News & Insights

Auditor Liability Bulletin

May 12, 2023

Court Grants Summary Judgment in favor of Deloitte and Managing Director on Defamation, Tortious Interference Claims by Audit Client’s Former CFO


On May 10, 2023, a Georgia state court entered an order granting summary judgment in favor of Deloitte & Touche LLP and a Deloitte managing director, dismissing claims made by an audit client’s former chief financial officer for defamation and tortious interference with business relations.

According to the court’s order, in 2019, when the plaintiff was CFO of a Deloitte audit client, Deloitte alerted the client’s parent company to reports of alleged improper accounting practices by the CFO, as required by professional standards. The audit client subsequently terminated the CFO after an independent investigation. The terminated CFO was later hired as CFO by another Deloitte audit client. In 2020, Deloitte and the managing director communicated to the CFO’s new employer that they determined that they could not rely on management representations from the CFO as part of Deloitte’s current audit. The plaintiff alleged that those actions made him unemployable in his current profession and with his employer.

In its ruling on Deloitte’s and the managing director’s motion for summary judgment, the court held that the defamation claim failed because the statement that they would not accept management representations from the CFO was not a statement that could be proven false, and because the statement was a conditionally privileged accountant-client communication with no evidence of actual malice. The court further held that the tortious interference claim failed because, among other things, there was no evidence of malice and because Deloitte and the managing director were not strangers to the relationship.  

The case is, Sheffield v. Deloitte & Touche, LLP, Karen Lehto and Virginia Staton, Case No.: 20-C-03866-S4 (Gwinnett Cnty., Ga. May 10, 2023).  Deloitte and the managing director are represented by Stites & Harbison PLLC. Sheffield is represented by Mayer & Harper, LLP.  A copy of the order is attached.