Cromeans v. Morgan Keegan & Co., Inc.

Morgan Keegan & Company, Inc. (Morgan Keegan) (defendant) retained Armstrong Teasdale, LLP (Armstrong Teasdale) to prepare an offering statement in connection with the issuance of bonds that John Cromeans (plaintiff) later purchased. The offering statement indicated that Armstrong Teasdale was not aware of any facts that would lead it to believe that the offering statement contained misrepresentations or omitted material facts. Armstrong Teasdale also had a contract with the Missouri Department of Economic Development (DED) to work toward attracting Chinese businesses to Missouri. Pursuant to that contract, Armstrong Teasdale’s agent, Edward Li, investigated a Chinese company, Mamtek. Li reported to Armstrong Teasdale and DED that a Mamtek plant had not commenced manufacturing and could not do so because it was unable to satisfy zoning requirements. Armstrong Teasdale’s offering statement, however, reported that the plant was operational. Cromeans asserted claims against Armstrong Teasdale for legal malpractice and negligent misrepresentation, alleging that when he purchased the bonds, he relied to his detriment on the offering statement’s false representation that the Mamtek plant was operational. The district court granted summary judgment to Armstrong Teasdale. Cromeans filed a motion to vacate the order, which the court initially denied. However, the court then reconsidered the question of whether Armstrong Teasdale was entitled to summary judgment on Cromeans’s negligent-misrepresentation claim.