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Walpert11/21/2000
of the Magnetics, Inc.'s cash flow analysis and a projected profit and loss statement for the coming year. He also indicated that he was given a copy of the audit for Magnetics by the petitioner, whom he advised that he would consider lending money to Magnetics, dependent on Magnetics' financial condition, as reflected in the information with which he was provided by the petitioner, including financial reports the petitioner prepared for Magnetics.
The Court of Special Appeals concluded:
"Assuming the truth of these facts, WS&B;was aware that the financial report was going to be used for a particular purpose, i.e., to help Mr. Katz decide whether to make the $425, 000 loan to Magnetics. Moreover, WS&B;knew that it was Mr. Katz who was going to rely on the financial report, because he informed Mr. Tracey of this fact at a face-to-face meeting. These points address Credit Alliance factors one and two.
"Finally, if Mr. Katz's affidavit is credited, there was sufficient conduct on the part of WS&B; through Mr. Tracey, to meet the `linking conduct,' which is factor three of the Credit Alliance test. Mr. Tracey met with Mr. Katz to discuss Magnetics' financial condition in order for Mr. Katz to determine whether to `lend money to Magnetics.' Moreover, Mr. Tracey gave a copy of the 1989 audit directly to Mr. Katz. These actions on the part of Mr. Tracey could be construed by a jury as demonstrating Mr. Tracey's knowledge that Mr. Katz intended to rely on WS&B;s financial representations in the 1989 audit. Based on the facts set forth in Mr. Katz's affidavit, a dispute of material fact was presented as to the $425,000 loan."
We agree with that analysis and, so, we affirm.
JUDGMENT AFFIRMED, WITH COSTS.
Concurring Opinion follows:
Concurring Opinion by Wilner, J.:
I concur in the result reach by the Court. I would reach that result, however, by using the approach set forth in ยง 552 of the Restatement (Second) of Torts, rather than by tying ourselves to one 1985 case from New York.
As Chief Judge Bell points out, the Restatement approach has been adopted in 28 States and clearly represents the majority sentiment throughout the country. Accounting firms, increasingly, are national, or at least regional, in their operations, and it seems to me wiser to choose consistency with that majority view. We gain little by tying ourselves to the separate view of one State. The fact patterns that arise in this area obviously vary, and all concerned - the accounting profession, those who insure accountants against malpractice claims, those who deal with accountants, and the legal community that either advises accountants or becomes involved in malpractice claims - would be better served by having that larger body of case law, that is followed in most of the rest of the country, as guidance. The Restatement view, moreover, is a reasonable one. It limits the accountant's liability for professional negligence to the accountant's client and to those third parties to whom the accountant either intends to supply the information or actually knows the client intends to supply it. That limited extension of liability is entirely appropriate.
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