Home LOUIS J. BLANK & others vs. HASKELL A. KAITZ & others.

350 Mass. 779

April 21, 1966

Individuals (see American Discount Corp. v. Kaitz, 348 Mass. 706), who were directors of American Discount Corporation (Discount), seek to recover for losses alleged to have been caused by their reliance upon accounting reports negligently prepared for Discount by the defendant, professional accountants. A demurrer to a count in contract was properly sustained because the facts alleged did not show any contract between these plaintiffs and the defendants. A count in tort alleged misrepresentations by the defendants concerning Discount's financial condition. We do not now determine whether recovery can be had in Massachusetts for negligent or grossly negligent misrepresentation relied upon by one not in contractual privity with the defendants. No Massachusetts case seems to us to be controlling. See Harriott v. Plimpton, 166 Mass. 585, 588. Cf. New England Bond & Mortgage Co. v. Brock, 270 Mass. 107, 110-112. Even if we assume, without deciding, that some such recovery may be had, the original declaration was deficient at least because no facts were sufficiently alleged showing that the defendants knew that their accounting reports were to be a basis of reliance by the individual plaintiffs. This one defect may have been cured in a proposed amended declaration. The original declaration also was deficient because it was in general, vague, conclusionary terms, and failed to allege with clarity and certainty specific facts concerning (1) the negligent acts or omissions of the defendants; (2) the content of the auditors' reports and certificates; (3) the work which the defendants had agreed to do, had stated that they had done or omitted, and had actually done; (4) the extent to which the defendants' representations were qualified, contained disclaimers, or were expressed as opinions; (5) the "generally accepted principles of accounting" which the defendants were alleged to have violated; and (6) the facts misrepresented and what the plaintiffs allege the defendants knew, or (after reasonable investigation) should have known, concerning them. The proposed amended declaration contained many of the same defects. The trial judge acted within the range of his discretion in refusing to allow the amendment. See Grandchamp v. Costello, 289 Mass. 506, 507-508.

Exceptions overruled.


350 Mass. 779

April 27, 1966

This is a bill in equity seeking the rescission of a lease entered into between the plaintiff and the defendant. A decree was entered dismissing the bill, from which the plaintiff appealed. The judge made voluntary findings of fact and the evidence is reported. Although the judge denominated his findings as a "Report of Material Facts, Rulings and Order for Decree" they do not appear to be a complete report of all the facts upon which he based his decree. Accordingly, the "entry of the decree imported a finding of every fact essential to sustain it and within the scope of the pleadings." Birnbaum v. Pamoukis, 301 Mass. 569, 561. The grounds on which the plaintiff bases his right to rescind are as follows: (1) An alleged discrepancy between the number of square feet designated on the floor plan of the lease and the area actually demised, and (2) numerous alleged defects and deficiencies in the condition of the premises, including improper heating, defective windows which caused drafts, a broken window which was unrepaired for three or four months, an inoperative

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air conditioning unit, and a fire escape exit, access to which was blocked. Concerning the discrepancy as to area, the lease is ambiguous as to whether the figure appearing on the floor plan refers solely to the area actually occupied by the plaintiff or whether it takes into account other areas also represented on the plan. The method used in computing the area is also left to uncertainty by the lease. In these circumstances parol evidence was admissible. Stoops v. Smith, 100 Mass. 63. LaCouture v. Renaud, 325 Mass. 33. National Paper & Cordage Co. Inc. v. Atlantic Carton Corp. 332 Mass. 651, 653-654. On the basis of this evidence the judge could have found, and impliedly did find, that the plaintiff was given all the square footage that he was entitled to under the lease. As to the alleged constructive eviction, the judge found that the plaintiff failed to establish that the acts complained of satisfied the requirements of a constructive eviction. See Stone v. Sullivan, 300 Mass. 450, 455; Charles E. Burt, Inc. v. Seven Grand Corp. 340 Mass. 124, 127. The evidence on these issues was conflicting and we cannot say that the findings of the judge, express or implied, were plainly wrong, or that his rulings were tainted by error of law.

Decree affirmed with costs of appeal.