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Bowen Court Associates v. Ernst & Young3/27/2003
the loan proceeds. Eventually, after they defaulted on repaying that portion of the loan that they received, plaintiffs also lost the project's real estate at a foreclosure sale held on June 15, 1992.
Thereafter, DEPCO, as assignee and successor-in-interest of the credit union, sued plaintiffs for the unpaid loan balance, plus interest. Ultimately, DEPCO prevailed. See Bowen Court I, 763 A.2d at 1010. After unsuccessfully defending against DEPCO's lawsuit, Bowen Court and its guarantors then filed this lawsuit against the accountants, accusing them of negligently performing accounting services for the credit union and negligently misrepresenting its true financial situation. According to plaintiffs, the accountants' negligence caused them to default on their loan-repayment obligations. But it is undisputed that plaintiffs failed to file their claims against the accountants within § 9-1-14.1's time limits for filing professional-malpractice actions.
Moreover, in 1997, DEPCO settled its own claims against the accountants for their alleged professional negligence vis-à-vis their accounting work for the credit union and others.
As a result of that settlement, the accountants asserted that § 42-116-40 provided them with statutory immunity and barred plaintiffs' attempt to obtain equitable indemnification from them for their alleged negligence in connection with their accounting work for the credit union.
In due course, the accountants moved to dismiss plaintiffs' complaint under Rule 12(b)(6) of the Superior Court Rules of Civil Procedure, arguing, inter alia, that § 9-1-14.1, the accounting-malpractice statute of limitations, barred plaintiffs claims; that plaintiffs had alleged no facts giving rise to the breach of any duty owed to them by the accountants; and that § 42-116-40 precluded plaintiffs' indemnity claims. The plaintiffs responded by contending that their negligence claims were not subject to § 9-1-14.1 because they lacked any contractual relationship with the accountants and that § 42-116-40 did not immunize the accountants from their indemnity claims. After a hearing, the Superior Court granted the accountants' motion to dismiss plaintiffs' complaint pursuant to Rule 12(b)(6) and, alternatively, granted the motion under Rule 56 of the Superior Court Rules of Civil Procedure. Nevertheless, the court only entered an order dismissing the complaint under Rule 12(b)(6). The plaintiffs have appealed from the judgment dismissing their claims.
I. Dismissal vs. Summary Judgment
The accountants appended certain documents to their memorandum supporting their dismissal motion that plaintiffs did not attach to their complaint. They argued that the motion justice properly could consider these documents in deciding their Rule 12(b)(6) motion because plaintiffs had incorporated them by reference when they mentioned the previous Bowen Court I litigation in their complaint.
It is certainly true that documents attached to a complaint will be deemed incorporated therein by reference. See Super. R. Civ. P. 10(c) ("A copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes."). Thus, a motion justice may properly consider and refer to such documents in deciding a Rule 12(b)(6) motion. The documents that the accountants relied on, however, including their 1997 DEPCO settlement agreement, were not attached to plaintiffs' complaint or to any other pleading. Rather, the accountants appended them to the legal memorandum they filed in support of their motion to dismiss the complaint. Thus, the documentation relied on by the accountants in their dismissal motion and submitted to the court for its considera
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