Gumbiner Savett, Inc., a professional accounting firm, and Michael Rieff, a certified public accountant at the firm, were hired by the restaurant to prepare year-end documents with respect to earnings and taxes. According to the employees, in preparing W-2 documents, the accountants included the tip money taken by the restaurant managers as income to the employees. This resulted in overreporting employees’ income by as much as $30,000 per employee. The employees alleged that the inaccuracy in the figures reported in their W-2 forms subjected them to investigation by the Internal Revenue Service (IRS). Giacometti was audited by the IRS and has been subjected to litigation. After he was notified of his audit, Giacometti wrote to the accountants, requesting that his W-2 form be corrected.

Accountants did not correct the statement of income reported on his form.

Employees brought an action against the restaurant, its managers, the accounting firm, and the individual accountant. The employees asserted three causes of action against the accountants: negligence, conspiracy, and intentional infliction of emotional distress. They alleged that accountants negligently or fraudulently over-reported income on their W-2 forms. The accountants filed a motion for a demurrer (motion to dismiss). The trial court granted the demurrer, finding that the accountants owed no duty to the employees.

Employees appealed. Do you believe the appellate court upheld the demurrer? Why or why not?