WILLIAM A. STUART et al. v. RICHARD M. FREIBERG, SC 19208

Judicial District of Stamford-Norwalk

 

†††† †Summary Judgment; Whether Appellate Court Properly Reversed Summary Judgment for Defendant on Fraud, Negligent Misrepresentation and Accounting Malpractice Claims on Finding That There Were Genuine Issues of Material Fact.† The plaintiffs, William A. Stuart and Jonathan Stuart, and Kenneth J. Stuart, Jr. (Stuart, Jr.), are brothers.† In 1994, Stuart, Jr., who was the executor of his father's estate, retained the defendant as accountant for the estate.† In 2004, the plaintiffs brought this action against the defendant, alleging claims of fraud, negligent misrepresentation and accounting malpractice.† They claimed that the defendant aided in Stuart, Jr.'s mismanagement of the estate assets by filing false financial statements.† The trial court granted summary judgment in favor of the defendant.† The plaintiffs appealed to the Appellate Court (142 Conn. App. 684), which reversed the trial courtís judgment, concluding, as to the fraud and negligent misrepresentation claims, that there were genuine issues of material fact as to reliance.† Reliance is an element of both causes of action in that, to prove both fraud and negligent misrepresentation, a plaintiff must show that he relied on the defendantís false or negligent misrepresentation to his detriment.† The court determined that the plaintiffs raised a genuine issue of material fact as to their reliance here by presenting sufficient proof that their delay in seeking the removal of Stuart, Jr., as executor of the estate and in proceeding with their claims against him in Superior Court was the result of their reliance on the defendant's alleged misrepresentations.† With regard to the accounting malpractice claim, the Appellate Court determined that the trial court improperly found that the defendant's duty of care did not extend to the plaintiffs, concluding that there was sufficient evidence to raise a question about whether the plaintiffs were the intended beneficiaries of the defendant's services.† It further determined that there were disputed factual issues as to whether the plaintiffs had actually suffered harm as a result of the defendantís alleged malpractice, observing that the plaintiffs had submitted affidavits averring that the estateís assets were reduced in value as a result of the defendantís actions and that monies were expended to unravel the false accounting reports.† The Supreme Court will now decide whether the Appellate Court properly determined that genuine issues of material fact existed that should have precluded the granting of summary judgment on the plaintiffsí fraud, negligent misrepresentation and accounting malpractice claims.