Federal Deposit Ins. Corp. v. High Tech Medical Systems, Inc.

• Decision Date: 09 January 1991
• Docket Number: 89-2907,Nos. 89-2340,s. 89-2340
• Citation: Federal Deposit Ins. Corp. v. High Tech Medical Systems, Inc., 574 So.2d 1121, 16 Fla. L. Weekly 159 (Fla. App. 1991)
• Parties: 16 Fla. L. Weekly 159 FEDERAL DEPOSIT INSURANCE CORPORATION, as Liquidator of the Sunshine State Bank, Appellant, v. HIGH TECH MEDICAL SYSTEMS, INC., et al., Appellees.
• Court: Florida District Court of Appeals

Page 1121

574 So.2d 1121

16 Fla. L. Weekly 159

FEDERAL DEPOSIT INSURANCE CORPORATION, as Liquidator of the Sunshine State Bank, Appellant, v.HIGH TECH MEDICAL SYSTEMS, INC., et al., Appellees.

Nos. 89-2340, 89-2907.

District Court of Appeal of Florida Fourth District.

Jan. 9, 1991.

Rehearing Denied March 18, 1991.

Richard Bernstein of Haley, Sinagra & Perez, P.A., Fort Lauderdale, for appellant.

Paul, Landy, Beiley & Harper, Miami, and Larry Klein of Klein & Walsh, P.A., West Palm Beach, for appellees.

PER CURIAM.

In this consolidated appeal, the appellant, Federal Deposit Insurance Corporation("FDIC"), as liquidator of the Sunshine State Bank(the "bank"), appeals the entry of two summary judgments in favor of appellee, Kaufman, Rossin & Co.("Kaufman").Based on the following rationale, we affirm the award of summary judgment concerning those counts alleging a cause of action based upon fraudulent and negligent misrepresentation, but reverse the summary judgment regarding appellant's claims of negligence and breach of contract.

A brief recitation of the background facts is in order.In 1985 the original plaintiff, Sunshine State Bank, loaned defendantHigh Tech Medical Systems, Inc.("High Tech") the sum of $950,000 in exchange for a promissory note and security agreement.Kaufman is an accounting firm hired by High Tech to supply the bank with monthly reports regarding the amounts of High Tech's accounts receivable and inventory on hand.After closing on the loan and upon default by High Tech, the bank filed an action against Kaufman and others, seeking replevin and damages.

Originally the bank sued Kaufman only for negligence and breach of contract, contending that appellee negligently and grossly overstated the amount of accounts receivable and inventory in its reports to the detriment of the bank.The bank's breach of contract action was based on allegations that it was an intended third-party beneficiary to the contract between Kaufman and High Tech.Following the bank's declared insolvency in 1986, the FDIC was substituted as plaintiff and appellant in this action.

The trial court subsequently granted appellee's motion for summary judgment on the ground that, in the absence of privity between Kaufman and the bank, there existed no cognizable cause of action against Kaufman.The court later allowed FDIC to amend its complaint to add counts for fraudulent and negligent misrepresentation.These counts likewise became the subject of a further successful motion for summary judgment by Kaufman.It is from entry of these two summary judgments that the FDIC appeals.

Resolution of the appeal of the first summary judgment is made easy by Kaufman's confession of error based upon the supreme court's recent ruling in First Florida Bank v. Max Mitchell & Co., 558 So.2d 9(Fla.1990)(holding that privity is no longer required in an action against an accountant).Accordingly, we reverse the trial court's award of summary judgment as to the negligence and breach of contract counts and remand for further proceedings consistent herewith.

The gravamen of the FDIC's tort claims stems from allegations that Kaufman...