Appellate court rejects valuation date in damages case
In a 2023 Florida case, a jury awarded rapper Flo Rida more than $82 million in a breach of contract case.
BVR offers free resources in wake of disasters
For business valuation experts grappling with business interruption (BI) and damages matters in the wake of this year’s natural disasters, BVR is offering some free resources.
Free Resources to Help Valuers With Business Interruption Claims
For business valuation experts grappling with business interruption (BI) and damages matters in the wake of this year’s natural disasters and tech outages, BVR is offering some free resources. You can download two full chapters from The Comprehensive Guide to Economic Damages, 7th edition, that deal with BI, lost profits, and damages claims. Plus, we provide some tips on uncovering misrepresentations in claims.
Celsius Holdings, Inc. v. Strong Arm Productions USA, Inc.
In determining the amount of damages in this contract dispute, the Florida Appellate Court dealt with the appropriate date of value of stock of the defendant in determining the appropriate amount of damages. The date of value was an issue that arose in a number of cases. The court rejected the use of the date of trial but remanded for the court to determine whether to use the date of the breach of contract or the date at which restrictions on the sale of stock lapsed. While the court touched on the restriction issue, no evidence that a value at the date of breach, which included the impact of the restrictions on value, was presented.
Florida Appellate Court Remands for Determination of the Proper Date of Value in a Damages Case
In determining the amount of damages in this contract dispute, the Florida Appellate Court dealt with the appropriate date of value of stock of the defendant in determining the appropriate amount of damages. The date of value was an issue that arose in a number of cases. The court rejected the use of the date of trial but remanded for the court to determine whether to use the date of the breach of contract or the date at which restrictions on the sale of stock lapsed. While the court touched on the restriction issue, no evidence that a value at the date of breach, which included the impact of the restrictions on value, was presented.
Crypto theft not a ‘direct physical loss,’ court affirms
The 4th Circuit Court of Appeals has affirmed a district court’s ruling that a homeowner’s insurance policy does not cover the theft of cryptocurrency because it is not a “direct physical loss” as required by the policy.
Headwater Rsch. LLC v. Samsung Elecs. Co.
Multiple factors in this decision on motions to exclude expert witnesses have importance in determining infringement damages. First, the court allowed the use and reliance of other experts in the case to be appropriate. Second, the court noted that documents one of the experts used are ones experts normally rely on. Additionally, the court did deny the use by a witness of a trailing royalties based on post-trial sales.
U.S. District Court (Texas) Allows Damages Based on Acceptable Data Relied on but Denies Expert Testimony on Running Royalty Analysis on Post-Trial Sales
Multiple factors in this decision on motions to exclude expert witnesses have importance in determining infringement damages. First, the court allowed the use and reliance of other experts in the case to be appropriate. Second, the court noted that documents one of the experts used are ones experts normally rely on. Additionally, the court did deny the use by a witness of a trailing royalties based on post-trial sales.
BVR lends a helping hand in wake of disasters
For business valuation experts grappling with business interruption (BI) and damages matters in the wake of this year’s natural disasters and tech outages, BVR is offering some free resources.
Sedaghatpour v. Lemonade Ins. Co. (II)
Similar to what happened with many of the pandemic cases, the court here determined that cryptocurrencies did not have a physical presence or at least not one that was part of the cause of the theft that the plaintiff suffered. Definitions of cryptocurrencies supported the decision of the court. The Court of Appeals affirmed this case. In valuing cryptocurrencies, the lack of insurance coverage could be an additional risk to be considered. Subsequent to the date of this claim, most insurance companies had specifically excluded loss of cryptocurrency from coverage.
Optimistic projections not necessarily unreliable under Daubert
In a federal district court in Washington, a liquor distributor sued the supplier of Four Roses bourbon for damages for improperly terminating its distribution agreement.
Expert accused of cherry-picking comps
In a New York case, a shareholder accused his partner of freezing him out, and he sued for damages.
TAKTL, LLC v. IWR, N. Am., LLC
This case, a breach of construction contract case, again provided a tutorial on the application of FRE 702 and the Daubert rules as to whether a witness qualified to testify. This case was post-Dec. 1, 2023, so the rule application was subject to the clarification of FRE 702 that became effective on that date. The court went in depth into the “fit” requirement, which was: Did the expert adequately apply testimony and a report that “fit” the case at hand, a requirement clarified by the Dec. 1, 2023, changes?
Court Decides on Motions to Exclude Under Post-Dec. 1, 2023, FRE 702
This case, a breach of construction contract case, again provided a tutorial on the application of FRE 702 and the Daubert rules as to whether a witness qualified to testify. This case was post-Dec. 1, 2023, so the rule application was subject to the clarification of FRE 702 that became effective on that date. The court went in depth into the “fit” requirement, which was: Did the expert adequately apply testimony and a report that “fit” the case at hand, a requirement clarified by the Dec. 1, 2023, changes?
American Society of Appraisers (ASA) 2024 International Conference
I had the pleasure of attending the 2024 ASA International Conference in Portland, Ore., September 15 to 19. This was my first time to visit Portland, Ore., and I found it to be a very pleasant and attractive place to be. The conference was held at the Downtown Hilton in Portland.
Hetrick v. iink
The FRE 702 rules were modified in December 2023 to strengthen the qualifications for admittance of expert testimony. In this case, the Virginia U.S. District Court allowed the expert to testify and denied the Daubert motion to exclude the testimony. Among other things, the court found that the testimony was relevant to the case at hand.
U.S. District Court (Virginia) Denies Daubert Motion to Exclude Under New (2023) FRE 702
The FRE 702 rules were modified in December 2023 to strengthen the qualifications for admittance of expert testimony. In this case, the Virginia U.S. District Court allowed the expert to testify and denied the Daubert motion to exclude the testimony. Among other things, the court found that the testimony was relevant to the case at hand.
Yador v. Mowatt
The plaintiff’s damages expert was challenged in a Daubert motion in this case asserting that his use of historical data from two comparable companies as the basis for his revenue growth estimates amounted to “cherry picking” rather than using a survey or other independent method. The court allowed the testimony, noting that “‘any selection of comparable companies is inherently the product of expert judgment,’ and the record does not indicate that [the expert’s] judgment was biased or otherwise flawed.”
U.S. District Court (New York) Denies Daubert Challenge and Allows Testimony of DCF Method of Determining Damages
The plaintiff’s damages expert was challenged in a Daubert motion in this case asserting that his use of historical data from two comparable companies as the basis for his revenue growth estimates amounted to “cherry picking” rather than using a survey or other independent method. The court allowed the testimony, noting that “‘any selection of comparable companies is inherently the product of expert judgment,’ and the record does not indicate that [the expert’s] judgment was biased or otherwise flawed.”
Schiano v. Harsanyi
This case was important for two reasons. First, it was a bellwether deciding that an employee bookkeeper can be liable for assisting in fraudulent schemes representatives of the company perpetrate and can be found to have breached a fiduciary duty to the company. Secondly, forensic accountants, in determining damages, should now be alerted and alert attorneys to this possible liability of an employee bookkeeper.
New York Appellate Court Finds Bookkeeper Employee Liable for Aiding and Abetting Fraud and Breach of Fiduciary Duty
This case was important for two reasons. First, it was a bellwether deciding that an employee bookkeeper can be liable for assisting in fraudulent schemes representatives of the company perpetrate and can be found to have breached a fiduciary duty to the company. Secondly, forensic accountants, in determining damages, should now be alerted and alert attorneys to this possible liability of an employee bookkeeper.
Am. Nw. Distribs. v. Four Roses Distillery LLC
Even under the new FRE 702, testimony was admissible if it was “reliable” and based on an acceptable foundation and related to the case at hand. The expert in this case met all these requirements. Since the methodology the expert used was not challenged, that part of the new FRE 702 was not applicable. The court admitted the expert.
Washington U.S. District Court Rules Damages Expert’s Calculations Are ‘Reliable’ and Admissible Under Rule 702
Even under the new FRE 702, testimony was admissible if it was “reliable” and based on an acceptable foundation and related to the case at hand. The expert in this case met all these requirements. Since the methodology the expert used was not challenged, that part of the new FRE 702 was not applicable. The court admitted the expert.
Bombshell ruling on exclusion of damages experts in NFL case
“The Court agrees that [the experts’] testimonies based on their flawed methodologies should be excluded.” So wrote a federal judge in overturning the $4.7 billion verdict against the NFL in the Sunday Ticket antitrust case.
Damages experts brace for post-outage BI work
In the wake of the massive technology outage, the “large and significant factor around this outage is business interruption,” said Dave Burg, Kroll’s Global Head of Cyber Risk, in an interview with Bloomberg.