the in the colloquy with my my adversary bears noting that this is an effort by the plaintiff to get a nd bite at the apple after losing in texas on exactly or almost exactly the same kinds of fraud claims that they're now trying to bring against the accountant who by the way let me say that's not before us that that's something that presumably you would go back and they could litigate collateral estoppel before the district yes that's true your honor and that only comes up in connection with the alleged the alleged to stop a latches argument that wasn't part of the adversary argument that i actually a motion was made by my co counsel which was the only counsel in the case at the time in which in which they tried to raise that it was denied without prejudice but we are here on the out on the a o m statute so aside from the portions of the complaint in this case that you cited judge rundle i want to just direct your honour's attentions to various paragraphs along the way starting  irregularities giving rate rise to serious questions about the ship of the seller of this business is accounting practice which was allegedly overseen by my clients in this case  not your grief didn't really go into this didn't didn't highlight parts of the complaint as i recall i believe that our brief may not have done it your honor but what judge we contained in our opinion hadn't the other thing i'm curious about and maybe it's just a strategic point on your part but six hundred and seventeen thousand positive versus negative three of four negative to eighty six i would have assumed that you would have made some offer and maybe it's premature as to or some argument that these things are different because at least in part based upon standards and based upon how accounts are supposed to treat different information i mean maybe that's not the place for this and that's not a for us but it would seem to me a matter of common sense well i would agree that it's a matter of common sense your honor and it didn't seem to us that that that was part of the record that should cheer pertain on this particular motion but you haven't given the a inclusion that i would ask your honest to draw from these pleadings and even from the oral argument that's been conducted with my adversary this morning it seems pretty it seems to me that one cannot reasonably dispute that in order to prove its case they have to show proof of a deviation from standards of  standards of behavior gover the accounting profession and whether or not unlike in the movie into they laid out in this complaint what those standards are it's really not our job as defendants at this point at this stage of the case to lay that out it's up to the plaintiffs to indicated what standards apply but there are obviously standards and gas there are there is a code of conduct to be able to prove its case in that in that situation and you're in a position to tell us what fraud allegations here result from the defendant's failure to comply with standards that's contained in these regulations is that the accountants be candid open clear that they not mislead at all that they at they not withhold information that would bear upon the information they're providing and all of those all of those standards are found in and gas and they're found in the  accountant to understand when you know that was true or not right that may be true your honor but that would not prove the case ready part of the problem here is there's an oversimplification on the part of the plaintiff of what he would have to prove and obviously a claim that shapiro misrepresented is not is not admitted but in order to he would have to prove not just a duty to tell the truth which i'm sure would be which one would find in the standard but again the materiality of the supposedly liar misstatement would be essential to proving the case against the accountant just alleging that somebody lied about something doesn't give you a judgment you've got to show a lot of other things that in a case of a complex accounting situation you've got to show it was material and b how it damaged the party who claims that they reacted to the so called misstatement that's all part of the whole picture in this case and it couldn't be clearer we say that all of the claims here and of and implicate the defendants of performance of their duties as accountants and whether or not they conform to standard did not act in accordance with applicable professional standards but they dropped that count so that right but that's how i understand they dropped it your honor my point is they recognized leaving it to begin with that there are standards that govern the conduct but they're alleging misconduct they're alleging took place here why why wouldn't and why would an expert be required could kno lay person to clued that a reasonable purchaser would want to know that the balance sheet states that the current liability of three that a reasonable buyer would want to know that the company was operating at a loss for any the issue your honor him if you question the abstract would lead me to have to say yes but we can't deal with that in the abstract i would respectfully submit we have to know what the context was in which these numbers were being created and presented to the buyer and there's a there  explanations and there would be explanations and therefore it's not simple simply to say this one says this and this one says that you've got to look at the context in which they were dealing hipping in mind that my clients were accountants or the seller and they were dealing with the buyer so they were producing information short by the bar and they explained the  information when asked to the buyer and without getting into what the actual purpose was and what the documents were intended to show you can't really answer that question in order to give the point of any short the lay before this motion was filed so unless your honour's have any more questions of me that's all i would have i just have one i want to make sure i understand the crux of your scrapings your position is that not just the beginning of the case then what happens is your client has a right to explain why and what might appear to be amiss actually isn't to misty cause this is the way accountants do things when they create documents for different purposes for different people is that your position yes but that and once you get into that realm all kinds of expert testimony is required to figure out what the accountants intent duty etc are and all that goes to materiality as well that's correct your honor and it's one of the reasons why obviously looking at the claims in this case the idea that a jury could on its own come up with come up with a reasonable resolution without expert question that he's sort of conceded at least in the abstract to use his word that there are different books or two sets of books or what have you but why isn't that just a starting point in this case isn't it clear that that they're entitled to explain themselves as to why what might appear at st blush to be amiss is actually standard operating procedure in the accountant accountancy profession yes your honor be happy to and i believe he actually made a number of concessions during his argument that is want let's remember what the purpose of the affidavit of marriage statute is it is a preliminary threshold gatekeeping function to weed out  s malpractise claims but for a lawsuit gets very far down the road it is not intended to narrow or dictate the way a case will be developed or tried here all we have to show we make t the point i was trying to make is that the the other day without merit statute is intended to as i said created you keep in function i don't believe there's  you going to have to prove a deviation from a standard of care and as we see it play out i think the point is you probable you are going to have to prove that whether this random air is want to openness with  standard of care is you know the way you count for any company expenses you're going to you're going to have to prove that in order to succeed are you not your honor as it plays out you're not just going to go say ok two sets of books jury decide in our favor that's not what's going to happen here is it well that's the that's the case that we think we would from we would present and would be persuasive and it also bears repeating as trench argument pointed out this isn't just about two books this is also no gap or gas standard that applies to that statement to the degree it might implicate ethical rules corey stoker and other cases but those two in particular make clear that's not enough  standards but that wasn't essential to prove so here we don't have to prove that they violated their codes of conduct in order to prevail at trial and finally i do think materiality a reasonable buyer absolutely can present evidence that i'm a c e o i've done x number of deals and we always look at these these values if i had known there were there were two values out there on the severance and books that were for me the entire time i would have different business decision you don't have to be an accountant to make judgments so for those i see my time is up just the court has no other questions for me i'd be happy to answer any others already hearing don thank you very much mister allen thank you mister or law is your only excellent argument we will take the matter under advisement