JP Foodservice Distributors, Inc. v. PricewaterhouseCoopers LLP

291 A.D.2d 323, 737 N.Y.S.2d 849, 2002 N.Y. App. Div. LEXIS 2037

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: February 26, 2002
• Status: Published

Opinion

—Order, Supreme Court, New York County (Karla Moskowitz, J.), entered July 27, 2001, which denied defendant’s motion to stay this action pending final resolution of a related action before the same court and Justice, entitled JP Foodservice Distributors, Inc. v Sorrento, Inc. (Index No. 604112/00), unanimously modified, on the law, the facts and in the exercise of discretion, to grant the motion in part to the extent of staying only the trial of this action pending the trial of the related action, and otherwise affirmed, without costs.

Plaintiff purchased all of the outstanding capital stock of Sorrento Food Service, Inc. (SFS), allegedly in reliance on financial statements audited by the predecessor-in-interest of defendant accounting firm. Plaintiff now alleges that such financial statements were materially false and misleading, and sues defendant in this action for alleged negligence in auditing the financial statements. At the same time, plaintiff is suing the seller of SFS’s stock for fraud, inter alia, in a separate action. We believe that the factual issues in the two actions are so closely intertwined that a stay of the trial of this action against the accountants pending the trial of the related action against the seller would serve the interests of judicial economy and avoidance of inconsistent results (see, CPLR 2201), and modify the order of the IAS court accordingly. We do not, however, grant defendant’s motion to the extent it sought a stay of discovery. We further note that the IAS court retains discretion to consolidate the two actions should such relief be sought (see, CPLR 602 [a]). Concur — Andrias, J.P., Saxe, Sullivan, Rosenberger and Friedman, JJ.