WARD INC AND KBH CONSTRUCTION COMPANY INC PLAINTIFFS RESPONDENTS APPELLANTS v. DELOITTE TOUCHE LLP AND DELOITTE TOUCHE USA LLP DEFENDANTS APPELLANTS RESPONDENTS (2010)

MEMORANDUM AND ORDER

Appeal and cross appeal from an order of the Supreme Court, Monroe County (Harold L. Galloway, J.), entered September 17, 2009 in an accounting malpractice action.   The order, among other things, granted in part defendants' motion for summary judgment and denied plaintiffs' cross motion for partial summary judgment.

It is hereby ORDERED that the order so appealed from is unanimously modified on the law by granting that part of the motion of defendants seeking summary judgment dismissing the second amended complaint in its entirety against defendant Deloitte & Touche USA LLP and dismissing the second amended complaint in its entirety against that defendant and as modified the order is affirmed without costs.

Memorandum:  Plaintiffs commenced this accounting malpractice action seeking damages allegedly resulting from, inter alia, the failure of defendants-third-party plaintiffs (defendants) to adhere to applicable professional standards and to fulfill promises made to plaintiffs in conducting the audit of plaintiffs' 1996 financial statements.   We note at the outset that defendants made two motions each seeking different relief.   We agree with defendants on their appeal that Supreme Court should have granted that part of their first motion seeking summary judgment dismissing the second amended complaint in its entirety against defendant Deloitte & Touche USA LLP (Deloitte USA), and we therefore modify the order accordingly.   Defendants met their initial burden by submitting evidence that plaintiffs engaged only defendant Deloitte & Touche LLP (Deloitte) to audit their financial statements and that Deloitte alone conducted the audits (see generally Zuckerman v. City of New York, 49 N.Y.2d 557, 562).   Plaintiffs failed to raise a triable issue of fact whether Deloitte USA may be liable for the actions of Deloitte (see generally Fresh Del Monte Produce N.V. v Eastbrook Caribe A.V.V., 44 AD3d 551, 552).

Contrary to the further contention of defendants on their appeal, we conclude that the court properly denied that part of their motion to strike the reports of plaintiffs' experts.   We reject defendants' contention that those reports are without foundation, speculative or lacking probative value (see Edwards v. St. Elizabeth Med. Ctr., 72 AD3d 1595).   Contrary to defendants' contention, there is no basis for striking those reports for plaintiffs' failure to comply with CPLR 3101(d)(1)(i) “where there is no evidence of intentional or willful failure to disclose and no prejudice to [defendants]” (Ruzycki v. Baker, 9 AD3d 854, 855).   The court also properly denied that part of defendants' motion seeking to strike the claims with respect to Deloitte's alleged errors in connection with the accounting of equipment repairs.   Defendants failed to demonstrate any prejudice resulting from plaintiffs' delay in responding to their discovery demands concerning those claims (see generally Schaaf v. Pork Chop, Inc., 24 AD3d 1277).   We have examined defendants' remaining contentions on their appeal and conclude that none has merit.

Patricia L. Morgan

Clerk of the Court