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Jan 20

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Speculative damages lead to summary judgment

When it comes to damage calculations, the term “speculative” is effectively a death sentence.  In order to provide evidentiary value, a damage calculation must be to a reasonable degree of certainty.  In Carter v. Clements Walker PLLC, et al. (“CW”), the Court found that despite an expert opinion that Carter suffered $33 million in damages, there was “no evidence in the record from which the court or a jury could conclude with reasonable certainty that Carter suffered any actual damages” and granted CW’s Motion for Summary Judgment (“MSJ”).

The Court found that Carter’s deposition testimony and discovery responses created a record without any damages evidence.  Carter then attempted to introduce an expert opinion of millions in damages that the court found highly deficient:

Only Gariboldi’s report, which estimates that RCI sustained $33 million in lost profits as a result of losing foreign patent protection, even purports to provide any valuation of RCI’s damages. In light of the overwhelming evidence that neither RCI nor Carter had, at the time of his opinion, ever realized or reasonably projected any commercial value from the invention (even though it had domestic patent protection), Gariboldi’s speculative, bare-bones conclusion is insufficient to create a genuine issue of material fact on whether Carter suffered damages”

Further noting:

“In his response to Defendants’ Motion for Summary Judgment, Carter did not include any other portions of this report, argue that it creates a genuine issue of material fact as to Carter’s damages, or otherwise attempt to support or bolster Gariboldi’s opinion.”

While establishing damages in an untapped market may in some cases be appropriately deemed speculative, there are approaches which may in certain cases overcome this obstacle.  As noted by the Court, Carter did himself a disservice by refusing to produce documents that may have bolstered his claim and failing to integrate information that might have been reasonably relied upon by his expert into his earlier discovery responses.  This article provides a more detailed discussion and practical suggestions to establishing damages.

About the author

Renee Howdeshell

Renee Howdeshell is a founding member of Fulcrum Inquiry, an accounting, finance and economic consulting firm that performs damage analyses for commercial litigation, forensic accountings, royalty & distribution audits, financial investigations, and business valuations. Ms. Howdeshell holds a degree in Finance and Marketing from the University of Virginia's McIntire School of Commerce and is a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE). She has testified as an expert witness in federal court, CA state court and arbitration regarding the results of her work. She can be reached at (213) 787-4112 and her resume is available at www.fulcrum.com.

Permanent link to this article: http://betweenthenumbers.net/2014/01/speculative-damages-lead-to-summary-judgment/

2 comments

  1. Carol Cantrell

    Renee – I was intrigued by the blog on speculative damages in a summary judgment motion. There was a reference to a full article, which I did not see how to download. Can you send me the full article or a link? Thank you so much. I am a plaintiff and want to file a motion for summary judgment. Our damages consist of lost profits in a trust, comparing the actual rate of return to the average stock market return (or even a certificate of deposit) over the same period. Many thanks, Carol

    1. Renee Howdeshell

      Thank you Carol – the link has been fixed. Feel free to contact me if you need assistance with your damage analysis.

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