Opinion ID: 2139960
Heading Depth: 1
Heading Rank: 16

Heading: Testimony of Dennis R. Hein

Text: Dennis R. Hein is a certified public accountant who testified as an expert witness on behalf of Aon. Pearson assigns error by the district court in overruling his motion in limine and receiving, over Pearson's foundational objections, Hein's opinions with regard to lost profits. Hein testified that he reviewed Aon's financial documents for the years 2000 to 2002. He attempted to determine what revenues were taken away by Pearson during 2002 and 2003 and what effect expenses had on those revenues. In calculating expenses, he focused on those that he opined would vary directly with the production of business, including items such as entertainment, lodging, travel, public relations, postage, office supplies, and printing. He found that Aon's average expense ratio for these variable items in the years 2000 to 2002 was 3.72 percent of its revenues. To be conservative, he rounded this figure up to 6 percent. To calculate the revenue lost when the Aon customers followed Pearson to Midlands, Hein looked at Aon's average growth rate of 4.76 percent in the years 2000 to 2002. He rounded that number down to 4 percent, and then multiplied the total revenues generated to Aon in 2001 by the customers Pearson took to Midlands by that percentage. After determining this sum, he subtracted 6 percent to represent the additional expenses Aon would have incurred in generating the revenue. His calculation resulted in a net lost profit to Aon in 2002 of $199,683. Hein conducted a similar analysis for 2003 and determined that the 2003 lost profits were $207,671. Hein's opinions with respect to lost profits were based upon a reasonable degree of professional certainty as a certified public accountant. On cross-examination, Hein testified that in performing his calculations, he considered all of Aon's actual expenses. He essentially stated that Aon's fixed costs would have remained the same with respect to the additional revenue, because Aon had employees capable of handling the increased revenue volume. Thus, Hein reasoned that the only additional expenses Aon would have incurred in generating the income were those that he identified as accounting for 6 percent of the revenue generated. Pearson argues that the trial court failed to properly perform its gatekeeper function and that Hein's methodology was suspect because he failed to include all relevant expenses. We held in City of Lincoln v. Realty Trust Group [28] that not every attack on expert testimony amounts to a claim under Daubert v. Merrell Dow Pharmaceuticals, Inc., [29] and Schafersman v. Agland Coop. [30] Pearson's motion in limine and objections during trial did not raise a Daubert/Schafersman issue. What Pearson really is asserting is an attack on the factual basis of the opinion, a criticism that goes to its weight, not its admissibility. The admission of expert testimony is ordinarily within the trial court's discretion, and its ruling will be upheld absent an abuse of discretion. [31] We conclude that the district court did not err in receiving Hein's opinions regarding damages over Pearson's objections.