Litigation Support: Lost Income – Commercial Tenant
In a recent Litigation Support engagement, Ryan Nguyen, Forensic Accounting Manager, provided expert testimony based on forensic accounting analysis of economic damages.
Our client, a local doctor, leases his facility and recently his partner passed away suddenly, creating a vacancy in the building and a need to find a tenant to fill the space. Our client brought on a tenant, who moved from Northern California and was supposed to pay his proportionate share of the office expenses, including rent. However the tenant’s practice never became profitable and he quickly fell behind on payments, with his debt growing over the course of a year.
A dispute arose over how much was owed to our client. The tenant claimed that he was supposed to be subsidized until his practice became profitable. Further, the tenant claimed that he was supposed to receive the patients of the deceased doctor and that our client lured him to move to Orange County under false pretenses. He counter-claimed for lost future income because he shut down his former practice in Northern California to move to Orange County. Our client claimed that all unpaid expenses for the year were due. The agreement was never to subsidize the new doctor for the entire time, and our client could not promise the former doctor’s clients because clients have the freedom to choose their doctor.
The jury found 12-0 in our client’s favor, awarding all unpaid expenses and denying the tenant any damages for lost future income.