On October 29, 2024, Justice Cohen of the New York County Commercial Division issued a decision in Lateral Inv. Mgt., LLC v. Marcum, LLP, 2024 NY Slip Op. 33865(U), rejecting an attempt to assert a commercial bad faith claim against an auditor, explaining:
Commercial bad faith claims are made where a depositary bank acts dishonestly where it has actual knowledge of facts and circumstances that amount to bad faith, thus itself become a participant in a fraudulent scheme-such conduct falls wholly outside the allocation of business risks that was contemplated by UCC 3-405(l)(c). Plaintiffs cite no case to support the proposition that this claim can be sustained in an action against an auditor which is not predicated on the UCC. Accordingly, the Eleventh Cause of Action for commercial bad faith is dismissed.
(Internal citations omitted).