Opinion ID: 324093
Heading Depth: 1
Heading Rank: 3

Heading: main, lafrentz and 3 i co.

Text: 10 The complaint alleges that Main, Lafrentz failed to follow generally accepted accounting principles when it audited the books of 3 I Co. Specifically it alleged that Main, Lafrentz reviewed three specific agreements between 3 I Co. and other individuals or corporations and that it failed accurately to reflect the effect of those agreements on 3 I Co.'s financial statements with the result that 3 I Co.'s assets were substantially inflated. For example, the complaint claims that the value of the stock used to purchase a data bank license was inflated so as to increase the assets of 3 I Co. and that Main, Lafrentz failed to disclose this fact. Since 3 I Co. initially established the values assigned to the assets in question, it is alleged to be a party to the misrepresentation of its assets. 11 While the allegations here are not as specific as might be desired, they do specify the agreements and amounts involved in the alleged misrepresentation. They cannot be characterized as merely conclusory since they clearly are much more than a bald assertion that Main, Lafrentz engaged in fraudulent acts. It may well be that plaintiffs have no claim against Main, Lafrentz but the proper manner in which to determine whether a claim exists is to require an answer, and, if necessary, a trial of those issues. This result is especially appropriate since in applying rule 9(b) we must not lose sight of the fact that it must be reconciled with rule 8 which requires a short and concise statement of claims. See 5 C. Wright & A. Miller, Federal Practice & Procedure 1298, at 406-410 (1969). 12 We realize that one purpose of rule 9(b) is to protect reputations of accountants and other professionals from scurrilous and baseless allegations of fraud. Segal v. Gordon, supra, 467 F.2d at 607. However, rule 9(b) does not insulate professionals from claims of fraud where a complaint alleges the fraudulent acts with particularity, and this complaint does so. In any event, defendants may, in appropriate situations, be spared the expense and delay of a trial by moving for summary judgment. 13 As we find that the complaint with respect to Main, Lafrentz and 3 I Co. does sufficiently particularize the circumstances of the alleged fraud, the order of the district court dismissing the complaint as to Main, Lafrentz and 3 I Co. is reversed.