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Tuesday, October 23, 2012

Ind. Decisions - Supreme Court decides one today

In National Wine & Spirits, Inc., National Wine & Spirits Corporation, NWS, Inc., NWS Michigan, Inc., and NWS, LLC v. Ernst & Young, LLP, a 12-page, 4-0 opinion, Justice David writes:

In this case, a company hired an accounting firm to provide auditing services. Their agreement provided that any claim arising from the services would be submitted to arbitration. During the years covered by the agreement, an employee of the company committed fraud and theft, causing significant losses to the company.

The company alleged negligence, breach of contract, and unjust enrichment against the accounting firm and demanded arbitration. The arbitration panel ultimately found the accounting firm negligent and the company comparatively negligent. The company then filed the present suit, claiming the accounting firm committed deception because the documents that the accounting firm produced during the arbitration were misleading and caused the arbitration panel to find the company comparatively at fault.

We hold that, under the facts of this case, the issue underlying the deception claim is the veracity of the documents produced at arbitration, which was an issue necessarily decided by the arbitration panel. Accordingly, issue preclusion bars the company’s deception claim, and we affirm the trial court’s grant of summary judgment in favor of the accounting firm.

Posted by Marcia Oddi on October 23, 2012 11:22 AM
Posted to Ind. Sup.Ct. Decisions