Bunge Nsmail 3

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 26, 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 26, 2012
3 CHRONOLOGICAL AND ALPHABETICAL INDEX OF WITNESSES
4
5 STEPHEN GAGGERO, CALLED BY THE PLAINTIFF PAGE
CROSS EXAMINATION BY MR. BLECHER (RESUMED) 1
6 REDIRECT EXAMINATION BY MR. BEECHEN 71
RECROSS EXAMINATION BY MR. BLECHER 103
7
8
9 EXHIBITS
10 FOR IN
IDENTIFICATION EVIDENCE
11 PLAINTIFFS' PAGE PAGE
12 120 E-MAIL 3 4
13 122 E-MAIL STRING 4 4
14 123 E-MAIL 7 8
15 136 - 20 21
16 141 E-MAIL 21 21
17 144 E-MAILS 22 22
18 150 E-MAILS 23 23
19 152 E-MAIL 24 24
20 158 E-MAIL 25 26
21 159 E-MAIL 26 26
23 188 E-MAIL 37 37
24 190 E-MAIL 39 43
25 192 E-MAIL 43 43
26 195 DOCUMENT 45 45
28 197 - 46 46

1 199 E-MAIL 49 49
2 200 - 54 54
3 202 E-MAIL 53 54
4 205 LETTER 55 57
5 213 - 60 60
6 214 E-MAILS 60 60
7 218 - 61 -
8 219 LETTER 62 62
9 220 LETTER 64 64
10 221 LETTER - 65
11 222 LETTER - 66
12 223 RESPONSE TO 222 - 67
13 224 LETTER - 67
14 225 LETTER 68 68
15 226 LETTER 69 69
17
18
19
20
21
22
23
24
25
26
27
28

1
1 SANTA MONICA, CALIFORNIA; THURSDAY, JANUARY 26, 2012,
2 10:10 A.M.
3 * * * *
4
5 THE COURT: ALL RIGHT. WE'RE ON THE RECORD BUNGE
6 VERSUS 511 OFW, ET AL. I'LL ASK THE ATTORNEYS ONCE
7 AGAIN TO STATE THEIR APPEARANCE, PLEASE.
8 MR. POLK: CHRIS POLK, YOUR HONOR, FOR
9 PLAINTIFFS, AND PAUL BEECHEN AS WELL FOR PLAINTIFF.
10 MR. BLECHER: GOOD MORNING, YOUR HONOR. MAXWELL
11 BLECHER AND JOHN ANDREWS FOR DEFENDANT AND
12 CROSS-COMPLAINANT.
13 THE COURT: THANK YOU. ALL RIGHT. WE'RE
14 PROCEEDING WITH MR. GAGGERO; IS THAT CORRECT?
15 MR. BLECHER: CORRECT.
16 THE COURT: SIR, WOULD YOU PLEASE TAKE THE
17 WITNESS STAND ONCE MORE. AND I'LL REMIND YOU, YOU ARE
18 STILL UNDER OATH. LET'S PROCEED.
19
20 CROSS EXAMINATION (RESUMED)
21 BY MR. BLECHER:
22 Q MR. GAGGERO, JUST FOR A MOMENT, WOULD YOU
23 GO BACK AND LOOK AT EXHIBIT 18. IN EXHIBIT 18, WHICH IS
24 IN EVIDENCE, IN THE FIRST LINE, YOU INDICATED THAT THERE
25 MUST BE A DOCUMENT IN FINAL RECORDABLE FORM WHICH THE
26 BUYER'S ATTORNEY SHOULD BE ABLE TO RECORD BY NOON THAT
27 DAY. DO YOU SEE THAT?
28 A YES.

2
1 Q SO YOU ASKED FOR A RECORDABLE DOCUMENT?
2 A YES.
3 Q NOW, MOVE, IF YOU CAN, TO EXHIBIT 118.
4 A OKAY.
5 Q E-MAIL FROM MR. FOLKERT TO YOU. IT SAYS,
6 "ATTACHED IS THEIR PROPOSED RECORDING DOCUMENT." DO YOU
7 SEE THAT?
8 A YES.
9 Q AND IS THAT THE FIRST DOCUMENT YOU
10 RECEIVED FROM MR. BUNGE OR HIS LAWYER THAT PURPORTED TO
11 RESPOND TO YOUR REQUESTS FOR RECORDABLE DEED
12 RESTRICTION?
13 A I DON'T KNOW IF I WAS ASKING FOR A DEED
14 RESTRICTION, BUT A DOCUMENT IN RECORDABLE FORM THAT
15 OUTLINED WHAT THEIR PARKING DESIRES WERE, WHICH WERE TO
16 PRESERVE THE STATUS QUO, IF THEY CHANGED USE.
17 Q OKAY. NOW, IF YOU TURN THE PAGE AND TELL
18 ME IF THAT'S AN E-MAIL THAT -- AN E-MAIL YOU SENT TO
19 MR. FOLKERT AND YOU RECEIVED THE DOCUMENT MARKED AS
20 EXHIBIT 118.
21 THE COURT: I'M SORRY. YOU SAID TURN TO PAGE TO
22 WHAT?
23 MR. BLECHER: 119.
24 THE WITNESS: YES, THAT'S MY RESPONSE TO THIS.
25 Q BY MR. BLECHER: WHEN YOU SAY "OUR
26 CONCERNS HAVE BEEN VALIDATED," CAN YOU ELABORATE JUST A
27 BIT ON WHAT YOU HAD IN YOUR HEAD?
28 A YES. OUR CONCERNS WERE THAT THEY WERE

3
1 GOING TO EXPAND OR ATTEMPT TO EXPAND THE PARKING RIGHTS
2 THAT WERE GRANTED UNDER THE COASTAL PERMIT AND THAT THEY
3 WERE GOING TO TRY AND LINK 511 OWNERSHIP, 517 OWNERSHIP,
4 AND 601 OWNERSHIP. AND THAT'S AFTER I HAD INDICATED
5 THEY HAD TO BE SEPARATE DEALS. 511 AND 517 HAVE NO
6 RIGHT TO COMMIT FOR OR ENTER INTO AN AGREEMENT FOR THE
7 OWNER OF 601 AND WERE NOT GOING TO EXPAND THE PARKING
8 RIGHTS THAT ARE ALREADY A RECORDED CONDITION ON THE LOT.
9 Q DID YOU FIND THAT THE PURPORTED PARKING
10 LICENSE AGREEMENT, WHICH IS EXHIBIT 118, LINKED THE TWO
11 TRANSACTIONS TOGETHER?
12 A IT WAS ATTEMPTING TO DO SO, YES.
13 Q DID YOU ALSO FIND THAT IT SUBSTANTIALLY
14 EXPANDED THE PARKING RIGHTS THAT YOU THOUGHT THE PARTIES
15 HAD DISCUSSED OR AGREED UPON?
16 A YES. IT WENT WAY BEYOND THE STATUS QUO,
17 WHICH IS WHAT THEY WERE -- WHAT WAS REPRESENTED TO ME AS
18 ALL THEY WANTED.
19 Q OKAY. THEN IN EXHIBIT 120. MARKED 120,
20 YOUR HONOR.
21 THE COURT: ONE MOMENT
22 THE WITNESS: I'M ON 119.
23 THE COURT: WELL, WE'LL MARK 120 FOR
24 IDENTIFICATION. PLEASE PROCEED. GO AHEAD.
25 MR. BLECHER: THANK YOU.
26 Q IS THAT AN E-MAIL YOU SENT TO MR. FOLKERT
27 ON OR ABOUT THE DATE IT BEARS? YOU MAKE A STATEMENT,
28 "ATTORNEYS ARE OVERREACHING." DO YOU SEE THAT?

4
1 A YES.
2 Q AND THEN YOU SAY, "GET THE RESPONSE
3 TOMORROW, PLEASE. WE HAVE TO MAKE CERTAIN DECISIONS."
4 WHAT WAS THE URGENCY OF GETTING A RESOLUTION WITH
5 MR. BUNGE ABOUT PARKING?
6 A WE WERE IN NEGOTIATIONS BACK AND FORTH
7 WITH OTHER PARTIES AS WELL AS MR. BUNGE ON, I THINK,
8 THREE OF THE FOUR PROPERTIES THERE. SO WE WERE TRYING
9 TO PICK THE BEST HORSE.
10 Q NOW, LOOK AT EXHIBIT 122. TELL ME IF
11 THAT'S A STRING OF E-MAILS BETWEEN AND YOU MR. FOLKERT
12 ON THE SUBJECT OF THE DEED RESTRICTION.
13 A YES, IT IS.
14 MR. BLECHER: WE'D ASK THE COURT TO MARK AND
15 ADMIT 122.
16 MR. BEECHEN: NO OBJECTION.
17 THE COURT: ALL RIGHT. 122 IS MARKED AND
18 ADMITTED. WHAT ABOUT 120? IS THAT -- IS THERE A
19 REQUEST TO ADMIT THAT?
20 MR. BLECHER: PLEASE, YOUR HONOR. AND THANK YOU
21 FOR REMINDING ME.
23 THE COURT: ALL RIGHT. IT COMES IN. BEFORE YOU
24 GO ON, I JUST WANT TO MAKE SURE I UNDERSTAND SOMETHING
25 THAT WAS MENTIONED YESTERDAY.
26 THE DEED RESTRICTION LANGUAGE THAT WE'VE BEEN
27 TALKING ABOUT, DID YOU DRAFT THAT, OR DID YOU HAVE AN
28 ATTORNEY DRAFT THAT?

5
1 THE WITNESS: I DRAFTED THAT LAST LITTLE PART. I
2 CAN SHOW YOU.
3 THE COURT: OKAY.
4 THE WITNESS: AND THEN MR. KAHN, MR. BUNGE'S
5 ATTORNEY, DID THE REST OF IT TO DO WHATEVER HE HAD TO DO
6 TO MAKE IT RECORDABLE. ALL I WAS CONCERNED WITH WAS
7 THIS LANGUAGE RIGHT HERE.
8 THE COURT: CAN YOU READ THE LANGUAGE?
9 THE WITNESS: YES.
10 MR. BLECHER: EXCUSE ME. COULD YOU JUST
11 REFERENCE WHICH EXHIBIT.
12 THE COURT: 31.
13 THE WITNESS: I'M AT EXHIBIT 31, BATES 527.
14 MR. BLECHER: WE'LL COVER THIS, IF WE LOOK AT THE
15 NEXT EXHIBIT.
16 THE COURT: WELL, I NEED MY QUESTION ANSWERED.
17 SO WHAT IS THE LANGUAGE?
18 THE WITNESS: "THAT CERTAIN COASTAL DEVELOPMENT
19 PERMIT 589059 RECORDED WITH THE COUNTY RECORDER AS
20 INSTRUMENT NUMBER 89-11-04-160 IS HEREBY SUPPLEMENTED AS
21 FOLLOWS:
22 "IN THE EVENT THERE IS ANY CHANGE IN USE AT 511,
23 517, 523" -- AND THEN I DID NOT ADD THAT 601, THEY
24 DID -- "OCEAN FRONT WALK, SAID CHANGE IN USE SHALL NOT
25 INVALIDATE THE PARKING RIGHTS AND OBLIGATIONS CONVEYED
26 BY COASTAL PERMIT NUMBER 589059."
27 THE COURT: AND YOU DRAFTED THAT?
28 THE WITNESS: THAT WAS -- TWO LITTLE BITS RIGHT

6
1 THERE I DRAFTED.
2 THE COURT: LET ME ASK YOU, WHY WAS THERE ANY
3 NEGOTIATION OR DISCUSSION ABOUT SIMPLY MAKING THAT PART
4 OF THE AGREEMENT BETWEEN THE BUNGES AND THE 601 OWNERS?
5 JUST MAKING AN AGREEMENT WITHOUT ISSUES OF RECORDATION
6 ABOUT THE FUTURE USE OF THE PARKING?
7 THE WITNESS: I THINK -- I THINK WE THOUGHT THIS
8 WAS AN AGREEMENT, BECAUSE BUNGE WANTED IT SIGNED BEFORE
9 WE WENT INTO ESCROW. BECAUSE HE SAID THE TWO DEALS
10 WEREN'T LINKED, AND HE WANTED TO MAKE SURE THAT THIS
11 COULDN'T BE BACKED OUT OF. WE THOUGHT -- WE SAID FINE.
12 SO WE HAD JOE SIGN THIS BEFORE IT EVEN WENT TO ESCROW,
13 BECAUSE WE THOUGHT IT WAS SORT OF AN AGREEMENT. BUT --
14 THE COURT: WHAT DO YOU MEAN BY "SORT OF AN
15 AGREEMENT"? THE QUESTION -- WHAT I'M STRUGGLING WITH
16 IS: WAS THERE A MEETING OF THE MINDS ON A PARTICULAR
17 AGREEMENT TO DO A PARTICULAR THING? AND SO I'M ASKING:
18 WHAT WAS YOUR UNDERSTANDING OF THIS DOCUMENT?
19 THE WITNESS: 601 OCEAN FRONT WALK COMMITTED BY
20 JOE'S SIGNATURE TO ALLOW THE STATUS QUO TO REMAIN EVEN
21 IF MR. BUNGE CHANGED THE USE AND EVEN IF, BECAUSE OF
22 THAT CHANGE IN USE, THE COASTAL PERMIT AND THE PARKING
23 THEREIN WENT AWAY FOR SOME REASON. THE 601 OWNERS WOULD
24 HONOR THE CONDITIONS IN THAT COASTAL PERMIT.
25 THE COURT: OKAY. THANK YOU. APPRECIATE THAT.
26 LET'S PROCEED. I'M SORRY, MR. BLECHER.
27 MR. BLECHER: NO, NO. I THINK WHAT WILL HELP ON
28 THAT ISSUE, YOUR HONOR.

7
1 Q IF YOU LOOK AT EXHIBIT 123 AND THAT'S AN
2 E-MAIL FROM YOU TO MR. FOLKERT OF SEPTEMBER 17. SEE
3 THAT?
4 A YES.
5 Q AND YOU RECALL SENDING THAT AND THE
6 ATTACHMENT?
7 A 122 OR 123?
8 Q 123.
9 THE COURT: DO YOU WISH THAT MARKED?
10 MR. BLECHER: EXCUSE ME?
11 THE COURT: DO YOU WISH THAT MARKED?
12 MR. BLECHER: YES.
13 THE COURT: WE'LL MARK THAT.
14 THE CLERK: WHAT NUMBER?
15 THE COURT: 123.
16 Q BY MR. BLECHER: DID YOU PREPARE AND SEND
17 THE E-MAIL AND THE ATTACHMENT THAT CONSTITUTE EXHIBIT
18 123?
19 A YES, I DID.
20 MR. BLECHER: WE'D OFFER 123 INTO EVIDENCE.
21 THE WITNESS: THIS IS EXACTLY WHAT I SENT TO HIM
22 WITH THE BLANKS.
23 Q BY MR. BLECHER: THAT'S WHAT I WANTED TO
24 ESTABLISH. THIS IS THE FIRST TIME THAT THE LANGUAGE
25 ACTUALLY BECAME PART OF EXHIBIT 32 EMERGED; CORRECT?
26 A YES.
27 Q AND YOU CREATED THAT?
28 A I DID.

8
1 Q AND THE ONLY CHANGE BETWEEN WHAT EXISTS ON
2 123 AND WHAT BECAME THE FINAL VERSION OF EXHIBIT 32 IS
3 THAT MR. BUNGE OR HIS LAWYERS ADDED LOT 601; CORRECT?
4 A AND THEY FILLED IN THE BLANKS.
5 Q FILLED IN THE BLANKS, BUT THEY ADDED 601.
6 A YES.
7 THE COURT: WAIT A MINUTE. THERE WAS A REQUEST
8 TO ADMIT THIS. IS THERE ANY OBJECTION?
9 MR. BEECHEN: NO. I WAS JUST WAITING FOR --
10 THE COURT: SO WAS I. ALL RIGHT. 123 IS
11 ADMITTED. LET'S PROCEED.
12 Q BY MR. BLECHER: NOW, IN RESPONSE TO THAT,
13 I'D LIKE YOU TO LOOK AT EXHIBIT 126. AND THAT'S AN
14 E-MAIL FROM MR. FOLKERT TO YOU, SAME DAY, BUT FOUR HOURS
15 LATER. SEE THAT?
16 A YES.
17 Q AND IT STATES THAT, QUOTE, "HERE IS
18 BUNGE'S ATTORNEY'S VERSION." DO YOU SEE THAT?
19 A YES.
20 Q AND ATTACHED TO EXHIBIT 126, ATTACHED TO
21 THE E-MAIL IS A DOCUMENT CAPTIONED "PARKING LICENSE
22 AGREEMENT." DO YOU SEE THAT?
23 A YES.
24 Q DID YOU THINK THIS DOCUMENT FROM
25 MR. BUNGE'S LAWYER HAD THE SAME DEFICIENCIES OR PROBLEMS
26 YOU HAD EARLIER DESCRIBED IN RESPECT TO EXHIBIT 122?
27 MR. BEECHEN: OBJECTION; LEADING, YOUR HONOR.
28 THE COURT: SUSTAINED. LEADING.

9
1 Q BY MR. BLECHER: WERE YOU CONTENT WITH
2 THIS PARKING LICENSE AGREEMENT?
3 A NO.
4 Q AND DO YOU RECALL LOOKING AT THE FIRST
5 VERSION FROM MR. BUNGE'S LAWYER, WHICH IS EXHIBIT 122?
6 A YES.
7 Q AND DO YOU REMEMBER WHAT THE PROBLEMS WITH
8 THAT WAS?
9 A YES.
10 Q WHAT WERE THEY?
11 A THAT THEY WERE TRYING TO LINK THE TWO
12 DEALS TOGETHER, AND THEY WERE TRYING TO CAUSE THE OWNERS
13 OF 511 AND 517 TO ENTER INTO AN AGREEMENT FOR THE OWNER
14 OF 601 OCEAN FRONT WALK.
15 Q AND DID YOU HAVE THE SAME PROBLEM WITH
16 EXHIBIT 126 WHEN YOU SAW IT?
17 A YES.
18 THE COURT: WHEN YOU SAY "LINKED TOGETHER," DO
19 YOU MEAN MAKE ONE A CONTINGENCY OF THE OTHER?
20 THE WITNESS: TWO THINGS. ONE, A CONTINGENCY OF
21 THE OTHER, AND THEY'RE ASKING THE 511 AND 517 OWNERS TO
22 CONVEY RIGHTS THAT THE 511 AND 517 OWNERS DIDN'T HAVE,
23 BECAUSE THEY WEREN'T THE OWNERS OF 601.
24 IN OTHER WORDS, 511 AND 517, IN THAT CONTRACT,
25 DON'T HAVE THE RIGHT TO CONVEY RIGHTS THAT ANOTHER
26 ENTITY OWNS, THE PROPERTY. AND SO -- I CAN'T SELL YOUR
27 HOUSE WITHOUT -- YOU KNOW WHAT I MEAN? YOU HAVE TO SELL
28 YOUR HOUSE. IF I WANTED TO PUT A DEED RESTRICTION ON

10
1 YOUR PROPERTY, YOU HAVE TO AGREE.
2 THE COURT: ALL RIGHT. LET'S PROCEED.
3 Q BY MR. BLECHER: AT THIS POINT, LET'S TAKE
4 A SHORT DETOUR AND LOOK AT EXHIBITS 31 AND 32. IS 31
5 THE FINAL VERSION OF THE DEED RESTRICTION AGREEMENT?
6 A YES.
7 Q AND IS 32 THE FINAL VERSION OF THE
8 PURCHASE AND SALE AGREEMENT OF 511 AND 517 --
9 A LET ME JUST BACK UP ON 31, BECAUSE I'M NOT
10 POSITIVE ABOUT ONE POINT. I KNOW AT ONE POINT PATTY
11 FRANEY IN THE ESCROW OFFICE SAID THERE WAS SOMETHING
12 WRONG WITH THE DEED RESTRICTION, EXHIBIT D, THAT --
13 SOMETHING ABOUT THE TITLE OF IT, LIKE WHO IT WAS GOING
14 TO BE MAILED TO OR THE VESTING MAYBE. AND SO I THINK
15 THERE WAS SOME CHANGES, BUT I DON'T KNOW IF THIS WAS
16 BEFORE OR AFTER HER INVOLVEMENT WITH THE BUNGES IN THAT
17 REGARD. THEY WORKED IT OUT. I JUST DON'T KNOW IF THIS
18 WAS PRE OR POST THAT.
19 Q BUT IS 31 WHAT YOU UNDERSTOOD TO BE THE
20 FINAL VERSION OF THE DEED RESTRICTION BETWEEN BOARDWALK
21 SUNSET AND MR. AND MRS. BUNGE?
22 A YES.
23 Q LOOK AT EXHIBIT 32 AND TELL ME WHETHER YOU
24 UNDERSTAND THAT TO BE THE FINAL VERSION OF THE PURCHASE
25 AGREEMENT BETWEEN MR. AND MRS. BUNGE AND THE OWNERS OF
26 511 AND 517?
27 A YES.
28 Q NOW, IS THERE ANYWHERE, MR. GAGGERO, WHERE

11
1 THE PERFORMANCE OF THE AGREEMENT EVIDENCED BY EXHIBIT 31
2 IS MADE CONDITIONED UPON OR CONDITIONED ON THE
3 PERFORMANCE OF DOCUMENT 32?
4 Q OBJECTION, YOUR HONOR, SECONDARY EVIDENCE
5 RULE, IF HE'S JUST ASKING WHAT THE DOCUMENTS STATE.
6 THE COURT: ONE MOMENT. OVERRULED. YOU MAY
7 ANSWER.
8 THE WITNESS: NO, THERE IS NO CONDITION IN EITHER
9 THE DOCUMENTS THAT LINK THEM TO THE OTHER DOCUMENT OR
10 MAKE THEM CONTINGENT UPON THE OTHER DOCUMENT.
11 THE COURT: LET ME ASK A QUESTION. YOU'VE
12 DESCRIBED YESTERDAY WHO THE PRINCIPALS OF THE 601
13 PROPERTY WERE AT THE TIME WHO HAD TO MAKE THE DECISION
14 ON WHAT WOULD HAPPEN TO 601. WHO ARE THE PRINCIPALS OF
15 511 AND 517 WHO WOULD MAKE THE DECISION ABOUT THE SALE?
16 THE WITNESS: JOE PRASKE AND FINANCIAL ADVISORS.
17 THE COURT: WHO ARE THE FINANCIAL ADVISORS?
18 THE WITNESS: JIM WALTERS IS THE C.P.A., THE
19 FINANCIAL ADVISOR INVOLVED IN THAT, AND SEVERAL TAX
20 ATTORNEYS THAT I DON'T KNOW THAT JOE DEALS WITH.
21 THE COURT: ARE THEY EMPLOYEES OR PRINCIPALS OF
22 THOSE CORPORATIONS -- OF THOSE PARTNERSHIPS?
23 THE WITNESS: THEY ARE CONSULTANTS TO JOE, AND
24 JOE IS THE GENERAL PARTNER OR MANAGING MEMBER OF THOSE
25 ENTITIES.
26 THE COURT: ALL RIGHT. CONSULTANTS ARE NOT
27 MEMBERS OR DECISION MAKERS. THEY ARE --
28 THE WITNESS: CORRECT.

12
1 THE COURT: -- SIMPLY ADVISORS; IS THAT CORRECT?
2 THE WITNESS: CORRECT.
3 THE COURT: SO MR. PRASKE IS THE ONE WHO WOULD
4 MAKE THE DECISION FOR THE LIMITED PARTNERSHIP?
5 THE WITNESS: YES. AS FAR AS AN OVERALL ASSET
6 MANAGEMENT STRATEGY TO SELL OR KEEP AS AN INCOME
7 PROPERTY, THAT WOULD BE LEFT UP TO MR. PRASKE. AND THEN
8 AFTER THAT MAKING IT HAPPEN, THE NUTS AND BOLTS OF IT
9 WOULD BE LEFT TO PACIFIC COAST MANAGEMENT, AND THAT'S
10 ME. THERE'S REALLY AN ASSET MANAGER FOR PRASKE'S
11 PORTFOLIO. THEY HOLD SOME TRUSTS FOR LOTS OF DIFFERENT
12 ENTITIES.
13 THE COURT: OKAY. I UNDERSTAND THAT. OKAY.
14 LET'S PROCEED.
16 Q MR. GAGGERO, IF YOU'D LOOK NOW -- I THINK
17 JUST TO MAKE THE RECORD COMPLETE, IT'S ALSO TRUE THAT
18 THE PERFORMANCE OF THE PURCHASE AND SALE AGREEMENT,
19 EXHIBIT 32, IS NOT IN ANY WAY CONTINGENT AS FAR AS YOU
20 KNOW OR ARE AWARE ON THE PERFORMANCE OF EXHIBIT 31?
21 MR. BEECHEN: OBJECTION; LEADING.
22 THE COURT: SUSTAINED.
23 Q BY MR. BLECHER: CAN YOU TELL US WHETHER
24 YOU HAVE AN UNDERSTANDING OF WHETHER THE PERFORMANCE OF
25 THE PURCHASE AND SALE AGREEMENT IS IN ANY WAY
26 CONDITIONED UPON OR CONTINGENT UPON THE PERFORMANCE OF
27 THE DEED RESTRICTION AGREEMENT, WHICH IS EXHIBIT 31?
28 A IN MY OPINION, IT'S NOT, BECAUSE I WENT TO

13
1 GREAT LENGTHS TO MAKE SURE IT WASN'T THE MAIN FOCUS OF
2 THE NEGOTIATIONS FOR A MONTH AND A HALF OR TO ENSURE
3 THAT THEY WERE NOT CONTINGENT UPON ONE ANOTHER AND THOSE
4 WERE THE TERMS THAT WERE NEGOTIATED --
5 Q I WANT TO SEE IF WE CAN CLOSE THE CIRCLE
6 ON THIS. AT ANY TIME IN THE COURSE OF THESE WHOLE
7 NEGOTIATIONS DID MR. BUNGE OR ANYBODY REPRESENTING HIM
8 -- MR. FOLKERT, MR. KAHN, ANYONE -- SAY, "I INSIST THAT
9 THESE TWO AGREEMENTS BE MADE CONDITIONED UPON EACH
10 OTHER."
11 A NO.
12 Q NOW, LET ME ASK YOU TO LOOK AT EXHIBIT 22,
13 WHICH APPEARS TO BE YOUR (INAUDIBLE) TO EXHIBIT 126.
14 A BY THE WAY, YOUR LAST QUESTION, THEY TRIED
15 THAT, BUT THEY DIDN'T SAY, "WE INSIST, OR THERE'S NO
16 DEAL." THEY KEPT TRYING TO MAKE THEM CONTINGENT ON ONE
17 ANOTHER, AND WE KEPT INSISTING THAT WE WOULD NOT ALLOW
18 IT.
19 Q I UNDERSTAND. YOU MADE THAT POINT. MY
20 QUESTION IS: DID ANYBODY EVER SAY TO YOU POINT BLANK,
21 "WE WANT THESE TWO AGREEMENTS MADE CONDITIONED UPON EACH
22 OTHER"?
23 A NO.
24 Q NOW, EXHIBIT 22, IS THAT YOUR RESPONSE TO
25 THE BUNGE PROPOSAL THAT WE LOOKED AT AS EXHIBIT 125?
26 EXCUSE ME, I THINK IT'S 126. YOU'VE GOT 126. IS
27 EXHIBIT 22 YOUR REPLY TO THAT?
28 A I DON'T THINK SO. WHAT EXHIBIT? 20?

14
1 Q EXHIBIT 22.
2 A 22, I'M SORRY. THAT'S MY MISTAKE.
3 Q THAT'S AN E-MAIL FROM YOU TO MR. FOLKERT,
4 SEPTEMBER 17 AT 2:48.
5 A YES, THAT'S MY --
6 Q THAT'S YOUR RESPONSE TO EXHIBIT 126, IS IT
7 NOT?
8 A THAT'S CORRECT. "SIMPLY UNACCEPTABLE.
9 I'LL TAKE IT AS A PASS ON PURCHASING THE PROPERTY.
10 SORRY IT DIDN'T WORK OUT."
11 THE COURT: WHEN YOU SAY "THE PROPERTY," WHAT
12 WERE YOU REFERRING TO?
13 THE WITNESS: DEPARTMENT AND THE STORAGE, 511 AND
14 517.
15 THE COURT: SO BECAUSE YOU COULDN'T COME TO AN
16 AGREEMENT ON THE DEED RESTRICTION, THAT WAS A PASS ON
17 511 AND 517?
18 THE WITNESS: YEAH. THEY KEPT TRYING TO LINK THE
19 TWO TOGETHER, AND WE TOLD THEM THEY COULDN'T LINK THEM
20 TOGETHER. IF THEY WANTED TO EXPAND THEIR PARKING RIGHTS
21 OR BUY RIGHTS OR -- THEY WOULD HAVE TO DEAL WITH 601
22 INDEPENDENTLY, AND THEY WOULD HAVE TO STRUCTURE A
23 SEPARATE DEAL WITH 601. BECAUSE WE HAD PEOPLE THAT
24 WANTED TO BUY 511 AND USE IT AS AN APARTMENT. WE HAD
25 PEOPLE THAT WANTED TO BUY 517 AND USE IT AS STORAGE.
26 AND BUNGE WAS TRYING TO TIE IT TOGETHER AND EXPAND THE
27 PARKING RIGHTS TO 24 HOURS, SEVEN DAYS A WEEK, AND
28 EXCLUSIVE USE NO MATTER WHAT. LOTS OF OTHER TERMS.

15
1 THE COURT: OKAY. SO AT THAT --
2 MR. BLECHER: SO -- YOU'RE NOT LISTENING TO US.
3 WE CANNOT TIE THIS TOGETHER. WE WILL SELL THESE TWO FOR
4 WHAT THEY ARE, AND YOU CAN NEGOTIATE SEPARATELY WITH
5 601.
6 THE COURT: SO -- BUT HAVEN'T YOU TIED THEM
7 TOGETHER THROUGH YOUR RESPONSE IN YOUR E-MAIL BY SAYING
8 BECAUSE WE CAN'T GET TOGETHER ON A DEED RESTRICTION,
9 THEN THE DEAL ON 511 AND 517 ARE DONE?
10 THE WITNESS: WELL, IF I HAVE THE HAT OF AN ASSET
11 MANAGER FOR THREE DIFFERENT OWNERS AND THE BUYER IS
12 REFUSING TO BUY TWO OF THE OWNERS' PROPERTIES UNLESS
13 THEY CAN BRING IN THE THIRD OWNER, THEN -- AND THE THIRD
14 OWNER WILL NOT BE BOUND BY THAT TRANSACTION THE WAY THAT
15 THE BUYER WANTS IT TO BE BOUND, THEN I HAVE TO SAY IT'S
16 A PASS ALL THE WAY ACROSS.
17 THE COURT: BUT HADN'T THE DEAL BEEN STRUCK ON
18 511 AND 517?
19 THE WITNESS: NO. THIS WAS STILL PART OF IT.
20 THEY WERE NEGOTIATING -- THEY WERE ATTEMPTING TO
21 NEGOTIATE EVERYTHING INTO ONE DEAL, AND WE WERE
22 INSISTING IT BE SEPARATED. IT WAS AFTER THIS "SIMPLY
23 UNACCEPTABLE" THAT THEY CAME BACK A COUPLE WEEKS LATER,
24 A WEEK AND A HALF LATER, AND SAID, "OKAY, WE'LL AGREE.
25 IT WILL JUST BE SEPARATELY OWNED, AND WE'LL AGREE TO SUM
26 AND SUBSTANCE OF YOUR LANGUAGE."
27 THE COURT: GOT IT. THANK YOU. PLEASE PROCEED.
28 Q BY MR. BLECHER: IF YOU NOW LOOK AT

16
1 EXHIBIT 128. IS THAT AN ATTEMPT TO CLARIFY YOUR CONCERN
2 WITH THE TWO PROPOSALS YOU RECEIVED FROM MR. BUNGE'S
3 LAWYER?
4 A I'M SORRY. SAY THE QUESTION AGAIN.
5 Q 128.
6 A 128. I HAVE THAT.
7 Q YES. WHICH IS IN EVIDENCE. DO YOU HAVE
8 THAT?
9 A I HAVE THAT.
10 Q IS THAT AN ATTEMPT TO CLARIFY WHAT YOUR
11 CONCERNS WERE?
12 A YES.
13 Q AND CAN YOU INFORM THE JUDGE WHAT THOSE
14 CONCERNS WERE?
15 A IT'S WHAT I JUST EXPLAINED TO THE JUDGE.
16 THEY ARE ATTEMPTING TO BUY PART OF 601 BY GETTING
17 EXCLUSIVE PARKING IN THE 511 AND 17 DEAL, AND WE SAY
18 HERE THAT THEY CAN BUY THEM INDIVIDUALLY, THEY CAN BUY
19 THE PACKAGE, BUT THEY CAN'T COMMINGLE THEM. AND IF THEY
20 WANT TO DEAL WITH THE -- IF THEY WANT TO BUY -- THEY CAN
21 BUY 601 OR DEAL WITH THE NEXT OWNER IF THEY WANT SOME
22 SORT OF EXCLUSIVE PARKING ALLOCATION WITH A LIFETIME
23 LEASE.
24 Q IS THAT MORE OF YOUR EFFORT TO SEPARATE
25 THE PURCHASE AGREEMENT FROM THE DEED RESTRICTION ISSUE?
28 THE WITNESS: NO. I'M SORRY.

17
1 MR. BEECHEN: MOVE TO STRIKE.
2 THE COURT: STRICKEN.
3 Q BY MR. BLECHER: MOVE OVER TO EXHIBIT 25,
4 PLEASE, WHICH IS IN EVIDENCE. HAVING REJECTED THE TWO
5 SUGGESTIONS OR DOCUMENTS CREATED BY MR. BUNGE'S LAWYER,
6 DID YOU NOW GET INFORMED THAT MR. BUNGE WAS WILLING TO
7 DO THE DEED RESTRICTION YOU PROPOSED AND WHICH WE
8 IDENTIFIED EARLIER?
9 A YES.
10 Q AND IS THAT NOW ATTACHED IN THE FORM THAT
11 WAS AGREED UPON AS BATES PAGE 73 TO EXHIBIT 25?
12 A I'M CONFUSED.
13 Q WHAT DID YOU SAY?
14 A I'M CONFUSED.
15 Q IS THE DEED RESTRICTION THAT YOU
16 ULTIMATELY AGREED UPON WITH MR. BUNGE ON OR ABOUT
17 SEPTEMBER 25TH, BATES PAGE 73, IN EXHIBIT 25?
18 A I DON'T HAVE A BATES PAGE 73.
19 THE COURT: NEITHER DO I. IN EXHIBIT 25.
20 Q BY MR. BLECHER: ALL RIGHT. THEN WE'LL
21 HAVE TO GO TO EXHIBIT 131, WHICH IS THE COMPLETE
22 VERSION. DO YOU HAVE EXHIBIT 131, SIR?
23 A I DO.
24 MR. BLECHER: I WOULD ASK THE COURT TO MARK THAT.
25 THE COURT: OKAY. ONE MOMENT.
26 MR. BLECHER: 131.
27 THE COURT: WAS ADMITTED TWO DAYS AGO.

18
1 Q IF YOU LOOK AT 131, PAGE 73, IS THAT THE
2 DEED RESTRICTION THAT YOU AND MR. BUNGE ACTUALLY AGREED
3 UPON ON OR ABOUT SEPTEMBER 25, 2007?
4 A YOU'RE ASSUMING WE MADE AN AGREEMENT ON
5 SEPTEMBER 25TH, 2007. THIS WAS SOMETHING THAT TED
6 FOLKERT SENT OVER SAYING, "I BELIEVE THE ONLY CHANGE IS
7 601. THIS IS WHAT BUNGES ARE WILLING TO AGREE TO, AND I
8 BELIEVE IT'S WHAT YOU SUBMITTED PREVIOUSLY." AND SO I
9 LOOK AT IT, AND IT'S NOT JUST 601 THEY ADDED. THEY
10 ADDED ANOTHER -- IT SAYS IN THE SECOND PARAGRAPH,
11 "GRANTS OR CERTIFIES THE COASTAL DEVELOPMENT." SO THEY
12 ARE NOW MAKING THE OWNER OF 601 BOARDWALK SUNSET CERTIFY
13 THAT THE COASTAL PERMIT IS SUPPLEMENTED. AND SO THAT
14 WOULD HAVE HAD TO BE NEGOTIATED OUT. AND THEN I THINK
15 THE RECORDING OF BUNGE ENTERPRISES WAS CHANGED LATER BY
16 THEIR ATTORNEYS OR WHOEVER, AND THEN I THINK THAT TOP
17 PARAGRAPH, THE FIRST PARAGRAPH, WAS CHANGED BY THEIR
18 ATTORNEY AS WELL, HOW THEY ACCEPT IT TO MAKE IT
19 RECORDABLE.
20 Q IF YOU LOOK AT EXHIBIT 26, WHAT ARE YOU
21 COMMUNICATING BY THAT E-MAIL TO MR. FOLKERT WHEN YOU
22 SAY, "WE WILL PREPARE A P.S.A. FOR SIGNATURE. HE CAN
23 THEN BUY PROPERTY PURSUANT TO THE TERM OF THE P.S.A. OR
24 NOT."
25 A WHAT I WAS CONVEYING WAS THAT IT SEEMED
26 THAT EVERY TIME WE THOUGHT WE MADE OURSELF CLEAR,
27 MR. BUNGE'S ATTORNEYS WOULD TRY AND ADD SOMETHING ELSE
28 IN OR SNEAK SOMETHING ELSE IN. SO I THOUGHT BY THE TIME

19
1 WE GO THROUGH THIS WITH THE PURCHASE AND SALE AGREEMENT
2 FOR THE TWO DIFFERENT TRANSACTIONS, THE THREE DIFFERENT
3 PROPERTIES, WE'RE GOING TO LOSE THE BUYERS THAT WE'RE
4 NEGOTIATING WITH RIGHT NOW. SO I'M GOING TO TAKE IT
5 UPON MYSELF JUST TO GO AHEAD AND CREATE THE PURCHASE AND
6 SALE AGREEMENT, CREATE THIS -- SEPARATE TRANSACTIONS AND
7 SEND IT TO THEM SO THAT THEY CAN EITHER ACCEPT IT OR
8 REJECT IT. AND WE KNOW IF WE'RE GOING TO DEAL WITH THEM
9 OR MOVE ON TO THE OTHER POTENTIAL BUYERS. SO I SAID,
10 "WE'LL PREPARE THE P.S.A., AND YOU CAN BUY THE
11 PROPERTIES PURSUANT TO THE TERMS OF THE P.S.A. OR NOT."
12 Q WERE YOU THEN PROCEEDING ON TWO SEPARATE
13 TRACKS TO FINALIZE THE P.S.A. AND CONTINUE TO AGREE ON
14 THE DEED RESTRICTION?
15 A AND NEGOTIATING WITH OTHER POTENTIAL
16 BUYERS.
17 Q NOW, EXHIBIT 134, DOES THAT EVIDENCE THE
18 AGREEMENT THAT YOU AND MR. AND MRS. BUNGE ARRIVED AT ON
20 A ASK YOUR QUESTION AGAIN, PLEASE.
21 Q HAD YOU --
22 A ASK YOUR QUESTION AGAIN, PLEASE.
23 Q IS THIS THE FINAL AGREEMENT ON THE DEED
24 RESTRICTION THAT YOU AGREED WITH MR. AND MRS. BUNGE?
25 A I'M NOT SURE. I'D HAVE TO COMPARE IT TO
26 THE ONE THAT WAS SIGNED. 31.
27 Q ALL RIGHT. NOW, LOOK AT EXHIBIT 136 --
28 MR. BLECHER: -- WHICH I ASK THE COURT TO MARK.

20
1 THE COURT: ALL RIGHT. SO MARKED.
2 Q BY MR. BLECHER: AND DOES THIS INDICATE
3 THAT MR. BUNGE WAS STILL TWEAKING THE DEED RESTRICTION
4 AGREEMENT?
5 A HE WAS TWEAKING BOTH AGREEMENTS.
6 Q ALL RIGHT. AND IF YOU LOOK AT THE VERY
7 LAST PARAGRAPH, DOES THIS ALSO SUGGEST FOR THE FIRST
8 TIME THAT MR. BUNGE IS NOW SEEKING TO MAKE SOME
9 SUBSTANTIVE CHANGE TO THE RIGHTS ACQUIRED FOR PARKING?
10 A NO. THEY HAVE BEEN TRYING TO GET 24-HOUR
11 PARKING THROUGHOUT ALL OF THE EARLIER ITERATIONS,
12 L.L.I.'S AND DEED RESTRICTIONS THAT THEY WERE SENDING
13 US.
14 Q EVEN AS YOU'RE AGREEING ON THE LANGUAGE OF
15 THE DEED RESTRICTION, MR. BUNGE IS SUGGESTING HE WANTS
16 SOMETHING MORE.
17 A SAYS HE'LL PAY US $100,000 IF WE MAKE IT
18 24-HOUR.
19 Q AND IF YOU LOOK AT EXHIBIT 140, DOES THAT
20 EVIDENCE YOUR VIEW THAT YOU WOULD NOT MODIFY THE DEED
21 RESTRICTION?
22 A YES. AND IT ALSO SAYS HE CANNOT REFER TO
23 THE 601 PROPERTY IN THE PURCHASE AGREEMENT.
24 Q NOW, IN EXHIBIT -- I THINK WE'LL OFFER
25 THAT ONE IN EVIDENCE. 136?
26 THE COURT: ANY OBJECTION TO 136 BEING ADMITTED?
27 MR. BEECHEN: NO.
28 THE WITNESS: I WAS READING FROM 140.

21
1 THE COURT: IT IS ADMITTED.
2 MR. BLECHER: 140 IS ALREADY IN.
3 THE COURT: OKAY.
4 Q BY MR. BLECHER: CAN YOU IDENTIFY 141 FOR
5 US, SIR?
6 A IT'S AN E-MAIL FROM TED FOLKERT TO ME
7 DATED OCTOBER 5.
8 Q SUGGESTING SOME CHANGES, AGAIN, ON THE
9 DEED RESTRICTION?
11 THE COURT: SUSTAINED. LET'S PROCEED.
12 MR. BLECHER: I ASK THE COURT TO MARK AND ADMIT
13 141.
14 THE COURT: OBJECTIONS?
16 THE COURT: 141 IS ADMITTED.
17 Q BY MR. BLECHER: AND IF YOU LOOK AT
18 EXHIBIT 143, DO YOU RECALL ADVISING THE BUNGES THROUGH
19 MR. FOLKERT THAT YOU WERE NOT PREPARED TO NEGOTIATE
20 24-HOUR PARKING RIGHTS AT THAT TIME?
21 A YES.
22 Q AND IN EXHIBIT 144, IS THAT A STRING OF
23 E-MAILS BETWEEN AND MR. FOLKERT?
24 A YES, THAT'S AN E-MAIL BETWEEN MR. FOLKERT
25 AND I DATED OCTOBER --
26 MR. BLECHER: I WOULD ASK THE COURT TO MARK AND
27 ADMIT EXHIBIT 144.

22
1 Q BY MR. BLECHER: DO YOU SEE ON EXHIBIT
2 144 --
3 THE COURT: ALL RIGHT. 144 IS ADMITTED.
4 MR. BLECHER: THANK YOU, YOUR HONOR.
5 Q IN 144, SOME OF THE TYPE IN THE E-MAIL IS
6 IN FAINTER PRINT AND SOME IS IN BOLDER PRINT. DO YOU
7 SEE THAT?
8 A I DO.
9 Q CAN YOU EXPLAIN THAT?
10 A THE FAINTER PRINT IS WHAT TED SENT TO ME
11 WITH CERTAIN QUESTIONS OR COMMENTS, AND THE BOLDER PRINT
12 WAS MY RESPONSE TO HIM.
13 Q AND SO IT'S CORRECT THAT ON OCTOBER 5 YOU
14 TOLD MR. FOLKERT THAT THE LANGUAGE REGARDING THE 601
15 TRANSACTION SHOULD NOT BE INCLUDED IN THE 511, 517
16 TRANSACTION. DO YOU SEE THAT?
17 A I DO.
18 Q IS THAT A CONSTANT THEME YOU KEPT UP?
19 A YES. AND, MOREOVER, THE WORDING IS NOT
20 ACCEPTABLE TO THE 601 OWNERS.
21 Q AND CAN YOU LOOK AT EXHIBIT 145 AND TELL
22 ME IF THAT'S ALSO AN E-MAIL STRING MAINLY FROM
23 MR. FOLKERT?
24 A YEAH. THIS IS AN E-MAIL FROM TED FOLKERT
25 TO --
26 Q AND DO YOU SEE RIGHT IN THE CENTER OF THE
27 PAGE WHERE THE NOTEBOOK RING IS? THIS IS TO MR. BUNGE
28 FROM MR. FOLKERT: "LANGUAGE REGARDING THE 601

23
1 TRANSACTION SHOULD NOT BE INCLUDED IN THE 511, 517
2 TRANSACTION." DO YOU SEE THAT?
3 A YES.
4 Q DID YOU GET A COPY OF THIS, DO YOU THINK,
5 OR -- THEY ARE NOT NOTED. OR DO YOU KNOW?
6 A I DON'T KNOW.
7 Q AND TAKE A LOOK AT 146. DO YOU RECALL
8 SEEING THIS E-MAIL STRING BETWEEN MR. FOLKERT AND
9 MR. KAHN, MR. BUNGE'S LAWYER?
10 A YES, I SEE THAT.
11 Q DID YOU GET THIS AT THE TIME?
12 A I DON'T KNOW.
13 Q IDENTIFY, IF YOU COULD, 150 AS AN E-MAIL
14 STRING BETWEEN YOU AND MR. FOLKERT ON OCTOBER 8, 2007.
15 A I RECOGNIZE IT AS AN E-MAIL FROM TED TO ME
16 AND ME TO TED.
18 ADMIT 150.
20 THE COURT: 150 IS MARKED AND ADMITTED.
21 Q BY MR. BLECHER: AND THIS RECITES FROM
22 MR. FOLKERT, "WE ARE ALMOST THERE." DO YOU SEE THAT?
23 A YES.
24 Q AND YOU THEN GO ON TO DESCRIBE SOME WORD
25 CHANGES IN THE DEED RESTRICTION. DO YOU SEE THAT?
26 A I DO.
27 Q AND IF YOU LOOK AT EXHIBIT 28, WHICH IS IN
28 EVIDENCE, DOES THAT INDICATE THAT YOU DECLINE OR ACCEPT

24
1 THOSE PROPOSED WORD CHANGES?
2 A YES.
3 Q AND IN EXHIBIT 152, IS THAT AN E-MAIL THAT
4 YOU RECEIVED FROM PAT BUTLER?
5 A I SEE IT.
6 Q AND WHO IS PAT BUTLER?
7 A I DON'T REMEMBER EXACTLY. I THINK IT'S AN
8 ASSISTANT OF TED FOLKERT'S. SOMETHING TO DO WITH TED
9 FOLKERT, BUT I DON'T REMEMBER.
10 Q NOW, DOES THIS SUGGEST THE FIRST TIME THAT
11 THERE WAS COMPLETE AGREEMENT ON BOTH THE PURCHASE
12 AGREEMENT AND THE DEED RESTRICTION WITH MR. BUNGE?
13 A ASK ME AGAIN, PLEASE.
14 Q DOES THIS E-MAIL SUGGEST TO YOU THAT THIS
15 IS THE DATE ON OR ABOUT WHICH THERE WAS COMPLETE
16 AGREEMENT ON THE PURCHASE AND SALE AGREEMENT AND THE
17 DEED RESTRICTION SUCH THAT ESCROW COULD BE OPENED?
18 A I CAN'T BE SURE FROM THIS E-MAIL, BECAUSE
19 THERE WAS A LOT OF OTHER THINGS THAT WENT ON UP TO AND
20 AFTER.
21 Q ALL RIGHT.
23 ADMIT EXHIBIT 152.
24 THE COURT: EXHIBIT 152 IS MARKED. OBJECTION TO
25 ADMISSION?
26 MR. BEECHEN: NO. IT'S A LITTLE VAGUE AS TO
27 FOUNDATION, BUT I'LL -- NO OBJECTION.
28 THE COURT: WITHOUT OBJECTION, IT COMES IN.

25
1 Q BY MR. BLECHER: LET ME ASK YOU TO MOVE TO
2 EXHIBIT 29. THERE'S AN E-MAIL TO YOU FROM MR. FOLKERT
3 ATTACHING THE PURCHASE AND SALE AGREEMENT, WHICH IS IN
4 PART OF EXHIBIT 29.
5 MR. BLECHER: SO I WOULD ASK THE COURT TO MARK
6 158, WHICH IS THE FIRST PAGE OF EXHIBIT 29, THE E-MAIL
7 AND THE ATTACHMENT THAT'S REFERENCED.
8 THE COURT: 158 IS MARKED FOR IDENTIFICATION.
9 Q BY MR. BLECHER: NOW, LOOKING AT EITHER 29
10 OR 158, THE E-MAIL PORTION, YOU RECOGNIZE THAT AS AN
11 E-MAIL YOU RECEIVED FROM MR. FOLKERT?
12 A YES.
13 Q DOES IT SUGGEST TO YOU THAT MR. BUNGE,
14 QUOTE, "PREFERS THAT THE DEED RESTRICTION AGREEMENT BE
15 EXECUTED ON THE SELLER'S END SO THAT IT CANNOT BE DENIED
16 WHEN HE EXECUTES IT AND OPENS ESCROW SINCE THEY ARE NOT
17 LINKED IN ANY WAY." DO YOU SEE THAT?
18 A I DO.
19 Q WHAT DID YOU UNDERSTAND THAT SENTENCE TO
20 MEAN?
21 A SINCE THEY HAD FINALLY ACQUIESCED TO THE
22 FACT THAT THEY WERE ENTIRELY SEPARATE TRANSACTIONS, HE
23 WANTED TO MAKE SURE THAT WE AGREED TO HIS DESIRE TO HAVE
24 THE STATUS QUO PRESERVED, IF HE CHANGED THE USE. SO ON
25 BEHALF OF THE OWNER, IT WAS GIVEN TO JOE PRASKE, AND JOE
26 PRASKE SIGNED THAT DOCUMENT BEFORE IT WAS PUT IN SO THAT
27 THEY WOULD HAVE THE ASSURANCE THEY AGREED TO PRESERVE
28 THE STATUS QUO, IF THEY CHANGED USE.

26
1 Q NOW, CAN I ASK YOU TO LOOK AT 159 AND TELL
2 ME IF THAT'S AN E-MAIL YOU RECEIVED FROM MR. FOLKERT ON
3 OR ABOUT THE DATE IT BEARS.
4 A YES.
5 MR. BLECHER: AND WE'LL ASK THE COURT TO MARK AND
6 ADMIT 159.
8 THE COURT: ONE MOMENT, PLEASE. 159 IS MARKED
9 AND ADMITTED. WHAT DO YOU WANT TO DO ABOUT 158?
10 MR. BLECHER: OFFER IT IN EVIDENCE, YOUR HONOR.
11 THANK YOU.
13 MR. BEECHEN: NO.
14 THE COURT: ALL RIGHT. IT'S ADMITTED.
15 Q BY MR. BLECHER: NOW, AS OF LATE OCTOBER,
16 DID YOU UNDERSTAND THERE WAS STILL -- MR. BUNGE WAS
17 EXPRESSING SOME CONCERN ABOUT WHETHER HE COULD RAISE THE
18 MONEY TO BUY 511 AND 517?
19 A HE HAD CONCERNS ABOUT THE TIME -- HE HAD
20 CONCERNS ABOUT HAVING ENOUGH TIME TO RAISE THE MONEY.
21 Q AND THERE WAS TALK THEN ABOUT PUSHING OUT
22 THE CLOSE OF ESCROW TO ALLOW MR. BUNGE AN OPPORTUNITY TO
23 RAISE THE MONEY BY SELLING PROPERTY OR OTHERWISE.
24 A IT GAVE HIM MORE TIME TO DO THAT, YES.
25 Q AND, NOW, IF WE LOOK AT EXHIBIT 160 --
26 MR. BLECHER: I'LL ASK THE COURT TO MARK 160.
27 THE COURT: 160 IS MARKED.
28 Q BY MR. BLECHER: IS THAT AN E-MAIL STRING

27
1 WITH YOU AND MR. FOLKERT?
2 A YES.
3 Q AND NOW FOR THE FIRST TIME IS THE CLOSE OF
4 ESCROW SET AT JUNE 15, 2008?
5 A YES.
6 MR. BLECHER: WE'D OFFER 160 INTO EVIDENCE, YOUR
7 HONOR.
10 Q BY MR. BLECHER: SO FROM THE DATE OF THE
11 AGREEMENT, WHICH ARE EXHIBITS 31 AND 32 DATED OCTOBER
12 30, UNTIL THE CLOSE OF ESCROW, WE HAVE SEVEN AND A HALF
13 MONTHS; CORRECT?
14 A EIGHT AND A HALF MONTHS, OCTOBER 30TH.
15 YES, SEVEN AND A HALF.
16 Q IN YOUR EXPERIENCE, IS THAT A LONG,
17 NORMAL, OR SHORT ESCROW PERIOD?
18 MR. BEECHEN: OBJECTION; INCOMPLETE HYPOTHETICAL.
19 DEPENDS ON THE DEAL.
20 THE COURT: SUSTAINED. WELL, OVERRULED. IT
21 ASKED BASED UPON HIS EXPERIENCE, IS IT LONG OR SHORT.
22 IT IS OVERRULED. YOU MAY ANSWER.
23 THE WITNESS: IT'S A LONG ESCROW. IT'S A LONG
24 ESCROW PARTICULARLY BECAUSE ALL OF THE CONTINGENCIES HAD
25 TO BE WAIVED BEFORE IT WENT INTO ESCROW. AND,
26 TYPICALLY, WHEN YOU BUY A HOME OR SOMETHING, YOU HAVE A
27 CONTINGENCY PERIOD, AND THAT'S INCLUDED IN THE ESCROW.
28 IN THIS SITUATION, ALL OF THE DUE DILIGENCE WAS DONE

28
1 BEFOREHAND, SO THAT WAS SIMPLY A PERIOD TO PUT TOGETHER
2 THE FUNDING AND CLOSE.
3 THE COURT: SO, IN YOUR VIEW, AS SOON AS ESCROW
4 WAS OPENED, THE CONTINGENCIES ENDED; IS THAT CORRECT?
5 THE WITNESS: THAT'S CORRECT. THERE WERE NO
6 CONTINGENCIES. IT COULD HAVE CLOSED THE NEXT DAY IF THE
7 MONEY WAS THERE.
8 THE COURT: ALL RIGHT. AND THE $500,000 ON EACH
9 PROPERTY WAS THERE ON TIME; IS THAT CORRECT?
10 THE WITNESS: I THINK THE SECOND $500,000 HE WAS
11 A COUPLE WEEKS LATE ON, BUT HE GOT IT IN.
12 THE COURT: ALL RIGHT. LET'S PROCEED.
13 Q BY MR. BLECHER: NOW, MR. GAGGERO, DID YOU
14 HAVE A VIEW AS TO WHETHER THE RIGHTS UNDER THE COASTAL
15 COMMISSION DEED RESTRICTION, SLASH, PERMIT COULD BE
16 ELIMINATED AT ANY TIME BY THE OWNER OF 601?
17 A I DON'T BELIEVE THEY COULD. THERE WAS A
18 BUYER WHO WANTED 601, BRIAN DOMINION DEVELOPMENT, AND HE
19 WAS SERIOUS. THEY PUT IT UNDER AN OPTION PERIOD AND DID
20 A LOT OF DUE DILIGENCE AND SUGGESTED THAT THEY FELT IT
21 COULD BE ELIMINATED. AND WE HAD A MEETING, AND I TOLD
22 HIM I DISAGREED WITH HIM. MY INTERPRETATION OF THIS
23 DOCUMENT WAS DIFFERENT.
24 AND THEY LATER SENT ME AN E-MAIL TO THAT EFFECT,
25 THAT THEY FELT IT COULD BE REMOVED. AND I TOLD THEM
26 THAT THE DEAL WAS DEAD THEN, BECAUSE THAT'S NOT
27 SOMETHING THAT I BELIEVE. AND I WENT FURTHER TO TELL
28 THEM AT A LUNCH MEETING THAT IF I WAS WRONG AND THE

29
1 RIGHTS COULD BE ELIMINATED FOR ANY REASON, WE WOULD PUT
2 A DEED RESTRICTION ON THE PROPERTY TO ENSURE THAT THAT
3 COULDN'T HAPPEN SO THAT THE PEOPLE IN THE 500 BLOCK
4 WEREN'T SURPRISED AND SUDDENLY DIDN'T HAVE PARKING.
5 Q IF I UNDERSTAND WHAT YOU'RE SAYING, SOME
6 PERSPECTIVE BUYER TOLD YOU HE WANTED TO BUY 601, BUT HE
7 WAS GOING TO ABOLISH THE PARKING.
8 A YEAH. I FELT IT COULD NOT BE REMOVED,
9 BECAUSE I THOUGHT THE DEED RESTRICTION OF COASTAL RAN
10 WITH THE LAND UNTIL THE RETAIL USES CEASED. IF THE
11 RETAIL USES CEASED, THEN THE PARKING WOULD NO LONGER
12 EXIST. SO I DIDN'T THINK THEY COULD REMOVE IT JUST
13 BECAUSE THEY WANTED TO BUILD CONDOS THERE. THEY FELT
14 THEY COULD. THAT PUT A QUESTION IN MY MIND; SO I WASN'T
15 SURE ANYMORE BECAUSE I'M NOT --
16 THE REPORTER: I'M SORRY. CAN YOU SLOW DOWN?
17 THE WITNESS: SORRY.
18 BY MR. BLECHER:
19 Q CAN I ASK YOU TO GO INTO THE BOOK AND SEE
20 IF WE'RE LUCKY AND IF EXHIBIT 237 IS THERE. CAN YOU
21 IDENTIFY 237 AS A STRING OF E-MAILS AND/OR LETTERS
22 BETWEEN YOURSELF MAINLY AND RICHARD RINGER OVER THE
23 SUBJECT OF 601 PARKING.
24 A IT IS. THIS IS THE E-MAIL STRING.
25 MR. BLECHER: I'LL ASK THE COURT TO MARK 237.
26 THE COURT: ONE MOMENT. ALL RIGHT. 237 IS NOW
27 MARKED.
28 Q BY MR. BLECHER: SO WE DON'T HAVE TO

30
1 LABORIOUSLY READ ALL OF THESE, CAN YOU SUMMARIZE WHAT IS
2 GOING ON WITH YOU AND MR. RINGER IN EARLY NOVEMBER 2007
3 IN RESPECT TO THE 601 PARKING.
4 A OH, MR. RINGER WAS A BROKER WITH MARCUS
5 AND MILLICHAP AND WAS REPRESENTING INTERESTED PARTIES --
6 PARTIES INTERESTED IN PURCHASING 601 OCEAN FRONT WALK
7 AND OTHER PROPERTIES THAT WERE THERE IN VENICE THAT WE
8 WERE MANAGING. AND -- DO YOU WANT ME TO GO ON?
9 Q UH-HUH.
10 A AND THIS PARTICULAR E-MAIL WAS IN
11 REFERENCE TO A.P. COMPANIES THAT WERE THE OAKWOOD GARDEN
12 FOUNDERS. AND THEY SENT AN E-MAIL SAYING THE WAY THEY
13 SEE IT, THEY CAN ELIMINATE THE PARKING, AND THEY ARE NOT
14 GOING TO BUILD CONDOS AND PUT IN LEVELS OF SUBTERRANEAN
15 PARKING FOR THE 500 BLOCK. AND RICK RINGER IS SAYING,
16 "CAN YOU SHED SOME LIGHT ON THIS?"
17 AND I SAID, "IT SEEMS THE DEAL IS DEAD." AND
18 THEN RICK SENT ME AN E-MAIL SAYING, "WAIT, WAIT, WAIT.
19 THEY WANT TO TALK TO YOU ABOUT IT. AT LEAST TALK TO
20 THEM, BECAUSE THEY WANT TO PUT A LOT OF MONEY INTO
21 THIS." AND I SAID, "AS I INDICATED AT LUNCH, THOSE 43
22 SPACES HAVE TO BE REPLACED BY ANYBODY THAT BUYS 601 AND
23 WANTS TO DEVELOP THERE. AND WE'RE NOT GOING TO ALLOW
24 THEM TO ELIMINATE THAT PARKING."
25 Q AND DID THIS DEAL WITH MR. RINGER OR
26 MR. RINGER'S CLIENT ACTUALLY DIE BECAUSE YOU REFUSED TO
27 ALLOW THE 601 PARKING RIGHTS TO BE ELIMINATED?
28 A YES.

31
1 MR. BLECHER: YOUR HONOR, I'M GOING TO ASK LEAVE
2 TO ASK HIM ABOUT THE CONSIDERATION ISSUE THAT'S BEEN
3 RAISED. I KNOW THAT MR. PRASKE WAS AGREEING WHATEVER
4 DOCUMENTS EXIST ON THAT, BUT I THINK INDEPENDENT OF
5 THAT, WE OUGHT TO BE ALLOWED TO ASK MR. GAGGERO ABOUT
6 THE ISSUE OF CONSIDERATION FOR HIS SELLING HIS LIMITED
7 PARTNERSHIP INTEREST TO THE TRUST.
8 THE COURT: OBJECTION?
9 MR. BEECHEN: FRANKLY, I DON'T UNDERSTAND WHAT
10 MR. BLECHER JUST SAID. CONSIDERATION IN WHAT AREA? I
11 JUST COULDN'T HEAR HIM.
12 MR. BLECHER: THE CONSIDERATION HE RECEIVED FOR
13 GIVING UP HIS LIMITED PARTNERSHIP.
14 THE COURT: I DON'T SEE ANY PROBLEM.
15 MR. BEECHEN: NO, NO, NO. I MEAN, WE'VE HAD
16 TESTIMONY. THE ONLY THING, IT MAY BE CUMULATIVE, BUT --
17 MR. BLECHER: I JUST DIDN'T WANT TO GO INTO IT
18 WHILE THE PRASKE THING WAS STILL OPEN-ENDED.
19 THE COURT: I APPRECIATE YOUR ASKING. I SEE NO
20 PROBLEM WITH IT.
21 AS TO 237, YOU MARKED IT. DID YOU WANT IT
22 ADMITTED?
23 MR. BLECHER: YES. THANK YOU, YOUR HONOR.
25 THE COURT: ALL RIGHT. IT COMES IN. THAT'S 237.
26 Q BY MR. BLECHER: MR. GAGGERO, AT ONE TIME
27 WERE YOU A LIMITED PARTNER OF 511?
28 A YES.

32
1 Q AND THEN YOU SOLD THAT INTEREST TO WHOM?
2 OR TRANSFERRED IT TO WHOM?
3 A TO THE ARENZANO TRUST, AND THERE MIGHT
4 HAVE BEEN ANOTHER TRUST OR ENTITY. I JUST DON'T
5 REMEMBER RIGHT NOW.
6 Q IN OTHER WORDS, YOUR LIMITED PARTNERSHIP
7 WENT TO ONE OR BOTH OF THE TRUSTS.
8 A TERRA MAR WASN'T ONE OF THE TRUSTS BACK
9 WHEN I TRANSFERRED MY INTEREST.
10 Q SO IT WAS ARENZANO.
11 A AND I THINK THERE MAY HAVE BEEN ANOTHER
12 ONE. I JUST DON'T RECALL RIGHT NOW. 15 YEARS AGO.
13 Q IS THAT ALSO TRUE OF GINGERBREAD?
14 A YES. THERE WAS ARENZANO, AND THEN THERE
15 WAS ANOTHER ONE.
16 Q IS IT ALSO TRUE OF YOUR MEMBERSHIP
17 INTEREST IN BOARDWALK SUNSET?
18 A YES. 15 YEARS AGO.
19 Q WHEN YOU DID THOSE TRANSFERS, DID YOU
20 RECEIVE ANY CONSIDERATION?
21 A NO.
22 THE COURT: WHY DON'T WE TAKE A BREAK AT THIS
23 TIME. 15 MINUTES. THE WITNESS IS ORDERED TO RETURN,
24 AND THE ATTORNEYS ARE ORDERED TO RETURN. THANK YOU.
25 (RECESS TAKEN AT 11:09 TO 11:31 A.M.)
26 THE COURT: BACK ON THE RECORD. THE ATTORNEYS
27 ARE PRESENT. MR. GAGGERO IS ON THE WITNESS STAND ONCE
28 MORE.

33
1 SIR, YOU ARE STILL UNDER OATH.
2 ALL RIGHT. LET'S PROCEED.
4 Q NOW, AT SOME STAGE, MR. GAGGERO, DID YOU
5 TRANSFER YOUR PERSONAL INTEREST IN THE PROPERTY AT 511
6 TO THE NEWLY FORMED LP?
7 A YES.
8 Q AND IS THE SAME THING TRUE OF GINGERBREAD?
9 A YES.
10 Q AND BOARDWALK SUNSET?
11 A YES.
12 Q NOW, WHEN YOU MADE THOSE TRANSFERS TO THE
13 LIMITED PARTNERSHIP OR LLC, IN EACH CASE DID YOU OR DID
14 YOU NOT RECEIVE SOME CONSIDERATION?
15 A IN EACH CASE I RECEIVED CONSIDERATION.
16 Q AND CAN YOU TELL US, AS BEST YOU NOW
17 RECALL WHAT THE CONSIDERATION WAS FOR CONVEYING YOUR
18 PERSONAL OWNERSHIP INTEREST TO THE 511 LIMITED
19 PARTNERSHIP?
20 A THE ASSUMPTION OF THE DEBT. THERE IS $2
21 MILLION ON GINGERBREAD COURT THAT IS NO LONGER MY
22 RESPONSIBILITY. $1,250,000 ON 511 OCEAN FRONT WALK.
23 AND ON BOARDWALK SUNSET, I DON'T REMEMBER.
24 Q 250 ON GINGERBREAD?
25 A NO. 2 MILLION ON GINGERBREAD --
26 Q OH, 2 MILLION ON GINGERBREAD.
27 A -- AND 250 ON 511, AND ON BOARDWALK SUNSET
28 I DON'T REMEMBER. AND THOSE ARE THE LOAN BALANCES.

34
1 THAT WAS THE ORIGINAL LOAN AMOUNTS I DON'T REMEMBER --
2 THE COURT: MR. GAGGERO, PLEASE SLOW DOWN. I'M
3 NOT SURE HOW MUCH OF THIS IS GETTING ON THE RECORD.
4 PLEASE GO AHEAD.
5 THE WITNESS: I APOLOGIZE.
6 Q BY MR. BLECHER: AND JUST SO WE MAKE SURE
7 WE HAVE IT --
8 A 511 OCEAN FRONT WALK, THERE WAS AN
9 ORIGINAL LOAN AMOUNT OF $1,250,000.
10 Q FOR WHICH YOU WERE RESPONSIBLE?
11 A THAT'S CORRECT. AND I DON'T REMEMBER WHAT
12 THE EXACT LOAN BALANCE WAS AT THE TIME THE PROPERTY --
13 THE OWNERSHIP INTEREST WAS TRANSFERRED TO THE LP.
14 THE COURT: CAN I ASK A QUESTION, THOUGH? THIS
15 WAS A DEBT THAT WAS PERSONAL TO YOU?
16 THE WITNESS: IT WAS SECURED AGAINST THE
17 PROPERTY, AND THAT I SIGNED. AND IT WAS SECURED AGAINST
18 THE PROPERTY. THE LENDERS HAVE THE PROPERTY. AND
19 THEN --
20 THE COURT: WAS THERE A PERSONAL GUARANTEE SIGNED
21 BY YOU ON THAT?
22 THE WITNESS: I DO NOT REMEMBER A PERSONAL
23 GUARANTEE, BUT IT WAS NOT A -- WHAT DO YOU CALL IT? A
24 LOAN WITHOUT ANY PERSONAL GUARANTEE.
25 THE COURT: AND SO DID THE -- WHOEVER LENT THE
26 MONEY, DID THEY AGREE TO THE TRANSFER TO ANOTHER ENTITY
27 OF THE LOAN?
28 THE WITNESS: IN ONE CASE, IT WAS PAID OFF

35
1 IMMEDIATELY. AND GINGERBREAD COURT CASE IT WAS PAID
2 OFF, AND THE NEW LENDER DID NOT -- I DID NOT SIGN THE
3 DOCUMENTS, HAD NO RESPONSIBILITIES FOR IT. AND THE 511
4 CASE THERE WAS A DISPUTE BETWEEN THE LENDER AND I OVER
5 THAT, AND THEN THE LENDER ACCELERATED THE LOAN. WE WENT
6 TO COURT ON IT, AND I LOST BECAUSE THE COURT RULED THAT
7 THERE WAS A TRANSFER OF OWNERSHIP -- AND THERE WAS A
8 TRANSFER OF THE OWNERSHIP.
9 THE COURT: OKAY. ALL RIGHT. THANK YOU.
10 PLEASE PROCEED.
11 Q BY MR. BLECHER: NOW, LET ME SHIFT YOU TO
12 EXHIBIT 56.
13 A 56.
14 Q DO YOU SEE MR. FOLKERT, IN HIS E-MAIL,
15 WHICH IS IN EVIDENCE, SUGGESTS THAT HE WENT TO THE
16 REGISTRAR'S OFFICE --
17 THE COURT: I'M SORRY. I'M HAVING TROUBLE
18 HEARING YOU. COULD YOU USE THE MICROPHONE, PLEASE?
19 Q BY MR. BLECHER: IN THIS E-MAIL, WHICH IS
20 IN EVIDENCE, MR. FOLKERT IS SUGGESTING THAT HE WENT TO
21 THE REGISTRAR'S OFFICE IN REGARD TO RECORDING THE DEED
22 RESTRICTION. DO YOU SEE THAT?
23 A YES.
24 Q IS THAT SOMETHING YOU ASKED HIM TO DO?
25 A WE HAD A DISCUSSION ABOUT IT, AND I DON'T
26 REMEMBER IF I ASKED HIM TO DO IT OR HE SUGGESTED TO DO
27 IT. BUT THE OUTCOME OF THE DISCUSSION WAS THAT HE WAS
28 GOING TO GO DOWN AND FIND OUT IF IT WAS OR WAS NOT

36
1 RECORDABLE. THAT WAS THE TIME WHEN -- THE 19TH OR
2 20TH -- WHEN IT WAS -- WE WERE INFORMED THAT THERE WERE
3 PROBLEMS WITH THE DEED RESTRICTION. AND SO WE SAID
4 LET'S JUST GO FIND OUT IF THERE IS OR ISN'T A PROBLEM
5 WITH IT.
6 Q AND HE REPORTED BACK TO YOU AS SET FORTH
7 IN THE FIRST PARAGRAPH THAT HE DOESN'T THINK IT WAS A
8 RECORDABLE DOCUMENT?
9 A YEAH. HE SAID THAT A SUPERVISOR DOWN AT
10 THE RECORDER'S OFFICE SAID THAT IT PROBABLY ISN'T
11 RECORDABLE.
12 Q NOW, AT THAT POINT IN TIME, DID THE
13 EMPHASIS SHIFT TO SOME OTHER WAY TO ACHIEVE THE PARKING
14 THAT MR. BUNGE WANTED?
15 A YES. MR. BUNGE HAD CONTINUED TO LOBBY US
16 TO GIVE HIM 24/7 PARKING AND SOME OTHER CONSIDERATION,
17 ESSENTIALLY, A LEASE FROM BOARDWALK SUNSET ON THE 601
18 PROPERTY THAT HAD OTHER CONDITIONS. AND SO WE BEGAN
19 NEGOTIATING THAT WITH HIM, THINKING THAT IF HE AND
20 BOARDWALK SUNSET CAME TO AN AGREEMENT ON A LEASE, ON A
21 PARKING LEASE THAT ACHIEVED EVERYTHING HE HAD WANTED
22 SINCE SEPTEMBER, THAT -- AND IT WAS SOMETHING THAT
23 SATISFIED BOTH PARTIES, THEN THE DEED RESTRICTIONS
24 DIDN'T HAVE TO BE REDRAWN OR WHATEVER YOU WOULD DO TO
25 MAKE IT RECORDABLE.
26 Q THIS WAS GOING FROM PLAN A TO PLAN B AND
27 IN RESPECT TO PROVIDING PARKING.
28 THE REPORTER: PROVIDING WHAT?

37
1 MR. BLECHER: PLAN A TO PLAN B IN RESPECT TO
2 PROVIDING PARKING.
3 THE WITNESS: I GUESS YOU COULD CHARACTERIZE IT
4 THAT WAY.
5 Q BY MR. BLECHER: NOW, LOOK AT EXHIBIT
6 188 --
7 A IT WASN'T -- IT WASN'T ELIMINATING PLAN A.
8 Q NO. IT WAS JUST AN ALTERNATIVE WAY.
9 A WE WERE PURSUING AN ALTERNATIVE AT
10 MR. BUNGE'S REQUEST TO SEE IF WE COULD ACCOMMODATE HIM
11 AND SOLVE TWO PROBLEMS WITH ONE EXERCISE.
12 Q ALL RIGHT.
13 MR. BLECHER: I WOULD ASK THE COURT TO MARK 188.
14 THE COURT: ONE MOMENT. 188 IS MARKED. LET'S
15 PROCEED.
16 Q BY MR. BLECHER: CAN YOU IDENTIFY THIS AS
17 AN E-MAIL YOU RECEIVED FROM MR. FOLKERT IN -- NOW WE'RE
18 IN DECEMBER OF 2007.
19 A SORRY. WHICH EXHIBIT?
20 Q 188. IT'S AN E-MAIL YOU GOT FROM
21 MR. FOLKERT.
22 A IT'S AN E-MAIL I RECEIVED FROM
23 MR. FOLKERT, YES.
24 MR. BLECHER: WE WOULD OFFER 188 INTO EVIDENCE,
25 YOUR HONOR.
27 THE COURT: IT COMES IN.
28 Q BY MR. BLECHER: IN THIS E-MAIL

38
1 MR. FOLKERT IS INQUIRING, QUOTE, "ANYTHING TO OFFER THEM
2 UNDER 601 PARKING YET?" DID YOU SEE THAT?
3 A YES.
4 Q DID YOU PRESUME THAT WAS BASED ON THE
5 INQUIRIES FROM MR. BUNGE TO MR. FOLKERT?
6 A I KNEW WE WERE ALL WORKING ON PUTTING
7 TOGETHER A DRAFT LEASE THAT WOULD ADDRESS MR. BUNGE'S
8 DESIRES. AND THEY WANT TO KNOW IF I ROUGHED OUT AN
9 OUTLINE ON IT.
10 Q NOW, TAKE A LOOK AT EXHIBIT 189 --
11 MR. BLECHER: -- WHICH I WOULD ASK THE COURT TO
12 MARK.
13 THE COURT: 189 IS IN EVIDENCE.
15 Q ARE YOU THERE, MR. GAGGERO?
16 A I AM. WHAT'S THE QUESTION?
17 Q THE QUESTION IS, PART OF EXHIBIT 189 IS A
18 DOCUMENT CAPTIONED "PARKING OPTION AND PARKING
19 AGREEMENT." DO YOU SEE THAT?
20 A YES.
21 Q WHO CREATED THAT DOCUMENT?
22 A TED FOLKERT.
23 Q AND WAS THE IDEA NOW TO MOVE TO SOME FORM
24 OF OPTION AND PARKING AGREEMENT THAT WOULD AFFORD
25 MR. BUNGE MORE PARKING THAN HE WOULD HAVE UNDER THE WHAT
26 WE'RE CALLING DEED RESTRICTION?
27 A YES. MR. BUNGE HAD GIVEN US HIS OUTLINE
28 CRITERIA. I HAD SENT AN OUTLINE TO MR. FOLKERT. YOU

39
1 CAN SEE IN THE BOTTOM OF THE E-MAIL OF THE EXHIBIT WE'RE
2 LOOKING AT, BUNGE KEEPS ASKING ABOUT THE PARKING
3 AGREEMENT, BECAUSE HE KNEW WE WERE WORKING ON A PARKING
4 AGREEMENT. "ANYTHING FINALIZED?" AND SO I SAID THEN,
5 "I JUST SENT YOU A DRAFT TO REVIEW." AND THEN TED TOOK
6 IT AND PUT IT IN SORT OF A LEGAL FORM AND SENT IT BACK
7 TO ME.
8 Q AND THAT'S THE DOCUMENT MARKED "PARKING
9 OPTION AND PARKING AGREEMENT"; CORRECT?
10 A THE ONE TED SENT BACK TO ME, YES.
11 Q IF YOU LOOK AT EXHIBIT 190 --
12 MR. BLECHER: -- WHICH I WOULD ASK THE COURT TO
13 MARK.
15 Q BY MR. BLECHER: MR. GAGGERO, IS THAT YOUR
16 REWRITE OF THE PARKING AGREEMENT?
17 A NO. THIS IS -- LET ME SEE -- IF YOU LOOK
18 AT THE E-MAIL TIMES, THIS IS WHAT I -- TED ASKED ME --
19 "BUNGE KEEPS ASKING ABOUT THE PARKING AGREEMENT.
20 ANYTHING FINALIZED?" AND THAT WAS ON DECEMBER 10 AT
21 11:33 A.M. AND THEN I SENT BACK TO HIM ON DECEMBER 10
22 AT 11:56 A.M., "I JUST SENT YOU A DRAFT TO REVIEW."
23 AND NOW IF YOU LOOK AT EXHIBIT 190, IT'S
24 DECEMBER 10 AT 11:31 A.M. SO THERE WAS A TWO-MINUTE
25 PERIOD BETWEEN WHEN MR. FOLKERT SAID, "BUNGE KEEPS
26 ASKING ABOUT THE PARKING AGREEMENT" AND "I JUST SENT IT
27 TO YOU." I HAD SENT HIM EXHIBIT 191. AND THEN LATE
28 THAT AFTERNOON, AT 5:02 P.M., MR. FOLKERT SENT ME BACK

40
1 EXHIBIT 189, "PARKING OPTION AND PARKING AGREEMENT,"
2 WHERE HE HAD TAKEN MY SORT OF ROUGH OUTLINE AND PUT IT
3 INTO A DRAFT CONTRACT FORM.
4 Q IN ANY EVENT, IS IT FAIR TO SAY THAT BY
5 EARLY DECEMBER, EVERYBODY WAS NOW WORKING ON A PARKING
6 AGREEMENT, SLASH, PARKING OPTION, WHICH WOULD HAVE
7 AFFORDED MR. BUNGE MORE RIGHTS THAN HE HAD UNDER THE
8 DEED RESTRICTION?
9 A YES.
10 THE COURT: WAIT A MINUTE. WHAT DO YOU MEAN BY
11 "MORE RIGHTS"? WERE THEY DIFFERENT RIGHTS? MY QUESTION
12 IS NOT PROPER. THE DEED RESTRICTION, EXHIBIT 2, SPOKE
13 ABOUT THE NEED FOR 38 SPACES ON 601. THIS AGREEMENT
14 THAT IS ONE OF THE PAGES ON 190 ONLY TALKS ABOUT 30
15 PARKING SPACES; IS THAT CORRECT?
16 THE WITNESS: MR. BUNGE ONLY WANTED 30, BECAUSE
17 THERE WAS 30 UNITS THAT HE WANTED TO CONVERT TO A HOTEL,
18 AND THE CODE REQUIRES ONE SPACE PER UNIT; SO HE WAS
19 SAYING --
20 THE COURT: WHICH CODE?
21 THE WITNESS: THE COASTAL COMMISSION AND THE L.A.
22 CITY LOCAL COASTAL DEVELOPMENT PARKING REQUIREMENTS.
23 THE COURT: SO THAT DOESN'T REFERENCE -- THAT'S
24 WITHOUT REGARD TO THE ORDER FROM THE COASTAL COMMISSION
25 AS TO THE DEED RESTRICTION.
26 THE WITNESS: RIGHT. MR. BUNGE WAS GOING TO HAVE
27 TO GO AND GET PERMITS TO MAKE A HOTEL THERE. AND WHEN
28 HE WENT TO GET HIS PERMITS TO CHANGE THE USE FROM

41
1 APARTMENTS AND RETAIL TO A HOTEL, ONE OF THE THINGS BOTH
2 THE COASTAL COMMISSION AND THE CITY OF L.A. WOULD ASK
3 FOR IS THAT HE HAVE ONE PARKING SPACE FOR EACH HOTEL
4 ROOM.
5 THE COURT: BUT THAT IS NOT IN ANY OF THE
6 DOCUMENTS THAT THE COURT HAS BEFORE IT.
7 THE WITNESS: OKAY. AND SO MR. BUNGE HAD
8 REQUESTED SINCE SEPTEMBER IN THE -- IF YOU LOOK AT THE
9 EXHIBITS THAT ARE BEFORE THE COURT -- BACK AND FORTH IN
10 SEPTEMBER AND AGAIN IN OCTOBER, MR. BUNGE SAID HE WOULD
11 GIVE US $100,000 AND HE WOULD REDUCE THE NUMBER OF
12 SPACES THAT WOULD BE COMMITTED, FOR LACK OF A BETTER
13 WORD RIGHT NOW, AT 601 FROM 38 TO 30, IF HE COULD HAVE
14 -- HE WOULD REDUCE THEM FROM 38 TO 30 AND GIVE US
15 $200,000 IF HE COULD HAVE 24/7 PARKING. BECAUSE ONE OF
16 THEIR REQUIREMENTS WOULD BE THAT A HOTEL IS GOING TO
17 HAVE 24/7 PARKING. YOU COULDN'T HAVE THE RIGHTS TO
18 PARKING THAT WAS ONLY VALID ONLY DURING RETAIL -- AFTER
19 HOURS RETAIL SPACES WERE OPEN.
20 THE COURT: ALL RIGHT. THANK YOU.
21 PLEASE PROCEED.
22 Q BY MR. BLECHER: SO THE MAJOR CHANGE FROM
23 THE PARKING AGREEMENT, SLASH, OPTION TO THE DEED
24 RESTRICTION IS MR. BUNGE WOULD GET FEWER SPACES, BUT HE
25 WOULD GET THEM ALL DAY AND NIGHT.
26 A YEAH. HE WOULD GET THEM ALL DAY AND
27 NIGHT. HE WOULD HAVE A LEASE ON THEM THAT WOULD NOT
28 DISAPPEAR IF THE RETAIL USES DISAPPEARED, WHICH IS WHAT

42
1 WOULD HAPPEN -- COULD POTENTIALLY HAPPEN WITH THE
2 COASTAL PERMIT. THE COASTAL PERMIT RAN WITH THE LAND
3 UNTIL AND UNLESS THE RETAIL USES IN THE 500 BLOCK CEASED
4 TO EXIST. THEN THOSE WOULD DRY UP. WITH A LEASE --
5 THAT WAS ULTIMATELY WHAT WE GAVE HIM -- WAS 30 YEARS OR
6 UNTIL THE HOTEL USE CEASES. HE WOULD HAVE THOSE -- A
7 LEASE ON THOSE PARKINGS AS LONG AS HE HAD A HOTEL. HE
8 WOULD HAVE THEM 24/7, WHICH IS THEIR REQUIREMENT AND HE
9 WOULD HAVE THE 30 THAT HE NEEDED. AND THEY WOULD BE
10 TRANSFERABLE, THEY WOULD BE EXCLUSIVELY HIS. NO ONE
11 ELSE COULD PARK THERE.
12 FOR EXAMPLE, RIGHT NOW THOSE PARKING SPACES -- WE
13 PARK TWO, THREE, FOUR TIMES A DAY WHEN PEOPLE COME.
14 TOURISTS COME DOWN AND GO UP AND DOWN THE BOARDWALK AND
15 GO TO THE STORES. AND AT NIGHT WE LEASE THOSE SPACES TO
16 THE TENANTS WHO ARE IN MR. BUNGE'S HOTEL. SO IT IS A
17 DOUBLE, TRIPLE, QUADRUPLE RENT OF SPACES. MR. BUNGE
18 WANTED TO HAVE EXCLUSIVE, ONLY HIS HOTEL USE, SO THEY
19 WERE ONLY HIS DEDICATED. NOBODY ELSE COULD PARK THERE.
20 Q SO WERE YOU SHIFTING NOW TO A FORM OF
21 PARKING AGREEMENT MORE TAILORED TO BUNGE'S POTENTIAL USE
22 OF THE PROPERTY AS A HOTEL?
23 A THIS IS WHAT HE WANTED, YES.
24 MR. BLECHER: DID I OFFER 192, YOUR HONOR?
25 THE COURT: THE LAST THING THAT OCCURRED WAS
26 MARKING 190, AND THAT'S IT.
27 MR. BLECHER: THEN I WOULD OFFER 190.

43
1 MR. BEECHEN: NO.
2 THE COURT: IT'S ADMITTED.
3 Q BY MR. BLECHER: AND NOW IF YOU WOULD LOOK
4 QUICKLY AT 192, WHICH I WOULD ASK THE COURT TO MARK.
5 THE COURT: ONE MOMENT. SO MARKED. 192.
6 Q BY MR. BLECHER: IS THIS E-MAIL FROM
7 MR. FOLKERT TO YOU SAYING MR. BUNGE IS CONFIRMING THE
8 CODE REQUIREMENTS FOR PARKING?
9 A YES, IT IS.
10 Q YOU UNDERSTOOD BY "CODE REQUIREMENTS,"
11 CODE REQUIREMENTS FOR A HOTEL?
12 A THAT'S THE 30 SPACES WE WERE TALKING ABOUT
13 VERIFYING THAT 30 SPACES WAS ENOUGH UNDER THE CODE WHICH
14 -- AND THIS IS --
15 THE COURT: WAIT. IT'S ONLY A YES OR NO
16 QUESTION.
17 THE WITNESS: OKAY. YES.
18 MR. BLECHER: I WOULD OFFER 192 INTO EVIDENCE.
20 THE COURT: IT IS ADMITTED, 192.
21 Q BY MR. BLECHER: AND 193, MR. GAGGERO, IS
22 IN EVIDENCE. DID YOU RECALL RECEIVING THIS TELLING YOU
23 MR. BUNGE WAS GETTING VARIOUS PARKING REQUIREMENT
24 OPINIONS OR PLANNED USE OF 511 AND 517? DO YOU SEE
25 THAT?
26 A YES.
27 Q SO IN DECEMBER WE'RE MOVING ALONG NOW ON
28 THIS PARKING AGREEMENT, SLASH, PARKING OPTION CONCEPT OF

44
1 FEWER SPACES BUT ALL NIGHT LONG.
2 A PARKING LEASE. THE OPTION TOOK THE PLACE
3 OF AN ESCROW. OPTION TO LEASE.
4 Q AND IN 194, WHICH IS IN EVIDENCE, YOU'RE
5 TELLING MR. FOLKERT YOU'RE BASICALLY WAITING FOR
6 MR. BUNGE TO COMMENT ON THE OPTION AND LEASE.
7 A YES. MR. FOLKERT HAD RAISED HIS PERSONAL
8 THOUGHTS ABOUT THINGS THAT MAY COME UP WITH THE WAY WE
9 HAD DONE THIS DRAFT OPTION AND LEASE. AND I SAID LET'S
10 JUST, YOU KNOW, LEAVE IT UP TO MR. BUNGE AND HIS
11 ATTORNEY TO COMMENT ON IT, BECAUSE WE CAN'T TRY AND
12 THINK --
13 Q DID YOU AGREE WITH MR. FOLKERT'S
14 OBSERVATIONS THAT THE NEW AGREEMENT SEEMED LIKE A
15 REASONABLE WAY TO RESOLVE THE ISSUE?
16 A YES.
17 Q YOU UNDERSTOOD THE ISSUE TO MEAN ISSUE
18 ABOUT PARKING SINCE THE DEED RESTRICTION, APPARENTLY,
19 COULD NOT BE RECORDED?
20 A THAT AND MR. BUNGE'S DESIRE ALL ALONG TO
21 HAVE 24/7 DEDICATED PARKING.
22 Q OKAY. NOW IN 195 --
23 A "DEED" IS THE WRONG WORD. A LEASE ON THE
24 PARKING.
25 Q CAN YOU IDENTIFY 195 FOR ME? IT'S AN
26 E-MAIL TO YOU FROM MR. FOLKERT, BUT IT HAS ATTACHED A
27 DOCUMENT NOW CALLED "OPTION."
28 A YES, I SEE IT.

45
1 Q IS THAT A DOCUMENT YOU SENT TO MR. FOLKERT
2 THE DAY AFTER CHRISTMAS 2007?
3 A YES.
4 Q AND IS THAT A DOCUMENT YOU PREPARED, OR
5 WAS IT PREPARED BY YOUR LAWYER OR WHAT?
6 A I PREPARED THIS.
7 Q OKAY. SO YOU SENT IT TO MR. FOLKERT
8 SOLICITING HIS VIEWS BEFORE SUBMITTING IT TO MR. BUNGE?
9 A YEAH. I SAID, "PLEASE TAKE A LOOK AT THIS
10 DRAFT OPTION."
11 MR. BLECHER: WE'D OFFER 195 INTO EVIDENCE, YOUR
12 HONOR.
14 THE COURT: 195 IS MARKED AND ADMITTED.
15 Q BY MR. BLECHER: AND JUST FOR THE RECORD,
16 MR. GAGGERO, 196 IS AN E-MAIL STRING WITH YOU AND
17 MR. FOLKERT CONTINUING TO FOCUS ON THE LEASE AND THE
18 OPTION OF THE PARKING.
19 A YES. AND IT INDICATES THAT I SAID I'D
20 LIKE TO COMPLETE THIS IN THIS YEAR.
21 Q WHICH ONLY HAD FOUR DAYS LEFT.
22 A YEAH, I WAS THINKING THAT I WAS
23 OPTIMISTIC.
24 MR. BLECHER: AND YOUR HONOR, WE WOULD ASK YOU TO
25 MARK AND ADMIT 196.
28 Q BY MR. BLECHER: AND IN 197 DID

46
1 MR. FOLKERT TELL YOU HE HAD SENT YOUR DOCUMENT CALLED
2 "OPTION" WHICH IS PART OF EXHIBIT 195 -- THAT HE HAD
3 SENT THAT ON TO MR. BUNGE?
4 A HE SAID HE SENT IT TO MR. BUNGE, BUT THAT
5 HIS ATTORNEY WAS OUT FOR A WEEK OR SOMETHING.
6 Q BUT HE SHIPPED IT OUT.
7 A HE SHIPPED IT OUT, BUT HE WAS SAYING IT'S
8 NOT GOING TO GET REVIEWED ANY TIME SOON, BECAUSE HIS
9 ATTORNEY IS OUT OF TOWN.
11 ADMIT 197.
13 Q BY MR. BLECHER: OKAY. WE'RE NOW INTO THE
14 FIRST WEEK OF JANUARY.
17 Q AND YOU SENT AN E-MAIL -- THIS IS IN
18 EVIDENCE -- TO MR. FOLKERT SAYING IT'S YOUR STATE OF
19 MIND THAT YOU'RE WAITING FOR MR. BUNGE'S LAWYER TO
20 COMMENT ON THE DRAFT OPTION THAT YOU SENT HIM AND WHICH
21 WE IDENTIFIED AS PART OF EXHIBIT 195, I BELIEVE. YES.
22 A THAT'S BECAUSE PATTY FRANEY HAD SENT AN
23 E-MAIL BELOW THAT TO TED SAYING THAT, APPARENTLY, SHE
24 WAS MISSING THE BOILERPLATE ESCROW INSTRUCTIONS.
25 THE COURT: ONE MOMENT. I DON'T SEE A QUESTION.
26 I SEE A COMMENT, BUT PLEASE MAKE IT A QUESTION.
27 Q BY MR. BLECHER: IN THIS E-MAIL ON
28 JANUARY 8, IS IT CORRECT THAT YOU WERE STILL WAITING FOR

47
1 MR. BUNGE OR HIS LAWYER TO RESPOND TO THE OPTION
2 AGREEMENT AS PART OF EXHIBIT 195?
3 A YES.
4 Q NOW, THERE'S SOME NOTE AT THE BOTTOM YOU
5 WERE COMMENTING ON THAT MS. FRANEY WAS SAYING SHE STILL
6 DIDN'T HAVE YOUR SIGNED VERSION OF THE ESCROW
7 INSTRUCTIONS. DO YOU SEE THAT?
8 A YES.
9 Q AND DO YOU KNOW WHY YOU NEVER SIGNED THEM?
10 A WELL, I'M NOT THE ONE TO SIGN THEM, BUT,
11 AGAIN, TED SENT ME -- HE FORWARDED THIS E-MAIL THAT
12 FRANEY HAD SENT TO THEM, AND, APPARENTLY, THE
13 BOILERPLATE INSTRUCTIONS HADN'T BEEN SIGNED OR HADN'T
14 BEEN SENT TO PRASKE. I DON'T KNOW. BUT I THOUGHT TO
15 MYSELF, IT'S MOOT WHETHER THEY'RE SIGNED OR NOT, BECAUSE
16 WE ARE NOW WORKING ON A LEASE WITH AN OPTION, AND THE
17 OPTION WOULD TAKE THE PLACE OF AN ESCROW.
18 SO I SAID, "I'M UNDER THE BELIEF WE'RE WAITING
19 FOR BUNGE'S ATTORNEY TO COMMENT ON THE DRAFT OPTION WE
20 SENT HIM, WHICH OPTION WILL TAKE THE PLACE OF THE DEED
21 RESTRICTION CONTEMPLATED IN THE ESCROW FRANEY IS
22 INQUIRING ABOUT; THEREFORE MOOTING THAT ESCROW." AND
23 THEN I SAID, "PLEASE ADVISE ME IF I'M MISTAKEN AND
24 PROVIDE CONFIRMATION THAT BUNGE IS IN AGREEMENT AND I'M
25 NOT MISTAKEN."
26 THE COURT: I'M SORRY. WHERE IS THE REFERENCE TO
27 MS. FRANEY?
28 MR. BLECHER: BOTTOM OF EXHIBIT 66, YOUR HONOR.

48
1 THE COURT: 66?
2 MR. BLECHER: 198 -- I'M SORRY -- WHICH IS THE
3 SAME AS 66.
4 THE COURT: HOLD ON A MINUTE. AND JUST SO I
5 UNDERSTAND, IN 198 THE SIGNED ESCROW INSTRUCTIONS THAT
6 ARE BEING REFERRED TO ARE THE ONES WITH REGARD TO 601
7 AND THE PARKING.
8 THE WITNESS: THAT'S CORRECT. THEY ARE THE
9 BOILERPLATE. THEY GET ATTACHED TO THE OTHER DEAL. AND
10 SO PATTY FRANEY HAD SENT TO TED LOOKING FOR THOSE ESCROW
11 INSTRUCTIONS. TED SAYS HE DOESN'T KNOW ANYTHING ABOUT
12 THAT --
13 THE COURT: I KNOW. MY QUESTION WAS MORE NARROW
14 THAN THAT. PLEASE GO ON.
15 Q BY MR. BLECHER: NOW, LET ME ASK YOU TO GO
16 TO EXHIBIT 199, WHICH IS AN E-MAIL FROM MR. KAHN TO
17 MR. FOLKERT. CAN YOU IDENTIFY MR. KAHN?
18 A YES.
19 Q WHO IS HE?
20 A HE'S THE ATTORNEY FOR MR. BUNGE WHO IS --
21 Q AND DID MR. FOLKERT EITHER SEND YOU THIS
22 OR OTHERWISE INFORM YOU OF ITS CONTENTS?
23 A HE TOLD ME THAT THEY WERE REVIEWING --
24 THAT MR. KAHN WAS REVIEWING THE LEASE AND THE OPTION
25 THAT WE HAD SENT OVER TO HIM AND THAT THEY WOULD BE
26 GETTING BACK TO US.
27 Q DID HE TELL YOU THAT MR. BUNGE EXPRESSED,
28 QUOTE, "HIS DISSATISFACTION WITH THE FORM AND CONTENT OF

49
1 THE PROPOSED OPTION," END QUOTE.
2 A I KNEW THEY WERE SUPPOSED TO BE GETTING US
3 THEIR REWRITE OF IT OR PUTTING IN THEIR COMMENTS ON IT.
4 Q BUT MY QUESTION TO YOU, SIR, IS WHEN YOU
5 KNEW THAT ON YOUR ORIGINAL DOCUMENT CAPTIONED "OPTION,"
6 MR. BUNGE FOUND IT UNACCEPTABLE.
7 A DID I THINK HE FOUND IT ACCEPTABLE?
8 Q UNACCEPTABLE.
9 A UNACCEPTABLE. I DIDN'T KNOW THAT HE FOUND
10 IT UNACCEPTABLE.
11 MR. BLECHER: YOUR HONOR, WE WOULD ASK YOU TO
12 MARK AND ADMIT 199.
13 MR. BEECHEN: NO OBJECTIONS.
15 Q BY MR. BLECHER: CAN YOU LOOK AT 200 AND
16 TELL ME WHAT YOU UNDERSTAND THAT TO BE. IT'S AN E-MAIL
17 FROM MR. FOLKERT TO YOU WITH A BUNCH OF NUMBERS. WHAT'S
18 THAT ALL ABOUT?
19 A TED AND I WERE BRAINSTORMING ON FINDING A
20 WAY TO JUST SELL THE SUBSURFACE RIGHTS FOR -- TO DO A
21 LEASE OF THE SUBSURFACE RIGHTS TO MR. BUNGE.
22 Q THIS HAS TO DO WITH BUILDING SUBTERRANEAN
23 PARKING ON 601?
24 A RIGHT. THAT WAY -- ONE OF THE THINGS
25 MR. BUNGE WAS EXPRESSING CONCERN ABOUT WAS THE COST OF
26 THE PARKING SPACES IN THE LEASE. HE WANTED TO HAVE A
27 CAP ON IT. AND WE SAID WE COULD JUST SELL IT TO YOU,
28 AND YOU CAN OWN THAT UNDERGROUND -- YOU KNOW, YOU CAN

50
1 SELL AIR RIGHTS OR SUBSURFACE RIGHTS. AND SO IF THEY
2 DEVELOP ON TOP OF HIS PARKING LOT, AND HE WOULD OWN IT,
3 AND HE COULD CONTROL HIS OWN PRICING. IT WOULDN'T BE
4 SUBJECT TO WHOEVER A FUTURE DEVELOPER OWNER WAS THAT
5 WOULD BE ABLE TO INCREASE THE PRICE AND DO WHATEVER THEY
6 WANTED TO.
7 THE COURT: LET'S STOP HERE. WE'LL TAKE THE NOON
8 RECESS. WITNESS AND THE ATTORNEYS ARE ORDERED BACK FOR
9 1:30. ALL RIGHT. THANK YOU.
10 MR. POLK: THANK YOU, YOUR HONOR.
11 (LUNCH RECESS TAKEN AT 12:00 P M.)
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

51
1 (AFTERNOON SESSION BEGINS AT 1:36 P.M.)
2 THE COURT: BACK ON THE RECORD IN BUNGE VERSUS
3 511 OFW, LP, ET AL. THE ATTORNEYS ARE PRESENT.
4 MR. GAGGERO IS ONCE AGAIN ON THE WITNESS STAND.
6 LET'S PROCEED.
8 Q IF YOU WOULD LOOK AT 196, PLEASE.
9 A OKAY.
10 Q AND FROM 196, CAN YOU DETERMINE WHETHER ON
11 DECEMBER 26 OR 27 THE DRAFT OPTION AGREEMENT AND THE
12 PARKING OPTION AGREEMENT THAT YOU DRAFTED WAS SENT ON TO
13 MR. BUNGE?
14 A I DON'T KNOW FOR SURE. IT SAYS, "TED IS
15 GOING TO GET IT TO HIM TODAY."
16 Q WOULD IT BE YOUR BEST JUDGMENT THAT
17 SOMEWHERE AROUND THE 26TH OR 27TH OF DECEMBER, THE
18 PARKING OPTION WAS SENT ON TO MR. BUNGE?
19 A YES.
20 Q AND NOW IF YOU LOOK AT EXHIBIT 66, CAN YOU
21 SEE FROM THE FIRST LINE OF THAT THAT MR. BUNGE WAS OUT
22 OF TOWN AND DIDN'T RETURN UNTIL JANUARY 7?
23 A YES, AS OF JANUARY 8.
24 Q AND IN THE FIRST PARAGRAPH OF YOUR E-MAIL
25 TO MR. FOLKERT, CAN YOU TELL US WHETHER AND WHY YOU SAW
26 THIS OPTION AS, QUOTE, "TAKING THE PLACE OF THE DEED
27 RESTRICTION CONTEMPLATED IN THE ESCROW," END QUOTE. DO
28 YOU SEE?

52
1 MR. BEECHEN: SORRY, COUNSEL. WHICH EXHIBIT?
2 THE COURT: WHICH EXHIBIT ARE WE TALKING ABOUT?
3 MR. BLECHER: 198 OR 66.
4 THE COURT: 66?
5 MR. BLECHER: YEAH, SAME THING.
6 THE COURT: OKAY.
7 Q BY MR. BLECHER: DID YOU HAVE THE QUESTION
8 IN MIND, SIR?
9 A YEAH, YOU WANT TO KNOW WHETHER OR WHY I
10 FEEL THE OPTION WILL TAKE THE PLACE OF A DEED
11 RESTRICTION; IS THAT RIGHT?
12 Q YES.
13 A IT WAS MY UNDERSTANDING THAT THE OPTION
14 WOULD TAKE THE PLACE OF THE DEED RESTRICTION, OR I
15 SHOULD SAY THE LEASE, BECAUSE THE OPTION IS JUST ESCROW
16 FOR THE LEASE. THE OPTION AND LEASE WOULD TAKE THE
17 PLACE OF THE DEED RESTRICTION WHEN AND IF BUNGE AND 601
18 CAME TO AN AGREEMENT TO THE TERM ON THE LEASE. AND THAT
19 WAS EVERYBODY'S FOCUS AT THAT TIME; AND, THEREFORE, IT
20 WOULD TAKE THE PLACE OF THE DEED RESTRICTION GOING DOWN
21 THE PATH WE WERE ALL GOING DOWN.
22 Q AND IN LOOKING AT EXHIBIT 68, AS WE DID
23 BEFORE LUNCH WITH THOSE NUMBERS, THE COST OF $433 A
24 MONTH FOR A SPACE -- DOES THAT ASSUME THE CONSTRUCTION
25 OF A WHOLE NEW GARAGE?
26 A YES, THAT ASSUMES THE CONSTRUCTION OF A
27 SUBTERRANEAN PARKING GARAGE. THAT IS THE $2 MILLION
28 NUMBER UNDERNEATH THERE. AND THAT'S ASSUMING THAT THAT

53
1 SUBTERRANEAN PARKING GARAGE WAS ESSENTIALLY OWNED BY
2 BUNGE AND HE'D OWN HIS OWN SUBTERRANEAN PARKING LOT, AND
3 HE COULD RENT IT OUT HOW AND AS HE WANTED TO. HE COULD
4 USE IT FOR HIS HOTEL USE OR CUSTOMERS TO THE BOARDWALK
5 OR OTHER USES, WHATEVER HE WANTED. HE WOULD OWN THAT
6 SUBTERRANEAN PARKING STRUCTURE.
7 Q DID MR. BUNGE, TO YOUR KNOWLEDGE, EVER
8 AGREE TO BUILD A SUBTERRANEAN PARKING LOT?
9 A NO. WE GAVE HIM OPTIONS THAT WE COULD
10 MAKE IT SO THE DEVELOPER WOULD BUILD IT, OR HE COULD
11 JUST HAVE THE SUBSURFACE AND TERRAIN BE PART OF THAT.
12 WE DISCUSSED LOTS OF VARIATIONS ON THAT CONCEPT.
13 Q COULD YOU LOOK AT EXHIBIT 202 AND TELL US
14 WHAT THE PURPOSE OF YOUR E-MAIL TO MR. FOLKERT WAS?
15 MR. BLECHER: I WOULD ASK THE COURT TO MARK 202.
17 Q BY MR. BLECHER: FIRST OFF, THAT'S AN
18 E-MAIL FROM YOU TO MR. FOLKERT. NOW WE'RE INTO THE
19 MIDDLE OF JANUARY; CORRECT?
20 A YES.
21 Q AND WHAT IS THAT ALL ABOUT?
22 A IT'S A RESPONSE TO THE EARLIER EXHIBITS.
23 68, I GUESS IT IS. WHAT ABOUT IF -- WHEN TED ASKED THE
24 QUESTION WHAT ABOUT IF HE GETS THE WHOLE UNDERGROUND
25 LEVEL AND COULD GRANT WHAT HE DOESN'T NEED, MAYBE IT
26 WOULD WORK. AND THESE ARE MY THOUGHTS ON -- MY
27 FIRST-BLUSH THOUGHTS ON WHAT THAT WOULD LOOK LIKE.
28 Q DOES THIS HAVE TO DO WITH THE PROPOSED

54
1 UNDERGROUND PARKING?
2 A YES.
3 Q THAT NEVER BECOME A REALITY?
4 A YES. IT WAS ANOTHER CONCEPT WE WERE
5 BRAINSTORMING TO --
6 MR. BLECHER: I WOULD LIKE TO OFFER 200 AND 202
7 INTO EVIDENCE, YOUR HONOR.
9 THE COURT: ALL RIGHT. WE'LL MARK 200 SINCE
10 THERE'S NO OBJECTION. BOTH OF THEM COME IN: 200 AND
11 202.
12 Q BY MR. BLECHER: DO YOU KNOW, SIR, WHETHER
13 THE COASTAL COMMISSION EVER APPROVED PLANS FOR BUILDING
14 ON 601?
15 A YES, THEY DID.
16 Q AND WAS THAT A BUILDING TO BE A PARKING
17 LOT OR SOME OTHER KIND OF STRUCTURE?
18 A IT WAS TWO LEVELS OF SUBTERRANEAN -- AS
19 APPROVED BY THE COASTAL COMMISSION, TWO LEVELS OF
20 SUBTERRANEAN, HALF A LEVEL OF STREET PARKING, GROUND
21 LEVEL RETAIL STORES, AND A SECOND FLOOR FOOD COURT.
22 Q AND CAN YOU LOOK NOW AT EXHIBIT 70, WHICH,
23 I BELIEVE, IS IN EVIDENCE.
24 THE COURT: IT IS. PLEASE ASK YOUR NEXT
25 QUESTION.
26 Q BY MR. BLECHER: DO YOU RECALL,
27 MR. GAGGERO, ON OR ABOUT JANUARY 22 RECEIVING THIS
28 LETTER FROM MR. BUNGE SUGGESTING HE WANTED TO GET HIS

55
1 MONEY BACK AND TERMINATE THE -- ALL THE AGREEMENT?
2 A YES.
3 Q AND THAT WAS SENT TO YOU BY MR. FOLKERT,
4 EVEN THOUGH THAT SEEMS TO BE ADDRESSED DIRECTLY TO YOU.
5 A CORRECT.
6 Q AND I'D ASK YOU TO LOOK AT EXHIBIT 205 --
7 MR. BLECHER: -- WHICH I'LL ASK THE COURT TO HAVE
8 MARKED.
10 Q BY MR. BLECHER: AND IS 205, MR. GAGGERO,
11 YOUR REPLY TO MR. BUNGE'S LETTER THAT WE JUST LOOKED AT,
12 EXHIBIT 70?
13 A NO.
14 Q THERE WAS A SECOND LETTER FROM MR. BUNGE.
15 A YES. THERE WAS A LETTER IN RESPONSE TO
16 MR. BUNGE'S JANUARY 22ND LETTER FROM ME, ANOTHER LETTER
17 FROM MR. BUNGE, AND THEN THIS EXHIBIT 205, JANUARY 29
18 LETTER.
19 Q I BEG YOUR PARDON. COULD YOU LOOK AT 71,
20 WHICH IS IN EVIDENCE, AND TELL ME WHETHER THAT'S THE
21 REPLY TO MR. BUNGE'S JANUARY 22 LETTER.
22 A IT IS.
23 Q AND WAS IT CORRECT THAT AS OF THE -- THAT
24 THAT DATE, JANUARY 24, THE OWNERS OF 511 AND 517
25 REMAINED READY, WILLING, AND ABLE TO GO AHEAD WITH THE
26 PURCHASE AND SALE AGREEMENT?
27 A YES.
28 Q AND THAT THE OWNER OF 601 REMAINS READY,

56
1 WILLING, AND ABLE TO COMPLY WITH THE TERMS OF WHAT
2 WAS -- WE'RE CALLING THE DEED RESTRICTION?
3 A SPECIFICALLY, I SAID THE OWNER OF 601
4 REMAINS READY, WILLING TO COMPLY WITH THE TERMS OF THEIR
5 AGREEMENT AND RECORD THE DOCUMENT THAT WAS AGREED TO AND
6 ATTACHED AS AN EXHIBIT.
7 Q CORRECT. AND THAT REFERS TO THE DEED
8 RESTRICTION THAT WE'VE IDENTIFIED AS EXHIBIT 31.
9 A CORRECT.
10 Q AND IS THAT STATEMENT TRUE, THAT YOU WERE
11 READY TO GO AHEAD AND ATTEMPT TO RECORD IT?
12 A YES.
13 THE COURT: THAT YOU WERE AT THAT TIME?
14 THE WITNESS: YES, SIR. AT ALL TIMES WE WERE UP
15 UNTIL OCTOBER SOMETHING OF 2008.
16 Q BY MR. BLECHER: IF YOU DROP DOWN TO THE
17 PARAGRAPH SECOND FROM THE BOTTOM, YOU TELL MR. AND
18 MRS. BUNGE, "IF YOU REMAIN WILLING TO COMPLY WITH THE
19 AGREEMENTS, SIMPLY HAVE THE EXHIBIT RECORDED ON 601 AND
20 CLOSE THE ESCROW ON 511 AND 517." DO YOU SEE THAT?
21 A ON THE CLOSING DATE, YES.
22 Q SO YOU'RE INVITING MR. BUNGE TO TAKE THE
23 DEED RESTRICTION AND HAVE IT RECORDED.
24 A I DID.
25 Q YOU HAD NO OBJECTION TO THAT.
26 A NO OBJECTION. WE HAD ALREADY SIGNED IT.
27 Q NOW, I MOVE YOU TO 72. AND THIS IS
28 MR. AND MRS. BUNGE REPLYING TO YOUR LETTER OF JANUARY 22

57
1 AND BASICALLY NOW ASKING THAT, QUOTE, "THE CONTRACT HAS
2 TO BE CANCELED AND OUR MONEY REFUNDED." DO YOU SEE
3 THAT?
4 A YES.
5 Q AND YOU DID RECEIVE THIS ON OR ABOUT
6 JANUARY 24?
7 A YES.
8 Q NOW, IF WE LOOK AT EXHIBIT 205, THAT'S
9 YOUR REPLY TO THAT LETTER, IS IT NOT?
10 A CORRECT.
11 MR. BLECHER: MAY I ASK THE COURT TO MARK AND
12 ADMIT 205.
13 THE COURT: ANY OBJECTION ON 205?
14 MR. BEECHEN: NO.
16 Q BY MR. BLECHER: NOW, IF I CAN GET YOU
17 OVER TO EXHIBIT 213, MR. GAGGERO.
18 A I HAVE IT.
19 Q THESE ARE SOME E-MAILS BETWEEN MR. FOLKERT
20 AND MR. BUNGE IN APRIL. SEE THAT? 2008?
21 A YES.
22 Q AND NOW, BALL PARK, TWO AND A HALF MONTHS
23 PAST THE ASSERTED CANCELLATION. DO YOU RECALL THAT?
24 A YES.
25 Q AND IT SAYS HERE, "MR. BUNGE SAYS TO
26 MR. FOLKERT, QUOTE, "STEVE AND I ARE MEETING TO SEE IF
27 WE CAN WORK OUT A DEAL TO PURCHASE THE PARKING LOT AS
28 WELL AS PUT THE GINGERBREAD PROPERTY BACK TOGETHER. IF

58
1 THIS WORKS, WE CLEARLY WANT THE APARTMENT EMPTY, ET
2 CETERA." DO YOU SEE THAT?
3 A YES.
4 Q AT THE END OF APRIL OF 2008, WERE YOU
5 STILL WORKING WITH MR. BUNGE AFTER HIS CANCELLATION TO
6 TRY TO PUT THE DEAL TOGETHER?
7 A WE WERE STILL WORKING ON -- WHEN YOU SAY
8 "PUT THE DEAL TOGETHER," I ASSUME YOU'RE TALKING ABOUT
9 AN ALTERNATIVE PARKING ARRANGEMENT FROM THE DEED
10 RESTRICTION.
11 Q YES.
12 A YES.
13 Q AND WOULD THE ALTERNATIVE PARKING
14 ARRANGEMENT, IN YOUR MIND, THEN HAVE LED BUNGES GOING
15 FORWARD FOR THE PURCHASE OF THE PROPERTY? IN OTHER
16 WORDS, WHY WOULD THEY WANT PARKING, IF THEY WEREN'T
17 GOING TO OWN THE PROPERTY?
18 A I'M NOT SURE I UNDERSTAND YOUR QUESTION.
19 Q WELL, EXPLAIN TO ALL OF US WHY YOU AND
20 MR. BUNGE WERE TALKING ABOUT PARKING IN APRIL.
21 A BECAUSE MR. BUNGE WANTED TO HAVE 24/7
22 PARKING AND A LEASE ON THAT PARKING. AND NOW HE WAS
23 STARTING -- IN THE NEGOTIATIONS HE WAS ALSO NOW WANTING
24 TO CONTROL WHAT THE COST OF THE SPACES WERE GOING TO BE.
25 BECAUSE BEFORE THERE WAS NO CONTROL ON WHAT THE SPACE
26 COST WAS, NOT IN THE DEED RESTRICTION, COASTAL PERMIT,
27 THERE'S NO CAP ON THE PARKING. SO NOW HE WANTS TO
28 CONTROL THE PARKING COST, HAVE THE SPACES BE EXCLUSIVELY

59
1 HIS, AND HE WANTS TO BE ABLE TO USE THEM 24 HOURS A DAY
2 EXCLUSIVELY. SO I'M JUST TRYING TO APPEASE HIM,
3 ACCOMMODATE THAT, THAT DESIRE AND, AT THE SAME TIME,
4 MAKE IT SO IT'S NOT A LOSS FOR THE 601 OWNER SO THEY CAN
5 HAVE -- IT BECOMES A BUSINESS.
6 Q BUT DOESN'T THIS CONTINUOUS DISCUSSIONS
7 ABOUT PARKING RIGHTS SUGGEST AN INTEREST IN CLOSING THE
8 PURCHASE OF THE TWO PROPERTIES?
9 A AS FAR AS I WAS CONCERNED THE PURCHASE --
10 THE COURT: WAIT. WAIT. YOU ASKED A QUESTION.
11 LET THE WITNESS ANSWER. GO AHEAD.
12 THE WITNESS: AS FAR AS I WAS CONCERNED, PURCHASE
13 AND SALE AGREEMENT FOR 511, 517 WAS STILL ACTIVE, AND WE
14 HADN'T GOTTEN TO THE ESCROW CLOSING DATE YET. HIS
15 ESCROW CLOSING DATE WAS IN JUNE SOMETIME, AND THIS IS
16 APRIL.
17 Q BY MR. BLECHER: THAT'S WHAT I'M TRYING TO
18 GET AT. WERE YOU NOW TALKING ABOUT PARKING LOT ON 601
19 THAT HAD NOTHING TO DO WITH THE PURCHASE OF 511 OR 517,
20 OR DID YOU STILL THINK THERE REMAINED A POSSIBILITY OF
21 SELLING 511 AND 517 TO MR. BUNGE?
22 A MY STATE OF MIND AND I BELIEVE THE WAY THE
23 DOCUMENTS FLOW IS THAT WE WERE STILL UNDER CONTRACT.
24 511 AND 517 WERE STILL UNDER CONTRACT TO SELL THE
25 PROPERTY TO MR. BUNGE. HE HAD NEVER EXPRESSLY CANCELED
26 THAT, EVEN THOUGH I SENT HIM LETTERS ASKING IF HE WAS
27 EXPRESSLY CANCELLING THAT ESCROW AND THOSE TWO
28 CONTRACTS; AND, IF SO, PLEASE SEND CANCELLATION

60
1 INSTRUCTION THAT EXPRESSLY CONTRACT THOSE PER THE TERMS
2 OF THOSE AGREEMENTS. AND HE NEVER DID. AND I ASKED HIM
3 SEVERAL TIMES TO DO IT. AND SO IT WAS MY BELIEF THAT WE
4 WERE STILL UNDER CONTRACT AND CERTAINLY STILL UNDER
5 ESCROW, BECAUSE NO ESCROW CANCELLATION INSTRUCTIONS WERE
6 SENT IN UNTIL SOMETIME IN THE FALL OF 2008.
7 MR. BLECHER: MAY I OFFER 213 INTO EVIDENCE?
8 THE COURT: OBJECTION? 213?
9 MR. BEECHEN: NO, YOUR HONOR.
10 THE COURT: ALL RIGHT. IT IS MARKED AND
11 ADMITTED.
12 Q BY MR. BLECHER: IF YOU LOOK AT 214,
13 THERE'S AN E-MAIL THERE FROM YOU TO MS. FRANEY IN
14 RESPONSE TO AN E-MAIL FROM HER TO YOU, ALL ON APRIL 24,
15 2008. DO YOU SEE THAT?
16 A YES.
17 Q OKAY.
18 MR. BLECHER: I'D ASK THE COURT TO MARK AND ADMIT
19 214.
20 MR. BEECHEN: NO OBJECTIONS.
21 THE COURT: IT'S ADMITTED.
22 Q BY MR. BLECHER: AND SO AS OF LATE APRIL
23 2008, YOU WERE STILL ENGAGED IN DISCUSSIONS WITH
24 MR. BUNGE ON THE SALE AND THE PARKING LOT.
25 A WE WERE IN DISCUSSIONS ON PARKING
26 ALTERNATIVES.
27 Q AND NOW I'LL ASK YOU TO LOOK AT EXHIBIT
28 218, AND THAT'S AN E-MAIL FROM -- EITHER AN E-MAIL OR A

61
1 LETTER FROM MR. BUNGE TO MARA ESCROW, ATTENTION PATTY
2 FRANEY, IN JUNE OF 2008. DO YOU SEE THAT?
3 A YES.
4 MR. BLECHER: AND I'D ASK THE COURT TO MARK AND
5 ADMIT 218.
6 MR. BEECHEN: WELL, OBJECTION TO THIS ONE, YOUR
7 HONOR, ONLY BECAUSE I DON'T THINK WE HAVE SUFFICIENT
8 FOUNDATION ABOUT WHAT IS THE NEW -- THE SUGGESTED
9 INSTRUCTIONS. I'M JUST LOOKING AT THE BOTTOM HERE.
10 THE COURT: OKAY. I DON'T NEED -- AT THIS POINT,
11 I WOULD ASK FOR NO SPEAKING OBJECTION. 218 IS MARKED.
12 THE OBJECTION AS TO FOUNDATION IS WELL TAKEN. THE
13 OBJECTION IS SUSTAINED ON THAT AT THIS POINT. IT IS
14 NEITHER FROM OR TO THIS WITNESS. AND SO HE IS -- HE
15 CANNOT AUTHENTICATE THE E-MAIL.
16 Q BY MR. BLECHER: LOOKING AT 218, DOES IT
17 HELP REFRESH YOUR RECOLLECTION THAT IN JUNE OF 2008 YOU
18 WERE STILL WORKING WITH MR. BUNGE TO SEE IF YOU COULD
19 WORK OUT A COMPROMISE AND OPEN A NEW ESCROW?
20 A I WAS NOT WORKING WITH MR. BUNGE TO OPEN A
21 NEW ESCROW UNLESS ONE WAS NECESSARY BY WHAT A NEW
22 PARKING CONCEPT WOULD HAVE REQUIRED.
23 Q ABSENT OPENING A NEW ESCROW, WERE YOU
24 CONTINUING TO TALK TO MR. BUNGE TO SEE WHETHER YOU COULD
25 PUT SOMETHING TOGETHER THAT WOULD MAKE A DEAL?
26 A YES. ACCOMMODATE HIS PARKING DESIRES,
27 YES.
28 Q WOULD YOU IDENTIFY 219 AS A LETTER YOU

62
1 RECEIVED FROM MR. BUNGE ON OR ABOUT JUNE 20, 2008?
2 A YES.
3 MR. BLECHER: NOW, I'D ASK THE COURT TO MARK AND
4 RECEIVE 219.
7 Q BY MR. BLECHER: I INVITE YOUR ATTENTION
8 TO THE SECOND PARAGRAPH. MR. BUNGE SAYS, "I REPEAT, I
9 RESPECTFULLY DISAGREE WITH YOUR STATEMENT THAT THE SALE
10 OF 511 AND 517 OCEAN FRONT WALK WERE NOT CONTINGENT OR
11 RELATED TO THE PARKING RESTRICTION AGREEMENT WHICH WAS
12 SUPPOSED TO BE RECORDED ON THE 601 OCEAN FRONT WALK
13 PROPERTY. WHO WOULD PAY THAT PRICE FOR A PROPERTY THAT
14 HAD NO PARKING?" DO YOU SEE THAT?
15 A YES.
16 Q NOW, DID OR DID NOT 511 AND 517 COME WITH
17 PARKING THAT RAN WITH THE LAND?
18 A THEY DID.
19 Q SO YOU DIDN'T NEED ANY KIND OF SEPARATE
20 DEED OR DEED RESTRICTION, WHATEVER YOU WANT TO CALL IT
21 -- YOU DIDN'T NEED ANY OF THAT FOR 517 AND 511 TO HAVE
22 THE PARKING RIGHTS THAT EXISTED UNDER THE COASTAL
23 COMMISSION PERMIT.
24 A THAT'S CORRECT.
25 Q THE ONLY THING THAT THE DEED RESTRICTION
26 DID WAS MAKE SURE THAT THOSE RIGHTS UNDER THE PERMIT
27 WOULD NOT GET REDUCED IF THE USE OF THE PROPERTY
28 CHANGED; CORRECT?

63
1 A SAY IT DIFFERENTLY. WHAT THE DEED
2 RESTRICTION DID WAS MAKE PUBLIC RECORD THAT THE OWNER OF
3 601 AND FUTURE OWNER WOULD PROVIDE THE SAME PARKING
4 UNDER THE SAME CONDITIONS AS THE COASTAL PERMIT
5 IRRESPECTIVE OF WHETHER MR. BUNGE CHANGED THE USE OF 511
6 AND/OR 517.
7 Q BUT DID YOU HAVE AN UNDERSTANDING OF
8 WHETHER YOU NEEDED THE DEED RESTRICTION OR ANY DOCUMENT
9 FOR PARKING RIGHTS TO PASS WITH THE SALE OF 511 OR 517?
10 MR. BEECHEN: THAT'S VAGUE AND AMBIGUOUS. WHAT
11 IS MEANT BY "PARKING RIGHTS"?
13 Q BY MR. BLECHER: LET ME PUT IT THIS WAY:
14 IF YOU SOLD 511 AND 517 WITH NO KIND OF DEED RESTRICTION
15 OR SEPARATE PARKING AGREEMENT, WOULD YOU TELL US WHAT
16 YOU UNDERSTOOD THE PARKING RIGHTS, IF ANY, WHICH WOULD
17 PASS TO THE PURCHASER OF THOSE TWO LOTS.
18 A WHOEVER BOUGHT 511 WOULD HAVE THE RIGHT TO
19 SIX SPACES FOR THEIR CUSTOMERS AND EMPLOYEES DURING THE
20 HOURS THAT THE RETAIL BUSINESSES WERE OPEN. AND WHOEVER
21 BOUGHT 517 OCEAN FRONT WALK WOULD HAVE THE RIGHT TO 32
22 SPACES FOR THEIR CUSTOMERS AND EMPLOYEES DURING BUSINESS
23 HOURS WHEN THE RETAIL SHOPS WERE OPEN. AND THOSE RIGHTS
24 WERE IN PERPETUITY UNTIL SUCH TIME AS THE RETAIL USES
25 CEASED TO EXIST.
26 Q AND FROM WHAT SOURCE DID THOSE PARKING
27 RIGHTS EMANATE?
28 A FROM THE COASTAL COMMISSION PERMIT,

64
1 SOMETHING 589.
2 Q I ASK YOU TO LOOK AT 220, SIR. IS THAT A
3 LETTER YOU RECEIVED FROM MR. BUNGE ON OR ABOUT JUNE 27,
4 2008?
5 A YES.
6 MR. BLECHER: WE'D ASK THE COURT TO MARK AND
7 RECEIVE 220.
9 THE COURT: 220 IS MARKED AND RECEIVED.
10 Q BY MR. BLECHER: IF YOU LOOK AT THE DATE
11 OF THE LETTER, DID YOU AGREE THIS IS NOW NOT QUITE TWO
12 WEEKS PAST THE ESCROW CLOSING DATE?
13 A YES.
14 Q AND, OF COURSE, THE ESCROW NEVER CLOSED;
15 CORRECT?
16 A THE ESCROW FOR 511 AND 517; CORRECT.
17 Q IS IT CORRECT, AS MR. BUNGE SUGGESTS, THAT
18 THE TWO OF YOU WERE STILL TALKING ABOUT SOME FORM OF
19 PARKING AGREEMENT FOR 601?
20 A YES.
21 Q AND THAT WAS, AS MR. BUNGE PUTS IT, QUOTE,
22 "THE SUBSTITUTE FOR THE ORIGINAL EASEMENT" -- WHAT HE
23 CALLS AN EASEMENT. DO YOU SEE THAT? THAT DID NOT GET
24 RECORDED.
25 A YES.
26 Q DID YOU UNDERSTAND WHEN YOU USE THE WORD
27 "EASEMENT" YOU WERE TALKING ABOUT THE DEED RESTRICTION?
28 A THAT WAS MY UNDERSTANDING.

65
1 Q AND DO YOU RECALL HE SUGGESTED THAT IF YOU
2 COULD REACH AN AGREEMENT ON PARKING, HE WOULD WITHDRAW
3 HIS CANCELLATION OF THE ESCROW?
4 A I'M SORRY. WHAT WAS THE FIRST PART?
5 Q IF THE TWO OF YOU COULD REACH AN AGREEMENT
6 ON PARKING, HE WOULD THEN WITHDRAW HIS ESCROW
7 CANCELLATION NOTICE.
8 A ARE YOU ASKING ME IS THAT WHAT IT SAYS
9 HERE?
10 Q YES. IS THAT WHAT YOU UNDERSTOOD HIM TO
11 BE SAYING TO YOU?
12 A THAT'S WHAT I UNDERSTOOD HIM TO BE SAYING.
13 BUT, AGAIN, I DON'T THINK HE CANCELLED THE ESCROW. AND,
14 IF HE DID, I DON'T KNOW WHICH ONE HE DID. AND THERE'S
15 NO CANCELLATION INSTRUCTIONS TO US.
16 Q NOW, IN RESPONSE TO THAT, SIR, DID YOU
17 WRITE THE LETTER THAT'S MARKED EXHIBIT 221?
18 A YES, I DID.
19 Q AND WITH THIS LETTER, DID YOU ACTUALLY
20 SEND TO MR. BUNGE YET ANOTHER DOCUMENT CALLED "OPTION TO
21 LEASE PARKING"?
22 A YES.
23 MR. BLECHER: I ASK THE COURT TO RECEIVE 221.
26 Q BY MR. BLECHER: NOW, IF YOU GO TO EXHIBIT
27 222, CAN YOU IDENTIFY THAT AS THE LETTER YOU RECEIVED
28 FROM MR. BUNGE IN THE EARLY PART OF AUGUST 2008?

66
1 A EXHIBIT 222?
2 Q YES.
3 A YES.
4 Q AND DID YOU UNDERSTAND THIS TO BE A NEW
5 PROPOSAL TO PURCHASE 511, 517, 523, AND 601?
6 A I UNDERSTOOD IT AS A NEW PROPOSAL TO ADD
7 523 AND 601 TO THE CONTRACT THAT WAS STILL IN EXISTENCE
8 FOR A TOTAL PRICE OF $21 MILLION.
9 Q AND YOU SEE ATTACHED TO THIS PRO FORMA FOR
10 A HOTEL ON VENICE BEACH THE COST OF THE HOTEL AND THE
11 INCOME AND EXPENSES. DO YOU SEE THAT?
12 A YES.
13 Q DID YOU UNDERSTAND THAT AS OF AUGUST,
14 EARLY AUGUST 2008, MR. BUNGE WAS STILL INTERESTED IN
15 BUILDING THE HOTEL ON 511 AND 517?
16 A YES. IN ADDITION TO THEM BUILDING A HOTEL
17 ON THE PARKING LOT AS WELL AND MAKING IT ALL ONE BIG
18 HOTEL INSTEAD OF JUST APARTMENT HOTELS OVER ON 511 AND
19 517.
20 Q SO HIS PLAN FOR THE FOUR LOTS IS NOW
21 SIGNIFICANTLY EXPANDED.
22 A CORRECT. FOR THE THREE, AND NOW IT
23 INCORPORATED A FOURTH AND EXPANDED.
24 Q BEAR WITH ME.
25 MR. BLECHER: DID I ASK THE COURT TO ADMIT 222?
26 THE COURT: NO.

67
1 Q BY MR. BLECHER: NOW, IS 223 A RESPONSE TO
2 222?
3 A YES.
4 MR. BLECHER: AND I'D ASK THE COURT TO ADMIT 223.
6 THE COURT: ADMITTED.
7 Q BY MR. BLECHER: IF YOU LOOK AT 224, SIR,
8 THEN IDENTIFY THAT AS THE LETTER YOU WROTE TO MR. AND
9 MRS. BUNGE TOWARD THE END OF SEPTEMBER OF 2008.
10 A I'M SORRY. WHAT EXHIBIT?
11 Q PARDON?
12 A EXHIBIT 224?
13 Q EXHIBIT 224.
14 A OKAY. YES.
15 Q IS THE SUBSTANCE OF THAT THAT YOU WANT HIM
16 TO MAKE SOME CLEAR DECISION ON GOING FORWARD OR NOT
17 GOING FORWARD ON THE PURCHASE AGREEMENT FOR 511 AND 517?
18 A YES.
19 MR. BLECHER: CAN WE OFFER 224 INTO EVIDENCE,
20 YOUR HONOR?
23 Q BY MR. BLECHER: AND THEN 225 IS A LETTER
24 YOU APPARENTLY WROTE TO MR. AND MRS. BUNGE IN OCTOBER OF
25 2008; IS THAT CORRECT?
26 A YES.
27 MR. BLECHER: SO WE'D ASK THE COURT TO MARK AND
28 RECEIVE 225 INTO EVIDENCE.

68
1 THE COURT: OBJECTION?
4 Q BY MR. BLECHER: DID YOU UNDERSTAND THAT
5 IN SEPTEMBER/OCTOBER 2008, MR. BUNGE WANTED TO LEAVE THE
6 ESCROW FOR 511 AND 517 OPEN DEPENDING ON WHETHER HE
7 COULD RAISE MONEY FOR WHAT YOU CALL "GRAND HOTEL
8 PROJECT"?
9 A IT WAS MY UNDERSTANDING THAT HE WAS TRYING
10 TO RAISE MONEY FOR THIS GRAND HOTEL PROJECT, AND HE WAS
11 SAYING, CLEARLY, HE WANTED TO RAISE THAT MONEY AND THEN
12 CLOSE THOSE ESCROWS.
13 Q HE HAD AN UNDERSTANDING THAT IF HE COULD
14 RAISE ENOUGH MONEY TO DO THE BIG HOTEL PROJECT AND THE
15 PARKING THAT HE WAS NOW ENVISIONING, HE WOULD GO AHEAD
16 AND DO THE PURCHASE.
17 MR. BEECHEN: OBJECTION, YOUR HONOR; FOUNDATION.
19 Q BY MR. BLECHER: ON THE BASIS OF THE
20 MEETINGS WITH MR. AND MRS. BUNGE IN SEPTEMBER AND
21 OCTOBER AND EXHIBIT 225, WHAT WAS YOUR STATE OF MIND IN
22 RESPECT TO MR. BUNGE'S INTENTION ON 511 AND 517?
23 A MY STATE OF MIND WAS MR. BUNGE WAS NOW
24 WANTING TO CONDITION THE CLOSE OF THE 511 AND 517
25 PURCHASE ON HIS ABILITY TO RAISE THE MONEY TO DO A VERY
26 LARGE HOTEL DEVELOPMENT, WHICH WOULD INCLUDE THE PARKING
27 LOT, WHICH WAS A HALF AN ACRE AND THE 523 WHICH WAS
28 ANOTHER PROPERTY AND THEN THE TWO SUBJECT PROPERTIES.

69
1 AND THAT WAS MY STATE OF MIND. AND MY STATE OF MIND
2 FURTHER WAS REFLECTED IN THE SECOND PAGE WHERE I TOLD
3 JOSE AGAIN THAT THE OWNER OF 601 REMAINED WILLING TO
4 PROVIDE PARKING PER THE TERMS OF THE COASTAL PERMIT
5 BETWEEN BOARDWALK SETUP OR PER THE TERMS OF THE THREE
6 DIFFERENT LEASE OPTIONS BOARDWALK SUNSET HAS PROVIDED
7 YOU IN AN EFFORT TO MAKE EVERYBODY HAPPY.
8 MR. BLECHER: OFFER 225 INTO EVIDENCE, YOUR
9 HONOR?
10 THE COURT: 225 HAS BEEN ADMITTED.
12 Q OKAY. AT LAST, MR. GAGGERO, TAKE A LOOK
13 AT 226, PLEASE. AND TELL ME THIS IS -- TELL ME WHETHER
14 THIS IS A LETTER YOU RECEIVED FROM MR. BUNGE ON OR ABOUT
15 OCTOBER 29, 2008.
16 A IT IS.
17 Q AND, IN THIS LETTER, HE SAYS, QUOTE, "I'VE
18 COME TO THE CONCLUSION THAT TO PROTECT OUR INTEREST IN
19 BUYING THE PROPERTIES, WE HAVE TO FILE A LAWSUIT." DO
20 YOU SEE THAT?
21 A YES.
22 MR. BLECHER: AND I THINK I SHOULD ASK THE COURT
23 TO MARK AND ADMIT 226.
25 THE COURT: ALL RIGHT. SO ORDERED.
26 Q BY MR. BLECHER: DID YOU EVER LOOK AT THAT
27 LAWSUIT? I GUESS WE HAVEN'T ESTABLISHED -- DID
28 MR. BUNGE EVER FILE A LAWSUIT THAT HE REFERRED TO HERE?

70
1 A I BELIEVE THIS IS THE LAWSUIT. IN MY
2 REPORT HERE.
3 Q DO YOU RECALL IN THE LAWSUIT WHAT
4 MR. BUNGE ASKED THE COURT TO DO?
5 A HE WANTED SPECIFIC PERFORMANCE TO BE ABLE
6 TO BUY THE PROPERTY.
7 Q TO ORDER YOU TO SELL THE PROPERTY?
8 A TO ORDER US TO SELL THE PROPERTY.
9 Q SO THAT, IN OR ABOUT LATE OCTOBER 2008, HE
10 WAS SAYING TO THE COURT, "I HAVE A DEAL TO BUY THESE,
11 AND YOU HAVE TO FORCE THE SELLERS TO SELL." THE COURT
12 HAS TO ORDER THE SELLERS TO SELL; CORRECT?
13 A CORRECT.
14 MR. BLECHER: I THINK THE COURT COULD TAKE
15 JUDICIAL NOTICE OF THE LAWSUIT, WHICH IS FILED IN THIS
16 COURT.
17 THE COURT: SURE.
18 MR. BLECHER: DO WE NEED TO MARK IT AS AN
19 EXHIBIT?
20 THE COURT: NO, WE DON'T NEED TO.
21 MR. BLECHER: WE HAVE ENOUGH EXHIBITS.
22 THE COURT: I CAN TAKE JUDICIAL NOTICE OF ANY
23 DOCUMENT THAT'S IN THE FILE.
24 MR. BLECHER: THANK YOU. FOR NOW I HAVE NO
25 FURTHER QUESTIONS OF MR. GAGGERO.
26 THE COURT: OKAY. RECROSS?
27 MR. BEECHEN: YES.
28 //

71
1 REDIRECT EXAMINATION
2 BY MR. BEECHEN:
3 Q NOW, MR. GAGGERO, LET'S GO TO,
4 APPROXIMATELY, NOVEMBER 19, 2007. THAT'S THE DATE IN
5 WHICH -- THE 19TH AND THE 20TH. THAT'S THE DATE IN
6 WHICH YOU GIVE INSTRUCTIONS THROUGH LISA JOHNSON, "DO
7 NOT RECORD THE DEED RESTRICTION." DO YOU RECALL THAT
8 DATE?
9 A I THOUGHT IT WAS THE 20TH.
10 Q 20TH OF NOVEMBER 2007. AND YOUR TESTIMONY
11 IS THAT MR. BUNGE -- THE REASON WHY YOU CANCELED THE
12 RECORDING OF THE DEED RESTRICTION WAS BECAUSE THE BUNGES
13 WANTED IT TO NOT BE RECORDED; CORRECT?
14 A THAT WASN'T MY TESTIMONY.
15 Q WELL, IS THAT THE REASON WHY YOU CANCELED
16 IT, BECAUSE YOU KNEW THE BUNGES DIDN'T WANT TO DO THIS
17 DEAL ANYMORE THAT WAS REPRESENTED BY THE DEED
18 RESTRICTION?
19 A NO. BECAUSE I WAS TOLD THAT THE DEED
20 RESTRICTION WAS NOT RECORDABLE, IT COULDN'T BE INSURED,
21 THE TITLE COMPANY FELT IT WAS TRYING TO AMEND THE
22 COASTAL COMMISSION PERMIT, THAT THE COUNTY RECORDER
23 WOULDN'T ACCEPT IT. SO I SAID HOLD OFF ON SENDING IT
24 DOWN FOR A COUPLE DAYS, BECAUSE WE DON'T WANT SOMETHING
25 TO GET RECORDED THAT SHOULDN'T BE RECORDED BY ACCIDENT
26 AND THEN DOWN THE ROAD, SOMEONE SAYS, MR. GAGGERO, SO
27 YOU SENT IT DOWN ON ACCOMMODATION KNOWING IT WAS AN
28 INVALID AND IMPROPER DOCUMENT. AND THAT'S A. AND B,

72
1 BECAUSE I WANTED -- TED AND I DISCUSSED IT, AND WE SAID
2 WE'D BETTER GO DOWN AND SEE IF THAT DOCUMENT CAN BE
3 RECORDED OR NOT.
4 AND BECAUSE MR. BUNGE HAD BEEN REPEATEDLY SAYING
5 THAT WHAT HE WANTED WAS 24/7 PARKING AND ONLY 30 SPACES
6 AND HE'D GIVE $200,000 FOR IT. IT WAS THE CULMINATION
7 OF ALL OF THOSE THINGS. IN PARTICULAR, SENDING DOWN
8 SOMETHING THAT MAYBE SHOULDN'T BE RECORDED, JUST HAVING
9 A COURIER TAKE IT DOWN WITH A BUNCH OF DOCUMENTS AND
10 ACCIDENTALLY GET IT RECORDED -- IT JUST DIDN'T SEEM
11 RIGHT.
12 Q SO LET'S LOOK AT EXHIBIT 31 FOR A MOMENT
13 IN THE WHITE BINDER. DO YOU HAVE IT IN FRONT OF YOU,
14 SIR? JUST THE FIRST PAGE.
15 A I DO.
16 Q IF YOU LOOK UNDER THE HEADING OF
17 "AGREEMENT TO RECORD." DO YOU SEE THAT, SIR?
18 A YES.
19 Q OKAY. IT SAYS, "OWNER AGREES TO RECORD
20 THE DEED RESTRICTION ON 601." SO IT'S YOUR TESTIMONY
21 THAT ON NOVEMBER 20, YOU RECOGNIZED IT WOULD NOT BE
22 POSSIBLE FOR THE OWNER TO RECORD THAT DEED RESTRICTION;
23 CORRECT?
24 A NO.
25 Q OKAY. SO IT COULD HAVE RECORDED THE DEED
26 RESTRICTION?
27 A I DON'T KNOW.
28 Q OKAY. SO -- BUT IT DIDN'T GET RECORDED BY

73
1 THE OWNER, DID IT?
2 A IT DIDN'T GET RECORDED AT ALL.
3 Q RIGHT.
4 A IT WAS IN ESCROW'S POSSESSION. THE
5 PARAGRAPH BELOW IT SAYS THAT --
6 THE COURT: WAIT. PLEASE JUST ANSWER THE
7 QUESTION.
8 Q BY MR. BEECHEN: THE BOTTOM LINE IS THE
9 OWNER DID NOT CAUSE THIS DEED RESTRICTION TO BE
10 RECORDED; CORRECT? JUST CALLS FOR A YES OR NO. CAN YOU
11 ANSWER THE QUESTION JUST YES OR NO? DID OR DID NOT
12 CAUSE IT TO BE RECORDED.
13 A I DISAGREE WITH THAT STATEMENT.
14 Q I JUST ASKED FOR A YES OR NO. DID OR DID
15 NOT CAUSE IT TO BE RECORDED.
16 A IT WASN'T THE OWNER'S FAULT THAT IT DID
17 NOT GET RECORDED.
18 THE COURT: BUT THAT'S NOT THE QUESTION.
19 THE WITNESS: I DON'T UNDERSTAND THE QUESTION.
20 Q BY MR. BEECHEN: I DIDN'T ASK WHOSE FAULT
21 IT WAS. IT SAYS -- THE AGREEMENT SAYS, "OWNER AGREES TO
22 RECORD THE DEED RESTRICTION ON 601." I'M JUST ASKING,
23 REALLY, A VERY SIMPLE QUESTION. DID THE OWNER RECORD
24 THE DEED RESTRICTION ON 601? JUST YES OR NO?
25 A I SAID NO. THE OWNER DID NOT RECORD THE
26 DEED RESTRICTION.
27 Q THAT'S ALL. YOU'VE ANSWERED THE QUESTION.
28 THANK YOU.

74
1 NOW, YOU SAID THAT THE BUNGES WANTED TO HAVE A
2 NEW DEAL, THAT THEY WANTED TO HAVE ONE THAT CALLED FOR
3 24/7 PARKING. I THINK THAT WAS THE MAIN EMPHASIS OF
4 WHAT THE BUNGES WERE -- AND THAT'S WHY YOU AND TED
5 FOLKERT STARTED TO COME TOGETHER, CAME TOGETHER, RATHER,
6 TO CRAFT A NEW AGREEMENT. DID I UNDERSTAND YOU
7 CORRECTLY, THAT THE MAIN OBJECTIVE SOUGHT BY THE BUNGES
8 WAS TO HAVE 24/7 PARKING?
9 A AND A LEASE.
10 Q AND A LEASE.
11 A RIGHT. AND THE LEASE, OBVIOUSLY, HAS MUCH
12 BROADER RIGHTS THAN THE COASTAL COMMISSION PERMIT.
13 Q WELL, YOU SAID THAT THE LEASE WAS GOING TO
14 REQUIRE -- PROVIDE FOR EXCLUSIVE PARKING; CORRECT? THAT
15 WAS ONE OF THE THINGS THAT WAS GOING TO BE PROVIDED.
16 A IT WAS VARIOUS ITERATIONS IN THE LEASE,
17 BUT THAT'S WHAT THEY WANTED, YES.
18 Q HOW DID THE BUNGES EXPRESS THIS? THIS IS
19 EXPRESSIONS WHICH ARE MADE TO YOU BETWEEN NOVEMBER 20 OR
20 NOVEMBER 19 AND DECEMBER 27, WHEN YOU'VE COME UP WITH
21 THIS NEW AGREEMENT. IS THAT WHEN THE BUNGES WERE
22 EXPRESSING TO YOU THEIR DESIRE TO HAVE THIS NEW
23 AGREEMENT?
24 A IT STARTED BACK IN SEPTEMBER, ACTUALLY.
25 Q WELL, LET'S JUST FOCUS ON -- BECAUSE ISN'T
26 IT CORRECT THAT THE BUNGES HAD SUBMITTED ESCROW
27 INSTRUCTIONS? IF YOU LOOK AT EXHIBIT 81, THEY SUBMITTED
28 ESCROW INSTRUCTIONS TO ESCROW ON NOVEMBER 19 FOR THE

75
1 RECORDING OF THIS DEED RESTRICTION. WERE YOU AWARE OF
2 THAT, SIR?
3 IF YOU LOOK AT EXHIBIT 81, THOSE ARE -- THESE ARE
4 THE INSTRUCTIONS TO MARA ESCROW THAT THE BUNGES ARE
5 PREPARED TO HAVE THE DEED RESTRICTION RECORDED.
6 A ASKED ESCROW TO RECORD IT, NOT THE OWNER.
7 Q YES. JOINT INSTRUCTIONS.
8 A NOT THE OWNER. THE ESCROW --
9 Q NO, SIR. THE DOCUMENT WILL SPEAK FOR
10 ITSELF.
11 A OKAY.
12 Q WHAT I'M SAYING IS, WERE YOU AWARE THAT
13 THE BUNGES HAD SUBMITTED TO ESCROW ON NOVEMBER 19
14 INSTRUCTIONS WHICH WOULD PROVIDE FOR THE RECORDING OF
16 A YES.
17 Q OKAY. AND, IN FACT, TED FOLKERT TOLD YOU
18 HE WAS GOING TO BE SOLICITING THOSE INSTRUCTIONS FROM
19 THE BUNGES; CORRECT?
20 A I DON'T EXACTLY UNDERSTAND. SOLICITING
21 INSTRUCTIONS FROM THE BUNGES?
22 Q RIGHT.
23 A WHAT DOES THAT MEAN?
24 Q THAT MEANS THAT THERE IS GOING TO BE A
25 MINOR CHANGE, AND TED FOLKERT WAS GOING TO GET THE
26 BUNGES' AGREEMENT ON THAT AGREEMENT, ON THE NEW
27 INSTRUCTIONS. DID HE TELL YOU THAT?
28 A NO. I DON'T KNOW WHAT YOU'RE TALKING

76
1 ABOUT.
2 Q YOU DON'T? ALL RIGHT.
3 A I DON'T KNOW WHAT NEW INSTRUCTIONS YOU'RE
4 TALKING ABOUT. I DON'T KNOW WHAT MINOR CHANGE YOU'RE
5 TALKING ABOUT.
6 Q WELL, IF YOU LOOK AT EXHIBIT 47 --
7 A SO WE'RE LEAVING 81 NOW?
8 Q FOR A MOMENT.
9 A SHOULD I KEEP IT?
10 Q WHATEVER WORKS BEST FOR YOU, SIR.
11 A I DON'T KNOW IF IT'S STILL PERTAINING TO
12 THIS; SO I WAS GOING TO LEAVE IT OPEN. OKAY. I'M ON
13 47.
14 Q YOU SEE THE MIDDLE? THE MIDDLE E-MAIL?
15 THIS IS FROM TED FOLKERT TO YOU. DID YOU RECEIVE THIS
16 DOCUMENT, SIR, THE ONE THAT SAYS, "I AM SUPPOSED TO MEET
17 WITH THE BUNGES TOMORROW A.M. TO GET THEIR SIGNATURES
18 CONFIRMING THEIR AGREEMENT TO THE RECORDING OF 601"?
19 A YES, I GOT THAT.
20 Q SO YOU KNEW, AT LEAST ON NOVEMBER 16,
21 MR. FOLKERT WAS GOING TO BE GETTING THE -- SOME
22 DOCUMENT, WHICH, IF YOU GO TO EXHIBIT 81, AND IF YOU
23 LOOK AT THE ADDITIONAL ESCROW INSTRUCTION, WHICH IS
24 BATES STAMP NUMBER 666, IT IS DATED NOVEMBER 16, 2007,
25 HE WAS GETTING THE BUNGES TO SIGN OFF ON MAKING SURE
26 THAT THE 601 -- EXCUSE ME, THAT THE DEED RESTRICTION ON
27 601 WOULD BE RECORDED; CORRECT?
28 A LIKE YOU SAID, THIS DOCUMENT SPEAKS FOR

77
1 ITSELF.
2 Q VERY GOOD. NOW -- SO AFTER NOVEMBER 19,
3 YOU DID HEAR -- IS IT CORRECT THAT YOU DID HEAR FROM THE
4 BUNGES IN WHICH YOU HAVE -- IN WHICH THEY'RE SAYING,
5 HOLD OFF. LET'S DO A NEW DEAL. LET'S DO A NEW DEAL
6 WHICH PROVIDES FOR 24/7 PARKING AMONGST SOME OTHER
7 THINGS THAT WE'VE YOU DISCUSSED?
8 A I DID NOT HEAR FROM THEM WHEN THEY SAID,
9 HOLD OFF. IF THERE'S CORRESPONDENCE AND E-MAILS IN THE
10 FILE THAT SHOW THAT THERE WAS A JOINT EFFORT BETWEEN TED
11 FOLKERT, MR. BUNGE, HIS ATTORNEY, MYSELF, AND JOE PRASKE
12 TO WORK ON AN ALTERNATIVE PARKING ARRANGEMENT, THE ONE
13 THAT BUNGE HAD WANTED FROM DAY ONE.
14 Q AND YOU'RE SAYING THAT THERE ARE
15 WRITTEN -- FOR EXAMPLE, THERE'S E-MAILS, THERE'S
16 LETTERS, SOMETHING FROM THE BUNGES OR FROM THEIR COUNSEL
17 BETWEEN -- LET'S SAY OCTOBER 30, 2007 AND DECEMBER --
18 END OF DECEMBER OF 2007 IN WHICH THE BUNGES ARE
19 EXPRESSING WE, IN ESSENCE, WANT A DIFFERENT AGREEMENT
20 THAN THE DEED RESTRICTION. IS THAT YOUR TESTIMONY, SIR?
21 A NO, THAT'S NOT MY TESTIMONY. I JUST GAVE
22 YOU MY TESTIMONY.
23 Q WELL, DID THE BUNGES EXPRESS DURING THAT
24 TIME PERIOD THEY WANTED A DIFFERENT AGREEMENT?
25 A WHICH TIME?
26 Q OCTOBER 30, 2007 TO THE END OF DECEMBER
27 2007.
28 A YES.

78
1 Q OKAY. AND WERE THEY EXPRESSING THIS FROM
2 THE BUNGES BY E-MAILS?
3 A YES, I BELIEVE THERE WAS SOME E-MAIL
4 TRANSMISSIONS INVOLVED IN THAT TIME PERIOD FROM THE
5 BUNGES' ATTORNEY, AND THE BUNGES WERE COPIED ON.
6 Q WERE THEY EXPRESSING IT BY LETTERS TO YOU?
7 A NO.
8 Q LET ME READ TO YOU FROM YOUR DEPOSITION AT
9 PAGE 359, 2 THROUGH 18.
10 THE COURT: ANY OBJECTION?
11 MR. BLECHER: NO, YOUR HONOR.
12 THE COURT: PLEASE PROCEED.
13 MR. BEECHEN: NO OBJECTION?
14 THE COURT: NO OBJECTION.
15 MR. BEECHEN:
16 "QUESTION: MY QUESTION IS, DURING
THAT TIME PERIOD, AGAIN, OCTOBER 30,
17 2007 UNTIL THE END OF DECEMBER, 2007,
ARE YOU AWARE OF ANY COMMUNICATION FROM
18 BUNGE OR HIS ATTORNEY REGARDING A NEW
PARKING AGREEMENT?
19
"ANSWER: YES.
20
"QUESTION: AND HOW DID THAT
21 COMMUNICATION TAKE, WHAT FORM? WAS IT
AN E-MAIL? WAS IT A LETTER? WAS IT A
22 TELEPHONE CALL?
23 "ANSWER: ALL THE ABOVE.
24 "QUESTION: ALL OF THE ABOVE?
25 "ANSWER: YES.
26 "QUESTION: SO THEN THERE WERE
MULTIPLE COMMUNICATIONS?
27
"ANSWER. THAT'S CORRECT.
28
"TO YOU OR TO FOLKERT?

79
1
"ANSWER: BETWEEN ALL OF US.
2
"QUESTION: SO YOU WERE INVOLVED
3 AT THAT POINT?
4 "ANSWER: YES."
5 Q NOW, MR. GAGGERO, IN REQUEST NUMBERS 17 --
6 NOTICE TO PRODUCE DOCUMENTS -- 17, 18, AND 19, WHICH I
7 CAN READ INTO THE RECORD, YOUR COUNSEL HAS BEEN SERVED
8 WITH THEM LONG AGO. I ASKED YOU TO PRODUCE AT TRIAL
9 EVERY COMMUNICATION WHICH YOU RECEIVED FROM BUNGE
10 BETWEEN OCTOBER 30, 2007 AND DECEMBER 31, 2007.
11 DO YOU HAVE ANY SUCH DOCUMENTS, SIR?
12 A EVERYTHING I HAVE HAS BEEN PRODUCED.
13 Q NO. DO YOU HAVE IT? I WOULD ASK COUNSEL
14 TO GIVE IT TO ME. BECAUSE I DON'T HAVE ANY.
15 A WELL, YOU SAY YOU HAVEN'T, BUT I'VE
16 READ -- FOR THE LAST TWO HOURS I'VE BEEN READING
17 DOCUMENTS THAT ARE WITHIN THAT TIME FRAME THAT ARE
18 COMMUNICATIONS BETWEEN BUNGE, MYSELF, HIS ATTORNEY, AND
19 MR. FOLKERT.
20 Q OTHER THAN THOSE WHICH YOU'VE READ, DO YOU
21 HAVE ANY DOCUMENTS IN WHICH THE BUNGES ARE STATING THAT
22 THEY WISH TO CHANGE THE TERMS OF THE PARKING ON 601?
23 AND THAT'S REQUEST TO PRODUCE NUMBER 18.
24 A I BELIEVE THERE'S DOCUMENTS THAT I HAVE
25 NOT COMMENTED ON THAT EXIST IN THESE BINDERS HERE, THESE
26 EVIDENCE BINDERS.
27 Q I WOULD ASK THAT YOU SHOW THEM TO ME.
28 A YOU'VE GOT THREE 3-RING BINDERS.

80
1 THE COURT: WAIT. THIS IS BECOMING AN ARGUMENT
2 BETWEEN COUNSEL AND THE WITNESS. IT'S NOT SUPPOSED TO
3 BE AN ARGUMENT. IT'S AN EXAMINATION. I'M GOING TO ASK
4 YOU TO SIMPLY ANSWER THE QUESTION.
5 DID YOU BRING DOCUMENTS WITH YOU AS PER THE
6 SUBPOENA? PERIOD. THAT'S THE ONLY QUESTION.
7 Q BY MR. BEECHEN: LET ME READ THE REQUEST
8 TO YOU SPECIFICALLY.
9 "EACH WRITING FROM BUNGE RECEIVED
BY DEFENDANTS DURING THE PERIOD OF
10 OCTOBER 30, 2007 TO DECEMBER 31, 2007 IN
WHICH BUNGE STATES IN SUBSTANCE THAT
11 BUNGE WISHES TO CHANGE THE TERMS FOR
PARKING ON THE 601 PROPERTY FROM THOSE
12 CONTAINED IN DEED RESTRICTION."
13 DO YOU HAVE ANY SUCH DOCUMENTS?
14 MR. ANDREWS: CAN I OBJECT, YOUR HONOR? WE HAVE
15 AN UNDERSTANDING THAT ANY DOCUMENTS THAT WERE PRODUCED
16 IN DISCOVERY WE WOULD NOT HAVE TO PRODUCE AT TRIAL. SO
17 IF HE'S ASKING IF THERE'S ADDITIONAL DOCUMENTS --
18 THE COURT: WAIT A MINUTE. THERE'S NO SUCH
19 UNDERSTANDING PROVIDED TO THE COURT. THERE'S A
20 SUBPOENA. THE OBJECTIONS WERE DENIED BY THE COURT,
21 BECAUSE THEY WERE LATE AND BOILERPLATE AND NONSPECIFIC.
22 AND THE QUESTION IS TO THE WITNESS WHETHER HE BROUGHT
23 ANY. THIS IS THE QUESTION THAT MR. BLECHER SUGGESTED
24 THAT TAKE PLACE; SO IT'S GOING AHEAD. THE OBJECTION IS
25 OVERRULED. THE WITNESS IS INSTRUCTED TO ANSWER
26 FORTHRIGHT EITHER YES OR NO.
27 DO YOU HAVE THOSE DOCUMENTS? DID YOU BRING THOSE
28 DOCUMENTS?

81
1 THE WITNESS: YES.
2 MR. BEECHEN: MAY I HAVE THEM, PLEASE?
3 THE WITNESS: MAY I GO TO MY CAR?
4 THE COURT: SURE. WE'LL TAKE A 15-MINUTE RECESS
5 RIGHT NOW.
6 MR. BEECHEN: THAT WOULD BE FINE. THANK YOU,
7 YOUR HONOR.
8 THE COURT: RECONVENE IN 15 MINUTES. THE WITNESS
9 IS ORDERED TO APPEAR, AND THE ATTORNEYS ARE ORDERED TO
10 REAPPEAR.
11 (RECESS TAKEN FROM 2:32 TO 2:48 P.M.)
12 THE COURT: BACK ON THE RECORD IN BUNGE VERSUS
13 511 OFW, ET AL. AND THE ATTORNEYS ARE HERE AND WITNESS
14 IS BACK ON THE STAND.
16 LET'S PROCEED.
17 MR. BEECHEN: THANK YOU, YOUR HONOR.
18 Q MR. GAGGERO, WHEN WE BROKE, I HAD ASKED
19 YOU TO PRODUCE, IF YOU HAVE IT, THE WRITING RESPONSIVE
20 TO NOTICE TO PRODUCE OR REQUEST NUMBER 18. THIS IS THE
21 ONE IN WHICH THE BUNGES ARE STATING THAT THEY WISH TO
22 CHANGE THE SUBSTANCE OR, IN SUBSTANCE, CHANGE THE TERM
23 OF PARKING FOR 601.
24 DO YOU HAVE SUCH A DOCUMENT, SIR?
25 A THE WAY THAT WHOLE LINE OF QUESTIONING
26 WENT DOWN AND DISCUSSION, I WENT OUT TO MY CAR, AND I
27 BROUGHT IN ALL OF THE ORIGINALS AND ALL OF THE FILES
28 THAT I HAVE THAT WERE GIVEN TO DAVID CHATFIELD. AND

82
1 BECAUSE HE COULDN'T BE HERE, IT'S HIS FILES AND MY FILES
2 AND THE ORIGINALS ALL IN THOSE THREE BOXES; RIGHT? SO
3 ANYTHING THAT EXISTS IN THOSE THREE BOXES THAT WE'RE
4 AWARE OF UNLESS IT COMES FROM YOUR SIDE.
5 THE COURT: WHAT THREE BOXES ARE WE TALKING
6 ABOUT?
7 THE WITNESS: OVER ON THIS DOLLY THERE.
8 THE COURT: IS THAT TO BE TURNED OVER TO THE
9 PLAINTIFF?
10 THE WITNESS: NO. NOT WITHOUT GOING THROUGH IT.
11 BECAUSE IT'S MY BELIEF THAT EVERYTHING THAT IS GERMAINE
12 HAS ALREADY BEEN --
13 THE COURT: WAIT. THIS HAS TO BE RESPONSIVE TO A
14 QUESTION. SO THE SUBPOENA REQUESTS THAT DOCUMENTS BE
15 TURNED OVER. WELL, EITHER SIDE WISH TO BE HEARD?
16 MR. BEECHEN: YEAH. I MEAN, YOUR HONOR, THE
17 SUBPOENA REQUEST A SPECIFIC DOCUMENT. I THINK WE'RE
18 ENTITLED TO HAVE THAT DOCUMENT.
19 THE COURT: WELL, YES AND NO. BECAUSE THE
20 SUBPOENA REQUESTS A CERTAIN DOCUMENT RESPONSIVE TO A
21 PARTICULAR ISSUE, AND THAT COULD BE A DOCUMENT OR MORE
22 THAN ONE DOCUMENT.
23 MR. BEECHEN: THAT'S TRUE. THAT'S TRUE.
24 THE COURT: SO IT IS UP TO THE SUBPOENAED
25 INDIVIDUAL TO PROVIDE THAT DOCUMENT OR DOCUMENTS TO
26 PLAINTIFF. THAT'S ALL THERE IS. THERE'S NOTHING MORE.
27 MR. BEECHEN: THAT'S ALL I REQUEST.
28 THE COURT: AND SO EITHER YOU'VE GOT IT, OR YOU

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