Business Is Lost After Injury – Or Grown While Recovering?

Forensic Accounting Expert

Irina Balashova, CPA, CIA, CFF, Forensic Accounting Expert
Case Synopsis: Co-owner of a plumbing company with annual sales ranging between $1M and $2M was injured in a motor vehicle accident and allegedly lost profits from his inability to work directly with customers and supervise the work of others.
It was claimed that by applying certain industry-wide performance metrics, the company had become less profitable because of higher labor costs, among other factors. As a result of the allegedly impaired profits in future years, it was estimated that the plaintiff sustained a personal income loss of $100,000 per year, which would have accumulated to a future loss of $2M. Continue reading “Business Is Lost After Injury – Or Grown While Recovering?”

Double Counting: Help Me! Help Me Again!

Slip and Fall Expert Witness

Irina Balashova, CPA, CIA, CFE, Forensic Accountant Consultant ::::
When assessing economic losses, be aware of potential double counting of damages utilizing different categories of loss.
Case Synopsis: A mechanic was involved in a slip-and-fall accident, injuring his back, which resulted in a partial paralysis. Plaintiff now requires assistance with most activities of daily living. Claims were made for future medical costs and for loss of household services (“HHS”).
Expert Analysis: The plaintiff’s future medical costs claim was detailed in a life care plan, which included assistance with activities of daily living, such as personal care activities, as well as HHS that plaintiff was unable to perform post-injury, such as cooking, cleaning, transportation and shopping. The annual loss amount in this category totaled approximately $50,000. The claim for lost HHS also included a variety of general domestic chores that could be performed by repair workers, maids, landscapers, cooks, and laundry workers. The annual loss amount in this category totaled approximately $8,000. Based upon the descriptions of services provided, it was apparent the plaintiff’s claimed loss of HHS included many of the same services included in the life care plan, as a subset of the activities of daily living. Continue reading “Double Counting: Help Me! Help Me Again!”

Double Counting 1 of 2: Household Chores… Done Remotely

Irina Balashova, CPA, CIA, CFE, Economic Consultant ::::
When assessing economic losses, be aware of the potential double counting of damages, utilizing different categories of loss.
Case Synopsis: A traveling agent was injured in an MVA. Prior to the injury, the plaintiff spent the majority of her time away from home, as her service area spanned across multiple states. She purchased a home in an area that would reduce commuting time. She returned home sporadically, staying there approximately seven days a month. Her economic claims were for both loss of income and loss of household services.
Expert Analysis: The claim for lost earnings was based on traveling agent’s ability to succeed in her work, which required extensive traveling. This requirement was a necessity in order to generate income. Her workweek was much longer than normal 40 hours, 70 to 80 hours on average. She also routinely stayed overnight away from home. A loss of household services claim, at a minimum, requires the plaintiff’s consistent presence at home when not working.
The facts of the case essentially contradicted each other and thus, only one of the two claims could be supported. The case facts show that the loss of household services claim lacks merit. The plaintiff appeared to be focused on building her career, which was evident from her steadily increasing annual earnings and the fact that she received bonuses and positive appraisals. From a household services perspective, plaintiff’s husband testified there was no, or limited, involvement from her related to performing household services.
Even though there are statistics showing the average time people in various stages of their life commit to household services, the case specific facts here showed otherwise. Having proper documentation on hand as well as relevant testimony, can make it easier to rebut any unreasonable claims. Having your economic expert involved early to advise/assist in discovery and request relevant documents and testimony can help resolve these claims.
Result: case was settled with no amount for double claim.
Irina Balashova, CPA, CIA, CFE, is an Economic Consultant with DJS Associates, and can be reached via email at experts@forensicDJS.com or via phone at 215-659-2010.