Pretzel & Stouffer partners Richard Waris and Brendan Nelligan succeeded in having an accounting malpractice case dismissed. The case was filed in the United States District Court by a major U.S. insurer against a local accounting firm in connection with a review engagement our client performed of the insurer’s customer, a construction contracting company. The insurer alleged that it issued $5 million in performance bonds on behalf of the contractor, purportedly in reliance upon our client’s review report pertaining to the contractor’s financial statements. Mr. Waris and Mr. Nelligan argued that the insurer failed to set forth that privity of contract existed between our client and the insurer. Absent such privity of contract or other facts that would support the existence of a duty, under Illinois law, the insurer could not recover from our client and the District Court dismissed the complaint with prejudice.
The Hanover Ins. Group v. DNH Business Consultants, P.C., 2012 U.S. Dist. LEXIS 71844 (N.D. Ill. May 23, 2012).