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Audit Malpractice Defense Wins – Eleventh Circuit Court of Appeals

April 21, 2016

John Rogers and Joe Kingma represented New York accountants who audited the financial statements of a Savannah-based design/build water purification company. The company and its investors sought more than $10 million in damages. Joe and John limited the scope of the case by having the investors’ claims and the punitive damages claims struck on summary judgment. TSG Water Resources, Inc. v. D’Alba & Donovan Certified Public Accountants, P.C., 366 F. Supp. 2d 1212 (S.D. Ga. 2004). The plaintiff still sought millions of dollars in damages when the case was tried in Savannah, GA. The jury awarded less than $300,000 and found there was no intentional wrongdoing by the accountants. The trial judge applied the engagement letter’s provision prohibiting recovery of consequential damages and found the plaintiffs were entitled to nothing. The decision was affirmed by the Eleventh Circuit.

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For informational purposes only. Past success does not indicate the likelihood of success in future cases.