Appellants, members of an investment partnership, sought review of a decision of the Superior Court of Fresno County (California) that entered a judgment in favor of appellee accounting firm. Appellants asserted appellee misrepresented the financial condition of a corporation whose debts appellants guaranteed.
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Overview
Appellants, members of an investment partnership, brought an action against appellee accounting firm alleging that appellee misrepresented the financial condition of a corporation whose debts appellants guaranteed. The trial court held in favor of appellee and appellants sought review. The court affirmed the summary dismissal holding that the trial court properly granted summary judgment of negligent and intentional misrepresentation causes of action. The court found that appellants did not demonstrate a reasonable inference that appellee intended to influence them in any identifiable transaction or type of transaction. In addition, the court held that appellee presented evidence to establish that appellants did not rely on appellee’s representations in any guaranty or guaranty-related transaction that altered appellants’ legal relationships. The court also found that appellants failed to establish that they were third party beneficiaries of the contract. The court held that appellants were nothing more than incidental beneficiaries of the audit engagement contract and as such they are not entitled to sue for breach of the contract.
Outcome
In an action brought by appellants alleging appellee misrepresented the financial condition of a corporation whose debts appellants guaranteed, the court held the trial court properly granted summary judgment because appellants did not demonstrate a reasonable inference that appellee intended to influence them in any identifiable transaction or type of transaction.
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