Opinion ID: 2543385
Heading Depth: 1
Heading Rank: 9

Heading: May the court allow testimony regarding future profits without foundation, based on conjecture and speculation over the objection of the appellants for lack of foundation and best evidence?

Text: [¶ 11] The sellers' primary argument is that the trial court erred by allowing the testimony of the buyers and the buyers' CPA regarding the amount of the corporation's future profits. The sellers contend that the trial court should have sustained their objections under W.R.E. 701, for lack of foundation, and under W.R.E. 1002, for lack of best evidence, as no documentation regarding the books and records of the corporation were offered into evidence to support the witnesses' speculations. [¶ 12] The Statement of Proceedings indicates that two certified public accountants testified as experts for the buyers and sellers at trial. The Statement of Proceedings does not specify whether the buyers who testified did so as expert witnesses. With nothing more in the record, we assume that they testified as lay witnesses. W.R.E. 701 states: If the witness is not testifying as an expert, his testimony in the form of opinions or inferences is limited to those opinions or inferences which are (a) rationally based on the perception of the witness and (b) helpful to a clear understanding of his testimony or the determination of a fact in issue. This Court has stated that [i]t was the intent of the framers of the Rules of Evidence to considerably relax the prohibition against receipt of opinion testimony both by expert and lay witnesses. Generally, the rules should be liberally construed to allow the admission of such evidence. McCabe v. R.A. Manning Const. Co., Inc., 674 P.2d 699, 705 (Wyo.1983). [¶ 13] The question of allowing or excluding evidence is a question for the trial court to decide. Brockett v. Prater, 675 P.2d 638, 641 (Wyo.1984). A trial court's ruling will not be overturned without a clear showing of an abuse of discretion. Id. In determining whether there has been an abuse of discretion, `the ultimate issue is whether or not the court could reasonably conclude as it did.' Vaughn v. State, 962 P.2d 149, 151 (Wyo.1998) ( quoting Gaines v. Doby, 794 P.2d 566, 570 (Wyo.1990)). The burden is on the appellant to show such abuse. Blake v. State, 933 P.2d 474, 477 (Wyo.1997). [¶ 14] Without a transcript, it is impossible to determine what foundation may have been laid for the challenged testimony. However, some foundation for the opinions is contained in the Statement of Proceedings. Therefore, we accept the trial court's findings as to the admissibility of this evidence. Salt River Enterprises, Inc. v. Heiner, 663 P.2d 518, 520 (Wyo.1983). We cannot say that it was an abuse of discretion for the trial court to have admitted the buyers' lay opinions as to future profits. [¶ 15] The sellers also contend that this testimony violated W.R.E. 1002. W.R.E. 1002 states: To prove the content of a writing, recording, or photograph, the original writing, recording, or photograph is required, except as otherwise provided in these rules or by statute. W.R.E. 1001 defines writings and recordings as consisting of letters, words, sounds, or numbers, or their equivalent, set down by handwriting, typewriting, printing, photostating, photographing, magnetic impulse, mechanical or electronic recording, or other form of data compilation[.] (Emphasis added.) [¶ 16] There is nothing in the trial court's findings or in the Statement of Proceedings to suggest that the buyers' testimony was given to prove the contents of a writing. Rather, the testimony was offered as opinions on the likelihood of future profits. W.R.E. 1002 does not apply to such testimony, so it was not error for the trial court to overrule the sellers' objection. [¶ 17] The sellers' statement of this first issue is limited to the admission of testimony regarding future profits of the corporation. In their appellate brief, however, the sellers also contend that it was error for the trial court to allow Neal Johnson, the corporation's accountant, to testify that the NOL carry forward reduction amount was $160,633.00. Their major concern is that Neal Johnson's statement as to the amount of the reduction is reflected in the one documentary piece of evidence produced by the buyers. This was a copy of the revised audit report made by the IRS, which itemized the adjustments made to income. The amount came to $160,633.00, to which the IRS then deducted a previous NOL of $84,370.00, to arrive at a total adjustment for year ending July 31, 1995, of $76,263.00. This value equaled the corporation's taxable income for the year, a loss of $76,263.00, so the corrected income was $0.00, and no taxes were due. This evidence, not the evidence concerning future profits, is the primary focus of the sellers' W.R.E. 1002 argumentthe best evidence of the NOL carry forward reduction would be the IRS audit report. [¶ 18] Once again, the limitations inherent in having a statement of the proceedings, rather than a transcript, make it impossible to determine the exact basis for the trial court's evidentiary rulings. Some information may be discerned from the known facts. For instance, Neal Johnson was not giving an opinion as an expert witness; rather, he was testifying as a fact witnessthe corporation's accountant. Further, his testimony detailed the nine separate expenses that had been disallowed by the IRS, including the separate amount for each expense. While we know from the scant record that the sellers objected to this testimony on the basis of foundation and the best evidence rule, we do not know what foundation may have been laid, nor what writings, if any, may have been utilized to produce the individual numbers, nor do we know why the trial court overruled the objections. What is most odd, given the nature of an objection under W.R.E. 1002, is the fact that the IRS examination report detailing the $160,633.00 NOL reduction had been received into evidence as Plaintiffs' Exhibit 13. It is hard to comprehend a best evidence objection under these circumstances. The sellers have not met their burden of showing that the trial court abused its discretion in admitting this testimony.