Update as of 10/30/2023:
Congrats to our clients (defendant CPA/Audit firm and their counsel) on a HUGE WIN this week. FEG's Chris Davis served as defendant's accounting expert in this accounting malpractice case at trial in August 2023. Two months later, the Honorable Douglas W. Stern ruled in favor of our clients who filed a Motion for Nonsuit based on the "unclean hands" defense. On October 30, 2023, Judge Stern threw out the jury verdict:
"ORDER
1. The defense of unclean hands and in pari delicto having been proven
by Defendant [CPA firm], Plaintiff [the audit client and publicly held entity]... shall take nothing on its Complaint.
2. The Jury Verdict is ordered VACATED."
Our clients considered the outcome at trial a victory at the time because the jury awarded plaintiffs damages in an amount LESS THAN the California Code of Civil Proc. 998 offer made by our clients/defendants prior to trial (there are economic consequences to the plaintiff that could have been avoided had they accepted the 998 offer, including paying my expert fees). Plaintiffs immediately filed a motion for a new trial.
Now, this case is even more gratifying with Judge Stern's recent Order vacating the jury verdict; a reading of the tentative Order indicates he left no wiggle room for a challenge. Judge Stern also endorsed Zero damages, consistent with our calculations/conclusions offered and shared with the clients during our work together as we prepared for trial.
Congratulations again to our clients on this important WIN. FEG's Chris Davis is so grateful for the opportunity to assist counsel and testify at trial to explain to the judge and jury exactly what they needed to hear and learn.
Original post:
Financial Evidence Group's Chris Davis served as the defendant's accounting expert in an accountant malpractice case and recently testified at a jury trial in Los Angeles Superior Court (August 2023). Chris was retained by counsel for an international CPA firm who audited and reviewed the financial statements of a publicly held company. The allegations against the CPA firm stemmed from the audit client's CEO's admitted misappropriation of company funds.
The trial concluded with a successful outcome for the defendant in terms of damages awarded, which amount came below the offer from defendant via the California Code of Civil Procedure 998 made several months prior to trial (a rejection of a 998 offer followed by a damage award at trial that is lower than the 998 offer has further unfavorable financial consequences to the plaintiff). Additionally, a Motion for Nonsuit is also pending to be ruled upon by the presiding judge in October 2023.
Chris had the rare experience of attending the vast majority of the trial and considered the opportunity an experience of a lifetime. The jurors appeared locked in to Chris's testimony as Chris, who was the last witness called to the stand, explained the facts in conjunction with the relevant professional standards while teaching the jury the important distinctions between a financial statement audit and a fraud examination. Chris also assisted counsel in rebutting plaintiff's damages which were ultimately considerably reduced (by 80%) in the jury's award.
Financial Evidence Group congratulates counsel representing the defendant CPA firm for their successful and brilliant representation of their happy client.