Ultramares Corporation v. Touche

Touche (defendant) audited Fred Stern's finances knowing the resulting balance sheet would be shown to various banks and creditors generally, but without knowing Ultramares (plaintiff) specifically would rely on it, and negligently certified Fred Stern as solvent based on falsified figures the company's own officers provided; Ultramares, relying on that certified balance sheet, made loans to Fred Stern, which later collapsed leaving the loans unpaid, and Ultramares sued for both negligent misrepresentation and false certification. The jury awarded Ultramares damages, but the trial judge entered judgment for Touche, and the appellate division reversed.