Plaintiff sued defendant after they terminated a management services contract between the two parties. The plaintiff hired a business valuation expert witness to provide testimony in this case. The defendant filed a motion to exclude this testimony. the court denied the motion.
Facts: This case (Radiologix, Inc. et al v. Radiology and Nuclear Medicine, LLC – United States District Court – District of Kansas – January 4th, 2018) involves the early termination of a management services contract between the two parties. The plaintiffs claim breach of contract, conversion, and unjust enrichment. The defendants assert a counterclaim for breach of contract. The plaintiffs have hired business valuation expert witness Marc Vianello to provide testimony. The defendants have filed a motion to exclude this expert testimony.
Discussion: Mr. Vianello will be testifying about the damages that the plaintiffs allegedly sustained when the defendant’s terminated the contract. The defendant argues that Mr. Vianello’s opinion should be excluded because he did not calculate any damage amount sustained by either plaintiff and that he bases his calculation on financial records of affiliated non-parties that have not been substantiated.
Regarding the first argument, Mr. Vianello’s report explains that he understands that each plaintiff has a separate corporate structure and that his damages calculation is the value of profits that RadNet (a company on the hierarchy) would have earned under the management services agreement. The defendant argues that Mr. Vaniello’s report ignores the corporate veil that separates the numerous RadNet companies and that his damages opinions are not relevant to the case because the entities he points to are not parties to this case. The plaintiffs argue that his calculations accounts for all of the expenses that RNMIP (another company) would have incurred to provide or arrange for service to the defendant. The court agreed with the plaintiff on this issue stating that they do not need to itemize the damages separately between the two corporate entities. Any arguments related to this issue go to the weight of the evidence and not the admissibility and can be brought up during cross examination.
Next, the defendant states that Mr. Vianello’s damages opinions are not reliable because he basis his calculations on unsubstantiated records of non-parties, ignores costs incurred by the “corporate level” and uses an incorrect calculation to formulate a current value reduction for future costs. The court disagreed, stating that any such arguments related to this issue go to the weight of the evidence and not the admissibility and can be brought up during cross examination.
Conclusion: The motion to exclude the expert witness testimony of Mr. Marc Vianello is denied.