Young v. Jones
United States District Court for the District of South Carolina
816 F. Supp. 1070 (1992)
Young and other investors (investors) (plaintiffs) deposited more than $500,000 in a bank, and the entire amount disappeared. The investors claimed that when they deposited their money in the bank, they relied on an audit letter from Price Waterhouse, Chartered Accountants (PW-Bahamas) confirming a financial statement that turned out to be falsified. The audit letter was printed on letterhead with a trademark signed “Price Waterhouse.” The investors contend that PW-Bahamas and Price Waterhouse’s partnership in the U.S. (PW-US) operated as partners by estoppel, and therefore PW-US can be held liable for the alleged negligence of PW-Bahamas regarding the audit letter. The investors argue that Price Waterhouse held itself out as a partnership with offices around the world, and PW-US made no distinction between itself and other PW entities around the world. As proof that PW-Bahamas and PW-US held themselves out as partners, the investors offer a Price Waterhouse brochure stating that Price Waterhouse is a large and respected global entity, with 400 offices throughout the world. The investors aver that the brochure was intended to present an image of a large international accounting firm, and that PW-US promoted that image to give the public confidence in Price Waterhouse’s stability and expertise.
Rule of Law
Holding and Reasoning (Hawkins, C.J.)