52_Cal[1]._App._4th_820,_60_Cal._Rptr._2d_780, - Page 1 1...

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1 of 1 DOCUMENT MATTCO FORGE, INC., Plaintiff and Respondent; MATEO MINGUEZ, Plaintiff and Appellant, v. ARTHUR YOUNG & COMPANY et al., Defendants and Appel- lants. No. B087488. COURT OF APPEAL OF CALIFORNIA, SECOND APPELLATE DISTRICT, DI- VISION THREE 52 Cal. App. 4th 820 ; 60 Cal. Rptr. 2d 780; 1997 Cal. App. LEXIS 89; 97 Cal. Daily Op. Service 948; 97 Daily Journal DAR 1354 February 7, 1997, Decided SUBSEQUENT HISTORY: [***1] The Name of this Case has been Corrected February 26, 1997. Review Denied April 30, 1997, Reported at: 1997 Cal. LEXIS 2448. PRIOR HISTORY: APPEAL from a judgment of the Superior Court of Los Angeles County. Super. Ct. No. C731746. Dion G. Morrow, Judge. DISPOSITION: The judgment is reversed as to Mattco's award of damages, except the portion that awarded Mattco out-of-pocket-expenses and interest thereon, which is affirmed. CASE SUMMARY: PROCEDURAL POSTURE: Appellant accounting firm sought review of the judgment from the Superior Court of Los Angeles County (California), which found in favor of respondent client in jury verdicts on respondent's malpractice action following the trial court's ruling that to establish liability and damages respondent needed to show only that ap- pellant caused respondent to suffer harm and that respondent's underlying action had value. OVERVIEW: Respondent client filed a malpractice suit against appellant accounting firm, alleging that appellant had negligently provided accounting litigation support in respondent's federal action against another manufacturer. In the federal action, appellant told respondent to prepare job estimates to replace missing ones that were not identified as such when produced under discovery which resulted in sanctions and the subsequent dismissal of the action. The court af- firmed the jury verdict awarding out-of-pocket expenses and interest, but reversed and remanded the award for compensatory and punitive damages. The court held that the trial court's jury instructions were an erroneous statement of the law because appellant should have been held to the same standard as attorneys in professional malpractice ac- tions. The court held that respondent was required to show a causal connection between appellant's negligence and the harm suffered by respondent. The evidence showed that appellant was only liable for its negligent conduct that resulted in sanctions and that respondent's own misconduct in falsifying evidence contributed to its loss in the underlying action. OUTCOME: The court reversed the trial court's judgment in favor of respondent client in awarding compensatory and punitive damages and remanded because, in the underlying professional malpractice action, respondent was required to show a causal connection between appellant accounting firm's negligence and the harm suffered by respondent. The award of expenses was affirmed because appellant was liable only for its negligence that resulted in sanctions. CORE TERMS:
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This note was uploaded on 03/10/2010 for the course ACCTG 351B taught by Professor Inama during the Fall '09 term at Golden Gate.

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52_Cal[1]._App._4th_820,_60_Cal._Rptr._2d_780, - Page 1 1...

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