The Scott Hutchison, Plaintiff v. John R. Parent, Defendant, United States District Court, N.D. Ohio, Western Division, April 27, 2015 case dealt with a Daubert challenge to an expert who offered an alternative business valuation based on admittedly “incompetent data.” The court claimed the Daubert challenge finding that the analysis was in line with the AICPA standards. The court stated:  

Mr. Dollarhide testified he put together more than one report based upon incomplete data. He cited to the American Institute of Certified Public Accountants Standards for Valuation Services in support of his utilization of an alternative method of valuation for the Eunice, Louisiana property. The guidelines of the AICPA allow for alternative methods when it is “not practical or not reasonable to obtain or use relevant information” and “because of the unreliability of the financial data [ ] [y]ou can’t apply the standard appraisal methods.” (Dollarhide Testimony at p. 11). 

Mr. Dollarhide’s conclusions are based upon methods permitted by the AICPA in the absence of complete and reliable financial data. The Court is well aware of the difficulties which have plagued both sides of the litigation in getting current and accurate information in a timely fashion. Moreover, the causes of action being tried include breach of fiduciary duty and fraud. Within those claims Plaintiff alleges instances of fraud by commission and omission on the part of the Defendant. And due to the alleged fraudulent conduct of the Defendant, Plaintiff seeks punitive damages. 

As the reliability inquiry is a flexible one, Mr. Dollarhide’s methodology meets the threshold requirement in this instance. The strength of his opinion can be tested on cross-examination and the weight of his testimony will be for the trier of fact to assess.