Case Study: Exposing Flaws in Opposing Expert’s Damages Analysis in Attorney Malpractice Case

Issue:

An HVAC company in Portland (plaintiff) bought another HVAC company along with its customer list and two customer service phone numbers that had been placed with stickers on HVAC systems sold in prior years. A year later, the plaintiff learned that when customers called these numbers to request service, a third-party competitor was answering. The phone numbers had been mysteriously released to a different telecom provider and bought by the third-party competitor.

The plaintiff intended to sue the telecom provider who wrongly released the phone numbers, but the plaintiff’s attorney failed to file a claim against the telecom companies in time, allowing the statute of limitations to expire. The plaintiff then sued the attorney (defendant) for lost profits related to the loss of customer service phone numbers.

Assignment:

The defendant’s malpractice defense attorney contacted us to estimate lost profits that the plaintiff may have experienced due to a loss of the customer service phone numbers. An opposing expert had prepared a plaintiff damages analysis for mediation claiming an unreasonably high loss. The analysis was based on unsupported assumptions that were vastly out of proportion to the amount paid to acquire the phone numbers and given that the plaintiff still had access to the acquired customer list. Our role was to perform an independent lost profits analysis using supportable assumptions. 

With two weeks until mediation, we had to get up to speed quickly and calculate lost profits based on limited financial data provided by the plaintiff. We also reviewed the opposing expert’s analysis and identified numerous unsupported and irrational assumptions. Our team also evaluated sales trends before and after acquisition, pointed out flaws in the opposing expert’s calculation and presented two scenarios to the defendant’s attorney for use in mediation. 

Resolution:

The case resolved in mediation. Our client told us they were impressed with our quick work and appreciated our help in resolving the case.

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Have questions about this type of damage analysis? Reach out to Kevin Marold who conducted and prepared the analysis for this case.
Email: [email protected]