Accountant Off Hook for $20 Million Homebuilder Loss After Error

An accounting error was the result of bad work, not fraud, the Texas Supreme Court said Friday in rejecting claims from a homebuilder who said he lost $20 million in the mistake.

By a unanimous vote, the justices tossed fraud and fiduciary duty claims against accountants Brandon and Linda Pitts.

“This is a straightforward professional malpractice allegation,” Chief Justice Jimmy Blacklock wrote in the opinion, rejecting the fraud allegation.

He added: “Overstating one’s professional competence is a classic example of malpractice.”

The high court was called on by the accountants to consider the state’s anti-fracturing rule, which prevents plaintiffs ...