George J. ("Jay") Coleman, III
Telephone: 602-977-7305
E-Mail:
gjc@slwplc.com
Accountant's Liability
George J. ("Jay") Coleman III is a Phoenix, Arizona business litigator who concentrates a substantial
portion of his practice on representing accountants. For over 30 years, he has defended Big Four and
local accounting firms in audit, tax and consulting malpractice, as well as securities fraud, litigation in
state and federal courts in Arizona, New Mexico, Texas and California, and before arbitration panels,
as well as investigations and proceedings before State Accountancy Boards, the AICPA and the SEC.
He also handles more routine matters such as subpoenas, disengagements and practice management
advice. Jay has published articles and spoken to both local and national audiences on issues
concerning accounting malpractice and loss prevention. He is currently serving his second five-year
appointment to the Law Review Advisory Committee of the Arizona State Board of Accountancy,
where he helped rewrite the Arizona statutes and regulations governing the accounting profession.
Formerly a partner with the Southwest’s largest (and one of the nation’s largest) law firm, he joined
Salmon, Lewis & Weldon, P.L.C. in 2015.
Representation of Big Four and Other National Accounting Firms

Defended firm’s actuarial and pension plan consultants against law firm’s $4 million ERISA
malpractice claim arising out of merger of defined benefit plan into defined contribution plan.
After 24 fact and expert depositions, won contentious discovery dispute to obtain documents
suggesting that statute of limitations had run. Used those documents to prepare summary
judgment arguments, which were used with mediator to leverage an advantageous settlement.
(2008-2013)

Defended audit malpractice claim brought by Receiver for failed health insurance company
alleging that, had auditors issued a going concern opinion and/or an NAIC notice of adverse
condition, insurance regulators would have stepped in sooner and prevented a $40 million
plus deepening insolvency. Thirty-eight fact witness depositions and eight expert witnesses.
After a three-week arbitration, the AAA Panel returned a complete defense Award. (20072009)

Defended firm's MAS consultants against $246 million plus punitives claim arising out of
implementation of a large national big box retail chain's enterprise-wide SAP computer
system. Plaintiff alleged not only negligence but also that it was fraudulently induced to hire
the firm which, despite its marketing literature, allegedly knew that it did not have sufficient
staff and expertise to install the computer system. After three years of contentious litigation,
including a failed mediation, the production of millions of pages of electronic and hard copy
documents, numerous discovery disputes (including pioneering e-discovery issues), more
than 40 fact witness depositions, working with more than half a dozen experts, and briefing
George J. (“Jay”) Coleman, III
Page 2
______________________
and arguing 13 motions for summary judgment, the vast majority of the plaintiffs' claims were
dismissed on summary judgment. The case then settled at mediation on favorable terms.
(2002-2005)

Defended various lawsuits and regulatory matters with a $35-60 million exposure arising out of
the audits of a Tucson-based insurance holding group that was a victim of massive
management fraud. (1995-2002)
o
Defended auditors in depositions before the SEC, which ultimately filed a civil action
against management but concluded that the auditors did no wrong.
o
Defended Arizona state court audit malpractice litigation brought by management of the
holding company. Negotiated a settlement with the insurance subsidiary and used that
settlement as a partial bar to the holding company's action. Case then settled on
favorable terms.
o
Defended federal court securities fraud class action brought by investors. After extensive
deposition and motion practice received a favorable partial summary judgment ruling and
then won an arbitration before retired Federal Judge Lawrence Irving in San Diego.
o
Defended an investigation by the Arizona State Board of Accountancy, which did not take
adverse action.
o
Defended an investigation by the AICPA, which did not take adverse action.

Served as local counsel in Rule 102(e) proceedings against audit partner and manager and in
their lawsuit to enjoin the SEC from maintaining that proceeding. (1999-2000)

Defended $14.5 million (plus trebles and punitives) audit malpractice case in state court in
Fort Worth, Texas arising out of losses in bank’s mortgage warehousing program. Spent a
substantial amount of time in Fort Worth over three years. The plaintiff bank was affiliated
with the Bass Brothers and represented by Steve Susman of Susman Godfrey. Over 25
depositions were taken and many motions (including Cenco imputation issues and the viability
of the "audit interference" rule in Texas) were argued. Obtained a favorable settlement at
mediation. (1995-1997)

Defended and settled tax malpractice lawsuit in Arizona state court arising out of an IRS audit
of a law firm. (1995)

Won motion to dismiss tax malpractice claim in New Mexico state court. (1994)

Defended Arizona state court action filed on behalf of lender arising out of firm's audits of
MiniScribe (the bricks in the inventory client), which was eventually transferred to Colorado
where other counsel took over. (1990-1993)

Defense of audit malpractice claim where firm refused to give a clean opinion unless
management reversed previously recognized income from sale/leaseback of hydroponic
greenhouses. Company reversed the income and showed a loss on its 10-K, could not obtain
financing, filed for bankruptcy and sued auditors in Arizona state court seeking $56 million in
lost profits, primarily from sale of greenhouse ranges in the Middle East. Over 50 depositions
taken. Won partial summary judgment (arguing that the auditor's duty to the public under
George J. (“Jay”) Coleman, III
Page 3
______________________
Arthur Young transcends its duty to the client, and that, since financial statements are the
client's representations, the client caused its own damages by choosing to disseminate its
statements) in 1987 and then a directed verdict on the remaining claims at trial in 1988, which
rulings were reversed on appeal (despite the AICPA submitting an amicus brief supporting our
position). Upon retrial in 1993 won a defense verdict. (1985-1993)

Handled numerous smaller matters such as responding to third-party document and
deposition subpoenas and where necessary negotiating and litigating associated protective
orders, reviewing and producing documents, and defending depositions.
Representation of Local Accounting Firms

Over the years have represented many local accounting firms on over one hundred matters
ranging from the defense of audit, tax, consulting and valuation malpractice claims, and
handling inquiries from and investigations by the AICPA and the State Board of Accountancy,
to complying with and where necessary contesting subpoenas, advising on engagement
letters and disengaging, and otherwise advising on practice management and loss prevention
issues. Representative matters include:
o
Defended forensic auditors in AICPA and HUD investigation of their audit of misuse of
funds by Indian tribe’s housing authority. (2012–2015)
o
Defended auditors against various securities fraud lawsuits filed by client and investors
over failure to detect Ponzi scheme. Won partial motions to dismiss and then obtained
summary judgments on remaining claims. (2009-2013)
o
Defended tax accountant against civil claims for malpractice, negligent misrepresentation,
and breach of fiduciary duty brought by high net worth clients over their participation in
massive tax shelter (one client sheltered $140 million in one year alone) that IRS, in the
largest tax shelter case in its history, disallowed. (2005-2012)
o
Defended tax accountant who gave erroneous advice on capital gain treatment of client’s
sale of Preakness-winning thoroughbred racehorse. Conceding liability but arguing
reliance and causation, obtained successful result at mediation (2011)
o
Defended tax accountants against client’s claims that firm was responsible for six years of
tardy tax returns and resulting IRS penalties. After two unsuccessful mediations, won
partial summary judgment and then a defense verdict in a week-long jury trial. (20062010)
o
Defended accountant for family-owned automobile dealerships against claims by certain
family members that he aided and abetted other family members’ defalcations and
usurpation of corporate opportunity in opening competing dealership. After failed
mediation, matter eventually settled. (2005-2008)
o
Defended forensic accountants against apartment owner’s claims that they aided and
abetted insurer’s bad faith when analyzing lost business income from fire loss. After fact
depositions and expert reports, won dispositive motion and was awarded attorney fees.
(2005-2006)
George J. (“Jay”) Coleman, III
Page 4
______________________
Education

University of Notre Dame Law School (J.D., 1983)

University of Notre Dame (B.A. Philosophy, 1980)
Court Admissions

Supreme Court of Arizona (1984-present)

Supreme Court of Connecticut (on retired status)

Supreme Court of New York (1993-2013)

United States District Court, District of Arizona

United States Court of Appeals, Ninth Circuit

United States Tax Court
Representative Speaking & Publications


Have written many articles on risk management and defending accountant liability claims for
various insurance carriers, the Arizona Society of CPAs, and other publications. Was asked by
Aspen Publishers to write a post-Enron book on accountant liability issues but declined feeling
that the effort and time involved would not be worth the benefit. Recent articles include:
o
Common Discovery Disputes in Accountant Liability Litigation, American Bar Association
Section of Litigation Professional Liability Litigation Newsletter (Spring 2013, Vol. 9, No. 2)
o
Loss Prevention for Accountants: Avoiding Malpractice and Litigation While Keeping Your
Clients Happy, CPA Mutual “Of Mutual Interest” periodical (Summer and Fall 2013 issues)
o
Risk Management for Accountants: Avoiding Professional Liability Actions, Arizona
Society of CPA's Magazine (January 2013 issue)
Have spoken on risk management and other accountant liability issues to various industry
groups such as the AICPA, the Arizona Society of CPAs, CPA Connect and the Federal Tax
Institute, including
o
Faculty, AICPA Expert Witness Skills Workshop (January 24-26,2013)
o
Uncertain Tax Positions and Protecting Privilege, Arizona State Bar Tax Section (June 17,
2011)
o
Risk Management For Tax Accountants: When Your Clients Aren't Your Friends Anymore,
CPA Connect Roundtable (October 23, 2009)
George J. (“Jay”) Coleman, III
Page 5
______________________
o
Faculty, Legal and Ethical Issues for Arizona Accountants, Half Moon Seminar (February
23, 2006)
o
Defending the Accounting Malpractice Case: An Overview of General Strategies and
Tactics on Discovery, Motion Practice and Trial, Faculty, National ALI-ABA seminar on
Accountants' Liability (February 10, 2005)
Professional Recognition & Awards

Best Lawyers in America®, Commercial Litigation

Arizona's Finest Lawyers

AV Preeminent Rated Lawyer by Martindale-Hubbell

Top Lawyers of Arizona

Top Pro Bono Attorney of the Year, Arizona Foundation for Legal Services & Education (2006)
Community Involvement

Phoenix Art Museum, Men's Arts Council
Other Professional Experience

Five-year appointment to the Law Review Advisory Committee of the Arizona State Board of
Accountancy (2009-2014). Over three years Committee rewrote the Arizona statutes and
regulations governing the accounting profession, culminating in revised A.R.S. § 32-701 et
seq. signed into law April 29, 2013. Began serving second five–year appointment in 2015.

Arizona Court of Appeals, Law Clerk to Hon. William E. Eubank (1983-1984)