Court Opinion

ID: 5928639
Source: CourtListenerOpinion
Date Created: 2022-01-13 04:58:09.603461+00
Date Added: 2024-06-11T08:46:41.597087
License: Public Domain

Carro, J. P.
(dissenting). In this action for damages for accountants’ negligence, the Supreme Court properly dismissed the complaint upon defendant’s demonstration of the lack of any conduct on its part linking it to plaintiff which would evince the accountants’ understanding of plaintiff’s reliance, and plaintiff’s failure to raise any issue of fact in *626that regard (Credit Alliance Corp. v Andersen & Co., 65 NY2d 536, 551).
While there may have been contact between the parties during defendant’s audit of Top Brass Enterprises, Inc.’s financial statements for the first quarter of fiscal year 1983-1984 in October and November 1983, in connection with plaintiffs consideration of a $20 million line of credit to Top Brass, that contemplated transaction was not consummated. Over the next nine months, Top Brass continued to utilize the line of credit from its prior lender, did not borrow any funds from the plaintiff, and had no communication with the plaintiff.
The only contact between the parties which is pertinent to the line of credit issued to Top Brass by plaintiff in October 1984, occurred on September 14, 1984, after defendant had completed its fieldwork in connection with its audit of Top Brass’ financial statements for the 1983-1984 fiscal year, when plaintiff’s regional manager telephoned defendant’s engagement partner. In this 10-minute conversation, unsolicited by defendant’s representative, plaintiff did not request defendant to perform any work in connection with its review. Defendant’s partner’s responses to plaintiff’s inquiries were limited to generalities that nothing untoward had been uncovered in the course of the audit and that an unqualified opinion would issue, certifying the tentative draft which plaintiff had received from Top Brass itself. This single, isolated and unsolicited contact was insufficient to raise any issue of fact as to a "bond between them so close as to be the functional equivalent of contractual privity” (Ossining Union Free School Dist. v Anderson LaRocca Anderson, 73 NY2d 417, 419).
As the Supreme Court trenchantly observed in granting defendant’s motion for summary judgment, "if a lender can secure possible loan recourse against a borrower’s auditor by the simple act of calling the auditor before advancing a loan and announcing reliance on the auditor’s opinion, then every lender’s due diligence list will in the future mandate such a telephone call. For the small price of a phone call, the bank would in effect acquire additional loan protection [by] placing the auditor in the role of an insurer or guarantor of loans extended to its clients.”
I agree with the majority that further discovery might shed additional light on whether defendant knew the purpose of the financial report and plaintiff’s intention to rely on it, but those are merely the first two prerequisites that plaintiff is *627required to establish in order to hold the defendant liable. The third is that "there must have been some conduct on the part of the accountants linking them to [the plaintiff], which evinces the accountants’ understanding of [the plaintiff’s] reliance.” (Credit Alliance Corp. v Andersen & Co., supra, 65 NY2d, at 551.)
Plaintiff submitted no evidence that defendant had any direct dealings with plaintiff with respect to the line of credit at issue here, except for the 10-minute telephone conversation that occurred after the fieldwork for the audit had been completed. Plaintiff submitted no evidence that defendant had specifically agreed with Top Brass to prepare the report for plaintiff’s use or according to plaintiff’s requirements, or had specifically agreed with Top Brass to provide plaintiff with a copy of the report or actually did so. In short, there is no evidence of any "word or action” on the part of the defendant directed to plaintiff, or anything in defendant’s retainer agreement with Top Brass, which provided the necessary link between them. (Credit Alliance Corp. v Andersen & Co., supra, 65 NY2d, at 553-554; Westpack Banking Corp. v Deschamps, 66 NY2d 16, 19.)
Here, plaintiff must already be aware of any word or action on the part of defendant directed to plaintiff, and already has defendant’s retainer agreement with Top Brass in hand. As further discovery would not assist plaintiff in satisfying the third element of the Credit Alliance test, I am of the view that the defendant’s motion for summary judgment was properly granted. "To speculate that something might be caught on a fishing expedition provides no basis to postpone decision on the summary judgment [motion] under the authority of CPLR 3212 (subd [f]).” (Auerbach v Bennett, 47 NY2d 619, 636; see also, Trails W. v Wolff, 32 NY2d 207, 221.)
Milonas and Ellerin, JJ., concur with Kupferman, J.; Carro, J. P., and Rubin, J., dissent in a separate opinion by Carro, J. P.
Order, Supreme Court, New York County, entered on or about September 5, 1990, and a judgment of said court entered thereon on September 17, 1990, are reversed, on the law, and the defendant’s motion for summary judgment dismissing the complaint denied with leave to renew upon the conclusion of all pretrial discovery, without costs.