Quad City Bank & Trust v. Jim Kircher & Associates, P.C.
2011 Iowa Sup. LEXIS 75
| Iowa | 2011Background
- Quad City Bank & Trust (QCBT) sues Kircher for accounting negligence over Chapman Lumber’s 2003 audit conducted by Kircher & Associates.
- District court barred an expert, Kerry Bolt, from testifying on GAAS standards, breach, and causation; allowed some discussion of the audit work papers but did not rule on their admissibility.
- Trial proceeded, resulting in a verdict for Kircher; QCBT appealed and the court of appeals reversed, remanding for a new trial.
- Chapman Lumber, aided by a USDA-guaranteed loan, faced defaults and fire damage; QCBT later liquidated Chapman and recovered about $1.289 million.
- Key evidentiary issue was whether Bolt could testify about work papers and whether Bolt (non-CPA) could testify about GAAS standards, breach, and causation; error preservation became central to the appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Preservation of error on Bolt’s work-paper testimony | QCBT preserved error by the definitive limine ruling and offer of proof | Kircher argues ruling not final on work papers; no renewal occurred | Error not preserved for Bolt’s work-paper testimony due to lack of final ruling and offer of proof |
| Bolt’s qualification to testify on GAAS standards, breach, and causation | Bolt was qualified as an expert to opine on Feltes’s adherence to work papers; ultimate standard still appropriate | Bolt not qualified as CPA; cannot testify on GAAS standards or breach | Bolt unqualified to testify on general auditing standards and causation; district court did not abuse discretion in excluding that testimony |
| Scope and definitiveness of the district court’s limine ruling | Ruling covered ultimate admissibility of Bolt’s GAAS testimony | Ruling was limited to Bolt’s qualification for GAAS testimony, not work papers | Court’s ruling on GAAS testimony was definitive; exception to preservation applied; not needing renewal for those issues |
| Effect of no renewal of Bolt’s testimony at trial | Offer of proof and work papers could still be admitted if allowed | No renewal meant no final ruling on the remaining Bolt testimony | Error not preserved for Bolt’s work-paper testimony due to no renewal; admissibility issues not reviewable |
Key Cases Cited
- Twyford v. Weber, 220 N.W.2d 919 (Iowa 1974) (motion in limine rulings are procedural steps and not final unless definitive)
- Johnson v. Interstate Power Co., 481 N.W.2d 310 (Iowa 1992) (standing rule: failure to renew limits review unless ruling final)
- Alberts, 722 N.W.2d 402 (Iowa 2006) (exception to preservation when ruling definitive and reaches admissibility)
- Garnac Grain Co. v. Blackley, 932 F.2d 1563 (8th Cir. 1991) (non-CPA experts may be allowed where experience supports weight rather than admissibility)
- Ranes v. Adams Labs., Inc., 778 N.W.2d 677 (Iowa 2010) (testimony admissibility hinges on qualification and reliability of expert testimony)
- Leaf v. Goodyear Tire & Rubber Co., 590 N.W.2d 525 (Iowa 1999) (expert must be qualified in area of testimony; degree/licensure not sole criterion)