Opinion ID: 1059643
Heading Depth: 1
Heading Rank: 5

Heading: the compensation case

Text: As we have already stated, Reid claimed that Cellar Door Productions breached its contract by failing to pay him compensation that he was entitled to receive for the 1997 calendar year. Reid testified that he was entitled to receive 50% of all profits realized in each calendar year by Cellar Door Productions. Willie J. Rountree, a certified public accountant who qualified as an expert witness, reviewed certain financial documents that had been produced by the defendants and information that Reid had provided to him. Rountree described the compensation methodology as follows. Cellar Door Productions took the cash at the end of the year [and made] certain adjustments. For instance, if there [were] additional receivables outstanding for cash that had not been received for [concerts] that had already been completed, they would add those as additions to cash. If [there] were accounts payable outstanding for bills that had not been paid at the end of the year, they would show those as subtractions from cash available for the split, and they would also add back any advances that [Reid or Boyle] had received during the year to come up with a balance they called available cash. And that would be split between the two of them. Rountree stated, during the defendants' cross-examination, that information that he relied upon in making his calculations had been provided to him by Reid. The defendants asked Rountree to assume that Reid had already received certain payments as compensation which Rountree had not used in his calculations. The defendants further asked Rountree whether this assumption would affect the amount of compensation he believed Reid was entitled to receive from Cellar Door Productions. Rountree replied yes. In response to the chancellor's question, whether, in Rountree's opinion, Cellar Door Productions owed Reid $334,665.21, Rountree replied in the affirmative. Rountree also stated in response to that same question that even though the defendants' counsel raised interesting issues about Rountree's assumptions, Rountree had not seen sufficient documentation to opine whether the defendants' assumptions were correct. The defendants contend that the chancellor erred by relying upon Rountree's testimony because Rountree did not know whether the defendants' assumptions were correct. Additionally, the defendants contend that Rountree relied upon certain information that had been provided by Reid that Wasson, chief financial officer and director of business development for the Cellar Door Companies, disputed. We find no merit in the defendants' contentions. We have reviewed Rountree's testimony in its entirety, along with his exhibits that include his calculations. Rountree testified that his opinions and calculations were based upon the defendants' audited financial statements, financial documents produced during discovery, and information provided by Reid. We hold that this information is sufficient to support Rountree's opinions.