624, 627 (7%? Cir. 1990). Tricontinental does not meet this burden.
Nothing in the pleadings before me alleges with this degree of
particularity representations made by PwC after Tricontinental’s
stock purchase. Tricontinental does allege omissions on the part
of PwC. However, as discussed in my previous memorandum opinion of
July 18, 2002, PwC had no duty to reveal misleading statements on
the part of its clients. Chestnut Corp. v. Pestine, Brinati,
Gamer, Ltd., 281 Ill. App. 3d 719 (Ill. App. Ct. 1996). Alleged
omissions on the part of PwC of alleged misrepresentations on the
part of Anicom’s officers and directors cannot sustain a claim of
fraudulent concealment.

Further, Rule 9{b) also requires that the plaintiff plead with
specificity sufficient facts to “provide a basis for believing that
(they] could prove scienter at trial.” Kreindler v. Chemical Waste
Mgmt., Inc., 877 F. Supp. 1140, 1152 (N.D. I11. 1995) (Castillo,
J.). Conclusory statements as to PwC’s knowledge are not
sufficient. See, e.g., Dileo, 901 F.2d at 629. Nothing in the
amended complaint provides anything beyond conclusory statements
about PwC’s knowledge. For these reasons, I grant PwC’s motion to
dismiss Count V of the amended complaint.

III.

Scott C. Anixter, Alan B. Anixter, Carl E. Putnam, and Donald

Welchko (collectively, “individual defendants”) have also moved to

dismiss Count V of the amended complaint, as well as certain other


Leasing v. Prime Capital Corp., 192 F. Supp.2d 852, 871-872 (N.D.
Ill. 2002) (Bucklo, J.) (citing the Illinois Public Accounting Act,
225 ILCS §450/30.1). Auditors, such as PwC, also owe a duty to
third parties with whom they are not in privity of contract when
they are aware that a previously prepared audit has been furnished
to the third party and if the auditor at that time verifies the
accuracy of the audit to the third party. Id. at 873. Nothing in
the amended complaint alleges a false statement of material fact
from PwC to Tricontinental, nor is there any allegation that PwC
owed a duty to Tricontinental. Tricontinental does not allege that
it was in privity of contract with PwC. While PwC may have been
aware that the 1997 audit prepared by PwC had been given to
Tricontinental, nowhere in the amended complaint does
Tricontinental allege that PwC then verified the accuracy of the
audit. Tricontinental has not alleged sufficient facts to support
a claim of negligent misrepresentation, and I grant PwC’s motion to
dismiss Count IV.
Il.

PwC also moves to dismiss Count V, common law. As
Tricontinental’s claim of fraudulent concealment is a form of
fraud, the claim must be pleaded with a heightened level of
specificity. Fed. Rule Civ.P. 9(b). To satisfy this requirement,
Tricontinental must plead the “who, what, when, where, and how”

involved in the alleged fraud. DiLeo v. Ernst & Young, 901 F.2d


aspects of the complaint. Specifically, they move to dismiss the
use of certain oral statements and press releases alleged in
support of Tricontinental’s claims. While Tricontinental alleges
statements that technically conform to the particularity
requirement of Rule 9(b), these statements are not sufficient to
support their claims of fraud. First, only statements attributed
to an individual or collectively to the identified four individual
defendants are sufficiently particular; statements attributed to
Anicom or to defendants generally are not. See, e.g., Sears v.
Likens, 912 F.3d 889, 893 (7*® Cir. 1990) (“A complaint that
attributes misrepresentations to all defendants, lumped together
for pleading purposes, generally is insufficient.). Second, even
those statements attributed to individual defendants by
Tricontinental are insufficient to support the claim of fraud. A
number of these statements have already been dismissed by this
Court, and will not be reconsidered here. See Tricontinental
Indus. Ltd. v. Anixter, 215 F. Supp. 2d 942 (N.D. Til

2002) (declaring statements not actionable that correspond to 431,
33 and 42 of the amended complaint).

Tricontinental alleges additional oral statements and press
releases attributed to the individual defendants to support its
claims. See Amended Complaint, 927, 50, 65, 70, 71. However, as
discussed in my previous memorandum opinion of July 18, 2002,

statements which consist of predictions and forecasts, as these


Minute Order Ferm (06197)

United States District Court, Northern District of Illinois

Name of Assigned Jud} ine E 5 Sitting Judge if Oth
or Magistrate Judge Elaine E, Bucklo than Assigned Judge
CASE NUMBER 01 C 5526 DATE 1/29/2004
CASE Tricontinental Industries, et al. vs. Anixter, et al.
TITLE

[in the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
‘of the motion being presented]

MOTION:
DOCKET ENTRY:
qd) im Filed motion of [ use listing in “Motion” box above.]
(2) Qa Brief in support of motion due
@) im) Answer brief to motion due___. Reply to answer brief due
(4) Oo Ruling/Hearingon___set for____at
(5) a Status hearing[held/continued to] [set for/re-set for]on___—s set for at
(6) im) Pretrial conference[held/continued to] [set for/re-set for]on__—ssetfor at
a” a Trialfset for/re-set for]on___at
(8) oO [Bench/Jury trial] [Hearing] held/continued toa
(9) ia] This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OFRCP4(m) OLocal Rule 41.1 OOFRCP41(a)(1) UO FRCP41(a)(2).
ao [Other docket entry]  Pricewaterhouse’s motion to dismiss Counts IV and V of the amended

complaint (111-1) and individual defendants’ motion to dismiss common law fraud claim and certain
statements (112-1) are granted and it is so ordered. Enter Memorandum Opinion and Order. Document
numbers 121-1, 126-1, and 131-2 are terminated as moot.

di) @ [For further detail see order attached to the original minute order.]

No notices required, advised in open court, Document

Number

No notices required,

V | Notices mailed by judge’s staff

Notificd counsel by telephone.

Docketing to mail notices.

Mail AO 450 form. .
99 rapa’ gg

Copy to judge/magistrate judge.

courtroom Bot ney
MPI deputy’s -
initials

contral Clerk's Office



statements do, are not actionable. See, e.g., Searls v. Glasser,
64 F.3d 1061, 1066 (7 Cir. 1995) (stating that such statements are
“petter described as puffery rather than as material statements of
fact”). These oral statements and press releases are not
actionable. As Tricontinental alleges no further support for its
claim of fraudulent concealment, I also grant the individual

defendants’ motion to dismiss Count V.

ENTER ORDER:

FF
Lone 2 Guhl
Elaine E. Bucklo
United States District Judge

Dated: January 24 , 2004


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

TRICONTINENTAL INDUSTRIES LTD.,
a British Columbia corporation,
and TRICONTINENTAL DISTRIBUTION
LIMITED, formerly known as
TEXCAN CABLES LIMITED, a
Canadian corporation,

Plaintiff,
Vv.

)
)
)
)
)
)
)
)
) No. O1 C 5526
)
)
ALAN B. ANIXTER, SCOTT C. )
ANIXTER, CARL E. PUTNAM, DONALD
WELCHKO, individuals, and }
PRICEWATERHOUSECOOPERS, LLP,
)

DOCKETED

Defendants. JAN 30 2004

MEMORANDUM OPINION AND ORDER

Tricontinental Industries Ltd. and Tricontinental Distribution
Ltd., formerly known as Texcan Cables, Ltd. (collectively,
“Tricontinental”), sold assets to Anicom, Ltd. (“Anicom”), in
exchange for Anicom stock. Tricontinental sues individual officers
and directors of Anicom as well as PricewaterhouseCoopers, LLP
(“PwC”), an accounting firm that provided auditing and consulting
services to Anicom in the time surrounding the transaction, for
violations of the Securities Acts of 1933 and 1934 and for
violations of several Illinois laws. I have previously dismissed
the claims arising against PwC, fricontinental Indus., Ltd. v.
Anixter, 184 F. Supp. 2d 786 (N.D. Ill. 2002), as well as the

claims against the individual officers and directors arising under

A


the Securities Act of 1933. Id. I have further granted the
individual defendants’ motion to dismiss with regard to certain
oral statements and press releases. Tfricontinental Indus., Ltd. v.
Anixter, 215 F. Supp.2d 942 (N.D. Ill. 2002). Tricontinental has
since filed an amended complaint, adding two new claims: (1) Count
IV, negligent misrepresentation on the part of PwC; and (2) Count
V, common law fraud, specifically fraudulent concealment, against
both PwC and the individual defendants. PwC moves to dismiss both
claims against it; the individual defendants move to dismiss the
common law fraud claim against them, as well as to dismiss certain
statements alleged by Tricontinental in support of its other
claims. I grant the motions.
I.

PwC moves to dismiss Count IV, negligent misrepresentation.
On a motion to dismiss, I take all well-pleaded factual allegations
in the complaint as true and draw all reasonable inferences in
favor of the plaintiff. First Ins. Funding Corp. v. Federal Ins.
Co., 284 F.3d 799, 804 (7% Cir. 2002). To sustain a claim of
negligent misrepresentation, Tricontinental must allege a false
statement of material fact on the part of PwC. Bd. of Educ. v. A,
C and S, 131 Ill. 2d 428, 452 (1989). Tricontinental must also
allege that PwC had a duty to Tricontinental to communicate
accurate material. Id. Generally, under Illinois law, an auditor

is only liable to those in privity of contract with him. Wafra