                                      NOT PRECEDENTIAL
         UNITED STATES COURT OF APPEALS
              FOR THE THIRD CIRCUIT
                   _____________

                      No. 10-3713
                     _____________

          OVERLAND LEASING GROUP, LLC,

                                     Appellant,

                           v.

     FIRST FINANCIAL CORPORATE SERVICES INC.;
        FORTRAN GROUP INTERNATIONAL, INC.;
                F.F.C. SERVICES, INC.;
            GEORGE R. FUNARO & CO., P.C.;
                  KMA ASSOCIATES;
          DINESH DALMIA; RADHA DALMIA;
             IGTL SOLUTIONS (USA), INC.;
     VANGUARD INFO-SOLUTIONS CORPORATION;
   GREG L. RHODES; THOMAS TURRIN & CO, CPA, P.C.;
            AND JOHN DOES I THROUGH IX

            GEORGE R. FUNARO & CO., P.C.,
                               Third Party Plaintiff,

                           v.

      SANJEET ANAND and JOHN DOES I through X,
                              Third Party Defendants,

           THOMAS TURRIN & CO., CPA, P.C.,
                              Third Party Plaintiff,

                           v.

R. VIJAYKUMAR; SANJEET ANAND; JOHN DOES, I through X,
                              Third Party Defendants,
                                    _______________

                     On Appeal from the United States District Court
                              for the District of New Jersey
                                  (D.C. No. 06-cv-5850)
                        District Judge: Hon. Susan D. Wigenton
                                    _______________

                       Submitted Under Third Circuit LAR 34.1(a)
                                    June 24, 2011

       Before: CHAGARES, JORDAN and GREENAWAY, JR., Circuit Judges.

                                   (Filed: July 7, 2011)
                                    _______________

                               OPINION OF THE COURT
                                   _______________

JORDAN, Circuit Judge.

       Overland Leasing Group, LLC, (“Overland”), appeals the decision of the United

States District Court for the District of New Jersey granting summary judgment in favor

of George R. Funaro & Co., P.C., (“Funaro”), and Thomas Turrin & Co., CPA, P.C.

(“Turrin”). For the reasons that follow, we will affirm.

I.     Background

       In 2004, Allserve Systems Corp., (“Allserve”) leased computer equipment from

Fortran Group International, Inc. (“Fortran”) and First Financial Corporate Services, Inc.,

(“First Financial”), pursuant to a master lease agreement. Overland acquired Fortran’s

and First Financial’s interests in that leased equipment in March 2005. Prior to that,

Funaro, which is an accounting firm, issued an Independent Auditor’s Report (“Funaro

                                             2
Report”) of Allserve’s financial statements in June 20041 and a report compiling

Allserve’s financial statements in January 2005 (the “Compilation”). Near the end of

July 2005, Turrin, another accounting firm, prepared an audit report (“Turrin Report”) of

Allserve’s finances for the year ending March 31, 2005. In August 2005, Allserve ceased

making payments on the equipment and subsequently declared bankruptcy.

       In December 2006, Overland filed suit against numerous parties, including Funaro

and Turrin (together, “Appellees”). Overland alleged that it was defrauded during the

purchase of the equipment leased to Allserve and that Appellees furthered that fraud by

preparing financial statements and audits that did not accurately reflect the financial

condition of Allserve. Specifically, Overland alleged both that Appellees committed

accountants’ malpractice and negligent misrepresentation of financial information and

that Appellees intentionally and recklessly misrepresented Allserve’s financial condition.

       The District Court granted Appellees’ motions for summary judgment on those

claims. Applying New Jersey law pursuant to its previous conflict of laws analysis, the

District Court held that a non-client, such as Overland, cannot recover from accountants,

such as Appellees, for malpractice and negligent representation unless it can establish the

three elements set forth in N.J. Stat. Ann. § 2A:53A-25(b)(2) (the “New Jersey Statute”),

namely that the accountants agreed that their services would be made available to the

       1
         In September 2004, Funaro learned of discrepancies in Allserve’s audited
financial statements and demanded return of all the copies of the Funaro Report.
Ultimately, through the efforts of its staff and outside counsel, Funaro located 38 of the
original 40 copies of the Funaro Report issued to Allserve.
                                              3
third party who was specifically identified to them, that the accountants knew the third

party would rely on the professional accounting service in connection with a specific

transaction, and that the accountants directly expressed their understanding of the third

party’s intended reliance.

       Viewing the facts and inferences in the light most favorable to Overland, the

District Court held that there was no genuine issue of material fact and that Overland had

failed to adduce evidence establishing any of the elements of the New Jersey Statute with

respect to either of the Appellees. The District Court also found in favor of Appellees on

Overland’s intentional tort claim. In its timely appeal, Overland has limited its

arguments to the District Court’s decision on the malpractice and negligent

misrepresentation claims.

II.    Discussion2

       Overland argues that the District Court erred in deciding that the New Jersey

Statute applies to the Appellees. It says that the New Jersey Statute applies only to

accountants licensed in New Jersey, not to accountants licensed in other states, as

Appellees are. We need not address the merits of that argument here, however, for even



       2
         The District Court had jurisdiction pursuant to 28 U.S.C. § 1332(a), and we have
appellate jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review of an
order granting summary judgment, “may affirm the order when the moving party is
entitled to judgment as a matter of law, with the facts viewed in the light most favorable
to the non-moving party,” and “may affirm the District Court on any grounds supported
by the record.” Kossler v. Crisanti, 564 F.3d 181, 186 (3d Cir. 2009) (en banc) (internal
quotation marks omitted).
                                             4
if the New Jersey Statute does not apply to Appellees, New York law would and

Appellees would still prevail.3

       Without the New Jersey Statute, New Jersey law demands application of the broad

common-law foreseeability rule. Cf. E. Dickerson & Son, Inc. v. Ernst & Young, LLP,

846 A.2d 1237, 1240 (N.J. 2004) (holding that “the manifest legislative intent in adopting

[the Statute] was to … restore the concept of privity to accountants’ liability towards

third parties”). New York’s law, however, requires a relationship between accountants

and third parties “approach[ing] that of privity” before liability attaches to an

accountant’s acts of negligence – a standard very similar to that imposed under the New

Jersey Statute. Credit Alliance Corp. v. Arthur Andersen & Co., 483 N.E.2d 110, 119

(N.Y. 1985) (internal quotation marks omitted). Therefore, since the outcome of the

negligence claim might differ under New Jersey law (sans Statute) and New York law,

we must conduct a conflict-of-laws analysis under the law of the forum state, New Jersey.

See Kirschbaum v. WRGSB Assocs., 243 F.3d 145, 150 (3d Cir. 2001) (observing that, in

a diversity case, the conflict-of-laws rules of the forum state apply).

       New Jersey law directs us to the Restatement (Second) of Conflict of Laws (1971)

(the “Restatement”), to determine which state’s law to apply. See P.V. ex rel. T.V. v.



       3
         The District Court chose to apply New Jersey law after finding that New York
law and New Jersey law – inclusive of the New Jersey Statute – were substantively the
same. If the New Jersey Statute applies to Appellees, we agree with that analysis and the
District Court’s disposition of the case. Since we choose to avoid the state law issue
concerning the applicability of the Statute, our analysis proceeds on a different track.
                                              5
Camp Jaycee, 962 A.2d 453, 455 (N.J. 2008) (applying the Restatement in a conflict-of-

laws analysis in a tort action); Debra F. Fink, D.M.D., MS, PC v. Ricoh Corp., 839 A.2d

942, 986 (N.J. Super. Ct. 2003) (applying § 148 of the Restatement in a conflict-of-laws

analysis in an action for misrepresentation); Vail v. Pan Am Corp., 616 A.2d 523, 527 n.3

(N.J. Super Ct. App. Div. 1992) (citing to § 148 of the Restatement for conflict-of-laws

rules regarding misrepresentation). Three sections of the Restatement are relevant to a

conflict-of-laws analysis in this case. First, § 6 of the Restatement prescribes several

“cornerstone” factors relevant to choosing the appropriate rule of law, see Camp Jaycee,

962 A.2d at 458 (acknowledging § 6 of the Restatement as the “cornerstone of the entire

Restatement”), including “the relevant policies of other interested states and the relative

interests of those states in the determination of the particular issue,” “the protection of

justified expectations,” “certainty, predictability and uniformity of result,” and “ease in

the determination and application of the law to be applied[,]” RESTATEMENT (SECOND)

OF CONFLICT OF LAWS     § 6 (1971).

       Second, § 145 of the Restatement provides specific guidance for choosing which

rule of law is appropriate to apply in tort actions: “The rights and liabilities of the parties

with respect to an issue in tort are determined by the local law of the state which, with

respect to that issue, has the most significant relationship to the occurrence and the

parties under the principles stated in § 6.” RESTATEMENT (SECOND) OF CONFLICT OF

LAWS § 145(1) (1971). Section 145 also includes four specific factors to be weighed

when determining which state has the most significant relationship: “(a) the place where
                                               6
the injury occurred, (b) the place where the conduct causing the injury occurred, (c) the

domicil, residence, nationality, place of incorporation and place of business of the parties,

and (d) the place where the relationship, if any, between the parties is centered.”

RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 145(2) (1971).

       Third, § 148 of the Restatement highlights additional relevant factors to be

considered in a conflict-of-laws analysis for actions concerning misrepresentation,

including negligent misrepresentation, when a plaintiff’s reliance took place at least in

part in a state other than where the false representations were made.4 RESTATEMENT

(SECOND) OF CONFLICT OF LAWS § 148(2) (1971). Those additional factors include:

        (a) the place, or places, where the plaintiff acted in reliance upon the
       defendant’s representations, (b) the place where the plaintiff received the
       representations, (c) the place where the defendant made the representations,
       … (e) the place where a tangible thing which is the subject of the
       transaction between the parties was situated at the time, and (f) the place
       where the plaintiff is to render performance under a contract which he has
       been induced to enter by the false representations of the defendant.

Id.

       Many of those factors referenced in the Restatement are relevant and readily

apparent from the record. Overland is a Delaware company with headquarters in

Massachusetts and an office in New York; Appellees are accountants licensed in New

       4
         We assume, for the sake of completeness, that some of Overland’s reliance took
place in New Jersey, even though the record appears to indicate that Overland’s reliance
took place wholly in New York. Otherwise, if Overland’s reliance occurred wholly in
New York, § 148 of the Restatement would expressly direct application of New York law
since the reliance and representations occurred in the same state. RESTATEMENT
(SECOND) OF CONFLICT OF LAWS § 148(1) (1971).
                                             7
York; and Allserve is a Texas company with a principal place of business in New Jersey.

The alleged negligent misrepresentations of the Appellees are within the reports finalized

at and disseminated from Appellees’ offices in New York.5 The agreements by which

Overland acquired its interest in the leased equipment were executed by a representative

of Overland’s New York office, listed Overland’s contact address in New York, and

designated New York law as controlling. It also appears that some, if not all, of

Overland’s activity involving review of the reports produced by Appellees and the

reliance by Overland on those reports occurred in New York.6 Furthermore, while New

Jersey has an interest in ensuring that companies that operate within its borders do not

employ negligent accountants to audit their books, New York has a compelling interest in

applying its law in a predictable, uniform manner to activities by New York licensed

accountants that occurred in New York and that allegedly induced a company’s New

York employees to enter into a contract on behalf of their employer in which New York

law was chosen as controlling. In light of these considerations, New York law is




       5
         Whatever work Appellees may have done in New Jersey, if any, to prepare their
reports, the alleged misrepresentations that form the basis of Overland’s cause of action
occurred in New York.
       6
         Overland asserts that “decisions are made” at its principal place of business in
Boston, Massachusetts. (Reply Brief at 15, 17.) However, Stephan Parisi, the primary
credit analyst for Overland at the time of the transaction at issue here, stated during his
deposition that he, his boss, and his boss’s supervisor were responsible for “perform[ing]
the credit analysis for th[e] transaction” and were located in Overland’s New York office.
(App. at 545-47, 551.)
                                             8
properly applied to Overland’s accountants’ malpractice and negligent misrepresentation

claims.

       Under New York law, Appellees cannot be liable to Overland “for the negligent

preparation of financial reports” unless a relationship “approach[ing] that of privity”

existed between them; i.e., “(1) [the Appellees] must have been aware that the financial

reports were to be used for a particular purpose or purposes; (2) in the furtherance of

which [Overland] was intended to rely; and (3) there must have been some conduct on

the part of [Appellees] linking them to [Overland], which evinces [Appellees’]

understanding of [Overland’s] reliance.” Credit Alliance, 483 N.E.2d at 115, 118.

       Overland has presented no evidence upon which a reasonable jury could rely to

find that such a relationship existed between it and either Appellee. There is no evidence

in the record that either Appellee communicated with Overland with respect to the

purchase of the leased equipment at issue or that either Appellee exhibited any conduct

that would show that they knew or understood that Overland was relying on the

representations Appellees made in the reports at issue.7 Therefore, Overland’s claims



       7
         Nor is there any evidence on which a reasonable jury could rely to find that
Overland actually relied on any representation made by either Appellee when deciding
whether or not to purchase the leased equipment. Overland’s primary credit analyst
stated that his report to Overland’s Investment Committee regarding the underwriting and
recommendation for purchasing the leased equipment from Fortran did not rely on the
Funaro Report and that he did not receive the Compilation until after issuing a
commitment letter to one defendant involved in the purchase and on the same day as
issuing its commitment letter to Fortran. Likewise, the Turrin Report did not even exist
at the time that Overland decided to purchase the leased equipment.
                                             9
against the Appellees must fail, and summary judgment in favor of Appellees was

proper.8

III.   Conclusion

       For the foregoing reasons, we will affirm the judgment of the District Court.




       8
         Overland also asserts that even if Funaro is “insulated by the [New Jersey
Statute]” for the opinions in the Funaro Report, Funaro is still liable under the “standards
of ordinary negligence” for its failed attempt to retrieve every copy of the Funaro Report
after learning of the document’s potential inaccuracies. (Appellant’s Opening Brief at
30.) That argument is unpersuasive. The harm Overland claims that it suffered from
Funaro’s alleged common law breach of a duty to diligently track down every copy of the
Funaro Report is that it relied on the misrepresentations in a copy of that Report that
Funaro failed to locate. That line of reasoning, of course, is inconsistent with our
conclusion that, under New York law, the benefit of liability extends only to those in a
relationship “approaching privity” with the accountant. Credit Alliance, 483 A.2d at 115.
The liability theory Overland presses is even further removed from the idea of privity,
and we do not think New York would extend the benefit of accountant liabilty to
someone who happens on a stray report.
                                            10
