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Report of expert not usable as admission

Divorce_MAINA business valuation report prepared by an expert retained by a man in his divorce could not be used against him as a party admission, the Court of Appeals has held on an issue of first impression in Virginia.

While statements made by a party’s agent can be used as party admissions, the agent must have authority to speak for the party. A case on point from the 3rd U.S. Circuit Court of Appeals held that an expert is retained to give his or her separate opinion and therefore cannot be an agent able to make statements usable against a party, wrote Chief Judge Glen A. Huff in Pence v. Pence (VLW 016-7-240).

The Pence divorce was a complex appeal from Arlington Circuit Court, with the wife assigning 14 different errors; the husband had three such assignments.

The couple had married in 2001 and had three children. The husband was a contractor running a business called Pence Quality Homes. The man built homes; the couple also flipped houses in the Northern Virginia area, often living in the residence while it was being worked on, Huff wrote.

The wife worked in the business; she had a substantial trust fund established by her grandparents and the couple sometimes drew upon the fund to support loans for projects.

According to the opinion, about 2012 the marriage began to break down. The following year, the husband confronted the wife about an affair with her personal trainer. She promised to stop it, but several months later she resumed the relationship. In 2015, the husband was granted a divorce on the grounds of adultery.

The trial judge stated that the woman’s actions had “dissolved more than the marriage – she dissolved their business relationship.”

Expert’s report

The trial judge worked through a number of legal issues that made their way to the appeals court.

The wife sought to use a business evaluation report prepared by an expert hired by the husband as a party admission against him. The trial judge rejected the effort.

The expert had been identified during discovery, but the husband had not designated him as a trial witness.

Huff cited case law that holds that the statements of another can be used as a party admission in litigation if the person “had authority to make such statements” on the party’s behalf.

The judge wrote that no Virginia opinions have addressed the party admission rule to testimony of an expert witness, but a 1995 case from the 3rd Circuit, Kirk v. Raymark Indus. Inc., 61 F.3d 147, is directly on point.

Interpreting the Federal Rules of Evidence, the Kirk court said the maker of any statement to  be used as an admission must be an agent of the party. In normal cases, an expert has not agreed to be “subject to the client’s control.”

Because the witness has been retained to provide his or her opinion on the matter before the court, the Kirk court said, “[W]e fail to comprehend how an expert witness, who is not an agent of the party who called him, can be authorized to make an admission for that party.”

After citing the Kirk opinion, Huff wrote, “An expert witness…is expected to testify to his or her own opinion concerning the issues presented and not the opinion of the party.”

The husband’s expert was only identified in discovery and was not a trial witness, Huff added. The expert was not authorized, sanctioned or empowered to speak on the man’s behalf, so the report could not be considered as the husband’s statement that could become a party admission.

The appeals court affirmed on that issue.

The case was remanded on several other grounds, including classification of stock and IRA, classification of the wife’s credit card debts and child support.

VLW 016-7-240