Forensic Accounting Expert Witness Testimony Excluded in Hotel Litigation

Summary: Forensic Accounting Expert Witness testimony not allowed as the court opined that the expert did not have first-hand knowledge of the case at hand.

Facts:  This case (Raab v. Wendel et al – United States District Court – Eastern District of Wisconsin – December 7th, 2018) involves a business dispute over the ownership of a hotel in East Troy, Wisconsin.  The plaintiff alleges that the defendant, through a variety of associated companies and corporations, unlawfully diverted assets away from the plaintiff.  The defendants hired Forensic Accounting Expert Witness Joseph D. Kenyon to provide expert testimony on their behalf.  The plaintiff has filed a motion to exclude this expert from testifying.

Discussion:  The plaintiff argues that Kenyon’s testimony does not set forth how his opinions are the products of reliable principles and methods.  Second, the plaintiff argues that the court should exclude Kenyon’s conclusions about fluctuations in expense amounts related to payroll because they do not contain any opinions and are not based on any methodology.  Last, the plaintiff argues that the court should exclude Kenyon’s opinions relating to payroll because the defendants provided him with access to documentation and data that the defendants did not provide to the plaintiffs.

The court opines that the defendants rely almost entirely on Kenyon’s statements in his declaration in its opposition to the plaintiff’s motion to exclude his testimony.  The court opines that it agrees with the plaintiff that the sufficiency of Kenyon’s report depends on what is contained in the report and not what was said later in his declaration.  The court further states that Kenyon failed to explain how his opinions are grounded in reliable principles and methods and therefore will not be permitted to testify as an expert.

The court also opines that Kenyon would be permitted to offer factual testimony if, as a result of his review of the financial records, he possesses first-hand knowledge of evidence consistent with Wendel’s explanations for the fluctuations.

Conclusion:  The motion to exclude the expert witness testimony of Joseph D. Kenyon is granted.