Bunge Nsmail 2

1 SUPERIOR COURT OF THE STATE OF CALIFORNIA
2 FOR THE COUNTY OF LOS ANGELES
3 DEPARTMENT WE B HON. NORMAN P. TARLE, JUDGE
4 JOSE BUNGE; VICTORIA BUNGE, )
)
5 )
PLAINTIFF(S), )
6 )
V. ) NO. SC100361
7 )
511 OFW, LP., A CALIFORNIA )
8 LIMITED PARTNERSHIP; )
GINGERBREAD COURT, L.P., A )
9 CALIFORNIA LIMITED PARTNERSHIP;)
BOARDWALK SUNSET, LLC, A )
10 CALIFORNIA LIMITED LIABILITY )
COMPANY; STEVE GAGGERO; AND )
11 DOES 1-50; INCLUSIVE, )
)
12 DEFENDANT(S). )
_______________________________)
13 )
AND RELATED CROSS-ACTION )
14 _______________________________)
15
REPORTER'S TRANSCRIPT OF PROCEEDINGS
16 JANUARY 25, 2012
17
18 APPEARANCES:
FOR PLAINTIFFS: LAW OFFICES OF
19 PAUL D. BEECHEN, INC.
BY: PAUL D. BEECHEN, ESQ.
20 AND CHRISTOPHER POLK, ESQ.
1900 AVENUE OF THE STARS
21 SUITE 2300
LOS ANGELES, CALIFORNIA 90067
22
23 FOR DEFENDANTS: BLECHER & COLLINS
BY: MAXWELL M. BLECHER, ESQ.
24 AND JOHN E. ANDREWS, ESQ.
515 SOUTH FIGUEROA STREET
25 SUITE 1750
LOS ANGELES, CALIFORNIA 90071
26
27
KAREN B. YODER, CSR NO. 8123
28 OFFICIAL REPORTER

1 MASTER INDEX
2 JANUARY 25, 2012
3 CHRONOLOGICAL INDEX OF WITNESSES
4
5 JOSEPH PRASKE, CALLED BY THE PLAINTIFF (776) PAGE
DIRECT EXAMINATION BY MR. BEECHEN 2
6 CROSS EXAMINATION BY MR. BLECHER 37
REDIRECT EXAMINATION BY MR. BEECHEN 42
7
SCOTT WOODS, CALLED BY THE PLAINTIFF
8 DIRECT EXAMINATION BY MR. BEECHEN 48
CROSS EXAMINATION BY MR. BLECHER 51
9 REDIRECT EXAMINATION BY MR. BEECHEN 53
10 STEVEN GAGGERO, CALLED BY THE PLAINTIFF
CROSS EXAMINATION BY MR. BLECHER (RESUMED) 115
12
LISA JOHNSON, CALLED BY THE PLAINTIFF
14
15 ALPHABETICAL INDEX OF WITNESSES
16 LISA JOHNSON, CALLED BY THE PLAINTIFF PAGE
18 STEVEN GAGGERO, CALLED BY THE PLAINTIFF
CROSS EXAMINATION BY MR. BLECHER (RESUMED) 115
20
JOSEPH PRASKE, CALLED BY THE PLAINTIFF
22 REDIRECT EXAMINATION BY MR. BEECHEN 42
23 SCOTT WOODS, CALLED BY THE PLAINTIFF
REDIRECT EXAMINATION BY MR. BEECHEN 53
25
26
27
28

1 EXHIBITS
2 FOR IN
IDENTIFICATION EVIDENCE
3 PLAINTIFFS' PAGE PAGE
4 75 RESULTS OF APPRAISAL 93 99
5 76 LETTER OF INTENT 94 95
6 77 OFFER 95 99
7 83 CHART 22 37
8 DEFENDANTS'
10 102 TRANSMITTAL 121 121
12 104 COUNTERPROPOSAL 122 122
13 105 E-MAIL 123 123
14 106 COUNTERPROPOSAL 124 124
15 107 E-MAIL 125 125
16 108 126 126
17 109 126 126
18 110 RESPONSE 126 126
19 111 E-MAIL 127 127
20
21
22
23
24
25
26
27
28

1
1 SANTA MONICA, CALIFORNIA; WEDNESDAY, JANUARY 25, 2012
2 10:25 A.M.
3 * * * *
4
5 THE COURT: WE'RE ON THE RECORD IN BUNGE VERSUS
6 511 OFW, LP, ET AL. I'LL ASK THE ATTORNEYS TO STATE
7 THEIR APPEARANCES, PLEASE.
8 MR. BEECHEN: PAUL BEECHEN AND CHRIS POLK ON
9 BEHALF OF PLAINTIFFS.
10 MR. BLECHER: MAXWELL BLECHER AND JOHN ANDREWS
11 FOR THE PLAINTIFF AND COUNTER CLAIMANT; MS. JENNIFER
12 JOHNSON, THE PARALEGAL; MR. GAGGERO, THE CLIENT.
13 THE COURT: THANK YOU. ALL RIGHT. DOES THE
14 PLAINTIFF WISH TO CALL ANOTHER WITNESS?
15 MR. BEECHEN: YES, PLEASE. WE WOULD BE CALLING
16 JOSEPH PRASKE, WHO IS OUR NEXT WITNESS.
17 THE COURT: MR. PRASKE.
18 MR. BEECHEN: YOUR HONOR, MR. PRASKE IS A
19 DEFENDANT IN THIS ACTION, AND WE WILL CALL HIM PURSUANT
20 TO EVIDENCE CODE SECTION 776.
21 THE COURT: PLEASE RAISE YOUR RIGHT HAND, SIR.
22
23 JOSEPH PRASKE,
24 CALLED ON BEHALF OF THE PLAINTIFF, HAVING BEEN DULY
25 SWORN, WAS EXAMINED AND TESTIFIED AS FOLLOWS:
26 THE CLERK: DO YOU SOLEMNLY STATE THAT THE
27 TESTIMONY YOU MAY GIVE IN THE CAUSE NOW PENDING BEFORE
28 THIS COURT SHALL BE THE TRUTH, THE WHOLE TRUTH, AND

2
1 NOTHING BUT THE TRUTH, SO HELP YOU GOD?
2 THE WITNESS: YES, I DO.
3 THE CLERK: THANK YOU. PLEASE BE SEATED. PLEASE
4 MAKE YOURSELF COMFORTABLE. I'LL ASK YOU TO DRAW THE
5 MICROPHONE UP.
6 THE WITNESS: IS THAT GOOD?
7 THE COURT: THAT'S GREAT.
8 MR. BEECHEN: THAT'S GREAT.
9 THE COURT: THANK YOU. I'LL ASK YOU TO STATE AND
10 SPELL YOUR FULL NAME.
11 THE WITNESS: JOSEPH PRASKE, J-O-S-E-P-H
12 P-R-A-S-K-E.
13 MR. BEECHEN: I'LL LET YOU GET YOUR WATER.
14 THE WITNESS: NO. GO AHEAD.
15
16 DIRECT EXAMINATION
17 BY MR. BEECHEN:
18 Q MR. PRASKE, YOU'RE AN ATTORNEY AT LAW?
19 A YES, I AM.
20 Q ALL RIGHT. AND YOU HAVE BEEN LICENSED TO
21 PRACTICE, I THINK, SINCE 1987?
22 A YES.
23 Q AND YOUR SPECIALTY IS CURRENTLY OR, AT
24 LEAST, SINCE ON OR BEFORE 1997 ESTATE PLANNING
25 INVOLVING -- IS THAT CORRECT, ESTATE PLANNING?
26 A THAT'S ONE OF THE THINGS I DO, YES.
27 Q AND THAT INVOLVES EFFORTS TO LOWER ESTATE
28 TAXES, AMONGST OTHER THINGS?

3
1 A IT COULD, YES.
2 Q CREATE AN ESTATE PLAN?
3 A YES.
4 Q CREATE DOCUMENTS TO EXECUTE THAT ESTATE
5 PLAN?
6 A YES.
7 Q AND THOSE DOCUMENTS WOULD INCLUDE THE
8 PREPARATION OF SUCH THINGS AS PARTNERSHIP AGREEMENTS?
9 A IT'S POSSIBLE.
10 Q AND YOU'VE DONE THAT, IS WHAT I'M ASKING.
11 A YES.
12 Q AND, IN FACT, YOU SPECIALIZE IN ESTATE
13 PLANNING. THAT IS YOUR SPECIALIZATION WITHIN THE
14 PRACTICE OF LAW?
15 A NO. I THINK -- I MEAN, I DON'T HAVE --
16 IT'S ONE OF THE PRIMARY THINGS THAT I DO. PUT IT THAT
17 WAY.
18 Q FINE.
19 A SPECIALIZATION IS -- REQUIRES ADDITIONAL
20 THINGS THAT I'M NOT AWARE OF, BUT I DON'T WANT TO CALL
21 IT SPECIALIZATION.
22 Q IS THERE AN ESTATE PLANNING SPECIALIZATION
23 WITHIN THE STATE BAR?
24 A I THINK THERE MIGHT BE, BUT I'M NOT SURE.
25 Q ALL RIGHT. AND IN CONNECTION WITH YOUR
26 WORK, YOU GO TO SEMINARS; CORRECT?
27 A YES.
28 Q YOU ENGAGE IN CONTINUING LEGAL EDUCATION?

4
1 A YES, I DO.
2 Q ALL RIGHT. NOW, YOU KNOW STEVE GAGGERO?
3 A YES.
4 Q AND YOU MET HIM IN 1997?
5 A YES.
6 Q AND HE RETAINED YOU TO CREATE AN ESTATE
7 PLAN FOR HIM; CORRECT?
8 A YES.
9 Q NOW, I WANT TO FOCUS ON THREE PROPERTIES.
10 AND THIS WAS PART OF YOUR WORK FOR MR. GAGGERO IN TERMS
11 OF YOUR ESTATE PLANNING INVOLVING PROPERTIES LOCATED ON
12 OCEAN FRONT WALK IN VENICE; CORRECT?
13 A YES.
14 Q I WANT TO FOCUS ON THREE OF THOSE: 511,
15 517, AND 601 OCEAN FRONT WALK. ARE YOU FAMILIAR WITH
16 THOSE PROPERTIES?
17 A YES, I AM.
18 Q ALL RIGHT. NOW, AS I UNDERSTAND IT, YOU
19 CREATED GRANT DEEDS IN CONNECTION WITH 511 AND 517 OCEAN
20 FRONT WALK; CORRECT?
21 A YES.
22 Q YOU WERE NOT INVOLVED IN THE TRANSFER OF
23 601 OCEAN FRONT WALK IN 1997; CORRECT?
24 A THERE WAS ANOTHER ATTORNEY.
25 Q OKAY. BUT YOU TOOK OVER FROM THAT
26 ATTORNEY IN TERMS OF ESTATE PLANNING FOR MR. GAGGERO;
27 CORRECT?
28 A SORT OF. BUT, I MEAN, I CAN'T SAY THAT I

5
1 TOOK OVER IN TERMS OF ESTATE PLANNING. I DON'T KNOW IF
2 THAT'S THE RIGHT CHARACTERIZATION.
3 Q ALL RIGHT. SO THEN PART OF THE ESTATE
4 PLAN WAS TO TRANSFER THESE THREE PROPERTIES FROM
5 MR. GAGGERO'S INDIVIDUAL NAME INTO VARIOUS BUSINESS
6 ENTITIES; CORRECT?
7 A YES.
8 Q SO PRIOR TO THESE TRANSFERS, THESE THREE
9 PROPERTIES -- 511, 517, AND 601 -- WERE IN THE NAME OF
10 STEVEN GAGGERO.
11 A YES.
12 Q ALL RIGHT. LET'S TAKE 511. YOU CREATED
13 AN ENTITY CALLED 511 OCEAN FRONT WALK OR -- EXCUSE ME --
14 OFW, LP; CORRECT?
15 A YES.
16 Q AND SO YOU CREATED -- AND THEN YOU CREATED
17 A GRANT DEED BY WHICH MR. GAGGERO TRANSFERRED THAT
18 PROPERTY, 511, INTO 511 OFW, LP.
19 A YES.
20 Q NOW, WITH REGARD TO 517 OCEAN FRONT WALK,
21 IN 1998 YOU CREATED A GRANT DEED, AND YOU CAUSED THAT TO
22 BE RECORDED. AND BY THAT RECORDING OR -- EXCUSE ME --
23 BY THE CREATION OF THAT GRANT DEED, YOU THEN TRANSFERRED
24 517 OCEAN FRONT WALK FROM MR. GAGGERO INDIVIDUALLY INTO
25 GINGERBREAD COURT, LP; CORRECT?
26 A YES.
27 Q OKAY. AND IN 1997, 601 OCEAN FRONT WALK
28 WAS TRANSFERRED FROM MR. GAGGERO INDIVIDUALLY INTO AN

6
1 ENTITY CALLED BOARDWALK SUNSET, LLC.
2 A YES.
3 Q SO THAT'S A LIMITED LIABILITY COMPANY.
4 A YES.
5 Q THE FIRST TWO ARE LIMITED PARTNERSHIPS,
6 AND THE THIRD IS A LIMITED LIABILITY COMPANY.
7 A CORRECT.
8 THE COURT: I'M SORRY. WERE YOU THE ONE WHO
9 CREATED AND TRANSFERRED 601 OCEAN FRONT WALK INTO
10 BOARDWALK SUNSET, LLC?
11 THE WITNESS: NO.
12 Q BY MR. BEECHEN: THAT TOOK PLACE IN -- 601
13 TRANSFER TOOK PLACE IN 1997. THE TRANSFERS OF 511 AND
14 517 TOOK PLACE IN 1998.
15 A YES.
16 Q NOW, LET'S TAKE, FIRST OF ALL, ONLY THE
17 TRANSFERS WHICH YOU HANDLED, 511, 517. IS IT CORRECT --
18 FIRST OF ALL, THERE WAS NO PURCHASE AND SALE AGREEMENT
19 BETWEEN MR. GAGGERO AND THE TWO LIMITED PARTNERSHIPS; IS
20 THAT CORRECT?
21 A CORRECT.
22 Q THERE WAS NO ESCROW OPENED FOR THE
23 TRANSFER OF THE ENTITIES FROM 511, 517 INTO THE TWO
24 PARTNERSHIPS; CORRECT?
25 A RIGHT.
26 Q THERE WAS NO CONSIDERATION PAID TO
27 MR. GAGGERO WHEN HE TRANSFERRED 511, 517 INTO THE TWO
28 LIMITED PARTNERSHIPS; CORRECT?

7
1 A WELL, THERE WAS THE ASSUMPTION OF THE
2 DEBT. I THINK THAT'S CONSIDERATION.
3 Q BUT NOTHING FLOWED DIRECTLY TO
4 MR. GAGGERO. HE WAS JUST -- WHATEVER DEBT WAS AGAINST
5 THE PROPERTY REMAINED AGAINST THE PROPERTY; CORRECT?
6 A WHAT DO YOU MEAN, "NOTHING FLOWED TO HIM"?
7 OTHER THAN THE ASSUMPTION OF THE DEBT?
8 Q LET ME REPHRASE.
9 A NOTHING OTHER THAN THE ASSUMPTION OF THE
10 DEBT.
11 Q AND THE DEBT REMAINED IN THE NAME OF
12 MR. GAGGERO, DIDN'T IT?
13 A FOR A TIME BEING.
14 Q AND, IN FACT, WHEN YOU MADE THESE
15 TRANSFERS -- OR EXCUSE ME. WHEN THESE TRANSFERS TOOK
16 PLACE, YOU TOLD THE COUNTY ASSESSOR THAT, IN FACT, THE
17 OWNERSHIP OF THESE PROPERTIES HAD NOT CHANGED; THAT
18 WHILE THE TITLE HAD CHANGED, IN FACT, THEY SHOULD NOT BE
19 REASSESSED, BECAUSE MR. GAGGERO, IN SUBSTANCE STILL
20 OWNED THESE PROPERTIES; CORRECT?
21 A I THINK THAT'S NOT THE RIGHT
22 CHARACTERIZATION. AS FAR AS THE COUNTY ASSESSOR IS
23 CONCERNED, THERE WAS AN EXEMPTION FROM REASSESSING.
24 Q AND THAT EXEMPTION WAS BASED ON WHAT?
25 A THAT THE TRANSFEROR, MR. GAGGERO, WAS THE
26 SOLE LIMITED PARTNER OF THE LIMITED PARTNERSHIP. AND
27 THAT'S AN EXCEPTION.
28 Q SO THERE HAD NOT BEEN EITHER A CHANGE IN

8
1 OWNERSHIP OR A CHANGE IN CONTROLLER; IS THAT CORRECT?
2 A NO. NO, THAT'S NOT TRUE.
3 Q NOW, ISN'T IT TRUE THAT WHAT YOU TOLD THE
4 ASSESSOR WAS THAT THE TRANSFER -- LET'S SAY 517 -- WAS
5 FROM AN INDIVIDUAL ENTITY TO ANOTHER ENTITY THAT IS
6 COMPRISED OF THE SAME PARTY, THAT IS, MR. GAGGERO?
7 A RIGHT. THAT'S CORRECT.
8 Q AND THAT THERE WAS NO, THEN, REASSESSMENT
9 AFTER THESE TRANSFERS TOOK PLACE FROM MR. GAGGERO INTO
10 THESE TWO LIMITED PARTNERSHIPS; RIGHT?
11 A RIGHT. THERE ARE A LOT OF EXEMPTIONS FROM
12 REASSESSMENTS, AND THAT'S ONE OF THEM.
13 THE COURT: MR. GAGGERO WAS A LIMITED PARTNER IN
14 THESE TWO ENTITIES?
15 THE WITNESS: YES.
16 Q BY MR. BEECHEN: AND YOU NEVER TOLD THE
17 ASSESSOR AFTER THESE TRANSFERS TOOK PLACE THAT THERE HAD
18 BEEN ANY CHANGE IN THE OWNERSHIP OF THESE LIMITED
19 PARTNERSHIPS; CORRECT?
20 A NO. THERE IS NO REQUIREMENT TO DO SO.
21 Q DID YOU TELL THE STATE BOARD OF
22 EQUALIZATION THAT THERE HAD EVER BEEN A CHANGE IN EITHER
23 THE OWNERSHIP OR CONTROL OF THESE TWO LIMITED
24 PARTNERSHIPS?
25 A NO. THERE WAS NO REQUIREMENT TO DO SO.
26 Q ALL RIGHT. AND DID YOU TELL THE STATE
27 BOARD OF EQUALIZATION THAT THERE WAS ANY KIND OF A
28 CHANGE IN CONTROL OR OWNERSHIP UNDER BOARDWALK SUNSET,

9
1 LLC?
2 A DID I? NO, I DIDN'T.
3 Q BUT NOW, YOU BECAME -- WHEN THESE ENTITIES
4 WERE CREATED -- LET'S TAKE FIRST OR ALL THE LIMITED
5 PARTNERSHIP. YOU BECAME THE TRUSTEE OF THE GENERAL
6 PARTNER OF 511 OFW, LP; CORRECT?
7 A YES.
8 Q AND YOU APPOINTED -- YOU MADE YOURSELF
9 THAT POSITION; CORRECT?
10 A WHAT DO YOU MEAN?
11 Q WELL, DID SOMEONE TELL YOU, "WE WANT YOU
12 TO BE THE TRUSTEE," OR DID YOU JUST TAKE IT UPON
13 YOURSELF TO BECOME THE TRUSTEE?
14 A IT WAS PART OF THE ESTATE PLAN.
15 Q ALL RIGHT. AND SO, IN ESSENCE, YOU ARE
16 THE GENERAL PARTNER, OR YOU CONTROL THE GENERAL PARTNER
17 OF 511 OFW, LP; CORRECT?
18 A IN THAT CONTEXT, YES.
19 Q LET'S TAKE GINGERBREAD COURT, LP. YOU'RE
20 ALSO THE GENERAL PARTNER OF THE ENTITY -- EXCUSE ME.
21 YOU ARE THE TRUSTEE OF THE GENERAL PARTNER OF THIS -- OF
22 GINGERBREAD COURT, LP; CORRECT?
23 A YES.
24 Q AND YOU, AGAIN, AS PART OF THE ESTATE
25 PLAN, YOU MADE YOURSELF -- PUT YOURSELF IN THAT
26 POSITION; CORRECT?
27 A AS PART OF THE ESTATE PLAN.
28 Q YEAH. NOW, BOARDWALK SUNSET, BECAUSE IT'S

10
1 A LIMITED LIABILITY COMPANY, THAT HAS MEMBERS; CORRECT?
2 AS OPPOSED TO LIMITED PARTNERS, THEY'RE CALLED
3 "MEMBERS."
4 A AS OPPOSED TO LIMITED PARTNERS, YES, THEY
5 ARE CALLED MEMBERS.
6 Q AND THEN THERE'S A MANAGER OF AN LLC;
7 CORRECT?
8 A YES.
9 Q AND YOU ARE -- WHAT? -- THE HEAD OF THE
10 ENTITY THAT IS THE MANAGER OF BOARDWALK SUNSET, LLC?
11 A YES.
12 Q OKAY. SO THEN YOU CONTROL AS BEING ALL
13 THESE THREE ENTITIES; CORRECT?
14 A YES.
15 Q AND YOU -- WHAT? YOU PUT YOURSELF IN AS
16 PART OF THE ESTATE PLAN WITH REGARD TO BEING THE HEAD OF
17 BOARDWALK SUNSET ALSO?
18 A THAT WAS PART OF THE ESTATE PLAN.
19 Q MR. GAGGERO HAD TO AGREE THAT YOU BECAME
20 THE HEAD OF ALL THESE ENTITIES, DIDN'T HE?
21 A YES.
22 Q NOW, THESE THREE ENTITIES -- LET'S TAKE
23 ONE AT A TIME -- HAVE TWO LIMITED PARTNERS; CORRECT?
24 A TWO ENTITIES HAVE TWO LIMITED PARTNERS.
25 Q THE ARENZANO TRUST AND THE TERRA MAR
26 TRUST.
27 A YES.
28 Q SO THAT'S THE SAME -- LET'S PUT A LITTLE

11
1 GRAPHIC UP HERE. WE HAVE ARENZANO AND TERRA MAR. AND
2 YOU'RE THE TRUSTEE OF BOTH OF THOSE ENTITIES; CORRECT?
3 A YES.
4 Q OKAY. AND THOSE TWO ENTITIES CONTROL ALL
5 OF THE PROFITS AND LOSSES. LET'S TAKE EACH ONE AT A
6 TIME: 511 OFW, LP; CORRECT?
7 A THEY RECEIVE ALL THE PROFITS AND LOSSES.
8 Q OKAY. THEY ARE THE ONLY ONE THAT RECEIVES
9 THEM. THE GENERAL PARTNER HAS NO INTEREST IN PROFITS OR
10 LOSSES; CORRECT?
11 A CORRECT.
12 Q JUST ARENZANO AND TERRA MAR. GINGERBREAD
13 COURT, SAME THING; CORRECT? IN OTHER WORDS, ARENZANO
14 AND TERRA MAR ARE THE TWO LIMITED PARTNERS OF THAT
15 ENTITY.
16 A YES.
17 Q AND THEY ARE THE ONLY ONES THAT SHARE IN
18 PROFITS AND LOSSES OF GINGERBREAD COURT; CORRECT?
19 A YES.
20 Q BOARDWALK SUNSET HAS TWO MEMBERS; CORRECT?
21 A YES.
22 Q ARENZANO AND TERRA MAR; CORRECT?
23 A YES.
24 Q AND THEY ARE THE ONLY ONES WHO SHARE IN
25 THE PROFITS AND LOSSES OF BOARDWALK SUNSET.
26 A YES.
27 Q ALL RIGHT. NOW, WHO ARE THE BENEFICIARIES
28 OF ARENZANO?

12
1 A THAT INFORMATION IS PROTECTED BY
2 ATTORNEY/CLIENT PRIVILEGE AND RIGHTS OF PRIVACY. ALL I
3 CAN TELL YOU IS THAT FOR SURE MR. GAGGERO IS NOT.
4 Q THAT'S NOT MY QUESTION, SIR. ARE YOU
5 REFUSING TO ANSWER THAT QUESTION?
6 A YES.
7 MR. BEECHEN: YOUR HONOR --
8 THE COURT: WHAT MOTION ARE YOU MAKING?
9 MR. BEECHEN: I MAKE A MOTION THAT HE BE
10 COMPELLED TO ANSWER THE QUESTION.
11 THE COURT: OKAY. THE COURT WILL COMPEL COUNSEL
12 TO ANSWER THE QUESTION IN SPITE OF THE INDICATION THAT
13 IT'S AN ATTORNEY/CLIENT PRIVILEGE.
14 WELL, I'LL BACK UP ON THAT. LET ME HEAR --
15 MR. BEECHEN: DO YOU WANT ME TO EXPLORE THAT A
16 LITTLE BIT BETTER? BECAUSE I DON'T THINK WE HAVE A
17 RECORD.
18 THE COURT: I DON'T THINK YOU HAVE A RECORD
19 EITHER.
20 MR. BLECHER: THIS IS A DISCLOSURE OF INFORMATION
21 THAT -- NOT EVEN MANY OF THE BENEFICIARIES KNOW THAT
22 THEY'RE BENEFICIARIES. THIS COULD BE A DISASTER TO THE
23 ENTIRE ESTATE PLAN. THOSE BENEFICIARIES HAVE NOT BEEN
24 PUT ON NOTICE. THEY HAVE NOT BEEN SUBPOENAED.
25 MR. PRASKE HAS NOT BEEN SUBPOENAED IN HIS
26 CAPACITY AS A LAWYER OR A REPRESENTATIVE OF THE TRUST.
27 HE'S BEEN SUBPOENAED AND ASKED TO COME HERE ONLY AS A
28 REPRESENTATIVE AS A GENERAL PARTNER OF THE THREE

13
1 ENTITIES: 511, GINGERBREAD, AND BOARDWALK COURT.
2 BUT THE KEY ISSUE HERE IS YOU'RE INVADING PRIVACY
3 RIGHTS OF PEOPLE. AND THEY HAVEN'T BEEN GIVEN AN
4 OPPORTUNITY TO COME HERE AND OBJECT. AND I THINK THAT'S
5 ESSENTIAL IN BEING IN MR. PRASKE'S POSITION, NOT SO MUCH
6 THAT IT'S ATTORNEY/CLIENT, BUT THAT HE SITS ON THE BASIS
7 OF -- HE POSSESSES CONFIDENTIAL INFORMATION ABOUT THIRD
8 PARTIES AND THE ROLE IN THESE TRUSTS, AND THEY HAVEN'T
9 BEEN GIVEN AN OPPORTUNITY TO BE PRESENT AND TO BE HEARD.
10 THE COURT: OF COURSE, WE COME RIGHT BACK, THEN,
11 TO THE 1987 ISSUE, THAT IF THAT WERE PROPERLY ADDRESSED,
12 THEN THE COURT COULD TAKE THAT INFORMATION IN CAMERA TO
13 MAKE THE DETERMINATION. RIGHT NOW, I'M JUST SHOOTING IN
14 THE DARK. I HAVE NO IDEA.
15 MR. BLECHER: I THINK HE'S WILLING TO DO THAT.
16 BUT THERE'S A GRAVE DANGER IN PROSPECT OF RELEASING THEM
17 WITHOUT GIVING THESE PEOPLE AN OPPORTUNITY TO BE HEARD.
18 AND, AS I SAY, MR. PRASKE, IF QUESTIONED, WILL TELL YOU
19 THAT THERE ARE NUMEROUS BENEFICIARIES THAT PROBABLY
20 DON'T EVEN KNOW THEY ARE BENEFICIARIES TO PROTECT THEM
21 BECAUSE THEY ARE MINORS SO THAT PEOPLE DON'T TRY TO
22 MARRY THEM FOR THEIR MONEY. AND PEOPLE DON'T UNDERSTAND
23 THAT THEY HAVE THIS MONEY EVEN TO SPEND, AND ALL OF THAT
24 IS THREATENED BY THIS FOR NO AVAIL, BECAUSE THIS MAN IS
25 A LAWYER, AND HE'S NOW TESTIFIED UNDER OATH THAT
26 MR. GAGGERO IS NOT A BENEFICIARY UNDER THESE TRUSTS.
27 THAT'S THE ONLY BASIS ON WHICH THEY COULD CONCEIVABLY
28 ARGUE, IF IT HAS ANY BASIS AT ALL.

14
1 THE COURT: EXCEPT THAT IT DEPENDS -- LIKE
2 EVERYTHING ELSE IN THE LAW, IT DEPENDS WHO IS THE
3 TRUSTEE -- THE BENEFICIARY, RATHER. IF THE BENEFICIARY
4 IS SIMPLY A CONDUIT TO MR. GAGGERO --
5 THE WITNESS: YOUR HONOR --
6 THE COURT: THERE ARE A -- WHAT I'M SAYING --
7 THERE ARE A NUMBER OF SCENARIOS.
8 THE WITNESS: I'M SAYING THAT NEITHER DIRECTLY OR
9 INDIRECTLY AND THE MOST CREATIVE MANNER, HE IS NOT.
10 THE COURT: EXCEPT THAT THAT IS A CONCLUSIONARY
11 STATEMENT THAT THE COURT IS THE ONE TO DETERMINE THAT.
12 AND I CAN'T DETERMINE THAT, IF ALL I'M GETTING ARE VAGUE
13 STATEMENTS. ALL SIDES, ACTUALLY, HAD AN OPPORTUNITY --
14 MR. PRASKE KNEW HE WAS BEING SUBPOENAED FOR THIS
15 PURPOSE. THE DEFENSE KNEW BASED UPON THE 1987 REQUESTS
16 AND THE BASIS FOR MR. PRASKE TO COME IN THAT THIS WAS
17 GOING TO COME UP. AND SO, BASICALLY, I'M GETTING,
18 "PLEASE TAKE MY WORD FOR IT, AND I DON'T WANT YOU TO GO
19 ANY FURTHER."
20 IT WOULD BE HELPFUL IF THERE WAS SOME LAW
21 INVOLVED IN THIS, WHICH THE COURT HASN'T SEEN. THERE
22 WERE SOME OBJECTIONS TO IT PRIOR TO THIS, WHICH THE
23 COURT REALLY HASN'T RECEIVED. BUT I'M WILLING TO
24 GIVE -- WELL, I'LL HEAR FURTHER ARGUMENT AT THIS POINT,
25 AND THEN I'LL MAKE A RULING.
26 MR. BEECHEN: LET ME SUGGEST THIS: AS YOUR HONOR
27 HAS NOTED, WHAT WE HAVE BEEN TOLD IS HE'S NOT THERE,
28 HE'S NOT THERE, BUT AT THE SAME TIME THEY WON'T PRODUCE

15
1 THE DOCUMENTS. THEY, OBVIOUSLY, PRECLUDE ME FROM
2 DETERMINING WHAT THE SITUATION IS. AN ALTERNATIVE TO
3 MAKING HIM ANSWER THIS IS SIMPLY TO, UNDER THE EVIDENCE
4 CODE, SAY THAT THE FAILURE TO PRODUCE THIS EVIDENCE,
5 THAT THE SANCTION, IF YOU WILL, IS THAT THE COURT WILL
6 CONCLUDE THAT MR. GAGGERO IS, IN FACT, THE BENEFICIARY
7 OF THESE TWO ENTITIES AND LEAVE IT AT THAT.
8 THE COURT: WHAT EVIDENCE CODE SECTION ARE YOU
9 TALKING ABOUT?
10 MR. BEECHEN: IT'S THE ONE IN WHICH THE FAILURE
11 TO PRODUCE STRONGER EVIDENCE OR FAILURE TO PRODUCE
12 EVIDENCE WHICH IS WITHIN YOUR CONTROL --
13 MR. BLECHER: THAT ONLY CREATES AN INFERENCE. IT
14 DOESN'T COMPEL THE CONCLUSION THAT YOU ARGUED FOR. IT'S
15 COMPLETELY WRONG.
16 THE COURT: PLEASE ADDRESS THE COURT. I HAVEN'T
17 ARGUED FOR ANY INFERENCE.
18 MR. BLECHER: MR. PRASKE HAS ADVISED US THAT HE'S
19 WILLING TO TURN THESE STATUTES OVER TO YOU IN CAMERA.
20 HE'S NOT AFRAID OF THE COURT. HE'S AFRAID THAT THESE
21 DOCUMENTS WILL SEE THE LIGHT OF DAY, THAT PEOPLE WILL
22 FIND THEM ON THE INTERNET, THAT THE BENEFICIARIES OF
23 THESE TRUSTS AND OTHER PEOPLE WILL FIND ON THE INTERNET
24 WHO THESE BENEFICIARIES ARE. AND IT HAS ABSOLUTELY
25 NOTHING TO DO WITH THIS CASE, AND WE ARE PREPARED TO LET
26 YOU LOOK AT OR REACH THAT CONCLUSION ON YOUR OWN. BUT
27 FOR OPPOSING COUNSEL, WHO'S QUITE ADVERSE TO MR. GAGGERO
28 TO HAVE ACCESS TO THESE DOCUMENTS, IS A COMPLETELY

16
1 DIFFERENT QUESTION.
2 MR. PRASKE, ARE YOU PREPARED TO GIVE THE COURT --
3 THE COURT: WAIT, WAIT. PLEASE DON'T INQUIRE OF
4 THE WITNESS. I HAVEN'T PERMITTED THAT. I'VE PERMITTED
5 ARGUMENT OF THE ATTORNEYS FOR THE PARTIES, AND I FOUND
6 THAT THERE'S BEEN A FAILURE WITH REGARD TO THE RESPONSE
7 UNDER 1987. BUT MR. PRASKE DOES HAVE A RIGHT TO
8 INTERPOSE AN OBJECTION AS THE ATTORNEY FOR THOSE
9 BENEFICIARIES. AND THAT'S DIFFERENT THAN THE 1987
10 ISSUE.
11 MR. BEECHEN: I UNDERSTAND THAT, AND LET ME
12 JUST -- I AM ASKING IN HIS CAPACITY AS THE TRUSTEE OF
13 THESE TWO TRUSTS. HE WOULD CLEARLY HAVE KNOWLEDGE OF
14 WHO THE BENEFICIARIES ARE, BECAUSE HE NEEDS TO
15 COMMUNICATE FROM TIME TO TIME WITH REGARD TO THESE
16 BENEFICIARIES, IF NOTHING ELSE, TO INFORM THEM OF WHAT
17 PROFITS AND LOSSES HAVE OCCURRED IN CONNECTION WITH
18 THESE THREE PROPERTIES. I'M NOT ASKING FOR A
19 COMMUNICATION. I AM SIMPLY ASKING FOR HIS KNOWLEDGE AS
20 THE TRUSTEE OF THE ARENZANO AND TERRA MAR TRUST.
21 THE COURT: MR. PRASKE, DO YOU WANT TO BE HEARD
22 ON THAT?
23 THE WITNESS: YOUR HONOR, I CANNOT PROVIDE THAT
24 INFORMATION. ONE OF THE TRUSTS IS A FOREIGN TRUST
25 THAT'S GOVERNED BY THE LAWS OF ANOTHER JURISDICTION. I
26 HAVE NO POWER TO OVERRIDE THAT LAW AND PROVIDE THAT
27 INFORMATION.
28 MR. BEECHEN: YOUR HONOR --

17
1 THE WITNESS: ALL I CAN DO IS -- I STAKE MY
2 REPUTATION. NOT ONLY THAT -- I'VE ALREADY SAID THAT.
3 BUT I'VE BEEN CONSISTENT IN EVERY TIME THAT THEY ASK ME
4 THE QUESTION IN A DEPOSITION. THEY SAID THEY WERE GOING
5 TO, YOU KNOW, THINK ABOUT IT. AND BEFORE THEY WOULD
6 RELEASE ME, THEY WERE GOING TO THINK ABOUT WHETHER TO GO
7 TO THE COURT TO GET SOME ORDER TO COMPEL ME TO PROVIDE
8 THAT INFORMATION. AND I THINK THEY NEVER DID THAT.
9 MR. BLECHER: MAY I BE HEARD ON THAT VERY POINT
10 FOR 10 SECONDS? THERE'S FOUR VOLUMES OF MR. PRASKE'S
11 DEPOSITION, STARTING IN JULY AND CONTINUING ON AS
12 RECENTLY AS NOVEMBER. IN, VIRTUALLY, EVERY ONE OF THESE
13 VOLUMES, MR. PRASKE CLAIMS THE RIGHT OF PRIVACY OR
14 CLAIMS AN ATTORNEY/CLIENT PRIVILEGE. AND HE'S QUITE
15 CORRECT THAT COUNSEL SAID, "I'M GOING TO TAKE THIS UP
16 WITH THE COURT."
17 NOW, HAVING CLAIMED THESE RIGHTS OF PRIVACY AND
18 PRIVILEGE MONTHS AGO AND IN THE FACE OF THE PLAINTIFF'S
19 STATEMENT THAT THEY ARE GOING TO TAKE IT UP WITH THE
20 COURT, I SUGGEST TO THE COURT THERE MAY BE A WAIVER ON
21 THIS ISSUE.
22 THE COURT: I DON'T FIND A WAIVER. THE ISSUE
23 REALLY IS A BIT DIFFERENT. AND I THINK MR. PRASKE HAS
24 AN ABILITY TO INTERPOSE AN OBJECTION BASED UPON THIS,
25 BUT THAT IS NOT -- THAT DOESN'T END THE INQUIRY. THE
26 COURT WILL GIVE MR. PRASKE A CHANCE TO ADDRESS THIS
27 THROUGH AN IN CAMERA PROCEDURE IN A NUMBER OF WAYS, ONE
28 OF WHICH IS GOING TO BE TO ALLOW THE COURT TO REVIEW THE

18
1 DOCUMENTS IN CAMERA. I HAVE SOME HESITATION ABOUT THAT,
2 BECAUSE IF IT INVOLVES A FOREIGN ENTITY WITH A FOREIGN
3 TRUST, I DON'T KNOW THAT I WOULD OR WOULD NOT BE ABLE TO
4 UNDERSTAND IT. ON THE OTHER HAND, I'M NOT GOING TO
5 REACH THAT UNTIL I SEE THAT ON A TRUST DOCUMENT. BUT
6 I'LL ALLOW MR. PRASKE TO PRESS THE POINT ON BEHALF OF
7 THE BENEFICIARIES. I THINK HE HAS THE AUTHORITY AND THE
8 ABILITY UNDER THE LAW TO INTERPOSE AN OBJECTION.
9 WHAT THE COURT WILL DO IS AS FOLLOWS: WE'RE
10 GOING TO STEP BACK A BIT ON THIS. I'M GOING TO GIVE
11 MR. PRASKE AN OPPORTUNITY, IF YOU WISH, TO BRIEF THE
12 ISSUE WITH AN OPPOSING BRIEF, NO MORE THAN FIVE PAGES ON
13 THIS, IF YOU WISH TO DO THAT. IF NOT, THEN -- AND THAT
14 IS PRIOR TO THE COURT TAKING A LOOK AT THE TRUST
15 DOCUMENTS IN CAMERA. IF NOT, THEN YOU CAN SIMPLY
16 PROVIDE THESE UNDER SEAL TO THE COURT -- FOR THE COURT'S
17 INSPECTION UNDER SEAL.
18 WHAT DO YOU WISH TO DO?
19 THE WITNESS: WELL, DOES "UNDER SEAL" MEAN THAT I
20 JUST SHOW YOU THE DOCUMENT FOR YOUR EYES ONLY, AND THEN
21 I WOULD HOLD ONTO THE DOCUMENT AFTER YOU SEE IT?
22 THE COURT: NO. THE COURT WOULD GET THE
23 DOCUMENT, REVIEW IT, AND THEN SEAL IT IN A SEALED
24 ENVELOPE KEEPING IT SEPARATE FROM THE COURT -- THE USUAL
25 2. -- C.R.C. RULE OF 2.550, I BELIEVE IT IS.
26 THE WITNESS: OKAY. I DON'T KNOW. I WOULD HAVE
27 TO CONSULT WITH COUNSEL, YOU KNOW, BECAUSE I CAN'T TAKE
28 THE RISK THAT DOCUMENT WOULD BE -- I MEAN, I'M ASSUMING

19
1 THAT YOU'RE GOING TO FIND, YOU KNOW, YOU'RE GOING TO
2 AGREE WITH THE STATEMENTS THAT I'M MAKING, AND THEN I
3 WANT THAT TO BE OVERWITH, BUT THAT DOCUMENT WOULD NEVER
4 SEE THE LIGHT OF DAY ANYWHERE ELSE FOR ANY REASON. BUT
5 I DON'T KNOW ABOUT THESE PROCEDURES, AND I'D HAVE TO
6 CONSULT WITH SOMEBODY.
7 THE COURT: WELL, PART OF THE PROBLEM IS THE
8 COURT HAS TO PRESERVE THAT FOR APPEAL, BUT WHAT I WILL
9 ALLOW YOU TO DO -- THAT'S WHY I SUGGEST THAT THE FIRST
10 STEP IS SIMPLY TO BE A LIMITED BRIEFING, NO MORE THAN
11 FIVE PAGES FROM EACH SIDE. YOU CAN THEN PROVIDE THE
12 COURT WITH THE GUIDANCE CONCERNING THE -- I'LL ALLOW UP
13 TO TEN PAGES, THE MORE I THINK ABOUT THIS. I DON'T KNOW
14 HOW MUCH MATERIAL THERE IS IN THE TRUST DOCUMENTS. AND
15 I'LL ALLOW THE DEFENSE COUNSEL TO PROVIDE AN OPPOSITION.
16 AND THEN I'LL ALLOW YOU TO PROVIDE A REPLY BEFORE ANY
17 ISSUE ABOUT COMPELLING ANYTHING IN CAMERA OR COMPELLING
18 ANYTHING ON THE WITNESS STAND.
19 I THINK THAT'S WHAT I WOULD DO AND, IN THE
20 INTERIM, PERMIT COUNSEL TO INQUIRE WITH REGARD TO ANY
21 OTHER AREA THAT'S RELEVANT IN THE TRIAL.
22 YES, MR. BLECHER?
23 MR. BLECHER: THANK YOU. AT THE RISK OF
24 OFFENDING, I PRONOUNCE IT BLECHER.
25 THE COURT: I APPRECIATE THE CORRECTION.
26 MR. BLECHER: I THINK THE COURT'S PROBLEM IS WE
27 HAVE NOTHING TO HIDE FROM THE COURT ON THIS SO-CALLED
28 ALTER EGO ISSUE. THE CONCERN IS THAT IF WE GIVE THEM TO

20
1 YOU AND YOU SEAL THEM THAT --
2 THE COURT: I HAVEN'T GOTTEN THERE.
3 MR. BLECHER: PARDON?
4 THE COURT: I HAVEN'T GOTTEN TO THAT STAGE. ALL
5 I'M DOING IS ASKING FOR BRIEFS.
6 MR. BLECHER: WE'RE WILLING TO BYPASS THE
7 BRIEFING. IF I UNDERSTAND MR. PRASKE CORRECTLY, HE'S
8 SAYING TO YOU THAT IF YOU LOOK AT THESE AND CONCLUDE, AS
9 YOU CERTAINLY WILL, THAT MR. GAGGERO HAS NO FINANCIAL
10 INTEREST IN AND IS NOT AN OWNER OF ANY OF THESE
11 PROPERTIES, HE WOULD LIKE TO HAVE THE DOCUMENTS RETURNED
12 TO HIM WITH THE UNDERSTANDING THAT THEY WILL BE
13 PRESERVED FOR WHATEVER APPELLATE PROCEEDINGS OR
14 SOMETHING THAT MAY FOLLOW.
15 THE COURT: THAT IS A POSSIBILITY, BECAUSE WE DO
16 RETURN EXHIBITS TO ATTORNEYS TO PRESERVE IT PENDING
17 APPEALS. SO IT'S NOT AN IMPOSSIBILITY. IF THERE'S SOME
18 TYPE OF AN AGREEMENT WITH REGARD TO THAT, WITHOUT HAVING
19 IT BRIEFED, I'M HAPPY TO DO THAT. BUT I'M GOING TO LET
20 THE -- MAYBE MR. PRASKE THINK ABOUT THIS AND HAVE THE
21 ATTORNEYS CONSIDER IT.
22 BUT THE ONLY BRIEFING THAT I WOULD ACCEPT,
23 CANDIDLY, IS FROM MR. PRASKE AND FROM PLAINTIFFS'
24 COUNSEL. BECAUSE IF THE ISSUE IS THE PRIVACY OF
25 BENEFICIARIES, THEN MR. GAGGERO DOESN'T HAVE A HORSE IN
26 THAT PARTICULAR RACE. IF IT EVER COMES TO A SITUATION
27 WHERE THE COURT WOULD DRAW AN INFERENCE AS REQUESTED BY
28 THE PLAINTIFFS' COUNSEL, THEN THE DEFENSE DOES HAVE AN

21
1 INTEREST IN THAT ISSUE.
2 BUT THE DISCLOSURE OF WHAT MR. PRASKE CLAIMS TO
3 BE INDIVIDUALS OTHER THAN MR. GAGGERO IS AN ISSUE THAT I
4 WOULD HAVE TO GO SLOW ON, BECAUSE ONCE, YOU KNOW, THAT
5 IS PART THE RECORD, THAT IS PART OF THE RECORD. EVEN IF
6 I SEAL IT, IT'S BEEN HEARD. AND SO I UNDERSTAND THE
7 CONCERN THAT MR. PRASKE HAS, AND HE HAS AN OBLIGATION TO
8 HIS -- THE BENEFICIARIES.
9 THERE'S ALSO THAT OTHER LURKING ISSUE ABOUT THE
10 LAWS OF OTHER JURISDICTIONS, APPARENTLY, THAT I'M JUST
11 NOT AWARE OF. BUT IT SEEMS TO ME THAT HE'S ENTITLED TO
12 HAVE THE COURT CONSIDER IT. AND I DON'T SEE ANY
13 REASON -- SINCE THIS IS NOT A JURY TRIAL, I DON'T SEE
14 ANY REASON TO SLOW DOWN ON THAT ISSUE AND JUST MAKE A
15 DECISION ON THAT. THAT ALSO GIVES THE PARTIES AN
16 OPPORTUNITY, IF THEY SEE FIT TO TAKE A WRIT ON A COURT
17 ORDER. AND I WOULD RATHER GO SMALL, STEP BY SMALL STEP
18 ON THAT, RATHER THAN MAKING A PRECIPITOUS --
19 MR. BEECHEN: SO THIS IS WHAT I INTEND TO DO,
20 WHICH IS NOT PURSUE THE LEVEL ABOVE THIS AT THIS POINT
21 AND JUST -- WE'LL JUST WAIT AND SEE HOW MATTERS DEVELOP.
22 I HAVE A FEW MORE QUESTIONS --
23 THE COURT: LET ME MAKE THE RECORD CLEAR. WHEN
24 COUNSEL SAID, "AT THIS POINT," HE WAS POINTING TO THE
25 CHART, THE HAND-DRAWN CHART.
26 MR. BEECHEN: WHICH WOULD I WOULD ASK TO BE
27 MARKED AS EXHIBIT 84.
28 THE COURT: BUT SINCE THE COURT REPORTER CAN'T

22
1 TAKE DOWN TWO PEOPLE TALKING AT THE SAME TIME, LET ME
2 FINISH THIS. THAT THE CHART THAT WAS REFERRED TO
3 EARLIER ABOUT THE STRUCTURE OF 511, 517, AND 601 --
4 WE'LL MARK THAT AS REQUESTED BY PLAINTIFF'S COUNSEL AS
5 EXHIBIT 84. IS THERE ANY OBJECTION -- STRIKE THAT.
6 WE'LL MARK IT FOR IDENTIFICATION AS 84, AND THEN WE'LL
7 SEE WHAT HAPPENS.
8 MR. BEECHEN: OKAY. SO YOUR HONOR, WHAT I'M
9 GOING TO DO IS JUST HOLD OFF ON THIS ISSUE THAT WE'VE
10 JUST BEEN DISCUSSING, AND WE'LL ADDRESS IT IN DUE
11 COURSE. JUST PRESERVING THAT RIGHT NOW.
12 THE COURT: CLERK TELLS ME 83 IS NEXT.
13 MR. BEECHEN: SORRY?
14 THE COURT: JUST CHECK TO SEE IF OUR RECORDS ARE
15 THE SAME.
16 MR. BEECHEN: IS THERE AN 84 ALREADY?
17 THE COURT: NO. THERE'S AN 82 AND NOTHING ELSE.
18 MR. BEECHEN: OKAY. I RE-MARK IT AS 83.
19 THE COURT: ALL RIGHT. IT IS 83. THAT'S
20 CORRECT.
21 Q BY MR. BEECHEN: MR. PRASKE, LET'S JUST
22 TALK ABOUT, THEN, LOOKING AT EXHIBIT 83 OF THIS CHART,
23 DID ARENZANO PAY ANY CONSIDERATION TO 511 OFW, LP,
24 GINGERBREAD COURT, OR BOARDWALK SUNSET FOR ITS INTERESTS
25 IN THOSE THREE ENTITIES?
26 A NO.
27 Q OKAY. DID TERRA MAR PAY ANY CONSIDERATION
28 TO ANY -- ITS INTEREST IN THOSE THREE ENTITIES?

23
1 A YES.
2 Q AND WHAT DID IT PAY?
3 A I'M NOT ENTIRELY CLEAR. THERE WAS AN
4 INVESTMENT MADE BY TERRA MAR FOR ITS SHARE.
5 Q HOW MUCH?
6 A I DON'T KNOW THE AMOUNT.
7 Q DO YOU HAVE ANY DOCUMENTATION REGARDING
8 THAT INVESTMENT?
9 A YES.
10 Q DO YOU HAVE IT HERE IN COURT?
11 A NO.
12 THE COURT: LET ME ASK YOU THIS, MR. PRASKE: I
13 DON'T WANT TO PUT YOU IN A COMPROMISING POSITION WITH
14 REGARD TO THE BENEFICIARIES OR WITH REGARD TO YOUR
15 OBLIGATIONS AS AN ATTORNEY. WOULD THE INITIAL STRUCTURE
16 AND CONSIDERATION BE REFLECTED IN THE -- IN ANY
17 DOCUMENTS THAT WERE REFERRED TO IN THE SUBPOENA? I'M
18 NOT ASKING WHAT THEY ARE OR ANYTHING LIKE THAT.
19 DO YOU UNDERSTAND MY QUESTION?
20 THE WITNESS: I'M NOT SURE HOW BROAD THE SUBPOENA
21 WAS. CERTAINLY, THERE ARE TAX RETURNS WHICH, YOU KNOW,
22 CANNOT BE PRODUCED UNDER RIGHTS OF PRIVACY, AND THAT WAS
23 RAISED IN APRIL.
24 THE COURT: I DON'T THINK TAX RETURNS WERE --
25 MR. BEECHEN: THEY WERE NOT REQUESTED.
26 THE COURT: THEY WERE NOT REQUESTED, BUT I THINK
27 THE ORIGINAL TRUST DOCUMENTS WERE.
28 MR. BEECHEN: ACTUALLY, YOUR HONOR, REQUEST

24
1 NUMBER 26 ASKED FOR EACH WRITING THAT SETS FORTH THE
2 CONSIDERATION PAID BY TERRA MAR TRUST FOR ITS INTEREST
3 IN DEFENDANTS BOARDWALK SUNSET, LLC; GINGERBREAD COURT,
4 LP; AND/OR 511 OFW, LP. SO THAT DOCUMENT THAT I JUST
5 ASKED TO BE PRODUCED WAS REQUESTED IN ITEM NO. 26.
6 THE COURT: BUT LET ME ASK: DOES SUCH A DOCUMENT
7 EXIST AS FAR AS YOU ARE CONCERNED?
8 THE WITNESS: I'M NOT 100 PERCENT CERTAIN,
9 BECAUSE I KNOW IT'S REFLECTED AS SUCH IN THE INCOME TAX
10 RETURNS THAT HAVE BEEN FILED OVER THE YEARS.
11 THE COURT: RIGHT. THE INCOME TAX RETURNS ARE
12 NOT AT ISSUE. THERE IS NO ORDER FOR THEM. IS THERE
13 ANYTHING OTHER THAN THE INCOME TAX RETURNS? WHAT I'M
14 REFERRING TO, REALLY, ARE THE INITIAL DOCUMENTS THAT SET
15 UP THE STRUCTURE WHERE I WOULD ASSUME THERE BE SOME
16 REFERENCE TO CONSIDERATION PAID AND THE AMOUNT OF
17 CONSIDERATION PAID. IS THERE ANYTHING LIKE THAT IN YOUR
18 RECOLLECTION?
19 THE WITNESS: I'M NOT CERTAIN. I MEAN, IT'S
20 POSSIBLE, BUT I JUST DON'T KNOW WITHOUT LOOKING AT THAT
21 AGAIN OR WHETHER THAT WAS ONLY IN THE TAX RETURN.
22 THE COURT: OKAY. YOU DID RECEIVE THE SUBPOENA
23 THOUGH. THE COURT WILL ORDER THAT YOU REVIEW THE
24 DOCUMENTS REFLECTED IN THAT. I'M ASKING YOU TO REVIEW
25 IT. IF NO SUCH DOCUMENT EXISTS FOR THAT CONSIDERATION
26 ON ITEM 26, THEN I WOULD ORDER YOU TO PROVIDE A
27 DECLARATION UNDER PENALTY OF PERJURY TO THE COURT
28 STATING THAT AND STATING THAT YOU MADE A THOROUGH REVIEW

25
1 OF ALL THE DOCUMENTS. IF IT DOESN'T EXIST, THERE'S
2 NOTHING TO BRING IN.
3 THE WITNESS: OKAY.
4 THE COURT: IF IT DOES EXIST, WE CAN HAVE A
5 FURTHER CONVERSATION. I AM NOT GOING TO MAKE A SECRET
6 ABOUT THE DIRECTION I'M GOING. IF SUCH A DOCUMENT
7 EXISTS, I WOULD ORDER IT TO BE BROUGHT IN WITH ANY
8 REFERENCE TO ANY BENEFICIARY OR PERSON OR ENTITY THAT
9 YOU BELIEVE IS COVERED BY THE ATTORNEY/CLIENT PRIVILEGE
10 OR ANY OTHER PRIVACY PRIVILEGE TO BE EDITED OUT, ANY
11 REFERENCE TO THAT. BUT I BELIEVE THAT THE PLAINTIFF IS
12 ENTITLED TO ISSUES -- TO INFORMATION CONCERNING ISSUES
13 OF CONSIDERATION AND STRUCTURE ASIDE FROM ANY OTHER
14 PRIVACY ISSUES. SO THE COURT WILL ORDER THAT -- HOW
15 LONG DO YOU THINK IT WOULD TAKE YOU? I DON'T WANT TO
16 MAKE THIS IMPOSSIBLE FOR YOU. I JUST WANT TO MAKE SURE
17 WE CAN GET THE INFORMATION BEFORE THE COURT FOR PURPOSES
18 OF THIS TRIAL.
19 THE WITNESS: I THINK BY THE END OF THIS WEEK.
20 THE COURT: YES. THEN I'LL ASK YOU TO PROVIDE
21 THAT TO THE COURT AND ALL COUNSEL WITH REGARD TO EITHER
22 THAT DECLARATION THAT WE SPOKE OF, OR, IN THE
23 ALTERNATIVE, YOU MAY PROVIDE A COPY OF THE ITEM THAT IS
24 REQUESTED. AND THE COURT WILL ALLOW YOU TO EDIT OUT
25 THAT PORTION.
26 IF YOU -- IF THERE IS SOMETHING IN EXISTENCE AND
27 YOU WILL EDIT IT OUT, WHAT THE COURT WILL ASK YOU TO DO
28 IS NOT HAVE IT REWRITTEN THROUGH WORD PROCESSING BUT

26
1 SIMPLY BLANK OUT THAT AREA SO IT'S EVIDENT TO EVERYONE
2 THAT A CERTAIN PIECE HAS BEEN TAKEN OUT. OTHERWISE,
3 IT'S GOING TO BE IMPOSSIBLE TO SEE IF SOMETHING WAS IN
4 THE ORIGINAL. THAT WOULD BE SUFFICIENT AT THAT POINT.
5 IF WE NEED TO GO FURTHER BASED UPON WHAT THERE IS, I
6 WILL CERTAINLY GIVE YOU AN OPPORTUNITY TO BE HEARD ON
7 THIS.
8 MR. BEECHEN: I JUST HAVE ONE REQUEST, AND THAT
9 IS WHEN MR. PRASKE COMES BACK -- I GUESS THAT'S WHAT
10 WE'RE ANTICIPATING -- THAT HE HAVE AN UNREDACTED VERSION
11 AVAILABLE FOR YOU TO REVIEW IN THE EVENT THAT WE DISPUTE
12 THE REDACTIONS, IN OTHER WORDS, THE EXTENT OF THE
13 REDACTIONS.
14 THE COURT: WELL, I'M GOING TO -- ONE, I'M GOING
15 TO ALLOW WHATEVER IS PROVIDED TO THE COURT ON FRIDAY
16 AFTERNOON BE PROVIDED BY MESSENGER. THE COURT WILL MAKE
17 FURTHER ORDERS. THE COURT WILL ORDER MR. PRASKE TO STAY
18 ON CALL TO THE SUBPOENAING ATTORNEY SUBJECT TO RE-RECALL
19 INTO THIS COURT. I DON'T THINK WE NEED TO DO ANYTHING
20 MORE THAN THAT AT THIS POINT.
21 MR. BEECHEN: THAT'S FINE.
22 THE COURT: AGAIN, I'M NOT GOING TO PUT YOU IN AN
23 IMPOSSIBLE POSITION. I DON'T INTEND TO, BUT WE'LL JUST
24 TAKE THIS STEP BY STEP AND SEE WHAT THERE IS. AND IF
25 THERE'S SOME OTHER -- I MAY NOT BE ANTICIPATING ALL THE
26 PERMUTATIONS THAT THE DOCUMENTS CAN TAKE. IF THERE'S
27 SOMETHING YOU WANT TO ADDRESS IN THE DECLARATION THAT I
28 HAVEN'T THOUGHT OF, THEN PLEASE DO THAT, AND WE WILL

27
1 JUST ADDRESS IT. BUT YOU OUGHT TO ANTICIPATE THAT I'M
2 GOING TO ASK YOU TO COME BACK IN AND MAKE A FURTHER
3 STATEMENT UNDER OATH WITH REGARD TO THOSE. OKAY?
4 THE WITNESS: YEAH, I UNDERSTAND.
5 THE COURT: I APPRECIATE THAT. THANK YOU.
6 WHATEVER YOU FILE WITH THE COURT, I'VE ORDERED YOU TO
7 TURN IT OVER TO ALL THE ATTORNEYS. I WOULD ASK YOU TO
8 DO THAT EITHER BY E-MAIL OR FAX OR SOME -- OR HAND
9 DELIVERY SO THAT IT'S TO THEM AROUND THE SAME TIME THAT
10 THE COURT GETS IT, RATHER THAN A FIVE-DAY NOTICE. OKAY?
11 THE WITNESS: YES.
12 THE COURT: I APPRECIATE IT. THANK YOU VERY
13 MUCH. LET'S PROCEED.
14 Q BY MR. BEECHEN: JUST TO GO BACK A LITTLE
15 BIT AND PICK THIS UP AGAIN. AFTER THE TRANSFERS TOOK
16 PLACE, 511, 517 TO THE TWO LIMITED PARTNERSHIPS, THERE
17 WAS NO REASSESSMENTS OF THE PROPERTIES -- OF EITHER OF
18 THOSE TWO PROPERTIES; CORRECT?
19 A CORRECT.
20 Q AND WHEN ARENZANO AND TERRA MAR OBTAINED
21 THEIR INTERESTS IN THE THREE PROPERTIES, THERE WAS NO
22 REASSESSMENT BASED UPON THAT EVENT; CORRECT? NO
23 REASSESSMENT OF THE REAL PROPERTY BASED UPON THOSE
24 EVENTS.
25 A CORRECT.
26 Q NOW, YOU'RE AWARE THAT THERE WAS A
27 TRANSACTION INVOLVING THE BUNGES; CORRECT?
28 A YES.

28
1 Q ALL RIGHT. AND YOU WERE AWARE THAT IN
2 CONNECTION WITH THAT TRANSACTION THERE WERE GOING TO BE
3 THE CREATION OF CERTAIN RIGHTS IN PARKING ON THE 601
4 PROPERTY; CORRECT?
5 A NOT TOO FAMILIAR WITH THAT, NO.
6 Q ALL RIGHT. BUT YOU WERE AWARE THAT THERE
7 WAS GOING TO BE SOMETHING TO DO WITH PARKING ON 601;
8 CORRECT?
9 A I RECALL SOME DOCUMENTS TO THAT EFFECT.
10 Q AND IT WAS YOUR THOUGHT THAT THESE -- THE
11 CREATION OF WHATEVER THESE PARKING RIGHTS WERE, WERE
12 NECESSARY FOR THE COMPLETION OF THE TRANSACTION
13 INVOLVING 511, 517 OCEAN FRONT WALK; CORRECT?
14 A NO, I DIDN'T THINK SO.
15 Q LET ME READ TO YOU FROM YOUR DEPOSITION.
16 PAGE 294. THIS IS IN VOLUME NUMBER 3, LINE 21 THROUGH
17 295, LINE 25.
18 THE COURT: ANY OBJECTION?
19 MR. BEECHEN: LINE 21. OBJECTION?
20 THE COURT: OBJECTIONS?
21 MR. ANDREWS: HE CAN READ IT. I DON'T THINK IT'S
22 INCONSISTENT WITH WHAT HE SAID.
23 MR. BLECHER: NO, YOUR HONOR.
24 MR. BEECHEN:
25 "QUESTION: WAS IT YOUR DECISION
TO SELL THE PARKING RIGHTS, WHATEVER
26 RIGHTS WERE BEING CONVEYED IN THE 601
PROPERTY, TO THE BUNGES?
27
"ANSWER: I DON'T KNOW TOO MUCH
28 ABOUT HOW THE PARKING PERTAINED TO THE
BUNGES' PURCHASE OF 511 AND 517.

29
1
"QUESTION: WELL, DID YOU MAKE
2 THAT -- DID YOU MAKE THE DECISION?
3 "ANSWER: WELL, THAT PART WAS
RECOMMENDED TO ME BY THE BROKERS, I
4 THINK, AND I REALLY DON'T KNOW WHY IT
WAS NECESSARY.
5
"QUESTION: THE BROKERS? WHO ARE
6 YOU REFERRING TO?
7 "TED FOLKERT AND STEVE --
8 "ANSWER: TED FOLKERT AND STEVE
GAGGERO FOR PACIFIC COAST MANAGEMENT.
9
"QUESTION: AND WHAT DID THEY SAY
10 TO YOU? WHY WOULD THE --
11 "ANSWER: I DON'T KNOW THAT. I
THOUGHT MAYBE THIS WAS NECESSARY TO
12 COMPLETE THE TRANSACTION, BUT I DID NOT
KNOW THAT. I DID NOT KNOW IF IT WAS OR
13 IT WAS NOT.
14 "QUESTION: BUT THAT'S WHAT THEY
SAID TO YOU, THAT IT WAS NECESSARY TO
15 COMPLETE THE TRANSACTION.
16 "ANSWER: NO, I DON'T RECALL.
17 "QUESTION: WELL, I'M TRYING TO
FIND OUT WHAT THEY DID SAY TO YOU.
18
"ANSWER: I DON'T KNOW.
19
"QUESTION: WELL, DID THEY SAY
20 THAT SOMEHOW THE BUNGES NEEDED THIS
PARKING AGREEMENT?
21
"ANSWER: I THINK SO. I REALLY
22 DON'T KNOW. IT'S JUST SOMETHING -- JUST
SEEMS SOMETHING THAT WAS NECESSARY TO
23 CLOSE THE TRANSACTION, BUT I DON'T KNOW
WHETHER IT WAS OR IT WASN'T."
24
25 Q NOW, IF YOU COULD LOOK AT EXHIBIT 31,
26 WHICH IS IN THAT WHITE VOLUME BEHIND YOU -- NOT THAT
27 ONE. THAT ONE. 32, EXCUSE ME.
28 A OKAY.

30
1 Q DO YOU HAVE THAT? AND IF YOU COULD LOOK
2 AT THE SECOND PAGE OF THE DOCUMENT, WHICH IS BATES
3 STAMPED BUNGE 47. IS IT CORRECT, MR. PRASKE -- NOW, YOU
4 SIGNED THIS DOCUMENT; CORRECT?
5 A I SEE MY INITIALS. I'M ASSUMING THERE'S A
6 SIGNATURE IN HERE. YES.
7 Q OKAY. AND IS IT CORRECT THAT YOU'RE NOT
8 SURE OF WHETHER OR NOT, LOOKING AT THE TERM "LICENSES
9 AND PERMITS," WHETHER THAT INCLUDED THIS NEW DEED
10 RESTRICTION THAT WAS BEING CREATED FOR THE BENEFIT OF
11 THE BUNGES?
12 A I DON'T KNOW. IT HAD NOTHING TO DO WITH
13 THAT.
14 Q I UNDERSTAND THAT, BUT YOU'RE THE GUY WHO
15 SIGNED IT. I'M TRYING TO FIND OUT WHETHER, YOU KNOW --
16 IF, YOU KNOW, IF IT'S INCLUDED OR NOT INCLUDED; THAT THE
17 NEW DEED RESTRICTION, WHICH WAS BEING RECORDED AGAINST
18 THE 601 PROPERTY WAS INCLUDED OR NOT INCLUDED UNDER THE
19 TERM "LICENSES AND PERMITS" AS THOSE THINGS WHICH WERE
20 GOING TO BE SOLD TO THE BUNGES IN CONNECTION WITH 511
21 AND 517.
22 A I DON'T KNOW.
23 Q ALL RIGHT. LET'S TALK A LITTLE BIT --
24 BECAUSE THERE'S BEEN SOME MENTION OF THIS THING CALLED
25 PACIFIC COAST MANAGEMENT. PACIFIC COAST MANAGEMENT IS
26 AN ENTITY THAT YOU CREATED; CORRECT?
27 A YES.
28 Q ALL RIGHT. AND THIS WAS PART OF THE

31
1 ESTATE PLAN INVOLVING MR. GAGGERO THAT YOU CREATED, THIS
2 PACIFIC COAST MANAGEMENT?
3 A NO, I DON'T RECALL THAT. NO.
4 Q NOW, YOU'RE THE ONLY DIRECTOR OF PACIFIC
5 COAST MANAGEMENT; CORRECT?
6 A I'M NOT CERTAIN IF I AM THE ONLY DIRECTOR.
7 IT MAY BE ONE OTHER DIRECTOR, WHO WOULD BE THE
8 BOOKKEEPER OF PACIFIC COAST MANAGEMENT.
9 Q BUT YOU'RE NOT THE SHAREHOLDER OF PACIFIC
10 COAST MANAGEMENT; CORRECT?
11 A NO.
12 Q WHO IS THE SHAREHOLDER?
13 A THE SHAREHOLDER IS ANOTHER COMPANY.
14 Q WHAT'S THE NAME OF THAT COMPANY?
15 A I'M NOT CERTAIN. I'D HAVE TO LOOK AT
16 DOCUMENTS.
17 Q DO YOU HAVE A NAME FOR IT?
18 A I WOULD HAVE TO SEE THE DOCUMENTS. I
19 CAN'T RECALL RIGHT NOW.
20 Q YOU'RE THE PRESIDENT OF PACIFIC COAST
21 MANAGEMENT; CORRECT?
22 A YES.
23 Q YOU ESTABLISHED PACIFIC COAST MANAGEMENT.
24 YOU ORGANIZED IT; CORRECT?
25 A YES.
26 Q IT'S A NEVADA CORPORATION; CORRECT?
27 A YES.
28 Q YOU'RE NOT THE SHAREHOLDER; CORRECT?

32
1 A I AM THE -- I BELIEVE I AM THE MANAGER OF
2 AN LLC THAT IS THE SHAREHOLDER. I DON'T RECALL THE
3 EXACT NAME OF THAT LLC.
4 Q AND DOES THAT SHAREHOLDER HOLD A MEETING
5 EVERY YEAR?
6 A YES.
7 Q YOU ATTEND THAT MEETING?
8 A YES.
9 Q BUT YOU DON'T KNOW THE NAME OF THE
10 SHAREHOLDER, THE LLC OF WHICH YOU ARE -- WHAT? -- THE
11 MANAGER?
12 A RIGHT, NOT OFFHAND. I'D HAVE TO LOOK AT
13 THE DOCUMENT.
14 Q IS THERE MORE THAN ONE SHAREHOLDER?
15 A I THINK THERE IS ONLY ONE.
16 Q AND DID YOU CREATE THAT LLC THAT YOU'RE
17 NOW THE MANAGER OF?
18 A YES.
19 Q AND IS THAT ALSO A NEVADA CORPORATION OR
20 -- EXCUSE ME -- NEVADA, LLC?
21 A I BELIEVE SO.
22 Q OKAY. AND WHO'S THE MEMBERS OF THE LLC?
23 A WELL, I'D HAVE TO SEE THE LLC, FIRST OF
24 ALL.
25 Q YOU DON'T KNOW WHO THE MEMBERS ARE? IS
26 THAT YOUR TESTIMONY?
27 A I THINK -- I MEAN, IT'S CONTROLLED BY ME.
28 I DON'T KNOW -- I CAN'T GIVE YOU THE NAMES OF EACH OF

33
1 THESE THINGS. HOWEVER, I'M TELLING YOU THAT THEY ARE
2 CONTROLLED BY ME.
3 Q I HEARD YOUR TESTIMONY, BUT NOW MY
4 QUESTION TO YOU IS -- DO YOU KNOW WHO THE MEMBERS ARE OF
5 THIS LLC? DOES IT HAVE A MEMBER?
6 A OF THE LLC? THAT'S THE SHAREHOLDER, YES.
7 Q BUT YOU DON'T KNOW WHO IT IS? YOU CAN'T
8 RECALL WHO IT IS?
9 A LIKE I SAID, I'M NOT PREPARED TO ANSWER
10 THAT. I WASN'T PREPARED TO ANSWER THAT TODAY. I'D HAVE
11 TO LOOK AT THOSE DOCUMENTS.
12 Q ALL RIGHT. AND THEN MR. GAGGERO IS A
13 CONSULTANT FOR PACIFIC COAST MANAGEMENT; RIGHT?
14 A YES.
15 Q AND, IN FACT, HE IS THE INDIVIDUAL WITH
16 WHOM YOU COMMUNICATE REGARDING WHAT IS GOING TO OCCUR IN
17 TERMS OF BUYING AND SELLING 511, 517, AND 601. HE'S THE
18 GUY WHO WAS MAKING THE DECISIONS AND THEN BASICALLY
19 HAVING THE AGREEMENTS CREATED FOR YOU TO SIGN; CORRECT?
20 A HE IS ONE OF THE PEOPLE THAT WOULD MAKE
21 RECOMMENDATIONS.
22 Q AND WHERE IS PACIFIC COAST MANAGEMENT
23 LOCATED? WHERE'S ITS OFFICE LOCATED?
24 A IN VENTURA.
25 Q HAVE YOU EVER BEEN TO ITS OFFICE?
26 A YES. I THINK YOU ASKED ME WHERE. I DON'T
27 RECALL THE ADDRESS.
28 Q OKAY. IS IT ON A RANCH, SOME KIND OF A

34
1 RANCH SITUATION?
2 A NO. I THINK IT'S ON VICTORIA AVENUE.
3 Q THAT'S THE MAILING ADDRESS. WHERE IS THE
4 OFFICE?
5 A WELL, THE OFFICE MAY BE -- I'D HAVE TO
6 LOOK AT THE DOCUMENTS.
7 Q YOU DON'T KNOW WHERE THE OFFICE IS?
8 A THE OFFICE MAY BE MY ATTORNEY'S OFFICE.
9 Q ISN'T THERE AN OFFICE ON A RANCH IN
10 VENTURA?
11 A FOR --
12 Q PACIFIC COAST MANAGEMENT.
13 A IT'S THE LOCATION OF THE BOOKKEEPER. I
14 CAN'T SAY THAT THAT'S THE -- THAT'S NOT THE OFFICE OF
15 THE CORPORATION.
16 Q THE LOCATION OF THE BOOKKEEPER ON A RANCH
17 IN VENTURA COUNTY; CORRECT?
18 A YES.
19 Q ALL RIGHT. AND HAVE YOU BEEN TO THAT
20 RANCH?
21 A YES.
22 Q ALL RIGHT. MR. GAGGERO -- HAVE YOU EVER
23 SEEN MR. GAGGERO ON THIS RANCH?
24 A YES.
25 Q IS THIS A RANCH WHICH IS OCCUPIED BY
26 MR. GAGGERO IN SOME FASHION?
27 A NO, NOT TO MY KNOWLEDGE.
28 Q LIVED THERE, FOR EXAMPLE?

35
1 A NO, NOT TO MY KNOWLEDGE.
2 Q DOES HE HAVE AN OFFICE THERE? THIS RANCH?
3 A YES, I BELIEVE SO.
4 Q NOW, WHY DID YOU HIRE PACIFIC COAST
5 MANAGEMENT TO MANAGE THESE THREE PROPERTIES AS OPPOSED
6 TO SOME OTHER ENTITY?
7 A WE NEEDED BOOKKEEPING.
8 Q WELL, DID YOU TALK TO ANYBODY ELSE ABOUT
9 HAVING SOMEONE ELSE MANAGE THESE PROPERTIES OTHER THAN
10 THIS ENTITY THAT YOU CREATED?
11 A TED FOLKERT'S COMPANY MANAGES THESE
12 PROPERTIES.
13 Q SO PACIFIC COAST MANAGEMENT DOESN'T MANAGE
14 THEM?
15 A NO, I THINK THE MANAGER OF THE PROPERTIES
16 IS BY TED FOLKERT'S COMPANY.
17 Q I'M NOT TALKING ABOUT DAY-TO-DAY
18 MANAGEMENT RIGHT NOW. I'M TALKING ABOUT SORT OF THE
19 DECISIONS REGARDING BUYING, SELLING, THAT KIND OF THING.
20 A THOSE ARE MY DECISIONS.
21 Q PACIFIC COAST MANAGEMENT ADVISES YOU WITH
22 REGARD TO THAT; CORRECT?
23 A YES.
24 Q AND THAT PRIMARILY COMES FROM MR. GAGGERO
25 DISCUSSING WITH YOU WHAT HE WANTS DONE; CORRECT?
26 A NO. LIKE I SAID, THOSE ARE
27 RECOMMENDATIONS.
28 Q DID YOU EVEN TALK TO MR. GAGGERO ABOUT THE

36
1 BUNGE TRANSACTION?
2 A YES, I THINK SO.
3 Q LET ME READ TO YOU FROM YOUR DEPOSITION,
4 PAGE 285, 23 TO 286, LINE 7.
6 MR. ANDREWS: ANY OBJECTION?
8 THE COURT: PLEASE PROCEED. THANK YOU.
9 MR. BEECHEN:
10 "QUESTION: YOU ARE AWARE, OF
COURSE, THAT MR. GAGGERO MADE A NUMBER
11 OF DECISIONS REGARDING THE TRANSACTION
WITH THE BUNGES?
12
"NO.
13
"ANSWER: NO.
14
"QUESTION: YOU ARE NOT AWARE OF
15 THAT?
16 "QUESTION (SIC): WHAT DO YOU
MEAN?
17
"QUESTION: THAT HE IN
18 COMMUNICATION WITH TED FOLKERT WAS
BASICALLY TELLING TED FOLKERT WHAT TO
19 COMMUNICATE TO THE BUNGES. ARE YOU
AWARE OF THAT?
20
"ANSWER: NO."
21
22 LET ME GO DOWN TO LINE 14. ON PAGE 286.
25 MR. BEECHEN:
26 "QUESTION: WERE YOU AWARE THAT
MR. GAGGERO WAS INVOLVED AT ALL IN
27 CONNECTION WITH THE TRANSACTION WITH THE
BUNGES?
28
"ANSWER: YES.

37
1
"QUESTION: WHAT DID YOU
2 UNDERSTAND HIS INVOLVEMENT WAS?
3 "ANSWER: WELL, IT'S DIFFICULT TO
ANSWER. I WOULD ASSUME HE WAS ACTING IN
4 MY BEST INTEREST, BUT AS FAR AS
SPECIFICS, I DON'T KNOW."
5
6 MR. BEECHEN: YOUR HONOR, AT THIS POINT, I HAVE
7 NO FURTHER QUESTIONS. OBVIOUSLY, PENDING THE DECISION
8 IS REGARDING FURTHER DOCUMENTATION AND TESTIMONY. I
9 WOULD ONLY ASK THAT EXHIBIT 83 BE PLACED INTO EVIDENCE.
11 MR. BLECHER: NO OBJECTION TO 83, YOUR HONOR.
12 THE COURT: ALL RIGHT. LET ME JUST GET TO THAT.
13 ONE MOMENT, PLEASE. ALL RIGHT. IT IS ADMITTED. 83.
14
15 CROSS EXAMINATION
16 BY MR. BLECHER:
17 Q WITH RESPECT TO PACIFIC COAST MANAGEMENT,
18 MR. PRASKE, IS MR. GAGGERO AN OWNER OF THAT?
19 A NO.
20 Q IS HE ONE OF THE OWNERS OF THE LLC THAT IS
21 THE SHAREHOLDER OF P.C.M.?
22 A NO.
23 Q AND HIS SOLE ROLE, THEN, WITH RESPECT TO
24 PACIFIC COAST MANAGEMENT IS CONSULTANT?
25 A YES.
26 Q DOES HE GET A SALARY FOR THAT?
27 A YES. I'M NOT CERTAIN OF THE AMOUNT. I
28 THINK THAT'S PROBABLY IN THE RECORDS SOMEWHERE.

38
1 Q AND AS A CONSULTANT, I TAKE IT HE GIVES
2 YOU INPUT WITH RESPECT TO MANAGEMENT DECISIONS
3 CONCERNING THE PROPERTY.
4 MR. BEECHEN: OBJECTION; LEADING.
5 THE WITNESS: YES.
6 MR. BEECHEN: MOVE TO STRIKE.
7 THE COURT: THE OTHER SIDE WISH TO BE HEARD?
8 MR. BLECHER: I CAN REFRAME IT, IF YOU WANT.
9 THE COURT: ALL RIGHT. THEN THE OBJECTION IS
10 SUSTAINED. AND PLEASE REPHRASE.
11 Q BY MR. BLECHER: HOW DOES MR. GAGGERO AND
12 YOU INTERFACE OR DEAL WITH EACH OTHER IN HIS CAPACITY AS
13 CONSULTANT OF P.C.M. AND YOUR CAPACITY AS MANAGER?
14 A HE ADVISES, AND HE MAKES RECOMMENDATIONS
15 FROM TIME TO TIME. WE DISCUSS THOSE RECOMMENDATIONS,
16 BUT OTHER THAN THAT, HE HAS NO ROLE.
17 Q AND WHO HAS THE FINAL DECISION-MAKING
18 AUTHORITY, SIR?
19 A ONLY I DO.
20 Q NOW, LOOK UP AT EXHIBIT 83 AND AT THE
21 TRUSTS DESIGNATED ARENZANO AND TERRA MAR. DO YOU SEE
22 THAT?
23 A ARENZANO?
24 Q ARENZANO.
25 A YES.
26 Q ARE THOSE REVOCABLE OR IRREVOCABLE TRUSTS?
27 A THEY ARE IRREVOCABLE SINCE THE DATE THEY
28 WERE FORMED.

39
1 Q AND JUST SO THE RECORD IS CLEAR, IS
2 MR. GAGGERO A BENEFICIARY OF THE ARENZANO TRUST?
3 A NO.
4 MR. BEECHEN: I'M GOING TO OBJECT. ON THE ONE
5 HAND, THEY ARE PULLING OUT ALL THIS INFORMATION. ON THE
6 OTHER HAND, THEY WILL NOT PRODUCE THESE DOCUMENTS. I
7 THINK THAT IF THEY ARE NOT GOING TO PRODUCE THE
8 DOCUMENTS, THEN TO SIT HERE AND HAVE THIS TESTIMONY,
9 WHICH IS CLEARLY BIASED, COME IN, I THINK THAT ALL OF IT
10 OUGHT TO BE OFF LIMITS UNTIL WE SEE WHAT THESE DOCUMENTS
11 ARE.
12 THE COURT: THE OBJECTION IS SUSTAINED. RATHER
13 THAN --
14 MR. BEECHEN: AND I JUST MOVE TO STRIKE
15 EVERYTHING WHERE HE STARTS TALKING ABOUT THE ARENZANO
16 BEING IRREVOCABLE AND EVERYTHING ELSE.
17 THE COURT: SUSTAINED.
18 MR. BEECHEN: I'M SORRY. I'M JUST -- YOU KNOW.
19 THE COURT: SUSTAINED. I CAUTION THE ATTORNEYS,
20 THOUGH, ABOUT SPEAKING OBJECTIONS. JUST MAKE THE
21 OBJECTIONS.
22 MR. BEECHEN: I APOLOGIZE.
23 THE COURT: WHAT I WANT TO DO AT THIS TIME,
24 THOUGH, BEFORE COUNSEL GOES FURTHER, IS WHAT I DIDN'T
25 DO, IS SET A BRIEFING SCHEDULE FOR THIS. SO LET ME ASK
26 YOU, MR. PRASKE, HOW LONG WOULD YOU NEED IN ORDER TO
27 BRIEF THOSE ISSUES ON THE PRIVACY CONCERNING THE
28 BENEFICIARIES THAT YOU'VE INDICATED?

40
1 THE WITNESS: DIFFICULT FOR ME TO ANSWER. I'M
2 NOT A LITIGATOR. I WOULD HAVE TO DISCUSS WITH THE
3 ATTORNEY WHO WILL DRAFT IT FOR ME. I DON'T KNOW HIS
4 AVAILABILITY.
5 THE COURT: ALL RIGHT. WE'LL DISCUSS IT THIS
6 AFTERNOON. SEE IF YOU CAN GET IN TOUCH WITH HIM THIS
7 AFTERNOON. OTHERWISE, WE'RE GOING TO HAVE TO SET
8 ANOTHER -- I'LL JUST HAVE TO SET A DATE --
9 THE WITNESS: NO, NO. I THINK I CAN FIND OUT.
10 THE COURT: OKAY. LET'S PROCEED.
11 Q BY MR. BLECHER: ONE LAST AREA,
12 MR. PRASKE. WHEN YOU SET UP 511, I THINK YOU TESTIFIED
13 ON DIRECT THAT MR. GAGGERO WAS THE OWNER; CORRECT?
14 A OF -- WHEN IT WAS SET UP, HE WAS THE
15 LIMITED PARTNER.
16 Q LIMITED PARTNER. EXCUSE ME.
17 A ON THE DAY THAT THE DOCUMENT WAS RECORDED.
18 Q THAT'S WHAT YOU DIDN'T SAY ON CROSS
19 EXAMINATION. HOW LONG DID MR. GAGGERO REMAIN A LIMITED
20 PARTNER?
21 A VERY SHORTLY, WITHIN -- WITHIN A MATTER OF
22 A FEW DAYS AT THE MOST. IT WAS TRANSFERRED. AND THAT'S
23 JUST PER THE COUNTY ASSESSOR MAKES THAT -- THEY'RE THE
24 ONES THAT TELL YOU HOW TO DO THESE TRANSACTIONS.
25 Q AND DID YOU HAVE ANY UNDERSTANDING AS TO
26 WHETHER HAVING MR. GAGGERO BE A LIMITED PARTNER FOR A
27 DAY OR THEREABOUTS ENTITLED YOU TO SOME EXEMPTION FROM
28 REAPPRAISAL?

41
1 A YEAH. THAT'S ALL PREVIOUSLY DISCUSSED
2 WITH THE COUNTY ASSESSOR. LIKE I SAID, THEY TELL YOU
3 HOW TO STRUCTURE THESE TRANSACTIONS. AND EVERY COUNTY
4 IS -- AT THE TIME, EVERY COUNTY WAS DIFFERENT. THERE
5 WERE SOME COUNTIES THAT WOULD TELL YOU GO AHEAD AND
6 STRUCTURE THE TRANSACTIONS WITH THE ULTIMATE OWNERSHIP
7 OF THE LIMITED PARTNERS. OTHER COUNTIES, LOS ANGELES
8 INCLUDED, WOULD TELL YOU TO RECORD THE DOCUMENT WITH THE
9 SAME -- WITH THE GRANTOR BEING THE LIMITED PARTNER, AND
10 THEN YOU CAN TRANSFER IT AFTER.
11 Q AND DO YOU RECALL GOING THROUGH THIS
12 TRANSACTION AND ABIDING THE VIEWS OF THE COUNTY
13 ASSESSOR?
14 A ABSOLUTELY. AND IT'S ALL IN THE
15 DOCUMENTS. THERE'S CORRESPONDENCE BETWEEN ME AND THE
16 COUNTY ASSESSOR TO THAT EFFECT.
17 Q OKAY. ONE LAST QUESTION. AFTER A DAY OR
18 TWO EXPIRED AND MR. GAGGERO CEASED TO BE A LIMITED
19 PARTNER AND ARENZANO AND TERRA MAR BECAME THE LIMITED
20 PARTNERS, DID THAT REQUIRE, AS YOUR UNDERSTANDING, TO
21 NEED ANY NOTIFICATION TO THE ASSESSOR FOR REAPPRAISAL
22 PURPOSES?
23 A NO.
24 Q AND DO YOU KNOW WHETHER THAT'S STILL THE
25 LAW OR WHETHER THAT LAW HAS NOW BEEN MODIFIED?
26 A I BELIEVE IT'S THE LAW. I WANT TO DO
27 EVERYTHING BY THE BOOK. I DON'T WANT TO SAY I'M ABOVE
28 ANYTHING. IF THERE IS SOMETHING NEW THAT TOOK EFFECT IN

42
1 2012, THAT'S POSSIBLE.
2 Q YES. AND DO YOU RECALL THE NAME OF THE
3 PERSON IN THE ASSESSOR'S OFFICE WITH WHOM YOU DEALT IN
4 RESPECT TO THIS TRANSACTION?
5 A NO, BUT IT'S IN THE DOCUMENTS.
6 MR. BLECHER: THANK YOU, YOUR HONOR. I HAVE
7 NOTHING FURTHER.
8 THE COURT: ANYTHING FURTHER?
9 MR. BEECHEN: VERY BRIEFLY, YOUR HONOR.
10
11 REDIRECT EXAMINATION
12 BY MR. BEECHEN:
13 Q SO MR. PRASKE, LET ME SEE IF I UNDERSTAND
14 YOUR TESTIMONY CORRECTLY. SHORTLY AFTER THIS TRANSFER
15 TOOK PLACE FROM MR. GAGGERO TO 511 OCEAN FRONT WALK TO
16 GINGERBREAD COURT, THAT WITHIN A FEW DAYS, MR. GAGGERO
17 JUST GAVE AWAY HIS INTEREST, HIS LIMITED PARTNERSHIP
18 INTEREST, IN THESE TWO TRUSTS, ARENZANO AND TERRA MAR.
19 IS THAT YOUR TESTIMONY?
20 A HE GAVE AWAY HIS INTERESTS IN THE LIMITED
21 PARTNERSHIPS TO ARENZANO TRUST.
22 Q SO HE GAVE AWAY THE INTEREST TO ARENZANO
23 TRUST --
24 A IT MAY HAVE BEEN -- I'M NOT SURE IF IT WAS
25 100 PERCENT, MAYBE 99 PERCENT. HE RETAINED 1 PERCENT.
26 Q AT LEAST 99 PERCENT HE GAVE AWAY?
27 A YES.
28 Q ALL RIGHT. AND NOW, YOU WERE INVOLVED IN

43
1 THAT, GIVING IT AWAY, CREATING WHATEVER DOCUMENTS GAVE
2 IT AWAY; CORRECT?
3 A YES.
4 Q ALL RIGHT. AND DID YOU NOTIFY THE STATE
5 BOARD OF EQUALIZATION THAT MR. GAGGERO HAD GIVEN AWAY
6 99 PERCENT, WHICH REPRESENTED 99 PERCENT OF THE INTEREST
7 IN PROFITS AND LOSSES IN THESE TWO ENTITIES? DID YOU
8 NOTIFY THE BOARD OF EQUALIZATION OF THAT FACT?
9 A COUNTY ASSESSOR OR BOARD OF EQUALIZATION.
10 Q STATE BOARD OF EQUALIZATION.
11 A NO, NO.
12 Q SO YOU DIDN'T NOTIFY THE COUNTY ASSESSOR,
13 AND YOU DIDN'T NOTIFY THE STATE BOARD OF EQUALIZATION;
14 CORRECT?
15 A NO, I DIDN'T SAY -- I SAID I DIDN'T NOTIFY
16 THE STATE BOARD OF EQUALIZATION.
17 Q RIGHT. AND YOU DIDN'T NOTIFY THE
18 ASSESSORS WHEN MR. GAGGERO GAVE AWAY HIS 99 PERCENT
19 INTEREST.
20 A THE ASSESSOR WAS AWARE OF THE TRANSACTION
21 PRIOR TO THE RECORDING OF THE DOCUMENT.
22 Q YOU MADE THE ASSESSOR AWARE THAT MR. --
23 THAT MR. GAGGERO HAD TRANSFERRED 99 PERCENT OF HIS
24 INTEREST TO ARENZANO?
25 A NO, NO. I DESCRIBED THE TRANSACTION. I
26 DO IT ALL THE TIME. ATTORNEYS DO IT ALL THE TIME.
27 Q SIR, I DIDN'T ASK WHAT ATTORNEYS DO ALL
28 THE TIME. I'M ASKING YOU --

44
1 MR. BLECHER: HE WAS TALKING.
2 MR. BEECHEN: I WITHDRAW THE QUESTION.
3 THE COURT: THE QUESTION IS WITHDRAWN.
4 MR. BEECHEN: FINE. LET ME BE PRECISE.
5 Q DID YOU NOTIFY THE COUNTY RECORDER WHEN
6 MR. GAGGERO GAVE AWAY HIS 99 PERCENT INTEREST TO THE
7 ARENZANO TRUST?
8 A WHEN HE GAVE IT AWAY, NO. I NOTIFIED THEM
9 PRIOR.
10 Q DID YOU NOTIFY THEM PRIOR THAT HE WAS
11 GOING TO BE GIVING IT AWAY?
12 A YES.
13 Q AND HOW DID YOU DO THAT? IN WRITING?
14 A I DON'T THINK SO. I MEAN, THIS IS -- YOU
15 ASKED ME AT THE BEGINNING OF YOUR QUESTIONING ABOUT DO
16 I -- DO I ENGAGE IN CONTINUING LEGAL EDUCATION IN MY
17 SPECIALTY. YES. AND IT WAS PLAINLY RECOMMENDED AT THAT
18 TIME THAT WHEN YOU HAVE THESE TRANSFERS FROM AN
19 INDIVIDUAL TO A LIMITED PARTNERSHIP THAT YOU BELIEVE IS
20 GOING TO BE EXEMPT FROM REAPPRAISAL; THAT YOU CLEARED
21 THAT WITH THE COUNTY ASSESSOR PRIOR TO THE TRANSFER,
22 BECAUSE EVERY COUNTY HAS DIFFERENT INTERNAL RULES. AND
23 SO THAT'S WHAT I DID.
24 Q NOW, LET'S BE CLEAR. WE'RE TALKING ABOUT
25 TWO TRANSFERS HERE. WE'RE TALKING ABOUT, FIRST, THE
26 TRANSFER FROM GAGGERO TO 511 OCEAN FRONT WALK. THAT,
27 YOU TOLD THE COUNTY ABOUT, THAT THIS IS -- SHOULD NOT
28 TRIGGER A REAPPRAISAL BECAUSE MR. GAGGERO RETAINED A --

45
1 THE 100 PERCENT LIMITED PARTNERSHIP INTEREST; CORRECT?
2 A NO, NO. I TOLD THEM WHAT THE ULTIMATE --
3 THE ULTIMATE END PRODUCT WAS GOING TO BE. AND THEY'RE
4 THE ONES THAT TELL YOU HOW TO RECORD IT AND HOW TO
5 REFLECT IT IN YOUR DOCUMENTS.
6 Q OKAY. SO YOUR TESTIMONY IS THAT THE
7 COUNTY RECORDER ALSO TOLD YOU THAT WHEN MR. GAGGERO
8 GIVES AWAY 99 PERCENT OF THE OCEAN FRONT WALK TO
9 ARENZANO, THAT THAT ALSO DOES NOT TRIGGER A REAPPRAISAL
10 OF THE PROPERTY?
11 A RIGHT.
12 Q OKAY.
13 MR. BEECHEN: NO FURTHER QUESTIONS.
14 MR. BLECHER: NOTHING, YOUR HONOR.
15 THE COURT: MR. PRASKE, I'M GOING TO ASK YOU TO
16 REMAIN ON CALL TO THE ATTORNEY WHO SUBPOENAED YOU AND TO
17 MAKE SURE THAT THEY HAVE YOUR PHONE NUMBER SO THEY CAN
18 GET A HOLD OF YOU.
19 MR. ANDREWS: YOUR HONOR, FOR THE RECORD, HE WAS
20 NOT SUBPOENAED. HE WAS NOTICED TO APPEAR IN HIS
21 CAPACITY AS THE GENERAL PARTNER, AS THE TRUST --
22 THE COURT: NOTICED TO APPEAR BY WHOM?
23 MR. ANDREWS: BY THE PLAINTIFF. BUT IN HIS
24 LIMITED CAPACITY TO WHICH HE IS A PARTY. HE WAS NOT
25 SUBPOENAED AS A THIRD PARTY.
26 THE COURT: BUT HE'S STILL UNDER THAT NOTICE TO
27 APPEAR.
28 MR. ANDREWS: CORRECT.

46
1 THE COURT: PURSUANT TO THAT, THE COURT IS NOT
2 DISSOLVING THAT; SO THERE'S CONTINUING JURISDICTION TO
3 ORDER MR. PRASKE BACK, IF NECESSARY. WHEN DO YOU THINK
4 YOU'LL HAVE THE INFORMATION WITH REGARD TO THE BRIEFING?
5 DO YOU WANT TO TAKE A MOMENT TO CALL NOW?
6 THE WITNESS: YES, OR I CAN HAVE ONE OF THE
7 ATTORNEYS PROVIDE YOU WITH THAT INFORMATION.
8 THE COURT: WELL, THE ORDER IS GOING TO BE
9 PERSONAL TO YOU, AND THEN I HAVE TO ORDER THE OTHER
10 ATTORNEYS ON THE OTHER SIDE TO PROVIDE OPPOSITION, IF
11 THEY WISH. THIS IS NOT AN ORDER --
12 MR. BEECHEN: I UNDERSTAND. WE MIGHT EVEN BE
13 ABLE TO TALK ABOUT THIS DURING THE NOON RECESS AND SEE
14 IF WE CAN COME TO SOME OTHER RESOLUTION.
15 THE COURT: I UNDERSTAND THAT.
16 MR. BEECHEN: WE GET THE IDEA.
17 THE COURT: ARE THERE ANY OTHER ORDERS, REQUESTS,
18 WITH REGARD TO MR. PRASKE NOW THAT HE'S HERE? I DON'T
19 WANT TO CALL HIM BACK, IF I DON'T HAVE TO CALL HIM BACK.
20 ANY OTHER ORDERS, REQUESTS, WITH REGARD TO ANY OTHER
21 ISSUES THAT EITHER SIDE HAS?
22 MR. BEECHEN: I WOULD JUST SAY I THINK YOU'VE
23 COVERED IT COMPLETELY. LET'S SEE WHAT DEVELOPS. IF
24 THERE IS A PROBLEM, WE KNOW WHERE TO FIND HIM.
25 THE COURT: OKAY. ALL RIGHT. I APPRECIATE THAT.
26 SUBJECT TO RE-CALL THEN, MR. PRASKE, THANK YOU VERY MUCH
27 FOR COMING IN. AND I APPRECIATE YOU BEING HERE AND
28 WAITING THIS MORNING. THANK YOU, SIR.

47
1 MR. BEECHEN: AND WE DO HAVE ANOTHER WITNESS.
2 THE COURT: READY TO GO AHEAD.
3 MR. BEECHEN: GOOD.
4 THE COURT: PLEASE CALL YOUR NEXT WITNESS. IS
5 YOUR OTHER WITNESS HERE?
6 MR. BEECHEN: HE'S JUST OUTSIDE, YOUR HONOR. AND
7 WE'RE BRINGING HIM IN. HE'S BEING BROUGHT IN.
8 THE COURT: SIR, PLEASE COME FORWARD. THIS WAY,
9 PLEASE. I'LL ASK YOU TO STOP RIGHT THERE, RAISE YOUR
10 RIGHT HAND, AND BE SWORN BY THE CLERK.
11
12 SCOTT HENRY WOODS,
19 THE WITNESS: I DO.
20 THE CLERK: THANK YOU. PLEASE BE SEATED.
21 THE COURT: PLEASE MAKE YOURSELF COMFORTABLE.
22 AND WOULD YOU PLEASE ADJUST THE MICROPHONE SO YOU'RE
23 SPEAKING DIRECTLY INTO THE MICROPHONE. WHEN YOU'RE
24 READY, PLEASE STATE YOUR FULL NAME AND THEN SPELL YOUR
25 NAME.
26 THE WITNESS: MY NAME IS SCOTT HENRY WOODS. LAST
27 NAME IS W-O-O-D-S. FIRST NAME S-C-O-T-T. MIDDLE NAME
28 H-E-N-R-Y.

48
1 THE COURT: PLEASE PROCEED.
2
4 BY MR. BEECHEN:
5 Q MORNING, MR. WOODS.
6 A MORNING
7 Q BY WHOM ARE YOU CURRENTLY EMPLOYED?
8 A I'M EMPLOYED BY LOS ANGELES COUNTY
9 ASSESSOR'S OFFICE.
10 Q AND HOW LONG HAVE YOU BEEN EMPLOYED BY THE
11 COUNTY ASSESSOR?
12 A CLOSE TO 17 YEARS.
13 Q AND WHAT IS YOUR CURRENT ASSIGNMENT WITHIN
14 THE ASSESSOR'S OFFICE?
15 A I'M A PROPERTY ASSESSMENT SPECIALIST, AND
16 I LOOK AT CHANGES OF CONTROL OF LEGAL ENTITIES FOR
17 OWNERSHIP PURPOSES.
18 Q AND HOW LONG HAVE YOU BEEN IN THAT
19 POSITION?
20 A IT WILL BE ABOUT EIGHT YEARS NOW.
21 Q NOW, WHEN YOU SAY THAT YOU'RE INVOLVED
22 WHERE THERE'S INSTANCES OF CHANGE IN OWNERSHIP OR CHANGE
23 IN CONTROL, WHY WOULD THE ASSESSOR BE INTERESTED IN SUCH
24 SITUATIONS?
25 A WE'RE INTERESTED IN SUCH SITUATIONS
26 BECAUSE, UNDER PROPOSITION 13, WHENEVER THERE'S A CHANGE
27 OF OWNERSHIP, THE PROPERTY OWNED BY THE ENTITY CHANGING
28 OWNERSHIP IS REAPPRAISED.

49
1 Q ALL RIGHT. SO LET ME GIVE YOU AN EXAMPLE.
2 HYPOTHETICALLY, LET'S ASSUME THAT AN INDIVIDUAL OWNS
3 100 PERCENT OF A LIMITED PARTNERSHIP INTEREST IN A
4 CALIFORNIA LIMITED PARTNERSHIP. AND THAT LIMITED
5 PARTNERSHIP OWNS A PIECE OF PROPERTY LOCATED IN LOS
6 ANGELES COUNTY. A DATE THAT INDIVIDUAL TRANSFERS
7 99 PERCENT OF THAT 100 PERCENT INTEREST TO A TRUST,
8 WOULD SUCH AN EVENT TRIGGER A REASSESSMENT OF THE
9 PROPERTY?
10 A NO, IT WOULD NOT. IT WOULD DEPEND ON WHAT
11 TYPE OF TRUST IT IS. IF IT'S A REVOCABLE TRUST THAT THE
12 INDIVIDUAL OWNS AND IS A TRUSTOR AND A TRUST DEED, THEN
13 IT WOULD NOT.
14 Q ASSUME IT'S AN IRREVOCABLE TRUST.
15 A IF IT'S IRREVOCABLE, THEN WE LOOK TO SEE
16 WHO THE BENEFICIARIES ARE OF THE TRUST, AND IF THEY ARE
17 NOT IN AN EXCLUDED CLASS, THEN IT WOULD BE A CHANGE OF
18 OWNERSHIP
19 THE COURT: WHAT DO YOU MEAN BY "EXCLUDED CLASS"?
20 THE WITNESS: IF THE BENEFICIARIES WERE -- SAY
21 THEY WERE CHILDREN OF THE TRUSTEE OR THEY WERE A SPOUSE,
22 THEN THEY WOULD FALL UNDER ANOTHER EXEMPTION THAT WOULD
23 EXEMPT THE PROPERTIES FROM BEING REAPPRAISED.
24 THE COURT: DOES IT MATTER IF THAT EVENT WERE TO
25 HAVE TAKEN PLEASE IN 1997 OR 1998?
26 THE WITNESS: NO. THE LAW HAS NOT CHANGED AS TO
27 HOW -- WHETHER OR NOT SOMEBODY WILL BE EXCLUDED OR NOT.
28 THE COURT: THANK YOU. PLEASE PROCEED.

50
1 Q BY MR. BEECHEN: SO IN OTHER WORDS -- AND
2 THAT LAW WENT INTO EFFECT, I THINK, IN 1983?
3 A I BELIEVE SO.
4 Q ALL RIGHT. SO, OBVIOUSLY, IT WOULD HAVE
5 BEEN IN EFFECT IN 1997?
6 A YES.
7 Q IN 1998?
8 A YES, SIR.
9 Q SO THEN, AGAIN, JUST SO I UNDERSTAND, IF
10 THERE IS A TRANSFER OF GREATER THAN 50 PERCENT IN THE
11 OWNERSHIP OF AN ENTITY TO AN IRREVOCABLE TRUST THAT IS
12 COMPRISED OF, LET'S SAY, FAMILY MEMBERS OR THE PERSON
13 THAT'S MAKING THE TRANSFER, THEN THAT IS NOT A BASIS FOR
14 REASSESSMENT.
15 A YES, YOU'RE RIGHT.
16 Q BUT IT WAS TO AN ENTITY THAT WAS
17 COMPLETELY FOREIGN, EITHER NOT A FAMILY MEMBER,
18 BASICALLY JUST, TRULY, A THIRD PARTY, THAT WOULD TRIGGER
19 THE REASSESSMENT.
20 A YES, WE WOULD REASSESS IT.
21 Q NOW, YOU'RE FAMILIAR WITH THE RECORDS OF
22 THE COUNTY RECORDER IN CONNECTION WITH THREE PROPERTIES:
23 511, 517, AND 601 OCEAN FRONT WALK?
24 A YES, I HAVE LOOKED AT THOSE.
25 Q AND, CERTAINLY, WITH REGARD TO 511 AND
26 517, THERE HAVE BEEN NO REASSESSMENTS SINCE PRIOR TO
27 1998 -- IS THAT CORRECT? -- OTHER THAN WHATEVER IS THE
28 ORDINARY REASSESSMENT UNDER -- EXCUSE ME. THERE HAS

51
1 BEEN NO REASSESSMENT BASED UPON EITHER A CHANGE IN
2 OWNERSHIP OR CHANGE IN CONTROL?
3 A TO MY RECOLLECTION, WITHOUT LOOKING AT THE
4 ACTUAL DOCUMENTS, THAT'S RIGHT.
6 THE COURT: CROSS.
7
8 CROSS EXAMINATION
9 BY MR. BLECHER:
10 Q MR. WOODS, DOES IT CONFORM WITH YOUR
11 UNDERSTANDING THAT -- IF THE PRIOR OWNER OF 511 BECAME
12 THE LIMITED PARTNER FOR ONE DAY, DOES IT CONFORM WITH
13 YOUR UNDERSTANDING, AS IT EXISTED IN 1997, THAT THAT
14 WOULD BE AN EXEMPT TRANSACTION?
15 A CAN YOU REPEAT THAT ONE MORE TIME, THAT
16 QUESTION?
17 Q YES. IF THE PRIOR OWNER OF 511 BECAME A
18 LIMITED PARTNER IN THE NEW ENTITY FOR ONLY ONE DAY, IS
19 IT YOUR UNDERSTANDING, AS THE PRACTICE EXISTED IN 1997
20 OR 1998, THAT THAT WOULD BE AN EXEMPT TRANSACTION?
21 A IF THE PRIOR OWNER OF 511 WERE TO BECOME A
22 NEW LIMITED PARTNER?
23 Q YES.
24 A IT WOULD DEPEND ON HOW MUCH OWNERSHIP
25 INTEREST HE WOULD OBTAIN.
26 Q AND IS THAT SOMETHING THAT, AT THAT TIME,
27 WHEN THESE TRANSACTIONS WERE STRUCTURED, THAT THE OWNER
28 OR LAWYER DISCUSSED WITH THE COUNTY ASSESSOR? IS THAT A

52
1 COMMON PRACTICE?
2 A NO, IT'S NOT. USUALLY -- WE ARE A LITTLE
3 REACTIONARY. WHENEVER SOMETHING OCCURS, WE WILL LOOK AT
4 IT BASED ON THE INFORMATION THAT'S PROVIDED US. FOR
5 EXAMPLE, IF NOT MORE THAN A 50 PERCENT CHANGE OCCURRED
6 IN 511 WHEN THE NEW PARTNER CAME ON, THEY WOULD NOT BE
7 REQUIRED TO FILE ANY INFORMATION WITH THE STATE BOARD OF
8 EQUALIZATION. THEREFORE, WE WOULD NEVER GET THE
9 INFORMATION. THEREFORE, WE WOULD NOT KNOW ABOUT IT.
10 Q BUT ARE THERE INSTANCES IN WHICH YOU'RE
11 AWARE THAT THE LAWYER FOR THE PROPERTY AND THE COUNTY
12 ASSESSOR DISCUSSED THE TRANSACTION IN ADVANCE OF ITS
13 BEING ACCOMPLISHED?
14 A WE DO NOT GIVE LEGAL ADVICE, BUT IF THEY
15 ASK US WHETHER THIS IS CAUSING A CHANGE OF OWNERSHIP, WE
16 WILL SAY BASED ON THIS STATUTE THAT THESE ARE THE FACTS,
17 YES OR NO, IT WILL NOT.
18 Q AND THAT KIND OF CONSULTATION WITHOUT
19 LEGAL ADVICE IS NOT UNCOMMON, IS IT?
20 A IT WILL HAPPEN, YES, PERIODICALLY. I WILL
21 GET CALLS MYSELF.
22 Q NOW, DO YOU HAVE ANY FACTS OR INFORMATION
23 INDICATING THAT THERE'S ANYTHING IN CONNECTION WITH 511,
24 517, AND 601 THAT'S INAPPROPRIATE?
25 MR. BEECHEN: OBJECTION, YOUR HONOR. JUST
26 INAPPROPRIATE.
27 THE COURT: SUSTAINED. IT'S A BIT VAGUE. DO YOU
28 UNDERSTAND THE QUESTION?

53
1 THE WITNESS: I THINK I DO, BUT I WOULDN'T KNOW.
2 I COULDN'T ANSWER.
3 Q BY MR. BLECHER: YOU WOULDN'T KNOW THE
4 ANSWER?
5 A I WOULDN'T KNOW THE ANSWER.
6 Q IS THERE ANY PROCEEDING THAT YOU'RE AWARE
7 OF WITHIN THE COUNTY ASSESSOR PENDING AGAINST ANY OF
8 THESE PIECES OF LAND?
9 A NOT TO MY KNOWLEDGE.
10 MR. BLECHER: THANK YOU, SIR. NOTHING FURTHER.
11 THE COURT: REDIRECT?
12 MR. BEECHEN: I DON'T THINK SO, YOUR HONOR. JUST
13 ONE QUESTION.
14
15 REDIRECT EXAMINATION
16 BY MR. BEECHEN:
17 Q WHEN THERE IS A CHANGE IN OWNERSHIP OR
18 CONTROL OF A BUSINESS ENTITY SUCH AS A LIMITED
19 PARTNERSHIP OR AN LLC, IS IT CORRECT THAT THE RULE IS
20 THAT, SHOULD THERE BE A CHANGE IN EXCESS OF 50 PERCENT
21 ANY OF THEIR OWNERSHIP OR CONTROL, THAT THE LAW REQUIRES
22 THAT THERE BE A REPORTING OF THAT FACT TO THE STATE
23 BOARD OF EQUALIZATION?
24 A YES, THAT HAS BEEN IN EFFECT SINCE 1983.
25 Q ALL RIGHT. AND THEN IS IT THE PROCEDURE
26 THAT, ONCE IT'S REVIEWED BY THE STATE BOARD OF
27 EQUALIZATION OR THAT DOCUMENT IS RECEIVED BY THE STATE
28 BOARD OF EQUALIZATION, THAT'S SENT TO A COUNTY ASSESSOR

54
1 TO DETERMINE WHETHER A REASSESSMENT IS APPROPRIATE OR
2 NOT?
3 A YES, THAT'S CORRECT.
5 MR. BLECHER: NONE.
6 THE COURT: THANK YOU VERY MUCH FOR COMING IN. I
7 APPRECIATE YOUR PATIENCE.
8 DO YOU HAVE ANOTHER WITNESS YOU WANT TO CALL?
9 MR. BEECHEN: MY NEXT WITNESS WOULD BE
10 MR. GAGGERO, WHO IS HERE. WE COULD START IN OR START
11 FRESH AT 1:30.
12 THE COURT: WHAT'S THE PREFERENCE?
13 MR. BLECHER: 1:30.
14 THE COURT: OKAY. SURE. 1:30.
15 THE CLERK: WE DO HAVE A 1:30 EX PARTE ON
16 CALLAHAN. THAT WAS THE CASE THAT WAS TRANSFERRED TO US
17 FROM DEPARTMENT I.
18 THE COURT: I'M JUST TRYING TO REMEMBER HOW
19 LONG -- I THINK IT'S ABOUT FIVE MINUTES. BUT I'VE BEEN
20 SO WRONG SO OFTEN THIS WEEK. I'M GOING TO ASK THE
21 PARTIES TO WAIT JUST A MOMENT. WHY DON'T WE ASK YOU TO
22 COME BACK AT 1:45. I WOULD RATHER NOT HAVE YOU COME
23 BACK AT 1:30 AND WAIT 15 MINUTES. THE COURT WILL BE
24 OPEN AT 1:30.
25 MR. BEECHEN: IF YOU'VE GOT ANOTHER HEARING, WHY
26 DON'T WE JUST MOVE THIS OFF TO THE SIDE.
27 THE COURT: THAT'S FINE. IF YOU WANT TO LEAVE IT
28 LIKE THAT, THAT'S FINE. THIS IS A CONTINUED EX PARTE.

55
1 I'VE HEARD THE ARGUMENTS. THERE WERE A COUPLE OF THINGS
2 WE WERE GOING TO DO.
3 (LUNCH RECESS TAKEN AT 11:54 A.M.)
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
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24
25
26
27
28

56
1 (AFTERNOON SESSION BEGINS AT 1:38 P.M. ANOTHER
2 CASE IS CALLED. TRIAL STARTS AT 1:50 P.M.)
3 THE COURT: LET'S GO ON THE RECORD. BUNGE VERSUS
4 511 OFW, ET AL. THE ATTORNEYS ARE ONCE AGAIN PRESENT.
5 ASIDE FROM MR. GAGGERO, HOW MANY MORE WITNESSES DO YOU
6 HAVE, IF ANY?
7 MR. BEECHEN: WE HAVE ONE MORE -- WELL, SOME OF
8 THIS IS REALLY GOING TO DEPEND UPON THE TESTIMONY OF
9 MR. GAGGERO. WE'RE EITHER GOING TO HAVE ZERO, ONE, OR
10 TWO.
11 THE COURT: OKAY.
12 MR. BEECHEN: ONE OF THOSE WILL BE QUITE SHORT.
13 ANOTHER ONE WILL BE A LITTLE BIT LENGTHIER, BUT I WOULD
14 GUESS EVEN THE SECOND ONE WOULD BE NO MORE THEN AN HOUR
15 AND MAYBE EVEN LESS.
16 THE COURT: ARE THEY ON YOUR WITNESS LIST? THEY
17 ARE. THEY ARE. THE FOLLOWING WOULD BE MR. GAGGERO,
18 LISA JOHNSON, AND THEN CORIN KAHN.
19 DOES THE DEFENSE HAVE ANY IDEA -- I'M NOT GOING
20 TO HOLD YOU TO IT. I JUST WANT TO HAVE SOME IDEA OF WHO
21 YOU MIGHT CALL, IF ANYONE.
22 MR. BLECHER: I DON'T THINK THERE WILL BE ANY
23 WITNESSES. ALL WERE THE SAME, AND WE COVERED
24 EVERYTHING. WE EXPECT TO DO -- THE CROSS OF MR. GAGGERO
25 MIGHT BE LONGER THAN USUAL SO WE DON'T HAVE TO CALL HIM
26 BACK.
27 THE COURT: THAT'S FINE WITH THE COURT.
28 MR. BLECHER: AND ON THE BRIEF, YOUR HONOR, WE

57
1 CONFERRED WITH MR. PRASKE. WOULD FEBRUARY 10 BE
2 AGREEABLE?
3 THE COURT: THAT'S FINE WITH ME.
4 MR. BLECHER: THEY CAN TAKE WHATEVER THEY NEED.
5 THE COURT: FEBRUARY 10 FOR HIM TO GET HIS
6 INITIAL BRIEF IN. YOU TELL ME WHAT YOU NEED AFTER THAT.
7 MR. BEECHEN: I AM GOING TO BE GONE FROM THE 12TH
8 TO THE 17TH, OUT OF THE STATE. I THOUGHT THAT WE WERE
9 GOING TO GET THAT INITIAL BRIEF FASTER THAN TWO WEEKS.
10 SO I HATE TO DO THIS, BUT I WOULD ASK UNTIL THE END OF
11 FEBRUARY, BECAUSE I GET BACK ON THE 17TH --
12 THE COURT: THAT'S FINE.
13 MR. BEECHEN: -- AND I WON'T EVEN SEE IT.
14 THE COURT: THAT'S OKAY.
15 MR. BEECHEN: ALL RIGHT.
16 THE COURT: THE END OF FEBRUARY BEING THE LAST
17 DAY OF FEBRUARY?
18 MR. BEECHEN: YEAH. I'M JUST KIND OF TRYING TO
19 PICK A DATE. I CAN'T -- I CAN'T EVEN SEE THAT FAR TO
20 SEE WHETHER THAT'S A WEEKDAY OR WHAT IT IS.
21 MR. BLECHER: WEDNESDAY THE 28TH.
22 MR. BEECHEN: I'M DEFERRING TO MR. BLECHER'S
23 EYES.
24 THE COURT: I'M GOING TO ASK YOU TO MAKE
25 ARRANGEMENTS WITH THE CLERK ON HOW THAT IS TO BE
26 DELIVERED SINCE WE'RE GOING TO BE DARK.
27 MR. BEECHEN: THAT'S FINE.
28 THE CLERK: WHAT IS THE DATE, YOUR HONOR?

58
1 THE COURT: 29TH OF FEBRUARY. AND THEN I'LL --
2 BY THE END OF BUSINESS TOMORROW I'LL LET YOU KNOW HOW --
3 WHAT WE'RE GOING TO DO ON THAT, BECAUSE OBVIOUSLY THAT'S
4 DURING THE PERIOD THAT THE COURT IS DARK. WE NEED A DAY
5 OR TWO TO GO OVER IT. SO I SUSPECT IT WILL BE SOMETIME
6 THE WEEK OF MARCH 12TH WHEN THE COURT COMES BACK. I'M
7 NOT GOING TO GO LONGER THAN THAT. IT DEPENDS WHAT THE
8 RULING IS AND HOW WE'RE GOING TO PROCEED. THE REST OF
9 IT SHOULD BE PRETTY EASY AND QUICK ONE WAY OR THE OTHER.
10 MR. BEECHEN: YEAH. I WOULD EXPECT THAT
11 DEPENDING UPON HOW YOU RULE, EITHER WE'RE NOT GOING TO
12 GO MUCH FURTHER AT ALL, OR WE'RE GOING TO LOOK AT THESE
13 DOCUMENTS. AND WE'RE PROBABLY TALKING LESS THAN AN HOUR
14 OF TESTIMONY, PROBABLY CLOSER TO 30 MINUTES OF TESTIMONY
15 IS REALLY WHAT WE'RE TALKING ABOUT.
16 THE COURT: THAT'S WHAT I SUSPECT. SO I'LL
17 ACCOMMODATE EVERYBODY'S CALENDAR ON THAT, AND WE'LL JUST
18 WORK FROM THERE.
19 MR. BEECHEN: OKAY.
20 THE COURT: OKAY. PLEASE CALL YOUR NEXT WITNESS.
21 MR. BEECHEN: YES. STEVEN GAGGERO, THE
22 DEFENDANT.
23 THE COURT: MR. GAGGERO, PLEASE COME FORWARD.
24 I'LL ASK YOU TO RAISE YOUR RIGHT HAND AND BE SWORN BY
25 THE CLERK.
26
27 STEVEN GAGGERO,

59
6 THE WITNESS: I DO.
7 THE CLERK: THANK YOU. PLEASE BE SEATED.
8 THE COURT: PLEASE MAKE YOURSELF COMFORTABLE.
9 THE WITNESS: THANK YOU.
10 THE COURT: YOU'VE HEARD THE INSTRUCTIONS NOW AD
11 INFINITUM. IF YOU WOULD, PLEASE STATE YOUR FULL NAME
12 AND SPELL YOUR FULL NAME.
13 THE WITNESS: STEPHEN MICHAEL GAGGERO.
14 S-T-E-P-H-E-N. MICHAEL, M-I-C-H-A-E-L. GAGGERO,
15 G-A-G-G-E-R-O.
16 THE COURT: PLEASE PROCEED.
17
19 BY MR. BEECHEN:
20 Q MR. GAGGERO, WE WERE HEARING -- YOU WERE
21 HERE WHEN MR. PRASKE WAS TALKING ABOUT THE INTERACTION
22 BETWEEN HE AND YOU REGARDING THE BUNGE TRANSACTION.
23 NOW, IS IT CORRECT THAT IN CONNECTION WITH THE
24 DISPOSITION OF THE ASSETS INVOLVING THE BUNGES, THAT YOU
25 WERE, IN ESSENCE, THE GO-TO PERSON? YOU WERE THE PERSON
26 WHO WAS GOING TO ENGAGE IN THE NEGOTIATIONS ON BEHALF OF
27 THE SELLING ENTITIES?
28 A THAT'S TRUE.

60
1 Q AND IS IT TRUE THAT YOU NEVER ACTUALLY
2 SPOKE TO THE BUNGES ABOUT THIS TRANSACTION IN 2007?
3 A THAT'S CORRECT.
4 Q AND THAT THE THREE PERSONS INVOLVED IN THE
5 TRANSACTION WITH THE BUNGES, ASIDE FROM MR. PRASKE WHO
6 SIGNED VARIOUS DOCUMENTS -- THAT THE THREE PERSONS WERE
7 YOURSELF, TED FOLKERT, AND MR. CHATFIELD? IS THAT
8 CORRECT?
9 A I DON'T THINK MR. CHATFIELD WAS INVOLVED.
10 Q WELL, DIDN'T MR. CHATFIELD -- AND HE'S AN
11 ATTORNEY; CORRECT?
12 A YES.
13 Q DAVID CHATFIELD IS HIS NAME?
14 A YES.
15 Q AND HE'S BEEN YOUR ATTORNEY FOR HOW LONG?
16 A I'M NOT SURE.
17 Q WELL, HE WAS YOUR ATTORNEY, FOR EXAMPLE,
18 IN 1998?
19 A OKAY.
20 Q IS THAT RIGHT?
21 A I DON'T REMEMBER.
22 Q OKAY. AND ISN'T HE THE ONE WHO ACTUALLY
23 DRAFTED THE DEED RESTRICTION AGREEMENT AND THE PURCHASE
24 AND SALE AGREEMENT IN CONNECTION WITH THE BUNGES?
25 A NO. CORIN KAHN DRAFTED THE DEED
26 RESTRICTION AGREEMENT, AND I DRAFTED THE PURCHASE
27 AGREEMENT.
28 Q AND DID YOU PERSONALLY DRAFT THAT

61
1 AGREEMENT?
2 A I CUT AND PASTED IT FROM ANOTHER AGREEMENT
3 WE HAD ON THE WORD PROCESSOR.
4 Q NOW, LET'S TALK ABOUT YOUR RELATIONSHIP
5 WITH MR. PRASKE IN CONNECTION WITH THIS TRANSACTION. IS
6 IT CORRECT THAT, IN TERMS OF DECISIONS THAT YOU WERE
7 MAKING REGARDING THE TRANSACTION WITH THE BUNGES, THAT
8 YOU WERE NOT CLEARING THOSE DECISIONS FIRST BEFORE YOU
9 CONVEYED THEM TO MR. FOLKERT?
10 A THE INDIVIDUAL NEGOTIATING COMPONENTS ARE
11 NOT SOMETHING THAT JOE AND I TALK ABOUT. WE DEAL IN A
12 MORE GLOBAL SENSE ON LIQUIDATING CERTAIN ASSETS AND
13 REINVESTING THEM IN OTHER TYPES OF INVESTMENTS AND HOW
14 WE'RE TRYING TO STRUCTURE VARIOUS PORTFOLIOS AND
15 INVESTMENTS. I DON'T WANT TO -- I'LL PICK A WORD THAT
16 ISN'T -- ACTUAL DETAILS OF THE NEGOTIATION AND HOW TO
17 ACHIEVE THE BIG PICTURE THAT WE'RE AFTER IS LEFT UP TO
18 ME AND OTHER PEOPLE IN THE OFFICE.
19 Q OKAY. NOW, LET'S GO BACK TO 1989. AND,
20 AT THAT TIME, YOU OWNED THESE THREE PROPERTIES: 511,
21 517, AND 601. YOU OWNED THOSE IN YOUR NAME; CORRECT?
22 A YES.
23 Q ALL RIGHT. AND IN 1989, YOU WANTED TO
24 TAKE THE 511, 517, AND ANOTHER PROPERTY LOCATED AT 523
25 OCEAN FRONT WALK, AND YOU WANTED TO BE ABLE TO HAVE
26 RETAIL SHOPS IN THOSE LOCATIONS; CORRECT?
27 A AMONGST OTHER THINGS, YES.
28 Q AND, IN ORDER TO DO THAT, YOU HAD TO GO TO

62
1 THE COASTAL COMMISSION IN ORDER TO GET A PERMIT TO ALLOW
2 THAT -- THOSE USES TO TAKE PLACE.
3 A YES.
4 Q BECAUSE PREVIOUSLY THEY HAD BEEN
5 RESIDENTIAL USES?
6 A CORRECT.
7 Q ALL RIGHT. SO IF YOU LOOK AT EXHIBIT 2 --
8 IT'S IN THE WHITE BOOK RIGHT BEHIND YOU.
9 A OKAY.
10 Q EXHIBIT 2 IS THE RESULT OF, BASICALLY, AN
11 AGREEMENT MADE BETWEEN YOU AND THE CALIFORNIA COASTAL
12 COMMISSION ABOUT WHAT THE CALIFORNIA COASTAL COMMISSION
13 WOULD REQUIRE TO ISSUE IN EXCHANGE FOR WHICH IT WOULD
14 ISSUE ITS PERMIT ALLOWING YOU TO OPERATE A RETAIL
15 OPERATION IN THESE THREE PROPERTIES: 511, 517, AND 523;
16 IS THAT CORRECT?
17 A YES.
18 Q ALL RIGHT. AND SO WHAT YOU HAD TO PROMISE
19 ON YOUR SIDE AS THE OWNER OF THESE FOUR PROPERTIES WAS
20 TO PROVIDE PARKING; CORRECT?
21 A I'M SORRY. SAY THAT AGAIN, PLEASE.
22 Q YOU HAD TO PROVIDE PARKING ON 601 OCEAN
23 FRONT WALK FOR THE BENEFIT OF 511, 517, AND 523.
24 A THAT'S ULTIMATELY WHERE WE DID PROVIDE THE
25 PARKING. THE COASTAL COMMISSION DOESN'T CARE
26 NECESSARILY WHERE YOU PROVIDE THE PARKING. IN SOME
27 INSTANCES THEY CARE ABOUT A CERTAIN RADIUS, BUT THIS IS
28 WHERE WE PROVIDED THE PARKING.

63
1 Q THE RADIUS IN THIS INSTANCE WAS WITHIN 400
2 FEET?
3 A I'D HAVE TO -- IT'S CLOSER THAN THAT TO
4 523.
5 Q OKAY. ALL RIGHT. SO BASICALLY -- AND IS
6 IT CORRECT THAT, AT LEAST, YOU WERE TOLD BY THE COASTAL
7 COMMISSION THAT IF YOU DON'T PROVIDE PARKING, YOU'RE NOT
8 GOING TO GET YOUR PERMIT TO OPERATE RETAIL -- TO CONDUCT
9 RETAIL OPERATIONS AT THESE PROPERTIES?
10 A I DON'T REMEMBER THE COASTAL COMMISSION
11 SAYING THAT.
12 Q ALL RIGHT. NOW, WHEN THE BUNGES CAME TO
13 YOU OR CAME TO TED FOLKERT, I GUESS, AND SAID THAT THEY
14 WANTED TO MAKE SURE THAT THIS PARKING WOULD STILL BE
15 AVAILABLE TO THEM IF THEY WERE TO CHANGE THE USE OF THE
16 511, 517 PROPERTIES, IS IT CORRECT THAT YOU UNDERSTOOD
17 THAT THIS WAS, IN ESSENCE, THE SAME SITUATION YOU WERE
18 FACING WHEN YOU WANTED TO CONDUCT A RETAIL OPERATION AT
19 THOSE TWO PROPERTIES? THAT IS, IF THERE WAS GOING TO BE
20 A CHANGE IN USE, YOU WOULD HAVE TO GO TO THE COASTAL
21 COMMISSION TO GET A PERMIT, AND THAT IN ORDER TO GET
22 THAT PERMIT, YOU WERE GOING TO HAVE TO MAKE SURE THAT
23 THE COASTAL COMMISSION SAW THAT THERE WAS SUFFICIENT
24 PARKING.
25 A I DIDN'T COROLLATE IT LIKE THAT IN MY
26 MIND.
27 Q WELL, DID IT STRIKE YOU AS UNUSUAL THAT
28 THE BUNGES WANTED TO MAKE SURE THERE WAS PARKING IF

64
1 THERE WAS A CHANGE IN USE IN 511 AND 517?
2 A NO.
3 Q YOU UNDERSTOOD THAT THERE WAS NO PARKING
4 ON 511, 517, ON THOSE TWO PROPERTIES THEMSELVES;
5 CORRECT?
6 A YES.
7 Q ALL RIGHT. AND IF YOU'RE GOING TO CONDUCT
8 SOME SORT OF BUSINESS AT THOSE PROPERTIES, YOU NEED TO
9 HAVE PARKING AVAILABLE; CORRECT?
10 A DEPENDS ON THE BUSINESS. THERE'S MANY
11 PROPERTIES -- IN FACT, MOST PROPERTIES IN VENICE DON'T
12 HAVE PARKING.
13 Q YOU UNDERSTOOD THAT IF THERE IS GOING TO
14 BE A CHANGE IN USE, THAT WOULD REQUIRE A PERMIT, IN
15 OTHER WORDS, TO CHANGE SOME OF THE USES ON THOSE TWO
16 PROPERTIES IN 2007.
17 A THAT'S NOT A TRUE STATEMENT.
18 Q OKAY.
19 A THEY WERE GOING TO USE -- IT'S MY
20 UNDERSTANDING THEY WANTED TO CONVERT TO AN
21 APARTMENT/HOTEL, AND IT'S MY UNDERSTANDING AN
22 APARTMENT/HOTEL DOES NOT REQUIRE PARKING...
23 THE REPORTER: I'M SORRY. CAN YOU SLOW DOWN? I
24 DIDN'T GET HALF THAT ANSWER.
25 THE COURT: CAN YOU REPEAT THAT AND DO IT SLOWLY.
26 MR. BLECHER: ASK HIM TO KEEP HIS VOICE UP A
27 LITTLE BIT.
28 THE WITNESS: IT'S MY UNDERSTANDING THAT THE

65
1 CONVERSION TO AN APARTMENT/HOTEL DOES NOT REQUIRE
2 PARKING AS EVIDENCED BY SU CASA, WHICH IS A BUILDING THE
3 BUNGES OWN, WHICH THEY DID NOT PROVIDE PARKING FOR TO
4 CONVERT THE USE FROM AN APARTMENT BUILDING TO AN
5 APARTMENT/HOTEL. SO THAT'S WHY I TAKE EXCEPTION TO YOUR
6 STATEMENT.
7 Q BY MR. BEECHEN: OKAY. NOW, YOU
8 UNDERSTOOD THAT THE BUNGES WERE -- WHEN THE LETTER OF
9 INTENT WAS PRESENTED TO YOU IN SEPTEMBER OF 2007, YOU
10 WERE TOLD THAT THE BUNGES WERE INTERESTED IN HAVING SOME
11 SORT OF A PARKING COVENANT; CORRECT?
12 A THERE WERE MULTIPLE LETTERS OF INTENT IN
13 SEPTEMBER OF '07 BEGINNING IN AUGUST OF '07 SO -- AND I
14 KNOW SOME OF THEM HAD NO REFERENCE TO PARKING AT ALL.
15 SO I WOULD APPRECIATE IT IF YOU WOULD SHOW ME THE ONE
16 YOU'RE REFERENCING.
17 Q LET'S TAKE A LOOK AT EXHIBIT 16. THIS WAS
18 THE LAST LETTER OF INTENT THAT YOU RECEIVED FROM THE
19 BUNGES; CORRECT?
20 A I DON'T KNOW WHAT ALL THE LETTERS OF
21 INTENT.
22 Q ARE YOU AWARE OF ANY ONE LATER THAN THE
23 ONE DATED SEPTEMBER 12, 2007?
24 A I DON'T HAVE A RE-CALL OF THE DATES OF THE
25 VARIOUS LETTERS OF INTENT.
26 Q SO YOU DON'T RECALL ONE LATER THAN
27 SEPTEMBER 12; IS THAT CORRECT?
28 A I DON'T KNOW, AS I SIT HERE, IF THERE IS

66
1 ONE LATER THAN THIS DATE. I KNOW THERE WERE MULTIPLE
2 LETTERS OF INTENT, AND THEN THERE WERE E-MAILS THAT WENT
3 BACK AND FORTH THAT WERE -- THAT GREW OUT OF THE LETTERS
4 OF INTENT AND CONTINUED TO NEGOTIATE THE TERMS.
5 Q NOW, LET'S LOOK AT EXHIBIT 16, FIRST PAGE.
6 SEE THERE'S A REFERENCE TO PARKING COVENANT?
7 A YES.
8 Q NOW, YOU WERE PRESENTED WITH THIS DOCUMENT
9 BY TED FOLKERT; CORRECT?
10 A YES.
11 Q AND YOU WERE PRESENTED -- THIS LETTER WAS
12 PRESENTED TO YOU ON SEPTEMBER 13TH BY MR. FOLKERT?
13 A I DON'T KNOW THE EXACT DATE. IT WAS -- IT
14 WAS AROUND THAT TIME.
15 Q ALL RIGHT. AND YOU SAW THAT IT INCLUDED A
16 PARKING COVENANT? ON THE FIRST PAGE.
17 A I SEE IT SAYS "PARKING COVENANT," BUT I
18 DON'T KNOW IF IT INCLUDES A PARKING COVENANT.
19 Q YOU UNDERSTOOD THAT THE BUNGES WERE
20 SEEKING A PARKING COVENANT, AT LEAST BY THIS DOCUMENT;
21 CORRECT?
22 A I DON'T REALLY UNDERSTAND WHAT A COVENANT
23 IS SPECIFICALLY; SO I'M RELUCTANT TO COMMENT ON THAT.
24 Q WELL, YOU READ THE LETTER OF INTENT,
25 DIDN'T YOU?
26 A YES. BUT I DON'T KNOW WHAT A -- WHAT
27 LEGALLY DEFINES WHAT A COVENANT IS.
28 Q WELL, DID YOU READ WHAT FOLLOWS THE WORD

67
1 "PARKING COVENANT"?
2 A YES. I UNDERSTOOD THAT, BUT I'M JUST
3 SAYING I DON'T KNOW WHAT A COVENANT IS. IS MODIFYING
4 THE DEED RESTRICTION A COVENANT? I'M NOT SURE. I JUST
5 DON'T KNOW.
6 Q OKAY. BUT YOU UNDERSTOOD THAT THE BUNGES
7 WANTED SOMETHING IN CONNECTION WITH PARKING ON 601 OCEAN
8 FRONT WALK; CORRECT?
9 A YES, THEY WERE EXPRESSING AN INTEREST,
10 WHAT THE PARAGRAPH SAYS RIGHT HERE.
11 Q AND YOU KNEW THAT THE REASON WHY THEY
12 WANTED THIS WHATEVER THE DOCUMENT WAS GOING TO BE CALLED
13 WAS TO ASSURE THAT PARKING WOULD REMAIN IN PLACE ON 601
14 IN THE EVENT THAT THERE WAS A CHANGE IN USE IN
15 CONNECTION WITH 511 AND 517 OCEAN FRONT WALK.
16 A UNDER THE TERMS EXPRESSED IN THE COASTAL
17 PERMIT BACK IN '89.
18 Q CORRECT.
19 A YEAH.
20 Q BUT YOU UNDERSTOOD THAT THAT'S WHAT THE
21 BUNGES WERE SEEKING; CORRECT?
22 A YES.
23 Q OKAY. NOW -- SO IN RESPONSE TO THIS
24 DOCUMENT, YOU ASKED THE BUNGES TO PUT TOGETHER WHAT THEY
25 WERE SEEKING BY WAY OF AN AGREEMENT REGARDING PARKING.
26 THROUGH TED FOLKERT, YOU ASKED THE BUNGES, "LET ME SEE
27 WHAT IT IS YOU HAVE IN MIND REGARDING PARKING, THIS
28 AGREEMENT REGARDING PARKING."

68
1 A NO, THAT'S NOT WHAT I ASKED FOR. I ASKED
2 FOR A SPECIFIC LANGUAGE THEY WANTED RECORDED AGAINST 601
3 TO ACHIEVE WHATEVER IT IS THEY WERE AFTER, WHICH WAS
4 REPRESENTED TO ME AS BEING THEY WANTED TO MAKE SURE THAT
5 IF THEY CHANGED THE USE, THEY WOULD STILL HAVE THE EXACT
6 SAME PARKING RIGHTS AND OBLIGATIONS BEFORE AND AFTER THE
7 CHANGE IN USE AS THEY HAVE GRANTED FROM THE 1989 DEED
8 RESTRICTION OF THE COASTAL COMMISSION.
9 Q SO YOU UNDERSTOOD THIS WAS GOING TO BE A
10 RECORDED DOCUMENT. WHATEVER AGREEMENT WAS GOING TO BE
11 FINALLY REACHED WOULD BE RECORDED WITH THE L.A. COUNTY
12 RECORDER; CORRECT?
13 A I ASSUMED IT WOULD.
14 Q ALL RIGHT. AND THAT'S IMPORTANT SO THAT
15 THE WORLD AND ANY SUBSEQUENT -- FORGET THE WORLD -- ANY
16 SUBSEQUENT PURCHASERS OF THE 601 WOULD KNOW: WAIT.
17 THERE IS A CHANGE, IF YOU WILL, OR THERE'S SOME SORT OF
18 A MODIFICATION OR ADDENDUM TO THE 1989 DEED RESTRICTION
19 THAT PROVIDES IF THERE'S A CHANGE IN USE ON 511, 517,
20 THE PROVISIONS OF THE 1989 DEED RESTRICTION REMAIN IN
21 FULL FORCE AND EFFECT.
22 YOU UNDERSTAND THAT WAS THE PURPOSE OF THE
23 RECORDING.
24 A I DON'T NECESSARILY KNOW IF THAT WAS OR
25 WASN'T WHAT'S IN THEIR MIND. I KNOW WHAT THE EFFECT OF
26 A RECORDING IS.
27 Q THE EFFECT OF A RECORDING WOULD BE TO PUT
28 ANY PARTIES INTERESTED IN THE 601 PROPERTY ON NOTICE

69
1 THAT THAT DOCUMENT EXISTS? IS THAT WHAT YOUR
2 UNDERSTANDING WAS?
3 A IT WOULD PUT THEM ON NOTICE THAT IF THE
4 USE CHANGED AND FOR SOME REASON THE COASTAL PERMIT
5 BECAME INVALIDATED, THE OWNER OF THAT 601 PROPERTY STILL
6 HAD THE OBLIGATION TO PROVIDE THE PARKING PURSUANT TO
7 THE TERMS GRANTED IN THAT COASTAL PERMIT.
8 Q WELL, WAS IT YOUR UNDERSTANDING -- FORGET
9 WHAT YOUR UNDERSTANDING WAS FOR A MOMENT.
10 ALL RIGHT. AND DID YOU THINK THAT THE BUNGES'
11 REQUEST FOR THIS AGREEMENT THAT THERE IS A CHANGE IN USE
12 -- THAT THE PROVISIONS OF THE '89 DEED RESTRICTION WAS A
13 REASONABLE REQUEST ON THEIR PART?
14 A I DIDN'T GIVE ANY THOUGHT AS TO WHAT'S
15 REASONABLE OR LACK OF REASONABLENESS. MY JOB WAS TO
16 ENSURE THAT THE PROPERTIES THAT WERE BEING SOLD WERE
17 STRUCTURED APPLES-FOR-APPLES SITUATION. WE HAD MULTIPLE
18 BUYERS TRYING TO BUY THE PORTFOLIO IN ITS ENTIRETY,
19 DIFFERENT PROPERTIES, AND THE OTHER PEOPLE WERE
20 INTERESTED IN THE PROPERTY JUST AS THEY WERE WITH THE
21 DEED RESTRICTION THAT WAS ATTACHED. MR. BUNGE WANTED TO
22 DO WHAT APPEARED TO BE DEVELOPMENT. AND HE HAD
23 DIFFERENT ISSUES.
24 AND SO MY JOB IS TO MAKE SURE THAT MR. BUNGE'S
25 OFFER WAS THE SAME AS THE OTHER SUITORS. AND SO MY JOB
26 WAS TO TRY AND MAKE SURE THAT THERE WAS NOT ANY EFFECT
27 ON THE BUNGE TRANSACTION, THAT THAT TRANSACTION WOULD
28 NOT AFFECT THE OTHER OWNERS OF 601 AND THE OTHER

70
1 TRANSACTIONS THAT WE WERE NEGOTIATING OVER THERE.
2 SO, TO THAT END, I HAD TO TRY AND MAKE SURE THAT
3 ANYTHING THAT 601 AGREED TO WOULD NOT EXPAND WHAT IT WAS
4 ALREADY OBLIGATED TO DO UNDER THE COASTAL PERMIT.
5 Q SO THE QUESTION IS -- YOU DIDN'T THINK
6 ABOUT IT. THE ANSWER -- EXCUSE ME -- IS -- FORGET IT.
7 I JUST WANT TO GET -- MY QUESTION IS: DID YOU THINK IT
8 WAS REASONABLE? AND IF I UNDERSTAND WHAT YOUR INITIAL
9 RESPONSE WAS, YOU DIDN'T THINK ABOUT IT ONE WAY OR
10 ANOTHER; CORRECT?
11 A I TOLD YOU WHAT I WAS THINKING.
12 Q ALL RIGHT. LET ME READ TO YOU FROM YOUR
13 DEPOSITION AT PAGE 310, LINES 9 THROUGH 11. EXCUSE ME.
14 LET'S START AT LINE 3. 3 THROUGH 11, PAGE 310. EXCUSE
15 ME. LET'S GO THROUGH LINE 24.
17 MR. BLECHER: EXCUSE ME. WHAT LINE ARE WE
18 STARTING ON?
19 THE COURT: 3 THROUGH 24.
20 THE WITNESS: AM I SUPPOSED TO HAVE ONE?
21 THE COURT: NO, NOT AT THIS POINT.
22 MR. BLECHER: NO OBJECTION, YOUR HONOR.
23 MR. BEECHEN:
24 "QUESTION: WASN'T 601 GOING TO
CONTINUE TO PROVIDE THE PARKING? ISN'T
25 THAT WHAT WAS BEING NEGOTIATED? IF
THERE WAS A CHANGE IN USE, 511, 517,
26 601, CONTINUED TO PROVIDE THE PARKING ON
THE TERMS SET FORTH IN THE RECORD IN THE
27 1989 DEED RESTRICTION; CORRECT?
28 "ANSWER: YES.

71
1 "QUESTION: ALL RIGHT. DID YOU
THINK THAT THAT REQUEST BY BUNGE WAS A
2 REASONABLE ONE?
3 "ANSWER: YES.
4 "QUESTION: OKAY. AND IS THAT
BECAUSE NEITHER 511 OR 517 HAD ANY
5 PARKING ON IT; CORRECT?
6 "ANSWER: IS WHAT BECAUSE?
7 "QUESTION: THAT IT WAS REASONABLE
BECAUSE NEITHER 511 NOR 517 HAD ANY
8 PARKING.
9 "ANSWER: NOT NECESSARILY. IT WAS
JUST REASONABLE THAT IF SOMEBODY'S
10 BUYING 511 AND 517, IF THEY WANT TO --
IF THEY WANT TO CONTINUE THE STATUS QUO,
11 THAT'S REASONABLE. BECAUSE THEY WANT TO
CHANGE IT FROM RETAIL TO HOTEL AND THEY
12 WANT TO MAINTAIN THE STATUS QUOTE AND
THAT CHANGE OF USE, THEY DON'T WANT THAT
13 TO CAUSE THE LOSS OF WHATEVER RIGHTS AND
OBLIGATIONS THEY HAD, THAT SEEMS
14 REASONABLE."
15 THE WITNESS: AND I AGREE WITH THAT STATEMENT.
16 Q BY MR. BEECHEN: THAT SEEMS A REASONABLE
17 REQUEST. YOU DON'T HAVE TO RESPOND, SIR.
18 AND WAS IT YOUR UNDERSTANDING, AS YOU'RE
19 NEGOTIATING THIS, THAT THE BUNGES' GOAL WAS THAT THEY
20 WANTED TO BE ABLE TO CHANGE THE USE FROM RETAIL TO A
21 HOTEL FOR THESE TWO PROPERTIES? AND WHEN THEY MADE THAT
22 CHANGE, THEY DIDN'T WANT TO LOSE THE PARKING RIGHTS THAT
23 WERE GRANTED UNDER THE 1989 COASTAL PERMIT AS A RESULT
24 OF THAT CHANGE IN USE?
25 A IS THAT A QUESTION, OR ARE YOU READING?
26 Q I WANT TO KNOW IF THAT WAS YOUR
27 UNDERSTANDING OF THE BUNGES' GOAL.
28 A I'M SORRY. I THOUGHT YOU WERE READING.

72
1 SAY IT AGAIN, PLEASE.
2 Q SURE. WAS IT YOUR UNDERSTANDING THAT THE
3 BUNGES' GOAL WAS THAT THEY WANTED TO BE ABLE TO CHANGE
4 THE USE AT 511, 517 FROM RETAIL TO A HOTEL AND, IN DOING
5 SO, TO MAKE SURE THEY DIDN'T LOSE THE PARKING RIGHTS
6 THAT WERE GRANTED UNDER THE 1989 DEED RESTRICTION?
7 A WAS THAT MY UNDERSTANDING OF WHAT THEY
8 WANTED?
9 Q YES, SIR.
10 A YES.
11 Q NOW, IS IT CORRECT -- IF YOU LOOK AT
12 EXHIBIT 31, PLEASE, AND SPECIFICALLY AT THE BOTTOM
13 ENTITLED "DEED RESTRICTION," WHICH IS 527. AT THE
14 BOTTOM THERE'S PAGINATION NUMBERS, 527. AND IN TERMS OF
15 -- DO YOU HAVE IT IN FRONT OF YOU, SIR?
16 A I DO.
17 Q AND IN THAT LAST PARAGRAPH, STARTS "IN THE
18 EVENT." DO YOU SEE THAT?
19 A I DO.
20 Q OKAY. THAT'S LANGUAGE WHICH YOU CAME UP
21 WITH; CORRECT?
22 A WITH THE EXCEPTION OF THE 601, THIS
23 LANGUAGE, I ASKED TED TO GIVE TO THE ATTORNEYS FOR
24 MR. BUNGE AND SAID THAT THIS IS SOMETHING THAT I THINK
25 THEY HAVE IN MIND AND THEY CAN MAKE ANY MODIFICATIONS
26 THEY WANT TO AND PUT IT IN RECORDABLE FORM.
27 Q THE ATTORNEY FOR MR. BUNGE TRIED TO MAKE
28 SOME MODIFICATIONS TO THIS LANGUAGE; CORRECT?

73
1 A YES. HE TRIED TO TIE THE TRANSACTIONS
2 TOGETHER FOR THE UMPTEENTH TIME, AT WHICH TIME I SAID,
3 "YOU KNOW, I WILL TAKE THAT AS A PASS, BECAUSE YOU
4 CONTINUE TO TRY TO TIE THE TRANSACTIONS TOGETHER."
5 THE COURT: AS A PASS FOR WHAT?
6 THE WITNESS: AS A PASS FOR THE ENTIRE DEAL WE
7 WERE NEGOTIATING. THEY CONTINUED TO TRY AND INCLUDE 601
8 AS A CONDITION ON THE PURCHASE OF 511 AND 517. I KEPT
9 CARVING IT OUT. AND THEN THEIR ATTORNEY, THROUGH
10 VARIOUS MEANS, WAS TRYING TO INCLUDE IT EITHER IN THE
11 P.S.A., THE L.O.I., THE DEED RESTRICTION, AND EVERY TIME
12 HE TRIED TO PUT THE WORDING BACK IN AGAIN, ONE WAY OR
13 THE OTHER, I'D TAKE IT OUT. AND BY THIS TIME I WAS
14 GETTING TIRED OF IT --
15 THE REPORTER: I'M SORRY. YOU'RE GOING TO HAVE
16 TO SLOW DOWN.
17 THE WITNESS: BY THIS TIME, THE TIME THAT WE'RE
18 REFERRING TO WHEN I SAY "I'LL TAKE THAT AS A PASS," IT
19 WAS MADE CLEAR THAT WE WERE NOT GOING TO TIE THE TWO
20 TRANSACTIONS TOGETHER NOR MAKE THE PURCHASE AND SALE OF
21 511 AND 17 CONTINGENT UPON ANYTHING HAVING TO DO WITH
22 THE DEED RESTRICTION OR EXPANDING THE RIGHTS THAT
23 ALREADY EXISTED TO PARKING ON 601.
24 THE COURT: SO WHAT YOU'RE SAYING IS THAT IF THE
25 UNDERSTANDING CONCERNING THE PARKING SPACES DIDN'T GO
26 THROUGH, THEN THE PURCHASE OF 511 AND 517 WASN'T GOING
27 THROUGH?
28 THE WITNESS: NO. I WAS SAYING THAT WE WERE NOT

74
1 GOING TO CONTINUE NEGOTIATING IF THEY CONTINUED TO
2 INSIST ON INCLUDING 601 AS A CONTINGENCY ON THE PURCHASE
3 OF 511 AND 17.
4 THE COURT: OKAY. PLEASE PROCEED.
5 MR. BEECHEN: THANK YOU, YOUR HONOR.
6 Q NOW, WHILE YOU CAME UP WITH THIS WORDING,
7 IS IT CORRECT THAT YOU DID NOT FEEL THAT YOU WERE
8 QUALIFIED TO PREPARE A DOCUMENT THAT'S RECORDABLE?
9 A THAT'S TRUE.
10 Q NOW -- SO ON OCTOBER 30TH, WHICH IS THE
11 DATE OF THIS AGREEMENT, WAS IT YOUR EXPECTATION THAT THE
12 DEED RESTRICTION THAT APPEARS ON PAGE 527 OF THIS
13 EXHIBIT WAS GOING TO BE RECORDED WITH THE L.A. COUNTY
14 RECORDER?
15 A YES.
16 Q AT SOME POINT THAT YOU HEARD THAT THERE
17 WERE PROBLEMS WITH THE RECORDING OF THIS DOCUMENT;
18 CORRECT?
19 A YES.
20 Q BUT THE TITLE COMPANY WAS EXPRESSING SOME
21 CONCERNS ABOUT IT; CORRECT?
22 A YES.
23 Q AND, EVENTUALLY, YOU TOLD THE ESCROW
24 OFFICER, I THINK THROUGH LISA JOHNSON, "DO NOT RECORD
25 THIS DOCUMENT"; CORRECT?
26 A NOT EXACTLY.
27 Q SO YOU HEARD THE DEPOSITION OF MS. FRANEY
28 YESTERDAY; RIGHT?

75
1 A I DID.
2 Q DID SHE GET IT WRONG? DID LISA JOHNSON
3 NOT TELL HER THAT YOU HAD TOLD LISA JOHNSON, "DO NOT
4 RECORD THIS DOCUMENT"?
5 A PATTY FRANEY WASN'T PRIVY TO THE
6 CONVERSATION BETWEEN LISA AND I. THE END RESULT WAS AN
7 INSTRUCTION NOT TO SEND THE DOCUMENT DOWN, BUT THE
8 PRELUDE TO THAT WAS --
9 Q I DIDN'T ASK THE PRELUDE. I'M SATISFIED
10 WITH YOUR ANSWER. THANK YOU, SIR.
11 THEN YOU ASKED MR. FOLKERT TO DETERMINE WHETHER
12 THE DOCUMENT COULD BE RECORDED; CORRECT? YOU ASKED HIM
13 TO GO DOWN AND TALK TO THE COUNTY RECORDER ABOUT THAT?
14 A I DON'T KNOW IF I ASKED HIM TO DO THAT OR
15 IF HE VOLUNTEERED ON HIS OWN. WE HAD A DISCUSSION, AND
16 WE DECIDED IT WOULD BE A GOOD IDEA IF HE WENT DOWN TO
17 FIND OUT IF IT WAS RECORDABLE OR NOT RECORDABLE.
18 Q THEN YOU FOUND OUT IT WAS NOT RECORDABLE.
19 AT LEAST HE REPORTED BACK IT WAS PROBABLY NOT
20 RECORDABLE.
21 A "PROBABLY" IS THE OPERATIVE WORD. WE
22 STILL DON'T KNOW, BECAUSE IT'S NEVER BEEN SENT DOWN.
23 Q AND THEN YOU AND MR. FOLKERT STARTED TO
24 COME UP WITH A NEW AGREEMENT REGARDING PARKING; CORRECT?
25 A AT THE REQUEST OF MR. BUNGE; CORRECT.
26 Q NOW, YOU SAY "AT THE REQUEST OF
27 MR. BUNGE." IS THAT REQUEST IN WRITING?
28 A IF YOU TAKE ALL OF THE E-MAILS --

76
1 Q SIR --
2 THE COURT: WAIT, WAIT. I'VE STOOD ASIDE WHILE
3 THIS IS GOING BACK AND FORTH, BUT I'M GOING TO STOP IT
4 AT THIS POINT. THIS IS NOT A CONVERSATION. THIS IS AN
5 EXAMINATION, WHICH MEANS THAT THE ONLY THING YOU CAN
6 ANSWER ARE THE QUESTIONS THAT COUNSEL ASKS.
7 IF IT NEEDS FURTHER EXPLANATION, THEN YOUR
8 ATTORNEYS WILL ASK YOU TO GIVE A FURTHER EXPLANATION,
9 BUT YOU CANNOT EXPAND ON THE QUESTION. ONLY GIVE THE
10 ANSWER THAT HE ASKS.
11 THE WITNESS: OKAY. ALL RIGHT.
12 Q BY MR. BEECHEN: MY QUESTION TO YOU, SIR,
13 IS COME -- LET'S SAY, AFTER OCTOBER 30, AFTER THIS
14 AGREEMENT, EXHIBIT 31/EXHIBIT 32, DID THE BUNGES PROVIDE
15 ANYTHING IN WRITING SAYING SOMEHOW THEY WANT TO CHANGE
16 THE DEED RESTRICTION, WHICH WAS PART OF EXHIBIT 31?
17 JUST ASK IF -- IS THERE A WRITING FROM THE BUNGES TO
18 THAT EFFECT?
19 A THERE ARE WRITINGS THAT IMPLY THAT.
20 Q FROM THE BUNGES; CORRECT?
21 A BETWEEN THE BUNGES AND MR. FOLKERT AND
22 MR. FOLKERT AND CORIN KAHN.
23 Q WELL, IN REQUEST NUMBER 17 IN THE NOTICE
24 TO APPEAR AND PRODUCE, I ASKED FOR THOSE WRITINGS. LET
25 ME READ TO YOU WHAT THIS REQUEST IS.
26 "EACH WRITING FROM BUNGE RECEIVED BY DEFENDANTS,"
27 WHICH WOULD HAVE INCLUDED YOU, "DURING THE PERIOD OF
28 OCTOBER 30 IN 2007 AND DECEMBER 31, 2007 IN WHICH,"

77
1 LET'S START OUT -- LETS GO -- I'M SORRY. I'M GOING TO
2 READ FROM REQUEST NUMBER 18.
3 "EACH WRITING FROM BUNGE RECEIVED BY DEFENDANTS
4 DURING THE PERIOD OF OCTOBER 30, 2007, TO DECEMBER 31,
5 2007, IN WHICH BUNGE STATES, IN SUBSTANCE, THAT BUNGE
6 WISHES TO CHANGE THE TERMS FOR PARKING ON THE 601
7 PROPERTY FROM THOSE CONTAINED IN DEED RESTRICTION."
8 DID YOU PRODUCE ANY DOCUMENTS HERE TODAY IN
9 RESPONSE TO THIS NOTICE TO PRODUCE?
10 A I BELIEVE THEY ARE IN THE EXHIBIT BOOKS.
11 Q WHICH ONE?
12 A I DON'T KNOW EXHIBIT NUMBERS OFF THE TOP
13 OF MY HEAD.
14 Q BECAUSE I DON'T -- THERE'S NOTHING THERE.
15 MR. BLECHER: EXCUSE ME, YOUR HONOR. THAT'S A
16 COMMENT, NOT A QUESTION.
17 THE COURT: SUSTAINED.
18 MR. BEECHEN: I'LL WITHDRAW IT.
19 Q DO YOU WANT TO GO THROUGH THOSE -- SO IN
20 OTHER WORDS, YOU'RE SAYING IN THE EXHIBITS, IN THE
21 DEFENDANTS' EXHIBITS, IS A WRITING FROM BUNGE TO THE
22 DEFENDANTS IN WHICH THEY SAY, IN SUBSTANCE, "WE WANT TO
23 CHANGE THE TERMS OF THE 601 DEED RESTRICTION"?
24 A THERE ARE EXHIBITS THAT IMPLY THAT.
25 Q YOU SAY "IMPLY IT." WHAT DO YOU MEAN BY
26 "IMPLY." THIS IS FROM THE BUNGES NOW. WHAT DO YOU MEAN
27 BY "IMPLY"?
28 A THERE ARE WRITINGS THAT TALK ABOUT

78
1 MR. BUNGE GOING DOWN TO THE COASTAL COMMISSION AND
2 HIRING PEOPLE TO LOOK INTO WHAT PARKING REQUIREMENTS HE
3 WOULD HAVE FOR HIS NEW DEVELOPMENT, THAT HE'S HIRED
4 PEOPLE TO DO RESEARCH ON THE PARKING CRITERIA. HE'S
5 ASKING, "HOW'S THE PARKING AGREEMENT COMING? ANY INPUT
6 ON THE PARKING AGREEMENT?" THERE'S A SERIES OF E-MAILS
7 THAT WOULD SHOW THOSE COMMUNICATIONS AND ALSO THAT THE
8 AGREEMENT WAS BEING TENDERED TO MR. KAHN AND MR. BUNGE.
9 Q NOW, YOU THEN PUT TOGETHER -- YOU THEN PUT
10 TOGETHER -- AND YOU -- YOU AND MR. FOLKERT GO BACK AND
11 FORTH TRYING TO COME UP WITH A NEW AGREEMENT REGARDING
12 PARKING; CORRECT? THIS IS AFTER -- THIS IS AFTER
13 NOVEMBER 20 -- ACTUALLY, I THINK AFTER NOVEMBER 27TH,
14 2007, YOU AND MR. FOLKERT GO BACK AND FORTH TRYING TO
15 COME UP WITH A NEW AGREEMENT REGARDING PARKING; CORRECT?
16 A WE WERE WORKING ON PUTTING TOGETHER
17 VARIOUS CONCEPTS FOR MR. BUNGE TO LOOK AT AND SEE IF IT
18 ADDRESSED WHAT HE WAS AFTER.
19 Q NOW, LET'S TAKE A LOOK AT EXHIBIT 65,
20 PLEASE. THIS IS THE DOCUMENT THAT YOU ULTIMATELY ASKED
21 TED FOLKERT TO PROVIDE TO THE BUNGES; CORRECT?
22 A THIS IS ONE OF MANY.
23 Q THIS IS THE FIRST ONE?
24 A I'M NOT SURE WHEN IT WAS PROVIDED TO THE
25 BUNGES.
26 Q WELL, DO YOU KNOW OF ONE THAT WAS ANY
27 EARLIER -- BESIDES AFTER OCTOBER 30, 2000 -- LET'S CALL
28 IT AFTER NOVEMBER 27 WHEN YOU STARTED WORKING ON A NEW

79
1 AGREEMENT, ARE YOU AWARE OF ANY DOCUMENT PRIOR TO THIS
2 ONE THAT YOU PROVIDED TO THE BUNGES?
3 A I DON'T KNOW THE DATE OF THIS ONE. I'D
4 HAVE TO LOOK AT THEM AND SEE, BECAUSE THERE WAS -- THEY
5 EVOLVED WITH DISCUSSIONS BACK AND FORTH WITH THE BUNGES,
6 AND THE TERMS AND CONDITIONS KEPT EVOLVING. I'D HAVE TO
7 SORT OF LOOK AT THEM AND SEE. IT WAS ALL A DRAFT, AND
8 WE WERE TRYING TO WORK IT OUT.
9 Q MY QUESTION, SIR, IS THAT ARE YOU AWARE OF
10 ANY ONE, EARLIER ONE, PRIOR TO DECEMBER 28, 2007, WHICH
11 YOU PROVIDED TO THE BUNGES? BESIDES THIS ONE
12 EXHIBIT 65?
13 A I'M A LITTLE CONFUSED. WAS THIS THEN
14 PROVIDED ON DECEMBER 28?
15 Q ACCORDING TO MR. BUNGE, IT WAS. LET'S
16 MOVE ON. DID YOU DRAFT THIS DOCUMENT?
17 A IN LARGE PART, I DID. THIS MAY HAVE TED'S
18 INPUT ON IT AS WELL FROM --
19 Q SO THIS IS THEN BASICALLY A CREATION OF
20 YOU AND TED FOLKERT.
21 A AND MR. BUNGE.
22 Q MR. BUNGE HAD SEEN THIS DOCUMENT BEFORE
23 YOU PROVIDED IT TO HIM ON DECEMBER 28?
24 A NO. THE TERMS IN IT WERE THE TERMS THAT
25 MR. BUNGE HAD BEEN ASKING FOR SINCE SEPTEMBER AND THEN
26 AGAIN IN OCTOBER AND THEN AT OR ABOUT THE TIME THAT THE
27 TITLE COMPANY SAID THE PARKING DEED RESTRICTION MAY NOT
28 BE RECORDABLE.

80
1 Q WELL, LET'S LOOK AT WHAT YOU DRAFTED --
2 YOU AND MR. FOLKERT DRAFTED. LET'S FIRST GO TO
3 RECITAL D.
4 A OKAY.
5 Q IT SAYS "THE RIGHTS AND OBLIGATIONS
6 ESTABLISHED BY THE COASTAL COMMISSION COULD BE
7 ELIMINATED BY THE OWNERS OF 601 OR BY THE CHANGE OF USE
8 OF 511 AND/OR 517." DO YOU SEE THAT?
9 A YES.
10 Q DID I READ THAT CORRECTLY?
11 A YOU DID.
12 Q AND YOU WROTE THOSE WORDS? YOU WROTE
13 THOSE TERMS?
14 A I DID.
15 Q SO --
16 A IT'S NOT A TERM. IT'S A RECITAL, AND I
17 WROTE IT.
18 Q WAS IT YOUR BELIEF, WHENEVER YOU WROTE
19 THIS, THAT, IN FACT, THE COASTAL PERMIT COULD BE
20 ELIMINATED BY THE OWNERS OF 601?
21 A NO, IT'S NOT MY BELIEF THEN OR NOW. IT'S
22 SOMETHING THAT ONE OF THE PEOPLE THAT WAS TRYING TO BUY
23 601 SAID IT WAS HIS BELIEF THAT IT COULD BE. AND THAT
24 WAS AT THE SAME TIME THIS WAS BEING DRAFTED. SO IT'S
25 SOMETHING I PUT IN THERE JUST IN CASE, BECAUSE IT'S
26 SOMETHING WE WANTED TO MAKE SURE COULDN'T BE -- COULDN'T
27 OCCUR.
28 Q SO WHILE YOU WROTE THIS RECITAL DEED, YOU

81
1 DIDN'T THINK IT WAS A TRUE STATEMENT. IS THAT YOUR
2 TESTIMONY?
3 A I'M NOT SURE IF IT IS OR NOT. AS I SIT
4 HERE TODAY, AND THEN -- I DON'T THINK -- I DON'T BELIEVE
5 THAT A BUYER OR AN OWNER OF 601 COULD ARBITRARILY
6 ELIMINATE THE PARKING. BUT I'M NOT A LAWYER; SO I DON'T
7 KNOW FOR SURE.
8 THERE WAS A GUY NAMED DOMINION AP DEVELOPMENT WHO
9 FELT THE WAY THE COASTAL PERMIT WAS WORDED THAT HE COULD
10 DO IT, AND WE HAD DISCUSSIONS ABOUT IT, AND I TOLD HIM
11 WE WOULD RECORD SOMETHING TO PRECLUDE YOU FROM DOING IT.
12 WE CAN'T ALLOW THAT TO HAPPEN. AND IF YOU'LL LOOK IN
13 THE E-MAIL CHAIN, YOU'LL SEE I DISAGREE WITH YOUR
14 INTERPRETATION. SO I DISAGREED THEN. I DON'T THINK YOU
15 CAN NOW, BUT TO BE EXTRA CAUTIOUS, WE PUT IT IN THERE.
16 SO WE WANT TO COVER IT THAT THAT CAN'T HAPPEN IN THE
17 FUTURE.
18 Q OKAY. LET'S LOOK AT WHAT ELSE YOU
19 INSERTED IN THIS AGREEMENT. FIRST OF ALL, UNDER THE
20 ORIGINAL AGREEMENT, EXHIBIT 31, THE COST FOR THIS DEED
21 RESTRICTION WAS GOING TO BE $100,000, AND THAT'S NOW
22 BEEN INCREASED TO $200,000; IS THAT CORRECT?
23 A THAT'S CORRECT.
24 Q OKAY. AND THEN THE NUMBER OF PARKING
25 SPACES HAVE BEEN REDUCED, BECAUSE, UNDER THE DEED
26 RESTRICTION, MR. BUNGE WOULD HAVE RECEIVED 38 SPACES.
27 AND, UNDER THIS AGREEMENT YOU DRAFTED, EXHIBIT 65, HE
28 NOW GETS 30 SPACES; CORRECT?

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