National Medical Transportation Network v. Deloitte & Touche

Defendants Deloitte & Touche and Gordon Johns appeal a judgment after jury trial favoring plaintiff National Medical Transportation Network (Medtrans) on its claims for professional negligence, breach of contract and negligent interference with prospective economic advantage. Defendants claim instructional errors, evidentiary error and the lack of substantial evidentiary support for various jury findings. Finding instructional errors plus insufficient evidence of causation, we reverse the judgment.

I

Introduction

Seeking to obtain capital contributions by investors, Medtrans hired defendants as independent auditors to issue an opinion about its financial condition. After unsuccessfully seeking to resolve disagreements with Medtrans’s management about the need for adjustments to the company’s financial statements, defendants resigned without issuing an audit opinion. Although hiring successor auditors, Medtrans lost a potential $10 million capital investment.

Medtrans brought this lawsuit against defendants for committing professional negligence by withdrawing prematurely from the auditing engagement, breaching the parties’ engagement contract by not issuing an audit…