Friday, October 8, 2021

Court finds CPA less qualified to assess earnings in small business than a family law lawyer

 Laura Williams and Jennifer Williams, etal  v Reeds, LLC

Release Date:  Oct 5, 2021

Venue:   Court of Appeals - Southern District     SD  36883, SD 36892


Summary:  This case is a fight over applying the "special circumstances" wage rate section to figure out what to pay survivors when the sole company owner was crushed by a car and  took a weekly draw that was not designated as wages and paid business and personal expenses off the business account.  

The Court deferred to the Commission's finding as to which expert it believed and adopted findings of a family law attorney over the opinions of a CPA and forensic specialist resulting in computation of wage rate based on $62,100.13 annual earnings rather than the net profits of the business of $13,127.  The court noted it is bound by the commission's finding even if other evidence would support a different result.

The court found a family law attorney was qualified as an expert to render an opinion on earnings under 490.065.1, and the expert's lack of expertise in worker's comp did not preclude admissibility of his expert opinion.  The employer argued since he was not an expert in comp, he could not opine on comp rate pursuant to the statute.  

One of the surviving daughters failed to persuade a majority of the Commission that she was "full-time" student to to avoid disqualification as a dependent.  The daughter argued employer lacked standing to challenge dependency when the ALJ found it, and the Commission found it was no longer present.  The court found the employer had standing to challenge the qualifications of any of the benefit recipients.   The Commission had found if claimant was part-time student at age 18, that dependency could not be revived by later enrolling full-time.