On appeal from Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-003621-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Collester and Graves.
Plaintiffs Harmony Global Sourcing, LLC (Harmony Global) and Salvatore DiSanto filed a complaint in December 2005 against defendants Steven Stigliano, Kimberly Krissel, and the accounting firm of Fineman West and Company and Harold West (the West defendants). Plaintiffs appeal from an order dated June 6, 2008, granting summary judgment in favor of the West defendants. We affirm.
After plaintiffs commenced this action, Steven Stigliano and Kimberly Krissel both filed for bankruptcy. In addition, plaintiffs' other claims against the West defendants, including negligence and accountant malpractice, were dismissed on October 25, 2007. Plaintiffs have not appealed from that order. As a result, this appeal involves only the fifth count of plaintiffs' complaint, which asserted a common law fraud claim against the West defendants.
Harmony Global was a business venture formed by defendants Stigliano and Krissel for the purpose of manufacturing fabrics and prom dresses to be sold in retail stores. Plaintiff DiSanto was approached by Stigliano as a potential investor in the company. Stigliano presented DiSanto with financial data prepared by the West defendants which made projections about Harmony Global's expected financial success. DiSanto claimed in his complaint that he was fraudulently induced to invest in Harmony Global on the basis of the projections, which he alleged were falsified by the West defendants.
The West defendants claimed they were hired by another potential investor, Ira Rosenberg, who wanted the financial projections to help him decide whether he should invest in Harmony Global. Harold West met with Stigliano at Rosenberg's request and Stigliano provided the West defendants with financial information about Harmony Global.
After Rosenberg told Stigliano that he was not interested in investing, Stigliano asked Rosenberg if he could show the projections to a potential "back-up investor." Rosenberg said yes ". . . why would I mind? They are your projections." At his deposition, Harold West testified that the West defendants were unaware that the projections would be utilized by anyone besides Rosenberg.
The "preliminary or draft" projections prepared by the West defendants were not final projections. They contained the following general disclaimer: "Preliminary: May be Subject to Change - For Management Review Only." They also indicated that the figures were assumptions based on the best estimate of management. Stigliano presented the projections to DiSanto, who subsequently invested "over one million dollars" in the business. According to DiSanto, Harmony Global was formed on or about March 2004, and it "went out of business on or about the end of 2005."
In their complaint, plaintiffs alleged that the financial projections prepared by the West defendants were "inaccurate, misstated, and fraudulent." When DiSanto was asked about those claims at his deposition, he responded as follows:
Q: You testified earlier Steve Stigliano came to you with a business plan as well as the financial projections; do you know what the actual business plan consisted of besides the financial projections?
A: Well, it was an overall situation of the accounts we were going to have, the fabrics we were going to make, the colors we were going to use, the staff, building, showroom, the accounts that we were going to sell [to], the ...