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Evidence — expert testimony

By: WISCONSIN LAW JOURNAL STAFF//October 25, 2011//

Evidence — expert testimony

By: WISCONSIN LAW JOURNAL STAFF//October 25, 2011//

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United States Court of Appeals

Civil

Evidence — expert testimony

A business owner can testify about his business’ profits without being an expert accountant.

“The district court excluded those opinions on the ground that a layperson without knowledge of accounting principles could not arrive at the conclusions Zeytoonjian drew in his affidavit. For example, with respect to Zeytoonjian’s assertions regarding Home Depot, the district court reasoned that only an accounting expert could say whether commissions for facilitating a third party’s purchase of a supplier’s products directly from the supplier should be included in the distributor’s total sales figure for that supplier.”

TMI disputes these exclusions and contends that Zeytoonjian simply testified as to factual statements of which he had personal knowledge as TMI’s president. As the advisory committee notes to Rule 701 explain, a business owner or officer is allowed to testify ‘to the value or projected profits of the business, without [being qualified] as an accountant, appraiser, or similar expert’ where that testimony is based on the ‘particularized knowledge that the witness has by virtue of his or her position in the business.’ Fed. R. Evid. 701 Advisory Comm. Notes, 2000 Amendment; see also Titan Int’l, 533 F.3d at 560; Von der Ruhr v. Immtech Int’l, Inc., 570 F.3d 858, 862 (7th Cir. 2009) (‘In the realm of lost profits, lay opinion testimony is allowed in limited circumstances where the witness bases his opinion on particularized knowledge he possesses due to his position within the company.’). Zeytoonjian’s affidavit attacks both Echo’s gross profit analysis and gross sales analysis.”

Affirmed.

11-1489 & 11-1493 Echo, Inc., v. Timberland Machines & Irrigation, Inc.

Appeals from the United States District Court for the Northern District of Illinois, Kocoras, J., Flaum, J.

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