A. Christine Davis, CPA/CFF, CVA, CGMA
Forensic Accounting, Auditing and Damages Expertise Contributes to Settlement of a Subrogated Action
Updated: Jun 21, 2022
Chris Davis of Financial Evidence Group has successfully assisted counsel to reach a settlement in a case involving a subrogated action.
Chris was retained as the accounting and damages expert for the defendant in a case to recover damages due to product liability, breach of contract, negligence and gross negligence, breach of express or implied warranty, strict products liability, and negligent misrepresentation. The plaintiff, who is in the business of insurance and reinsurance, had sued the defendant, a supplier of the insured, and claimed it had sustained a multi-million-dollar loss after paying on an insurance claim filed by the insured for purported lost sales allegedly caused by the defendant.
Chris applied her forensic accounting and auditing expertise along with her damages background as she reviewed the voluminous documentary evidence and testimony in the case. Chris assisted counsel in preparing for depositions and most recently prepared a well-written and persuasive confidential expert report for counsel’s use in mediation. In her report, Chris presented a number of expert opinions, including the opinion that the multi-million-dollar lost sales claim amount which the plaintiff paid to the insured was not supported by the insured’s own historical and expected sales, and as a result, was materially overstated. Chris highlighted the absence of any meaningful work undertaken by the claim adjuster for the plaintiff to ascertain the fairness of the claim, the testimony by the insured’s own employees which conflicted with the underlying components of the asserted lost sales claim, and contemporaneous sales data and forecasts evidencing that the value of the claimed lost sales was far greater than expected sales for the damage period.
Counsel for the defendant described Chris’s expert report as “beyond good,” and characterized Chris’s report as “a large supporting factor” in arriving at a settlement. Financial Evidence Group is grateful for the opportunity to assist counsel and congratulates them and their client for this positive resolution.