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1
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WOLFE AFFDVT
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EXTRACTED KEY WORDS
SWORN SUPREME COURT COUNTY HOWARD WOLFE DULY SWORN REPORT |
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
X
J.S.M. HOLDNGS, INC., HOWARD WOLFE : Index No.
and HAL WOLFE, :
Plaintiffs, AFFIDAVIT
-against- HOWARD WOLFE
ARTHUR ANDERSEN & CO.,
Defendant.
STATE OF NEW YORK ) ss.:
COUNTY OF NEW YORK f
HOWARD WOLFE, being duly sworn, states:
1. In connection with the sale by Lightron
Lamp Corporaton to J.S.M. Holdings, Inc., on July 9,
signed a personal guaranty of the corporate obligations
J.S.M., Inc. I am presently being sued on that guaranty
action presently pending in the Supreme Court of the State of New
York, County of Nassau, Lightron Corporation v. J.S.M.
Inc., Howard Wolfe and Hal Wolfe, Index No. 139898/82.
the complaint therein, which seeks a judgment against
personally in an amount of $1,183,671 is attached as
hereto. A copy of the personal guaranty signed by me
as Exhibit B thereto (indicated by an index page rather
tab to avoid confusion with the tabs to this affidavit).
2. Attached as Exhibit B hereto are copies
pertinent pages from the Instrument Systems Corporation's
report for 1980, the financial statements in which are
0 by Arthur Andersen. This report was among the documents relied
upon by me, Hal Wolfe, and our bankers in
Laurel Lamp corporation. Page 11 of that report
consolidated stockholders equity of
understanding at the time, and now, that the
shown on the balance sheet of Laurel Lamp
consolidated equity shown on page 11. The
represented approximately 15.7 percent of
equity as certified by Arthur Andersen.
this represented a material part of I.S.C.'s
I relied upon the Arthur Andersen
of the inventory figures shown in the books of
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2
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WOLF AFFDVT 2
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EXTRACTED KEY WORDS
COUNTY YORK HAL WOLFE FILINGS DALLACHIE |
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
X
J.S.M. HOLDNGS, INC., HOWARD WOLFE : Index No.
and HAL WOLFE, :
Plaintiffs, : AFFIDAVIT
-against- :
ARTHUR ANDERSEN & CO., :
Defendant. :
STATE OF NEW YORK ) ss.:
COUNTY OF NEW YORK ;
HAL WOLFE, being sworn, states:
1. In connection with the sale by Lightron
Lamp Corporation to J.S.M. Holdings, Inc., on July 9,
signed a personal guaranty of the corporate obligations
J.S.M., Inc. I am presently being sued on that guaranty
action presently pending in the Supreme Court of the State of New
York, County of Nassau, Lightron Corporation v. J.S.M.
Inc., Howard Wolfe and Hal Wolfe, Index No. 13898/82.
the complaint therein, which seeks a judgment against
personally in an amount of $1,183,671 is attached as
hereto. A copy of the personal guaranty signed by me is
as Exhibit A thereto (indicated by an index page rather
tab to avoid confusion with the tabs to this affidavit).
2. That as part of that data provided to
Holdings by Instrument System Corp. via Laurel Lamp Manufacturing
co., it was implied and stated by Myron Levy that the balance
sheet assets of Laurel were their assets which were used by
Arthur Andersen in preparing I.S.C. Is consolidated
for the fiscal year ended September 30, 1980 and prior
that these assets were prepared in accordance with GAAP
those assets depicted to be on hand as of September
audited by Arthur Andersen as of the 30th of June each year and
then rolled forward into I.S.C.'s September 31, 1980
filings.
3. J.S.M. relied on the fact that the Laurel
balance sheet presented to J.S.M. was part and parcel
reflected in the I.S.C. annual report and 10K filings
year ended September 30, 1980. Since Laurel's net equity
represented a significant portion of the total stated
assets which included its inventory, the Laurel inventory
constitute a material portion of the consolidated equity
I.S.C.
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3
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STEIN AFFDVT
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EXTRACTED KEY WORDS
COUNTY SUPREME COURT SIDNEY STEIN SWORN MEMBER BAR INVESTMENT GERTRUDE TINA FRENCH NOTARY PUBLIC STATE QUALLFIECL QUEENS COUNTY CORNMISSION EXPIRES |
0
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
J.S.M. HOLDINGS, INC., HOWARD WOLFE : Index No.
and HAL WOLFE, . .
Plaintiffs, : AFFIDAVIT
-against- :
ARTHUR ANDERSEN & CO., . .
Defendant. . .
STATE OF NEW YORK ) ss. :
COUNTY OF NEW YORK f
SIDNEY H. STEIN, being sworn, states:
1. I am a member of the Bar of the State of New
York and am a member of the firm of Stein, Zauderer,
Ellenhorn, Frischer & Sharp, attorneys for defendant
Andersen & Co. ("Andersen"). I make this affidavit in
support of Andersen's motion, brought pursuant to CPLR
§ 3211(a)(7), to dismiss the Complaint for failure to
cause of action. A copy of the Complaint is attached
Exhibit A.
2. This is an action by disgruntled investors
purchased a company in 1981, and who now claim that Arthur
Andersen & Co. ("Andersen") is liable to them for alleged
negligent errors in the company's unaudited financial
statements, on which Andersen did not report.
allegations of the Complaint provide no basis for
Andersen liable for negligence to anyone, much less to
parties not in privity of contract, the Complaint
dismissed pursuant to CPLR § 3211(a)(7) for failure
a cause of action. Moreover, the Complaint must be
for the additional reasons that plaintiffs' six
claim is barred by the three year statute of
negligence, and that the individual plaintiffs
standing to recover for an injury allegedly incurred
corporation.
3. This action was brought by plaintiffs
Holdings, Inc. ("J.S.M."), Howard Wolfe -- who is allegedly
the President and sole stockholder of J.S.M.,
-- who is allegedly J.S.M.'s Vice President,
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5
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RELY MEMO IN FRTHR SUPP
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EXTRACTED KEY WORDS
ARTHUR MEMORANDUM SUPREME COURT COUNTY MOVING MEMORANDUM GLANZER SHEPARD SUPRA PUBLIC WEIGHER WOLFES PAID MONEY COUNSEL SIDNEY STEIN ROBIN KAUFMAN PREPAID DUDLEY CHAPMAN ESQ NIMS HOWES COLLISON ISNER |
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
J.S.M. HOLDINGS, INC., HOWARD WOLFE, : Index
and HAL WOLFE, :
Plaintiffs, :
-against- :
ARTHUR ANDERSEN h CO.,
:
Defendant.
--"""--"---~-I----II-------------------x
REPLY MEMORANDUM OF LAW
IN FURTHER SUPPORT OF
DEFENDANT'S MOTION TO
DISMISS THE COMPLAINT
Preliminary Statement
As we showed in the moving memorandum of Arthur
Andersen & Co. ("Andersen"), plaintiffs are parties
privity of contract with Andersen, who claim
they purchased stock of Laurel Lamp Manufacturing
("Laurel") in reliance on Laurel's allegedly
concededly unaudited, balance sheet. Plaintiffs
their Complaint that they had no contract with
which is alleged to have had a "contractual
only with "1.S.C. and/or Lightron and/or Laurel."
plaintiffs assert that they are entitled to sue
because they are members of an indeterminate
persons consisting of then present and
holders of I.S.C., Lightron and Laurel."
Andersen's moving memorandum
under principles clearly enunciated by
fifty years ago and explicitly reaffirmed
Court of Appeals in Credit Alliance v. Arthur
65 N.Y.2d 536, 493 N.Y.S.2d 435 (1985),
not state a cause of action against Andersen
to parties not in privity. In a ludicrous
vent this insurmountable barrier to their
contend in their answering papers that they
Andersen for "negligence, " but for an alleged
perform contractual obligation [sic] to
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6
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ORDER
|
EXTRACTED KEY WORDS
DEFENDANT REPORTS CONTRACT COMPLAINT LAUREL ACCOUNTANT STOCK PURCHASE ALLEGE YORK DISMISS PREPARATION BENEFICIARIES BALANCE SHEET ALLEGATION AD2D MOTION HOLDING CPLR LIGHTRON NEGLIGENCE CONTENDS STATUTE LIMITATIONS ACCORDANCE WOLFE ARTHUR ANDERSON OFFICERS THIRD-PARTY BENEFICIARIES LAWSUIT |
>
,mm. &&,4-?
`S&REME COURT OF THE STATE OF NEW YORK, INDIVIDUAL ASSIGNMENT PAR-h *"..........--. . . . .
2
. . I" at the Courtkm themof, 60 ceptre S
New York, New York, 10007.
ry--
4
t +I P r e s e n t : Hoa MYRIAM J
ALTMAN
m--d
f"
1
k$c--
. _.
fir C,r .. .,
,/y-c;`,`,
:-
--against-
The follow@ papers nut&ted 1 to................ @ on this motioq
No..?;mi.- .on Wendar of..... %!.;1% 8.. 7
.................................. PAPEBS luh@mD
Notice of Motion - Order to Show Cause - and
..............................
lblsweringAflidavi~
.................................................................
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7
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NOTC OF SETTLMNT
|
EXTRACTED KEY WORDS
SUPREME COURT COUNTY NIMS HOWES COLLISON ISNER |
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
--------------------------------------x
J.S.M. HOLDINGS, INC., :
HOWARD WOLFE and HAL WOLFE,
:
Plaintiffs, :
- against - :
ARTHUR ANDERSEN & CO., . .
Defendant. :
PLEASE TAKE NOTICE- that an order,
within is a true copy, will be presented
entry herein to Justice Myriam J. Altman at
Clerk of IAS Part 14 of the Supreme Court
York in the County Courthouse, 60 Centre
New York on the 12th day of January, 1988 at 10:00
Dated: New York, New York
January 7, 1988
Yours etc.
FRISCHER & SHARP
Attorneys for
Andersen & Co.
45 Rockefeller
New York, New
Tel: (212)
TO: NIMS, HOWES, COLLISON & ISNER
Attorney for Plaintiffs
500 Fifth Avenue
Suite 3200
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8
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MEMO OF DEF TO DSMSS COMPLAINT
|
EXTRACTED KEY WORDS
COMPLAINT SUPREME COURT COUNTY STATUTE ANCE THIN COUNSEL |
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
----------------------------------------x
J.S.M. HOLDINGS, INC., HOWARD WOLFE : Index No.
and HAL WOLFE, :
Plaintiffs, .
-against-
ARTHUR ANDERSEN & CO.,
Defendant.
----------------"----------------------x
MEMORANDUM OF LAW IN SUPPORT
OF DEFENDANT'S MOTION TO
DISMISS THE COMPLAINT
This is an action by disgruntled investors
purchased a company in 1981, and who now claim that Arthur
Andersen & Co. ("Andersen") is liable to them for alleged
negligent errors in the company's unaudited financial
statements, on which Andersen did not report.' As the
allegations of the Complaint provide no basis for holding
Andersen liable for negligence to anyone, much less to
parties not in privity of contract, the Complaint
dismissed pursuant to CPLR 5 3211(a)(7) for failure
1 A copy of the Complaint is annexed as Exhibit A to
supporting affidavit of Sidney H. Stein, sworn to July 20,
1987.
a cause of action. Moreover, the Complaint must be
for the additional reasons that plaintiffs' six year
claim is barred by the three year statute of
negligence, and that the individual plaintiffs
standing to recover for an injury allegedly incurred
corporation.
PRELIMINARY STATEMENT
This action was brought by plaintiffs
Holdings, Inc. ("J.S.M."), Howard Wolfe -- who is allegedly
the President and sole stockholder of J.S.M.,
-- who is allegedly J.S.M.'s Vice President,
Treasurer [Complaint 77 2-31. Plaintiffs claim
approximately six years ago, in 1981, J.S.M.
the stock of Laurel Lamp Manufacturing Co. ("Laurel")
Lightron Corporation ("Lightron"), Laurel's parent
[Complaint 7 11). The investment was apparently
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9
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MEMO IN OPP TO DSMSS COMPLAINT
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EXTRACTED KEY WORDS
HAL WOLFE COURT MEMORANDUM OPPOSITION BASELESS TOUCHE GROUNDLESS ACCEPTANCE KALKSTEIN APP DIV HEADNOTE SUITE ATTORNEYS PLAINTIFFS |
SUMPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
J.S.M. HOLDINGS, INC., HOWARD WOLFE 1 Index No.
and HAL WOLFE
Plaintiffs,
-against-
ARTHUR ANDERSEN & CO.,
Defendant.
MEMORANDUM OF L?AW IN OPPOSITION TO DEFENDANT'S
MOTION TO DISMISS THE COMPLAINT
Defendant's motion seeks two rulings
(1) dismissing the complaint, and (2) dismissing
Howard and Hal Wolfe for lack of standing. Both
l baseless.
ARGUMENT
I. THIS ACTION IS FOUNDED ON BREACH OF CONTRACT
TOWARD THIRD PARTY BENEFICIARIES
GROUNDS OF NEGLIGENCE
Defendant's entire argument for dismissal
on the false assumption that the plaintiff's case
negligence. No assertion of negligence is made
the violation alleged is failure of the defendant
contractual obligation to furnish financial
the position of the Laurel Lamp corporation on
generally accepted accounting principles ("GAAP").
citations of cases based on negligence principles
irrelevant. Those cases themselves have recognized
in contract by a third party beneficiary are
the negligence principles applied therein. In
v. Touche, 255 N.Y. 170, 174 N.E. 441 (1931) the court expressly
distinguished the earlier case of Glanzer v. Shepard,
236, 135 N.E. 275 (1922) which found liability toward
party. Although Glanzer was decided on negligence,
said it could have reached the same result on a contract
theory. It was on a third party beneficiary basis that
defendant, Arthur Andersen, was denied a motion to dismiss
Philippson v. Hexalon Real Estate, Inc., 111 A.D. 2d
N.Y.S. 2d 506 (A.D, 1st Dept. 1985) Accord Delqado v. Korneqay,
89 Misc. 2d 1071, 395 N.Y.S. 2d 126 (D.C. Suffolk
Dist.). See also, Matter of DeLorean Motor Co., 56 B.R. 936
(Bkrtcy E.D.Mich. 1986).
A key element in establishing the status
a third party beneficiary is whether the benefit
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10
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COVER SHEET
|
EXTRACTED KEY WORDS
PETITIONER RESPONDENT |
46-3004R-175M-81
COUNTY CLERK, NEW 30R~ COUNTY
BER
Application for INDEX NUMBER pkanf .jo
C.P.L.R.
FEE 835.00
Spaces below to be TYPED or PRINTED by applicant
Name and UC
Attorney for Plaintiff
or Petitioner.
Telephone No.
Name and address of
Attorney for Defendant
or Respondent.
Telephone No, 1-j+& 7 \
OK . &`t.\
m3301)
#
A. Nature and object of action or
Nature of special proceeding
rs1 pS;
\
B. Application for Index Number filed by:
C. Date of Service of Summons
ing filed?
YESO NOCI
D. Is a Provisional Remedy being sought in advance
h the
Y,ES 0 NO M
Checked by -.I
DO NOT WRITE ON Llii
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11
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COMPLAINT
|
EXTRACTED KEY WORDS
BUYER AGREEMENT LAUREL YORK STOCK COUNSEL AMOUNT PAY LAWS HEREOF PAYMENTS COURT REPRESENTATIVES COSTS RIGHTS CONNECTION EXPENSE INSTRUMENT OBLIGATIONS FOREGOING BALANCE SHEET PROVISIONS CERTIFICATES HEREINAFTER TOTAL EXPENSE THEREOF HARMLESS CLOSING EXHIBIT TRANSACTIONS |
SUPREME COURT OF THE STATE OF NEW YORK
ZOUNTY OF NEW YORK
w--1---3--------
J.S.M. HOLDINGS, INC.,
HOWARD WOLFE and HAL WOLFE, . .
Plaintiffs,
:
v.
:
ARTHUR ANDERSEN b CO.,
:
Defendant. :
------------- -------x
Plaintiffs by their attorneys Dudley H.
Nims, Howes, Collison b Isner, for their
as follows:
PARTIES
1. Plaintiff J.S.M. Holdings, Inc.
York corporation having its place of business,
its certificate of incorporation, in the county of New
York.
2. Plaintiff Howard Wolfe is a resident
New Jersey and is President and sole stockholder
3. Plaintiff Hal Wolfe is a resident
Connecticut and is Vice President, Secretary and
J.S.M. _
4. Defendant Arthur Andersen t Co. ("AA")
partnership of certified public accountants with
State of New York.
5. Upon information and belief Lightron
("Lightron") is a Delaware corporation qualified
in the State of New York.
6. Upon information and belief, Instrument
Corporation ("ISC") is a Delaware corporation
business in the State of New York, having its
business in the county of Nassau, State of New York.
7. Upon information and belief, at all
hereto, Lightron was a wholly owned subsidiary
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12
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Government Exhibit # 1ST VRFD AMDED CMPLT
|
EXTRACTED KEY WORDS
HAL WOLFE YORK PLAINTIFF HOWARD DEFENDANTS THEREOF JERICHO PAY PROMISSORY HOLDER PAYMENT INDEBTEDNESS FOREGOING NASSAU DELAWARE DEPONENT INSTALLMENT GUARANTY HOLDINGS ATTORNEYS WACTLAR LIEBERMAN ALLEGES AGREEMENT DECLARE EXPENSES GUARANTEE DEMAND FORTHWITH HAL WOLFE HEREBY |
, ! (' ,- ,
-'
`!
;;SUPREME ZOURT OF THE STATE OF NEW YORK
i;COUNTY OF NASSAU
L-*----------------1
-x
~LIGHTRON ~~R.PoRATI~?~,
:
:
I I
FIRST AMENDED
1 -against-
VERIFIED COMPLAIN
AS OF RIGHT
IJ.S.M. HOLDINGS, INC.,
jand HAL WOLFE,
/
:
d
1 i_ - - - - e - - - -
- - - - 1:
Plaintiff,
Blau, Kramer, Wactlar &
! :
i!
~~Lieberman, P.C. , complaining
ndants, alleges as foil
j
i,
e :.
,j 1. At all times mentioned
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13
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JUDGEMENT
|
EXTRACTED KEY WORDS
COMPLAINT YORK DISMISSING MOTION WOLFE AFFIDAVIT SWORN JUDGEMENT EXHIBIT ANNEXED THERETO HOWARD WOLFE HAL WOLFE CLERK PLAINTIFFS STEIN OPPOSITION DELIBERATION THEREOF WRITTEN DECISION GRANTING DIRECTING FRISCHER SHARP ATTORNEYS RECOVER COSTS DISBURSEMENTS AMOUNT CHICAGO ILLINOIS SUITE |
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
J.S.M. HOLDINGS, INC., .. Index No. 17588/87
HOWARD WOLFE and HAL WOLFE, . Altman, J.
Plaintiffs, JUDGMENT
-against-
ARTHUR ANDERSEN & CO.,
Defendant.
Defendant Arthur Andersen & Co. having moved for an
Order pursuant to CPLR § 3211(a)(7) dismissing the complaint
for failure to state a cause of action, and the motion having
regularly come on to be heard at an IAS Part 14 of the Court
on the 15th day of September, 1987;
NOW, upon reading the complaint dated May 29, 1987;
the notice of motion dated July 20, 1987, the affidavit of
Sidney H. Stein, sworn to July 20, 1987, and the exhibit
annexed thereto; the affidavit of Howard Wolfe, sworn to
July 31, 1987, the affidavit of Hal Wolfe, sworn to July 30,
1987, and the exhibits annexed thereto, submitted in opposi-
tion to said motion; and due deliberation having been had
thereof and the Court having rendered its written decision
on December 29, 1987 granting defendant's motion to dismiss
the complaint; and the Court having issued its order on
February 8, 1988 dismissing the complaint against defendant
Arthur Andersen & Co. and directing the clerk to enter
judgment accordingly;
NOW, on motion of Stein, Zauderer, Ellenhorn,
Frischer & Sharp, attorneys for defendant Arthur Andersen &
co., it is
ADJUDGED that defendant Arthur Andersen & Co. shall
have judgment against plaintiffs dismissing the complaint;
and it is further
ADJUDGED that defendant Arthur Andersen t Co. shall
recover costs and disbursements against plaintiffs as
assessed by the clerk of the court in the amount of $x5, a
and that:d.&fendant have judgment
., -_ -- therefor.
-. -l
.._ _
-- . "
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