02/13/2013 05:29:30 PM EST
North Carolina Business Court Excludes Testimony Of Financial Expert On Lost Profit Damages
The case of Blythe v. Bell is like the gift that
keeps on giving. It generated two significant opinions last year, and
this week a third and a fourth. The July
2012 opinion was a major e-discovery decision, and the December
2012 opinion addressed an important issue about the assignment of LLC interests.
Today's post is about the Blythe v. Bell opinion
NCBC 8, on the subject of expert testimony. In this third Blythe
opinion, Defendants had moved to exclude the testimony of Plaintiffs' expert
witness, Barbee, on the grounds that he was not qualified to render his opinion
and that his methodology was deficient.
Barbee, a CPA, had offered testimony that the Plaintiffs'
damages were lost profits consisting of more than ten million dollars,
including "historic lost profits" of about $3.3 million; and
"additional lost profits" of about $7.4 million. Defendants'
Motion to Exclude at ¶7.
Remember that it is very tough to prove lost profit
damages in North Carolina. As Judge Gale held,
[w]hile the courts do not demand mathematical certitude
lost profits, they do not countenance conjecture or speculation, and conjecture
speculation does not become admissible simply because it is presented by an
Op. ¶19. He also said that while the amount of
damages to be awarded is for the jury to determine, "the court determines
as a matter of law whether the evidence would allow a jury to calculate lost
profits with reasonable certainty." Op. Par. 20.
Furthermore, the expert testimony must "pass the
realm of conjecture, speculation, or opinion not founded on facts, and must
consist of actual facts from which a reasonably accurate conclusion regarding
the cause and the amount of the loss can be logically and rationally drawn."
Op. ¶20 (quoting Overnite
Transp. Co. v. Int'l Brotherhood of Teamsters, 257 N.C. 18, 30, 125 S.E.2d
277, 286 (1962).
Read this article in
its entirety on North
Carolina Business Litigation Report, a blog for lawyers focusing on issues
of North Carolina business law and the day-to-day practice of business
litigation in North Carolina courts.
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