Accounting malpractice case summarily dismissed by the court; one contract claim reinstated
In Banker & Brisbois Co. v. Maddox, the Court of Appeals upheld the trial judge's summary disposition of the plaintiff company's malpractice claim against the accountants who failed to discover and report an employee's fraud. The Court did reinstate the company's contract claim based on the accountant's failure to report potential fraud, but concluded that the argument could not be presented as a negligence theory.
Apparently the firm's controlled stole over $400,000.00, much of which was embezzled after the accountants agreed to "keep an eye on her." Even though the accountant served as B & B's accountant for more than a decade, the court concluded that under Michigan law the accountant owed the company no fiduciary duty.