Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


12-29-2008

Tredennick v. Bone
Precedential or Non-Precedential: Non-Precedential

Docket No. 07-4830




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"Tredennick v. Bone" (2008). 2008 Decisions. Paper 37.
http://digitalcommons.law.villanova.edu/thirdcircuit_2008/37


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                                                              NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                  _________

                                   No. 07-4830
                                   _________

                             JOANN TREDENNICK,
                                            Appellant

                                         v.

             THOMAS BONE; MICHAEL J. MARTIN; TIM ZUBER;
            ADAM CUPERSMITH; KEN PICCIANO; KIM WICK and
                 DOUG VIDA, trading and doing business as,
                  KPMG LLP; EMANUEL B. HUDOCK



                  On Appeal for the United States District Court
                    for the Western District of Pennsylvania
                           (D.C. Civ. No. 07-cv-00735)
                  District Judge: Honorable Gary L. Lancaster



                   Submitted under Third Circuit LAR 34.1 (a)
                             on December 11, 2008


               Before: McKEE, SMITH and ROTH, Circuit Judges

                         (Opinion filed: December 29, 2008)



                                   OPINION


ROTH, Circuit Judge:
       JoAnn Tredennick appeals the dismissal of her suit for failure to state a claim

pursuant to Rule 12(b)(6). In her complaint, Tredennick pleads breach of contract,

negligence, fraud, and negligent misrepresentation. She alleges defendants, Thomas

Bone, Michael Martin, Tim Zuber, Adam Cupersmith, Ken Picciano, Kim Wick, and

Doug Vida, trading and doing business as KPMG LLP (KPMG defendants), and

defendant Emanuel B. Hudock failed to disclose certain tax information to her resulting

in significant tax liability and other losses. We assume the parties’ familiarity with the

facts and the record of prior proceedings, which we refer to only as necessary to explain

our decision. For the reasons given below, we affirm the dismissal of Tredennick’s

claims.1

       The District Court correctly found Tredennick’s breach of contract claim against

the KPMG defendants failed. The contract for tax services on which Tredennick relies

was between KPMG and Resco Products, Inc., not between KPMG and Tredennick.

Even though Tredennick is the majority shareholder in Resco, holding 92% of its capital

stock, she was not an intended third-party beneficiary of the contract because, under

Pennsylvania law, a party becomes a third party beneficiary “only where both parties to

the contract express an intent to benefit the third party in the contract itself.” Scarpitti v.




   1
    We review dismissal under Federal Rule of Civil Procedure 12(b)(6) de novo. See
Phillips v. County of Allegheny, 

, 230 (3d Cir. 2008). We will accept as true
the factual allegations of the complaint and draw all reasonable inferences in favor of the
plaintiff. See Watson v. Abington Tpk., 

, 150 (3d Cir. 2007).

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Weborg, 

, 150 (Pa. 1992) (citing Restatement (Second) of Contracts §

302(1)). Additionally, this contract specifically provided that any advice or

recommendations “may not be relied upon by any third party.” Accordingly,

Tredennick’s breach of contract claim was properly dismissed.

       The District Court appropriately dismissed Tredennick’s professional negligence

claim against all defendants. Under well-established Pennsylvania law, a plaintiff cannot

sustain a professional negligence action unless she is in privity with the party against

whom the action is directed. See Landell v. Lybrand, 

(Pa. 1919). Moreover,

to maintain a malpractice action based on negligence, there must have been an

undertaking to perform a specific service for the plaintiff. See Guy v. Liederbach, 

, 750 (Pa. 1983). Tredennick has failed to demonstrate that she was in privity

with any of the defendants and that any defendant performed a specific service for her.

Therefore, her negligence claim was correctly dismissed.

       Again we agree with the District Court’s dismissal of Tredennick’s claim of fraud

against all defendants. Under Federal Rule of Civil Procedure 9(b), a plaintiff must

allege with particularity all the essential elements of actionable fraud. Fed. R. Civ. P.

9(b). In the context of fraud against accountants, a plaintiff must demonstrate the manner

in which the defendant departed from reasonable accounting practices. See Christidis v.

First Pa. Mortgage Trust, 

, 100 (3d Cir. 1983). Additionally, where multiple

defendants are involved, the complaint should inform each defendant of the nature of his



                                              3
alleged participation in the fraud. See Silverstein v. Percudani, 

, 472-

73 (M.D. Pa. 2006). Tredennick’s complaint does not meet the pleading requirements for

fraud because she failed to provide information concerning the manner in which

defendants departed from reasonable accounting practices. Accordingly, the District

Court was correct in dismissing her fraud claim.

       Finally, the district court properly dismissed Tredennick’s negligent

misrepresentation claim. To survive a motion to dismiss, a plaintiff with a negligent

misrepresentation claim must demonstrate that (1) the defendant made a

misrepresentation of material fact, (2) with knowledge of its falsity, (3) with the intent to

induce the plaintiff to act on it, and (4) injury must result to the plaintiff, acting in

justifiable reliance on the misrepresentation. See Bortz v. Noon, 

, 561 (Pa.

1999). Tredennick cannot establish it was foreseeable that she would use or rely on the

accounting information KPMG provided because the contract between Resco and KPMG

specifically forecloses third party reliance on such information. Therefore, we agree with

the District Court’s dismissal of Tredennick’s negligent misrepresentation claim.

       Accordingly, for the foregoing reasons we conclude, as did the district court, that

all of Tredennick’s claims must be dismissed for failure to state a claim.2

       We will affirm the judgment of the District Court.




   2
    We agree with the district court that we need not address the KPMG defendants’
alternative argument that the parties are bound to arbitrate this dispute.

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