It is alleged that both statements overstated Smith's assets, net worth and general financial health, and that Andersen failed to conduct investigations in accordance with proper auditing standards, thereby failing to discover Smith's precarious financial condition and the serious possibility that Smith would be unable to survive as a going concern. EAB suffered substantial losses from the loans remaining unpaid. Under the Securities and Exchange Act of 1934, auditors and other defendants are faced with: Proportionate liability. (Ultramares Corp. v Touche, supra, at p 179.) In Larsen v United Fed. Indeed, we referred to this court's holding in MacPherson v Buick Motor Co. (217 N.Y. 382) where it was decided that the manufacturer of a defective chattel — there an automobile — may be liable in negligence for the resulting injuries sustained by a user regardless of the absence of privity — a belated rejection of the doctrine of privity as applied to the facts in Winterbottom. Co. v Coopers & Lybrand (70 Ohio St.2d 154, 436 N.E.2d 212); Spherex, Inc. v Grant & Co. (122 N.H. 898, 451 A.2d 1308); Larsen v United Fed. Under somewhat analogous facts, the court in Rusch Factors v Levin (284 F.Supp. Corp., 14 AD3d 472.) Because EAB's complaint and affidavit posit a direct nexus between the parties, to wit: the direct communications between them concerning EAB's intended reliance upon S & K's financial evaluation of Majestic Electro, the causes of action for negligence and for gross negligence or reckless indifference are adequately alleged. Leagle.com reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions. We conclude, as did the Appellate Division, that plaintiff has not satisfied the test and his complaint must be dismissed. During the course of its lending relationship with Majestic Electro, EAB relied upon the interim and year-end financial reports prepared by S & K to determine the maximum amounts it was willing to lend. Hosp. There, a seller of beans employed the defendants who were engaged in business as public weighers. 2d 138 (1983); Citizens State Bank v. … Moreover, there is no allegation that Andersen had any direct dealings with plaintiffs, had specifically agreed with Smith to prepare the report for plaintiffs' use or according to plaintiffs' requirements, or had specifically agreed with Smith to provide plaintiffs with a copy or actually did so. This case requires us to examine, once again, the tripartite standard, set forth by this Court in Credit Alliance Corp. v Arthur Andersen & Co. (65 2 536), for the functional equivalent of privity in a cause of action for negligent misrepresentation. Credit Alliance Corporation v. Arthur Andersen & Co 1. Cullen and Dykman LLP, Garden City ( Peter J. Mastaglio and Justin F. Capuano of counsel), for respondents. Modifications have thus been applied to create a new requirement of ‘near privity’ in the case of Credit Alliance Corp v Arthur Andersen & Co (65 N.Y.2d 536, 493 N.Y.S.2d 435, 483 N.E.2d 110 (1985). Disputing the wisdom of extending the duty of care of accountants to anyone who might foreseeably rely upon their financial reports, Cardozo, speaking for this court, remarked: "If liability for negligence exists, a thoughtless slip or blunder, the failure to detect a theft or forgery beneath the cover of deceptive entries, may expose accountants to a liability in an indeterminate amount for an indeterminate time to an indeterminate class. Discussion. 441, 444-48 (1931). 2. Edgington v. Fitzmaurice Case Brief - Rule of Law: In order to sustain an action for deceit, Plaintiff must first prove that there was a statement as to facts . Smith, Inc. for many years. In Ossining, the Court of Appeals discussed its decision in Credit Alliance Corp. v Arthur Andersen & Co. (65 NY2d 536, 551 [1985], amended 66 NY2d 812 [1985]), and clarified that the three-part Credit Alliance test for negligent misrepresentation claims against non privy parties. Every Bundle includes the complete text from each of the titles below: PLUS: Hundreds of law school topic-related videos from The Understanding Law Video Lecture Series™: Monthly Subscription ($19 / Month) Annual Subscription ($175 / Year). (Id., at p 358.) See Credit Alliance Corp. v. Arthur Andersen & Co., 65 N.Y.2d 536, 483 N.E.2d 110, 493 N.Y.S.2d 435, order amended by 66 N.Y.2d 812, 489 N.E.2d 249, 498 N.Y.S.2d 362 (1985). Are also linked in the first above-entitled action followed elsewhere: see, e.g., Rosenblum Inc. Adler... 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