Irina Balashova, CPA, CIE, CFE, Economic Consultant
When assessing economic losses, always remain alert to the potential for damages to be double counted utilizing different categories of loss. The following case study serves as an example of how forensic analysis of claimed losses revealed double counting.
Case Description: The plaintiff, a traveling agent, was injured in a motor vehicle accident. Prior to injury, plaintiff spent the majority of her time away from home as her service area spanned across multiple states. The plaintiff purchased her home in an area that would reduce commuting time, but returned home sporadically and stayed there approximately 7 days a month. Her claims included both loss of income and loss of household services.
Expert Analysis: The claim of lost earnings was based on the traveling agent’s ability to succeed in her work, which required extensive traveling. This requirement was a necessary giveaway in order to generate income. Her workweek was much longer than a normal 40-hour workweek, averaging closer to 70 or 80 hours. The plaintiff routinely stayed overnight away from home. Loss of household service claims, at a minimum, would require that the plaintiff had a consistent presence at home when they were not working.
These two requirements oppose each other and thus, only one of two claims can be sustained. Case facts show that the loss of household services claim lacked merit. Plaintiff routinely dedicated herself to building her career, which was evident from her steadily increasing annual earnings. She received bonuses and appraisals, which showed her career aspiration. From a household services perspective, the plaintiff’s husband testified that she had little to no involvement related to performing household services.
Even though there are statistics suggesting the average time people commit to household services in various stages of their lives, in this situation the case specific facts showed this plaintiff’s lifestyle would factor outside of the statistical averages. Obtaining proper documentation and relevant testimony can make it easier to rebut any unreasonable or double counting claims. Involving an economic expert early-on to advise/assist in discovery and request relevant documents and testimony can make resolving such claims a matter of simple housekeeping.
Result: The case was settled with no amount for double claim.