De Tomaso Automobili Holdings N.A. LLC (“De Tomaso”) creates, develops, and sells luxury automobiles. Norman Choi is its current owner. Ryan Berris is its former Chief Executive Officer and Chief Marketing Officer. Berris sued Choi and De Tomaso for, inter alia, breach of contract and wrongful discharge.
Berris sued Choi and De Tomaso for, inter alia, breach of contract and wrongful discharge.
Defendants filed a motion to exclude testimony purporting to show that Berris’ travel expenses were reasonable. De Tomaso did not have a written, formal expense policy in place when Berris incurred these expenses. Berris proposed to offer the expert testimony of John Imperiale, a certified public accountant who currently serves as a Senior Director in the Expert Services practice at a financial and risk advisory firm, to give the jury “additional context and guidance regarding what may constitute proper business expenses.”
Accounting Expert Witness
John T. Imperiale has over 14 years of experience advising clients and managing engagement teams in the areas of forensic accounting investigations, financial reporting, asset tracing, financial fraud investigations, and quantification of damages. Imperiale is also experienced in accounting and auditor malpractice matters and related Generally Accepted Accounting Principles (GAAP) and Generally Accepted Auditing Standards (GAAS) guidance and damages.
Prior to joining Kroll, he was an associate in the audit practice of a national public accounting firm. He received his B.B.A in finance and accounting from Villanova University and his M.B.A. from the Fordham University Graduate School of Business.
Discussion by the Court
Defendants argued that the Court should exclude Imperiale’s opinions because he merely “regurgitates” what Berris has told him, and because his opinions are not based on reliable principles or methods.
As to Imperiale’s methods, because De Tomaso did not have an expense policy in place, Imperiale used “professional accounting and taxation guidelines issued by the Financial Accounting Standards Board (‘FASB’) and the U.S. Internal Revenue Service (‘IRS’) in order to provide a general framework for what are generally and customarily accepted as valid business expenses.” Under these guidelines, Imperiale opined that “the principal analysis of whether a particular expense is considered to be a ‘business expense’ turns on if it is ‘common and accepted in your industry’ and ‘helpful and appropriate for your trade or business,’” as well as whether “the expense was incurred in ‘carrying out other activities that constitute the entity’s ongoing major or central operations.’”
Although the IRS and FASB guidelines do not directly control the issues in this case, absent a written expense policy, the jury has no benchmark against which to measure the reasonableness of Berris’ expenses. The Court agreed with Berris that insight into what constitutes a business expense under tax and accounting standards may assist the jury in drawing the line between business and personal expenses in this context, which in turn will assist the jury in determining whether Berris breached his fiduciary duty to De Tomaso by reimbursing certain expenses.
As for Defendants’ argument that Imperiale is merely bolstering Berris’ testimony, although he relies in part on Berris’ factual statements, the Court held that Imperiale does not merely “regurgitate[] what a party has told him,” but rather analyzes whether Berris’ expenditures are reasonably considered business expenses if Berris’ factual assertions are taken as true.
Held
The Court denied the Defendants’ motion to preclude the testimony of John Imperiale.
Key Takeaway:
The Court will put in place appropriate guardrails at trial to ensure that Imperiale isn’t simply acting as a mouthpiece for otherwise inadmissible evidence and isn’t vouching for Berris’ credibility. Imperiale should make clear that he was asked to assume the truth of the stated reasons for the various expenses, and that he is not testifying as to the veracity of those reasons.
Case Details:
| Case Caption: | Berris V. Choi Et Al |
| Docket Number: | 1:23cv4305 |
| Court Name: | United States District Court for the Southern District of New York |
| Order Date: | September 04, 2025 |
