Filed November 5, 2007
But mere awareness of a potential transaction, or even knowledge of actual reliance, does not establish a relationship approaching privity when the work was performed for a different purpose and would have been performed regardless of that potential reliance. Houbigant, 303 A.D.2d at 94, 753 N.Y.S.2d at 495 (requisite linking conduct is not established by licensor’s contractual entitlement to receive the audited financial statements, by the auditor’s consent in forwarding the financial statements, or by auditor’s awareness that licensor would rely on information contained in financial statements). Moreover, Grant Thornton expressly warned TH Lee that its audits were not planned or conducted in contemplation of the proposed transaction and that TH Lee was not their intended beneficiary.
Filed September 22, 2008
¶ 162), amply support a strong inference of GT’s actual knowledge of the underlying fraud and breaches of fiduciary duty. See Thomas H. Lee, 2008 WL 3166536, at *11; Houbigant, Inc. v. Deloitte & Touche LLP, 303 A.D.2d 92, 97 (N.Y. App. Div. 2003) (“[A]t the pleading stage of a fraud claim against an accountant, the plaintiff need not be able to make an evidentiary showing of exactly what the accountant knew as to the falsehoods in the certified financial statements.”).
Filed February 4, 2008
The court in Houbigant simply noted in the context of the third “linking” factor of Credit Alliance that a non-client plaintiff must demonstrate some conduct by the accountant directed to the plaintiff. 303 A.D.2d at 94, 753 N.Y.S.2d at 494. The court did not hold that an accountant has a duty to every known recipient of its audit work.
Filed December 5, 2012
If not, the claim fails. See Murphy, 660 N.Y.S.2d at 374 (1997) (dismissing claim at summary judgment where the record presented “only the standard consumer-agent insurance placement relationship, albeit over an extended period of time,” and thus did not satisfy the “high level required to recognize the special relationship threshold that might superimpose on defendants the initiatory advisement duty, beyond the ordinary placement of requested insurance responsibilities”); see also Houbigant, Inc. v. Deloitte & Touche LLP, 753 N.Y.S.2d 493, 495 (1st Dep’t 2003) (no 6 To the extent plaintiffs allege that their own self-proclaimed expertise was insufficient in light of alleged “special expertise” of Morgan Stanley, such a showing would be insufficient as a matter of law. See Mandarin Trading Ltd. v. Wildenstein, 919 N.Y.S.2d 465, 471 (2011) (defendant’s “expertise alone cannot create a special relationship where otherwise the relationship between the parties is too attenuated”); Ravenna v. Christie’s Inc., 734 N.Y.S.2d 21 (1st Dep’t 2001) (dismissing negligent misrepresentation claim because the parties did not have a special relationship of trust and confidence, despite allegations that seller had superior expertise concerning the painting at issue and conveyed its information directly to plaintiff).
Filed September 17, 2012
Indeed, as courts have recognized, because “a plaintiff realistically cannot be expected to plead a defendant’s actual state of mind,” plaintiffs in fraud actions need only allege “a minimal factual basis for their conclusory allegations of scienter.” Conn. Nat’l Bank v. Fluor Corp., 808 F.2d 957, 962 (2d Cir. 1987); see also Houbigant, Inc. v. Deloitte & Touche LLP, 303 A.D.2d 92, 98 (1st Dep’t 2003) (“The element of scienter, that is, the requirement that the defendant knew of the falsity of the representation being made to the plaintiff, is, of course, the element most likely to be within the sole knowledge of the defendant and least amenable to direct proof.”)13 Thus, a plaintiff need only allege “facts to show that defendants had both motive and opportunity to commit fraud, or … by alleging facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness.”
Filed July 2, 2012
Under New York law, a "plaintiff need not show that defendant had a ' specific intent' to induce acts by the plaintiff." Sheehy v. New CenturyMortg. Corp., 690 F. Supp. 2d 51, 68 n.14 (E.D.N.Y. 2010); see Houbigant, Inc. v. Deloitte & Touche, LLP, 753 N.Y.S.2d 493, 499 (2003). "Issues of motive and intent are usually inappropriate for disposition on summary judgment."
Filed November 4, 2010
the defendants’ “familiarity with the [f]unds, as well as their general experience in providing financial services to funds” in concluding that “[p]laintiffs allege a strong inference that the [defendants] consciously avoided confirming facts that, if known, would demonstrate” both a breach of fiduciary duty and fraud) (internal quotation marks omitted); Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, No. 05 Civ. 9016(SAS), 2007 WL 528703, at *7 (S.D.N.Y., Feb. 20, 2007) (holding “actual knowledge” requirement satisfied where there was “circumstantial evidence” giving rise to an “inference of knowledge,” such as the series of “red flags” that the administrator allegedly ignored); Cromer Fin., 2003 WL 21436164, at *1, 9 (finding a material dispute of fact when plaintiffs argued that the defendant auditing firm “ignored evidence of [defendant’s] fraud and failed their responsibilities as auditors”); Houbigant, Inc. v. Deloitte & Touche LLP, 753 N.Y.S.2d 493, 498, 500 (App. Div. 1st Dep't 2003) (noting that cases had imposed fraud liability on accountants where the accountant “recklessly failed to independently verify and investigate the documents of a corporation it knew had severe internal control and reporting problems,” and imposing liability for aiding and abetting fraud “based on audit reports and financial statements that allegedly did not accurately reflect the financial condition of [the defendant’s] clients” (internal quotation marks and emphasis omitted)); Oster, 905 N.Y.S.2d at 72 (finding that knowledge of misrepresentations as to dates, and criminal background of the people running an investment vehicle, was sufficient to demonstrate actual knowledge that the investment vehicle was a Ponzi scheme); ADL, LLC v. Tirakian, No. CV 2006-5076, 2010 WL 3925131, at *17 (E.D.N.Y. August 26, 2010) (relying, in part, on defendants’ “extensive experience” of financial and business practices in order to infer actual knowledge). As in these decisions, Plaintiffs h
Filed November 24, 2009
(SUF ¶ 70.) Spain instead offers the mere generalization that the entire world relies on class, an argument that if accepted would expose class “to a liability in an indeterminate amount for an indeterminate time to an indeterminate class,” , 303 A.D.2d 92, 94 (1st Dep’t 2003) (no “linking conduct” despite auditor’s consent to company forwarding audited financial statements to third party). Ultramares, 255 N.Y. at 179, 174 N.E. at 444, and would ultimately cause the demise of the ship classification system, Case 1:03-cv-03573-LTS-RLE Document 260 Filed 11/24/2009 Page 49 of 55 41 60849079_5.DOCX Sundance II, 7 F.3d at 1084.
Filed July 2, 2008
Moreover, New York law “does not require [] specific intent for a fraud claim. Rather, the plaintiff must only allege facts from which it may be inferred that the defendant was aware that its misrepresentations would be reasonably relied on by the plaintiff.” Houbigant, 303 A.D.2d at 100. Case 1:08-cv-00235-PA Document 20 Filed 07/02/2008 Page 14 of 25 Bullivant|Houser|Bailey PC 888 S.W. Fifth Avenue, Suite 300 Portland, Oregon 97204-2089 Telephone: 503.228.6351 HARRY AND DAVID’S RESPONSE TO DEFENDANT’S MOTION TO DISMISS Page