BDO SEIDMAN LLP V. MINDIS ACQUISITION CORP 578 S.E.2d 400 (2003) CASE BRIEF

BDO SEIDMAN LLP V. MINDIS ACQUISITION CORP

578 S.E.2d 400 (2003)

NATURE OF THE CASE: The Superior Court found in favor of Mindis (P), in its suit for negligent misrepresentation against BDO (D) accounting firm. The Court of Appeals rejected D's contention that the jury was charged on an improper fraud standard of damages and affirmed the jury's verdict. D appealed.

FACTS: P was formed to purchase Mindis Corporation. After the purchase was complete, P discovered that the inventory value of Mindis was less than what appeared on Mindis's financial statements. P then sued Mindis's accountants, D, for negligent misrepresentation, contending that D was negligent in its audit of the financial statements. The trial court instructed the jury that damages were to be determined by the standard used in fraud and deceit cases, a benefit- of-the-bargain standard. The jury found in favor of P and awarded $44 million. The Court of Appeals rejected D's contention that the jury was charged on an improper fraud standard of damages and affirmed the jury's verdict. The Supreme Court of Georgia granted certiorari.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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