What Does a Divorce Lawyer - PowerPoint Presentation

Slide1

What Does a Divorce LawyerWant from a Forensic Accountant?

Best Practices for anEffective Working Relationship

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October 21, 2014Slide2

Mary S. PenceFeldesman Tucker Leifer Fidell LLPWashington, D.C.

Jason N. SposeepSchiller DuCanto & Fleck LLP

Chicago

Shirley M. Steinbach

Feldesman Tucker Leifer Fidell LLPWashington, D.C.

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What is at stake?

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The best outcome for the client

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Reputations

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Malpractice Exposure

6Slide7

Attorneys and Forensic Accountants have different training and mindsets

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The key is for the professionals to have each other’s backs.

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Central Concepts

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Responsiveness, timing,

being forward looking

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Clarity about strengths and weaknesses

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Good communication

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Division of responsibility

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Fitting into the attorney’s mindset

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15Strategy

InvestigationValuationsDetermination of Income

Cash Flow/support

Tracing of Marital and Non-marital Assets

Tax Projections

Types of Engagements in

Family Law CasesSlide16

Engagement to Develop Strategy

Understand

the attorney’s theory of

the case/assist

in its evolution

Understand

the client’s goals and objectives

Mastery

of the facts/documents

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Investigation Engagement

Understand the attorney’s theory of the case

Establish

scope of work

Establish priorities and time frames

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Possible Areas of Investigation

Hidden assets:

Examine corporate and personal tax returns

Examine personal and corporate bank

statements and corporate detailed general ledger.

Obtain SEC filings

Review databases regarding real estate and corporate entities

Income Issues:

Personal expenses disguised as business expenses

Employment-related perquisites

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Valuation Engagement

Know the law in the relevant jurisdiction

Disclose prior relevant experience or lack

thereof

Develop information about the opposing expert, if

any

Develop

information about ethical constraints of opposing expert

Disclose

your own prior expert opinions which may create a

conflict or

constraint with regard to your expert opinion in this matter

If

the case is in litigation, communicate with the attorney about

discovery

deadlines – i.e., designation of experts, production

of reports

, deposition and trial dates

Plan

ahead to preserve the work product privilege

Arrange

for direct contact with the client to glean

relevant information

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Determination of Income

Review relevant statutory and case law defining incomeUnderstand the attorney’s theory of the case

Educate the attorney as needed

Plan for the organization and presentation of conclusions

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Cash Flow/Support Engagement

Understand the attorney’s theory of the caseClarify division of responsibility:

Who will prepare the client’s detailed expense statement

How will results be presented?

How will tax ramifications be included?

Decide how results will be presented

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Tracing of Marital and Non-Marital Assets

Review statutory and case law definitions

Be in close communication with the attorney as information is produced/developed

Develop information about the opposing expert

Develop information about the ethical constraints of opposing expert

Disclose your own prior expert opinions which may create a conflict or constraint with regard to your expert opinion in this matter

If the case is in litigation, communicate with the attorney about discovery deadlines – i.e., designation of experts, production of reports, depositions and trial dates

Plan ahead to preserve the work product privilege

Agree on how conclusions will be presented

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Establishing Dissipation

Understand the applicable statutory and case law

With the attorney, develop the theory regarding d

issipation, including possible alternative theories

Develop settlement/court exhibits

Be mindful of evidentiary rules for introduction into evidence

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Examples of Establishing Dissipation:

Spending on a paramourGambling/addiction expendituresU

nusual luxury expendituresP

re-payment of rental/lease expenditures

Excess estimated tax payments27Slide28

Tax Projections and Opinions

Be knowledgeable about the relevant tax law, or associate with an expert in a particular specialty if needed in the relevant jurisdiction

With the attorney, decide how many and which scenarios will be created

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Provide the invoices or other supporting documents (including “yellow sheets”) for all “

personal expenses” charged to Mr. Helfer’s capital account from 1/1/2009 to the present.

Provide

the general ledger entries reflecting

all “personal expenses” charged to Mr. Helfer’s capital account

from 1/1/2009 to the present.

Provide

copies of canceled checks used as

payment for

“personal expenses” charged to Mr.

Helfer’s capital

account from 1/1/2009 to the present

.

Accountant-Drafted

Document Requests

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Produce all documents relating or referring to

personal expenses that are paid for you or reimbursed to you by Ginsberg Helfer & Boyd, PLLC since the date of the marriage, including invoices, “yellow sheets,” general ledger entries, and cancelled checks. This Request includes but is not limited to all documents relating or referring to the line item for “Personal Expenses” on the periodic Memoranda you receive from Ginsberg Helfer & Boyd, PLLC on the subject of your draws, a copy of which is attached as Exhibit A.

Attorney-Drafted Document Requests

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Be mindful of important discovery

datesHow soon can we serve discovery?

When will responses to document requests

and interrogatories

be received from the other side?

When

is the cut-off date for serving discovery

requests?

When

will the key persons be deposed?

Consult

early in the

engagement

Consult

often throughout the engagement

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Practice Pointers

(for Cooperating to Obtain Information

Necessary for Analysis)Slide34

34Discovery is a Two-Way Street!Slide35

35Discovery

Requests from Opposing Party

Produce

all your expert witnesses’ written communications, including emails, that relate to this

lawsuit.

Produce all documents prepared by your expert witness in the context of this litigation, including all drafts of reports

.

Produce

all documents provided to your expert witness in the context of the litigation

. Slide36

36Attorney-Client Privilege

The

attorney-client privilege

attaches to direct

communication between

a client and their attorney,

as well

as communications

made through

their respective

agents. 

Reed

Dairy Farm

v. Consumers

Power Co.

, 227 Mich.

App. 614

, 618, 576 N.W.2d 709, 711 (1998

).Slide37

37The Facts of

People v. Marcy

Defendant

was charged with

murder.

Defendant’s

attorney asked an expert

to conduct

a polygraph examination of

Defendant.

Prosecution

requested that the expert

reveal all the information

in his possession regarding

the murder.

The expert

refused on the grounds of

attorney-client privilege.

How

did the

Court rule?

See

91 Mich. App. 399, 283 N.W.2d 754 (1979).Slide38

38The Ruling in

People v. Marcy

[C]

ommunications

between [the defendant] and [the expert] are protected by the attorney-client

privilege. . . .

the

attorney-client privilege has been extended to cover,

i

nter

alia

, an accountant, investigator, engineer or appraiser employed by either the client or the attorney to assist the attorney. . .

[T]he

assistance of experts is often required in preparing a case for trial, and the participation of an expert in trial preparation often makes him, in effect, “assistant counsel . . . We agree with the trial court that the attorney-client privilege extends to the polygraph examination conducted by

[the expert] at

the request of

[the defendant‘s]

attorney

.”

91

Mich. App. 399, 406-07, 283 N.W.2d 754, 757 (1979) (internal citations and quotations omitted).

Cf. 

Ill. S. Ct. R. 201(b)(3); D. C. Superior Court Domestic Relations Rule 26(b)(4)(B); Michigan Court Rule 2.302(B)(4)(b). Slide39

39The Facts of

Meany v. Am.

Cas

. Co. of Reading

Product liability action.  Plaintiff was electrocuted upon operating a machine made by Defendant

Altec

. 

Altec

hired Dr. Chard to inspect its machine.  Dr. Chard prepared an

Initial Report

and provided it to the

Altec’s

attorney. 

Later,

Altec

designated Dr. Chard as a testifying expert

and produced his formal

expert

report

Altec

refused to produce Dr. Chard’s

Initial

Report under claims of attorney-client

privilege. 

Plaintiff moved to compel.

How

did the Court rule?

See

3:11-CV-401-S, 2013 WL 3154958 (

W.D

. Ky. June 19, 2013).  Slide40

40The Ruling in

Meany v. Am.

Cas

. Co. of Reading

“[C]

onfidentiality

implies that the information will not be used to form the basis of expert testimony at trial; this is because expert testimony must be cross-examinable. . .

A

distinction must be drawn between an expert hired to testify at trial and an expert consulted as an adviser who will not testify

.

The

first is a witness who . . . does not fall in the definition of representative of lawyer. 

In

this situation disclosure is contemplated and the privilege is

eliminated . . .

Altec

has waived any attorney-client privilege it may have had with respect to the Initial Report.”

2013

WL 3154958 (

W.D

. Ky. June 19, 2013) (internal citations and quotations omitted

);

see also

People v. Wagener

, 196 Ill. 2d 269, 275, 752 N.E.2d 430, 435 (2001)

(communications

between

defendant

and his expert are

attorney-client privileged

only so long as

expert

will not testify).  Slide41

41The work product doctrine . . . is designed to protect the right of an attorney to thoroughly prepare his case and to preclude a less diligent adversary attorney from taking undue advantage of the former's efforts

.

Work-Product Protection

Fischel

& Kahn, Ltd. v. van

Straaten

Gallery, Inc.

, 189 Ill. 2d 579, 591, 727 N.E.2d 240, 246 (2000) (citing

Hickman v. Taylor

, 329 U.S. 495 (1947)).Slide42

A party may obtain discovery of documents and tangible things that are relevant, and not privileged, and were prepared in anticipation of litigation or for trial only upon a showing that the party seeking discovery has substantial need of the materials and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means. 

See

Superior Court Domestic Relations Rules 26(b)(3); Michigan Court Rule 2.302(B)(3) (substantially similar).

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Work-Product Protection – Broad IterationSlide43

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Work-Product Protection – Broad

“Substantial need and inability without undue hardship to obtain the substantial equivalent.” 

See

, e.g.

,

In re Terra Int’l, Inc.

134 F.3d 302, 305 (5th Cir. 1998) (requiring disclosure of consulting expert’s report detailing condition of explosion site because site changed over time);

Delcastor

, Inc. v. Vail

Assocs

, 108

F.R.D

. 405, 408-09 (D. Colo. 1985) (requiring disclosure of

testifying expert’s

report where expert investigated site the morning after a mudslide, and weather and human activities altered the terrain before plaintiff’s expert could examine the site). Slide44

Discovery of facts known and opinions held by an expert, otherwise relevant and not privileged, and acquired or developed in anticipation of litigation or for trial, may be obtained only as follows:

(i) A

party may through interrogatories require any other party to identify each person whom the other party expects to call as an expert witness at trial, to state

the subject matter on which the expert is expected to testify, and to state the substance of the facts and opinions to which the expert is expected to testify and a summary of the grounds for each opinion

. (ii) A party may by

deposition

require a person whom any other party expects to call as an expert witness at trial to state the substance of the facts and opinions to which the expert is expected to testify and the grounds for each opinion. (iii) Upon

motion . . .

Superior

Court Domestic Relations Rules 26(b)(4);

see also

Michigan

Court Rule 2.302(B)(4) (substantially similar)

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Work-Product Protection – BroadSlide45

As MCR 2.302(B)(4) recognizes, the facts known and opinions held by an expert are not work product. Those facts and opinions are subject to discovery by means of interrogatories, deposition, and further discovery ordered by the court.

The arrangement of those facts and opinions in a report, made directly responsive to the inquiries of an attorney, is, however, work product; a disclosure of the report itself would betray those thoughts, mental impressions, formulations of litigation strategy, and legal theories of the attorney that are protected by the work-product doctrine. To hold that a party to a litigation could attain copies of those reports by merely making a demand for production without more would have the practical effect of chilling the ability of an attorney and his retained expert witness to freely communicate in writing.

Backiel

v. Sinai Hosp. of Detroit

, 163 Mich. App. 774, 778, 415 N.W.2d 15, 17 (1987)

45

Work-Product Protection – BroadSlide46

Material prepared by or for a party in preparation for trial is subject to discovery only if it does not contain or disclose the theories, mental impressions, or litigation plans of the party’s attorney.

Illinois Supreme Court Rule 201(b)(2

) (emphasis supplied); see also

Shields v. Burlington N. & Santa Fe Ry. Co., 353 Ill. App. 3d 506, 508-09, 818 N.E.2d 851, 853 (2004) (“Our

supreme court

. . . deliberately

narrowed the scope of the

protection”);

Jackson

ex rel. Jackson v. Reid

, 402 Ill. App. 3d 215, 234, 935 N.E.2d 978, 994 (2010) (“The work product rule protects documents prepared by

counsel

. Here, the articles, which plaintiffs' counsel sought to discuss during cross-examination, were not prepared by defense counsel. Thus, work product rule does not apply

.”) (emphasis original).

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Work-Product Protection – NarrowSlide47

For each testifying expert who is retained in anticipation of litigation: The

party must identify: (i) the subject matter on which the witness will testify; (ii) the conclusions and opinions of the witness and the bases therefor; (iii) the qualifications of the witness; and (iv) any reports prepared by the witness about the case.

Illinois Supreme Court Rule

213(f)(3).

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Work-Product Protection – NarrowSlide48

Consulting Experts – Generally (but not always) protected from discovery.

Testifying Experts – Certain work product may be protected if prepared in anticipation of litigation depending on the law of the forum.

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Summary: Am I required to respond to the discovery requests?Slide49

Think twice before changing roles from a consulting expert to a testifying expert.

Work under the assumption that the privilege will be waived (because you may ultimately be designated as a testifying

expert).

Communicate

verbally with the attorney and client whenever possible, as opposed to in writing. 

Doing so will at least

minimize

the burden

to produce

documents

.

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Practice Pointers

For Consulting ExpertsSlide50

Know the law of the forum on the subject of work-productEspecially if

you’re in a jurisdiction that uses a narrow iteration of the doctrine, be mindful of the documents you create and what you put in writing

Beware

if you are testifying on behalf of a client regarding work you did for that client when litigation was

not anticipated because the doctrine does not apply in that context

50

Practice Pointers

For Testifying ExpertsSlide51

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© 2014

This

information is not intended to constitute legal advice and should not be relied upon in lieu of consultation with appropriate legal advisors in your own jurisdiction

.