Krohn

FACTS AND PROCEDURAL HISTORY

Plise controlled a corporate entity that owned 126 acres of real property in Henderson, Nevada (the City Crossing property). Plise divided the City Crossing property into 15 parcels, which he distributed among 15 companies that he created (the City Crossing entities). The City Crossing entities obtained development loans secured by the City Crossing property and personally guaranteed by Plise. In deciding to apply for the loans, Plise allegedly relied on financial statements and tax returns prepared by Sarna that "grossly exaggerated" the City Crossing entities' assets and income. When the City Crossing entities ran out of funds before the development project was complete, the lenders foreclosed on their security interests. In addition, they sued Plise for breach of contract and fraud, obtaining judgments against him for the deficiency balance. Plise subsequently filed for bankruptcy. More than two years after the first of the judgments against Plise, the bankruptcy trustee sued Sarna for accounting malpractice.1 She alleged that Sarna was negligent in preparing the financial statements and tax returns. Sarna moved for summary judgment on the…