FIRST DIVISION
May 5, 2003

JUSTICE O'MALLEY delivered the opinion of the court:

Plaintiff, Builders Bank, brought this action againstdefendant Barry Finkel & Associates, P.C., to recover lossesallegedly sustained from plaintiff's professional malpractice andnegligent misrepresentation. Plaintiff alleges that it reliedupon reviewed financial statements that defendant prepared forUrkov Manufacturing Company (UMC) for purposes of lending UMC$1.5 million. Defendant filed a motion to dismiss pursuant tosection 2-619 of the Code of Civil Procedure (the Code) (735 ILCS5/2-619 West (2000)). The trial court granted defendant's motionto dismiss plaintiff's amended complaint. Plaintiff appealsclaiming that the trial court erred by misinterpreting section30.1 of the Illinois Public Accounting Act (the Act) (225 ILCS450/30.1 (West 2000)).

BACKGROUND

The following facts are derived from the well-pleaded factsin plaintiff's amended complaint and the reasonable inferencesdrawn therefrom, which for purposes of this appeal must beaccepted as true (In re Chicago Flood Litigation, 176 Ill. 2d179, 184, 680 N.E.2d 268 (1997)), as well as the variousevidentiary materials submitted by both parties in connectionwith defendant's motion to dismiss.⁽¹⁾ See Lawson v. City ofChicago, 278 Ill. App. 3d 628, 634, 662 N.E.2d 1377 (1996) (inruling on a section 2-619 motion for dismissal, the court mayproperly consider "external submissions of the parties"); In rePetition for Submittal of the Question of Annexation to theCorporate Authorities of the City of Joliet, 282 Ill. App. 3d684, 688, 668 N.E.2d 1073 (1996) (court may consider when rulingon section 2-619 motion to dismiss "pleadings, depositions,affidavits [citations], and other evidence offered by theparties").

In November 1998, UMC, a private corporation then engaged inthe distribution of upholstery, designer fabrics and customdraperies, applied for a business loan from plaintiff. Inconnection with the loan and at plaintiff's request, defendant,UMC's long-time accounting firm, furnished plaintiff withreviewed financial statements, dated July 7, 1998, concerningUMC's operations for the years ending June 30, 1998, and June 30,1997. Defendant further supplied projected consolidatedfinancial statements, dated October 15, 1998, for the year endingSeptember 30, 1999.

Plaintiff alleges that when defendant prepared the projectedstatements for UMC in October 1998, it did so knowing that UMCintended to use the statements primarily to influence UMC'slenders. A loan preparation document prepared by plaintiff'sstaff during consideration of UMC's application utilized thereviewed statements prepared by defendant. Moreover, plaintiff'spresenting officer used the projected statements prepared bydefendant as evidence of UMC's future profitability. Thereviewed statements listed, inter alia, a value for inventory inexcess of $2.5 million. The stated value of the inventory,however, was purportedly inflated and the inventory was worthmuch less than the value stated in the financial statements.

On November 24, 1998, plaintiff requested that defendantfurnish it with additional financial statements for the yearsprior to those ending June 30, 1997, and June 30, 1998. Finkelpersonally consulted with UMC and sent financial statements forthe years ending June 30, 1995, and June 30, 1996, either toplaintiff or to UMC, which then sent them to plaintiff.

On November 24, 1998, plaintiff approved a loan to UMC inthe amount of $1.3 million. According to the complaint,plaintiff specifically relied on the reviewed and projectedfinancial statements prepared and submitted by defendant inmaking its decision to grant the loan.

On February 26, 1999, Barry Finkel and UMC's president,Morrie Urkov, personally met with plaintiff's president and thesenior vice-president to discuss a UMC request to increase theoriginal loan amount by $200,000, to $1.5 million. At themeeting, Finkel personally provided plaintiff with consolidatedfinancial statements, dated February 4, 1999, for UMC for the sixmonths ending December 31, 1998, which showed over $2.7 millionin UMC inventory for both 1997 and 1998. Finkel reviewed thesestatements with plaintiff's president and senior vice-president.

The new loan proposal was subsequently presented toplaintiff's board of directors (Board). The proposal included afull analysis of the financial information contained in thestatements prepared by defendant and specifically used thestatements for the year ending December 31, 1998, to calculatethe loan amount.

On March 17, 1999, the Board, allegedly acting insubstantial reliance on the financial statements prepared bydefendant, approved an increase in the amount of UMC's originalloan by the requested $200,000 following discussions with Finkel. Following the loan increase, UMC experienced financial hardshipand ceased its operations on November 30, 1999. The inventorylisted in the financial statements by defendant was subsequentlyliquidated for approximately $50,000.

ANALYSIS

The purpose of involuntary dismissal under section 2-619 ofthe Code is to afford litigants a means to dispose of issues oflaw and easily proved issues of fact at the onset of the case,reserving disputed questions of fact for trial. Zedella v.Gibson, 165 Ill. 2d 181, 185, 650 N.E.2d 1000 (1995); Goran v.Glieberman, 276 Ill. App. 3d 590, 592, 659 N.E.2d 56 (1995). Amotion to dismiss pursuant to section 2-619(a)(9), the sectionupon which defendant relies, acknowledges the plaintiff's causeof action but presents an affirmative matter that avoids thelegal effect of the claim. 735 ILCS 5/2-619(a)(9) (West 2000). In the instant case, the "affirmative matter" asserted bydefendant is the protection of accountants from third-partyliability set out in section 30.1 the Act. 225 ILCS 450/30.1(West 2000). It provides:

"No person, partnership or corporation licensed orauthorized to practice under this Act or any of itsemployees, partners, members, officers or shareholders shallbe liable to persons not in privity of contract with suchperson, partnership or corporation, for civil damagesresulting from acts, omissions, decisions or other conductin connection with professional services performed by suchperson, partnership or corporation, except for:

(1) such acts, omissions, decisions or conduct thatconstitute fraud or intentional misrepresentations, or

(2) such other acts, omissions, decisions or conduct, ifsuch person, partnership or corporation was aware that aprimary intent of the client was for the professionalservices to benefit or influence the particular personbringing the action; provided, however, for the purposes ofthis subparagraph (2), if such person, partnership orcorporation (i) identifies in writing to the client thosepersons who are intended to rely on the services, and (ii)sends a copy of such writing or similar statement to thosepersons identified in the writing or statement, then suchperson, partnership or corporation or any of its employees,partners, members, officers or shareholders may be heldliable only to such persons intended to so rely, in additionto those persons in privity of contract with such person,partnership or corporation." 225 ILCS 450/30.1 (West 2000).

Affirmative matters within the meaning of section 2-619(a)(9) of the Code encompass matters in the nature of adefense that negates the plaintiff's cause of action entirely orrefutes crucial conclusions of law or conclusions of materialfact that are unsupported by the complaint. O'Hare TruckService, Inc. v. Illinois State Police, 284 Ill. App. 3d 941,945-46, 673 N.E.2d 731 (1996). Defendant reasons that thestatute requires plaintiff to allege that defendant was aware ofthe client's intent to benefit or influence a third party at thetime the work was prepared by defendant. According to defendant,plaintiff cannot allege that defendant was aware that its clientintended that its work would influence plaintiff because UMC didnot have a relationship with Builder's Bank at the time defendantprepared the reviewed financial statements. Defendant arguesthat the action was, therefore, properly dismissed because no setof circumstances exist whereby plaintiff could state a cause ofaction under the statute.

Appellate review of a dismissal pursuant to section 2-619 is de novo and, thus, a reviewing court need not defer to thecircuit court's reasoning. Spillyards v. Abboud, 278 Ill. App.3d 663, 662 N.E.2d 1358 (1996). The relevant inquiry on appealis "whether the existence of a genuine issue of material factshould have precluded the dismissal or, absent such an issue offact, whether dismissal is proper as a matter of law." Kedzie &103rd Currency Exchange, Inc. v. Hodge, 156 Ill. 2d 112, 116-17,619 N.E.2d 732 (1993). In making this determination, we willconstrue all pleadings and supporting documents in a light mostfavorable to the nonmoving party. Mayfield v. ACME Barrel Co.,258 Ill. App. 3d 32, 34, 629 N.E.2d 690 (1994).

Plaintiff made, inter alia, the following allegations in itsfirst amended complaint:

"7. In connection with the loan and at plaintiff'srequest, defendant furnished plaintiff with reviewedfinancial statements for UMC for the years ending June 30,1998 and June 30, 1997 (dated July 7, 1998) as well asprojected consolidated financial statements for the yearending September 30, 1999 (dated October 15, 1998).

8. Plaintiff alleges that in October of 1998, whenFinkel prepared projected consolidated financial statementsfor UMC, Finkel did so knowing that UMC intended to use theprojected financial statements (showing UMC to be profitableinto the foreseeable future) primarily to influence UMC'slenders.

* * *

25. Defendant, Barry Finkel & Associates submitted thereviewed and consolidated financial statement to plaintiffin compliance with plaintiff's request for those statements,or UMC's instructions to Finkel to tender the statements toplaintiff, knowing that plaintiff would use those statementsin making its decision to grant or deny UMC's loanapplication.

26. As public accountants, defendant owed a duty of duecare to all persons who foreseeably would rely on reviewedor consolidated financial statements prepared by defendant,and to perform review services in accordance with thestatements on standards for accounting and review servicesof the American Institute of Certified Public Accountants."

Here, we must determine when third parties may hold anaccountant liable for negligent misrepresentation and malpracticewhen privity does not exist. In a recent case construing section30.1 of the Act, this court held that for a third nonprivityparty to hold an accountant liable, the party must show: (1) theintent of the client for the accountant's work to benefit orinfluence the third party; and (2) the accountant's knowledge ofthat intent. Chestnut Corp. v. Pestine, Brinati, Gamer, Ltd.,281 Ill. App. 3d 719, 724, 667 N.E.2d 543 (1996). Clearly,plaintiff's allegation in its pleading that defendant owed a dutyof due care to all persons who would foreseeably rely on itsstatements is simply not the law in Illinois. See also Brumleyv. Touche, Ross & Co., 139 Ill. App. 3d 831, 834, 487 N.E.2d 641(1985).

This court has thoroughly reviewed the common law relativeto third parties in Brumley v. Touche Ross & Co., 123 Ill. App.3d 636, 463 N.E.2d 195 (1984) (Brumley), and in a second decisioninvolving the same parties, Brumley v. Touche, Ross & Co., 139Ill. App. 3d 831, 487 N.E.2d 641 (1985) (Brumley II). For manyyears, an accountant was liable in damages for his work only tohis client. The rationale for this strict limitation onliability was announced in Ultramares Corp. v. Touche, 255 N.Y.170, 174 N.E. 441 (1931). The Ultramares Corp. court reasonedthat to allow third parties to recover for an accountant'snegligence "may expose accountants to a liability in anindeterminate amount for an indeterminate time to anindeterminate class." Ultramares Corp., 255 N.Y. at 179, 174N.E. at 444.

When Brumley presented this court with the issue of anaccountant's liability to a third party, we reviewed the historyof the issue since Ultramares, then looked for instruction to oursupreme court cases in Rozny v. Marnul, 43 Ill. 2d 54, 250 N.E.2d656 (1969), and Pelham v. Griesheimer, 92 Ill. 2d 13, 440 N.E.2d96 (1982). In Rozny, the supreme court recognized that anonprivity party could bring an action in Illinois against asurveyor for negligent misrepresentation. The Pelham court heldthat an attorney could owe a duty to a third party who was nothis client if the attorney was acting at the direction of or onbehalf of his client to benefit or influence the third party.

Relying on these opinions, we held in Brumley that anaccountant owed a duty to third parties who relied on his reportor opinion if the accountant "was acting at the direction of oron behalf of his client to benefit or influence [the]third-party." Brumley, 123 Ill. App. 3d at 642, 463 N.E.2d 195. In Brumley II we considered an amended complaint and clarifiedits previous holding by stating: "[T]o be sufficient plaintiff'scomplaint must allege facts showing that the purpose and intentof the accountant-client relationship was to benefit or influencethe third-party plaintiff." Brumley II, 139 Ill. App. 3d at 836,487 N.E.2d 641.

One year after the decision in Brumley II, section 30.1 ofthe Act was enacted. 225 ILCS 450/30.1 (West 2000). It nowgoverns liability to third parties not in privity with anaccountant and sets forth the only circumstances under which anaccountant may be sued by a third-party for negligence inrendering his professional services.

Relative to the pleadings in the case at bar, section 30.1of the Act provides that an accountant could be held liable to athird party when "such person, partnership or corporation wasaware that a primary intent of the client was for theprofessional services to benefit or influence the particularperson bringing the action." 225 ILCS 450/30.1 (West 2000).

At the outset we note that the statute is silent on theissue of timing. However, silence, as it relates to timing inthis statute, does not create an ambiguity. See Atkins v. Deere& Co., 177 Ill. 2d 222, 230-31, 685 N.E.2d 342 (1997) (findingthat the ambiguity did not exist as a result of legislature'ssilence). Rather, any ambiguity is created by the parties'disparate positions on the issue of timing that appear in theirbriefs.

Plaintiff contends, based upon the rule enunciated in Chestnut and in the statute, that an accountant should be heldliable for negligent misrepresentation anytime he submits hiswork product, or vouches for it anew, if he knows that hisprofessional services are being used by his client to influence aspecific third party, regardless of when the work product wascompleted.

On the other hand, defendant argues that primary intent asdescribed in section 30.1 of the Act should be determined at thetime the accountant performs the work for the client or when theaccuracy of the work is subsequently verified to the third party. Defendant cites Brumley II, 139 Ill. App. 3d at 836, and thefollowing language of the statute to support its argument: "[s]uch other acts, omissions, decisions or conduct, if [theaccountant] was aware that a primary intent of the client was forthe professional services to benefit or influence the particularperson bringing the action." (Emphasis added.) 225 ILCS450/30.1(2) (West 2000).

Our task is to determine what the legislature intendedrelative to the timing of the accountant's awareness referencedin the statute. In short, when does an accountant need to beaware that his client intends to benefit or influence a thirdparty with his work product for liability to accrue?

The legislature, in our view, could have indicated in thelanguage of the statute when awareness of the client's intentbecomes operative, but it did not do so. However, where there isno ambiguity in a statute, a court is not at liberty to departfrom its plain language by reading into it exceptions,limitations, or conditions not expressed by the legislature. Solich v. George & Anna Portes Cancer Prevention Center ofChicago Inc., 158 Ill. 2d 76, 83, 630 N.E.2d 820 (1994). Interms of timing, we do not read the statute to strictly requirethat an accountant be made aware of his client's intention toinfluence or benefit a third party only at the time the workproduct was created as plaintiff contends.

The standard announced in Pelham requires that a plaintiff"prove that the primary purpose and intent of the [client] ***was to benefit or influence the third party." Pelham, 92 Ill. 2dat 21. In Brumley II, we held that the plaintiff in that casemet the Pelham standard because he alleged that the defendantknew of the plaintiff's reliance on the defendant's reports andthat the defendant had subsequently verified its accuracy. Brumley II, 139 Ill. App. 3d at 836. We do not, however, readBrumley II as per se requiring independent verification in orderto meet the standard in Pelham. Other conduct may be sufficientto satisfy Pelham.

Our holding is a narrow one based on the facts of this case. We believe that the conduct of the professional corporation,Barry Finkel & Associates, outlined below, meets the Pelhamstandard and may give rise to liability to plaintiff if properlypled.

The record indicates that Finkel was told by Urkov that UMCwas applying for a loan and requested that financial statementsbe furnished to plaintiff. The record further establishes thatFinkel personally met with plaintiff on two occasions to discussissues related to the loan. In at least one meeting, UMC wasseeking an increase of $200,000 on a loan that had already beenapproved. In our view, it is reasonable to infer that Finkelplayed an active role in securing the loan or increasing the loanamount for UMC. From this evidence, a finder of fact couldconclude, pursuant to the statute, that defendant knew its workwas being used to influence plaintiff at least at the time of thesecond meeting and that defendant, at minimum, presented its workas accurate.

Moreover, there is no ambiguity in the requirement of thestatute that the third party be "the particular person bringingthe action." 225 ILCS 450/30.1 (West 2000). There can be noquestion that Barry Finkel knew when he met personally withplaintiff that it was Builder's Bank that the work product wasmeant to influence. Since neither party raises this issue, weneed not address it in any further detail.

We further caution that our holding is limited to the factsof this case and we are not expanding the scope of the statute. We decline to announce an affirmative duty on the part ofaccountants to seek out third parties for an indeterminate periodof time after their work is prepared, repudiating it because theaccountant becomes aware, however tangentially, that it may beused to influence or benefit a third party.

Therefore, after a thorough review of the record, we holdthat section 30.1 of the Act (225 ILCS 450/30.1 (West 2000)) isnot an affirmative matter that defeats plaintiff's cause ofaction pursuant to section 2-619 of the Code (735 ILCS 5/2-619(West 2000)). Accordingly, we reverse the lower court'sdismissal of the case and remand this matter to allow plaintiffto amend his complaint in conformance with the proofs elicited inthe limited discovery and the interpretation of section 30.1 ofthe Act (225 ILCS 450/30.1 (West 2000)).

Reversed and remanded.

GORDON, P.J., and McNULTY, J., concur.

1. Although this matter was disposed of on a section 2-619motion to dismiss, the trial court allowed limited discoverypursuant to agreement by counsel. Barry Finkel and Morris Urkovwere deposed and their depositions were made part of the recordon appeal.