Master exhibit

EXHIBIT A
STATEMENT OF DECISION
Gaggero v. Knapp, Petersen & Clarke, et al
Los Angeles Superior Court
(Case No. BC286925)

EXHIBIT A-2
APPELLATE COURT DECISION
Gaggero v. Knapp, Petersen & Clarke, et al (2010), California
Court of Appeal, Second Appellate District, Division Eight,
(Appeal Case No. B207567)

EXHIBIT B
AMENDED JUDGMENT
(Case No. BC286925)

RANDALL A. :MILLER (State BarNo.. 116036)
LORIS. BLITSTIEN (State BarNo. 149004)
.VTI<RAM SOHAL (State BarNo. 240251)
MILLERLLP
515 South Flower Street, Suite 2150
Los Angeles, California 90071
Telephone: 213 .493.6400
Facsimile: 888.749.5812
Attomeys for Defendants
KNAPP, PETERSEN & CLARKE,
STEPHEN RAY GARCIA, STEPHEN M.
HARRIS and ANDRE JARDINI
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES - UNLIMITED CIVIL JURlSDICTION
STEPHEN M. GAGGERO, an individual,
Plaintiff,
v.
KNAPP, PETERSEN & CLARKE,
STEPHEN RAY GARCIA, STEPHEN M.
HARRIS and ANDRE JARDIN!,
Defendants..
CASE NO. BC 286925
p!}lQP6~] AMENDED JUDGMENT IN
FAVOR OF DEFENDANTS
The California Court of Appeal having affirmed this Court's findings that Plaintiff
STEPHEN M. GAGGERO ("Plaintiff") failed to cru:ry his burden ofproofwithrespect to any of '
his c1a1ms, and a judgment having been entered in favor ofDefendants Kt'lAPP, PETERSEN &
CLARKE, STEPHEN RAY GARCIA, STEPHEN M. HARRIS and ANDRE JARDINI
(collectively, "Defendants") and against Plaintiff on each cause of action ofthe Second Amended
Complaint and awarding Defendants $1,202,994.50 in·attomeys' fees and $124,702.90 in costs,
.
[pROPOSED] ANIENDED JUDGMENT IN FAVOR OF DEFENDANTS

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MILLERLLP
LOS ANGELES
, <
" '
plus post-judgment interest at the legal rate, and this Court having now heard and ruled upon
Defendants' Motion for Attorneys' Fees and Costs on Appeal in favor ofDefendants and against
Plaintiff,
IT IS HEREBY ORDERED AND ADJUDGED THAT:
1. Plaintiff shall take notillng by way ofhis Second Amended Complaint and
judgment shall be entered as to all causes ofaction ofthe Second Amended Complaint in favor of
Defendants KNAPP, PETERSEN & CLARKE, STEVEN RAY GARCIA, STEPHEN HARRIS
and ANDRE JARDINI and against Plaintiff STEPHEN M. GAGGERO;
2. Defendants shall be awarded attorneys' fees in the sum of$1,395,718.40 (which
figure includes the award of$192,723.90 in attorneys' fees on appeal) and costs in the sum of ..
$125,224.90 (which figure includes the award of$522.00 in costs on appeal), plus post-judgment
interest at the legal rate; and
3. Defendants shall be awarded $320,591.78 in interest accrued on the previous
judgment as ofNovember 18, 2010 at the rate of$3.54.24 per day for 905 days.
Dated: ~"-=,·.~,-,2..,.,..t.-,.~~·~______
-2-
[PROPOSED] A"MENDED TIJDGMENT IN FAVOR OF DEFENDANTS

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MILLERLLP
Lt"lS ANGELE.~ •
PROOF OF SERVICE
I am a resident ofthe State ofCalifornia, over the age of eighteen years, and nota
party to the within action. My business address is MILLER LLP, 515 South Flower Street, Suite
2150, Los Angeles, California 90071. On December 13,201"0,"I served the within documents:
NOTICE OF LODGING OF [PROPOSEDl.AMENDED JUDGMENT
o by transmitting via facsimile the document(s) listed above to the fax number(s) set
forth below on this date before 5:00 p.m. "
~ by placing the document(s) listed above in a sealed envelope with postage
thereon fully prepaid, in the United States mail at Los Angeles, Californi~
addressed as set forth below.
o
D
o
by causing to be personally served to the person(s) at the addressees) set fo1'th
b e l o w . " "
By causing such document to be transmitted by electronic mail to the office ofthe
addressees".
by causing such document(s) to be sent overnight via Federal Express; I enclosed
such document(s) in an envelope/package provided by Federal Express addressed
to the person(s) at the address (es) set forth below and I placed the
envelope/package for collection at a drop box provided by Federal Express.
David Blake Chatfield
Westlake Law Group
Gary L. Bostwick, Esq.
Jean-Paul Jassy, Esq.
Bostwick & Jassy LLP2625 Townsgate Road, Suite 330
Westlake Village, CA 91361 12400 Wilshire Blvd., Suite400
Los Angeles, CA 90025
I am readily familiar with the firmls practice of collection and processing correspondence
for mailing. Under that practice it would be deposited with the U.S. Postal ServiCe on that same
day with postage thereon fully prepaid in the ordinary course ofbusiness. I am aware that on
motion ofthe party served, service is presumed invalid ifpostal cancellation date or postage
meter date is more than one day after date" ofdeposit for mailing in affidavit.
I declare under penalty ofp.erjury under the laws ofthe State of Califoniia that the above
is true and correct.
Executed 011 December 13,2010, at Los Angeles, California.
Susy Koshkak ' "
1
PROOF OF SERVICE

EXHIBIT C
TRANSCRIPT ON APPEAL
Gaggero v. Yura (2008)
California Court of Appeal, Second Appellate District, Division Five,
(Appeal Case No. B203780).
Gaggero Direct Examination
June 27, 2005 (90-126)

COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
NO. BC 239810
.,.JURTOFAPPEAL· SECUr
Wn[L,~1ID
MAY 20 2008
STEPHEN M. GAGGERO, )
)
)
PLAINTIFF-APPELLANT, )
)
VS. )
)
ANNA MARIE YURA, IN HER CAPACITY )
AS TRUSTEE OF THE FREDERICK )
EARL HARRIS II 1995 TRUST; AND )
DOES 1 THROUGH 15, )
)
DEFENDANTS-RESPONDENTS. )
- - - - - - - - - - - - - - - - - )
JOSEPH A. LANE CierI
Oepul:v ,..
APPEAL FROM THE SUPERIOR COURT OF LOS ANGELES COUNTY
HONORABLE MARY ANN MURPHY, JUDGE PRESIDING
REPORTER'S TRANSCRIPT ON APPEAL
JUNE 27, 2005 AND JUNE 28, 2005
APPEARANCES:
FOR PLAINTIFF-APPELLANT: BOSTWICK & JASSY LLP
BY: GARY L. BOSTWICK, ESQ.
12400 WILSHIRE BOULEVARD
SUITE 400
LOS ANGELES, CALIFORNIA 90025
(310) 979-6059
FOR DEFENDANT-RESPONDENT: MURPHY ROSEN & COHEN LLP
BY: DAVID E. ROSEN, ESQ.
SUITE 1300
SANTA MONICA, CALIFORNIA 90401
(310) 899-3300
VOLUME 2 OF ({p
PAGES 1 - 150-300
PAGES 301 - 431-600
On' ~ q! ALrL .. ~fi
PAULA B. RENTERIA, CSR #9374
OFFICIAL REPORTER

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1 AND AS I SAID WHEN I STARTED THIS OPENING
2 STATEMENT, HE THOUGHT HE'S GOING TO FLEX HIS MUSCLES, HE'S
3 GOING TO MAKE SOME THREATS, AND ANNA MARIE YURA WAS GOING TO
4 BOW DOWN TO HIS REQUESTS AND GIVE HIM WHAT HE WANTED.
5 WHAT HE DID WAS HE PLAYED A GAME OF CHICKEN, AND HE
6 LOST. PLAIN AND SIMPLE.
7 THE COURT: WHAT'S THE "RFR" IN THAT?
8 MR. ROSEN: RIGHT OF FIRST REFUSAL.
9 THE COURT: OKAY. ALL RIGHT. THANK YOU.
10 PLAINTIFF CAN CALL THEIR FIRST WITNESS.
11 MR. BEZEK: THANK YOU, YOUR HONOR. WE CALL
12 MR. GAGGERO.
13
14 STEPHEN MICHAEL GAGGERO,
15 THE PLAINTIFF, CALLED AS A WITNESS ON HIS OWN BEHALF, WAS
16 SWORN AND TESTIFIED AS FOLLOWS:
17 THE CLERK: PLEASE RAISE YOUR RIGHT HAND.
18 DO YOU SOLEMNLY STATE THAT THE TESTIMONY YOU ARE
19 ABOUT TO GIVE IN THE CAUSE NOW PENDING BEFORE THIS COURT
20 SHALL BE THE TRUTH, THE WHOLE TRUTH, AND NOTHING BUT THE
21 TRUTH, SO HELP YOU GOD?
MY NAME IS STEPHEN MICHAEL GAGGERO.
CAN YOU SPELL IT, PLEASE.
THE WITNESS:
THE CLERK:
THE WITNESS:
THE CLERK:
THE RECORD.
THE WITNESS:
THE CLERK:
27
28
26
25 PLEASE STATE AND SPELL YOUR FULL NAME FOR
22 I DO.
24 THANK YOU.
23 PLEASE BE SEATED.

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1 THE WITNESS: G-A-G-G-E-R-O. FIRST NAME IS SPELLED
2 S-T-E-P-H-E-N. MIDDLE NAME, M-I-C-H-A-E-L.
3 THE COURT: YOU MAY PROCEED.
4 MR. BEZEK: THANK YOU, YOUR HONOR.
5
6 DIRECT EXAMINATION
7 BY MR. BEZEK:
8 Q MR. GAGGERO, WOULD YOU TELL US WHERE YOU CURRENTLY
9 RESIDE, PLEASE.
10 A I RESIDE ON A RANCH IN VENTURA COUNTY ON CANADA
11 LARGA ROAD.
12 Q AND HOW LARGE IS THAT RANCH?
13 A IT'S 1,500 ACRES. AND IN MY TRUST WE HAVE -- IN
14 ANOTHER TRUST OF MINE, I HAVE AN ADJOINING 2,000 ACRES.
15 Q SO THE TOTAL IS ABOUT 3,500 ACRES?
16 A THAT'S CORRECT.
17 Q HOW LONG HAVE YOU LIVED THERE?
18 A IT BECAME MY PRIMARY RESIDENCE IN 1999.
19 Q ALL RIGHT. AND ARE THERE ANY ACTIVITIES OF ANY
20 KIND THAT ARE PERFORMED ON THAT RANCH, BUSINESS-TYPE
21 ACTIVITIES, ANY FARMING ACTIVITIES, ANY EQUESTRIAN
22 ACTIVITIES, ANYTHING LIKE THAT?
23 A WE HAVE AN EQUESTRIAN CENTER. WE RUN CATTLE. WE
24 GROW --
25 THE COURT: I DON'T KNOW WHO "WE" IS.
26 THE WITNESS: OH, PARDON ME. MYSELF AND COLLEEN
27 THE COURT: DON'T KNOW WHO "COLLEEN" IS EITHER.
28 THE WITNESS: MY SIGNIFICANT OTHER. AND WE -- SHE

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1 MANAGES THE EQUESTRIAN CENTER. I LEASE THE RANCH OUT TO A
2 CATTLE OPERATION. I LEASE THE GRAZING RIGHTS. I GROW OAT
3 HAY AND HARVEST IT, WALNUTS, AND I RAISE HORSES THERE, AND
4 VARIOUS OTHER THINGS.
5 Q BY MR. BEZEK: NOW, WHERE WERE YOU BORN?
6 A I WAS BORN IN ALTADENA, CALIFORNIA. PASADENA AREA.
7 Q AND HAVE YOU ESSENTIALLY LIVED IN CALIFORNIA ALL
8 YOUR LIFE?
9 A THAT'S CORRECT.
10 Q WHAT'S YOUR EDUCATIONAL BACKGROUND?
11 A I WENT TO HIGH SCHOOL AND COMPLETED THE --
12 THE COURT: WHO'S THE NEW PERSON SITTING AT COUNSEL
13 TABLE?
14 MR. BEZEK: OH, I'M SORRY, YOUR HONOR.
15 THE COURT: I DIDN'T GET AN INTRODUCTION.
16 MR. BEZEK: YOU DID NOT. MY FAULT. THIS IS COLLEEN
17 CONNORS, YOUR HONOR.
18 THE COURT: IS SHE A PARTY?
19 MR. BEZEK: SHE'S MY PARALEGAL.
20 THE COURT: OKAY. IS THIS THE SAME COLLEEN THAT THE
21 WITNESS JUST REFERRED TO, OR A DIFFERENT COLLEEN?
22 MR. BEZEK: A DIFFERENT COLLEEN.
23 THE COURT: ALL RIGHT.
24 MR. BEZEK: THE WITNESS REFERRED TO A COLLEEN O'BRIEN.
25 THIS IS COLLEEN CONNORS.
26 THE COURT: OKAY.
27 Q BY MR. BEZEK: MR. GAGGERO, YOU WERE TELLING US
28 ABOUT YOUR EDUCATIONAL BACKGROUND.

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1 A I WENT HALFWAY THROUGH THE 10TH GRADE. THAT'S IT
2 IN SCHOOL.
3 Q ALL RIGHT. NOW, AFTER LEAVING HIGH SCHOOL, DID YOU
4 EVENTUALLY GET INTO BUSINESS RELATED TO REAL ESTATE, LIKE
5 GENERAL CONTRACTING?
6 A YES.
7 Q CAN YOU GIVE US YOUR BUSINESS BACKGROUND, PLEASE.
8 A I BECAME A LICENSED GENERAL CONTRACTOR IN 1976.
9 PRIOR TO THAT, I WORKED MY WAY UP TO THAT BY BEING A
10 HANDYMAN AND A PAINTER AND A CARPENTER AND THEN ULTIMATELY
11 TOOK MY TEST AND BECAME A GENERAL CONTRACTOR, BUILT FOR
12 OTHERS UNTIL 1985, SOLD THE COMPANY.
13 AND UP TO 1985, I WAS BUILDING THINGS FOR MYSELF
14 WITH SURPLUS PROFITS. AND IN 1985, I STARTED BUILDING ONLY
15 FOR MYSELF AND DEVELOPING MY OWN PROJECTS AND STOPPED
16 BUILDING FOR THE GENERAL PUBLIC, ALTHOUGH FROM TIME TO TIME
17 I DID THE ODD FAVOR OR ODD JOB.
18 Q NOW, WHEN YOU STARTED BUILDING FOR YOURSELF, CAN
19 YOU GIVE THE COURT A KIND OF OVERVIEW OF THE TYPE OF
20 PROJECTS THAT YOU BEGAN TO SPECIALIZE IN, IF ANY, WHERE
21 THOSE PROJECTS MIGHT HAVE BEEN LOCATED, AND THE SIZE OF
22 THOSE PROJECTS?
23 A THEY VARIED IN REAL ESTATE TYPE BUT WERE
24 PREDOMINANTLY CUSTOM SINGLE-FAMILY HOMES, SOME IN THE
25 VALLEY, MOST OF THEM ON THE WEST SIDE. BUT BY AND LARGE
26 I SHOULD SAY SOME, IN THE EARLY STAGES, IN THE VALLEY,
27 BUT -- AND A FEW ON THE WEST SIDE, BUT ALMOST ALL OF THEM,
28 THE IMPORTANT ONES, WERE ALONG THE COAST FROM MALIBU ON

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1 DOWN.
2 AND I ALSO BOUGHT APARTMENT BUILDINGS AND REMODELED
3 THEM, BOUGHT SMALL SHOPPING CENTERS AND REMODELED THEM,
4 SMALL COMMERCIAL CENTERS AND REMODELED THEM, AND KEPT THEM
5 IN MY PORTFOLIO, OR SOMETIMES I WOULD SELL THEM AND THEN
6 ROLL THE MONEY INTO OTHER INVESTMENTS.
7 Q HOW LONG DID YOU DO THAT TYPE OF INVESTMENT
8 ACTIVITY FOR YOUR OWN ACCOUNT, BEFORE CREATING AN ESTATE
9 PLAN?
10 A I STARTED -- I THINK MY FIRST PURCHASE WAS IN 1976.
11 I THINK. AND I CONTINUED BUYING THINGS AND DEVELOPING THEM
12 FOR MY OWN PORTFOLIO UNTIL 1997, AT WHICH TIME I STARTED
13 DEVELOPING AN ESTATE PLAN. AND FROM 1997 ON THROUGH AND TO,
14 I THINK, 1999, MAYBE THE EARLY PART OF 1999, I STARTED
15 MOVING MY ASSET PORTFOLIO INTO AN ESTATE PLAN.
16 Q NOW, WHEN YOU WERE DOING THIS ESTATE PLANNING, DID
17 YOU DO THAT ON YOUR OWN, OR DID YOU HIRE A PROFESSIONAL TO
18 ASSIST YOU?
19 A INITIALLY, IN 1997, I USED SOME ATTORNEYS THAT I
20 HAD, JUST REGULAR GENERAL COUNSEL-TYPE ATTORNEYS. AND THEN
21 IN, I THINK, THE MIDDLE OR LATTER PART OF 1997 I WAS
22 INTRODUCED TO MR. PRASKE, AND I HIRED HIM TO BE THE
23 ARCHITECT OF THE ESTATE PLAN.
24 Q HOW IS IT THAT YOU CAME TO BE ACQUAINTED WITH OR
25 INTRODUCED TO MR. PRASKE?
26 A AN ATTORNEY NAMED LAURA SLOCUMB HAD AN OPPORTUNITY
27 TO WORK WITH HIM IN THE PAST, AND SHE INTRODUCED ME TO HIM.
28 Q AND WHAT PROMPTED YOUR DESIRE AT THAT POINT IN LIFE

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1 TO SEEK PROFESSIONAL ADVICE IN AN ATTEMPT TO CREATE AN
2 ESTATE PLAN?
3 A MY ESTATE WAS -- HAD GROWN RATHER LARGE, AND I HAD
4 JUST WEATHERED THE EARLY 1990'S AND MID-'90S, WHICH WAS A
5 PRETTY ROUGH TIME FOR ANYBODY IN REAL ESTATE. AND I DECIDED
6 THAT IT WOULD BE A PRUDENT IDEA TO GET A LAWYER TO LOOK AT
7 MY PORTFOLIO AND DEVELOP AN ESTATE PLAN SO THAT MY ESTATE
8 WOULD SURVIVE ME AND BE FOR THE BENEFIT OF MY CHILDREN AND
9 NOT BE SOMETHING THAT WAS EXPOSED.
10 Q NOW, AFTER YOU MET WITH MR. PRASKE, DID YOU MAKE A
11 DECISION ON WHETHER OR NOT TO PROCEED WITH AN ESTATE PLAN AT
12 THAT TIME?
13 A I HAD ACTUALLY MADE THE DECISION BEFORE THAT. I
14 THINK THE TRIGGERING EVENT WAS, I SOLD MY HOME IN MARCH OF
15 1997, AND I OWNED THE PROPERTY NEXT DOOR TO MY HOME, AS
16 WELL.
17 Q WHERE WAS THAT HOME LOCATED?
18 A IT WAS IN MALIBU ON ENCINAL BEACH.
19 Q WHAT WAS THE COMBINED SELLING PRICE OF BOTH
20 PARCELS?
21 A $14-1/2 MILLION.
22 Q AND ONCE THAT HOUSE WAS SOLD, ALONG WITH OTHER
23 ASSETS IN YOUR ESTATE, IS THAT WHEN YOU MADE THE DECISION TO
24 ESTABLISH
25 THE COURT: THERE'S NO TESTIMONY -- YOU'RE SORT OF
26 TESTIFYING AT THIS POINT. YOU SAID "ONCE THE HOUSE WAS
27 SOLD, ALONG WITH OTHER ASSETS." I DON'T KNOW THAT HE
28 TESTIFIED TO THAT. SO LET'S LET HIM PUT THE EVIDENCE IN,

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1 SINCE HE'S THE ONE THAT'S UNDER OATH.
2 Q BY MR. BEZEK: WHEN YOU SOLD THE HOUSE ON MALIBU
3 IN MALIBU, DID YOU HAVE OTHER ASSETS IN YOUR PERSONAL
4 PORTFOLIO AT THAT TIME?
5 A YES.
6 Q CAN YOU GIVE US A LIST, AS BEST YOU CAN RECALL, OF
7 THE ASSETS THAT YOU HAD AT THAT TIME, IN ADDITION TO THE
8 MALIBU HOUSE WHICH YOU HAD JUST SOLD?
9 A I OWNED A PARKING LOT IN VENICE BEACH, ON THE
10 BEACH. I OWNED A SMALL SHOPPING CENTER ON THE BEACH IN
11 VENICE BEACH. I OWNED AN APARTMENT BUILDING ON THE BEACH IN
12 VENICE BEACH. I OWNED A MIXED-USE RETAIL AND RESIDENTIAL
13 BUILDING ON THE BEACH IN VENICE BEACH. I OWNED A HOUSE ON
14 BROAD BEACH, IN MALIBU.
15 I OWNED -- WELL, AT THAT TIME -- ARE WE TALKING
16 ABOUT THAT SPECIFIC TIME, BECAUSE I HAD BEEN PUTTING SOME OF
17 THESE ASSETS INTO LIMITED LIABILITY COMPANIES AND LIMITED
18 PARTNERSHIPS, AS I INDICATED, STARTING IN THE EARLY PART OF
19 1997, SO --
20 THE COURT: LET'S GET A SPECIFIC QUESTION WITH A
21 SPECIFIC TIME FRAME SO WE'RE CLEAR ON WHAT YOU'RE ASKING
22 HIM.
23 Q BY MR. BEZEK: IN ADDITION TO THE PERSONAL ASSETS
24 THAT YOU JUST IDENTIFIED FOR US IN YOUR PERSONAL PORTFOLIO,
25 DID YOU ALSO HAVE ASSETS THAT WERE IN OTHER LIMITED
26 LIABILITY COMPANIES OR PARTNERSHIPS PRIOR TO THE TIME THAT
27 YOU ESTABLISHED YOUR ESTATE PLANNING TRUST?
28 A YES, I DID.

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1 Q OKAY. CAN YOU TELL US NOW -- FIRST OF ALL, HAVE
2 YOU GIVEN US, AS BEST YOU CAN RECALL, WHAT THE PERSONAL
3 ASSETS WERE, SUCH AS BROAD BEACH AND THE MALIBU PROPERTIES
4 AND THE OTHER THINGS YOU IDENTIFIED? HAVE YOU PRETTY MUCH
5 IDENTIFIED, AS BEST YOU CAN RECALL, THAT POPULATION OF
6 ASSETS?
7 A WELL, I HAD 2,000 ACRES --
8 THE COURT: IS THAT A "YES" OR "NO"?
9 THE WITNESS: NO.
10 THE COURT: OKAY.
11 Q BY MR. BEZEK: OKAY. WOULD YOU COMPLETE THAT LIST,
12 PLEASE.
13 THE COURT: OKAY.
14 THE WITNESS: I HAD 2,000 ACRES IN OJAI AND VENTURA.
15 AND IN A CORPORATION THAT I WAS THE SOLE SHAREHOLDER OF, I
16 HAD OTHER ASSETS.
17 Q BY MR. BEZEK: ALL RIGHT. NOW, AT THE TIME THAT
18 YOU MET WITH MR. PRASKE, DID THERE COME A TIME WHEN YOU
19 RETAINED HIM TO PREPARE FOR YOU AN ESTATE PLAN?
20 A YES.
21 Q APPROXIMATELY WHEN WAS THAT?
22 A IT WAS LATE 1997 AND EARLY 1998, I BELIEVE, WHEN
23 MR. PRASKE STARTED IMPLEMENTING THE ESTATE PLAN. IT'S NOT,
24 YOU KNOW, ONE THING THAT YOU JUST PULL A TRIGGER AND IT'S
25 DONE. IT TAKES A LONG TIME TO PUT IT ALL TOGETHER.
26 Q AT THE TIME THAT MR. PRASKE BEGAN TO DESIGN YOUR
27 ESTATE PLAN, WHAT WAS THE APPROXIMATE GROSS VALUE OF THE
28 ASSETS THAT WERE BEING PUT INTO THE ESTATE?

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1 MR. ROSEN: OBJECTION. LACK OF FOUNDATION.
2 THE COURT: SUSTAINED. AND I DON'T KNOW WHO OWNS THEM.
3 HE'S TALKING ABOUT THINGS HIS CORPORATION OWNS. I'M JUST
4 NOT CLEAR. THE WAY THIS TESTIMONY IS GOING IN, IT'S NOT
5 VERY PRECISE. SO LET'S -- SUSTAINED.
6 Q BY MR. BEZEK: LET'S FOCUS ON THE PERSONAL ASSETS
7 THAT YOU IDENTIFIED FOR US THAT WERE IN EXISTENCE AT THE
8 TIME YOU STARTED TALKING WITH MR. PRASKE.
9 ARE YOU FOCUSING WITH ME ON THAT?
10 A YES.
11 THE COURT: ARE YOU TALKING ABOUT ASSETS THAT HE OWNS AS
12 AN INDIVIDUAL? WHY DON'T YOU ASK IT THAT WAY.
13 MR. BEZEK: OKAY.
14 Q THESE ASSETS THAT YOU IDENTIFIED EARLIER, WERE
15 THESE ASSETS THAT YOU OWNED IN YOUR INDIVIDUAL NAME?
16 THE COURT: I HAVE NO IDEA WHAT ASSETS HE'S REFERRING
17 TO, BECAUSE SOME OF THEM HE WAS TALKING ABOUT A CORPORATION.
18 SO WE'RE NOT BEING PRECISE HERE.
19 AND I STILL DON'T KNOW WHAT -- YOU'RE TRYING TO GET
20 HIM TO SAY HE OWNED, AT WHAT PERIOD OF TIME, AS AN
21 INDIVIDUAL, AS OPPOSED TO HIS PARENTS, SOME TRUST.
22 YOU KNOW, THAT'S WHAT WE'RE GOING FOR HERE, I
23 THINK.
24 MR. BEZEK: ALL RIGHT.
25 Q FIRST OF ALL, LET'S IDENTIFY WITH PRECISION, IF WE
26 CAN, THOSE ASSETS THAT YOU OWNED IN YOUR OWN NAME AT THE
27 TIME THAT YOU WERE MEETING WITH MR. PRASKE.
28 A THE PROBLEM I'M HAVING IS I DON'T REMEMBER WHICH OF

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1 THE VENICE BEACH PROPERTIES I HAD TRANSFERRED INTO A LIMITED
2 LIABILITY COMPANY JUST BEFORE I MET MR. PRASKE.
3 Q LET ME ASK THE QUESTION THIS WAY. WHETHER IT WAS
4 OWNED IN YOUR OWN NAME OR WHETHER IT WAS OWNED IN THE NAME
5 OF A PARTNERSHIP OR A CORPORATION LET'S START, FIRST OF
6 ALL, WITH ASSETS IN THE NAME OF A CORPORATION. WERE ANY OF
7 THOSE CORPORATIONS OWNED IN WHOLE OR IN PART BY SOMEBODY
8 OTHER THAN YOU THAT HELD TITLE TO THOSE ASSETS?
9 A NO.
10 Q WITH REGARDS TO THE LIMITED LIABILITY COMPANIES,
11 WERE THERE SOME ASSETS THAT WERE IN LIMITED LIABILITY
12 COMPANIES AT THAT TIME?
13 A YES.
14 Q WERE YOU THE MANAGING MEMBER OF THOSE LIMITED
15 LIABILITY COMPANIES?
16 A YES.
17 Q AND DID YOU OWN THE STOCK IN THOSE --
18 A WAIT. I'M NOT SURE I WAS THE MANAGING MEMBER. I'M
19 NOT SURE.
20 Q OKAY. DID YOU OWN THE STOCK IN THOSE LIMITED
21 LIABILITY COMPANIES?
22 THE COURT: YOU MEAN 100 PERCENT OF THE STOCK, OR ANY,
23 1 PERCENT, OR WHAT -- HOW MUCH STOCK ARE WE TALKING ABOUT
24 HERE?
25 MR. BEZEK: I WANTED TO FIND OUT FIRST, YOUR HONOR, IF
26 HE OWNED, AND THEN WE'D TALK ABOUT HOW MUCH. IS THAT OKAY?
27 THE COURT: YOU'RE ASKING THE QUESTIONS.
28 MR. BEZEK: OKAY.

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1 Q DID YOU OWN THE STOCK IN THE LIMITED LIABILITY
2 COMPANIES, ANY STOCK?
3 A I OWNED ALL THE MEMBERSHIP INTERESTS.
4 Q OKAY. IN EACH OF THE LIMITED LIABILITY COMPANIES
5 THAT HELD A REAL ESTATE ASSET?
6 A THAT'S CORRECT.
7 Q IS THERE ANY OTHER CATEGORY OF OWNERSHIP VEHICLE,
8 CORPORATION, LIMITED LIABILITY COMPANY, PARTNERSHIP, THAT WE
9 HAVEN'T COVERED YET THAT HELD YOUR ASSETS AT THAT TIME?
10 A NO. THERE WERE NO TRUSTS AT THAT TIME. AND EVERY
11 ASSET, UP TO THE TIME I MET JOE PRASKE, WAS OWNED
12 100 PERCENT BY ME, EITHER BY VIRTUE OF THE MEMBERSHIP
13 INTEREST, THE SHARES, OR THE DIRECT TITLE TO THE PROPERTY.
14 Q NOW, FOCUSING JUST ON THAT GROUPING OF ASSETS, WHAT
15 WAS THE APPROXIMATE VALUE OF THOSE ASSETS?
16 MR. ROSEN: OBJECTION. LACK OF FOUNDATION, CALLS FOR
17 EXPERT TESTIMONY.
18 THE COURT: HE CAN TESTIFY AS TO THE VALUE OF HIS OWN
19 PROPERTY, RIGHT, IF HE OWNS IT? ISN'T THAT IN THE EVIDENCE
20 CODE?
21 MR. ROSEN: FOR EXAMPLE, I MEAN, IN REAL ESTATE, ARE WE
22 JUST GOING TO GET -- NECESSARILY IT'S GOING TO CALL FOR HIS
23 OPINION ON WHAT HE'S
24 THE COURT: LET'S LOOK AT THE EVIDENCE CODE SECTION AND
25 SEE WHAT IT SAYS. ANYBODY KNOW THE NUMBER WE'RE TALKING
26 ABOUT?
27 MR. BEZEK: I DON'T KNOW THE EVIDENCE CODE, YOUR HONOR,
28 BUT I THINK THE COURT'S RIGHT, THAT --

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1 THE COURT: WELL, LET'S LOOK AT IT AND SEE WHAT IT SAYS,
2 BECAUSE IT MIGHT APPLY TO PROPERTY HE HOLDS IN HIS OWN NAME
3 AND IT MIGHT NOT APPLY TO THE CORPORATE PROPERTY OR THE LLC
4 PROPERTY. LET'S GET THAT EVIDENCE CODE SECTION.
5 I ASSUME YOU'RE RELYING ON THAT TO GET AROUND THIS
6 OBJECTION?
7 MR. BEZEK: YES, YOUR HONOR.
8 THE COURT: ANY OTHER RESPONSE TO THAT OBJECTION?
9 MR. BEZEK: THE CASE LAW ESTABLISHES THAT AN INDIVIDUAL
10 HAS THE RIGHT AND IS COMPETENT TO TESTIFY TO THE VALUE OF
11 PROPERTY THAT THAT INDIVIDUAL OWNS.
12 THE COURT: OKAY. WHAT ABOUT THE PROPERTY IN THE
13 CORPORATIONS AND THE PARTNERSHIPS? THAT'S THE OTHER ISSUE.
14 MR. BEZEK: AS LONG AS THE TESTIFYING WITNESS HAS
15 ESTABLISHED THAT HE IS, IN THIS CASE, THE SOLE OWNER,
16 ALTHOUGH I DON'T THINK --
17 THE COURT: GOT A CASE THAT SAYS THAT? YOU DON'T KNOW
18 WHAT THE EVIDENCE CODE SECTION IS. DO YOU HAVE A CASE THAT
19 SAYS THAT?
20 MR. BEZEK: I DO NOT, YOUR HONOR.
21 THE COURT: OKAY. LET'S FIND THE EVIDENCE CODE SECTION.
22 MR. ROSEN: LOOKS LIKE IT'S IN THE 820 --
23 THE COURT: I THINK EVERYBODY SHOULD BRING THEIR
24 EVIDENCE CODE WITH THEM FOR THIS TRIAL, BECAUSE I AM GOING
25 TO BE ASKING YOU WHAT EVIDENCE CODE SECTIONS YOU'RE RELYING
26 ON. I THINK WE'RE GOING TO GET INTO SOME EVIDENTIARY
27 ISSUES, AS I READ THIS TRIAL BRIEF.
28 WHAT SECTION, COUNSEL?

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1 MR. ROSEN: IT'S IN THE REALM OF 814 TO 824, ARE THE
2 ONES DEALING WITH EVIDENCE OF --
3 THE COURT: YOU MADE THE OBJECTION. LET'S SEE IF WE CAN
4 FIND THIS.
5 MR. ROSEN: RIGHT.
6 THE COURT: THE VALUE -- OKAY. 813.
7 MR. ROSEN: I'M LOOKING AT 813, EXACTLY, YEAH.
8 THE COURT: (READING) :
9 THE OWNER OR THE SPOUSE OF THE OWNER.
10 AN OFFICER, REGULAR EMPLOYEE, OR PARTNER
11 DESIGNATED BY A CORPORATION, PARTNERSHIP,
12 OR UNINCORPORATED ASSOCIATION THAT IS
13 THE OWNER OF THE PROPERTY IF THE DESIGNEE
14 IS KNOWLEDGEABLE.
15 SUSTAINED ON FOUNDATION AS TO EVERYTHING EXCEPT
16 WHAT HE OWNS PERSONALLY. YOU'RE GOING TO HAVE TO LAY THAT
17 FOUNDATION.
18 PLEASE BRING YOUR EVIDENCE CODE TO THIS TRIAL.
19 MR. BEZEK: YES, YOUR HONOR, I WILL DO THAT.
20 Q MR. GAGGERO, AS TO THE PROPERTY IN THE LIMITED
21 LIABILITY COMPANIES AND THE CORPORATIONS I WANT TO FOCUS
22 JUST ON THAT --
23 THE COURT: THE ONES THAT HE'S SAYING HE OWNS, THE LLCS
24 OR THE CORPORATIONS?
25 MR. BEZEK: THE ONES THAT HE SAYS HE OWNS, THAT'S RIGHT.
26 THE COURT: RIGHT, OKAY.
27 Q BY MR. BEZEK: HOW DO YOU KNOW WHAT PROPERTY WAS
28 OWNED BY THOSE ENTITIES AT THAT TIME? THE TIME BEING WHEN

103
1 YOU WERE MEETING WITH MR. PRASKE TO SET UP THE ESTATE PLAN.
2 A BECAUSE I TRANSFERRED THEM FROM MY NAME INTO THE
3 LLCS THAT -- WELL, FIRST WITH THE LLC PROPERTIES I THINK
4 IT'S TWO PROPERTIES IN VENICE -- I TRANSFERRED THEM INTO
5 THESE ENTITIES AND MY ATTORNEY SET UP THE ENTITY.
6 Q AND WHEN YOU MADE THOSE TRANSFERS INTO THE
7 ENTITIES, DO YOU RECALL APPROXIMATELY WHEN THAT TRANSFER OR
8 THOSE TRANSFERS OCCURRED?
9 A YES.
10 Q WHEN WAS THAT?
11 A IN EARLY 1997.
12 Q AT THE TIME THAT YOU TRANSFERRED THEM --
13 A EARLY-TO-MID 1997.
14 Q AT THE TIME THAT YOU WERE ABOUT TO TRANSFER THEM,
15 BUT BEFORE YOU ACTUALLY TRANSFERRED THEM, YOU WERE STILL THE
16 OWNER AT THAT TIME, WERE YOU NOT?
17 A YES, I WAS.
18 Q AT THAT TIME, WHAT WAS THE VALUE OF THOSE
19 PROPERTIES?
20 THE COURT: YOU HAVEN'T ESTABLISHED THE OTHER PART OF
21 THAT, 813(A) (3), KNOWLEDGEABLE AS TO THE VALUE OF THE
22 PROPERTY. AND WE NEED A VALUATION DATE. IS THE VALUATION
23 DATE THE DATE OF THE TRANSFER THAT YOU'RE ASKING HIM WHAT
24 THE VALUE WAS?
25 MR. BEZEK: ALL RIGHT.
26 THE COURT: I'M JUST ASKING YOU. IF IT'S NOT THE DATE
27 OF VALUE, IF IT'S AFTER THE CORPORATION OWNED IT, THEN
28 WHAT'S HIS BASIS FOR KNOWING WHAT THE PROPERTIES ARE WORTH?

104
1 THAT'S WHAT THE FOUNDATION REQUIRES UNDER THE
2 EVIDENCE CODE. SO I DON'T KNOW WHAT DATE YOU'RE GOING FOR
3 HERE.
4 MR. BEZEK: WELL, HE DOESN'T HAVE A PRECISE DATE OF
5 TRANSFER BECAUSE HE DOESN'T RECALL. HE REMEMBERS IT WAS IN
6 LATE '97.
7 THE COURT: THE QUESTION IS -- WHAT ARE YOU ASKING HIM?
8 ARE YOU ASKING HIM FOR THE VALUATION AS OF THE DATE OF
9 TRANSFER?
10 MR. BEZEK: I'M ASKING HIM JUST BEFORE HE TRANSFERRED.
11 Q THE QUESTION WAS, BEFORE YOU TRANSFERRED IT, THE
12 DAY BEFORE YOU TRANSFERRED IT -- LET'S PUT A DATE THAT WAY.
13 THE DAY BEFORE YOU ACTUALLY TRANSFERRED IT, WHILE IT WAS
14 STILL IN YOUR NAME, WHAT WAS THE VALUE OF THAT PROPERTY AT
15 THAT TIME?
16 A I BELIEVE THE TWO PROPERTIES THAT ARE AT ISSUE HERE
17 ARE 523 OCEAN FRONT WALK AND 601 OCEAN FRONT WALK. THOSE
18 ARE THE ADDRESSES. THAT WOULD BE THE PARKING LOT AND THE
19 MIXED-USE RETAIL AND RESIDENTIAL PROPERTY. AND MY OPINION
20 OF VALUE IN 1997 OF THOSE PROPERTIES IS BETWEEN 6 AND $7
21 MILLION OF THOSE TWO PROPERTIES.
22 Q NOW, WITH REGARDS TO THE BALANCE OF YOUR PERSONAL
23 PORTFOLIO THAT WAS IN YOUR PERSONAL NAME BEFORE IT WAS
24 TRANSFERRED TO ANY OTHER ENTITY, DO YOU HAVE AN OPINION OF
25 THE COMBINED VALUE OF THOSE ASSETS?
26 A BETWEEN 35 AND $40 MILLION.
27 Q WHEN YOU MET WITH MR. PRASKE, DID THOSE COMBINED
28 VALUED PROPERTIES THEN BECOME PART OF THE ESTATE PLAN FOR

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1 WHICH YOU USED MR. PRASKE'S HELP TO SET UP?
2
3
A
Q
YES.
NOW, WHEN YOU GAVE US THIS VALUE A MOMENT AGO OF 35
4 TO $40 MILLION AS TO THOSE ASSETS, WAS THAT GROSS VALUE OR
5 WAS THAT NET WORTH, THAT IS, EQUITY?
6
7
8
9
MR. ROSEN:
THE COURT:
MR. ROSEN:
THE COURT:
MR. ROSEN:
THE COURT:
OBJECTION. VAGUE AND AMBIGUOUS.
HOW IS THAT AMBIGUOUS?
GROSS VALUE OR NET WORTH. GROSS OF --
SUSTAINED. GROSS.
12 THANK YOU.
13 WHY DON'T YOU REPHRASE.
14 Q BY MR. BEZEK: WHEN YOU GAVE US THAT NUMBER, THAT
15 VALUE, 35 TO $40 MILLION, WAS THAT THE GROSS FAIR MARKET
16 VALUE OF THOSE PROPERTIES?
17 A YES, THAT'S AN APPROXIMATE GROSS FAIR MARKET VALUE
18 OF THOSE PROPERTIES.
19
20
21
Q
A
Q
DID SOME OF THOSE PROPERTIES HAVE DEBT AGAINST IT?
YES.
CAN YOU TELL US WHAT THE APPROXIMATE EQUITY WAS IN
22 THOSE PROPERTIES AT THE TIME THEY WERE TRANSFERRED INTO THE
23 ESTATE PLAN THAT ULTIMATELY WAS DESIGNED AND IMPLEMENTED
24 THROUGH MR. PRASKE?
25 THE COURT: ARE YOU TALKING ABOUT THE PROPERTIES HE SAID
26 WERE WORTH 35 TO 40 MILLION?
27
28
MR. BEZEK: YES.
THE COURT: WHAT WAS HIS PERSONAL EQUITY IN THOSE

OKAY. BETWEEN 15 -- BETWEEN 15 AND $20
WAS
OH, OKAY.
IN THOSE PROPERTIES THE DAY BEFORE YOU
1
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PROPERTIES BEFORE HE TRANSFERRED THEM?
MR. BEZEK: CORRECT.
THE COURT: THAT'S YOUR QUESTION. OKAY.
MR. BEZEK: CORRECT.
THE WITNESS: AND THE 35 TO 40 IS NOT INCLUDING THE TWO
THAT WERE IN THE LIMITED LIABILITY COMPANIES OR THE LIMITED
PARTNERSHIPS, WHATEVER THEY WERE; IS THAT CORRECT?
Q BY MR. BEZEK: RIGHT. WE'RE GOING TO COVER THOSE
IN JUST A MINUTE.
A OKAY. BETWEEN 15 AND $20 MILLION WAS THE -- OH,
I'M SORRY. THE DEBT. YOU WANTED TO KNOW THE DEBT.
THE COURT: NO. HE ASKED FOR WHAT YOUR PERSONAL EQUITY
THE WITNESS:
THE COURT:
TRANSFERRED THEM.
THE WITNESS:
MILLION.
Q BY MR. BEZEK: ALL RIGHT. NOW, I WANT TO FOCUS ON
THE TWO PROPERTIES THAT WERE INVOLVED WITH THE LIMITED
LIABILITY COMPANIES THAT WE TALKED ABOUT A MOMENT AGO.
THE COURT: THE TWO PROPERTIES IN
THE WITNESS: WAIT. I HAVE TO GO BACK ON THAT BECAUSE
I'M A LITTLE CONFUSED HERE. I'M SORRY. THIS IS ALL -- THE
DAY BEFORE I TRANSFERRED THEM?
MR. BEZEK: YES.
THE COURT: INTO THE TRUST THAT THIS ATTORNEY SET UP,
WHAT WAS YOUR PERSONAL EQUITY IN THOSE PROPERTIES, THE

107
1 PROPERTIES THAT YOU'RE SAYING YOU PERSONALLY OWNED AS
2 OPPOSED TO WHAT WAS IN A TRUST OR A CORPORATE OWNERSHIP?
3 THE WITNESS: THE PROBLEM IS, THE PORTFOLIO PROPERTIES
4 TOOK OVER A YEAR TO GET TRANSFERRED.
5 THE COURT: WE JUST NEED A NUMBER.
6 THE WITNESS: OKAY.
7 THE COURT: ROUGHLY.
8 THE WITNESS: 25 TO $30 MILLION WAS THE NET EQUITY IN
9 THE PROPERTIES THAT ULTIMATELY GOT TRANSFERRED INTO THE
10 ESTATE PLANNING, NOT INCLUDING THE TWO THAT WE TALKED ABOUT
11 IN VENICE BEACH.
12 THE COURT: THAT'S NOT WHAT HE ASKED YOU. HE WANTED TO
13 KNOW WHAT YOUR PERSONAL EQUITY WAS IN THOSE PROPERTIES
14 BEFORE YOU TRANSFERRED THEM, THE ONES THAT YOU SAY YOU OWNED
15 PERSONALLY.
16 THE WITNESS: OKAY. CAN I WRITE THEM DOWN SO I CAN
17 TRACK THIS? IS THAT ALL RIGHT?
18 THE COURT: ABSOLUTELY.
19 DO YOU WANT TO GIVE HIM A PENCIL AND PAPER?
20 THE WITNESS: I HAVE ONE. I JUST WANT TO -- BECAUSE I'M
21 HAVING A HARD TIME GETTING ALL THIS TOGETHER.
22 THE COURT: WE'RE LOSING SOME TIME BECAUSE THE QUESTIONS
23 AREN'T SUPER PRECISE, SO YOU MIGHT WANT TO FOCUS IN A LITTLE
24 ON WHAT YOU'RE ASKING HIM.
25 THE WITNESS: OKAY. I THINK I GOT EVERYTHING I NEED.
26 Q BY MR. BEZEK: ALL RIGHT. AFTER HAVING DONE YOUR
27 ANALYSIS NOW, CAN YOU ANSWER THE FOLLOWING QUESTION: WHAT
28 WAS YOUR PERSONAL NET WORTH IN THE PROPERTIES THAT YOU

108
1 PERSONALLY OWNED THE DAY BEFORE THEY WERE TRANSFERRED TO THE
2 TRUST?
3 LET ME BACK UP, BECAUSE I THINK I UNDERSTAND WHAT
4 YOUR CONFUSION IS.
5 THE COURT: I THOUGHT THE QUESTION WAS, WHAT WAS HIS
6 PERSONAL EQUITY IN THE PROPERTIES.
7 MR. BEZEK: I THINK THERE'S ANOTHER CONFUSION, ANOTHER
8 CONCERN.
9 Q HOW LONG DID IT TAKE FOR THESE PROPERTIES
10 ULTIMATELY TO BE TRANSFERRED INTO THE FINALIZED ESTATE PLAN?
11 A OVER A YEAR.
12 Q OKAY. IS IT POSSIBLE FOR YOU TO FOCUS ON EACH
13 INDIVIDUAL PROPERTY THAT YOU OWNED PERSONALLY AND FOCUS ON
14 THE DATE WHEN THE TRANSFER OCCURRED AND THEN CALCULATE THE
15 VALUE OF EACH ASSET THE DAY BEFORE THAT TRANSFER OCCURRED
16 OVER THAT YEAR PERIOD OF TIME? CAN YOU DO THAT?
17 A I CAN, BUT I'M GOING TO BORE THE HECK OUT OF
18 EVERYBODY HERE WHILE I CALCULATE THAT.
19 THE COURT: WELL, WE'VE JUST WAITED FOR FIVE MINUTES FOR
20 HIM TO DO SOMETHING WITH A PENCIL AND PAPER. SO WHY DON'T
21 YOU JUST ASK HIM THE QUESTION THAT YOU HAD ON THE FLOOR WHEN
22 WE TOOK THE FIVE MINUTES SO HE COULD DO HIS CALCULATIONS.
23 WHAT WAS YOUR PERSONAL EQUITY IN THE PROPERTIES YOU
24 OWNED YOURSELF AS OPPOSED TO THE CORPORATION OR THE LLC
25 BEFORE YOU TRANSFERRED THEM? ROUGHLY.
26 THE WITNESS: AND I CAN USE THE PERIOD -- THAT YEAR
27 PERIOD, WHAT THEY WERE WORTH DURING THAT YEAR?
28 THE COURT: JUST BEFORE THEY WERE TRANSFERRED, ROUGHLY.

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1 THE WITNESS: ROUGHLY, MY -- THERE WAS $11 MILLION IN
2 NET VALUE OF THE ASSETS THAT I HELD PERSONALLY
3 THE COURT: THAT DOESN'T ANSWER THE QUESTION. WE'RE
4 TRYING TO FIND OUT WHAT WAS YOUR PERSONAL EQUITY IN THOSE
5 PROPERTIES BEFORE YOU TRANSFERRED THEM, THE ONES THAT YOU
6 SAID YOU OWNED PERSONALLY. WHAT WAS YOUR EQUITY?
7 THE WITNESS: 11 MILLION.
8 THE COURT: OKAY.
9 Q BY MR. BEZEK: NOW LET'S FOCUS ON THE OTHER TWO
10 ASSETS THAT YOU IDENTIFIED BEFORE THAT WERE NOT PERSONALLY
11 OWNED BY YOU. WHAT ASSETS WERE THOSE?
12 THE COURT: WE'VE GOT THEM, 523 AND 621 OCEAN FRONT,
13 VENICE.
14 IS THAT WHAT YOU SAID?
15 THE WITNESS: 601, YES.
16 THE COURT: OKAY, 601.
17 THE WITNESS: I DIDN'T BREAK THOSE TWO OUT SEPARATELY.
18 WHAT I DID WAS TOOK THE LIBERTY OF INCLUDING THE ONES THAT
19 WERE IN THE CORPORATION AND A LIMITED LIABILITY COMPANY AND
20 ANOTHER LIMITED PARTNERSHIP.
21 THE COURT: IN THE 11 MILLION?
22 THE WITNESS: NO, NO. I THINK WHAT YOU'RE TRYING TO
23 DETERMINE IS HOW MUCH WAS IN THE ENTITIES AND HOW MUCH WAS
24 IN MY PERSONAL NAME.
25 SO INSTEAD OF FOCUSING ONLY ON THE TWO IN VENICE,
26 WE TALKED ABOUT THE CORPORATIONS, AND I WENT AHEAD AND TOOK
27 EVERYTHING I CAN THINK OF, AND I TOOK THE ENTITIES AND DID
28 THE GROSS AND NET ON ALL THE PROPERTIES IN THE VARIOUS

110
1 ENTITIES.
2 THE COURT: WELL, HE GETS TO ASK THE QUESTIONS. IT'S
3 LIKE DANCING. HE LEADS AND YOU FOLLOW. SO HE ASKS THE
4 QUESTION; YOU HAVE TO ANSWER IT.
6 Q BY MR. BEZEK: FOR EACH OF THESE LIMITED LIABILITY
7 COMPANIES THAT HELD TITLE TO THOSE PROPERTIES, WERE YOU
8 THE -- DID YOU MANAGE OR PROVIDE MANAGEMENT SERVICES FOR
9 THOSE ENTITIES?
10 A YES.
11 Q WHAT DID THOSE MANAGEMENT SERVICES INCLUDE IN
12 RELATION TO MANAGING THE ASSET?
13 A ALL OF THE TASKS THAT GO ALONG WITH PROPERTY
14 MANAGEMENT AS WELL AS ALL OF THE ASPECTS OF THE ASSET
15 MANAGEMENT, SUCH AS REFINANCING, DEALING WITH TAX ISSUES,
16 INSURANCE ISSUES, MAKING DECISIONS TO BUY, SELL, BUY OR SELL
17 THE ASSET, TO IMPROVE THE ASSET, OVERSEEING ANY IMPROVEMENTq
18 TO THE ASSET, FINANCING, DESIGNING SOME ULTIMATE DISPOSITION
19 OF THE ASSET.
20 Q WHILE YOU MANAGED THOSE ASSETS FOR THE LIMITED
21 LIABILITY COMPANIES, DID YOU MAINTAIN KNOWLEDGE OF THE VALUE
22 OF THOSE ASSETS?
23 A YES.
24 Q OKAY. NOW, WITH REGARDS TO THOSE LIMITED LIABILITY
25 COMPANY ASSETS, CAN YOU TELL US WHAT THE VALUE OF THOSE
26 ASSETS -- OF THE ASSETS THAT WERE TRANSFERRED IN THERE WERE
27 WHEN THEY WERE TRANSFERRED TO THE TRUST?
28 THE COURT: YOU'RE TALKING ABOUT THE LLC COMPANIES HE

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1 SAID HE OWNED, CORRECT?
2
3
MR. BEZEK: YES, YOUR HONOR.
THE COURT: THOSE ARE THE TWO COMPANIES IN VENICE,
4 RIGHT -- TWO PROPERTIES IN VENICE?
5 THE WITNESS: YES. IF YOU WANT TO TALK ABOUT JUST THE
6 VENICE PROPERTIES, I'LL ADD THAT UP REAL QUICK, AND THAT
7 WILL BE
8 THE COURT: WE'RE JUST TALKING ABOUT THE LLCS THAT YOU
9 OWNED, THE TWO VENICE PROPERTIES. WAS THERE ANYTHING ELSE?
10
11
12
13
14
15
16
THE WITNESS:
AREA.
THE COURT:
OWNED.
THE WITNESS:
THE COURT:
THE WITNESS:
THERE WAS ANOTHER PROPERTY IN THE VENTURA
MY ERROR. JUST ALL THE PROPERTIES YOU
THE LLCS?
YEAH.
OKAY. THE NET EQUITY IN THE PROPERTIES,
17 IN THE THREE LLC'S, WAS APPROXIMATELY $11-1/2 MILLION.
18 Q BY MR. BEZEK: NOW, THAT'S IN ADDITION TO THE
19 $11 MILLION THAT WE TALKED ABOUT EARLIER FOR YOUR PERSONAL
20 ASSETS?
21
22
A
Q
THAT'S CORRECT.
NOW, IN ANY OF THAT ANALYSIS THAT YOU'VE JUST GIVEN
23 US, DID ANY OF THAT INVOLVE THE VALUE OF THE 2,000-ACRE AND
24 l,500-ACRE RANCH UP IN OJAI, VENTURA?
25 A YES, IT INCLUDED THE 2,000 ACRE ONE BECAUSE THAT
26 WAS AN LLC. IT DID NOT INCLUDE THE ONE THAT WAS IN THE
27 CORPORATION, AND IT DID NOT INCLUDE THE PARTNERSHIP THAT WAS
28 IN MONTECITO.

112
1 Q OKAY. I WANT TO FOCUS ON THOSE TWO CORPORATE
2 TRANSFERS OR ASSETS. ARE YOU WITH ME?
3 A YES.
4 Q OKAY.
5 THE COURT: YOU JUST REFERRED TO A PARTNERSHIP IN
6 MONTECITO AS A CORPORATE ASSET. I'M NOW CONFUSED.
7 MR. BEZEK: NO. IT WAS MY MISTAKE, YOUR HONOR, IN THE
8 QUESTION.
9 THE COURT: OKAY.
10 Q BY MR. BEZEK: LET'S FOCUS, FIRST OF ALL, ON THE
11 1,500-ACRE PARCEL THAT WAS NOT INCLUDED IN THE VALUATION SO
12 FAR.
13 A OKAY.
14 Q WAS THAT IN A -- WHAT KIND OF ENTITY HELD THAT
15 PROPERTY?
16 A A CORPORATION.
17 Q WERE YOU THE MANAGER FOR THAT CORPORATION? DID YOU
18 PROVIDE MANAGEMENT SERVICES FOR THAT CORPORATION?
19 A YES.
20 Q WERE THOSE MANAGEMENT SERVICES SIMILAR TO THE ONES
21 YOU JUST DESCRIBED TO US FOR THE OTHER PROPERTIES?
22 A YES.
23 Q IN THAT CAPACITY, WAS IT YOUR OBLIGATION AND YOUR
24 DUTY TO MAINTAIN KNOWLEDGE OF THE VALUE OF THAT ASSET?
25 A YES.
26 Q WHAT WAS THE VALUE OF THAT ASSET --
27 THE COURT: WERE YOU THE SOLE SHAREHOLDER IN THE
28 CORPORATION?

113
1 THE WITNESS: YES.
2 THE COURT: I'M SORRY.
3 Q BY MR. BEZEK: WHAT WAS THE VALUE OF THAT ASSET
4 WHEN IT WAS TRANSFERRED INTO THE TRUST, THE NET VALUE? I'M
5 TALKING ABOUT AFTER DEBT.
6 A 5.3 MILLION.
7 Q NOW, YOU ALSO MENTIONED AN ASSET IN MONTECITO THAT
8 WAS OWNED BY A PARTNERSHIP?
9 A YES.
10 Q AND WERE YOU THE MANAGER -- DID YOU PROVIDE
11 MANAGEMENT SERVICES FOR THAT PARTNERSHIP SIMILAR TO WHAT
12 YOU'VE ALREADY IDENTIFIED FOR US?
13 A YES.
14 Q MONTECITO IS LOCATED IN SANTA BARBARA?
15 A YES.
16 Q WHAT TYPE OF AN ASSET WAS THAT?
17 A IT WAS AN ESTATE.
18 Q DO YOU RECALL HOW LARGE THE REAL ESTATE PARCEL WAS
19 ON WHICH THIS ESTATE WAS LOCATED?
20 A I THINK IT WAS 11 ACRES.
21 Q OKAY.
22 THE COURT: WAS THE 11 ACRES IN MONTECITO A
23 SINGLE-FAMILY RESIDENCE?
24 THE WITNESS: YES, MA'AM -- YES, YOUR HONOR.
25 THE COURT: AND DID YOU HAVE A PARTNERSHIP INTEREST IN
26 THE PARTNERSHIP AND, IF SO, COULD YOU DESCRIBE IT BRIEFLY?
27 THE WITNESS: I HAD A PARTNERSHIP WITH A BANK, AND THEY
28 HAD 15 PERCENT -- THEY WERE ENTITLED TO THEIR REGULAR

114
1 INTEREST AND THEN 15 PERCENT OF THE NET EQUITY WHEN WE SOLD
2 IT.
3 THE COURT: A PARTNERSHIP AS OPPOSED TO A MORTGAGE?
4 THE WITNESS: IT WAS A PARTICIPATING MORTGAGE.
5 THE COURT: OKAY.
6 Q BY MR. BEZEK: WHAT WAS THE NET EQUITY IN THE
7 MONTECITO PROPERTY AT THE TIME IT WAS TRANSFERRED INTO THE
8 ESTATE PLAN?
9 MR. ROSEN: OBJECTION. VAGUE. IS HE TALKING ABOUT
10 MR. GAGGERO'S NET EQUITY OR THE TOTAL?
11 THE COURT: SUSTAINED.
12 Q BY MR. BEZEK: WHAT WAS THE NET EQUITY OF THE
13 PARTNERSHIP IN THAT ENTITY AT THE TIME IT WAS TRANSFERRED
14 INTO THE ESTATE PLANNING?
15 A I CAN'T ANSWER IT LIKE THAT, BECAUSE IT DIDN'T
16 ACTUALLY GET TRANSFERRED INTO THE ESTATE PLAN. IT -- I'M
17 NOT SURE IF IT GOT -- I'M NOT SURE IF IT GOT TRANSFERRED
18 INTO THE ESTATE PLAN OR NOT, ACTUALLY. I JUST DON'T KNOW IF
19 IT DID. IT WAS SOLD, AND I DON'T KNOW IF IT -- IF ONE OF
20 THE OWNERSHIP ENTITIES WAS PART OF THE ESTATE PLAN WHEN IT
21 WAS SOLD OR NOT. I DON'T RECALL.
22 Q ALL RIGHT. BETWEEN THE PROPERTIES THAT WE HAVE
23 IDENTIFIED SO FAR, IF MY MATH IS CORRECT, WE'RE AT ABOUT 26,
24 $27 MILLION IN NET EQUITY, TWO 11'S AND A 5?
25 A THAT'S CORRECT.
26 Q NOW, WHEN THESE ASSETS FUNDED THE ESTATE PLANNING
27 THAT HAD BEEN CREATED BY MR. PRASKE, DID MR. PRASKE PERFORM
28 ANY OTHER SERVICES OTHER THAN BEING THE LEGAL REPRESENTATIVE

115
1 THAT DESIGNED THE ESTATE PLAN FOR YOU? DID HE CONTINUE ON
2 IN ANY CAPACITY?
3 A YES.
4 Q WHAT CAPACITY?
5 A HE MANAGED THE ESTATE PLAN AFTER HE -- AS I
6 INDICATED, IT TOOK ABOUT A YEAR OR MORE TO GET IT INTO
7 PLACE, AND THEN HE MANAGED IT AND MAINTAINED IT AFTER THAT.
8 AND HE WAS THE TRUSTEE OF THE TWO TRUSTS. I THINK ONE MIGHT
9 BE A FOUNDATION AND ONE IS A TRUST.
10 Q NOW, ONCE THE ESTATE PLAN WAS ESTABLISHED AND
11 MR. PRASKE BEGAN TO PROVIDE SERVICES, AS YOU'VE JUST
12 IDENTIFIED, DID YOU CONTINUE TO PROVIDE SERVICES TO THE
13 TRUST IN TERMS OF LOCATING PROPERTY, FOR EXAMPLE, THAT THE
14 TRUSTS, OR ONE OF THEM, MIGHT WANT TO BUY?
15 A YES. I WAS THE ASSET MANAGER AND, IN THAT
16 CAPACITY, I MADE THE DETERMINATIONS AS TO THE HIGHEST AND
17 BEST USE OF ALL THE ASSETS, THE DISPOSITION OF THE ASSETS,
18 OR WHETHER WE SHOULD RETAIN THEM. AND I LOOKED TO BUILD THE
19 PORTFOLIO BY LOOKING FOR OPPORTUNITIES TO EITHER HOLD AND
20 GRANT, HOLD AND KEEP IN THE FAMILY, OR DEVELOP FOR RESALE.
21 Q AND DID YOU PERFORM THOSE SERVICES FOR THE ESTATE
22 FROM THE TIME THAT THE ESTATE WAS COMPLETE IN ITS FORMATION
23 TO THE PRESENT DATE?
24 A YES.
25 Q NOW, IN JULY, AUGUST OF 1998, DID YOU HAVE ANY
26 CONVERSATIONS WITH MR. PRASKE ABOUT THE 938 PROPERTY THAT
27 YOU HAD LOCATED?
28 A YES.

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1 Q AND I'M NOT TRYING TO LOCK YOU IN ON THE DATE,
2 BECAUSE I'M NOT SURE WHEN YOU HAD THE FIRST CONVERSATIONS,
3 BUT DO YOU HAVE A RECOLLECTION OF WHEN YOU FIRST BROUGHT TO
4 MR. PRASKE'S ATTENTION THE FACT THAT YOU HAD FOUND 938 AS A
5 POTENTIAL INVESTMENT FOR THE ESTATE?
6 A IT WOULD HAVE BEEN BETWEEN THE END OF MAY AND
7 PROBABLY THE END OF JUNE OF 1998 THAT I HAD DISCUSSIONS WITH
8 MR. PRASKE ABOUT MR. HARRIS' PORTFOLIO PROPERTIES, THE 938.
9 THE COURT: WE'RE GOING TO TAKE OUR 15-MINUTE AFTERNOON
10 BREAK. WE'LL SEE YOU AT 3:15.
12
13 (RECESS TAKEN.)
14
16 Q BY MR. BEZEK: NOW, MR. GAGGERO, WHEN WE BROKE, WE
17 WERE JUST ABOUT TO DISCUSS -- OR WERE IN THE PROCESS OF
18 DISCUSSING WHEN YOU BROUGHT TO MR. PRASKE'S ATTENTION THE
19 FACT THAT YOU HAD LOCATED THE 938 PROPERTY FOR SALE.
20 DO YOU REMEMBER THAT'S KIND OF WHERE WE WERE?
21 A YES.
22 Q DO YOU HAVE A RECOLLECTION, APPROXIMATELY, AS TO
23 WHEN YOU FIRST BROUGHT THIS INVESTMENT OPPORTUNITY
24 THE COURT: HE'S ALREADY ANSWERED THAT.
25 MR. BEZEK: HE DID? ALL RIGHT. THEN I'LL MOVE ON.
26 Q DID YOU MEET WITH MR. PRASKE AND DISCUSS THIS
27 OPPORTUNITY WITH HIM?
28 A MR. PRASKE AND I WERE WORKING TOGETHER ON AN ALMOST

117
1 DAILY BASIS, SO HE WAS PRETTY FAMILIAR WITH EVERYTHING I WAS
2 DOING.
3 THE COURT: YOU KNOW WHAT. YOU'RE GOING TO HAVE TO
4 LISTEN TO WHAT HE ASKS YOU AND ANSWER ONLY THAT QUESTION.
5 THE WITNESS: ALL RIGHT.
6 THE COURT: IT'S GOING TO TAKE -- YOU'RE GOING TO BE UP
7 HERE LONGER IF YOU DON'T DO THAT. LISTEN TO WHAT HE ASKS
8 AND ANSWER THAT QUESTION.
9 WOULD THE REPORTER READ IT BACK.
10 I'M GOING TO ILLUSTRATE WHAT HE ASKED YOU.
11 (THE QUESTION WAS READ BY THE REPORTER AS
12 FOLLOWS:
13 "Q DID YOU MEET WITH MR. PRASKE
14 AND DISCUSS THIS OPPORTUNITY WITH HIM?")
15 THE WITNESS: YES.
16 Q BY MR. BEZEK: WHAT DID YOU TELL MR. PRASKE ABOUT
17 THIS OPPORTUNITY?
18 MR. ROSEN: OBJECTION. HEARSAY.
19 THE COURT: WHAT'S THE EXCEPTION TO THE HEARSAY RULE?
20 MR. BEZEK: WHAT HE SAID, YOUR HONOR, IS NOT NECESSARILY
21 HEARSAY. ALSO, IT'S NOT BEING OFFERED FOR THE TRUTH OF THE
22 MATTER ASSERTED. ACTUALLY, IT'S BEING
23 THE COURT: WELL, A, WHAT'S THE EXCEPTION AND, B, WHAT'S
24 THE NONHEARSAY PURPOSE?
25 MR. BEZEK: RES GESTAE.
26 THE COURT: IT'S A STATEMENT OF A PARTY, SO IT'S
27 HEARSAY. SO WHAT'S THE HEARSAY EXCEPTION AND WHAT'S THE
28 NONHEARSAY PURPOSE?

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1 MR. BEZEK: ONE IS, IT'S NOT HEARSAY BECAUSE IT'S NOT
2 BEING OFFERED FOR THE TRUTH OF THE MATTER ASSERTED. RATHER,
3 IT IS BEING OFFERED AS RES GESTAE. THAT IS THE PURPOSE FOR
4 WHY A TRANSACTION WAS BEING DONE AND THE BASIS UPON WHICH
5 ACTIONS WERE TAKEN AFTER THE CONVERSATION.
6 MR. ROSEN: THAT RES GESTAE EXCEPTION THAT HE JUST
7 MENTIONED --
8 THE COURT: HE'S SAYING IT'S A NONHEARSAY PURPOSE, NOT
9 AN EXCEPTION.
10 MR. ROSEN: WELL, THAT ONLY APPLIES WHEN THE TESTIMONY
11 ITSELF IS EVIDENCE OF THE FACT OR THING THAT WAS DONE OR NOT
12 DONE. AND I DON'T THINK THERE'S -- I DON'T KNOW WHAT THE
13 FACT OR THING THAT WAS DONE OR NOT DONE IS THAT WE'RE
14 TALKING ABOUT.
15 THE COURT: COUNSEL?
16 MR. BEZEK: THE WITNESS HAS A RIGHT TO PRESENT
17 NONHEARSAY EVIDENCE TO ESTABLISH THE BASIS UPON WHICH
18 ACTIONS WERE TAKEN AND TO SHOW THE STATE OF MIND OF THE
19 PARTIES TO EXPLAIN ACTIONS THAT WERE TAKEN OR TO EXPLAIN A
20 PROCESS OR A PROCEDURE, WHICH IS EXACTLY WHY THIS IS BEING
21 OFFERED.
22 THE COURT: ALL RIGHT. JUST GIVE ME A MOMENT.
23 SUSTAINED.
24 Q BY MR. BEZEK: DID YOU HAVE A MEETING WITH
25 MR. PRASKE CONCERNING THE FACT THAT YOU HAD FOUND 938?
26 A YES.
27 Q AND AFTER MEETING WITH MR. PRASKE, DID YOU TAKE ANY
28 ACTION, ANY FURTHER ACTION, WITH REGARDS TO GOING FORWARD

119
1 WITH THE PURCHASE OF 938?
2
3
A
Q
YES.
WHERE WERE THE FUNDS GOING TO COME FROM TO PURCHASE
4 938?
5 A THAT WOULD DEPEND ON WHEN THE ESCROW CLOSING DATE
6 WAS ESTABLISHED.
7 Q LET ME ASK THE QUESTION THIS WAY. I'M NOT FOCUSING
8 YET ON HOW TITLE WOULD BE TAKEN. I'M ONLY ASKING FROM WHAT
9 GENERAL SOURCE WOULD THE FUNDS COME FROM TO PURCHASE 938.
10 A THERE WAS NO ESCROW CLOSING DATE, BY DESIGN, OF
11 MR. HARRIS IN THE PURCHASE AGREEMENT. MR. HARRIS WANTED TO
12 CONTROL WHEN THE CLOSE OF ESCROW WOULD OCCUR.
13 SO I COULDN'T TELL YOU THEN, AS I COULDN'T TELL YOU
-
14 NOW, WHETHER WE WOULD EXCHANGE INTO THE PROPERTY·BECAUSE WE
15 HAPPENED TO BE SELLING ONE OF THE ASSETS IN THE TRUST,
16 WHETHER WE WOULD TAKE CASH OUT OF THE TRUST AND PURCHASE IT,
17 WHETHER WE WOULD TAKE SOME CASH AND TAKE A REAL ESTATE
18 MORTGAGE, OR WHETHER I WOULD ASK MY PARENTS TO EITHER, FROM
19 THEIR TRUST OR THEM INDIVIDUALLY, TO FUND A PORTION OR ALL
20 OF IT.
21 IT WOULD DEPEND ON THE LIQUIDITY OF THE TRUST AT
22 THE TIME MR. HARRIS MADE A DECISION AS TO WHEN HE WANTED TO
23 CLOSE ESCROW.
24 WE WERE CONTINUING TO DO BUSINESS, AND THE TRUST
25 WOULD SOMETIMES HAVE MILLIONS OF DOLLARS LIQUID AND
26 SOMETIMES IT WOULD NOT HAVE MILLIONS AND ONLY HUNDREDS OF
27 THOUSANDS LIQUID.
28 WE ALWAYS HAD THE ABILITY TO BORROW AGAINST THE

120
1 ASSETS OF THE TRUST.
2 THE COURT: I DON'T KNOW WHO "WE" IS.
3 THE WITNESS: MR. PRASKE AND MYSELF ALWAYS HAD THE
4 ABILITY TO BORROW MONEY AGAINST THE ASSETS IN THE TRUST OR
5 PULL CASH DIRECTLY OUT OF THE TRUST. BUT WE COULDN'T MAKE A
6 DETERMINATION AS TO PRECISELY WHAT -- WHETHER WE WOULD TAKE
7 THE MONEY FROM A BANK ACCOUNT OR WHETHER WE WOULD BORROW IT
8 AS A MORTGAGE OR WHETHER WE WOULD LEVERAGE AN ASSET TO
9 PURCHASE IT UNTIL MR. HARRIS MADE A DECISION WHEN HE WANTED
10 TO CLOSE ESCROW.
11 WE SIMPLY COULDN'T DO OUR ACQUISITION PLANNING
12 UNTIL THAT DATE CERTAIN WAS DETERMINED, IDENTIFIED, AND TOLD
13 TO US. THEN I COULD TELL YOU EXACTLY, AFTER MEETING WITH
14 TAX COUNSEL, MR. PRASKE, AND MY ACCOUNTANTS, I COULD TELL
15 YOU EXACTLY WHERE THE MOST PRUDENT PLACE TO PULL THAT
16 PURCHASE MONEY FROM WOULD BE.
17 Q BY MR. BEZEK: IN EVERY ONE OF THE EXAMPLES YOU
18 GAVE, EXCEPT FOR YOUR PARENTS, WAS THE SOURCE OF THE
19 RESOURCE FROM WHICH THE FUNDS WOULD BE GENERATED THE ESTATE
20 PLAN OR THE ESTATE?
21 A YES.
22 Q ALL RIGHT. IN TERMS OF HOW TITLE WOULD BE TAKEN,
23 WERE YOU ABLE TO DETERMINE HOW TITLE WOULD BE TAKEN BEFORE
24 THERE WAS A CLOSING DATE FOR 938?
25 A NO.
26 Q CAN YOU EXPLAIN WHY?
27 A BECAUSE MR. HARRIS WANTED TO DO, UNDER IRS 1031,
28 WHAT'S CALLED A DIRECT EXCHANGE. WE WANTED THE OPPORTUNITY

121
1 TO DO, UNDER IRS 1031, WHAT IS REFERRED TO AS A DELAYED
2 EXCHANGE. MR. HARRIS DIDN'T WANT TO CLOSE ESCROW UNTIL HE
3 IDENTIFIED AND PUT UNDER CONTRACT A REPLACEMENT PROPERTY.
4 AT THAT TIME, HE WOULD DEFINE AN ESCROW PERIOD AND HE WOULD
5 GIVE US 30 DAYS TO CLOSE.
6 IF, WHEN HE GAVE US NOTICE THAT HE HAD FOUND A
7 REPLACEMENT PROPERTY AND GAVE US 30 DAYS' NOTICE TO CLOSE
8 ESCROW, IF AT THAT TIME THERE WAS AN ASSET IN THE ESTATE
9 PLANNING FACILITY OR IN ANY OF THESE TRUSTS, IF THERE WAS AN
10 ASSET THAT WAS EITHER UNDER CONTRACT, IN ESCROW, OR HAD SOLD
11 WITHIN A 45-DAY IDENTIFICATION PERIOD, WE WOULD HAVE TAKEN
12 THAT OPPORTUNITY TO USE THAT ASSET, AND THE PARTNERSHIP,
13 LIMITED LIABILITY COMPANY, CORPORATION, OR WHATEVER ENTITY
14 OWNED THAT ASSET THAT WAS UNDER CONTRACT OR IN ESCROW OR HAD
15 JUST RECENTLY SOLD, WE WOULD TAKE THAT ENTITY AND IDENTIFY
16 THAT ENTITY, AND WE WOULD ASSIGN THE PURCHASE AGREEMENT TO
17 THAT ENTITY SO THAT IT COULD MAKE A 1031 EXCHANGE IF THAT
18 WAS DETERMINED TO BE THE PRUDENT THING TO DO AT THE TIME.
19 IF, HOWEVER, WHEN MR. HARRIS IDENTIFIED A PIECE OF
20 PROPERTY AND GAVE US AN INSTRUCTION TO CLOSE WE DID NOT HAVE
21 A SALE PENDING OR A SALE THAT HAD RECENTLY COMPLETED, WE
22 COULD LOAN THE MONEY -- AND "WE," AGAIN, WAS THE TRUST,
23 MR. PRASKE AND MYSELF -- WE WOULD CAUSE THE MONEY TO BE
24 LOANED TO STEPHANIE BOREN, MY STEPSISTER, AND SHE WOULD
25 FUNCTION AS AN ACCOMMODATOR. AND BECAUSE SHE'S NOT BLOOD OR
26 HALF BLOOD, SHE'S LEGALLY ENTITLED TO BE AN ACCOMMODATOR
27 UNDER THE IRS RULE 1031.
28 THEN STEPHANIE BOREN WOULD PURCHASE THE PROPERTY

122
1 AND EFFECTIVELY WHAT'S CALLED WAREHOUSE THE PROPERTY, OR BE
2 A FORWARD ACCOMMODATOR.
3 SHE WOULD THEN OWN -- SHE WOULD CLOSE ESCROW ON THE
4 PROPERTY IN THAT 30-DAY PERIOD. AND THEN, WHEN THE TRUST
5 WHEN ONE OF THE ENTITIES WITHIN THE TRUST SOLD A PROPERTY IN
6 THE FUTURE, THEY COULD THEN EXCHANGE INTO -- THEY COULD
7 PURCHASE THE PROPERTY FROM STEPHANIE AND COMPLETE AN
8 EXCHANGE INTO IT.
9 THE COURT: WHAT'S THE TIME LIMIT ON THAT?
10 THE WITNESS: IT'S 45 DAYS WHEN WE ENTERED INTO THE
11 PURCHASE AGREEMENT. THE IRS HAD NOT COMPLETED THEIR -- THEY
12 HAD NOT ESTABLISHED THEIR REVERSE EXCHANGE PROVISION. IT
13 HAPPENED A YEAR LATER. AND SO THERE WAS NO TIME LIMIT WHEN
14 WE ENTERED INTO THE PURCHASE AGREEMENT.
15 THE COURT: WHEN DID THEY ESTABLISH THE 45-DAY TIME
16 PERIOD FOR ACCOMMODATION?
17 THE WITNESS: AH, THAT TIME PERIOD DID EXIST. THAT IS
18 FOR A DELAYED EXCHANGE. BUT FOR WAREHOUSING, THERE HAD NOT
19 BEEN -- A REVERSE EXCHANGE HAD NOT BEEN IDENTIFIED. AND THE
20 LEGISLATION HAD NOT BEEN DRAFTED YET.
21 THE COURT: WHEN DID IT GO INTO EFFECT?
22 THE WITNESS: I THINK IT WAS 1999. IT MIGHT HAVE BEEN
23 2000. SO IF YOU DID A REVERSE EXCHANGE BEFORE THE IRS
24 CREATED THE GUIDELINES FOR A REVERSE EXCHANGE, YOU JUST HAD
25 TO MAKE SURE THAT THE WAY YOUR FORWARD ACCOMMODATOR
26 PURCHASED THE PROPERTY WAS AS ARM'S-LENGTH AND AS CLEAN AS
27 POSSIBLE. FOR EXAMPLE
28 THE COURT: I WOULD LIKE TO KNOW THE DATE THAT THAT

123
1 REGULATION WENT INTO EFFECT, AND I WANT TO SEE THE REG AS
2 WELL, THE IRS REG. IS IT 1039 OF THE INTERNAL REVENUE CODE?
3 I NEED TO SEE THAT.
4 THE WITNESS: I HAVE A BOOK OVER THERE, IF YOU WOULD
5 LIKE.
6 THE COURT: OKAY.
7 MR. BEZEK: DO YOU HAVE IT HERE?
8 THE WITNESS: YES.
9 THE COURT: JUST MAKE A COPY FOR ME AND A COPY FOR
10 COUNSEL TOMORROW MORNING. I WOULD LIKE TO KNOW WHAT THE
11 CODE IS AND WHEN THAT WENT INTO EFFECT, THE 45-DAY RULE ON
12 THE -- OKAY.
13 THE WITNESS: THE 45-DAY RULE DID EXIST FOR A DELAYED
14 EXCHANGE.
15 THE COURT: I HEARD, YEAH, I HEARD WHAT YOU SAID. BUT
16 YOU'RE SAYING IT DIDN'T EXIST UNTIL SOMETIME IN 2000 FOR THE
17 WAREHOUSING SCENARIO.
18 THE WITNESS: YEAH, FOR THE REVERSE EXCHANGE.
19 THE COURT: THAT'S RIGHT. I WANT TO KNOW WHEN THAT RULE
20 WENT INTO EFFECT.
21 THE WITNESS: '99 OR 2000.
22 THE COURT: I WANT TO SEE THE REGS. I WANT TO SEE IT IN
23 WRITING, THE REVERSE EXCHANGE. OKAY.
24 Q BY MR. BEZEK: ALL RIGHT. NOW, DID MR. PRASKE
25 COMMIT THE FUNDS FROM THE ESTATE TO PURCHASE 938?
26 A YES.

124
1 Q BY MR. BEZEK: HOW DO YOU KNOW -- STRIKE THAT.
2 DID YOU HAVE A MEETING --
3 THE COURT: HE JUST FINISHED SAYING THAT HE WOULDN'T
4 KNOW WHERE THE MONEY CAME FROM UNTIL MR. HARRIS MADE THE
5 DECISION, WHICH HE APPARENTLY NEVER MADE, SO THUS THE
6 OBJECTION. DO YOU GET -- DO YOU UNDERSTAND THAT?
7 HOW CAN THE -- HE'S JUST FINISHED TELLING US THAT
8 HE WOULDN'T KNOW WHERE THE MONEY CAME FROM UNTIL HARRIS MADE
9 THE DECISION, AND NOW YOU'RE SAYING DID THE TRUST COMMIT THE
10 MONEY.
11 SO I'M NOT QUITE SURE -- I THINK THAT'S WHY WE HAVE
12 THE OBJECTION.
13 MR. BEZEK: WELL, I THOUGHT WHERE WE WERE, YOUR HONOR,
14 WAS THAT --
15 THE COURT: WHY DON'T YOU ASK THE QUESTION TO CURE THE
16 OBJECTION.
17 IS THAT WHAT YOUR OBJECTION WAS?
18 MR. ROSEN: THAT WAS MY OBJECTION, EXACTLY.
19 THE COURT: OKAY. THAT'S WHAT I THOUGHT.
20 Q BY MR. BEZEK: REGARDLESS OF THE ACTUAL DATE, UNDER
21 ALL SCENARIOS, EXCEPT FOR YOUR PARENTS, WOULD THE FUNDS COME
22 FROM THE ESTATE?
23 THE COURT: HE'S ALREADY TESTIFIED TO THAT.
24 MR. BEZEK: OKAY.
25 Q AND DID MR. PRASKE COMMIT TO YOU THAT, REGARDLESS
26 OF WHEN THERE WAS A CLOSING, THE FUNDS WOULD COME FROM THE
27 ESTATE?
28 A YES.

125
1 Q ALL RIGHT. NOW, SINCE THE FUNDING OF THE ESTATE,
2 SINCE THE COMPLETION OF THAT ORIGINAL FUNDING OF THE ESTATE,
3 YOU TOLD US THAT YOU PERFORMED MANAGEMENT SERVICES FOR THE
4 ESTATE; IS THAT CORRECT?
5 A I MANAGED THE ASSET PORTFOLIO, CORRECT.
6 Q AND AS PART OF THAT, IS YOUR JOB TO TRY TO INCREASE
7 THE VALUE OF THE ESTATE BY FINDING ADDITIONAL PROPERTIES,
8 INCREASING THE VALUE OF THAT ESTATE?
9 A YES.
10 Q HAVE YOU BEEN DOING THAT SINCE THE ESTATE WAS
11 FUNDED IN APPROXIMATELY -- COMPLETED, I MEAN, IN
12 APPROXIMATELY 1998?
13 A YES.
14 Q SINCE THE TRUST WAS ORIGINALLY FUNDED AND COMPLETED
15 IN THAT FUNDING, HAS THE VALUE OF THE TRUST INCREASED OR
16 DECREASED?
17 A INCREASED.
18 Q HAS IT INCREASED CAN YOU GIVE US AN
19 APPROXIMATION OF HOW MUCH IT HAS INCREASED?
20 A 30 TO 40 PERCENT.
21 Q NOW, YOU HAD MENTIONED THAT YOUR FAMILY, YOUR
22 MOTHER AND FATHER, ALSO HAVE A FAMILY TRUST; IS THAT
23 CORRECT?
25 THE COURT: SUSTAINED ON FOUNDATION.
26 Q BY MR. BEZEK: DO YOU KNOW WHETHER OR NOT YOUR
27 FAMILY -- YOUR PARENTS HAVE A FAMILY TRUST?
28 A YES, MY PARENTS HAVE A FAMILY TRUST. IT'S CALLED

126
1 THE GAGGERO FAMILY TRUST.
2 Q AND HAVE YOU EVER BEEN A BENEFICIARY OF THAT TRUST?
3 A I THINK I AM.
4 THE COURT: YOU HOPE YOU ARE.
5 THE WITNESS: I HOPE I AM, YES.
6 Q BY MR. BEZEK: FROM TIME TO TIME, DO YOUR PARENTS
7 INVEST IN REAL ESTATE?
8 A YES.
9 Q DO YOU EVER INVEST TOGETHER IN REAL ESTATE?
10 A YES.
11 Q DO YOU HAVE ANY PENDING TRANSACTIONS IN WHICH YOU
12 ARE A JOINT INVESTOR WITH YOUR PARENTS?
13 THE COURT: HE IS OR THIS TRUST IS?
14 MR. BEZEK: THAT'S A GOOD POINT.
15 THE COURT: HE'S SAYING UNDER PENALTY OF PERJURY THAT HE
16 HAS NO ASSETS IN THE YEAR 2000. SO YOU MIGHT WANT TO BE A
17 LITTLE MORE PRECISE IN YOUR QUESTIONS.
18 MR. BEZEK: THANK YOU, YOUR HONOR. FAIR COMMENT.
19 Q IS THERE A CURRENT CLOSING PENDING IN WHICH YOUR
20 PARENTS ARE INVOLVED AND YOU AS THE MANAGER FOR AN ASSET
21 FROM THE ESTATE ARE INVOLVED?
22 A YES.
23 THE COURT: THE TRUST, RIGHT?
24 MR. BEZEK: THE TRUST.
25 THE COURT: HIS TRUST? WHAT'S THE NAME OF THE TRUST
26 WE'RE TALKING ABOUT?
27 THE WITNESS: THERE'S TWO TRUSTS, YOUR HONOR. ONE IS
28 CALLED THE -- THERE'S ACTUALLY THREE. ONE TRUST IS CALLED

EXHIBIT D
June 28, 2005 (306-321)

306
1 (INDICATING). UNLESS YOU'RE GOING TO MAKE YOUR CLIENT ARGUE
2 IT. HE'S SMILING.
3 MR. BEZEK: DO I HAVE THAT CHOICE, YOUR HONOR?
4 THE COURT: GOOD MORNING.
5 THE WITNESS: GOOD MORNING.
6 THE COURT: YOU'RE STILL UNDER OATH. YOU UNDERSTAND
7 THAT?
8 THE WITNESS: YES.
9 THE COURT: GREAT. YOU MAY PROCEED.
10
11 STEPHEN MICHAEL GAGGERO,
12 THE PLAINTIFF, CALLED AS A WITNESS ON HIS OWN BEHALF, HAVING
13 BEEN PREVIOUSLY SWORN, RESUMED THE STAND AND TESTIFIED
14 FURTHER AS FOLLOWS:
15
16 DIRECT EXAMINATION (RESUMED)
17 BY MR. BEZEK:
18 Q GOOD MORNING, MR. GAGGERO.
19 A GOOD MORNING.
20 Q BEFORE WE GET STARTED TODAY, I WANT TO WORK ON A
21 LITTLE DEFINITIONAL ISSUE THAT I CREATED YESTERDAY, AND I
22 WANT TO MAKE SURE WE'RE CLEAR AS WE GO FORWARD.
23 YESTERDAY YOU DESCRIBED FOR THE COURT THE ESTATE
24 PLAN THAT WAS DESIGNED BY MR. PRASKE. YOU GENERALLY
25 REMEMBER THAT?
26 A YES.
27 Q AS WE GO FORWARD WITH YOUR QUESTIONING TODAY AND
28 THROUGHOUT THE TRIAL, DO YOU HAVE ANY PROBLEM DEFINITIONLY

307
1 WITH ME REFERRING TO THAT ESTATE PLAN THAT WAS CREATED BY
2 MR. PRASKE AS THE ESTATE PLAN?
3 A NO.
4 Q OKAY. SO AS WE GO FORWARD, IF I ASK YOU QUESTIONS
5 ABOUT: DID YOU DO WORK FOR THE ESTATE PLAN, WERE YOU A
6 MANAGER OF THE ESTATE PLAN, OF THE ASSETS --
7 THE COURT: YOU KNOW WHAT? THAT DOESN'T MAKE ANY SENSE,
8 AN ESTATE PLAN. I DON'T KNOW WHAT YOU'RE TALKING ABOUT.
9 ARE YOU TALKING ABOUT TRUSTS? IF YOU'RE TALKING ABOUT
10 TRUSTS, WHY NOT JUST SAY "TRUSTS."
11 Q BY MR. BEZEK: LET ME ASK YOU THIS --
12 THE COURT: I WOULD LIKE THESE QUESTIONS AND ANSWERS TO
13 BE AS PRECISE AS POSSIBLE SO I KNOW WHAT YOU'RE TALKING
14 ABOUT. WHEN YOU SAY "ESTATE PLAN," DO I HAVE TO GUESS EVERY
15 TIME, IS HE TALKING ABOUT TRUSTS?
16 IS THERE ANY REASON WE CAN'T USE THE EXACT TERMS AS
17 TO WHAT THESE INSTRUMENTS ARE? WHY CAN'T WE DO THAT?
18 MR. BEZEK: I CAN GIVE YOU AN ANSWER TO THAT, YOUR
19 HONOR, IF YOU -- THE PROBLEM IS THAT THE ESTATE PLAN THAT
20 WE'VE BEEN REFERRING TO IS COMPRISED OF A TRUST, A COUPLE OF
21 FOUNDATIONS, AND THEN THERE'S A NUMBER OF LIMITED LIABILITY
22 COMPANIES AND PARTNERSHIPS THAT ULTIMATELY FUNDED THAT PLAN.
23 SO HOW WE REFER TO THE PLAN, WHICH IS MULTIFACETED,
24 SO TO SPEAK, IS DIFFICULT BECAUSE IT'S A TRUST -- INVOLVES A
25 TRUST AND INVOLVES FOUNDATIONS.
26 THE COURT: WELL, WHO'S BUYING AND SELLING THE PROPERTY?
27 MR. BEZEK: WELL, IT'S THE ESTATE --
28 THE COURT: LET'S HEAR FROM THE WITNESS.

308
1 MR. BEZEK: ALL RIGHT. LET'S SEE IF WE CAN'T COVER THAT
2 AND GET THIS CLEAR. AND MAYBE IT WILL HELP IF WE TALK ABOUT
3 PROCEDURALLY HOW THESE -- HOW THE ESTATE PLAN WAS FUNDED,
4 HOW THE ESTATE WAS FUNDED.
5 Q WHEN YOU FUNDED IT ORIGINALLY, DID YOU MOVE ASSETS
6 THAT BELONGED TO YOU DIRECTLY INTO THE ESTATE PLAN OR INTO
7 THIS VEHICLE, OR DID YOU --
8 THE COURT: WHY DON'T YOU LET HIM TESTIFY -- HE SEEMS TO
9 BE REALLY FAMILIAR -- AND ASK OPEN-ENDING, NONLEADING
10 QUESTIONS. LET'S TRY IT THAT WAY, SINCE YOU'RE SUPPOSED TO
11 ASK NONLEADING QUESTIONS.
12 Q BY MR. BEZEK: MR. GAGGERO, WHAT PROCEDURE DID YOU
13 FOLLOW WHEN YOU HAD YOUR PERSONAL ASSETS AND YOU WERE USING
14 THOSE TO FUND THE ESTATE PLAN THAT WAS DESIGNED BY
15 MR. PRASKE? LET'S TALK ABOUT THE PROCEDURE THAT'S FOLLOWED.
16 THE COURT: OKAY.
17 THE WITNESS: INITIALLY I TOOK ASSETS AND PUT THEM INTO
18 LIMITED LIABILITY COMPANIES, LIMITED PARTNERSHIPS,
19 CORPORATIONS. AND I -- AND AT SOME POINT IN TIME, I MET
20 MR. PRASKE IN THAT PROCESS, AND I CAN'T TELL YOU EXACTLY
21 WHEN. HE'LL BE ABLE TO HAVE THE DATES AND TELL YOU EXACTLY
22 WHEN.
23 AND THEN I CONTINUED TO TRANSFER PROPERTIES INTO
24 LIMITED LIABILITIES THAT MR. PRASKE WOULD SET UP. FIRST
25 THESE OTHER CORPORATIONS AND LIMITED LIABILITY COMPANIES
26 WERE SET UP BY OTHER ATTORNEYS I HAD, AND THEN MR. PRASKE
27 STARTED SETTING THEM UP AND I WOULD TRANSFER PROPERTIES INTO
28 THOSE VARIOUS COMPANIES.

309
1 AND THEN MR. PRASKE WOULD CHANGE THE OWNERSHIP,
2 STOCK MEMBERSHIP, LIMITED PARTNERSHIP, AND GENERAL
3 PARTNERSHIP OWNERSHIP INTERESTS IN THOSE COMPANIES TO TRUST
4 OR FOUNDATION OWNERSHIPS.
5 Q BY MR. BEZEK: ALL RIGHT. AND IS THAT HOW THE
6 ESTATE PLAN THAT WAS DESIGNED BY MR. PRASKE WAS THEN FUNDED,
7 THROUGH THAT PROCESS, ULTIMATELY?
8 A YES.
9 Q CAN YOU TELL US GENERALLY WHAT IS -~ WHAT COMPRISES
10 THE ESTATE PLAN THAT WAS CREATED BY ATTORNEY PRASKE?
11 A I'M NOT EXACTLY SURE WHAT THERE IS COMPLETELY RIGHT
12 NOW WITHOUT LOOKING AT A LIST, BECAUSE THERE WAS A LOT I
13 HAVE TO REMEMBER ABOUT THAT.
14 Q I'M SORRY. I MISLED YOU WITH THE QUESTION. BAD
15 QUESTION.
16 WHEN IT WAS ORIGINALLY CREATED BY MR. PRASKE BACK
17 IN THE '97-'98 TIME FRAME, WHAT TYPES OF RECEIVING VEHICLES
18 COMPRISED THE ESTATE PLAN?
19 A LIMITED LIABILITY COMPANIES, LIMITED PARTNERSHIPS,
20 GENERAL PARTNERSHIPS, CORPORATIONS, TRUSTS, AND A
21 FOUNDATION.
22 Q OKAY. THAT RESULTING ESTATE PLAN, WITH ALL OF THE
23 THINGS THAT YOU JUST IDENTIFIED COMPRISING THAT PLAN, CAN WE
24 PUT A DEFINITIONAL TERM ON THAT SO THAT, AS WE GO FORWARD,
25 WE CAN REFER TO THAT ESTATE PLAN THAT WAS CREATED AND FUNDED
26 BY MR. PRASKE IN A SHORTHAND WAY?
27 MR. ROSEN: I'M GOING TO OBJECT TO --

310
1 Q BY MR. BEZEK: ALL RIGHT. WITH REGARDS TO THE 938
2 PROPERTY, BACK IN AUGUST OF '98, WHEN THE ORIGINAL -- WHEN
3 YOU WERE ORIGINALLY NEGOTIATING ON BEHALF OF THE -- LET ME
4 SEE HOW I WANT TO PHRASE THAT.
5 WAS ONE OF THE OPTIONS YOU WERE CONSIDERING WHEN
6 YOU WERE TALKING WITH MR. HARRIS ABOUT THE PURCHASE OF
7 938 -- WAS ONE OF THE OPTIONS THAT YOU WERE CONSIDERING
8 PURCHASING THE PROPERTY IN YOUR OWN NAME TEMPORARILY?
9 A YES.
10 THE COURT: CAN YOU PULL THAT MIKE UP.
11 THE WITNESS: YES. IT'S A LITTLE -- THE SCREW NEEDS TO
12 BE TIGHTENED.
13 THE COURT: IT'S AN L.A. COUNTY FACILITY. THE SCREW
14 NEEDS TO BE TIGHTENED. I'M NOT GOING TO MAKE ANY FURTHER
15 COMMENT. MAYBE WE'LL TRY TO GET SOMEONE TO DO THAT. MAYBE
16 I'LL BRING A SCREW- -- WELL
17 THE WITNESS: YOU CAN'T GET THEM?
18 THE COURT: I CAN. I'M SORRY. WE'LL TRY TO GET THAT
19 FIXED.
20 Q BY MR. BEZEK: HAD YOU HAD DISCUSSIONS WITH
21 MR. PRASKE ABOUT WHERE THE MONEY WOULD COME FROM IN THE
22 EVENT YOU WERE TO TAKE TITLE IN THE SALE OF THE 938
23 PROPERTY?
24 A IT WOULD COME FROM ONE OF THE --
25 THE COURT: THAT WAS A "YES" OR "NO" ANSWER.
26 THE WITNESS: OH. YES. I'M SORRY. YES.
27 Q BY MR. BEZEK: WHAT DID YOU --
28 A I JUMPED AHEAD THERE. SORRY.

311
1 Q WHAT DID YOU SAY TO MR. PRASKE?
2 A I DON'T REMEMBER SPECIFICALLY WHAT I SAID TO
3 MR. PRASKE OR SPECIFICALLY WHAT HE SAID TO ME, BUT I KNOW
4 THAT WE DISCUSSED THE SITUATION. I KNOW THAT
5 THE COURT: GIVE ME A SECOND. SORRY.
6 Q BY MR. BEZEK: DID MR. PRASKE COMMIT FUNDS IN THE
7 EVENT THAT YOU WERE THE VEHICLE THROUGH WHICH TITLE WOULD BE
8 TAKEN IN THE SALE OF THE PROPERTY?
9 MR. ROSEN: YOUR HONOR, I'M GOING TO OBJECT --
10 THE COURT: SUSTAINED. PRASKE IN WHAT ROLE? COMMIT
11 FUNDS FROM WHERE?
12 IS THAT WHAT THE OBJECTION IS?
13 MR. ROSEN: THAT'S A BETTER ONE. BUT MY OBJECTION WAS
14 ALSO GOING TO BE HEARSAY TO THE EXTENT HE MADE A COMMITMENT,
15 OTHER THAN TO THE EXTENT IT'S GOING TO HIS STATE OF MIND.
16 IF PRASKE MADE SOME SORT OF ORAL COMMITMENT TO HIM OF FUNDS,
17 THAT'S HEARSAY, AND MR. PRASKE CAN COME IN AND TESTIFY TO
18 THAT.
19 THE COURT: WHAT'S THE EXCEPTION TO THE HEARSAY RULE?
20 MR. BEZEK: IT'S NOT BEING OFFERED FOR STATE OF MIND;
21 THEREFORE, IT'S NOT HEARSAY, AND IT'S COMPLIANT WITH SHOWING
22 WHY MR. GAGGERO DID WHAT HE DID.
23 THE COURT: IS MR. PRASKE GOING TO TESTIFY IN THIS CASE?
24 MR. BEZEK: YES, YOUR HONOR.
25 THE COURT: WE'RE CONTINUING TO BE VERY VAGUE IN OUR
26 QUESTIONS, AND THAT'S SORT OF GOING TO BE WORKING TO YOUR
27 DISADVANTAGE. IF YOU CAN'T SAY WHERE THIS MONEY IS COMING
28 FROM AND EVERYTHING IS SO VAGUE, THAT'S GOING TO BE A

312
1 PROBLEM IN THIS CASE.
2 LET'S TALK ABOUT THAT HEARSAY OBJECTION. THE
3 FOUNDATION WOULD BE THAT THE RECIPIENT OR HEARER OF THE
4 STATEMENT LEARNED CERTAIN INFORMATION BY HEARING OR READING
5 IT AND BELIEVED SUCH INFORMATION TO BE TRUE AND ACTED IN
6 CONFORMITY.
7 THAT'S WHAT YOU HAVE TO ESTABLISH. AND I STILL
8 DON'T KNOW WHAT CAPACITY PRASKE IS IN AND WHERE THIS MONEY
9 IS COMING FROM. THAT'S NOT DEFINED IN THE QUESTION.
10 Q BY MR. BEZEK: DID YOU HAVE CONVERSATIONS WITH
11 MR. PRASKE IN MR. PRASKE'S ROLE AS THE TRUSTEE AND
12 REPRESENTATIVE OF THE ESTATE PLAN THAT WE'VE JUST DISCUSSED
13 THAT WAS FUNDED BY MR. PRASKE?
14 THE COURT: TRUSTEE OF THE TRUSTS IN THE ESTATE PLAN?
15 MR. BEZEK: AS TRUSTEE OF THE ESTATE PLAN THAT WAS
16 FUNDED BY -- LET ME ASK THE QUESTION THIS WAY.
17 Q IN WHAT CAPACITY DID YOU HAVE CONVERSATIONS WITH
18 MR. PRASKE? WHAT WAS HIS CAPACITY AT THE TIME?
19 A HE WAS THE TRUSTEE OF THE TRUST THAT WAS THE
20 GENERAL PARTNER OF THE LIMITED PARTNERSHIPS. HE WAS THE
21 MANAGING -- HE WAS THE TRUSTEE OF THE TRUSTS THAT WAS THE
22 MANAGING MEMBER OF THE LIMITED LIABILITY COMPANIES, OR SOME
23 OF THEM, OR HE WAS THE TRUSTEE OF THE TRUSTS OR OF THE
24 FOUNDATION THAT HAD THE MAJORITY MEMBERSHIP INTEREST.
25 HE WAS THE TRUSTEE OF THE TRUSTS OR THE FOUNDATION
26 THAT OWNED THE SHARES TO THE CORPORATIONS. HE WAS THE
27 TRUSTEE OF THE TRUSTS THAT HELD THE LIMITED PARTNERSHIP
28 INTERESTS OR THE OWNERSHIP INTERESTS OF THE LIMITED

313
1 PARTNERSHIPS. HE WAS THE TRUSTEE OR MANAGING MEMBER OR
2 MAJORITY MEMBERSHIP OWNER OR LIMITED LIABILITY -- OR LIMITED
3 PARTNERSHIP WITH THE 100 PERCENT OWNERSHIP OF ALL OF THOSE
4 VARIOUS ENTITIES, I.E., LIMITED LIABILITY COMPANIES, LIMITED
5 PARTNERSHIPS, OR TRUSTS THAT FORMED GENERAL PARTNERSHIPS.
6 SO, TO SUMMARIZE, MR. PRASKE HAD CONTROL OVER THE
7 OWNERSHIP ENTITIES OF EACH OF THE ENTITIES THAT THEY WERE A
8 PART OF.
9 SAID DIFFERENTLY, SO THERE'S NO CONFUSION -- I KNOW
10 IT'S CONFUSING. IT'S DIFFICULT FOR ME TO SAY --
II THE COURT: IT'S NOT CONFUSING.
12 SO WHAT YOU'RE TRYING TO SAY IS PRASKE HAD CONTROL
13 OVER ALL OF THE ENTITIES IN THE ESTATE PLAN THAT HE CREATED?
14 IS THAT WHAT YOU'RE TRYING TO SAY?
16 THE COURT: OKAY.
17 Q BY MR. BEZEK: AT THE SAME TIME, WERE YOU
18 DESIGNATED BY MR. PRASKE TO MANAGE THE ASSETS?
19 A YES.
20 THE COURT: OF WHAT?
21 MR. BEZEK: THE ASSETS OF THESE ENTITIES THAT HE JUST
22 IDENTIFIED THAT WERE USED TO FUND THE -- OR CREATE THE
23 ESTATE PLAN CREATED BY MR. PRASKE.
25 Q BY MR. BEZEK: WHAT WAS YOUR ROLE -- WHAT WERE YOUR
26 DUTIES IN PERFORMING THAT ROLE?
27 THE COURT: WELL, WHAT WAS YOUR TITLE? DID YOU HAVE A
28 TITLE?

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1 THE WITNESS: I WAS THE ASSET MANAGER. I MANAGED THE
2 ASSET PORTFOLIO.
3 THE COURT: OF ALL OF THE ABOVE?
4 THE WITNESS: OF ALL OF THE ASSETS -- GO ALL THE WAY
5 DOWNSTREAM TO THE TWO TRUSTS AND THE FOUNDATION AND
6 EVERYTHING ABOVE THAT, I WAS THE ASSET MANAGER OF THAT AND
7 THAT PORTFOLIO. I GUESS THAT'S A GOOD WORD FOR IT.
8 Q BY MR. BEZEK: IN THAT CAPACITY, DID YOU HAVE
9 OCCASION TO TALK TO MR. PRASKE IN HIS CAPACITY, AS YOU'VE
10 JUST DEFINED IT, ABOUT 938?
11 A YES.
12 Q WHAT WAS IT YOU DISCUSSED WITH HIM REGARDING 938 IN
13 THE PRE-AUGUST 1998 TIME FRAME?
14 A I DISCUSSED WITH HIM THE STRUCTURE OF THE PURCHASE
15 AND SALE AGREEMENT AND HOW WE WOULD FUND IT IN THE FUTURE,
16 DEPENDING UPON WHEN MR. HARRIS DETERMINED HE WANTED TO CLOSE
17 ESCROW.
18 Q WHY WAS THAT IMPORTANT, TO DETERMINE THE CLOSING
19 DATE, AS PART OF THESE CONVERSATIONS WITH MR. PRASKE?
20 A BECAUSE WE COULDN'T DETERMINE
21 THE COURT: "WE" MEANING?
22 THE WITNESS: MR. PRASKE AND I -- OR I'LL USE "1." I
23 COULDN'T DETERMINE WHICH OF THE ENTITIES, OR IF IT WOULD BE
24 JUST CASH ITSELF COMING FROM THE PARENT TRUSTS AND
25 FOUNDATION, WOULD BE THE FUNDING ENTITY OR TRUST OR
26 FOUNDATION FOR THE ULTIMATE ACQUISITION UNTIL I KNEW AT
27 LEAST THE MONTH AND THE YEAR THAT MR. HARRIS WAS GOING TO
28 DECIDE TO CLOSE ESCROW ON THESE.

315
1 BECAUSE THE MOST PRUDENT WAY TO PURCHASE THIS
2 PROPERTY WOULD BE TO PURCHASE IT WITH AN EXCHANGE, A TAX
3 DEFERRED 1031 EXCHANGE, SO THAT WE BOUGHT IT WITH DOLLARS
4 THAT WERE NOT AFTER-TAX DOLLARS, BUT WITH DEFERRED DOLLARS.
5 AND THE ONLY WAY I COULD DETERMINE WHICH OF THE
6 ENTITIES, OR IF I WOULD HAVE TO HAVE THE MONEY FROM THE
7 MOTHER TRUST OR FOUNDATION GIVEN STRAIGHT TO MYSELF OR TO
8 STEPHANIE BOREN TO PURCHASE IT, THE ONLY WAY I COULD
9 DETERMINE WHICH OF THESE ENTITIES WAS THE MOST APPROPRIATE
10 WAS TO KNOW THEIR STATUS AT THE SAME TIME WE HAD A CLOSING
11 DATE.
12 FOR EXAMPLE, IF MR. HARRIS GAVE ME 30-DAY NOTICE TO
13 CLOSE IN JULY OF 1999, I WOULD KNOW AT THAT POINT IN TIME
14 THAT I WOULD LOOK AT THE PORTFOLIO AND SAY: WHICH OF THESE
15 ENTITIES HAVE A PIECE OF PROPERTY THAT IS EITHER UNDER
16 CONTRACT TO SELL, IS IN ESCROW TO BE SOLD, HAS CLOSED ESCROW
17 ALREADY, AND IS WITHIN THE 45-DAY IDENTIFICATION PERIOD,
18 WHICH OF THOSE WOULD BE MY FIRST CHOICE.
19 SO, FOR EXAMPLE, IF MALIBU BROAD BEACH LP HAD JUST
20 SOLD A PIECE OF PROPERTY AND -- OR IT WAS IN ESCROW, LET'S
21 SAY, PENDING AND AT THE SAME TIME MR. HARRIS GAVE ME NOTICE
22 THAT HE NOW WANTED TO CLOSE ESCROW 30 DAYS FROM THIS CERTAIN
23 DATE, THEN I WOULD KNOW THAT THE IDEAL CANDIDATE TO BUY 938
24 WOULD BE MALIBU BROAD BEACH LP BECAUSE THEY WERE IN ESCROW
25 AND ESCROW WAS GOING TO CLOSE WITHIN, LET'S SAY,
26 30 DAYS.
27 IF MR. HARRIS GAVE ME A 30-DAY TIME LIMIT TO CLOSE
28 ESCROW, THEN I WOULD KNOW THAT I COULD EXCHANGE THE FUNDS

316
1 FROM MALIBU BROAD BEACH LP INTO 938 ON A TAX-DEFERRED BASIS.
2 IF, HOWEVER, NOTHING IN THE PORTFOLIO WAS EITHER
3 UNDER CONTRACT OR IN ESCROW OR HAD SOLD AND THE MONEY WAS
4 SITTING WITH AN ACCOMMODATOR, LET'S SAY, THEN I WOULD HAVE
5 TO CAUSE THE TRUST OR ONE OF THE CORPORATIONS IN THE TRUST
6 TO LOAN THE MONEY TO STEPHANIE BOREN TO PURCHASE THE
7 PROPERTY, SHE WOULD BUY IT.
8 AND THEN, LET'S SAY THREE MONTHS FROM NOW, SOMEONE
9 MADE AN OFFER ON ONE OF THE PROPERTIES OWNED BY ONE OF THE
10 ENTITIES IN THE PORTFOLIO, THEN I WOULD TAKE THAT PROPERTY
11 IN THAT ENTITY WHEN IT SOLD, AND I WOULD BUY FROM STEPHANIE
12 BOREN THE ASSET WITH TAX-DEFERRED DOLLARS.
13 SO THAT IS THE PLAN THAT WAS SET UP WITH
14 MR. FAINSBERT AND MR. HARRIS AT THE VERY OUTSET, BECAUSE
15 MR. HARRIS DIDN'T WANT TO BE PRESSURED INTO PICKING AN
16 ESCROW DATE AND THEN BE PRESSURED INTO FINDING A REPLACEMENT
17 PROPERTY WITH THE PROCEEDS FROM THE SALE.
18 HE WANTED TO HAVE COMPLETE CONTROL OVER WHAT MONTH,
19 WHAT DAY, WHAT YEAR THAT PROPERTY SOLD SO THAT HE COULD DO
20 WHAT'S CALLED A DIRECT EXCHANGE, WHICH MEANT THAT WHEN HE
21 CLOSED ESCROW ON 938, WITHIN THE SAME ESCROW HE WOULD BUY
22 ANOTHER PROPERTY.
23 IT'S THE SAFEST WAY TO DO A 1031 EXCHANGE. THERE'S
24 NO DEFERRAL ON IT.
25 AND THAT'S WHAT HE WANTED TO DO, WITH NO PRESSURE
26 IN SHOPPING FOR HIS REPLACEMENT PROPERTY. HE WANTED TO TAKE
27 HIS TIME AND REALLY LOOK AT THE MARKET.
28 THAT PUT ME IN A POSITION THAT I WOULD HAVE TO -- I

317
1 WOULD HAVE ONLY 30 DAYS WITHIN WHICH TO SELL SOMETHING AND
2 BUY HIS UNLESS I USED STEPHANIE AS A WAREHOUSER, WHERE WE
3 WOULD LET HER BUY THE PROPERTY, WE WOULD LOAN HER THE MONEY,
4 SHE WOULD WAREHOUSE IT, ESSENTIALLY, AND WE WOULD BUY IT
5 FROM HER IN THE FUTURE WHEN ONE OF THE ENTITIES OWNING ONE
6 OF THE PROPERTIES IN THE PORTFOLIO SOLD, THEN THAT WOULD
7 WORK.
8 THE COURT: AND IT WOULD ONLY WORK UP UNTIL THE DAY THAT
9 THEY IMPOSED THE 45-DAY LIMIT ON THE FORWARD ACCOMMODATOR
10 RULES?
11 THE WITNESS: EXACTLY.
12 THE COURT: AND WHEN DID THEY DO THAT?
13 THE WITNESS: THEY DID THAT SEPTEMBER 15 OF 2000.
14 THE COURT: AFTER THAT, YOU CAN'T DO THAT?
15 THE WITNESS: EXACTLY RIGHT. BEFORE SEPTEMBER 15, THE
16 PROPERTY WAS TRANSFERRED TO ME, AND THEN THE MONEY WOULD
17 HAVE JUST BEEN GIVEN TO ME TO BUY.
18 THE COURT: THANK YOU.
19 Q BY MR. BEZEK: ALL RIGHT. NOW, DID YOU EVER GET A
20 CLOSING DATE FROM MR. HARRIS BEFORE HE DIED?
21 A NO.
22 Q WE TALKED YESTERDAY ABOUT THE FUNDING OF THE
23 ESTATE, THE ESTATE PLAN THAT WAS CREATED BY MR. PRASKE, WHAT
24 YOU REFERRED TO AS THE MOTHER TRUSTS AND FOUNDATIONS.
25 ONCE --
26 THE COURT: MOTHER TRUST AND FOUNDATION SINGULAR?
27 THE WITNESS: SINGULAR FOUNDATION, TWO TRUSTS.
28 THE COURT: RIGHT.

318
1 THE WITNESS: THAT'S CORRECT.
2 Q BY MR. BEZEK: FROM THE TIME THAT IT WAS -- DO YOU
3 REMEMBER WHEN THE FUNDING WAS COMPLETED, APPROXIMATELY?
4 THE COURT: WHAT FUNDING?
5 Q BY MR. BEZEK: THE FUNDING OF THE ESTATE PLAN THAT
6 HAD BEEN CREATED BY MR. PRASKE, THE MOTHER TRUSTS AND
7 FOUNDATION.
8 A IT WAS IN 1998, EARLY OR MIDDLE 1998, I THINK.
9 Q ONCE YOU BEGAN MANAGING THE ASSETS FOR THE MOTHER
10 TRUSTS AND FOUNDATION, DID YOU PURCHASE ADDITIONAL
11 PROPERTIES ON BEHALF OF THE MOTHER TRUSTS AND FOUNDATION?
12 A YES.
13 Q FROM THAT POINT, WHEN YOU BEGAN THAT PROCESS IN
14 1998-'99, WHENEVER YOU BEGAN -- DO YOU REMEMBER
15 APPROXIMATELY IN '98 WHEN YOU BEGAN THAT?
16 A WE'LL CALL IT MID-1998 FOR AN ESTIMATE.
17 Q FROM THAT POINT FORWARD TO TODAY'S DATE, DO YOU
18 KNOW HOW MUCH PROPERTY WAS PURCHASED ON BEHALF OF THE MOTHER
19 TRUSTS AND FOUNDATION?
20 A YES.
21 Q CAN YOU TELL US HOW MUCH, PLEASE.
22 A $31 MILLION WORTH OF PROPERTY.
23 THE COURT: HOW MUCH OF THAT WAS 1031'S?
24 THE WITNESS: 13 MILLION WAS A 1031, AND I BELIEVE ABOUT
25 A $3-1/2 MILLION WAS A 1031, AND I CAN CHECK AND GIVE YOU --
26 THAT'S ALL I CAN REMEMBER RIGHT NOW.
27 THE COURT: ALL RIGHT. SO YOU'LL GET BACK TO ME WITH
28 THAT FIGURE?

319
1 THE WITNESS: YES.
2 THE COURT: NOW, IN CHAPTER 8, IF YOU READ THAT LAST
3 NIGHT -- AND I HOPE YOU DID YOU WILL NOTICE THAT IN A
4 COURT TRIAL I'M SUPPOSED TO BE SAVING MY QUESTIONS UNTIL THE
5 END OF BOTH SIDES' EXAMINATIONS. HOWEVER, BECAUSE WE'RE
6 DEALING WITH SOME COMPLICATED ISSUES HERE, I'M GOING TO ASK
7 THE QUESTIONS AS THEY COME UP.
8 IF ANYBODY HAS A PROBLEM WITH THAT, I WOULD
9 ENCOURAGE YOU TO OBJECT, AND I'LL SAVE MY QUESTIONS UNTIL
10 THE END. BUT SO FAR I'M NOT GETTING ANY FEELING THAT
11 ANYBODY IS HAVING AN ISSUE, BECAUSE I WANT TO ASK HIM AT THE
12 TIME.
13 MR. BEZEK: YOUR HONOR, I'M AWARE OF THE RULE. I HAVE
14 NOT OBJECTED BECAUSE I ENCOURAGE THE QUESTIONS.
15 THE COURT: DON'T HESITATE TO OBJECT IF YOU FEEL THAT
16 IT'S STRATEGICALLY NOT GOOD FOR THE WAY YOU WANT TO PRESENT
17 YOUR CASE, BECAUSE THIS IS FAIRLY COMPLICATED, AND I WANT TO
18 MAKE SURE -- MY GOAL IS TO UNDERSTAND EVERYTHING AS I GO
19 ALONG.
20 I'M NOT THE TYPE OF JUDGE THAT SITS ON THE BENCH
21 AND DOESN'T -- I WANT TO MAKE SURE I'M WITH THE CURVE IN
22 THIS CASE, THE LEARNING CURVE. NOT BEHIND IT. OKAY?
23 THAT'S MY PURPOSE.
25 Q NOW, YOU TOLD US A MOMENT AGO THAT YOU PURCHASED
26 $31 MILLION WORTH OF PROPERTY ON BEHALF OF THE MOTHER TRUSTS
27 AND FOUNDATION DURING THE TIME FRAME THAT WE IDENTIFIED. DO
28 YOU RECALL THAT?

320
1 A YES.
2 Q DID YOU EVER HAVE A SINGLE TIME WHEN THERE WAS A
3 PROPERTY UNDER CONTRACT THAT THE PROPERTY WAS NOT OR COULD
4 NOT BE FUNDED FROM THE ASSETS OF THE MOTHER TRUSTS AND
5 FOUNDATION?
6 A NO.
7 Q THIS MIGHT NOT BE A VERY FAIR QUESTION TO YOU, BUT
8 DO YOU RECALL WHAT THE LARGEST SINGLE PURCHASE PRICE WAS
9 DURING THIS TIME FRAME FOR A PIECE OF PROPERTY? IF YOU
10 DON'T REMEMBER, IT'S OKAY. I JUST
11 A IT WAS AROUND 7 MILLION.
12 Q AND THE PURCHASE PRICE ON THE 938 ORIGINALLY,
13 ORIGINALLY --
14 THE COURT: CAN YOU JUST -- DIDN'T YOU JUST SAY THERE
15 WAS A $13 MILLION TRANSACTION THAT WAS A 1031? WOULDN'T
16 THAT HAVE BEEN LARGER THAN THE 7 MILLION?
17 THE WITNESS: I SOLD 13 MILLION, AND I BOUGHT A SERIES
18 OF SMALL PROPERTIES.
19 THE COURT: IT WAS A SALE?
20 THE WITNESS: YEAH. I HAD TO REINVEST 13 MILLION, BUT
21 IT WAS A SERIES OF PROPERTIES.
22 THE COURT: THANK YOU.
23 Q BY MR. BEZEK: WHEN YOU FIRST BEGAN NEGOTIATING
24 WITH MR. HARRIS FOR THE PURCHASE OF 938 ON BEHALF OF THE
25 MOTHER TRUSTS AND FOUNDATION, WHAT WAS THE PURCHASE PRICE
26 THAT MR. HARRIS WANTED?
27 A 1,200,000.
28 Q WHAT WAS THE PURCHASE PRICE THAT WAS ULTIMATELY

321
1 AGREED UPON?
2 A 1,150,000.
3 Q WHY THE DIFFERENCE?
4 A BECAUSE WELL, HE WAS OFFERING BROKER
5 COOPERATION, AND WE REPRESENTED OURSELVES. I REPRESENTED
6 THE TRUST. THERE WAS NO BROKER REPRESENTING ME OR THE
7 ESTATE PORTFOLIO.
8 Q DID MR. HARRIS AND YOU NEGOTIATE THAT PRICE OF
9 $1,150,000?
10 A YES, PREDICATED ON THE FACT HE DIDN'T HAVE TO GIVE
11 $50,000 TO A BROKER.
12 THE COURT: WE'RE GOING TO TAKE A BREAK.
13
14 (BRIEF RECESS TAKEN.)
15
16 THE COURT: OKAY. SORRY ABOUT THE INTERRUPTION.
17 MR. ROSEN: I'M SORRY, YOUR HONOR. THERE WAS A LAST
18 QUESTION AND ANSWER, AND I DON'T KNOW IF HE WAS DONE WITH
19 HIS ANSWER, BUT I ACTUALLY WANTED TO MAKE A MOTION TO
20 STRIKE.
21 THE COURT: OKAY. THE QUESTION WAS: DID MR. HARRIS AND
22 YOU NEGOTIATE THAT PRICE OF 1 MILLION 500 $1,150,000.
23 ANSWER: YES, PREDICATED ON THE FACT THAT HE DIDN'T HAVE TO
24 GIVE 50,000 TO THE BROKER.
25 WHAT'S THE MOTION?
26 MR. ROSEN: MOTION TO STRIKE EVERYTHING AFTER "YES" AS
27 LACKING FOUNDATION AND NONRESPONSIVE AND LACKING
28 FOUNDATION.

EXHIBIT E
June 29, 2005 (616-617)

B20J780COURT OF APPEAL OF THE STATE OF CALIFORNIA
NO. BC 239810
_.)UR'TOF APPEAL· SE.COr
lfnJ1~IID
MAY 20 2008
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VS. )
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JOSEPH A. LANE Clert
Depuw ('.
REPORTER'S TRANSCRIPT ON APPEAL
JUNE 29, 2005 AND JUNE 30, 2005
APPEARANCES:
SUITE 400
(310) 979-6059
SUITE 1300
(310) 899-3300
VOLUME 3 OF lG,
PAGES 601 - 739-900
PAGES 901 - 1054-1200
PAULA B. RENTERIA, CSR NO. 9374
OFFICIAL REPORTER

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SAYING, BUT IT'S MY OPINION THAT ONCE STEPHANIE ASSIGNED THE
PURCHASE AGREEMENT AND RIGHT TO PURCHASE THE 938 PROPERTY TO
ME, SHE EXERCISED THE ASSIGNEE PROVISION IN THE PURCHASE
AGREEMENT. AND THAT MEANS THAT I AM THE ONE THAT MUST CLOSE
THE ESCROW, BECAUSE THERE'S NOT A FURTHER ASSIGNEE
PROVISION, UNLESS THE SELLER AGREES THAT I CAN ASSIGN THE
PURCHASE AGREEMENT ONE MORE TIME.
Q NOW, HAVE YOU SPOKEN WITH MR. PRASKE ABOUT HIS
COMMITMENT OF FUNDS IN THE EVENT THE ESCROW IS CLOSED IN
YOUR NAME?
A YES.
Q AND WHAT HAS BEEN COMMITTED, IF ANYTHING?
A THE SAME COMMITMENT AS IF IT WAS CLOSED IN ONE OF
THE TRUST ENTITIES OR MS. BOREN
THE COURT: WHAT IS THE COMMITMENT? LET'S HEAR WHAT THE
COMMITMENT IS.
THE WITNESS: OH, SORRY. I SEE.
THE COMMITMENT IS THAT THEY WILL FUND THE
ACQUISITION, "THEY" THE TRUSTS, THE TWO TRUSTS AND/OR THE
FOUNDATION, WILL CAUSE THE RESOURCES NECESSARY, THE
FINANCIAL RESOURCES, THE CASH NECESSARY TO PURCHASE THIS
PROPERTY IN MY NAME.
Q BY MR. BEZEK: ONCE THE PROPERTY IS PURCHASED IN
YOUR NAME, WHAT WOULD THE NEXT STEP BE IN TERMS OF RETAINING
TITLE IN THAT PROPERTY?
A TITLE WOULD BE VESTED IN MY NAME UPON CLOSE OF
ESCROW.
Q AND AT THAT POINT, WILL YOU EVALUATE WHAT NEEDS TO

617
1 BE DONE REGARDING THE PLACEMENT OF THAT PROPERTY INTO THE
2 FOUNDATION OR ONE OF THE TRUSTS?
3 A I WOULD HAVE OPTIONS AT THAT POINT. I WOULDN'T
4 HAVE THE 1031 OPTIONS THAT I HAD EARLIER, BUT I WOULD HAVE
5 THE OPTION, JUST LIKE I DID WHEN I CREATED -- WHEN I FUNDED
6 THE TRUST WITH MY ASSET, WHEN I TOOK MY ASSETS AND CREATED
7 MY TRUST, MY PERSONAL TRUST.
8 I COULD TAKE THIS ASSET IN MY NAME, TRANSFER IT TO
9 AN ENTITY, A LIMITED LIABILITY COMPANY, A LIMITED
10 PARTNERSHIP, A GENERAL PARTNERSHIP, OR A CORPORATION, AND
11 THEN HAVE ONE OF THE TRUSTS OR THE FOUNDATION SUBSUME -- IF
12 THAT'S THE RIGHT WORD -- THAT ENTITY INTO THE ESTATE PLAN,
13 JUST LIKE I DID THE OTHER PROPERTIES IN 1997 AND 1998; OR I
14 COULD JUST KEEP THE PROPERTY IN MY NAME.
15 Q ALL RIGHT. I WOULD LIKE TO CHANGE GEARS AGAIN. WE
16 WERE IN THE MIDDLE OF GOING THROUGH THE CHANGES AND ADOPTION
17 OF CHANGES IN THE CC&R'S YESTERDAY. DO YOU REMEMBER THAT'S
18 WHERE WE WERE WHEN WE ENDED THE DAY?
19 A YES.
20 Q I WOULD LIKE YOU TO GO BACK TO EXHIBIT 196.
21 A OKAY. I HAVE 196.
22 Q NOW, DURING THE COURSE OF THE MEETING WHERE THE
23 NOTES WERE DISCUSSED -- STRIKE THAT.
24 DURING THE COURSE OF THE MEETING WHEN THE NOTES
25 WERE TAKEN, AS YOU TESTIFIED TO YESTERDAY, WAS THERE ANY
26 DISCUSSION ABOUT THE STAIR SHAFT ENCLOSURE?
27 A YES.
28 Q CAN YOU TELL US FROM YOUR RECOLLECTION WHAT THAT

EXHIBIT F
Praske Direct Examination
June 30, 2005 (901-945)

(OFF-THE-RECORD DISCUSSION.)
THE COURT: WELL, GOOD MORNING, EVERYONE. YOU'VE GOT
YOUR EXPERT? IS HE AN EXPERT OR PERCIPIENT?
MR. BEZEK: HE HASN'T BEEN DESIGNATED AS AN EXPERT.
THE COURT: SO HE'S PERCIPIENT.
YOU MAY CALL YOUR NEXT WITNESS OUT OF ORDER.
MR. BEZEK: THANK YOU, YOUR HONOR. WE CALL JOE PRASKE.
THE CLERK: STAND THERE AND RAISE YOUR RIGHT HAND.
JOSEPH PRASKE,
CALLED BY THE PLAINTIFF AS A WITNESS, OUT OF ORDER, WAS
SWORN AND TESTIFIED AS FOLLOWS:
THE CLERK: DO YOU SOLEMNLY STATE THAT THE TESTIMONY YOU
ARE ABOUT TO GIVE IN THE CAUSE NOW PENDING BEFORE THIS COURT
SHALL BE THE TRUTH, THE WHOLE TRUTH, AND NOTHING BUT THE
TRUTH, SO HELP YOU GOD?
THE WITNESS: YES.
THE CLERK: PLEASE BE SEATED.
PLEASE STATE AND SPELL YOUR FULL NAME FOR THE
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CASE NUMBER:
CASE NAME:
LOS ANGELES, CA
DEPARTMENT 25
REPORTER:
TIME:
APPEARANCES:
BC 239810
GAGGERO V. YURA
THURSDAY, JUNE 30, 2005
HON. MARY ANN MURPHY, JUDGE
A.M. SESSION
(AS HERETOFORE NOTED.)
901

902
BY MR. BEZEK:
Q GOOD MORNING, MR. PRASKE.
A GOOD MORNING.
Q WOULD YOU TELL US WHAT YOU DO FOR A LIVING NOW.
A I'M AN ESTATE PLANNING LAWYER. BUT ALSO AT THIS
TIME, FOR THE PAST APPROXIMATELY FIVE YEARS, I ALSO HAVE A
CONSULTING BUSINESS IN ELECTRONICS MANUFACTURING.
Q CAN YOU GIVE US YOUR EDUCATIONAL BACKGROUND,
PLEASE.
A I GRADUATED FROM UCLA IN 1983, FROM LOYOLA LAW
SCHOOL IN 1987. I TOOK THE BAR EXAM AFTER LAW SCHOOL AND
RECORD.
THE WITNESS: JOSEPH PRASKE. J-O-S-E-P-H, P-R-A-S-K-E.
THE COURT: YOU MAY PROCEED.
MR. BEZEK: THANK YOU, YOUR HONOR.
YOUR HONOR, MAY MS. CONNORS BE EXCUSED FOR A MINUTE
FROM THE COURTROOM, MY PARALEGAL?
THE COURT: THE PARALEGAL? YOU DON'T HAVE TO ASK.
AS FAR AS I'M CONCERNED, UNLESS YOU HAVE A GOOD
REASON TO HAVE A PARALEGAL AT THAT COUNSEL TABLE, SHE'S NOT
ADMITTED TO THE BAR AND SHE SHOULD BE SITTING IN THE BACK
UNLESS SHE'S WORKING WITH YOU. IT'S OKAY IF SHE IS, BUT
TYPICALLY WE DO NOT ALLOW PARALEGALS TO SIT AT COUNSEL
TABLE.
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OKAY.
MR. BEZEK:
YOU MAY PROCEED.
THANK YOU, YOUR HONOR.
DIRECT EXAMINATION

903
1 WAS ADMITTED TO THE BAR IN DECEMBER OF THAT YEAR, '87.
2 Q PRIOR TO GRADUATING FROM THE BAR, DID YOU PERFORM
3 AN INTERNSHIP OR WORK AS A LAW CLERK FOR ANY PARTICULAR LAW
4 FIRMS?
5 A YES. I WORKED FOR RICHARD HONN, AT HONN & SECOF,
6 AND I CONTINUED TO WORK AT THAT FIRM UPON GRADUATION.
7 Q NOW, AFTER GRADUATING, DID YOU HAVE AN AREA OF
8 SPECIALTY?
9 A IMMEDIATELY MAYBE NOT SO MUCH, BUT SOON THEREAFTER
10 I DID MOST OF MY WORK IN ESTATE PLANNING.
11 Q AND THAT WOULD HAVE BEEN ABOUT THE YEAR OF -- WHEN
12 YOU STARTED TO CONCENTRATE ON ESTATE PLANNING?
13 A WITH HONN & SECOF, IN '88 AND '89.
14 Q ALL RIGHT. AND HAVE YOU SPECIALIZED IN ESTATE
15 PLANNING ESSENTIALLY SINCE THAT APPROXIMATE TIME FRAME?
16 A YEAH, BUT I DON'T HAVE A SPECIALIZATION
17 CERTIFICATE. BUT THAT'S MY PRIMARY PRACTICE.
18 Q IS THERE A SPECIALTY CERTIFICATE IN ESTATE
19 PLANNING?
20 A I THINK SO.
21 Q NOW, DURING THIS TIME FRAME, CAN YOU TELL US WHAT
22 YOUR EMPLOYMENT HISTORY WAS FROM HONN TO, ESSENTIALLY, THE
23 PRESENT DATE?
24 A I STARTED MY OWN PRACTICE IN APPROXIMATELY 1990. A
25 FEW YEARS THEREAFTER, I WAS APPROACHED BY A CLASSMATE FROM
26 LAW SCHOOL WHO WORKED AT GIBSON, DUNN & CRUTCHER, AND HE
27 ASKED ME TO GO INTO PRACTICE WITH HIM. SO HE AND I STARTED
28 A FIRM CALLED PRASKE & GROGAN. THAT FIRM GREW TO

904
1 APPROXIMATELY TEN MEMBERS, AND AFTER A FEW YEARS I LEFT THAT
2 FIRM TO GO BACK ON MY OWN. THE FIRM CONTINUED TO PRACTICE
3 UNDER MY NAME FOR A COUPLE OF YEARS. AND THAT WOULD TAKE ME
4 UP TO ABOUT 1997.
5 Q NOW, DID THERE COME A TIME WHEN YOU WERE REFERRED
6 TO STEVE GAGGERO?
7 A HE WAS REFERRED TO ME, YEAH, IN APPROXIMATELY 1997.
8 Q AND HOW DID THAT REFERRAL COME IN?
9 A FROM A LAWYER WHO -- HER NAME WAS LAURA SLOCUMB.
10 AND IT WAS A CLIENT OF MINE WHO KNEW OF HER AND RECOMMENDED
11 ME -- OR DISCUSSED ME WITH HER, AND THEN SHE STARTED TO
12 REFER BUSINESS TO ME.
13 Q ALL RIGHT. AND DID YOU MEET WITH MR. GAGGERO?
14 A YES.
15 Q WHAT WAS THE PURPOSE OF THAT MEETING?
16 A HE CAME IN TO DISCUSS ESTATE PLANNING.
17 Q ALL RIGHT. NOW, I WANT TO TALK ABOUT -- WELL, DID
18 YOU AGREE TO EVALUATE THE -- DID YOU AGREE TO TAKE ON THE
19 ASSIGNMENT FOR MR. GAGGERO TO PREPARE AN ESTATE PLAN?
20 A YES.
21 Q DID YOU ALSO BECOME -- WERE YOU HIRED BY
22 MR. GAGGERO OR BY PACIFIC COAST MANAGEMENT, ONE OF THE
23 ENTITIES, WERE YOU RETAINED TO PROVIDE SERVICES LET ME
24 REPHRASE THE QUESTION.
25 WERE YOU RETAINED TO PROVIDE SERVICES FOR ANY ONE
26 OF THE ENTITIES FROM, SAY, 1997 FORWARD? WHO RETAINED YOU?
27 MR. ROSEN: OBJECTION. LACK OF FOUNDATION, COMPOUND.
28 THE COURT: REPHRASE.

905
1 Q BY MR. BEZEK: WHO RETAINED YOU?
2 A I WAS RETAINED BY ALL OF THE ENTITIES THAT
3 COMPRISED PART OF MR. GAGGERO'S ESTATE PLAN.
4 Q ALL RIGHT. AND DID YOU PERFORM ANY OTHER
5 FUNCTIONS, ANY OTHER JOB DUTIES, OTHER THAN -- ONCE THE
6 ESTATE TRUSTS AND FOUNDATION WAS ESTABLISHED, DID YOU
7 PERFORM ANY OTHER DUTIES?
8 A YES. I ALSO DID A LOT OF ADMINISTRATIVE WORK.
9 Q AND FROM TIME TO TIME, WHEN YOU WERE PERFORMING
10 THOSE SERVICES, WHERE DID YOU WORK OUT OF?
11 A I HAD AN OFFICE AT 2802 SANTA MONICA BOULEVARD. I
12 WENT TO SANTA BARBARA WHERE MR. GAGGERO HAD AN OFFICE. I
13 WENT THERE ONCE A WEEK. AND AFTER A PERIOD OF TIME, I HAD
14 AN OFFICE AT THE 938 PACIFIC COAST HIGHWAY PROPERTY.
15 Q HOW FREQUENTLY WOULD YOU MEET WITH MR. GAGGERO OR
16 OTHER REPRESENTATIVES OF THE TRUSTS AND FOUNDATION?
17 A INITIALLY, APPROXIMATELY TWICE A WEEK. SO I WENT
18 TO SANTA BARBARA ONCE A WEEK, HE CAME DOWN TO L.A. ONCE A
19 WEEK, AND WE GOT TOGETHER PRACTICALLY EVERY TIME HE CAME
20 DOWN.
21 AND THEN WHEN I WORKED AT THE BEACH HOUSE AT 938, I
22 WORKED THERE THREE DAYS A WEEK.
23 Q CAN YOU GIVE US AN IDEA OF SOME OF THE
24 ADMINISTRATIVE FUNCTIONS YOU WERE PERFORMING?
25 A I DID THINGS LIKE ASSISTED WITH INSURANCE MATTERS,
26 SOME OF THE CONTACTS WITH THE CITIES, VARIOUS CITIES WHERE
27 HE HELD PROPERTIES.
28 IT'S HARD TO RECALL EVERYTHING, BUT IT WAS QUITE A

906
1 BIT OF ADMINISTRATIVE WORK IN ADDITION TO JUST THE LEGAL
2 WORK THAT I DID.
3 Q DID YOU FROM TIME TO TIME PROVIDE ANY TAX ADVICE?
4 THE COURT: TAX ADVICE TO WHOM?
5 Q BY MR. BEZEK: TO THE TRUSTS AND/OR THE FOUNDATION.
6 A YES, DEFINITELY.
7 Q NOW, DID YOU COME TO MEET FRED HARRIS?
8 A YES.
9 Q CAN YOU RECALL THE CIRCUMSTANCES UNDER WHICH YOU
10 FIRST MET MR. HARRIS?
11 A I THINK IT WAS THE FIRST TIME WE MET AT A
12 RESTAURANT ON OCEAN AVENUE IN SANTA MONICA. FRED WAS THERE,
13 STEVE GAGGERO WAS THERE, STEVE'S PARENTS WERE THERE.
14 THE COURT: YOU KNOW, THIS IS A TRIAL. WE DO USE PROPER
15 NAMES AT TRIAL, NOT FIRST NAMES. IT BECOMES CONFUSING.
16 THE WITNESS: NOT STEVE?
17 THE COURT: LET'S USE THE -- THIS IS A TRIAL. THIS IS
18 NOT A SOCIAL GATHERING HERE. LET'S USE THE LAST NAMES,
19 PLEASE.
20 THE WITNESS: THE PEOPLE PRESENT WERE MR. HARRIS,
21 MR. GAGGERO, AND MR. GAGGERO'S PARENTS.
22 Q BY MR. BEZEK: AND DID YOU HAVE LUNCH WITH THOSE
23 FOLKS THAT DAY?
24 A YES.
25 Q DO YOU RECALL GENERALLY WHAT WAS DISCUSSED?
26 A IT WAS
27 MR. ROSEN: YOUR HONOR, OBJECTION. LACK OF FOUNDATION
28 AS TO DATE AND TIME WHEN THIS MEETING HAPPENED.

934
1 THE COURT: A PLAN SHOULD BE FORMED?
2 Q BY MR. BEZEK: AN ESTATE PLAN SHOULD BE CREATED.
3 A HE AGREED WITH MY RECOMMENDATIONS.
4 Q WAS AN ESTATE PLAN CREATED?
5 A YES.
6 Q WHO CREATED IT?
7 A I DID MOST OF IT. OTHER PEOPLE WERE INVOLVED.
8 Q AND DID YOU GO THROUGH THE PROCESS OF ANALYZING THE
9 AVAILABLE ASSETS AT THE TIME?
10 A YES.
11 Q DID YOU DESIGN THE PLAN CONSISTENT WITH THE ASSETS
12 AND THE NEEDS OF THE CLIENT AT THAT TIME?
13 A YES.
14 Q WHAT ESTATE PLAN WAS DESIGNED AT THAT TIME?
15 A AS I DO WITH OTHER CLIENTS, I TAKE THE REAL
16 PROPERTY ASSETS AND RECOMMEND THAT THEY SHOULD BE
17 TRANSFERRED TO A LIMITED PARTNERSHIP, LIMITED LIABILITY
18 COMPANIES. AND SO WE DID THE SAME THING IN THIS CASE.
19 Q ONCE THOSE -- AS PART OF YOUR ANALYSIS, WERE YOU
20 ABLE TO DETERMINE, OR WERE YOU INFORMED DURING THAT MEETING,
21 WHAT THE VALUE OF THE ASSETS WERE IN MR. GAGGERO'S ESTATE AT
22 THAT POINT IN TIME, BEFORE ANY OF THE ASSETS WERE
23 TRANSFERRED INTO THESE LIMITED LIABILITY COMPANIES OR
24 CORPORATIONS?
25 A YES, OVER THE COURSE OF THOSE MEETINGS.
26 Q WHAT DID YOU DETERMINE?
27 A THAT THERE WAS NET VALUE OF APPROXIMATELY
28 30 MILLION.

935
1 Q AND GIVEN THE NATURE OF THE ASSETS AND THE AMOUNT
2 OF THE ASSETS, SPECIFICALLY WHAT ESTATE PLAN WAS THEN
3 DESIGNED?
4 A WELL, WE PUT EACH PROPERTY INTO A SEPARATE ENTITY,
5 LIKE I DESCRIBED EARLIER.
6 Q THAT WAS BEFORE ANY TRUSTS OR FOUNDATIONS WERE SET
7 UP?
8 A NO. THE TRUSTS OR FOUNDATIONS WERE ALREADY SET UP
9 SO THAT THE --
10 THE COURT: YOU KNOW WHAT. I MISSED THE TIME FOR THE
11 MORNING BREAK. SORRY TO INTERRUPT YOU IN THE MIDDLE OF A
12 WHY DON'T YOU JUST FINISH THIS ANSWER, AND THEN WE'LL TAKE
13 OUR BREAK.
14 MR. BEZEK: THIS IS FINE, YOUR HONOR. WE CAN JUST BREAK
15 RIGHT NOW.
16 THE COURT: GREAT. WE'LL BE IN RECESS FOR 15 MINUTES.
17
18 (RECESS TAKEN.)
19
20 THE COURT: OKAY.
21 Q BY MR. BEZEK: MR. PRASKE, HOW WAS THE ESTATE PLAN
22 STRUCTURED?
23 A LIKE I WAS SAYING, THAT EACH PROPERTY, EACH REAL
24 PROPERTY, IS PUT INTO A SEPARATE ENTITY, AND THEN SO
25 MR. GAGGERO TRANSFERS EACH PROPERTY BY GRANT DEED TO THE
26 LIMITED LIABILITY COMPANY, FOR EXAMPLE. AND INITIALLY
27 THE -- HE WOULD BE THE SOLE MEMBER OF THE LIMITED LIABILITY
28 COMPANY, AND THEN WOULD TRANSFER THAT MEMBERSHIP INTEREST TO

936
1 A TRUST.
2 Q NOW, WHAT TYPE OF ESTATE PLAN DID YOU STRUCTURE TO
3 RECEIVE THE VARIOUS LIMITED LIABILITY COMPANIES,
4 CORPORATIONS AND LLP'S?
5 THE COURT: DO YOU UNDERSTAND THE QUESTION AS PHRASED?
6 THE WITNESS: NO.
7 THE COURT: NEITHER DID I. BUT THAT'S WHAT HE'S BEEN
8 SAYING.
9 I CAN TELL YOU'RE NOT A TRUST ATTORNEY. WHY DON'T
10 WE TRY THAT AGAIN.
11 Q BY MR. BEZEK: WHEN YOU SET UP THE ESTATE PLAN, WAS
12 THE ESTATE PLAN COMPRISED OF TRUSTS AND A FOUNDATION?
13 A YES.
14 Q CAN YOU
15 THE COURT: WHY DON'T YOU ASK HIM OPEN-ENDED QUESTIONS.
16 IT MIGHT BE BETTER IF YOU LET HIM TALK, BECAUSE HE MIGHT
17 KNOW A LITTLE BIT MORE ABOUT THIS THAN YOU DO. WHAT, WHEN,
18 WHY, HOW, WHERE. YOU KNOW, THE NONLEADING.
19 JUST A SUGGESTION. YOU CAN TRY YOUR CASE ANY WAY
20 YOU WANT. I DON'T MEAN TO BE OVERBEARING.
21 MR. BEZEK: I KNOW GOOD ADVICE WHEN I HEAR IT, YOUR
22 HONOR.
23 THE COURT: OKAY.
24 Q BY MR. BEZEK: HOW DID YOU SET THE ESTATE PLAN UP?
25 A OKAY. THERE ARE, IN MR. GAGGERO'S ESTATE ALREADY,
26 A TOTAL OF THREE TRUSTS. AND THERE ARE -- I DON'T KNOW THE
27 NUMBER -- SEVERAL LLCS AND/OR LIMITED PARTNERSHIPS. THE
28 WHOLE PACKAGE TAKES SEVERAL MONTHS TO IMPLEMENT. AND SO

937
1 EACH PROPERTY -- AT THE END OF THE DAY, EACH PROPERTY IS
2 HELD BY EITHER A LIMITED PARTNERSHIP OR A LIMITED LIABILITY
3 COMPANY.
4 AND THEN I'LL TALK ABOUT HIS RESIDENCE SEPARATELY.
5 AND THEN THOSE LIMITED LIABILITY COMPANIES AND
6 LIMITED PARTNERSHIPS IN TURN ARE HELD BY THESE TRUSTS THAT
7 WERE SET UP, TWO OF THE TRUSTS THAT WERE SET UP.
8 Q DO THOSE TWO TRUSTS HAVE NAMES?
9 A YES. ONE IS CALLED AQUA SANTE FOUNDATION; THE
10 OTHER IS CALLED ARENZANO TRUST; AND THEN THE THIRD TRUST IS
11 FOR HIS RESIDENCE. THAT'S CALLED GIGANIN TRUST.
12 MR. ROSEN: YOUR HONOR, COULD I ASK THE WITNESS TO SPELL
13 THOSE?
15 THE WITNESS: AQUA SANTE, A-Q-U-A S-A-N-T-E, FOUNDATION;
16 ARENZANO, A-R-E-N-Z-A-N-O; GIGANIN, G-I-G-A-N-I-N.
17 MR. ROSEN: ARENZANO WAS A TRUST OR FOUNDATION?
18 THE WITNESS: AQUA SANTE FOUNDATION, ARENZANO TRUST,
19 GIGANIN TRUST.
20 Q BY MR. BEZEK: NOW, YOU SAID YOU WERE GOING TO
21 DISCUSS THE RESIDENCE SEPARATELY, AND YOU'VE INTRODUCED US
22 TO THAT BY TALKING ABOUT THE GIGANIN TRUST.
23 CAN YOU TELL US WHAT RESIDENCE WE'RE TALKING ABOUT?
24 A MR. GAGGERO'S PRINCIPAL RESIDENCE IS A 1,500-ACRE
25 PROPERTY WITH SEVERAL BUILDINGS ON IT, BUT THE OWNERSHIP OF
26 THAT ENTIRE PROPERTY IS IN THE NAME OF GIGANIN TRUST.
27 GIGANIN TRUST IS WHAT'S KNOWN AS A QUALIFIED PERSONAL
28 RESIDENCE TRUST UNDER INTERNAL REVENUE CODE SECTION 2702.

938
1 THE TRUST DOCUMENT IS DRAFTED ALMOST
2 THE COURT: IS THAT IRC WHAT? 2702?
3 THE WITNESS: 2702.
4 THE COURT: MAYBE YOU CAN SHOW HIM THAT DOCUMENT AND ASK
5 HIM WHAT IS -- THAT QUESTIONABLE DOCUMENT YOU GAVE ME
6 EARLIER FROM THE ACCOUNTANT, MAYBE HE CAN IDENTIFY THAT. HE
7 SEEMS TO KNOW.
8 MR. BEZEK: ACTUALLY, YOUR HONOR, WE ASKED HIM TO PULL
9 UP THAT THING.
10 THE COURT: LET'S COVER THAT BECAUSE -- ALL RIGHT. YOU
11 DON'T HAVE TO DO IT NOW. I JUST THOUGHT BEFORE HE LEAVES,
12 WE COULD CLARIFY THAT QUESTION.
13 THE WITNESS: SO SHOULD I GO ON?
14 THE COURT: YEAH. SORRY ABOUT THE INTERRUPTION.
15 THE WITNESS: OKAY. SO THEN THE DOCUMENT FOR THE
16 GIGANIN TRUST IS DRAFTED ALMOST IDENTICAL TO THE LANGUAGE
17 PROVIDED IN THE TAX REGULATIONS UNDER SECTION 2702.
18 Q BY MR. BEZEK: ALL RIGHT.
19 A IT'S NOT REALLY A DOCUMENT THAT I CREATE. THE IRS
20 CREATES THIS DOCUMENT. AND MR. GAGGERO HAS -- HE IS THE
21 TAXPAYER IN THAT DOCUMENT; AND THE TAXPAYER HAS THE RIGHT TO
22 RESIDE AT THE PROPERTY.
23 IT'S AN IRREVOCABLE TRUST WHERE THERE ARE
24 SUBSTANTIAL ESTATE TAX BENEFITS TO PUTTING YOUR PRINCIPAL
25 RESIDENCE INTO SUCH A TRUST.
26 Q NOW, AFTER MEETING WITH MR. GAGGERO, IDENTIFYING
27 THE ASSETS THAT EXISTED -- THIS APPROXIMATE $30 MILLION IN
28 ASSET VALUE THAT WE'RE TALKING ABOUT, NET VALUE -- DID ALL

939
1 OF THAT VALUE -- WAS IT TRANSFERRED INTO LIMITED LIABILITY
2 COMPANIES, PARTNERSHIPS, AND THEN THEREAFTER IT WAS THEN
3 SUBSUMED INTO ONE OF THESE TRUSTS OR THE FOUNDATION THAT WE
4 DISCUSSED?
5 A YES.
6 Q OKAY. HOW LONG DID IT TAKE FOR THIS ESTATE PLAN TO
7 BE FULLY FUNDED?
8 A I WOULD SAY SEVERAL MONTHS. PERHAPS AS MUCH AS ONE
9 YEAR.
10 Q DO YOU RECALL APPROXIMATELY WHEN THE FUNDING WAS
11 COMPLETE?
12 A I LOOKED AT THE DOCUMENTS RECENTLY, AND IT WAS
13 APPROXIMATELY MARCH OF '98, EXCEPT FOR THE PRINCIPAL
14 RESIDENCE, THE GIGANIN TRUST, WAS LATER. I THINK IN
15 EARLY '99.
16 Q NOW, ONCE THIS ESTATE PLAN WAS FULLY FUNDED, DID
17 YOU CONTINUE TO PROVIDE A ROLE BEYOND THAT OF THE ATTORNEY
18 FORMULATING OR CREATING THE ESTATE PLAN?
19 A YES.
20 Q WHAT ROLE DID YOU CONTINUE TO PLAY?
21 A I'M THE TRUSTEE OF THE TRUSTS. I'M THE MANAGER OF
22 LIMITED LIABILITY COMPANIES, GENERAL PARTNER OF LIMITED
23 PARTNERSHIP.
24 THE COURT: OF WHICH? ALL OF THEM? ALL OF THEM? I
25 DON'T KNOW HOW MANY THERE ARE. ARE YOU SAYING YOU'RE THE
26 GENERAL YOU'RE THE MANAGER OF ALL OF THEM?
27 THE WITNESS: I'M THE GENERAL PARTNER
28 THE COURT: HOLD ON. DON'T INTERRUPT ME. THE COURT

940
1 REPORTER CAN'T TAKE TWO PEOPLE SPEAKING AT ONCE.
2 ARE YOU SAYING YOU'RE THE MANAGER OF ALL OF THE
3 LLC'S AND GENERAL PARTNER OF ALL OF THE LP'S?
4 THE WITNESS: WHEN -- NO. I WOULD HAVE TO LOOK AT
5 DOCUMENTS. FOR THE LP'S, FOR TWO OF THE LP'S, I AM THE
6 GENERAL PARTNER.
7 THE COURT: TWO OF HOW MANY?
8 THE WITNESS: TWO OF FOUR.
9 THE COURT: ALL RIGHT. HOW ABOUT THE LLCS? YOU'RE
10 GENERAL MANAGER OF HOW MANY?
11 THE WITNESS: ACTUALLY, I THINK THAT THE MANAGER OF THE
12 LLCS, IN MOST CASES, IS A CORPORATION, OVER WHICH I AM THE
13 PRESIDENT.
14 THE COURT: FOR MOST OF THEM?
15 THE WITNESS: YEAH.
16 THE COURT: OKAY.
17 THE WITNESS: AND I AM THE TRUSTEE OF THE GIGANIN TRUST
18 FOR THE PRINCIPAL RESIDENCE.
19 THE COURT: ALL RIGHT. SORRY.
20 Q BY MR. BEZEK: NOW, IN THAT CAPACITY, IN YOUR
21 CAPACITY, CONTINUING CAPACITY, DO YOU HAVE THE AUTHORITY TO
22 APPOINT A MANAGER OF THE ASSETS?
23 A YES.
24 Q DID YOU APPOINT A MANAGER OF THE ASSETS FOR THE
25 ENTIRE ESTATE PLAN?
26 A YES.
27 Q WHO WAS THAT?
28 A MR. GAGGERO.

941
1 Q WHAT ARE THE DUTIES OF A MANAGER OF THE ASSETS?
2 A HE HANDLES ALL THINGS RELATED TO THE REAL ESTATE
3 PORTFOLIO.
4 Q DOES THAT INCLUDE BOTH PURCHASES AND SALES?
5 A BUYING AND SELLING, FINANCING, TRADING.
6 EVERYTHING.
7 Q DID THERE COME A TIME WHEN MR. GAGGERO IDENTIFIED
8 TO YOU A PARTICULAR PIECE OF PROPERTY THAT HE WAS
9 CONSIDERING PURCHASING ON BEHALF OF THE ESTATE PLAN?
10 A WELL, YES, SEVERAL TIMES.
11 Q OKAY. DO YOU RECALL HIM EVER IDENTIFYING ANY OF
12 THOSE PROPERTIES AS THE 938 PROPERTY IN SANTA MONICA --
13 A YES.
14 Q -- OR WHAT YOU ULTIMATELY LEARNED TO BE THAT?
15 A YES. BUT WHEN WE INITIALLY TALKED ABOUT IT, I
16 DIDN'T KNOW OF IT AS SPECIFICALLY THE 938 PROPERTY. I ONLY
17 KNEW OF IT AS A BEACH HOUSE IN SANTA MONICA WHERE, SINCE HE
18 VISITED THE SANTA MONICA/VENICE AREA FREQUENTLY, HE WANTED
19 TO HAVE A HOME AND HE WANTED TO HAVE A PLACE WHERE HE COULD
20 HAVE LIKE A HOME/OFFICE.
21 Q ALL RIGHT. NOW, AFTER THE FUNDING OF THE PLAN IN
22 ABOUT MARCH OF 1998, MARCH, APRIL, SOMEWHERE IN THAT TIME
23 FRAME, AND MR. GAGGERO WAS THE MANAGER OF THE ASSETS, HAS
24 THE VALUE OF THE ESTATE PLAN, THAT IS, THE TWO TRUSTS AND
25 THE FOUNDATION
26 THE COURT: IS THERE A BETTER WORD THAT HE COULD USE
27 OTHER THAN "ESTATE PLAN"? COULD YOU SUGGEST SOMETHING,
28 PLEASE. "THE ESTATE"?

942
1 THE WITNESS: JUST SAY "THE ESTATE" IS FINE.
2 THE COURT: "ESTATE PLAN" IS NOT THE WAY TO PHRASE IT?
3 THE WITNESS: SAY "TOTAL ESTATE."
4 Q BY MR. BEZEK: TOTAL ESTATE?
5 A YES.
6 Q IT SHALL BE SO.
7 A OKAY.
8 Q HAS THE VALUE OF THE TOTAL ESTATE INCREASED SINCE
9 THE TOTAL ESTATE WAS FUNDED OR DECREASED?
10 A SUBSTANTIALLY INCREASED.
11 Q DO YOU HAVE AN ESTIMATE OF THE INCREASE, THE VALUE
12 OF THAT INCREASE?
13 A AT LEAST 30 TO 40 PERCENT.
14 Q DID YOU AT ANY TIME CONFER WITH MR. GAGGERO ABOUT
15 THE AVAILABILITY OF RESOURCES FROM THE TOTAL ESTATE TO MAKE
16 A PURCHASE OF THE 938 PROPERTY?
17 A YES. BUT LIKE I -- WELL, YES.
18 Q OKAY. NOW LET'S TALK ABOUT INITIALLY WHEN THE
19 INFORMATION WAS BROUGHT TO YOUR ATTENTION. WHEN IT WAS
20 FIRST BROUGHT TO YOUR ATTENTION, WAS IT BROUGHT TO YOUR
21 ATTENTION AS A SPECIFICALLY IDENTIFIED PIECE OF PROPERTY
22 WITH AN ADDRESS?
23 A NO, I DIDN'T KNOW OF IT BY ADDRESS.
24 Q WHO BROUGHT IT TO YOUR ATTENTION?
25 A MR. GAGGERO.
26 Q WHAT DID HE SAY?
27 A THAT HE HAD IDENTIFIED THIS PROPERTY THAT HE WANTED
28 TO PURCHASE, THAT IT INCLUDED A RIGHT OF FIRST REFUSAL OVER

943
1 THE ADJACENT PROPERTIES, AND HE WAS JUST CONFIRMING MY
2 COMMITMENT OF THE ESTATE TO PURCHASE THAT PROPERTY, BUT HE
3 SAID IT WASN'T READY TO BE PURCHASED IMMEDIATELY.
4 Q WHAT DID YOU SAY TO MR. GAGGERO?
5 A I SAID, LIKE I ALWAYS DO, I SAY YES.
6 Q WERE THERE SUFFICIENT RESOURCES AT THE TIME FROM
7 WHICH TO DRAW IN ORDER TO MAKE A 2, $2-1/2 MILLION PURCHASE?
8 A EASILY, YES.
9 Q FROM THAT POINT TO THE PRESENT DATE, HAS THE TOTAL
10 ESTATE REMAINED COMMITTED TO PURCHASING THE PROPERTIES IN
11 THE EVENT THAT THE PROPERTIES CLOSE?
12 A YES.
13 Q HAS THE VALUE OF THE TOTAL ESTATE REMAINED
14 SUFFICIENTLY LARGE TO COMMAND THE RESOURCES NECESSARY TO
15 COMPLETE THAT PURCHASE SINCE AUGUST OF '98 TO THE PRESENT
16 DATE?
17 A YES.
18 Q WAS THERE ANY TIME FROM AUGUST 1, 1998 TO THE
19 PRESENT DATE WHEN THE TOTAL ESTATE DID NOT HAVE THE
20 RESOURCES SUFFICIENT TO MAKE A PURCHASE OF $2-1/2 MILLION OR
21 MORE, $2-1/2 MILLION
22 A NO. IT WOULD ALWAYS HAVE THE ABILITY TO DO THAT.
23 Q NOW, IF TITLE WERE TAKEN IN MR. GAGGERO'S NAME WITH
24 REGARDS TO THE 938 PROPERTY, FOR WHATEVER REASON, DOES THAT
25 CHANGE THE COMMITMENT OF THE TOTAL ESTATE?
27 THE COURT: I'M GOING TO ASK YOU TO REPHRASE THAT.
28 Q BY MR. BEZEK: IF IT BECAME EVIDENT THAT TO CLOSE

944
1 THIS TRANSACTION IT WOULD BE CLOSED IN MR. GAGGERO'S NAME,
2 WOULD YOU WITHDRAW THE COMMITMENT ON BEHALF OF THE TOTAL
3 ESTATE?
4 A NO.
5 MR. ROSEN: OBJECTION. CALLS FOR SPECULATION.
6 THE COURT: OVERRULED.
7 THE WITNESS: NO. THAT WOULD BE FINE.
8 Q BY MR. BEZEK: IF THE ESTATE WERE IF THE
9 PURCHASE WERE TO CLOSE IN AN ACCOMMODATION OR AN
10 ACCOMMODATOR'S NAME, WOULD THAT CHANGE YOUR COMMITMENT
11 THE TOTAL ESTATE'S COMMITMENT TO THE PURCHASE?
12 A NO. THAT WOULD BE FINE. WE'VE DONE THAT SEVERAL
13 TIMES SINCE THAT DATE.
14 Q AND WOULD THE FACT OF MR. GAGGERO'S -- STRIKE THAT.
15 IF THE CLOSING WERE TO OCCUR IN MR. GAGGERO'S NAME
16 AT ANY TIME REGARDING 938, WOULD THAT EVER HAVE AFFECTED THE
17 COMMITMENT FROM THE TOTAL ESTATE FROM AUGUST OF '98 TO THE
18 PRESENT DATE?
19 A NO. THAT WOULD BE FINE.
20 Q SAME QUESTION AS TO AN ACCOMMODATOR?
21 A YES. THAT WOULD BE FINE.
22 MR. BEZEK: ONE SECOND, YOUR HONOR, PLEASE.
23 NOTHING FURTHER OF MR. PRASKE, YOUR HONOR.
24 THE COURT: ALL RIGHT. YOU MAY CROSS.
25 MR. BEZEK: I'M SORRY, YOUR HONOR. DID YOU WANT TO GET
26 THESE--
27 THE COURT: YOU'RE THE ATTORNEY, NOT ME. YOU'RE
28 REPRESENTING YOUR CLIENT. I'M NOT THE ONE. I JUST THOUGHT

945
1 IT WOULD BE AN IDEA. YOU DECIDE WHAT YOU WANT TO DO. I'M
2 NOT GOING TO TELL YOU HOW TO TRY YOUR CASE. I THOUGHT WE
3 COULD MAYBE HAVE HIM IDENTIFY WHAT THAT IS.
4 MR. BEZEK: YOUR HONOR, I'M HANDING TO THE CLERK SOME
5 CFR'S THAT I'LL PRESENT TO THE WITNESS WITH A --
6
7
8
THE COURT: WE'RE NOT MARKING IT AS AN EXHIBIT, ARE WE?
MR. BEZEK: I'M SORRY, YOUR HONOR?
THE COURT: YOU'RE NOT MARKING IT AS AN EXHIBIT. YOU'RE
9 JUST PASSING IT UP FOR ME, RIGHT?
10 THANK YOU.
11 MR. ROSEN: YOUR HONOR, TO SAVE TIME, IF IT DOES, WHAT
12 I'VE BEEN HANDED DOES ACTUALLY NOW LOOK LIKE A REGULATION,
13 AND I HAVE --
14 THE COURT: YES, THIS IS A CFR. THIS IS OBVIOUS. THE
15 ONE WE WERE GIVEN THE OTHER DAY WAS IN SOME UNRECOGNIZABLE
16 FORM, SO THIS IS -- THIS IS FAIRLY RECOGNIZABLE. I DON'T
MR. BEZEK: ALL RIGHT.
THE COURT: DO YOU HAVE ANY QUESTIONS?
MR. ROSEN: NO.
THE COURT: IT'S A CFR. OKAY. I DON'T THINK WE NEED TO
DO THAT. AND I HAVE A HIGHLIGHTED COPY, TOO.
DO YOU HAVE A HIGHLIGHTED COPY, MR. ROSEN?
MR. ROSEN: I DO HAVE A HIGHLIGHTED COPY.
THE COURT: EXCELLENT. THANK YOU.
//1
//1
//1
17
18
19
20
21
22
23
24
25
26
27
28
THINK I DON'T HAVE ANY QUESTIONS.

EXHIBIT G
Praske Cross Examination
June 30, 2005 (1002-1005)

992
1 "QUESTION: AND HOW, IN YOUR OPINION,
2 WAS HIS CREDIT AFFECTED?
3 "ANSWER: WELL, I BELIEVE THAT THE
4 JUDGMENTS WERE LISTED ON THE CREDIT
5 REPORTS.
6 "AND THEN THAT WOULD HAVE A NEGATIVE
7 IMPACT WHEN APPLYING FOR FURTHER CREDIT
8 OR -- I'M SORRY.
9 "QUESTION: AND THEN THAT WOULD
10 HAVE A NEGATIVE IMPACT WHEN APPLYING
11 FOR FURTHER CREDIT OR PURCHASING?
12 "ANSWER: YES."
13 Q NOW, YOU SPENT SOME TIME TALKING ABOUT THESE TRUSTS
14 THAT WERE FORMED. THE FIRST ONE, THE ARENZANO -- I'M
15 SORRY -- THE FIRST ONE I THINK YOU SAID WAS THE AQUA SANTE.
16 IS THAT RIGHT?
17 A AQUA SANTE FOUNDATION.
18 Q WHO WAS THE BENEFICIARY OF THE AQUA SANTE
19 FOUNDATION?
20 A THERE IS A CLASS OF BENEFICIARIES.
21 Q WHAT DO YOU MEAN, A CLASS OF BENEFICIARIES?
22 A IT'S THE CLASS COMPRISED OF THE VARIOUS MEMBERS OF
23 THE GAGGERO FAMILY.
24 Q WELL, I MEAN, IS THE BENEFICIARY OF THE AQUA SANTE
25 FOUNDATION A SERIES OF INDIVIDUALS, OR IS IT SOME OTHER SORT
26 OF ENTITY?
27 A IT'S A SERIES OF INDIVIDUALS.
28 Q AND WHO ARE THE BENEFICIARIES OF THE AQUA SANTE

993
1 FOUNDATION?
2 A ANYONE IN THE GAGGERO FAMILY.
3 Q IS THERE A TRUST INSTRUMENT?
4 A YES.
5 Q AND DOES THE TRUST INSTRUMENT LIST THE
6 BENEFICIARIES?
7 A NO.
8 Q WHAT DOES IT SAY IN THE TRUST INSTRUMENT AS TO WHO
9 THE BENEFICIARIES ARE?
10 A ANY MEMBER OF THE GAGGERO FAMILY.
11 Q DOES IT DEFINE THE GAGGERO FAMILY?
12 A IT SAYS ANY MEMBER OF THE FAMILY OF MR. GAGGERO.
13 Q STEPHEN GAGGERO?
14 A YES.
15 Q JUNIOR?
16 A YES.
17 Q AND WHO IS THE BENEFICIARY OF THE ARENZANO TRUST?
18 A THE SAME.
19 Q IT'S DEFINED THE EXACT SAME WAY?
20 A YES.
21 Q AND HAD YOU EVER HAD A DISCUSSION WITH MR. GAGGERO
22 ABOUT WHO THE BENEFICIARIES OF THESE TRUSTS WERE?
23 A YOU MEAN BEYOND WHAT I'VE JUST DESCRIBED TO YOU?
24 Q NO. WHAT YOU'VE JUST DESCRIBED TO ME --
25 THE COURT: JUST ANSWER THE QUESTION. TAKE EACH
26 QUESTION SEPARATELY AND INDIVIDUALLY.
28 Q BY MR. ROSEN: YOU DID HAVE DISCUSSIONS WITH

994
1 MR. GAGGERO ABOUT THAT, CORRECT?
2 A YES.
3 Q AND, IN YOUR MIND, MR. GAGGERO KNEW THAT HE WAS THE
4 BENEFICIARY OF THESE TRUSTS, RIGHT?
5 MR. BEZEK: OBJECTION. IRRELEVANT, ALSO CALLS FOR
6 SPECULATION AND CONJECTURE, AND NO FOUNDATION.
8 THE WITNESS: REPEAT THE QUESTION.
9 Q BY MR. ROSEN: IN YOUR MIND, MR. GAGGERO KNEW THAT
10 HE WAS THE BENEFICIARY OF THESE TRUSTS?
11 A NO.
12 Q IN YOUR MIND, DID YOU THINK HE DIDN'T KNOW?
13 A NO. HE KNEW THAT HE WAS NOT THE BE~EFICIARY OF
14 THESE TRUSTS.
15 Q HE KNEW HE WAS NOT THE BENEFICIARY OF THESE TRUSTS?
16 A CORRECT.
17 Q AND YOU HAD WELL--
18 THE COURT: I THINK WE HAVE A DIFFERENCE BETWEEN "A
19 BENEFICIARY" AND "THE BENEFICIARY." I THINK THAT'S WHAT THE
20 ISSUE IS.
21 Q BY MR. ROSEN: IN YOUR MIND, DID MR. GAGGERO KNOW
22 HE WAS A BENEFICIARY OF THE TRUST?
23 A YES. A POTENTIAL BENEFICIARY OF THE TRUST.
24 Q THAT'S NOT A FACT YOU EVER HID FROM MR. GAGGERO, IS
25 IT?
26 A NO.
27 Q AND, IN FACT, YOU, IN EXPLAINING THESE INSTRUMENTS,
28 AFFIRMATIVELY TOLD MR. GAGGERO THAT HE WAS A BENEFICIARY OF

995
1 THESE TRUSTS?
2 A NO.
3 MR. BEZEK: OBJECTION. COMPOUND.
4 THE WITNESS: THAT'S NOT WHAT I SAID.
5 THE COURT: THAT IS A QUESTION, ASKING YOU IF YOU TOLD
6 HIM HE WAS A BENEFICIARY OF THE TRUST. DID YOU NOT TELL HIM
7 HE WAS A BENEFICIARY?
8 THE WITNESS: HE WAS A POTENTIAL BENEFICIARY.
9 THE COURT: A POTENTIAL BENEFICIARY?
10 THE WITNESS: YEAH.
11 Q BY MR. ROSEN: MR. PRASKE, WHAT'S THE DIFFERENCE
12 BETWEEN BEING A BENEFICIARY AND BEING A POTENTIAL
13 BENEFICIARY?
14 A BEING A POTENTIAL BENEFICIARY MEANS THAT IT IS UP
15 TO THE TRUSTEE TO DECIDE EACH YEAR AMONG THE CLASS OF
16 BENEFICIARIES WHO WILL BE -- WHO WILL RECEIVE DISTRIBUTABLE
17 INCOME.
18 Q AND YOU ARE THE TRUSTEE, RIGHT?
19 A YES.
20 Q SO YOU HAD THE DISCRETION TO DECIDE WHICH
21 BENEFICIARIES WOULD RECEIVE ANYTHING FROM THE TRUST. IS
22 THAT ACCURATE?
23 A YES.
24 Q DID YOU HAVE TO DECIDE THAT SOMEONE WOULD RECEIVE
25 SOMETHING?
26 A YES.
27 Q COULD MORE THAN ONE PERSON RECEIVE SOMETHING?
28 A YES.

996
1 Q AND YOU HAD THAT DISCRETION IN YOUR SOLE AND
2 ABSOLUTE AUTHORITY, RIGHT?
3 A YES.
4 Q DID YOU HAVE TO ANSWER TO ANYONE WITH RESPECT TO
5 THAT DECISION?
6 A YES.
7 Q WHO DID YOU HAVE TO ANSWER TO?
8 A THE PERSON WHO IS DESIGNATED AS THE PROTECTOR OF
9 THE TRUST.
10 Q AND WHO IS THE PROTECTOR OF THE TRUST?
11 A WELL, IN THIS CASE IT WAS ME, ALSO.
12 Q SO YOU HAD TO ANSWER TO YOURSELF TO DETERMINE WHO
13 WOULD GET ANY DISTRIBUTION FROM THE TRUST?
14 A YES.
15 Q AND EVERY YEAR THERE WAS A DISTRIBUTION FROM THE
16 TRUST, RIGHT?
17 A YES.
18 Q OF SOME AMOUNT, CORRECT?
19 A NO. I MEAN, THERE IS -- THERE ARE DISTRIBUTABLE
20 AMOUNTS EACH YEAR OF TYPES OF --
21 THE COURT: THAT'S NOT WHAT HE ASKED YOU.
22 THE WITNESS: -- OF INCOME AND LOSS.
23 THE COURT: THE COURT REPORTER READ THE QUESTION BACK.
24 I DON'T THINK YOU'RE ON THE SAME PAGE ANYMORE.
26 FOLLOWS:
27 "Q AND EVERY YEAR THERE WAS A
28 DISTRIBUTION FROM THE TRUST, RIGHT?

997
1 "A YES.
2 "Q OF SOME AMOUNT, CORRECT?")
3 THE WITNESS: YES.
4 Q BY MR. ROSEN: IN WHAT FORM DOES THAT DISTRIBUTION
5 TAKE?
6 A USUALLY IT'S IN THE FORM OF DISTRIBUTABLE TAXABLE
7 INCOME OR LOSS OR GAIN.
8 Q IS IT EVER JUST MONEY?
9 A IT COULD BE.
10 Q HAS IT EVER BEEN CASH?
11 A YES.
12 Q HAS CASH EVER BEEN DISTRIBUTED TO MR. GAGGERO?
13 A I'M NOT CERTAIN.
14 Q NOW, AS A TRUST LAWYER AND AS A PERSON THAT SET UP
15 THESE TRUSTS --
16 THE COURT: I DON'T UNDERSTAND THAT ANSWER. "NOT
17 CERTAIN" IMPLIES THAT YOU DON'T KNOW. IF YOU'RE THE ONE
18 THAT DISTRIBUTES THE MONEY, HOW IS IT THAT YOU DON'T KNOW IF
19 YOU EVER GAVE HIM CASH? I DON'T UNDERSTAND THAT ANSWER.
20 THE WITNESS: OKAY. BECAUSE THE DISTRIBUTIONS COULD
21 HAVE BEEN FROM ONE OF THE LLC ENTITIES TO ANOTHER.
22 THE COURT: HE'S ASKING YOU WHAT HAS, IN FACT, HAPPENED
23 IN THE PAST. IT IS A SIMPLE QUESTION. HAVE YOU EVER
24 DISTRIBUTED CASH TO MR. GAGGERO FROM THE TRUST? CAN YOU
25 ANSWER THAT SIMPLE QUESTION? FROM ANY OF THE TRUSTS.
26 THE WITNESS: I DON'T KNOW. I WOULD HAVE TO LOOK AT
27 RECORDS.
28 THE COURT: YOU DON'T KNOW, OR YOU DON'T REMEMBER?

998
YES.
EACH INDIVIDUALLY?
POTENTIALLY, YES.
AND COLLECTIVELY, CORRECT?
YES.
YOU COULDN'T HARM ONE BENEFICIARY AT THE EXPENSE OF
Q
A
Q
A
Q
ANOTHER, RIGHT?
A YES, YOU COULD.
Q YOU COULD?
A YES.
Q SO YOU BELIEVE THAT YOU COULD MAKE A DISTRIBUTION
TO ONE BENEFICIARY THAT WOULD HARM THE OTHER BENEFICIARIES?
A YES.
Q AND THAT'S BECAUSE YOU HAVE THE SOLE AND ABSOLUTE
DISCRETION TO DO WHATEVER YOU WANTED TO DO?
A YES. BUT TO TAKE INTO ACCOUNT THE OVERALL BENEFIT.
Q NOW, YOU SAID WHEN THESE TRUSTS WERE FIRST
ESTABLISHED THAT WHAT WAS DONE WAS PROPERTY WAS FIRST
THE WITNESS: I DON'T REMEMBER.
THE COURT: SO YOU DON'T REMEMBER. OKAY.
THE WITNESS: YEAH.
Q BY MR. ROSEN: NOW, AS THE PERSON THAT DEVISED THIS
ESTATE AND THE TRUSTS WITHIN IT AND, AS A TRUST LAWYER, YOU
UNDERSTOOD THAT YOU OWED FIDUCIARY DUTIES TO THE BENEFICIARY
OF THE TRUST, RIGHT?
A YES.
Q SO YOU OWED FIDUCIARY DUTIES TO THE GAGGERO FAMILY,
CORRECT?
A
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22
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28

999
1 TRANSFERRED INTO AN LLC OR AN LP AND THEN TRANSFERRED INTO A
2 TRUST; IS THAT CORRECT?
3 A YES.
4 Q AND SO WHEN A PIECE OF PROPERTY WOULD BE
5 TRANSFERRED INTO --
6 A CAN I CORRECT THAT? EXCUSE ME.
7 Q YES.
8 A YES, EXCEPT FOR THE PRINCIPAL RESIDENCE TRUST.
9 THAT WAS DIFFERENT. BUT THE OTHERS WERE LIKE THAT.
10 Q YOU'RE RIGHT. LET'S EXCLUDE THE PRINCIPAL
11 RESIDENCE TRUST.
12 JUST FOCUSING ON THE TWO OTHER TRUSTS, THE PROCESS
13 WAS FIRST A PIECE OF PROPERTY WAS TRANSFERRED TO AN LLC OR
14 AN LP AND THEN IT WAS TRANSFERRED INTO A TRUST, RIGHT?
15 A YES.
16 Q AND USING AN LLC AS AN EXAMPLE, MR. GAGGERO WOULD
17 OWN 100 PERCENT OF THE LLC THAT THE PROPERTY IS TRANSFERRED
18 INTO, CORRECT?
19 A AT THE MOMENT OF THE TRANSFER?
20 Q AT THE MOMENT OF THE TRANSFER.
21 A AT THE MOMENT OF THE TRANSFER.
22 Q AND THEN --
23 THE COURT: IS THAT A "YES" OR A "NO"?
25 Q BY MR. ROSEN: AND THEN MR. GAGGERO WOULD TRANSFER
26 HIS INTEREST IN THAT LLC TO THE TRUST?
27 A THAT WAS PART OF A TOTAL PACKAGE.
28 Q RIGHT. I'M--

1000
1 THE COURT: SO THAT'S A "YES," CORRECT?
2 THE WITNESS: YES.
3 Q BY MR. ROSEN: SO JUST SO I'M CLEAR ON THIS, IT'S A
4 TWO-STEP PROCESS: FIRST IT'S TRANSFERRED INTO AN LLC, USING
5 THAT AS AN EXAMPLE, OWNED BY MR. GAGGERO, AND THEN
6 MR. GAGGERO, AS A SECOND STEP, TRANSFERS HIS INTEREST IN
7 THAT LLC TO ONE OF THE TRUSTS?
8 A YES.
9 Q NOW, IF ONE OF THE TRUSTS WANTS TO BUY A PIECE OF
10 PROPERTY OR ONE OF THE ENTITIES WANTS TO BUY A PIECE OF
11 PROPERTY, YOU'RE THE ONE THAT'S GOT TO ULTIMATELY MAKE THE
12 DECISION ON WHETHER THE FUNDS ARE GOING TO BE RELEASED,
13 RIGHT?
14 A YEAH, BUT IT'S MANAGED BY MR. GAGGERO, THE VARIOUS
15 PROPERTIES, SO HE WILL MAKE THE RECOMMENDATION TO ME.
16 Q HE MAKES A RECOMMENDATION TO YOU, AND YOU HAVE THE
17 SOLE AND EXCLUSIVE AUTHORITY TO RELINQUISH THAT MONEY?
18 A YES.
19 Q YOU'RE THE ONLY ONE THAT CAN ACTUALLY RELINQUISH
20 THAT MONEY, RIGHT?
21 A YES.
22 Q NOW, MR. GAGGERO COMES TO YOU AND SAYS: HEY, I
23 WANT TO BUY THIS GREAT PIECE OF PROPERTY. WHAT SHOWING MUST
24 MR. GAGGERO MAKE TO YOU IN ORDER TO SATISFY YOU, AS THE
25 TRUSTEE WITH FIDUCIARY DUTIES, THAT I'M GOING TO RELEASE
26 FUNDS FOR THAT PIECE OF PROPERTY?
27 A SUCCESSFUL HISTORY OF MAKING POSITIVE, SUCCESSFUL
28 TRANSACTIONS.

1001
TWO?
A YES.
Q NOW, MR. GAGGERO APPROACHED YOU ABOUT GETTING MONEY
FOR THE 938 PROPERTY, RIGHT?
Q THAT'S IT?
A THAT'S THE MOST IMPORTANT THING.
Q SO MR. GAGGERO SAYS "I WANT MONEY," AND YOU SAY
"HOW MUCH"?
YEAH.
YES?Q
A BECAUSE IF HE CAME TO ME AND SAID "I WANT
$2 MILLION TO SPEND IN LAS VEGAS," I MIGHT SAY "NO."
Q IN OTHER WORDS, IT HAS TO BE FOR THE BENEFIT OF THE
TRUST?
A
A WELL
MR. BEZEK: OBJECTION, YOUR HONOR. ARGUMENTATIVE ON
THAT ONE.
THE COURT: OVERRULED.
THE WITNESS: NO.
Q BY MR. ROSEN: SO WHAT'S THE PROCESS?
A IF IT'S WITH REGARD TO MAKING INVESTMENTS FOR THE
BENEFIT OF THE TRUST AND HE MAKES A RECOMMENDATION ON A
PROPERTY INVESTMENT, I WILL FOLLOW THAT RECOMMENDATION.
Q SO I'M JUST CONFUSED WHY -- I'M TRYING, IN MY OWN
MIND, TO DISTINGUISH HOW THAT'S DIFFERENT FROM MR. GAGGERO
SAYING "I WANT MONEY" AND YOU SAYING "HOW MUCH"?
A BECAUSE
Q WHY ARE YOU DRAWING A DISTINCTION BETWEEN THOSE
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3
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5
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15
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25
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28

1002
1 A YES.
2 Q WHEN DID HE APPROACH YOU ABOUT THAT?
3 A IT WAS IN THE SUMMER OF '98.
4 Q AND HE TALKED TO YOU ABOUT THE PROPERTY, DIDN'T HE?
5 A WHEN?
6 Q IN THE SUMMER OF '98.
7 A YES.
8 Q AND EVEN THOUGH AT THE MOMENT IN THE SUMMER OF '98
9 YOU DIDN'T KNOW HE WAS TALKING ABOUT THE 938 PROPERTY, AT
10 SOME POINT WITHIN THE NEXT COUPLE OF MONTHS, YOU KNEW IT WAS
11 THE 938 PROPERTY BECAUSE YOU WERE DOING YOUR BOOKKEEPING, OR
12 WHATEVER YOU DO, AND YOU SAY, HEY, HERE'S A PURCHASE
13 AGREEMENT FOR THE 938 PROPERTY AND THAT'S WHAT HE WAS
14 TALKING ABOUT, RIGHT?
15 A YES.
16 Q NOW, YOU TESTIFIED THAT MR. GAGGERO IS THE MANAGER
17 OVER ALL THIS REAL ESTATE; IS THAT CORRECT?
18 A YES.
19 Q HE'S THE ONLY ONE THAT MAKES DECISIONS ABOUT THE
20 REAL ESTATE HELD WITHIN ALL THESE VEHICLES OWNED BY THE
21 TRUST, RIGHT?
22 A THERE MIGHT BE OTHER PEOPLE INVOLVED, BUT THAT
23 WOULD BE UP TO HIM. I LOOK TO HIM FOR MAKING THOSE
24 DECISIONS.
25 Q IN OTHER WORDS, THERE MIGHT BE OTHER PEOPLE WORKING
26 UNDER HIM, BUT HE'S THE DECISIONMAKER, CORRECT?
27 A YES.
28 Q AS TO ALL ASPECTS?

1003
1 A ALL ASPECTS?
2 Q OF THE PROPERTY, REAL PROPERTY HELD BY THE TRUST.
3 A YES.
4 Q HAVE YOU HEARD OF AN ENTITY CALLED MALIBU BROAD
5 BEACH LP?
6 A YES.
7 Q WHAT'S THAT ENTITY?
8 A THAT'S A LIMITED PARTNERSHIP.
9 Q IS THAT ONE OF THE LIMITED PARTNERSHIPS OWNED BY
10 ONE OF THE TRUSTS?
11 A YES.
12 Q WHICH TRUST IS IT OWNED BY?
13 A YOU MEAN WHICH IS IT ASSOCIATED WITH? AQUA SANTE
14 FOUNDATION.
15 Q DOES MALIBU BROAD BEACH OWN PROPERTY?
16 A WHEN?
17 Q WELL, DOES IT OWN PROPERTY NOW?
18 A YES, I BELIEVE SO.
19 Q DID IT OWN PROPERTY IN 2001?
20 A YES.
21 Q IN 2001, IT OWNED SOME PROPERTY IN VENICE, RIGHT?
22 A NO, I DON'T THINK SO.
23 Q DO YOU KNOW WHAT PROPERTY IT OWNED IN 2001?
24 A NO, CAN'T RECALL.
25 Q SO YOU JUST DON'T KNOW ONE WAY OR THE OTHER, RIGHT?
26 THE COURT: DON'T KNOW WHAT ONE WAY OR THE OTHER?
27 MR. ROSEN: I'LL WITHDRAW THE QUESTION.
28 Q DID MALIBU BROAD BEACH OWN A RENTAL HOUSE IN 2001?

1004
1 A YES, I BELIEVE SO.
2 Q WHERE WAS THAT RENTAL HOUSE LOCATED?
3 A IN MALIBU.
4 Q ON BROAD BEACH, RIGHT?
5 A YEAH.
6 Q AND MR. GAGGERO, AS THE MANAGER OF THE ESTATE, WAS
7 MANAGING THAT PROPERTY, AS WELL, RIGHT?
8 A YES.
9 Q MR. GAGGERO WAS THE ONE THAT MANAGED MALIBU BROAD
10 BEACH'S HOLDINGS, RIGHT?
11 A WELL, HE WAS THE PORTFOLIO MANAGER FOR MALIBU BROAD
12 BEACH.
13 THE COURT: WOULD THE COURT REPORTER READ THE QUESTION
14 BACK.
15 LET'S SEE IF YOU CAN ANSWER WHAT HE ASKED YOU.
17 FOLLOWS:
18 "Q MR. GAGGERO WAS THE ONE THAT
19 MANAGED MALIBU BROAD BEACH'S HOLDINGS,
20 RIGHT?")
21 THE WITNESS: IT WAS MANAGED BY THE LIMITED PARTNERSHIP.
22 Q BY MR. ROSEN: AND MR. GAGGERO WAS THE ULTIMATE
23 DECISIONMAKER AS TO WHAT WAS GOING TO HAPPEN WITH THAT
24 PROPERTY, RIGHT?
25 A HE WOULD BE THE ONE TO MAKE A RECOMMENDATION AS TO
26 WHETHER IT OUGHT TO BE SOLD OR IF AT THIS TIME HE OUGHT TO
27 BUY SOMETHING ELSE. AND TO THAT EXTENT, YES.
28 Q I APOLOGIZE FOR CUTTING YOU OFF.

1005
1 AS THE TRUSTEE OF THESE TRUSTS, IF YOU HAD A
2 QUESTION ABOUT THE RENTAL PROPERTY OWNED BY MALIBU BROAD
3 BEACH LP, YOU WOULD GO TO MR. GAGGERO AND ASK HIM ABOUT IT,
4 WOULDN'T YOU?
5 A IT WOULD DEPEND.
6 Q AS A TRUSTEE, YOU WOULD EXPECT HIM TO BE
7 KNOWLEDGEABLE ABOUT THAT PROPERTY, WOULDN'T YOU?
8 A MAYBE NOT ALL ASPECTS. IT WOULD DEPEND ON THE
9 SITUATION.
10 Q SOME ASPECTS?
11 A YES.
12 Q THE MACRO ASPECTS?
13 A ABOUT -- OKAY, YES.
14 Q THE RENTAL PROPERTY YOU WOULD EXPECT MR. GAGGERO TO
15 KNOW ABOUT, MAYBE NOT THE NITTY-GRITTY DETAILS, BUT YOU
16 WOULD EXPECT HIM TO HAVE A GENERAL SENSE ABOUT WHAT'S GOING
17 ON WITH THIS MALIBU BROAD BEACH RENTAL HOUSE, RIGHT?
18 A YES.
19 MR. ROSEN: NO FURTHER QUESTIONS, YOUR HONOR.
20 THE COURT: ALL RIGHT. MR. BEZEK, YOU MAY REDIRECT.
22
23 REDIRECT EXAMINATION
24 BY MR. BEZEK:
25 Q MR. PRASKE, YOU WERE ASKED SOME QUESTIONS ABOUT
26 SOME OUTSTANDING JUDGMENTS. DO YOU KNOW WHAT HAPPENED TO
27 THOSE JUDGMENTS, WHETHER THEY WERE PAID OR NOT?
28 A I RECALL THAT ONE OF THEM WAS SETTLED. ANOTHER ONE

EXHIBIT H
Gaggero Re- Direct Examination
July 15, 2005 (3426-3427)

COURT OF APPEAL OF THE STATE OF CALIFORNIA
C/erf
)
)
)
VS. )
)
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- - - - - - - - - - - - - - - - - )
NO. BC 239810
..rJURTOFAPPEAL. SEc..Vi
[f 11 f7 fal'n:;.
LlJ.J L~ J2;
MAY 202008
JOSEPH A. LANE
Depulv r"
REPORTER'S TRANSCRIPT OF TRIAL PROCEEDINGS
JULY 14, 2005 AND JULY 15, 2005
APPEARANCES:
SUITE 400
(310) 979-6059
SUITE 1300
(310) 899-3300
VOLUME 7 OF lfo
PAGES 3001 -~4-3300
PAGES 3301 - 3463-3600
OFFICIAL REPORTER

3426
1 Q WHERE WOULD THOSE FUNDS HAVE COME FROM?
2 A IT WOULD HAVE DEPENDED ON --
3 MR. ROSEN: OBJECTION. ASKED AND ANSWERED.
5 THE WITNESS: IT WOULD HAVE DEPENDED ON WHEN THE CLOSING
6 DATE WAS, BUT PART OF THE FUNDS MIGHT HAVE COME FROM A
7 MORTGAGE AND PART OF THE FUNDS MIGHT HAVE COME FROM MY TRUST
8 OR ALL OF THE FUNDS COULD HAVE COME FROM MY TRUST.
9 Q BY MR. BEZEK: AS OF THE YEAR 1999 -- WELL, LET ME
10 ASK THE QUESTION THIS WAY.
11 A I GUESS THE OTHER THING -- THE FUNDS WOULD HAVE
12 COME FROM ME, IF THAT'S WHAT YOU'RE ASKING. I MEAN, YOU'RE
13 ASKING WHERE I WOULD HAVE GOT THE FUNDS OR WOULD THEY BE
14 COMING FROM ME?
15 THE COURT: HE DIDN'T SAY. HE JUST SAID WHERE THE FUNDS
16 ARE COMING FROM.
17 THE WITNESS: IT WOULD HAVE COME FROM ME INTO THE
18 ESCROW. BUT ARE YOU ASKING WHERE I WOULD HAVE GOT THEM
19 FROM? I'M NOT QUITE SURE ON THAT.
20 Q BY MR. BEZEK: THAT'S A FAIR QUESTION.
21 DID YOU HAVE FUNDS AVAILABLE TO YOU AT THAT TIME?
22 DID YOU COMMAND THE RESOURCES NECESSARY TO GET THE MONEY TO
23 FULLY FUND THE CLOSE OF THIS TRANSACTION DURING THE YEAR
24 1998 FROM THE DATE OF AUGUST 10TH AND BEFORE LET'S SAY
25 FROM JULY 1 OF 1998 THROUGH THE END OF 1998, DID YOU COMMAND
26 THE RESOURCES NECESSARY TO CLOSE AND FUND THIS TRANSACTION?
27 MR. ROSEN: OBJECTION--
28 THE COURT: JULY TO DECEMBER '98?

MR. BEZEK: I'M SORRY?
THE COURT: YOU SAID JULY TO DECEMBER ' 98?
MR. BEZEK: THAT'S THE FIRST STEP. I WANT TO TAKE IT IN
STEPS.
MR. ROSEN: OBJECTION. VAGUE AND AMBIGUOUS.
THE COURT: OVERRULED.
THE WITNESS: YES.
1
2
3
4
5
6
7
8 Q
3427
BY MR. BEZEK: WHERE WOULD THOSE FUNDS HAVE COME
9 FROM DURING THAT TIME FRAME IN ORDER TO CLOSE THIS
10 TRANSACTION IF YOU CLOSED IN THAT TIME FRAME?
11 A THEY WOULD HAVE COME FROM ME TO THE ESCROW, UNLESS
12 I DID A 1031 EXCHANGE, AND THEN THEY WOULD HAVE COME FROM AN
13 ACCOMMODATOR TO THE ESCROW.
14 Q IF THE TRANSACTION HAD CLOSED AT ANY TIME DURING
15 THE YEAR 1999, FROM JANUARY 1, 1999 TO DECEMBER 31ST, 1999,
16 DID YOU HAVE -- DID YOU COMMAND THE RESOURCES TO MAKE FUNDS
17 AVAILABLE FOR THE CLOSE OF THIS TRANSACTION AT ANY TIME
18 DURING THE CALENDAR YEAR 1999?
19 A AT ALL TIMES I COMMANDED THE RESOURCES TO PURCHASE
20 THIS ALL CASH OR WITH A MORTGAGE. AND IF THERE HAPPENED TO
21 BE A 1031 EXCHANGE OPPORTUNITY AVAILABLE, I WOULD HAVE
22 EXCHANGED INTO IT WITH ONE OF THE ENTITIES THAT WERE OWNED
23 BY MY TRUST.
24 Q AFTER JANUARY -- ON AND AFTER JANUARY 1 OF 2000 TO
25 THE PRESENT DATE, HAVE YOU COMMANDED AND DO YOU COMMAND THE
26 RESOURCES NECESSARY TO CLOSE THIS TRANSACTION PURSUANT TO
27 THE TERMS OF THE PURCHASE AGREEMENT, EXHIBIT 154?
28 A YES.

EXHIBIT I
Jim Walter Direct & Cross Examination
July 19, 2005 (4021-4034)

1 COURT OF APPEAL OF THE STATE OF CALIFORNIA
2 SECOND APPELLATE DISTRICT
3 STEPHEN M. GAGGERO,
4 PLAINTIFF-APPELLANT,
5
6
7
8
VS.
ANNA MARIE YURA, ET AL.,
DEFENDANTS-RESPONDENTS.
NO. BC 239810
AlURTOF APPEAL· SEW"
l1nl1~rID
MAY 20 2008
9
JOSEPH A. LANE Cler~
10 APPEAL FROM THE SUPERIOR COURT OF LOS ANGELES COUNTY
11 HONORABLE MARY ANN MURPHY, JUDGE PRESIDING
12 REPORTERS' TRANSCRIPT ON APPEAL
13 JULY 19, 2005
14
15 APPEARANCES:
16
17
18
19
20
21
22
23
24
FOR PLAINTIFF-APPELLANT:
FOR DEFENDANTS-RESPONDENTS:
BOSTWICK & JASSY
BY: GARY BOSTWICK, ESQ.
SUITE 400
LOS ANGELES, CA 90025
MURPHY, ROSEN & COHEN
SUITE 1300
SANTA MONICA, CA 90401
25
26
27
28
VOL. ~ OF ~ SHARA CHAVEZ, CSR #4708
PAGES 3901 THROUGH 4093-4200, LORRAINE ROMIN, CSR #7508
INCLUSIVE. OFFICIAL REPORTERS
OR.',",':fAL
~------NOT TO BE REPRODUCED PER GOVERNMENT CODE 69954(D) ------~

4021
DIRECT EXAMINATION
JAMES WALTERS,
CALLED BY PLAINTIFF, HAVING BEEN FIRST DULY SWORN, WAS
EXAMINED AND TESTIFIED AS FOLLOWS:
SPELL YOUR NAME FOR THE RECORD.
THE WITNESS: JAMES WALTERS, W-A-L-T-E-R-S.
THE COURT: YOU MAY PROCEED.
BY MR. BEZEK:
Q. MR. WALTERS, WOULD YOU TELL US WHAT YOU DO FOR
A LIVING, PLEASE.
~------NOT TO BE REPRODUCED PER GOVERNMENT CODE 69954 (D) ------~
PLEASE STATE ANDPLEASE BE SEATED.THE CLERK:
MR. ROSEN: NO.
THE COURT: YOU MAY STEP DOWN.
THE WITNESS: THANK YOU VERY MUCH.
THE COURT: THANK YOU.
OKAY. LET'S CALL THE NEXT WITNESS.
MR. BEZEK: THIS SHOULD BE OUR FINAL WITNESS.
THE COURT: OKAY.
MR. BEZEK: IT WILL BE JIM WALTERS.
THE COURT: OKAY.
THE CLERK: PLEASE RAISE YOUR RIGHT HAND.
YOU DO SOLEMNLY STATE THAT THE TESTIMONY YOU
MAY GIVE IN THE CAUSE NOW PENDING BEFORE THIS COURT
SHALL BE THE TRUTH, THE WHOLE TRUTH, AND NOTHING BUT THE
TRUTH?
THE WITNESS: YES, SIR.
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4022
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A. I AM A CPA, AND I WORK WITH AN ACCOUNTING FIRM
IN THE SHERMAN OAKS AREA.
MR. ROSEN: YOUR HONOR, MAY I APPROACH AND LOOK AT
HIS NOTES.
THE COURT: YES.
MR. ROSEN: YOUR HONOR, MAY I ASK THAT THEY NOT BE
IN FRONT OF HIM WHILE HE TESTIFIES?
WORK IN A NUMBER OF AREAS INVOLVING TAXATION INCLUDING
REAL ESTATE TRANSACTION.
THE COURT: WHY DON'T YOU TURN THOSE OVER, PLEASE.
THANK YOU.
PARTICULAR SPECIALTY IN YOUR PROFESSION?
MR. GAGGERO IN OR ABOUT THAT TIME?
I DO
SINCE 1978.
MY MAIN EXPERTISE IS IN THE TAX AREA.
NOW, CAN YOU TELL US IF YOU HAVE ANY
I HAVE TO CALCULATE.
AND YOU'VE BEEN A CPA NOW FOR HOW LONG?
ALL RIGHT. AND WHEN WAS IT THAT YOU FIRST
SOMETIME IN 1984, 1985.
WAS THAT IN A PROFESSIONAL CAPACITY?
YES, SIR.
OKAY. WHAT DID YOU BEGIN TO DO FOR
I TOOK OVER THE TAX WORK FROM ANOTHER CPA
AND WHEN YOU SAY, "TAX WORK," CAN YOU GIVE US
Q.
A.
Q.
A.
Q.
OKAY. YOU MAY PROCEED.
MR. BEZEK: THANK YOU, YOUR HONOR.
A.
Q.
A.
Q.
A.
Q.
BECAME ACQUAINTED WITH STEVE GAGGERO?
FIRM.
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4023
KIND OF A GENERAL ENVELOPE OF THE SCOPE OF THE WORK THAT
YOU WERE DOING FOR MR. GAGGERO AT THAT TIME?
A. YES, IT WAS CONSULTING IN THE TAXATION OF REAL
ESTATE TRANSACTIONS, THE ACCUMULATION AND PREPARATION OF
THE TAX RETURNS, AND THE CONSULTING AND ADVICE ON
BOOKKEEPING AND ACCOUNTING SYSTEMS.
Q. AND HAVE YOU CONTINUED TO BE MR. GAGGERO'S
ACCOUNTANT PERFORMING THE FUNCTIONS YOU JUST IDENTIFIED
SINCE THAT DATE TO THE PRESENT DATE?
A. YES, SIR.
Q. IN THAT ROLE HAVE YOU PREPARED TAX RETURNS ON
BEHALF OF MR. GAGGERO?
A. YES, SIR.
Q. HAVE YOU DONE AN ANALYSIS OF DOCUMENTS IN AID
OF PREPARATION OF THOSE TAX RETURNS?
A. YES.
Q. HAVE YOU DONE THAT CONSISTENTLY SINCE YOU
FIRST BEGAN WORKING WITH MR. GAGGERO TO THE PRESENT
DATE?
A. YES, I HAVE.
Q. AND WHEN FILING TAX RETURNS ON A YEARLY BASIS,
DO YOU ASSIST MR. GAGGERO IN THAT PROCESS?
A. YES, I DO.
Q. ALSO THROUGHOUT THE YEAR FROM TIME TO TIME,
SAY, SINCE -- JUST PICK 1995 FORWARD, HAVE YOU CONSULTED
WITH MR. GAGGERO IN MATTERS RELATING TO TAX ISSUES
REGARDING THE PURCHASE AND SALE OF REAL PROPERTY?
A. YES, I HAVE.

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4024
Q. AND IN THAT REGARD HAVE YOU BECOME FAMILIAR
WITH THE HOLDINGS AND TRANSACTIONS THAT INVOLVE
MR. GAGGERO ON REAL ESTATE MATTERS?
A. YES.
Q. DO YOU MAINTAIN IN YOUR FILES COPIES OF
MATERIALS AND DOCUMENTS THAT RELATE TO CLOSINGS ON
PROPERTIES THAT MR. GAGGERO IS INVOLVED IN?
A. YES, WE DO.
Q. ARE YOU AWARE SINCE 1998, CAN YOU TELL US HOW
MANY PURCHASES MR. GAGGERO HAS BEEN INVOLVED IN
REGARDING REAL ESTATE MATTERS FROM THAT DATE TO
ESSENTIALLY THE PRESENT DATE?
A. 10 TRANSACT IONS.
Q. AND DO YOU KNOW FROM YOUR OWN RECOLLECTION
WHAT THOSE TRANSACTIONS ARE?
A. DO YOU MEAN INDIVIDUALLY WHAT THE TRANSACTIONS
WERE?
Q. WITHOUT REFERENCING THE DOCUMENTS, CAN YOU
REMEMBER EACH AND EVERY ONE OF THOSE TRANSACTIONS AND
TELL US THE DETAILS OF THOSE TRANSACTIONS?
A. NO.
THE COURT: WHY DON'T YOU ASK HIM WHAT HE REMEMBERS
FIRST.
MR. BEZEK: ALL RIGHT.
Q. CAN YOU TELL US WHAT YOU DO REMEMBER REGARDING
THOSE PURCHASES OF PROPERTIES DURING THAT TIME FRAME AS
I IDENTIFIED?
THE COURT: WHAT IS THE SPECIFIC QUESTION? DO YOU

4025
OTHER CLIENTS t SO I DON'T QUITE MEMORIZE ALL OF THEIR
IN -- ON PCH. I THINK TWO MORE PROPERTIES ON PCH.
THE COURT: IN MALIBU?
BUT I DO HAVE A LOT OF
THERE IS ANOTHER PROPERTY
WELL t I THINK THERE WAS ONE IN
THERE WAS -- THERE'S A BROAD
CAN YOU NAME THE ONES YOU CAN
THERE IS A -- THERE ARE TWO PROPERTIES
I'M SORRY.
'98 FORWARD.
ALL RIGHT.
I HAVE THEM HERE.
Q.
A.
THE WITNESS: YES.
RECALL t PLEASE.
A. GOING BACK TO -- YOU SAID 1995 FORWARD?
Q. '98?
WANT HIM FIRST TO IDENTIFY THE PROPERTIES t AND THEN
FOLLOW-UP WITH QUESTIONS ON THE ONES THAT HE REMEMBERS?
THAT WAS A LITTLE BROAD.
MR. BEZEK: THAT IS BETTER.
THE COURT: HE IS GOING TO REFRAME.
MR. BEZEK: PROBABLY NOT AS AS WELL.
Q. CAN YOU TELL US WHAT THE PROPERTIES WERE THAT
WERE PURCHASED DURING THAT TIME FRAME I'VE IDENTIFIED?
A. I CAN NAME SOME OF THEM.
IN VENTURA. THERE ARE
BEACH PROPERTY.
SANTA MONICA t TOO. AND THAT IS THE BEST TO MY
RECOLLECTION t UNFORTUNATELY.
I DID GO BACK AND PULL FROM MY FILE ALL THE
ESCROWS THAT I KNEW OF IN THE TIME PERIOD FROM '98
FORWARD.
TRANSACTIONS.
BY MR. BEZEK:
Q. OKAY. DO YOU KNOW THAT THERE WERE ADDITIONAL
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TRANSACTIONS, PURCHASES THAT YOU'VE NOT IDENTIFIED YET
FROM YOUR OWN MEMORY?
A. YES. I KNOW THAT THERE WERE 10 BECAUSE I
COUNTED THEM UP WHEN I PULLED THE INFORMATION. AND I
DIDN'T REALLY STUDY THE NAMES AND ADDRESSES. I ACTUALLY
LOOKED AT THE AMOUNTS OF THE CLOSINGS.
Q. ALL RIGHT. WOULD YOU LOOK AT THE DOCUMENT NOW
TO GIVE US THE PROPERTIES THAT WERE PURCHASED DURING
THAT TIME FRAME.
A. OKAY. THAT IS WHAT I HAVE HERE. THERE WAS
THE 3501 -- I CALL IT THE -- IT IS THE CANADA LARGA, BUT
I ACTUALLY REFER TO IT AS THE OJAI PROPERTY. THAT IS
FOR $6.7 MILLION.
Q. IS THAT MR. GAGGERO'S RANCH UP IN VENTURA?
A. YES.
Q. THAT'S WHERE HE IS LIVING RIGHT NOW?
A. YES.
Q. OKAY.
A. THERE IS THE 2101 WEST PIONEER PARKWAY IN
TEXAS, WHICH WAS FOR $1.8 MILLION. THERE IS THE 1267
OCEANFRONT IN SANTA MONICA WHICH IS $1,025,000. THERE
WAS THE 69480 -- I'M SORRY, 6948 VISTA DEL MAR FOR
$1 MILLION. THERE IS THE 32628 PACIFIC COAST HIGHWAY
FOR $2,115,000.
THE COURT: WHERE IS VISTA DEL MAR?
THE WITNESS: I'M SORRY. IN MALIBU, CALIFORNIA.
AND -- I'M SORRY -- WHAT DID I SAY. IT IS IN VISTA
DEL MAR. THEN THERE IS --

4027
THERE IS THE 2886 SOLYMAR BEACH DRIVE IN
THE COURT: THAT IS IN DEL MAR?
THE WITNESS: VISTA DEL MAR.
THE COURT: OKAY.
THE WITNESS: THEN THERE IS THE 22806, 22814
PACIFIC COAST HIGHWAY FOR $2.65 MILLION.
THE COURT: CAN YOU TELL ME WHERE THESE ARE,
PLEASE, THE TOWNS.
THE 230 EAST MAIN STREET FOR 1.5 MILLION; THAT IS IN
VENTURA, CALIFORNIA. AND THEN THERE IS THE 22800, 22804
PACIFIC COAST HIGHWAY IN MALIBU FOR $5.2 MILLION.
BY MR. BEZEK:
Q. NOW, ARE YOU ALSO FAMILIAR FROM WORKING
WITH STRIKE THAT.
WITH REGARDS TO THESE PURCHASES, DID YOU MEET
WITH MR. GAGGERO REGARDING ANY OF THESE PURCHASES TO
DISCUSS PRETAX PLANNING ISSUES RELATING TO SOME OF THESE
PROPERTIES?
A. I'VE MET WITH HIM ON ALL OF THESE PROPERTIES
PRECLOSE OF ESCROW.
Q. AND THOSE MEETINGS OCCURRED WHERE GENERALLY?
A. AT THE VENTURA PROPERTY.
Q. AND WAS ANYONE ELSE IN ATTENDANCE AT ANY OF
THOSE MEETINGS?
A. IN THOSE MEETINGS, IT WAS MR. GAGGERO AND
EAST MAIN STREET IN VENTURA FOR $1.8 MILLION. THERE IS
THERE IS THE 343
IN MALIBU.THE WITNESS: OH, I'M SORRY.
VENTURA, CALIFORNIA FOR 2.4 MILLION.
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MR. PRASKE.
Q. AND WHAT WAS THE PURPOSE OF THOSE MEETINGS?
A. THE PURPOSE OF THE MEETINGS WAS TO STRATEGIZE
AS TO TAX PLANNING AND ALSO STRATEGIZE AS TO THE ESTATE
PLANNING t AND ACTUALLY TO STRATEGIZE AS TO WHICH
ENTITIES MR. GAGGERO MANAGED WOULD AT TIMES TAKE
OWNERSHIP OF THE PROPERTIES.
Q. AND DURING THOSE MEETINGS WERE DECISIONS MADE
REGARDING THE ISSUES YOU JUST IDENTIFIED?
A. OH t ABSOLUTELY.
Q. WHO MADE THOSE DECISIONS?
A. MR. GAGGERO.
Q. WHAT WAS MR. PRASKE'S ROLE IN THOSE MEETINGS
AS YOU RECALL?
A. ADVICE.
Q. AND ONCE MR. GAGGERO MADE THE DECISION t WAS
THE DECISION -- THOSE DECISIONS IMPLEMENTED?
A. ABSOLUTELY.
Q. YOU SMILE WHEN YOU SAY THAT?
A. YOU HAVE TO KNOW MR. GAGGERO.
THE COURT: WELL
BY MR. BEZEK:
Q. ALL RIGHT.
THE COURT: THEY I MIGHT UNDERSTAND WHAT YOU ARE
TALKING ABOUT.
MR. BEZEK: ONE SECOND t YOUR HONOR.
OKAY. JUST A FEW CLOSE FINAL QUESTIONS.
Q. THE FIRM YOU ARE WITH NOW IS CALLED?

4029
III
(MARKED FOR IDENTIFICATION PLAINTIFF'S
EXHIBIT NO. 227, BUYER FINAL SETTLEMENT STATEMENT.)
THE COURT: ANY CROSS?
MR. ROSEN: THANK YOU.
MR. BEZEK: YOUR HONOR, I'M SORRY, WE HAVE A COpy
FOR MR. ROSEN.
THE COURT: A COPY OF THE DOCUMENT THAT THE WITNESS
BROUGHT INTO COURT WITH HIM; RIGHT?
MR. BEZEK: YES.
THE COURT: YOU'RE GIVING HIM A COPY OF THE
DOCUMENT THE WITNESS HAS IN FRONT OF HIM?
A. KELLOGG & ANDELSON ACCOUNTANCY CORPORATION.
Q. HOW LARGE THAT FIRM?
A. LARGE BY THE GIRTH OF MY EMPLOYEES OR THE
NUMBER OF EMPLOYEES OR BILLINGS? I'M SORRY.
Q. THE NUMBER OF EMPLOYEES THAT YOU HAVE.
A. JUST UNDER A HUNDRED EMPLOYEES.
Q. OKAY. AND HOW LONG HAS KELLOGG & ANDELSON
BEEN IN BUSINESS?
A. SINCE 1939.
Q. AND YOUR POSITION WITH THE FIRM IS?
A. I AM THE CHAIRMAN OF THE FIRM.
I THINK IT IS 227.EXHIBIT 227.
THANK YOU MR. WALTERS.ALL RIGHT.Q.
MR. BEZEK: YES.
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4030
CROSS-EXAMINATION
YES.
AND THE THIRD PROPERTY, 1267 OCEANFRONT?Q.
BY MR. ROSEN:
Q. MR. WALTERS, YOU IDENTIFIED THESE 10
PURCHASES, AND I'D LIKE TO GO THROUGH EACH ONE. THE
3501 CANADA LARGA, WHO WAS THE PURCHASER OF THAT
PROPERTY?
A. THE BUYER OF THIS PROPERTY ACCORDING TO THE
ESCROW DOCUMENTS THAT WE HAVE IS JOSEPH J. PRASKE,
TRUSTEE FOR THE GIGANIN TRUST.
Q. AS PART OF YOUR WORK DID YOU SEE THE CONTRACT,
THESE PURCHASE CONTRACTS AS WELL?
A. IN -- I SAW THE ESCROW CLOSINGS. AND TO
ANSWER YOUR QUESTION, I'M NOT QUITE SURE WHAT YOU MEAN
BY THE PURCHASE CONTRACT.
Q. WELL, THE ACTUAL PURCHASE AND SALE AGREEMENT
BY WHICH YOU KNOW, THE CONTRACT BY WHICH THE PROPERTY
WAS SOLD.
A. YES.
Q. AND WHO WAS THE BUYER ON THE CONTRACT FOR 3501
CANADA LARGA?
A. THE BUYER WAS THE SAME AS THE ESCROW.
Q. AND THE SECOND PROPERTY, 2101 WEST PIONEER,
WHO WAS THE PURCHASER OF THAT PROPERTY?
A. THE MALIBU BROAD BEACH LP.
Q. WAS THAT ALSO THE BUYER LISTED IN THE
CONTRACT?
A.
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4031
THAT WAS MALIBU BROAD BEACH LP.
AND WAS THAT ALSO THE PARTY IN THE CONTRACT?
YES, SIR.
AND THE NEXT ONE, 6948 VISTA DEL MAR, WHO WAS
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MALIBU BROAD BEACH LP.
WAS THAT ALSO THE PARTY TO THE CONTRACT?
YES, SIR.
AND THE NEXT ONE, 32628 PACIFIC COAST HIGHWAY,
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THAT ONE?
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AND 6948 VISTA DEL MAR, WHO WAS THE BUYER FOR
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HOLD ON A SECOND.
6948 VISTA DEL MAR.
39 -- WHAT WAS IT?
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THE COURT: WE JUST WENT OVER THAT.
THE WITNESS: WE WENT OVER THAT ONCE BEFORE.
MR. ROSEN: OH, DID WE? SORRY.
THE COURT: WE ARE OUT OF ORDER NOW.
THE WITNESS: MALIBU LP.
THE COURT: AND THEN 22806 TO 22814 PCH, WHO WAS
THE BUYER FOR THAT ONE?
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A.
Q.
A.
Q.
A.
Q.
YOU KNOW, THAT ONE I DON'T REMEMBER.
ANY RECOLLECTION AT ALL?
NO.
WAS IT IS MR. GAGGERO IN HIS PERSONAL NAME?
IT IS POSSIBLE, BUT I DON'T KNOW.
YOU JUST HAVE NO RECOLLECTION?

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4032
A. THAT'S CORRECT.
Q. WHAT ABOUT 2886 SOLYMAR BEACH DRIVE, WHO WAS
THE BUYER FOR THAT PROPERTY?
A. THAT WAS MARINA GLENCO, LP (PHONETIC).
Q. WAS THAT ALSO THE PARTY TO THE CONTRACT?
A. YES, SIR, IT WAS.
Q. AND 343 EAST MAIN STREET IN VENTURA, WHO WAS
THE BUYER OF THAT PROPERTY?
A. MARINA GLENCO, LP AND THE BARTLEY FAMILY
(PHONETIC) TRUST.
A. YES.
Q. HOW ABOUT 343 -- OH, THAT'S THE SAME ONE. I
APOLOGIZE.
HOW ABOUT 230 EAST MAIN STREET IN VENTURA, WHO
WAS THE BUYER OF THAT PROPERTY?
A. THAT WAS MARINA GLENCO LP.
A. YES.
Q. AND HOW ABOUT THE 22800 TO 22804
PACIFIC COAST HIGHWAY IN MALIBU?
A. MARINA GLENCO LP.
Q. THAT WAS ALSO THE PARTY TO THE CONTRACT?
A. YES, SIR.
Q. AS MR. GAGGERO'S TAX ACCOUNTANT WERE YOU
FAMILIAR WITH THE TRUSTS THAT HE HAD FORMED?
A. I AM FAMILIAR WITH THE TAX EFFECTS OF THE
TRUSTS.
'-----NOT TO BE REPRODUCED PER GOVERNMENT CODE 69954 (D) -------'

4033
YOUR HONOR, IN THE USE OF THE WORD -- WELL, AMBIGUOUS ON
PROPERTY?
A. IN THE YEAR 2001, DID MR. GAGGERO OWN ANY
PROPERTY IN HIS OWN NAME?
Q. YES.
QUESTION.
Q. DO YOU HAVE ANY BASIS, ANY REASONABLE BASIS IN
FACT AS TO WHAT IT WAS?
A. NO, I DO NOT.
Q. ANY APPROXIMATE?
A. NO, SIR.
Q. NO.
IN THE YEAR 2001, DID MR. GAGGERO OWN ANY
IT IS UNCLEAR.
1 1
M GOING TO OBJECT TO THE QUESTION,
IN THE YEAR 2001?
YES.
THAT WOULD BE A GUESS FOR ME TO ANSWER THAT
MR. BEZEK:
A.
Q.
A.
Q.
2001?
A.
Q.
A.
Q. DO YOU KNOW WHO THE BENEFICIARIES OF THE
TRUSTS ARE?
A. NO, I DO NOT.
Q. DID MR. GAGGERO EVER TELL YOU WHO THE
BENEFICIARIES OF ANY OF THE TRUSTS WERE?
NO, HE DID NOT.
YOU ALSO DO MR. GAGGERO'S TAX RETURNS?
THAT'S CORRECT.
WHAT WAS MR. GAGGERO'S INCOME IN THE YEAR
ONE OF THE WORDS THAT IS IN THERE.
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4034
I HAVE NO FURTHER QUESTIONS, YOUR
REDIRECT EXAMINATION
MR. BEZEK: REAL FAST, YOUR HONOR.
LET'SHAVE A FEELING YOU ARE GOING TO BE HANDLE THAT.
TRY IT.
THE WITNESS: MAYBE.
WELL, WHEN YOU SAY OWN, DO YOU ACTUALLY MEAN
THE COURT: DO YOU UNDERSTAND THE QUESTION?
THE WITNESS: IT IS A COMPLICATED ANSWER, BUT I DO
UNDERSTAND THE QUESTION.
THE COURT: YOU CAN GIVE THE COMPLICATED ANSWER. I
IN HIS NAME? OR DID HE OWN IT THROUGH ENTITIES THAT HE
CONTROLLED?
BY MR. ROSEN:
Q. I MEAN IN HIS NAME.
THE COURT: THAT IS WHAT HE WANTED TO KNOW.
THE WITNESS: NO, I DON'T THINK -- I DON'T THINK
THERE WAS OWNED IN MR. GAGGERO'S NAME.
MR. ROSEN:
HONOR.
THE COURT: OKAY. ANYTHING ON REDIRECT?
BY MR. BEZEK:
Q. MR. WALTERS, THE DECISION OF WHO WOULD TAKE
TITLE OR WHAT ENTITY WOULD TAKE TITLE FOR THESE 10
VARIOUS PROPERTIES THAT MR. ROSEN JUST WENT THROUGH WITH
YOU, WHO MADE THAT DECISION?
A. MR. GAGGERO.
Q. AND ARE YOU AWARE OF WITH REGARDS TO EVERY ONE
~------,NOT TO BE REPRODUCED PER GOVERNMENT CODE 69954(0) ------~
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4035
SUBJECT TO THE KENT DEPOSITION AND THE
THAT'S TRUE.
ANY OTHER DEPOS YOU NEED TO PUT IN?
I THINK THERE IS -- I THINK THERE IS
YOU ARE JUST SAYING YOU HAVE NO MORE
YOU MAY STEP
ANY RECROSS.
NOTHING, YOUR HONOR.
THANK YOU VERY MUCH.
OF THOSE TRANSACTIONS, DID MR. GAGGERO COMMAND THE
RESOURCES NECESSARY TO PURCHASE EACH OF THOSE
PROPERTIES?
A. YES. THEY ALL FLOW -- THE ACTUAL GAINS ON
THESE PROPERTIES ALWAYS FLOW THROUGH MR. GAGGERO'S TAX
RETURN, THROUGH THE TRUSTS AND ALL THE OTHER ENTITIES.
MR. BEZEK: ALL RIGHT. THAT IS ALL I HAVE, YOUR
HONOR.
THE COURT:
MR. ROSEN:
THE COURT:
DOWN.
MR. BEZEK:
OTHER DEPOSITION
THE COURT: WE ARE NOT RESTING YET, ARE WE? WAIT A
SECOND. ARE YOU GOING TO PROPOSE TO READ THE KENT DEPO?
MR. BEZEK: YES, YOUR HONOR.
THE COURT: OKAY. THEN YOU ARE NOT EVEN NEAR
RESTING YET.
MR. BEZEK:
THE COURT:
MR. BEZEK:
THE COURT:
LIVE WITNESSES.
MR. BEZEK: NO MORE LIVE WITNESSES.
THE COURT: THERE ARE DEPO READS. AND THEN WE'VE
GOT TO MAKE SURE YOU HAVE ALL THE EXHIBITS YOU WANT
IN --
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EXHIBIT J
REPORTERS’ CERTIFICATE TRANSCRIPT ON APPEAL

1
2
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
3 DEPARTMENT NO. 25 HON. MARY ANN MURPHY, JUDGE
4 STEPHEN M. GAGGERO, )
)
5 PLAINTIFF,)
)
6 VS. ) NO. BC 239810
)
7 ANNA MARIE YURA, IN HER CAPACITY) REPORTER'S CERTIFICATE
AS TRUSTEE OF THE FREDERICK EARL )
8 HARRIS II 1995 TRUST; AND )
9 )
DEFENDANTS. )
10 )
11
12 I, PAULA B. RENTERIA, OFFICIAL REPORTER OF THE
13 SUPERIOR COURT OF THE STATE OF CALIFORNIA, COUNTY OF LOS
14 ANGELES, DO HEREBY CERTIFY THAT THE FOREGOING PAGES
1 - 150-300; 301 - 431-600; 601 - 739-900; 901 - 1054-1200;
15 1201 - 1274-1500; 1501 - 1630-1800; 1801 - 1915-2100;
2101 - 2194-2400; 2401 - 2519-2700; 2701 - 2802-3000;
16 3001 - 3124-3300; 3301 - 3463-3600; 4201 - 4366-4500;
4501 - 4677-4800; 4801 - 4860-5100; 5101 - 5239-5400;
17 5401 - 5555-5700; 5701 - 5816-6000; 6001 - 6154-6300;
6301 - 6307-6600; 6601 - 6727-6900; 6901 - 6953-7200;
18 7201 - 7353-7500; 7501 - 7642-7800; 8101 - 8108-8400;
8401 - 8407-8700; 8701 - 8708-9000; 9001 - 9008-9300
19 COMPRISE A FULL, TRUE AND CORRECT TRANSCRIPT OF THE
PROCEEDINGS HELD IN THE ABOVE-ENTITLED MATTER ON 6/27/05;
20 6/28/05; 6/29/05; 6/30/05; 7/1/05; 7/5/05; 7/6/05; 7/7/05;
7/8/05; 7/12/05; 7/14/05; 7/15/05; 7/20/05; 7/21/05;
21 7/22/05; 7/25/05; 7/26/05; 7/27/05; 7/28/05; 8/1/05; 8/2/05;
8/3/05; 8/4/05; 8/5/05; 9/5/06; 2/2/07; 3/9/07 AND 4/26/07.
22
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27
28
DATED THIS 16TH DAY OF MAY, 2008.
Th3.~SR NO. 9374
OFFICIAL REPORTER

1
2
3 DEPARTMENT 25 HON. MARY ANN MURPHY, JUDGE
5 PLAINTIFFS,
6
7
8
9
10
VS.
ANNA MARIE YURA, ET AL.,
DEFENDANT(S) .
NO. BC 239810
REPORTER'S
CERTIFICATE
11 STATE OF CALIFORNIA
12 COUNTY OF LOS ANGELES
13
SS.
14 I, LORRAINE ROMIN, OFFICIAL REPORTER OF THE
15 SUPERIOR COURT OF THE STATE OF CALIFORNIA, FOR THE
16 COUNTY OF LOS ANGELES, DO HEREBY CERTIFY THAT THE
17 FOREGOING PAGES, 3601 THROUGH 3778-3900, AND PAGES 3913
18 THROUGH 4093-4200, INCLUSIVE, COMPRISE A FULL, TRUE, AND
19 CORRECT TRANSCRIPT OF THE PROCEEDINGS HELD IN THE
20 ABOVE-ENTITLED MATTER ON JULY 18 & 19, 2005.
21 DATED THIS ~~DAY OF.~ ,2008.
22
23
24
25

EXHIBIT K
REPORTERS DAILY TRANSCRIPT
(Case No. BC286925)
Gaggero Cross Examination
Aug. 2, 2007 (33-42, 69)

DEPARTMENT LA 24
STEPHEN M. GAGGERO,
-VS-
HON. ROBERT L. HESS, JUDGE
PLAINTIFF,
)
)
)
).
)
) CASE NO.
) BC286925
)
KNAPP, PETERSEN & CLARKE; STEVEN RAY
GARCIA, STEPHEN HARRIS, ANDRE JARDINI
AND DOES 1 THROUGH 50, INCLUSIVE,
)
): ORIGINAL
DEFENDANTS.
)
)
REPORTER'S DAILY TRANSCRIPT OF PROCEEDINGS
THURSDAY, AUGUST 2, 2007
TESTIMONY OF MR. STEPHEN GAGGERO
APPEARANCES:
FOR THE PLAINTIFFS:
FOR THE DEFENDANTS:
PAGES 1-77
BOSTWICK & JASSY LLP
BY: GARY L. BOSTWICK
12400 WILSHIRE BLVD.
SUITE 400
(310)· 979-6059
JULIAN A. SIMONIS, ESQ.
2625 TOWNSGATE ROAD #330
WESTLAKE, CA 91361
(805) 267-1211
SEDGWICK, DETERT, MORAN
& ARNOLD, LLP
BY: LORI S. BLITSTIEN
BY: RANDALL A. MILLER
801 SOUTH FIGUEROA STREET
18TH FLOOR
(213) 615-8047
CAROL L. CRAWLEY, CSR 7518

A
Q
IT HAD BEEN RESOLVED. IT WAS JUST UP ON APPEAL.
SO, BUT THERE HADN'T BEEN A DECISION ON APPEAL IN
THE STACEY CASE YET, CORRECT?
A CORRECT.
15
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9
Q SO AT THE TIME YOU SETTLED WITH THE VNBC CREDITORS,
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IT WAS YOU, STEPHEN GAGGERO, THAT PAID, NOT MR. STACEY'S
INSURANCE COMPANY, CORRECT, SIR?
A CORRECT.
Q ALL RIGHT. LET'S GO BACK TO THE SAME TIMEFRAME.
MARCH 14TH, 2001 TO AUGUST 28TH, 2001. AT NO POINT DURING
THAT TIMEFRAME, MR. GAGGERO, DID YOU OFFER TO PAY THE FULL
AMOUNT OF THE VNBC JUDGMENTS PLUS INTEREST, CORRECT?
A CORRECT.
Q AND AT NO POINT.DURING THAT SAME TIMEFRAME DID YOU
15 AUTHORIZE KNAPP, PETERSEN TO OFFER THE TOTAL AMOUNT OF THE
16 JUDGMENTS PLUS INTEREST TO VNBC, CORRECT, SIR?
17 A CORRECT.
18 Q AND THOSE JUDGMENTS IN FAVOR OF VNBC; THEY WERE
19 FINAL JUDGMENTS, RIGHT?
20 MR. BOSTWICK: OBJECTION, YOUR HONOR, CALLS FOR A LEGAL
21 CONCLUSION.
22 THE COURT: ASK HIM TO LAY SOME FOUNDATION, SIR.
23 BY MR. MILLER:
24
25
26
27
28
Q YOU UNDERSTOOD THAT THERE HAD BEEN -- STRIKE THAT.
THE ORIGINAL JUDGMENT IN FAVOR OF VNBC AND AGAINST
YOU TOOK PLACE IN 1995, CORRECT?
A I DON'T REMEMBER THE DATE.
Q GIVE ME YOUR BEST ESTIMATE?

A PARDON ME.
Q GIVE ME YOUR BEST ESTIMATE OF WHEN THE ORIGINAL
JUDGMENT AGAINST YOU IN FAVOR OF THE VNBC CREDITORS
OCCURRED?
A I THINK I ALREADY TESTIFIED HERE THAT IT WAS
16
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SOMEWHERE IN THE EARLY '90'S, BUT I -- OR MID '90'S, BUT IF
YOU SAY IT IS '95, I WON'T DISPUTE IT.
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Q OKAY. WELL, LET'S TAKE '95, AND THEN THERE WAS A
SECOND SET OF JUDGMENTS AS A RESULT OF AN APPEAL THAT YOU
FILED, OR WAS FILED ON YOUR BEHALF CORRECT, SIR?
A YES.
Q
A
Q
AND YOU LOST ON APPEAL, CORRECT?
YES.
AND THERE WAS MORE ATTORNEY'S FEES THAT WERE
15 ACCRUED AS A RESULT OF THE APPELLATE WORK THAT VNBC DID IN
16 OPPOSITION TO YOUR APPEAL, .CORRECT, SIR?
17 A YES.
18 Q OKAY. SO THEN THERE WERE A NUMBER OF INDIVIDUAL
19 JUDGMENTS AGAINST YOU AFTER THE APPEAL, CORRECT?
20 A YES.
21 Q AND THERE WERE NO MORE APPEALS AFTER THAT, SIR,
22 CORRECT?
23
24
A
Q
NOT THAT I REMEMBER, NO.
SO, IN YOUR MIND, WAS THAT THE TERMINIS OF THAT
25 ACTION AGAINST VNBC, THERE WAS NO MORE QUIBBLING, NO MORE
26 APPEALS, NO MORE FIGHTING; IT HAD REACHED ITS END POINT.
27 THAT WAS YOUR UNDERSTANDING, CORRECT, SIR?
28 MR. BOSTWICK: OBJECTION, YOUR HONOR, IT IS VAGUE AND

33
1 THE WITNESS: I AM SORRY, THE QUESTION AGAIN?
2 BY MR. MILLER:
3 Q YOU HAD THE FUNDS, OR MEANS TO GET THE FUNDS, TO
4 PAY OFF THE ENTIRE VNBC JUDGMENT, PLUS INTEREST, IN THIS
5 TIMEFRAME, CORRECT, SIR?
6 MR. BOSTWICK: MAY I BE HEARD AS TO WHY I THINK IT IS
7 IRRELEVANT, YOUR HONOR?
8 THE COURT: I DON'T THINK I NEED THAT. THANK YOU.
9 THE WITNESS: YES.
10 BY MR. MILLER:
11 Q NOW, I AM GOING TO CHANGE SUBJECTS ON YOU SO YOU
12 ARE NOT COMPLETELY SURPRISED.
13 YESTERDAY, MR. GAGGERO, YOU TESTIFIED THAT THERE
14 WERE A NUMBER OF DIFFERENT ENTITIES THAT PAID INVOICES, AND
15 BY THAT I MEAN KNAPP, PETERSEN AND CLARKE INVOICES.
16 REMEMBER THAT TESTIMONY?
17
18
A
Q
YES.
AND JUST SO WE ARE CLEAR, I AM TALKING ABOUT THE
19 2000, 2001 TIMEFRAME FOR THESE QUESTIONS.
20
21 A
DO YOU UNDERSTAND THAT?
YES.
22 Q NOW, WITH RESPECT TO THE PAYMENT OF KNAPP, PETERSEN
23 AND CLARKE INVOICES, THERE WERE OTHER ENTITIES THAT PAID
24 THOSE INVOICES, INCLUDING AVALON CORPORATION, CORRECT?
25 A YES.
26 Q A COMPANY CALLED AVALON SUNSET, DID THEY PAY THE
27 KPC INVOICES DURING THAT TIMEFRAME?
28 A AVALON SUNSET AND AVALON CORPORATION ARE ONE IN THE

34
1 SAME.
2 Q PACIFIC COAST MANAGEMENT CORPORATION, WERE THEY
3 ALSO A PAYOR OF THE KPC INVOICES DURING THAT TIMEFRAME?
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A
Q
A
WHEN YOU SAY A "PAYOR", WHAT DOES THAT MEAN?
MEANING THAT THEY PAID INVOICES?
WHAT DO YOU MEAN BY THAT IS WHAT I AM ASKING, I
SHOULD SAY.
Q DO YOU NOT UNDERSTAND IT?
A I KNOW WHAT THE WORD PAYOR MEANS, BUT I WANT TO
MAKE SURE THAT THE WAY YOU ARE PHRASING IT IS THE SAME WAY I
AM THINKING OF IT.
Q
A
OKAY?
ARE THEY THE ONES THAT WROTE THE CHECKS, YES. ARE
14 THEY THE ACTUAL PAYOR, THEY ARE A MANAGEMENT COMPANY. I
15 WANT TO MAKE SURE WE UNDERSTAND THAT.
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27
Q JUST SO WE ARE C~EART WE ARE TALKING ABOUT PACIFIC
COAST MANAGEMENT CORPORATION.
THAT IS AN ENTITY THAT EXISTED IN THAT TIMEFRAME,
2000 TO 2001, CORRECT, SIR?
A CORRECT.
Q PACIFIC COAST -- MAY I CALL IT PCM; WOULD YOU
UNDERSTAND IT TO MEAN PACIFIC COAST MANAGEMENT CORPORATION?
A YES.
Q IF I CAN USE THE ACRONYM PCM. PCM WROTE CHECKS TO .
KNAPP, PETERSEN FOR SERVICES THAT WERE INVOICED, CORRECT?
A YES.
Q AVALON CORPORATION, THAT IS A CORPORATION, RIGHT,
28 THAT WAS IN THE SAME TIMEFRAME?

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A
Q
YES.
AND WAS A CERTIFICATE OF CORPORATION FILED IN
CALIFORNIA FOR AVALON?
A I THINK SO.
Q WHEN?
A I DON!T KNOW.
Q BEFORE 2000?
A I ASSUME SO, I AM NOT SURE.
Q WELL, DO YOU KNOW IF AVALON CORPORATION WAS IN
35
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17
EXISTENCE PRIOR TO THE TIME YOU RETAINED KNAPP, PETERSEN ON
THE VARIOUS MATTERS?
A OH, YES, IT WAS.
Q AND WHAT WAS ITS BUSINESS?
A AT THAT TIME IT WAS A MANAGEMENT COMPANY.
Q AND WHAT DID IT MANAGE?
A· VARIOUS ASSETS, AND IT MIGHT HAVE STILL BEEN DOING
SOME CONSTRUCTION AND DEVELOPMENT, I HAVE TO THINK BACK ON
18 IT. IT MANAGED ME, MY LIFE, MY EXPENSES.
19 Q OKAY, BUT AVALON CORPORATION?
20 A IT MANAGED MY LITIGATION AND LITIGATION SURROUNDING
21 VARIOUS ENTITIES AND ASSETS THAT I OWNED, AND THAT MY FAMILY
22 OWNED.
23
24
25
Q
A
Q
YOU SET UP AVALON CORPORATION?
YES.
IN 2000, 2001, WHAT AFFILIATION DID YOU HAVE WITH
26 AVALON CORPORATION?
27 A I THINK I WAS STILL THE PRESIDENT AND MAYBE ONE
28 OTHER OFFICER, I DON! T REMEMBER SPECIFICALLY.

36
Q AND DID AVALON CORPORATION HAVE AN EXISTENCE
SEPARATE FROM STEPHEN GAGGERO AS AN INDIVIDUAL?
A IT WAS A YES, I THINK SO, YES.
Q THAT WAS THE INTENT WAS TO SET UP A SEPARATE
1
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9
CORPORATION TO DO THE THINGS THAT YOU JUST TOLD US THAT THEY
WERE DOING, CORRECT?
10
11
A ACTUALLY, I SET IT UP AS A CONSTRUCTION COMPANY
MANY, MANY, MANY YEARS AGO.
I JUST CHANGED ITS NAME OVER THE YEARS.
Q AND IT WAS INTENDED THAT THAT COMPANY HAVE A
SEPARATE EXISTENCE FROM STEPHEN GAGGERO, THE INDIVIDUAL,
12 CORRECT?
13 A IN SOME INSTANCES.
14 Q I MEAN YOU DIDN'T HOLD OUT THAT STEPHEN GAGGERO AND
15 AVALON CORPORATION WERE ONE IN THE SAME, CORRECT?
16 A THEY WERE NOT THE SAME ENTITY OR INDIVIDUAL, NO,
17 BUT THEY HAD COMMON INTERESTS THAT'S
18 Q DID AVALON CORPORATION FILE TAX RETURNS FOR THE
19 CORPORATION?
20 A YES.
21 Q OKAY. NOW, WE TALKED A LITTLE BIT ABOUT PCM. PCM,
22 DURING THIS TIMEFRAME, 2000 TO 2001, THEY WERE ALSO A
23 CORPORATION?
24
25
26
27
28
A
Q
A
Q
A
I AM NOT POSITIVE ABOUT THAT.
WERE THEY INCORPORATED IN NEVADA?
I AM NOT POSITIVE ABOUT THAT. I AM NOT SURE.
WHAT WAS PCM?
A MANAGEMENT COMPANY.

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Q AND DID PCM DO THE SAME THINGS THAT AVALON
CORPORATION DID, MANAGE YOUR ASSETS, PROPERTY CONSTRUCTION?
A I DIDN'T DO CONSTRUCTION. MANAGED ASSETS,
COMPANIES, ME, MY LIFE, MY FAMILY'S LIFE, TRUST, FOUNDATION,
THINGS OF THAT NATURE.
Q DID IT HAVE OFFICERS IN 2000, 2001?
A I DON'T KNOW.
Q DID IT HAVE DIRECTORS?
A THAT'S WHAT I DON'T KNOW. I DON'T KNOW IF IT WAS
OFFICERS, DIRECTORS, MEMBERS.
I AM NOT SURE I WAS A DIRECTOR, BUT I WAS TOLD ONCE
BY, WELL -- BY COUNSEL, THAT I COULDN'T BE A MANAGING
DIRECTOR 'CAUSE THAT WAS A EUROPEAN TERM, AND I DON'T REALLY
KNOW WHAT THAT MEANS. PROBABLY 'CAUSE I HAD BEEN SAYING
15 THAT. SO I HAVE GOT CONFLICTING ADVICE ON THAT AS I SIT
16 HERE.
17
18
19
Q
A
Q
OKAY. DID IT HAVE ARTICLES OF INCORPORATION?
I DON'T KNOW.
AND PCM WROTE CHECKS TO KPC FOR KPC-INVOICED
20 SERVICES, CORRECT?
21 A YES.
22
23
24
Q
A
Q
AND WHEN WAS PCM FORMED?
I DON'T KNOW.
AND WAS IT IN EXISTENCE FROM 2000 TO 2000 -- SAY
25 THE END OF 2003 -- DURING THAT ENTIRE TIME?
26
27
28
A
Q
I DON'T KNOW.
WHERE WAS PCM BASED?
MR. BOSTWICK: OBJECTION, YOUR HONOR, IT IS VAGUE.

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THE
THE
BY MR.
Q
A
Q
LEASED?
A
Q
A
COURT: YOU MEAN WHERE WERE THE OFFICES?
WITNESS: AT WHAT POINT IN TIME?
MILLER:
2000 TO 2001?
VENTURA AND SANTA MONICA IN THAT PERIOD OF TIME.
AND THOSE -- THAT WAS OFFICE SPACE THAT IT OWNED
YES.
PCM HAVE EMPLOYEES?
I DON'T KNOW IF THEY WERE CONSIDERED EMPLOYEES OR
11 INDEPENDENT CONTRACTORS.
38
OR
12 Q DID PCM HAVE PEOPLE THAT IT PAID FOR SERVICES THAT
13 WERE RENDERED ON ITS BEHALF?
14
15
16
17
A
Q
A
Q
YES.
INCLUDING YOU?
YES.
AND PCM -- SAME QUESTION I HAD WITH YOU WITH
18 RESPECT TO AVALON; PCM WAS 'MAINTAINED AS A SEPARATE ENTITY
19 FROM STEPHEN GAGGERO, THE INDIVIDUAL, CORRECT?
20 A THEY ARE SEPARATE, YES. I AM NOT -- I DON'T OWN
21 ANY OF PCM.
22 I AM A MANAGING DIRECTOR, BUT THAT IS ALL.
23 Q' DID YOU HAVE AN OWNERSHIP INTEREST IN PCM IN 2000
24 OR 2001?
25
26
A
Q
27 STOCK?
28 A
NO.
HOW WAS THAT COMPANY STRUCTURED? DID IT ISSUE
I DON'T KNOW.

39
Q PCM FILE TAX RETURNS?
A I BELIEVE SO.
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Q NOW, ASIDE FROM MONIES THAT WERE DEDUCTED, OR THAT
10
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YOU AUTHORIZED BE DEDUCTED FROM KNAPP, PETERSEN TRUST
ACCOUNTS, WHO ELSE, BESIDES PCM AND AVALON CORPORATION, PAID
KPC LEGAL INVOICES?
A I DON'T KNOW. I WOULD HAVE TO -- I MEAN I DON'T
RECALL IF THERE WAS SOMEBODY ELSE, OR SOME OTHER ENTITY.
Q AVALON SUNSET?
A
Q
A
SAME.
Q
DIDN'T YOU JUST SAY AVALON?
I SAID AVALON CORPORATION?
I THINK I TOLD YOU EARLIER THEY ARE ONE IN THE
OKAY. AVALON ENGINEERING -- DID THEY PAY KPC
15 INVOICES?
16 A I DON'T THINK SO.
17 Q DID YOU, STEPHEN GAGGERO, EVER WRITE A CHECK ON
18 STEPHEN GAGGERO'S INDIVIDUAL CHECKING ACCOUNT FOR SERVICES
19 THAT KPC RENDERED IN THE 2000, 2001 TIMEFRAME?
20 A I DON'T THINK I HAD A CHECKING ACCOUNT. I AM NOT
21 POSITIVE.
22 Q IS YOUR TESTIMONY THAT ALL OF THE KPC INVOICES THAT
23 WERE PAID IN THAT TIMEFRAME WERE PAID EITHER BY AVALON
24 CORPORATION OR PCM, CORRECT?
25 A THEY ARE THE ONES THAT WROTE THE CHECKS, YES.
26 Q OKAY. NOW, I WANT TO MOVE AHEAD A LITTLE BIT TO
27 ANOTHER TIMEFRAME, 2002, 2003, AND I GUESS WE MEAN THE
28 CALENDAR YEAR, SO THE ENTIRETY OF 2002, AND THE ENTIRETY OF

2003.
PCM HAD HIRED DAVID CHATFIELD AS AN IN-HOUSE
ATTORNEY, CORRECT?
A I DON'T KNOW IF PCM OR I HIRED HIM FRANKLY.
Q MR. CHATFIELD HAD A CONTRACT, A WRITTEN CONTRACT,
EMPLOYMENT CONTRACT?
A I THINK SO. I AM NOT POSITIVE.
AND THAT WAS BETWEEN PCM AND MR. CHATFIELD?
40
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Q
A I DON'T REMEMBER IF IT WAS, IF THERE WAS, AND IF IT
10 WAS, I THINK THERE WAS ULTIMATELY SOME KIND OF A CONTRACT
11 WITH MR. CHATFIELD, I THINK IT WAS WITH ME, BUT I AM NOT
12 SURE.
13 Q OKAY. YOU TESTIFIED YESTERDAY ABOUT SETTING UP,
14 AND I THINK YOU CALLED IT AN IN-HOUSE LEGAL DEPARTMENT; THAT
15 IS WHY MR. CHATFIELD WAS INTERVIEWED AND HIRED AND RETAINED,
16 CORRECT?
17 A YES.
18 Q I INTERRUPTED?
19 A YES.
20 Q THANK YOU.
21 AND HE WAS TO BE THE IN-HOUSE LEGAL DEPARTMENT FOR
22 PACIFIC COAST MANAGEMENT, CORRECT?
23 A FOR ME AND PACIFIC COAST MANAGEMENT.
24
25
26
Q
A
Q
WHEN HE WAS PAID -- HE WAS PAID ON PCM CHECK STOCK?
DO YOU MEAN EXCLUSIVELY, FO~ EVERYTHING, OR WHAT?
WERE THERE OCCASIONS WHERE HE WAS PAID BY PCM, AND
27 THEN WE WILL BREAK IT DOWN?
28 AYES.

41
Q OKAY. IN THE 2002 TIMEFRAME, WAS MR. CHATFIELD
PAID A SALARY BY PCM?
A I DON'T KNOW IF I DON'T KNOW WHAT THE EXACT
1
2
3
4
5
6
ARRANGEMENT WAS, WHETHER IT WAS CONSIDERED A SALARY OR SOME
HYBRID OF A SALARY.
Q HOW WAS HE COMPENSATED -- STRIKE THAT.
7 LET ME BACK UP A LITTLE BIT.
8 DID MR. CHATFIELD PERFORM SERVICES FOR PCM AS ITS
9 IN-HOUSE COUNSEL?
10 A YOU WOULD HAVE TO ASK MR. CHATFIELD THAT.
11 I THINK HE IS GOING TO BE HERE. I DON'T KNOW THE
12 TECHNICAL ANSWER TO THAT. I KNOW HE WAS AN IN-HOUSE COUNSEL
13 FOR ME AND FOR MY ASSETS, AND HE MAY BE IN-HOUSE COUNSEL FOR
14 PCM AS WELL.
15 I AM NOT QUITE SURE HOW THAT LEGAL STRUCTURE OF
16 THAT WORKS.
17 THE COURT: I AM A TRIFLE CONFUSED.
18 WHEN I THINK OF, WHEN I HEAR THE PHRASE IN-HOUSE
19 COUNSEL, IT SOUNDS TO ME LIKE AN ATTORNEY WHO IS HIRED BY A
20 CORPORATION OR ENTITY TO WORK, GENERALLY, EXCLUSIVELY FOR
21 THAT ENTITY OR -- BUT HIRED BY TO DO WORK FOR YET EXCLUSIVE
22 A PARTICULAR ENTITY, AND I AM CONFUSED BY YOUR REFERENCE,
23 MR. GAGGERO, TO IN-HOUSE COUNSEL FOR YOU.
24 WAS HE FUNCTIONING AS YOUR PERSONAL ATTORNEY, OR
25 WAS HE RETAINED BY YOU AS A PERSONAL ATTORNEY, OR WAS HE
26 FUNCTIONING FOR SOME ENTITY?
27 THE WITNESS: WELL, I KNOW HE WAS MY PERSONAL ATTORNEY,
28 AND I KNOW HE WAS THE ATTORNEY FOR ENTtTIES THAT EITHER I

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42
OWNED OR MANAGED, OR THAT MY FAMILY OR TRUSTS THAT I SET UP
OWNED, AND SO HE WAS ALL THOSE THINGS, SORT OF THE
I DON'T KNOW HOW THE CONTRACT IS WRITTEN.
MR. CHATFIELD, I AM SURE, CAN EXPLAIN IT BETTER THAN I CAN.
BY MR. MILLER:
Q WELL, IT SOUNDS LIKE, FROM THAT RESPONSE,
MR. GAGGERO, THAT MR. CHATFIELD DID OTHER THINGS THAN
APPEARING FOR YOU ON YOUR LITIGATED MATTERS, CORRECT?
A I THINK MR. CHATFIELD HAS WORKED EXCLUSIVELY ON
MATTERS THAT INVOLVE ME ONE WAY OR ..ANOTHER, OR MY ASSETS
THAT I SET UP INTO ENTITIES OR TRUSTS OR FOUNDATION OR A
MANAGEMENT COMPANY THAT MANAGES THEM.
Q I AM NOT SURE THAT WAS RESPONSIVE.
LET ME GO AT IT AGAIN,MR. CHATFIELD, DURING THE
2002, 2003 TIMEFRAME, WORKED ON OTHER MATTERS OTHER THAN
THOSE MATTERS THAT HE APPEARED ON YOUR BEHALF OR ONE OF YOUR
ENTITY'S BEHALF IN LITIGATION?
A I DON'T THINK SO.
Q OKAY.
SO IS IT YOUR TESTIMONY, MR. GAGGERO, THAT DURING
THAT TIMEFRAME, 2002, 2003, THE ONLY THING THAT
MR. CHATFIELD DID WAS LITIGATE YOUR CASES. WAS THAT YOUR
23 TESTIMONY?
24 A NO. THE LAST QUESTION YOU ASKED WAS MY TESTIMONY.
25 Q IS IT YOUR TESTIMONY NOW, MR. GAGGERO, THAT THE
26 ONLY THING THAT MR. CHATFIELD DID DURING THOSE TWO CALENDAR
27 YEARS WAS LITIGATE YOUR PERSONAL MATTERS?
28. A I DON'T KNOW. I WOULD HAVE. I AM JUST NOT SURE I

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Q
WHAT?
A
69
OKAY. WHICH, AT THE BEGINNING OF 2002, ENCOMPASSED
EVERYTHING AND ANYTHING THAT IS NECESSARY TO RUN A
LAW FIRM, FROM STAFFING TO OFFICE FACILITIES, FURNITURE,
COPY MACHINES, BINDING MACHINES, COMPUTERS, PRINTER, FAXES,
TELEPHONES, TELEPHONE SERVICES, FAX SERVICE, LEXUS, WEST
LAW, LIBRARY OF BOOKS, FILING CLERK, PARALEGAL, OTHER
ATTORNEYS THAT NEED TO COME IN AND HELP, I JUST CAN'T THINK
OF ALL THE THINGS -- MESSENGERS AND LAW CLERKS AND FILING
CABINETS AND FILES AND STATIONERY AND PAPER AND CONTINUING
11 EDUCATION, BAR DUES, THAT IS -- I MEAN, THERE IS MORE. I
12
13
14
15
16
17
18
19
20
JUST CAN'T THINK OF IT ALL.
Q
THOSE
AND IS IT YOUR TESTIMONY, MR. GAGGERO, THAT
ALL THOSE ITEMS THAT YOU JUST DESCRIBED, AND
WHATEVER ELSE ENCOMPASSES OVERHEAD WERE PROVIDED TO MR.
CHATFIELD AT GRATIS?
A
Q
A
Q
PARDON ME?
PROVIDED TO HIM AS PART OF THE DEAL?
YES.
THOSE WERE ALL OVERHEAD ITEMS THAT WERE PAID FOR BY
21 PCM?
22
23
A CHECKS WERE WRITTEN BY PCM.
I PAID FOR IT. I GIVE PCM THE MONEY. PCM WRITES
24 THE CHECKS., THEY WRITE CHECKS FOR ME.
25 THEY PAY MY UTILITIES. THEY PAY MY CREDIT CARD,
26 THEY PAY FOR MY DOGS' VET BILLS. I MEAN PCM MANAGES MY
27 LIFE. THEY ARE A MANAGEMENT COMPANY FOR ME PERSONALLY AND
28 FOR OTHER THINGS.

DEPT. LA 24 HONORABLE ROBERT L HESS, JUDGE
STEPHENM. GAGGERO,
-
PLAINTIFF,
-VS-
KNAPP, PETERSEN & CLARK; STEVEN RAY
GARCIA, STEPHEN HARRIS, ANDRE JARDINI
AND DOES 1 THROUGH 50, INCLUSIVE,
DEFENDANTS.
STATE OF CALIFORNIA
SS
COUNTY OF LOS ANGELES
)
)
)
)
)
) CASE NO.
) BC286925
)
)
)
)
)
)
I, CAROL L. CRAWLEY, OFFICIAL REPORTER OF THE
SUPERIOR COURT OF THE STATE OF CALIFORNIA, FOR THE COUNTY OF
LOS ANGELES, DO HEREBY CERTIFY THAT THE FOREGOING PAGES,
1-77, COMPRISE A FULL, TRUE, AND CORRECT TRANSCRIPT OF THE
PROCEEDINGS HELD ON AUGUST 2, 2007, IN DEPARTMENT 24 OF THE
LOS ANGELES COURT IN THE MATTER OF THE ABOVE-ENTITLED CAUSE.
DATED THIS 2ND DAY OF AUGUST, 2Q07.
(I~,~ t ,
UYJ~ ()(j)f-L , CSR #7518
=C~A=R=O~L-=C~RA~W~L~E=Y=-'-O~F=~~C=I=A~L~R=E==PORTER

EXHIBIT L
REPORTERS DAILY TRANSCRIPT
(Case No. BC286925)
Gaggero Cross Examination
Aug. 7, 2007 (39-41, 47-54)

1 SUPERIOR COURT OF THE STATE OF CALIFORNIA
2 FOR THE COUNTY OF LOS ANGELES
3 DEPARTMENT CE 24 HON. ROBERT L. HESS
4
6 PLAINTIFF, CASE NO. BC286925
7 VS.
8 KNAPP, PETERSEN & CLARKE, ET AL.,
9
10
11
12
13
14
15
16
17
18
19
20
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22
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24
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26
27
28
DEFENDANTS.
REPORTER'S DAILY TRANSCRIPT OF PROCEEDINGS
APPEARANCES:
TUESDAY, AUGUST 7, 2007
(SEE APPEARANCES PAGE)
CHRISTINE KWON-CHANG
OFFICIAL REPORTER
CSR NO. 12143, RPR

39
1 MR. CHATFIELD B!LLED ON YOUR LITIGATED MATTERS IN
2 2003, DO YOU, SIR?
3
4
A
Q
NO.
YOU HAVE NO IDEA WHAT PERCENTAGE OF TIME
5 MR. CHATFIELD SPENT ON YOUR LITIGATED MATTERS, AS
6 OPPOSED TO OTHER MATTERS, IN 2003, DO YOU, SIR?
7 MR. BOSTWICK: I'M GOING TO OBJECT.
8 IT'S VAGUE AND AMBIGUOUS AS TO THE WORD
9 "YOUR."
10 THE COt..TRT:. WHAT IS VAGUE AND AMBIGUOUS ABOUT
11 THAT, SIR?
12 MR. BOSTWICK: THERE MR. CHATFIELD WAS AN
13 IN-HOUSE COUNSEL WHO WORKED ON MATTERS THAT RELATED TO
14 MR. GAGGERO'S INTERESTS --
15
16
THE COURT: IN
MR. BOSTWICK: THROUGH HIS ESTATE PLANNING
17 ENTITIES, TRUSTS, AND FOUNDATION, IN ADDITION TO HIS
18 OWN/ SPECIFIC PERSONAL MATTERS, AND THAT'S WHY "YOUR"
19 CAN EITHER MEAN SINGULAR, HIS .OWN -- HIS OWN MATTER OR
20 MATTERS THAT RELATED TO THOSE OTHER ENTITIES,
21 FOUNDATIONS, OR TRUSTS.
22 AND THAT'S WHY IT'S VAGUE.
23
24
THE COURT: COUNSEL?
MR. MILLER: IT'S A TERMINOLOGY, A PHRASE WE'VE
25 BEEN USING FOR PROBABLY THE LAST NUMBER OF QUESTIONS.
26 THE COURT: WELL, YOU'VE BEEN TALKING ABOUT HIS
27 LITIGATED MATTERS.
28 ARE YOU BROADENING THIS TO -- TO INCLUDE

1 OTHER THINGS?
2 MR. MILLER: LET ME SEE IF I CAN CLARIFY.
3 Q BY MR. MILLER: IN 2002, OTHER THAN THE
4 MATTERS THAT WE JUST DISCUSSED AND THE CASES -- THE
5 LITIGATED CASES THAT ARE AT ISSUE IN THIS CASE, DID
6 MR. CHATFIELD DO ANY ESTATE PLANNING, TRUST, OR WORK
7 FOR YOUR FOUNDATION?
8 A HE LITIGATED CASES THAT HAD TO DO WITH
9 THOSE ENTITIES.
10 FOR EXAMPLE, BOUNTIFUL YOU'VE ASKED
11 ABOUT, THAT IS SULFER MOUNTAIN VERSUS BOUNTIFUL.
12 THAT'S DOES NOT HAVE MY NAME ANYWHERE.
13 I THINK IT WAS PACIFIC COAST MANAGEMENT
14 AND SULFER MOUNTAIN VERSUS BOUNTIFUL, SO THAT WAS ONE
15 OF, YOU KNOW, MY MATTERS, AS I UNDERSTAND YOUR
16 QUESTIONS, SO TOO OTHER MATTERS THAT HAD DIFFERENT
17 ENTITIES THAT WERE OWNED BY THE TRUST OR USED TO BE
18 OWNED BY ME AND PUT INTO THE TRUST AND THINGS LIKE
19 THAT.
20 Q OTHER THAN BOUNTIFUL OR SULFER MOUNTAIN,
21 AS WE'VE ALSO CALLED IT, DID MR. CHATFIELD WORK ON
22 OTHER LITIGATED MATTERS FOR YOU OR ANY ENTITIES THAT
23 YOU WERE AFFILIATED WITH IN 2002 OTHER THAN THOSE THAT
24 ARE AT ISSUE IN THIS CASE?
25
26
27
28
A
Q
YES.
AND TELL-ME THOSE MATTERS.
A I JUST CAN'T REMEMBER THEM WITHOUT --
FIVE YEARS AGO, I CAN'T REMEMBER.
40

41
--
1 Q O,KAY. SO WE KNOW THAT THERE WERE OTHER
2 THINGS THAT MR. CHATFIELD WAS DOING IN 2002 THAT
3 DIDN'T SOLVE THE LITIGATED MATTERS THAT ARE AT ISSUE
4 IN THIS CASE; CORRECT, SIR?
5 A THAT'S CORRECT.
6 THERE ARE OTHER MATTERS THAT HAD TO DO
7 WITH ME OR MY FAMILY OR TRUST OR SOMETHING LIKE THAT.
8 Q OKAY. AND CAN YOU GIVE US A BREAKDOWN
9 OR AN ALLOCATION OR PERCENTAGE OF THE TIME THAT
10 MR. CHATFIELD SPENT IN 2002 ON THE LITIGATED MATTERS
11 THAT ARE AT ISSUE IN THIS CASE VERSUS THE OTHER
12 LITIGATION THAT HE DID ON YOUR ESTATE OR PLANNING
13 OR -- ESTATE PLANNING, TRUSTS, OR FOUNDATION MATTERS?
14 A WELL, I DON'T THINK HE LITIGATED ESTATE
15 PLANNING, TRUST, OR FOUNDATION MATTERS, BUT HE WAS
16 INVOLVED WITH LITIGATION FOR ENTITIES THAT I WAS
17 INVOLVED WITH THAT JUST DIDN'T NECESSARILY HAVE MY
18 NAME ON THEM.
19 Q OKAY. OF THE TOTAL AMOUNT OF TIME THAT
20 MR. CHATFIELD SPENT ON YOUR MATTERS IN 2002, ARE YOU
21 ABLE TO GIVE US A PERCENTAGE, AN ESTIMATE, OR AN
22 ALLOCATION OF HOW MUCH OF HIS TOTAL TIME HE SPENT ON
23 THE LITIGATED MATTERS THAT ARE AT ISSUE IN THIS CASE
24 VERSUS LITIGATION OR NONLITIGATED MATTERS INVOLVING
25 YOUR ESTATES,' YOUR ESTATE PLANNING, YOUR TRUSTS, OR
26 YOUR FOUNDATIONS OR ANYTHING ELSE?
27 MR. BOSTWICK: YOUR HONOR, IT'S VAGUE,
28 AMBIGUOUS.

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Q WITH ALL THE SAME EQUIPMENT THAT YOU
TOOK THE TIME TO DESCRIBE FOR US LAST WEEK THAT YOU
HAD PURCHASED OR LEASED IN SOME WAY TO START UP THE
IN-HOUSE PRACTICE; CORRECT?
A TO RESTART IT, YES.
THE COURT: AND THIS IS P.C.M. 'S IN-HOUSE,
LEGAL; IS THAT CORRECT?
THE WITNESS: NO.
IT'S MINE AND P.C.M. 'S IN-HOUSE LEGAL.
P.C.M. ONLY MANAGES MY ESTATE, ENTITIES, AND ASSETS.
THE COURT: OKAY.
Q BY MR. MILLER: NOW, YOU WEREN'T ABLE
TO RECALL, MR. GAGGERO, WHAT CASES -- WHAT LITIGATED
MATTERS THAT ARE AT ISSUE IN THIS CASE THAT WERE STILL
PENDING IN 2003, BUT DO YOU HAVE AN ESTIMATE OF TIME
OF MR. CHATFIELD'S TIME THAT HE SPENT IN 2003 WORKING
ON THE LITIGATED MATTERS THAT ARE AT ISSUE IN THIS
CASE VERSUS EVERYTHING ELSE THAT HE WAS DOING IN 2003?
A
Q
SORRY. YOU LOST ME ON THAT QUESTION.
SURE.
21 ARE YOU ABLE TO GIVE US AN ESTIMATE OF
22 HOW MUCH TIME MR. CHATFIELD SPENT IN 2003 WORKING ON
23 THE LITIGATED MATTERS THAT ARE AT ISSUE IN THIS CASE,
24 AS OPPOSED TO EVERYTHING ELSE HE WAS DOING IN 2003 FOR
25 YOU OR YOUR ENTITIES?
26 A NO. I CAN'T GIVE YOU A PERCENTAGE ON
27 THAT.
28 Q AND THE ARRANGEMENT THAT MR. CHATFIELD
47

1 HAD IN 2002, WAS THE SAME ARRANGEMENT HE HAD IN 2003?
2 IN OTHER WORDS, HE WAS IN-HOUSE COUNSEL
3 FOR YOU OR P.C.M. AND COMPENSATED IN SOME MANNER THAT
4 YOU CAN'T RECALL, THAT RELATIONSHIP STILL EXISTED IN
5 2003; CORRECT, SIR?
6 A THE SAME RELATIONSHI~ -- THE SAME
7 RELATIONSHIP, AS FAR AS IN-HOUSE COUNSEL, EXISTED IN
8 2002 AND 2003.
9
10
11
12
13
Q
....on.
Q
A
Q
OKAY. AND AFTERWARDS; RIGHT?
YES.
OKAY. ALL THE WAY UP UNTIL TODAY?
CORRECT.
OKAY. SO ALL THIS EQUIPMENT THAT YOU
14 TOLD US ABOUT LAST WEEK, FAXES AND COPY MACHINES AND
15 WESTLAW AND EVERYTHING THAT YOU HAD TO BUY OR P.C.M.
16 HAD TO BUY TO START UP THIS LAW PRACTICE CONTINUED TO
17 BE IN USE AFTER 2003; CORRECT, SIR?
18 A
19
1
NOT NECESSARILY, NO.
THINGS -- PRINTERS DON'T LAST VERY LONG.
20 FAX MACHINES DON'T LAST VERY LONG. NEW EQUIPMENT
21 COMES OUT ON THE MARKET ALL THE TIME. SCANNERS ARE
22 SOMETHING NEW. WE GOT RID OF LEXIS AND GOT DISKS, AND
23 WE DECIDED TO GO TO WESTLAW.
24 THINGS CHANGE AND -- LAW BOOKS GO OUT OF
25 DATE, AND YOU NEED SOMETHING TO SUPPLEMENT THEM ALL
26 THE TIME. STAFFING NEEDS CHANGE. ALL KINDS OF THINGS
27 CHANGE, AS YOU KNOW.
28 Q BUT YOU CAN'T PROVIDE US TODAY ANY MORE
48

1 SPECIFIC TESTIMONY AS TO WHIC& OF THOSE ITEMS WERE
2 USED IN 2003, AS OPPOSED TO 2004; CORRECT, SIR?
3 A I DON'T REMEMBER. NO.
4 I'D HAVE TO -- NO. I DON'T KNOW.
5 Q AND MR. CHATFIELD, ALTHOUGH YOU CAN'T
6 RECALL THE FORMULA OR THE SPECIFIC DOLLAR AMOUNTS, HE
7 WAS NOT PAID IN ANY OTHER WAY OTHER THAN MONEY;
8 CORRECT?
9 A AND OVERHEAD.
10 WAS HE PAID STOCK?
11 A NO.
12 Q OKAY. AND HE WASN'T GIVEN ANY KIND OF
)
13 OWNERSHIP INTEREST IN P.C.M. OR ANY OF YOUR AFFILIATED
14 ENTITIES AS PART OF HIS COMPENSATION PACKAGE?
.15 A HE WAS NOT .
16 Q WASN'T GIVEN A CAR OR CORVETTE OR
17 SOMETHING LIKE THAT, AS PART OF HIS COMPENSATION?
18
19
20- YOU?
21
22
23
24
25
A NO.
Q YOU GAVE MR. BEZEK A CORVETTE, DIDN'T
MR. BOSTWICK: OBJECTION, YOUR HONOR.
IT'S NOT RELEVANT.
THE COURT: I DON'T KNOW IF IT IS OR NOT.
MR. BOSTWICK: WELL, IT LACKS FOUNDATION, THEN.
THE WITNESS: I DID NOT GIVE HIM A CORVETTE. I
26 PAID HIM WITH A CORVETTE.
27 Q BY MR. MILLER: OKAY. AT SOME POINT IN
28 TIME, MR. BEZEK WAS PAID FOR THE LEGAL SERVICES HE
49

1 RENDERED BY YOU GIVING HIM A CORVETTE AUTOMOBILE;
2 CORRECT, SIR?
3 A THAT'S CORRECT, AN ANTIQUE ONE HE LIKED
4 VERY MUCH.
5 Q YOU DIDN'T DO THE SAME FOR MR. CHATFIELD
6 AT ANY TIME, DID YOU?
7 A NO.
8 MR. MILLER: YOUR HONOR, THIS IS PROBABLY A
9 GOOD TIME TO TAKE A FEW MINUTES.
10 THE COURT: WE'LL STAND IN RECESS UNTIL 20
11 AFTER, PLEASE.
12
13
14
15
16
(AFTERNOON RECESS.)
THE COURT: LET'S BEGIN AGAIN.
MR. MILLER: THANK YOU, YOUR HONOR.
50
Q

BY MR. MILLER: MR. GAGGERO, BEFORE WE(/17
18 MOVE OFF THIS TOPIC ENTIRELY, LET ME MENTION THAT IN
19 RESPONSE TO YOUR EARLIER QUESTIONS THERE WERE A NUMBER
20 OF OTHER ENTITIES AND OTHER LEGAL WORK THAT
21 MR. CHATFIELD WAS DOING IN 2002, 2003.
22 WHAT ARE THE NAMES OF THE FOUNDATIONS --
23 FOUNDATION OR FOUNDATIONS THAT MR. CHATFIELD WAS DOING
24 LEGAL WORK FOR IN 2002, 2003?
25 A HE DIDN'T DO LEGAL WORK FOR A FOUNDATION
26 IN 2002 OR 2003.
27 Q OKAY.
28 A HE DID LEGAL WORK FOR ENTITIES.

1 Q WHAT ABOUT THE FAMILY TRUST THAT
2 MR. CHATFIELD WAS DOING WORK FOR IN 2002 OR 2003?
3 A I TOLD YOU THAT ONE THE OTHER DAY. IT'S
4 THE ARENZANO, A-R-E-N-Z-A-N-O, TRUST.
"5 Q AND DO YOU HAVE SOME AFFILIATION WITH
6 THE -- STRIKE THAT.
7 DID YOU IN 2002, 2003 HAVE SOME
8 AFFILIATION WITH THE ARENZANO FAMILY TRUST?I
9 A YES.

10 Q AND WHAT WAS YOUR -- THE NATURE OF YOUR
11 AFFILIATION, SIR?
12 A I'M THE TRUSTOR.
13 Q AND ARE YOU ALSO A BENEFICIARY OF THAT
14 TRUST?
15 A I AM IN A CLASS OF BENEFICIARIES.
16 Q AND WHAT DOES THE ARENZANO, FAMILY HOLD
17 IN TRUST?
18 A ASSETS.
19 Q COMPRISED OF?
20 A MANY THINGS.
21 Q LIKE WHAT?
22 A REAL PROPERTY, DEBT INSTRUMENTS, STOCKS,
23 LIVESTOCK, COMPANY OWNERSHIPS.
24
25
26
Q
A
Q
ANYTHING ELSE?
PERHAPS.
I WANT YOU TO NAME FOR ME ALL THE ASSETS
27 THAT WERE PART OF THE ARENZANO FAMILY TRUST DURING
28 THAT TIME PERIOD.
51

1 MR. BOSTWICK: YOUR HONOR, I'M GOING TO OBJECT
2 ON GROUNDS OF RELEVANCE AND INVASION OF PRIVACY.
THE COURT: RELEVANCE, COUNSEL?3
4 MR. MILLER: GOES TO A COUPLE OF THINGS, YOUR
5 HONOR.
6 FIRST OF ALL, THERE'S BEEN TESTIMONY
7 THAT MR. CHATFIELD DID WORK IN THIS TIME PERIOD FOR
8 THE FAMILY TRUST, SO I'M CERTAINLY ENTITLED TO PROBE
9 ON THAT BASIS.
10 THESE ARE ALSO MATTERS WHICH MAY GO TO
11 MR. GAGGERO'S LEVEL OF! SOPHISTICATION, HIS MANAGEMENT
12 OF OTHER ASSETS, HIS UNDERSTANDING OF LEGAL DOCUMENTS,
13 ALL OF WHICH ARE PLAINLY AT ISSUE IN THIS CASE.
14 THE COURT: WELL, HE TESTIFIED A MOMENT AGO
,
15 THAT HE I.S THE TRUSTOR, WHICH I ASSUME -- PERHAPS --
16 OKAY. PERHAPS I MISINTERPRETED THIS, BUT I THOUGHT BY
17 TRUSTOR HE MEANT THAT HE WAS THE SETTLOR OF THE TRUST.
18 HE DIDN'T SAY -- I -- I DIDN'T HEAR HIM
19 SAY HE WAS A TRUSTEE OF THE TRUST IN THIS TIME PERIOD,
20 WHICH MIGHT GO TO MANAGEMENT OF THE ASSETS, BUT I
21 HEARD HIM SAY TRUSTOR AND BENEFICIARY.
22 AND SO UNLESS YOU GET HIM MANAGING THIS
23 SOMEHOW, I'M NOT SURE THAT IT'S -- THAT THE DETAILS OF
24 WHAT IS IN THERE GOES TO THE ISSUES YOU POSIT.
25 YOU CAN INQUIRE FURTHER TO LAY SOME
26 FOUNDATION.
27 MR. MILLER: LET ME TRY TO LAY SOME FOUNDATION.
28 THANK YOU.
52

1 Q BY MR. MILLER: WERE YOU A TRUSTEE OF
2 THE ARENZANO FAMILY TRUST IN THAT TIME PERIOD?
3 A NO.
4 Q DID YOU PLAY ANY ROLE IN MANAGING THE
5 ASSETS THAT WERE PART OF THE -- OR WERE HELD BY THE
6 ARENZANO TRUST IN THAT TIME PERIOD?
7 A SOME OF THEM.
8 Q OKAY. SOME OF THEM, DID YOU HAVE A
9 PRIOR OWNERSHIP INTEREST IN AND THEN THEY WERE
10 TRANSFERRED TO THE TRUST IN SOME FORM OR FASHION?
11
12
A
Q
IN SOME FORM OR FASHION.
IN OTHER WORDS, THERE WAS REAL PROPERTY.
13 YOU, MEANING STEPHEN GAGGERO, HAD AN
14 OWNERSHIP INTEREST WHICH WAS SUBSEQUENTLY TRANSFERRED
15 TO THE TRUST?
16 A SUBSEQUENTLY TRANSFERRED TO AN ENTITY
17 THAT WAS OWNED BY A TRUST.
18 Q OKAY. WHAT IS THE NAME OF THAT ENTITY?
19 A OH, THERE'S MANY. I DON'T RECALL THEM
20 ALL.
21 Q WHO ARE THE TRUSTEES OF THE ARENZANO
22
23
24
25
26
27
28
FAMILY TRUST IN 2002, 2003?
A REINHARDT (PHONETIC), PROSH (PHONETIC),
AND JOSEPH PRASKE.
Q THAT'S THE SAME MR. PRASKE WE DISCUSSED
LAST WEEK WHO WAS INVOLVED IN P.C.M.?
A CORRECT.
Q AND HE IS AN ATTORNEY?
53

1
2
3 2003?
4
A
Q
A
54
THAT'S CORRECT.
WERE THEY THE ONLY TWO TRUSTEES IN 2002,
I THINK SO.
5 Q AND WHAT KIND OF LEGAL WORK DID
6
7
8
MR. CHATFIELD DO FOR THE ARENZANO FAMILY TRUST IN THE
2002, 2003 TIME FRAME?
A I DON'T THINK HE DID ANY FOR THEM, BUT I
9 CAN'T BE CERTAIN.
10 I DON'T THINK HE DID ANY FOR rHEM;
11 ACTUALLY.
12 Q DID MR. CHATFIELD DO ANY WORK WITH
13 RESPECT TO ANY OF THE ASSETS THAT WERE HELD IN THE
14 ARENZANO FAMILY TRUST IN THAT SAME TIME FRAME?
15
16
A
Q
YES.
THAT'S THE TRANSACTIONAL WORK THAT HE
17 PERFORMED, REAL ESTATE TRANSACTIONAL WORK?
18 A I DON'T KNOW WITHOUT LOOKING AT WHAT HE
19 DID IN 2002, IF HE DID ANY TRANSACTIONAL WORK.
20 AS I INDICATED, HE DID VERY LITTLE
21 TRANSACTIONAL WORK. HE MAY HAVE LOOKED AT A LEASE FOR
22 US OR SOMETHING, MAYBE LOOKED AT A LEASE AND MODIFIED
23 IT OR SOME OTHER CONTRACT, I'M NOT SURE, BUT VERY
24 LITTLE.
25 Q HAVE WE NOW TALKED ABOUT ALL THE ASSETS
26 THAT -- THAT WERE OWNED OR THAT WERE A PART OF THE
27 ARENZANO FAMILY TRUST IN 2002, 2003?
28 MR. BOSTWICK: YOUR HONOR, I'M GOING TO RENEW

1 THE OBJECTION.
2 IT'S AN INVASION OF PRIVACY, AND IT'S
3 NOT RELEVANT TO ANYTHING THAT HAS ANY ISSUE EXTENT IN
4 THIS CASE.
5 THE COURT: AT THIS POINT, SIR, I'M GOING TO
6 SUSTAIN IT ON THE COURT'S MOTION, 352.
7 Q BY MR. MILLER: ANY OTHER ENTITIES
8 MR. MILLER: THANK YOU, YOUR HONOR.
9 Q BY MR. MILLER: ANY OTHER ENTITIES IN
10 2002 OR 2003 THAT MR. CHATFIELD DID WORK FOR OTHER
11 THAN WHAT WE'VE ALREADY DISCUSSED? YOU YOURSELF
12 PERSONALLY? P.C.M.? ARENZANO FAMILY TRUST? AVALON?
13 A I DON'T KNOW ,THAT HE DID ANY WORK FOR
14 THE ARENZANO FAMILY TRUST. HE WORKED FOR AVALON. I
15 DON'T KNOW THAT HE DID ANY WORK FOR P.C.M. HE DID
16 WORK FOR FOR ME AND THE OTHER ENTITIES.
17
18
19
20
21
22
23
24
25
26
Q ON THE TRANSACTIONAL WORK THAT HE DID,
ALBEIT DE MINIMUS, WHO WAS HIS CLIENT?
A I DON'T KNOW.
I'D HAVE TO LOOK AT THE TRANSACTIONAL
WORK, BUT IT WOULD HAVE BEEN ME OR PACIFIC COAST
MANAGEMENT.
I'D HAVE TO LOOK AT THE EXACT THING YOU
ARE TALKING ABOUT, FRANKLY.
Q OKAY. ANY OTHER ENTITY WE HAVEN'T
DISCUSSED THAT MR. CHATFIELD DID SOME LEGAL WORK FOR
27 . IN THAT TIME FRAME?
28 A NOT THAT I CAN RECALL.
55

""}" 1 SUPERIOR COURT OF THE STATE OF CALIFORNIA
2 FOR THE COUNTY OF LOS ANGELES
3 DEPARTMENT CE 24 HON. ROBERT L. HESS
4
5 STEPHEN M. GAGGERO, )
)
6 PLAINTIFF,) CASE NO. BC286925
)
7 VS. )
)
8 KNAPP, PETERSEN & CLARKE, ET AL., ) REPORTER'S
) CERTIFICATE
9 DEFENDANTS.)
----------------------------------~)10
11
12
13 I, CHRISTINE KWON-CHANG, OFFICIAL REPORTER
14 OF THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, FOR
15 THE COUNTY OF LOS ANGELES, DO HEREBY CERTIFY THAT I
16 DID CORRECTLY REPORT THE PROCEEDINGS CONTAINED HEREIN
17 AND THAT THE FOREGOING PAGES COMPRISE A FULL, TRUE AND
18 CORRECT TRANSCRIPT OF- THE PROCEEDINGS TAKEN IN THE
19 'MATTER OF THE ABOVE-ENTITLED CAUSE ON AUGUST 7, 2007.
20
21
22
23
24
25
26
27
28
DATED THIS 8TH DAY OF AUGUST, 2007.
CHRISTINE KWON-CHANG,
OFFICIAL REPORTER
./

EXHIBIT M
DECLARATIONS OF STEPHEN GAGGERO AND JOSEPH
PRASKE IN SUPPORT OF MOTION FOR RECONSIDERATION
Gaggero v. Yura, Los Angeles Superior Court
(Case No. BC239810)

r-;-- ----- - -
KNAPP,
PETERSEN
& CLARKE
1 Andre E. Jardini (State Bar No. 71335) "
Lynn M. Johnson, Esq. (State Bar No. 137399)
2 KNAPP, PETERSEN & CLARKE
A Professional Corporation .
3 500 NorthBrand Boulevard
Twentieth Floor
4 Glendale, California 91203-1904
(818) 547-5000
5 Facsimile: (818) 547-5329 .
6 Attorneys for Plaintiff
STEPHEN M. GAGGERO .
7
o
SFP ?n2001
8
9
10
. FOR THE COUNTY OF LOS ANGELES
12 Plaintiff,
13 v.
14 ANNA MARlE YURA, in her capacity as
Trustee of the Frederick Earl Harris II
15 1995 Trust, and Does 1 through 15,
16
17
18
19
20
21
Defendants.
NO. Be 239810
[Assigned for all purposes to Edward A.
Ferns, Judge - Dept. 69] .
Date:
Time:
Dept.: .
Date Action Filed:
Trial Date:
10117/01
8:30 a.m.
69
11106/00
11105/01
NOTICE OF MOTION AND MOTION
FOR RECONSIDERATION;
MEMORANDUM OF POINTS AND
AUTHORITIES; DECLARATION OF
ANDRE JARDINI; DECLARATION OF
STEPHEN GAGGERO; DECLARATION
OF JOSEPH PRASKE; AND
DECLARATION OF STEPHEN M.
GAGGERO
22 PLEASE TAKE NOTICE that on October 17,2001 at 8:30 ~.m. or as soon·
23 thereafter as the matter may he heard in Department 69 ofthe above-entitled Couri, located
24 at 111 N. Hill St. Los Angeles, California, plaintiff Stephen M. Gaggero will, and hereby
25 does move this court for a motion for reconsideration ofthe order made by Judge Edward
26 Ferns on September 10,2001 granting defendant, Anna Marie Yura's motion for summary
27 ·udgment or in the alternative summary adjudication of issues.
28 IIII
1
"..j;'
K:0545700009PLD156_It,MJplPVG.wpd NOTICE OF MOTIONAND MOTION FOR RECONSIDERATION

I .
!
--:.:..' -~" ~
( .
0"1
.1
o.
KNAPP,
PETERSEN
& CLARKE
1 Andre E. Jardini (State Bar No. 71335) .
A Professional Corporation
3 500 North Brand Boulevard
Twentieth Floor
(818) 547-5000
5 Facsi:n1ile: (818) 547-5329
STEPHEN M. GAGGERO
7
ORIGI l r F!'1J" E~ ""!1J.d
8
9
10
12 Plaintiff,
13 v.
14 ANNA MARIEYURA, in her capacity as
Trustee ofthe Frederick Earl Harris II
15 1995 Trust, and Does 1 through 15,
16
17
18
19
20
21
Defendants~
NO. BC 239810
[Assigned for all purposes to Edward A..
Ferns, Judge - Dept. 69] . "
Date:
Time:
Dept.:
Date Action Filed:
Trial Date:
10/17/01
8:30 a.m..
69
11106100
11105101 .
FOR RECONSIDERATION;
ANDRE JARDIN!; DECLARATION OF
GAGGERO
22 PLEASE TAKE NOTICE that on October 17,2001 at 8:30 a.m. or as soon
23 thereafter as the matter may be heard in Department 69 ofthe above-entitled Court, located
24 at 111 N. Hill St. Los Angeles, California, plaintiff Stephen M. Gaggero will, and hereby.
26 Ferns on September 10, 2001 granting defendant, Anna Marie Yura's motion for summary
27 'udgment or in the alternative summary adjudication of issues.
28 1II1
1
K:0545700009PLD156_LMJpIPVG.wpd . NOTICE OFMOTIONAND MOTION FOR RECONSIDERATION

!
:-.. ' .. ~
.;
":
KNAPP, .
PETERSEN
& CLARKE
1 Andre E. Jardini (State Bar No. 71335)
A Professional Corporation
3 500 North Brand Boulevard
Twentieth Floor
(818) 547-5000
5 Facsimile: (818) 547-5329
STEPHEN M. GAGGERO
7
8
9
10
.. 11 STEPHEN M. GAGGERO,
12 Plaintiff,
13 v.
14 ANNA MARIE YURA, in her capacity as
Trustee ofthe Frederick Earl Harris II .
15 1995Trust, and Does i through 15,
16
17
18
19
20
21
Defendants.
NO. BC 239810
. [Assigned for all purposes to Edward A.
Ferns, Judge - Dept. 69]
Date:
Time:
Dept.:
Date Action Filed:
Trial Date:
10117/01 .
8:30 a.m.
69
11106/00
11105101
FOR RECONSIDERATION; ,
ANDRE JARDINI; DECLARATION OF
GAGGERO
22 PLEASE TAKE NOTICE that on October 17,2001 at 8:30 a.m. or as soon
23 thereafter as the matter may be heard in Department 69 ofthe above-entitled Court, located
24 at 111 N. Hill St. Los Angeles, California, plaintiff Stephen M. Gaggero will, and hereby
26 Ferns on September 10, 2001 granting defendant, Anna Marie Yura's motion for summary
27 'udgment or in the alternative summary adjudication of issiIes.
28 IIII
1
K:0545700009PLD156 LMJpIPVG.wod NOTICE OF MOTION AND MOTION FOR RECONSIDERA TJON

~:~! ;,
.-'
KNAPP,
PETERSEN
& CLARKE
1 This motion is made upon the grounds that plaintiffhas different facts, as set
2 forth more clearly in the declaration ofAndre Jardini upon which he can demonstrate that a
3 triable issue offact exists as to whether he is ready, willing and able to purchase the
4 property that is the subject ofthe instant property.
5 This motion is based on this notice ofmotion and motion, the memorandum of
. .
6 points and authorities attached hereto, all records, file~ and pleading in this matter, the
7 declaration ofAndre Jardini, the declaration of Stephen Gaggero, the declaration ofJoseph
8 Praske, the declaration of Stephen M. Gaggero, and such other oral and documentary
9 evidence as may be presented at the hearing ofthis motion..
10 DATED: September 20 ,2001 KNAPP, PETERSEN & CLARKE·
11
12
13 BY:__~~~~~c--=-:=i=-=--------
'14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
2
K:0545700009PLD156 LMJolPVG,WD<i NOTICE OF MOTIONAND MOTIONFOR RECONSTDp.RATTmJ

KNAPP,
PETERSEN
& CLARKE
1 DECLARATION OF JOSEPH J. PRASKE
2 I, JOSEPH J. PRASKE declare:
3 1. I am an attorney licensed to practice in the State ofCalifornia. I represent
4 Stephen M. Gaggero with regard to estate planning matters. The facts set forth herein are
5 true ofmy own personal knowledge, and if called upon to testify thereto, I could and would
6 competently do, so under oath.
7 2. I am trustee over a portion ofMr. Gaggero's personal estate. As trUstee, I
. .
8 have agreed to authorize funds from Mr. Gaggero's personal estate in the amount of
9 $1:100,000 for purchase ofthe real property located at 938 Palisades Beach Road. The
10 portion ofMr. Gaggero's estate over which I am trustee has well in excess of$l,lOO,OOO
11 readily available.
12 I declare under penalty ofperjury under the laws ofthe State of California that the
13 foregoing is true and correct.
14 Executed on September~ 2ooi, at Santa Monica, California.
15
16
17
18
19
20
21
22
. 23
24
25
26
27
28
17
K:OS4S'NJ0009J>LDJSl_AIDplMM.wpd

DECLARATION OF STEPHEN M. GAGGERO
2 I, STEPHEN M. GAGGERO declares:
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
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1. I am the plaintiffin the above-entitled action. I make this declaration in
support of amotion for reconsideration concerning the court's granting of a motion for
summaryjudgment in favor of defendant Anna Marie Yura. The facts set forth herein are
true ofmy own personal knowledge, and if called upon to testify thereto, I could and would
competently do so under oath.
2. I have reviewed the court's minute order of September 10, 2001, concerning
the granting of defendant's motion for summaryjudgment. It is clear thatdefendant has
misapprehended the testimonY,I gave in opposition to the motion in my declaration of
August 13,2001. This misapprehension was adopted by the court in its minute order.
3. I stated in my declaration ofAugust 13,2001, as follows: "From the time the
escrow was opened on the 938 property until the present, I stand ready, willing and able to
perfonn on the sales· agreement and have the funds available to do·so." (Emphasis added.)
4. ., By this plain statement, I meant that I personally have the funds available to
close escrow on the 938 property.
5. The a.bove language was ignored by defendant in its reply to the opposition
to the summary judgment motion. The court's minute order of September 10,2001, does
. .
not cite to or discuss this language. I believe that defendant has caused the court to
misinterpret my testimony. Defendant has argued, and the court has adopted, that I would
require "third party loans" to close the escrow.
6. The thought thatthere would be any difficulty whatsoever in funding the
escrow concerning this purchase is absurd. No requirements were made in any ofthe
extensive purchase and sale documents by Mr. Harris concerning any requirement
regarding my financial qualifications, because Mr. Harris and his wife were well aware of
my financial ability and my family'S financial ability, as Mr. And Mrs. Harris knew my
family very well even before the purchase agreement date ofAugust 10, 1998. In fact, my .
mother'and father attended the Harris's intimate wedding ceremony. Nowhere in the
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extensive purchase and sale documents was there any loan contingency, simply because I
did not then, nor do I now, need a loan to the purchase the property.
7. Defendant Anna Marie Yura testified at her deposition on August 29,2001,
that the·property had appreciated by $500,000 from the time I entered into escrow
concerning its purchase on August 10, 1998 (over three years ago). The purchase price
was $1,150,000. $50,000 was placed into escrow as an initial deposit to purchase the
property. Based on Ms. Yura's testimony, the property has a present value of at least
$1,650,000. A 100 percent loan for the purchase price ofthe property ($1,150,000)would
have a loan to value (ilLTV") ratio of a mere 66 percent. Almost all institutional lenders
have a "non-qualifier", "easy-qualifier", or "no-documentation" loan program for LTV's of
75 percent or less. These programs are designed to make purchase money mortgage loans,
based solely on the equity in the property. They are equityloans, and have very little to do
with the person or entity actually purchasing the property. It is simply preposterous to
conclude that there would be any difficulty whatsoever in obtaining a conventional
mortgage to purchase the property when there is a built in thirty three percent down
payment.
8. Nonetheless, so there is no mistake, I personally h~tVe the funds available to
close escrow, without the necessity of a mortgage or a "third pa.rty loan."
9. In addition, the Gaggero family trust has assets well in excess ofthe amount. .
necessary to close the escrow concerning 938 Pacific Coast Highway which are·committed
and available for this purchase·. The Gaggero family trust is managed and controlled by my
parents for the benefit ofthe trust beneficiaries, ofwhich I am one. Monies are readily
available through the Gaggero family trust for purchase of a property worth $1,650,000, for
a payment of $1,100,000.
10. In addition, I manage certain entities which have sufficient assets to close
the escrow on the 938 property. These entities are ready, willing and able to commit and
have committed the funds necessary to close escrow on the 938 property which is worth at
least $1,650,000, by payment of$1,100,000 into escrow.
19

18/09 '01 11:28 FAX 0665953083 FeD LE ANFDRE
i "
r .. ~8/.9.') 'OJ. J.0;2J. FAX +39 0647424~O~J._ _ _~.ME~R~J~D~lE:N~.ED~EN:::...:R:.:.:O:::MA~_ _ _ _ _ __
~002
~002
~!
FROM KNAPP, PE'~ER8EN, &; CLARKE·
(MON) 9.17' 01 16:4B/8T. 16:47/NO. 486452669~ P 2
i
t'.
~
l 11. h, additio~ myparents Stephen Gagg~ and Billie Sue Gaggcro FC
f' independently fin.a:nc:ially able to fund the purchase offue 938 propertybypaym~t of
,: $1.100,000 and on lllybehalf, have committed to do so.
t 12. LaJrt1y~ the trustee and attorney ormypersonal estate~ Joseph 1. ~ke, has .
1- a.greed t() autb.om~ the necel)sary funds ($1..1007 000) :from my pe:rsonsl estate to ~hase
t ·the 9381~operty_ My estate has well in excess of$1,100,000 at its disposal.
t 13. In shott, the C'.ourt has been-cm.:falrly persuaded by defendant to ign.,(!e my
~: 1:estimony.thatI have the funds personally available to me to close the escrow. ev~n
. J: . :
~: "Nithout 21 customary ~nortgage loan. ~urthert- it is readily apparon~ basoo on the 1
10.
}IF1·
.• 1;-
· . 12)
drcutnst3l1cos.and my test:im.ony, that there is noreal or material issue concerni:ng;my
readiness, vvillitl.gnes~l and ability to close the escrow.
14. During th~ pendency of this matter,. personaUyand through my.couhseI~ r
.' 11t: have offered repeatedly to close escrow on as short as seven days notice ifdefen~ts
· :14 t would agree to tht~ CC&R!s which I bad negotiated with Fred Hanis. Then~ has n~verbeen
1 J . r
· IS , ~tny <luest~ol:l- ~911t ~{ r~tte$"w:i1.1ingn-es~d ahilit:"J'..tO~close eSCJ:'oV'Y."
-' - ,.! .. - - - - ' .
16
1 15~ I mcot:l?oratc herein my testimony in its entirety given by way of d~laration
17 (In August 13,. 2D{H. audparticularlyparagraph 23 in which I state~ "•.. I stand ~dy,1 ' . i'
18 Ii 'willing 8l1ld able t(;l perfol'm on the sales agreement and have the :funds available to/do so.II
. ~. : .
19 I. C5m.phasil!> added.)
20 1
I declare Ul1lder penalty ofpeljury undet: the laws of the State ofCalifornia ~t tho
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25 '
26' Ij'
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27 !
,.
~ .
28: i.
U·!)~.
1:~ .
fi>regoing is true aJtld correct..
'.EJt,;:cu.ted 011 Septemb<:t' ~ 2001.. at Rome..
r
20
. 18/09 '01 11!19 NR. TXjRX3493 P.002
•

EXHIBIT N
COURT TRANSCRIPT FOR
MOTION TO COMPEL
(Case No. BC286925)

o
1 LOS ANGELES, CALIFORNIA; WEDNESDAY, OCTOBER 5, 2011
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DEPARTMENT 24 HONORABLE ROBERT L. HESS, JUDGE
12:00 P.M.
APPEARANCES: (AS NOTED ON TITLE PAGE)
(CAROL L. CRAWLEY, OFFICIAL REPORTER.)
THE COURT: GAGGERO, PLEASE.
11 MR. CHATFIELD: DAVID CHATFIELD ON BEHALF OF THE
12 PLAINTIFF.
13 MR. KHAJAVI-NOURI: GOOD MORNING, KAMRAN
14 KHAJAVI-NOURI ON BEHALF OF THE DEFENDANTS AND THE
15 MILLER LAW FIRM.
. 16 THE COURT: THE COURT ISSUED AN ORDER YESTERDAY
17 STRIKING I THINK IT WAS YESTERDAY, WAS THE ORDER
18 YESTERDAY.
19 THE CLERK: 8:45.
20 STRIKING THE 170.1, SO WE ARE HERE ON A
1
- - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - _ . _ - - - - - - - - - - - - _ . _ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
21 MOTION TO COMPEL FURTHER RESPONSES TO
o 22 INTERROGATORIES, AND THESE ARE POST JUDGMENT
23 - --- INTERROGATORIES;
--.------- ------ -·----2-4---- --- -- - --l---H-A-V-E--A-GOlJP-b-E-- O'F--0 8E-S-1'I-0NS-;- --- - ---------------
25 PLAINTIFF, IT APPEARS TO ME THAT QUESTIONS,
26 1, 2, 3, 8, AND 9 ARE ALL APPROPRIATE FOR POST
27 JUDGMENT INQUIRY.
-- - -- - - -------- - - - - - - - - - - - - .... ----------------------
000053

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1 HAVE THERE BEEN ANY SUPPLEMENTAL RESPONSES
2 SERVED?
3 MR. CHATFIELD: NO, THERE HAVEN'T, YOUR HONOR.
4 WE ATTEMPTED TO ENGAGE IN A MEET AND CONFER
5 ON THIS.
6 IT WAS JUST RECENTLY THAT WE HAVE LEARNED
7 THAT THE DEFENDANTS ALREADY HAVE THE ADDRESSES AND
8 THE INFORMATION THAT THEY ARE SEEKING NUMBER ONE.
9 THE COURT: WELL, BUT JUST A MINUTE.
10 YOU MADE A SERIES OF OBJECTIONS BASED ON
11 PRI VACY TO 1 AND 2.
12 AND YOU REFUSED TO ANSWER NUMBER THREE
13 BASICALLY, AND YOUR ANSWER TO NUMBER EIGHT WAS
14 ESSENTIALLY NON-RESPONSIVE BECAUSE YOU CLAIMED HE HAO
15 NO ATTACHABLE INTEREST AS A BENEFICIARY WHICH WASN'T
16 THE QUESTION.
17 AND NUMaER NINE, YOU KNOW, SEEMS TO ME TO
18 ALSO BE APPROPRIATE.
19 AND I DON'T, YOU KNOW, WHAT I SEE IN THE MEgT
20 AND CONFER IS I SEE THAT YOUR RESPONSE TO THEIR ME~___
21 AND CONFER REQUEST WHICH IS VERY AGGRESSIVE, IT IS A
22 DIATRIBE AGAINST THE KNAPP PETERSEN FIRM, RELATING TO
2:3 --THEIR HANDLING OF MATTERS AS 1'6 WHICH INCLUDING T.HOSE
__ ~A_ . __WliLCH--WER-E--·T~R"-I·E-D-B-ER-E---AN-B--YOlJ-1JO-ST :: ...
25 AND THAT LOSS WAS AFFIRMED. I DON'T SEE THAT
26 YOUR RESPONSES LEAVE ANYTHING OPEN.
27 YOU BASICALLY SAID NO.
28 YOU SAI D l:LKCK....N'O_~A.G-T-UA-I.-I.¥--Y-eB~S-A-I--B-:f--'I'~-Ml-GHT-- -~-------
000054

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1 BE FAIR TO SAY YOU SAID IT STRONGER THAN THAT, BUT
2 YOU SAID HECK NO WE ARE NOT GOING TO GIVE TO IT YOU.
3 SO, I DON'T SEE WHAT YOUR RESPONSE TO THEIR
4 MEET AND CONFER LETTER LEAVES OPEN.
5 LET'S TAKE THE PARAGRAPH THAT RELATES TO
6 INTERROGATORY NUMBER ONE, INQUIRY ABOUT MR. GAGGERO
7 INTERROGATORY NUMBER ONE, ASKS FOR WHAT IS YOUR
o 8 CURRENT RESIDENCE ADDRESS.
9 AND YOUR RESPONSE WAS INQUIRY ABOUT
10 MR. GAGGERO'S PRIVATE RESIDENCE INTERROGATORY NUMBER
11 ONE IS NOT PERHITTED BYLAW.
12 MR. GAGERRO HAS TOLD YOU UNDER PENALTY OF
13 PERJURY THAT HE OWNS NO REAL PROPERTY, HOLDS NO
14 LEASEHOLD INTEREST IN ANY REAL PROPERTY AND HOLDS NO
15 OTHER ATTACHABLE INTEREST IN ANY REAL PROPERTY.
16 YOU ARE ONLY ENTITLED TO REQUEST I~FORMATION
17 TO AIDE IN THE ENFORCEMENT OF THE COST JUDGMENT.
18 CITATION, FURTHERMORE, INFORMATION THAT FALLS
19 WITHIN AN EVIDENTIARY PRIVILEGE IS BHIELDED FROM YOUR
20 DISCOVERY.
--~- --~----------------------------~
21 INFORMATION THAT DOES NOT FALL WITH AN
o 22 EVIDENTIARY PRIVILEGE IS NONETHELESS, IS NONETHELESS
23 -BE -SHTELDEDFROMDTSCOVERYWHERE ITS DlsCL(y~nJRE WOULD
-- ------- ------24-- ----1 N-VA-DB-- A-N- TN-D-1-VI DBA-h'-S -e0N-S-T I-TUTI-ONAJ" -RIe;-ltT-OT - ----- - -- -------
25 PRIVACY.
26 CITATION, AS MR. GAGGERO OWNS NO REAL
27 PROPERTY AND HOLDS NO LEASEHOLD OR ATTACHABLE
000055

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TO MAKE ANY FURTHER INQUIRY IN THAT REGARD ESPECIALLY
IN LIGHT OF HIS PRIVACY RIGHTS.
HORSE FEATHERS.
SINCE WHEN MAY THEY NOT INQUIRE AS TO THE
RESIDENCE ADDRESS?
MR. CHATFIELD: SINCE THE STATE OF CALIFORNIA
INSTITUTED ARTICLE ONE SECTION ONE OF THE
CONSTITUTION.
THE COURT: OH, HORSE FEATHERS.
THAT IS NOT PROTECTABLE AS PRIVACY.
HIS RESIDENCE ADDRESS IS NOT PROTECTABLE.
IT IS NOT EXCUSE ME.
IT IS NOT PROTECTED IN THIS CASE, AND I AM
NOT GOING TO SUSTAIN THAT.
AND BUT YOU COMPLAIN THAT THEY DIDN'T CARRY
FORTH THE MEET AND CONFER.
YOUR RESPONSE TO THAT INTERROGATORY, FOR
EXAMPLE, LEAVES NO ROOM FOR FURTHER DISCUSSION.
MR. CHATFIELD: THAT IS NOT TRUE, YOUR HONOR.
4
THE COURT: WELL, WHAT ROOM FOR FURTHER DISCUSSION
DOES IT LEAVE?
YOU HAVE ASSERTED THAT THIS IS PRIVILEGED AND
23 --I YOU WILLN8-'I!-BG-TT.---
_~.!..._ _____ ____MR~ __ CHA.TEIELD-:- -£-0- W-HE:tiI --A--PA-RT-Y---A.-SS-ERTS---1Jl.-PR~ATY----
25 RIGHT OF THE OTHER SIDE MAY OVERCOME THE PRIVACY
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~IGHT BY STATING TH~Y HAVE NO OTHER WAY OF OBTAINING
THE INFORMATION FROM ANY OTHER PARTY AND AS THE COURT
--~---------
000056

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1 PLAINTIFF'S LAWYERS.
2 THEY WENT TO HIS HOUSE.
3 THEY WENT TO HIS OFFICE.
4 THEY HAD BOTH ADDRESSES. IN ADDITION.
5 THE COURT: SIR, WHY, JUST A MINUTE. SUPPOSE THEY
6 CAN FIND OUT THAT INFORMATION BY OTHER MEANS, WHY
7 DOES THAT PRECLUDE THEM FROM ASKING, AND THAT WAS
8 DURING THE REPRESENTATION IN 20Dl AND 2002.
9 NOW WHY DOES THAT PRECLUDE THEM FROM ASKING
10 FOR A SWORN RESPONSE TO THAT QUESTION IN 2011?
11 MR. CHATFIELD: WELL, YOUR HONOR, IT DOESN'T
12 PRECLUDE THEM FROM ASKING FOR THE INFORMATION.
13 HOWEVER, ONCE THE PRIVACY RIGHT IS ASSERTED,
14 AND THEY TELL US THAT THEY HAVE SEVERAL SOURCES.
15 THE COURT: I DON'T FIND THAT THERE IS A PRIVACY
16 RIGHT TO THIS THAT IS COGNIZABLE IN THIS CASE.
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MR. KHAJAVI-NOURI: CAN I ADD SOMETHING HERE?
THE COURT: YOU KNOW, AND THEN THEY WANT TO KNOW
WHO IS THE OWNER OF THE PROPERTY AT WHICH HE RESIDES
20 AT.
~~---- ---~----- - - - - - - -----~~------------------------~-------
21 YOU HAVE NO STANDING TO ASSERT THE PRIVACY
22 RIGHTS OF THIRD PERSONS IF HE DOESN'T OWN IT. THEY
2;3 ~~ ~~~~ A-RENO~ AP-PEA-RING 1'O-AS-SER':I'-'I'HE-IR--PRIVAC-YRI-GHTS;
~ __2IL_____________ DR _lS__ THERK__A-T_HEORY__ON __WH-I_GH__~~Q_U_·HA:V_E ----- ---- --- .---- .------
25 STANDING TO ASSERT THE PRIVACY RIGHTS OF SOME TH1RD
I )
26 PERSON?
27 WHO IS THE PE~SON ON WHOSE BEHALF YOU ARE
I 28 ASSERTING THE PRIVACY RIGHTS?
17_____________________
000057

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1 THAT IS INTERROGATORY NUMBER TWO.
2 MR. CHATFIELD: I DON'T KNOvv WHO THE PERSON IS TO
3 WHOM I AM ASSERTING THE PRIVACY RIGHTS.
4 THE COURT: ARE YOU ASSERTING A PRIVACY RIGHT
5 ARE YOU ASSERTING A CLAIM FOR PRIVACY?
6 MR. CHATFIELD: WE ARE STATING THAT MR. GAGGERO IS
7 NOT GOING TO REVEAL ANY PRIVATE INFORMATION HE MAY
8 HAVE REGARDING THIRD PARTIES.
9 THE COURT: I AM GOING TO COMPEL HIM TO.
10 THIS IS NOT CLOSE.
11 THIS IS NOT A CLOSE CASE.
12 MR. CHATFIELD: WHY IS THE INFORMATION RELATING TO
13 THE OWNER OF PROPERTY IN WHICH MR. GAGGERO RESIDES
14 RELEVANT?
15 THE COURT: BECAUSE THE TESTIMONY AT TRIAL, SIR,
16 WAS THAT IN -- WELL, PRIOR TO THE TURN OF THE
17 CENTURY, AND I THINK MY RECOLLECTION IS ROUGHLY
18 BETWEEN '95 AND '98, MR. GAGGERO CLAIMED TO HAVE DONE
19 EXTENSIVE QUOTE ESTATE PLANNING QUOTE CLOSE IN WHICH
20 HE PURPORTED TO TRANSFER EVERY INTEREST IN PROPERTY
21 TO ONE OR MORE CORPORATIONS AND/OR TRUSTS TO BE HELD
22
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FOR HIM.
-ANDTHEPtJRPOSEFORTHISVVKS -TODEFEATC£ATMS
____ ___ L4 __ ___-OE'__CR:E-D_I'I'-ORS__B"i __A_L_LOW_I_N_G_H_IM_~'1'O-AS.s-E-R-T-~HA-T-H-E- -H-AD--N8.--- - ---- -- -
25 PROPERTY AND NO INTEREST IN PROPERTY, AND THEREFORE
26 CREDITORS OF HIS COULD NOT COLLECT AGAINST HIM FOR
27 JUDGMENTS OWED.
I 28 THIS SMELLS LIKE A PERPETPA_T_~LO_liL~O_F----':'T_HE_s'AME'-_~-I-~~_~_
r7 ______________ _____
000058

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1 TACTIC, AND WHEN I RECITE THIS, I AM RECITING IT ON
2 THE BASIS OF THE EVIDENCE PRESENTED IN THIS COURT
3 DURING THE TRIAL OF THIS CASE BACK IN ABOUT 2006.
4 I DON'T KNOW WHAT HIS CURRENT SITUATION IS,
5 BUT HE WENT SO FAR AS TO CLAIM THAT HE HAD NO BANK
6 ACCOUNTS, AT ALL.
7 HE HAD NO CHECKING ACCOUNTS.
8 HE BASICALLY CLAIMED HE CLAIMED HE HAD NO
9 REAL PROPERTY, APPARENTLY LITTLE OR NO PERSONAL
10 PROPERTY.
11 HE COMPLAINED THAT WHENEVER HE WANTS MONEY
12 THAT HE GOES TO THE TRUSTEE OF HIS TRUST AND SAYS MAY
13 I PLEASE HAVE SOME MONEY, AND THE TRUSTEE CAN SAY YES
14 OR NO.
)
15 IF HE HAS A BILL, IE' HE PURPORTS TO CONTRACT
16 FOR AN OBLIGATION, IF HE WANTS TO BUY SOMETHING, AND
17 THE BILL COMES IN, HE GIVES IT TO THE TRUSTEE OF THE
18 TRUST.
19 AND THE TRUSTEE DECIDES WHETHER OR NOT TO PAY
20 IT.
- - - - - - - - - - - - - - - - - - - - - - -- - - - - - - -- - - - - - -- - - - -- - - - - -- - -- - - - - - - - - - - - - -
21 I THINK THAT THESE INQUIRIES ARE ENTIRELY
CJ 22 APPROPRIATE.
23-MR-.-CK:HAJ-AVT-N0URI: -MAY -I JUST ADD SOMETHING
________2-4____ -RERK,_ -YOUR-- HON OR?-
25 TBE COURT: YES.
)
26 MR. KHAJAVI-NOURI: WITH RESPEC~ TO THE ADDRESSES
27 AND THE PRIVACY INTEREST, THE FORM INTERROGATORIES
I
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28 THAT HAVE BEEN APPROVED BY THE JUDICIAL COUNCIL,_____I________
u 000059

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1 FREQUENTLY ASK FOR THE ADDRESSES, NAME, ADDRESS AND
2 TELEPHONE NUMBER SO THAT WOULD FURTHER SUPPORT OUR,
3 YOU KNOW, MEET AND CONFER ON THAT.
4 THE COURT: THERE IS POTENTIALLi A DISTINCTION
5 BETWEEN PRETRIAL INTERROGATORIES AND POST TRIAL, BUT
6 IT SEEMS TO ME THAT IT DOES NOT SIGNIFICANTLY
7 IMPLICATE ANY INTERESTS.
8 NOW, THE OTHER THING IS, THAT, EXCUSE ME THE
9 3 THAT I HAD QOESTIONS ABOUT REALLY WERE 14, 15, AND
10 16 WHICH ASKS FOR INFORMATION CONCERNING THE ADDRESS
11 AND TELEPHONE NUMBER OF STEVEN GAGGERO, SENIOR,
12 STEPHANIE LEE BOREN B-O-R-E-N. BETTY SUE GAGGERO,
13 AND THE RESPONSE WAS THEY CAN BE CONTACTED THROUGH
14 THE OFFICES OF COUNSEL IN THIS MATTER FOR STEVEN M
15 GAGGERO.
16 WHY IS THAT AN APPROPRIATE RESPONSE?
17 YOU DECLINED TO GIVE ME THE INFORMATION.
18 WHY IS IT AN APPROPRIATE RESPONSE?
19 MR. CHATFIELD: ALL RIGHT.
20 BEFORE WE GET TO THAT ISSUE, CAN I JUST
21 ADDRESS SOMETHING THE COURT SAID A SECOND AGO?
22
23
THE COURT: MAY I?
. -IW0ULB-- vmARE -AT 20MTNUTES AFTEKI2.
.... __ _____ _ 2 4 __bNJL.I.- WART .. L __SEE._.TRAT.T.HERE··IS-SOMEB0b ~-Eb S-E --5THIL---
25 HERE, AND I WOULD LIKE TO BE ABLE TO MOVE 'fHROUGH
26 THIS· PROCEEDING.
27 AND SO IF YOU CARE, IF YOU CARE TO ANSWER MY
28 QUESTION, FINE.
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1 IF YOU DO NOT CARE TO ANSWER THAT QUESTION, I
2 WILL MOVE ON.
3 MR. CHATFIELD: ALL RIGHT.
4 THEN, I WILL ANSWER YOUR QUESTION.
5 WHY DO THEY NOT NEED THE ADDRESS AND PHONE
6 NUMBERS OF MR. GAGGERO'S ELDERLY PARENTS AND SISTER,
7 BECAUSE I HAVE OFFERED TO ACCEPT SERVICE ON THEIR
8 BEHALF OF ANY DOCUMENTS THAT THEY NEED TO SERVE ON
9 THEM FOR A JUDGMENT DEBTOR EXAMINATION.
10 THE COURT: IN OTHER WORDS, YOU OKAY, IF THEY WERE
11 TO SERVE A SUBPOENA ON YOU, ON YOUR OFFICE, ON BEHALF
12 OF THESE PEOPLE, AND THOSE PEOPLE FAIL TO THE APPEAR.
13 MR. CHATFIELD: YES.
14 THE COURT: YOU WOULD WAIVE ANY OBJECTION OF
15 PERSONAL SERVICE FOR PURPOSES OF CONTEMPT?
16 MR. CHATFIELD: I AM ACCEPTING SERVICE.
17 THE COURT: BECAUSE YOU ARE REPRESENTING THAT YOU
18 DO REPRESENT EACH OF THEM.
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MR. CHATFIELD: THAT'S CORRECT, YOUR HONOR.
THE COURT: AND YOU, YOU WOULD WAIVE ANY CLAIM
21 THAT SERVICE ON YOUR OFFICE AS OPPOSED TO PERSONAL
22 SERVICE ON THEM, WAS IN ANY SENSE INADEQUATE ~OR
23- -ENFORCEMENT-O-F-THOSE -StJB-POENASTO AFPEAR -FOR J'UOGMENT-
__ _____ -~ ----- -2-4-- - --Dg.:g'1'GR-- EXAM-.- ----
25 MR. CHATFIELD: YES, YOUR HONOR.
26 THAT WAS THE PURPOSE OF MY RESPONSE AND THE
27 MEET AND CONFER LETTER.
28
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000061

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1 LIMITATIONS?
2 MR. CHATFIELD: NO, YOUR HONOR.
3 THE COURT: OKAY.
4 WELL, IF WE DON'T KNOW WHERE THEY ARE, IF YOU
5 WON'T TELL US WHERE THEY ARE, AND YOU WON'T WAIVE ANY
6 DISTANCE LIMITATIONS FOR SERVICE ON THEM, THEN IT IS
7 A LITTLE BIT HARD FOR THE DEFENSE TO BRING THEM IN TO
8 TESTIFY.
9 THAT IS INEFFECTIVE.
10 MR. CHATFIELD: THEY ARE IN SAN DIEGO, CALIFORNIA,
11 YOUR HONOR.
12 THE COURT: THAT IS INEFFECTIVE, SIR.
13 THAT IS INEFFECTIVE.
14 IF IT IS NOT FULLY EFFECTIVE BY SERVING IT ON
15 YOUR OFFICE, IT IS NOT FULLY EFFECTIVE.
16 IS THERE ANY REASON WHY I SHOULD NOT THEN I
17 SHOULD NOT GRANT EACH OF THESE?
18 IS THERE ANYTHING ELSE YOU WANT TO SAY?
19 MR. CAATFIELD: YES.
20 I WOULD LIKE TO SAY THAT THE COURT'S COMMENTS
21 REGARDING THE REASON AND LEGAL EFFECT OF THE CREATION
22 OF THE TRUSTS DIFFERS FROM THE RECORD AS I UNDEkSTAND
23~'I', ANB --
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MR. CHATFIELD: PARDON ME?
THE COURT: WERE YOU HERE FOR THAT TESTIMONY?
I HEARD OUT OF MR. GAGGERO'S MOUTH.
000062

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1 I READ THE TESTIMONY, AND I READ IT
2 DIFFERENTLY, YOUR HONOR, AND I SIMPLY.
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MR. CHATFIELD: I WOULD LIKE.
THE COURT: THE TESTIMONY IS WHAT THE TESTIMONY
IS, BUr THAT WAS THE COURT'S -- THAT WAS THE COURT'S
FINDING AT THE TIME THOSE FINDINGS BEING AFFIRMED BY
THE COURT OF APPEAL.
SO YOU MAY DIFFER IN NUANCE, FINE, BUT THAT
WAS THE SUBSTANCE OF WHAT HE TESTIFIED TO.
rs THERE ANYTHING YOU WANT TO SAY ABOUT THE
SANCTIONS?
MR. CHAtFIELD: YES, YOUR HONOR.
THE MOTION DID NOT TAKE AS MUCH TIME AS
ESTIMATED'BY THE DEFENDANTS.
I ALSO BELIEVE THAT THERE WAS.
THE COURT: AND WE KNOW THAT BECAUSE?
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MR. CHATFIELD: BECAUSE OF THE MOTION AND THE
REPLY BRIEF WERE LESS THAN TEN PAGES LONG, AND I ALSO
20 BELIEVE WHEN I PREPARED MY OPPOSITION THAT THERE WAS
21 SUBSTANTIAL JUSTIFICATION FOR MY OPPOSITION.
22 THE COURT: LET ME ASK AN -- I JUST HAD A QUESTION
--z3-AS-TO-WHE1'H-ERIFTRE -r~NTERROGKTORIESWERE-SERVED--
------- --24--- ----FlJRgTJAN"I'-T-O--GG-P=7-Q-8-.0-2-Q,-WHE-T-H-E-R--'I'-HE--S-ANG'I'-ION-S ------
25 PROVISION OF THE DISCOVERY STATUTE APPLIED.
26 MR. KHAJAVI-NOURI: I BELIEVE THAT SECTION HAS A
27 PROVISION THAT DISCOVERY IN ACCORDANCE WITH POST
______---=2,...8___ JUDGMENT ENFORCEMENT IS TQ_..ltE_I_N.l~E.R.E>.RE.T_ED_AN_D,----______
000063

1
2
3
4
o 5
6
7
8
o
9
10
11
12
13
14
15
16
17
18
CJ 19
20
21
22
--
23--- --
12
ENFORCED AS ANY OTHER TYPE OF DISCOVERY.
I THINK THERE IS A PROVISION ON THAT POINT
THERE WHICH WOULD IMPLY THAT THE SAME RULES AS TO
MOTIONS TO COMPEL AND SANCTIONS WOULD APPLY AS WELL.
MR. CHATFIELD: THAT IS NOT MY UNDERSTANDING OF
IT.
THE COURT: WHAT IS YOUR UNDERSTANDING, SIR?
MR. CHATFIELD: MY UNDERSTANDING IS THAT THE RULES
RELATING TO PRETRIAL DISCOVERY DO NOT APPLY GENERALLY
TO POST TRIAL DISCOVERY.
THE COURT: AND THAT IS BASED OKAY, BUT IN THIS
PARTICULAR CASE, AS TO SANCTIONS, WOULD YOU LIKE TO
CITE ME THE STATUTE, RULE OR CASE AUTHORITY?
MR. CHATFIELD: NO.
I DON'T HAVE ANY TO CITE TO YOU, YOUR HONOR.
MR. KHAJAVI-NOURI: 1 THINK IT IS 708.020 SECTION
C, AS WE CITED IN OUR MOTION, WHICH I THINK
PARAPHRASED HERE INTERROGATORIES SERVED PURSUANT TO
THIS SECTION MAY BE INFLUENCED TO THE EXTENT
PRACTICABLE IN THE SAME MANNER AS INTERROGATORIES IN
A CIVIL ACTION.
THE COURT: WELL, WHAT I SEE IS THAT THE
----- 0PP0-S~TTT0N DOESN'-TRAISE ~NY 1 SS-OE -OFTHTS.---
____ _________24__ _ __ _____ --MR.- ---KHAJA-V-I-=-NQlJR-L-:---XE'THE--GGU-R-'I'--W-E-RE-- '1'0-- AWA-RD- - ------- ----- -
25 SANCTIONS HE WOULD REQU.EST IT BE AWlRDED HALF AND
26 HALF lGAI'NST PLAINTIFF.
27 THE COURT: SINCE. THERE WERE OBJECTIONS, T.HESE'
28 WERE NOT SIGNED BY MR. GAG_G_ER(t,__S..IKGE--'TB.EY-N.ERE~ONLY---
~-----------------
1...'-.1____ ------------------------ ----__ -- --- ---------- -- -- ---- ----- ----- --
000064

c/
o
1
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3
4
5
6
7
£3
9
10
11
12
13
14
15
16
17
18
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20
- - - - - - - -
21
22
-23
13
OBJECTIONS, IS IT APPROPRIATE TO AWARD THE SANCTIONS
AGAINST MR. GAGGERO AS OPPOSED TO AS AGAINST COUNSEL?
MR. CHATFIELD: YOUR HONOR, I DON'T BELIEVE THESE
WERE JUST OBJECTIONS.
THEY WERE VERIFIED RESPONSES.
THE COURT: WELL, AS TO THE ONES IN QUESTION I
DON'T,THINK THERE WERE RESPONSES THAT THEY WERE
VERIFIED RESPONSE.
MR. CHATFIELD: NO, ACTUALLY MR. GAGGERO RESPONDED
THAT HE DID NOT OWN ANY REAL PROPERTY OR ANY INTEREST
IN ANY REAL PROPERTY WHEN ASKED THE QUESTIONS ABOUT
REAL PROPERTY.
THE COURT: OKAY.
SO WE WILL MAKE IT JOINT AND SEVERAL.
MR. KHAJAVI-NOURI: TO CLARIFY I BELIEVE THERE
WAS A VERIFICATION BY MR. GAGGERO.
THE COURT: OKAY.
BUT SOME OF THESE ARE PHRASED IN TERMS OF
OBJECTIONS ONLY.
MR. KHAJAVI-NOURI: CORRECT, CORRECT.
- - - - ~---------------------------------------------- - - - - - - -
AND, IN ADDITION, I HAVE SPENT TIME ON THIS
MOTION TODAY IN COURT AND ALSO BRIEFLY REVIEWING THE
- -MOTION-OPPOSITION-ANDREPLY,AND-THA'f 'tIME WAS NOT
-- ------ ----2-4- --t;A-F'I'{J-RcEB---IN-MR-; -I:"-I-E-b-D-'S])EeL-kRATIC}N-W'HICR-r-THTNX-IfKD--
25 A TOTAL OF ABOUT 11 HOURS.
26 THE COURT: OKAY.
27 MR. KHAJ-AVI-NOURI: AND I AM HAppy TO PROVIDE A
, __________2=-8"--1_ DECLARAV:.:.OJ:L_T_O-'DfE_CDDRL_____________________I_______
1_
!j
r----
000065

()
o
)
o
o
j
1 THE COURT: OKAY. JUST A MINUTE.
2
3
4
5
WE ARE GOING TO RESOLVE THIS TODAY.
HERE IS THE ORDER:
THE MOTION TO COMPEL IS GRANTED IN ITS
ENTIRETY.
6 COMPLETE, VERIFIED, SUPPLEMENTAL RESPONSES,
7 WITHOUT FURTHER OBJECTION, ARE TO BE SERVED ON OR
14
8 BEFORE OCTOBER 24TH, 2011 AS TO INTERROGATORIES 1, 2,
9 3 , 8, 9 , 1 4, 15, AN D 1 6 .
10 MONETARY SANCTIONS OF $2,000 ARE IMPOSED
11 JOINTLY AND SEVERELY UPON MR. GAGGERO AND HIS COUNSEL
12 PAYABLE TO COUNSEL FOR KPC, ON OR BEFORE NOVEMBER
13 7TH, 2011 PER CODE OF CIVIL PROCEDURE SECTIONS
14 2023.030, AND 2030.300.
15 DEFENSE IS TO GIVE NOTICE.
16 MOVING PARTY IS TO GIVE NOTICE.
17 MR. KHAJAVI-NOURI: ONE QUESTION THE SANCTIONS TO
18 BE PAID ON OR BEFORE NOVEMBER 7TH?
19 THE COURT: YES, THAT'S CORRECT.
20 MR. KHAJAVI-NOURI: OKAY. THANK YOU.
-71-----
22
23
24
25
26
27
28
-----~--------------------
000066

o
SUPERIOR COURT OF THE STATE OF CALIFORNIA.
DEPARTMENT LA 24 HON. ROBERT L. HESS, JUDGE
PLAINTIFF, )
) CASE NO.
-VS- )BC 286925
)
KNAPP PETERSEN AND CLARKE, )
)
DEFENDANTS. )
)
REPORTER'S TRANSCRIPT OF PROCEEDINGS
APPEARANCES: '
FOR THE PLAINTIFF:
FOR THE DEFENDANTS:
OCTOBER 5, 2011
LAW OFFICES OF
DAVID BLAKE CHATFIELD
2625 TOWNSGATE ROAD
SUITE 330
WESTLAKE VILLAGE, CA 91361
MILLER LLP
BY: KAMRAN KHAJAVI-NOURI
515 SOUTH FLOWER STREET
SUITE 2150
- - - - - - ---~-------~~------~----
- -- -- - - - - - ---~------'--~------ - - - - - - - - - - -
o
)
VOLUME 1 OF 1
PAGES 1-14 ONLY
- - - - - - -- - - - - - - - -- --~~--~--
CAROL L. CRAWLEY, CSR #7518
------ ------- - ------- ---- ----- --------------- -
- - - - - --
000067

(,
o
--)
o
----------------
o
---- - -_. --- - ---- - ----- -- ----
DEPT. LA 24 HONORABLE ROBERT L HESS, JUDGE
PLAINTIFF, )
)CASE NO.
-VS- )BC 286925
)
KNAPP PETERSEN AND CLARKE, )
STATE OF CALIFORNIA )
) SS
COUNTY OF LOS ANGELES )
)
DEFENDANTS. )
)
I, CAROL L. CRAWLEY, OFFICIAL REPORTER OF THE
SUPERIOR COURT OF THE STATE OF CALIFORNIA, FOR THE COUNTY OF
LOS ANGELES, DO HEREBY CERTIFY THAT THE FOREGOING PAGES,
1-14 COMPRISE A FULL, TRUE, AND CORRECT TRANSCRIPT OF THE
PROCEEDINGS HELD ON OCTOBER 5, 2011 IN DEPARTMENT 24 OF THE
LOS ANGELES COURT IN THE MATTER OF THE ABOVE-ENTITLED CAUSE.
DATED THIS 11TH DAY OF OCTOBER, 2011
~~=-=--=~~~~==~==~f CSR #7518
______ _ CARQL_L_.__CRAWLEY-r-QE'F-:GG-I-A~-RE-peRTER ----------------1----
------ ------ - - -- -"-- ---- - - ---_.-------------
-~---- --------- -~- -
----"---- -- -~.--
- - - - - - - - - --------------------------------------1--------
..-- --------- - ----------- -------- - - - - - - - - - - -
- -- - - - -- - - - - - - - - - - - - - --- - - - - - - - - - - - - - -
- - - - - - - - - -- - - - - - - - - - - - - '----~------,.~--.,-~--------------,.----""----------------........---'
u
000068

EXHIBIT O
PACIFIC COAST MANAGENT

Entity Details - Secretary of State, Nevada Page 1 of3
PACIFIC COAST MANAGEMENT, INC.
Business Entity Information
Status: Active File Date: 8/9/1999
Type: Domestic Corporation Entity Number: C19581-1999
Qualifying State: NV List of Officers Due: 8/31/2012
Managed By: Expiration Date:
NV Business 10: NV19991336529
Business License
8/31/2012
Exp:
Additional Information
Central Index Key: 1
Registered Agent Information
Name: JOSEPH PRASKE Address 1: 4790 CAUGHLIN PKWY
Address 2: SUITE 236 City: RENO
State: NV Zip Code: 895090907
Phone: Fax:
Mailing Address 1: Mailing Address 2:
Mailing City: Mailing State:
Mailing Zip Code:
Agent Type: Noncommercial Registered Agent
Financial Information
I No Par Share Count: 10 I Capital Amount: 1$ 20,000.00
Par Share Count: 120,000.00 I Par Share Value: 1$1.00
Officers M Include Inactive Officers
Treasurer - GORDON FREITAS
Address 1: PO BOX 25070 Address 2:
City: VENTURA State: CA
Zip Code: 93002 CountrY: USA
Status: Historical Email:
Treasurer - GORDON FREITAS
Address 1: PO BOX: 25070 Address 2:
State: CA
Country: USA
City: VENTURA
-I~------~~-r--~--------------------+-----~----+-------======~--~~--~I-
Zip Code: 93002
Status: Active Email:
President - JOSEPH J PRASKE
Address 1: 4790 CAUGHLIN PKWY STE 236 Address 2:
--~--~- ~----~--~-~-eity:~~REN0~-------~---~-~~-~--~---~- ---- --State~NV-----~------~-~---~~-------~- ~~~-~~ ----~
Zip Code: 89509 Country:
Secretary - JOSEPH PRASKE
City: RENO State: NV
Zin Cod~~ R95Q9 Countrv:

Director - JOSEPH PRASKE
Address 1: 4552 BELITA LANE Address 2:
City: LA CANADA State: CA
President - JOSEPH J PRASKE
Secretary - JOSEPH PRASKE
Director - JOSEPH PRASKE
Address 1: 4552 BELITA LANE Address 2:
City: LA CANADA State: CA
ActionsAmandmants,
Action Type: Articles of Incorporation
Document Number: C19581-1999-001 I # of Pages: 11
File Date: 81911999 I Effective Date: I
(No notes for this action)
Action Type: Annual List
Document Number: C19581-1999-005 1 # of Pages: 11
File Date: 10/16/1999 I Effective Date: I
No notes for this action)
No notes for this action)
Document Number: C19581-1999-004 I # of Pages: I2
File Date: 10112/2001 I Effective Date: I
-- - - ...
Fife Date:· 8/2372002
--- ----
t . .-
.. Effe-ctiveDate:l· . -
I(No notes for this action)
~.---~---~-. I-·-----~ Elie-Date~- -811312003-.~. --·_____ ~~_I· __EffectiveDate:_I.-'..____ _~_____ ~ __~___~ __________._
File Date: 10/4/2004 Effective Date: I
LIst of Officers for 2(j04 to 2005
Document Number: 20050374254-92 I # of Pages: 11
.

File Date: 1/2412008 I Effective Date: I
Fiie Date: 1217/2011 I Effective Date: I

EXHIBIT P
LIMITITED LIABILITY COMPANIES & LIMITED
PARTNERSHIP ENTITIES

Business Search - Business Entities - Business Programs Page 1 of 1
Business Entity Detail
Data is updated weekly and is current as of Friday, March 30, 2012. It is not a
complete or certified record of the entity.
Entity Name:
Entity Number:
Date Filed:
Status:
Jurisdiction:
Entity Address:
Entity City, State, Zip:
BLU HOUSE, LLC
199714310057
OS/23/1997
ACTIVE
CALIFORNIA
1437F SOUTH VICTORIA AVE., STE. 201
VENTURA CA 93003
Agent for Service of Process: JOSEPH J PK~SKE
Agen't Address:
Agent City, State, Zip:
2802 SANTA MONICA BLVD
SANTA MONICA CA 90404
* Indicates the information is not contained in the California Secretary of
State's database.
* Note: If the agent for service of process is a corporation, the address of the
agent maybe requested by ordering a status report.
• For information on checking or reserving a name, refer to Name Availability.
• For information on ordering certificates, ,copies of documents and/or status
reports or to request a more extensive search, refer to Information Requests.
• For help with searching an entity name, refer to Search Tips.
• For descriptions of the various fields and status types, refer to Field
Descriptions and Status Definitions.
Privacv Statement Free Document 'Readers
Copyright © 2012 California Secretary of State
http://kepler.sos.ca.gov/cbs.aspx~------~--------------------------------
4/3/2012

Entity Name:
Entity Number:
Date Filed:
Status:
Jurisdiction:
Entity Address:
BOARDWALK SUNSET, LLC
199714310068
OS/23/1997
ACTIVE
CALI FORl'UA
1437-F SOUTH VICTORIA AVE., STE. 201
VENTURA CA 93003
Agent for Service of Process: JOSEPH J P~~SKE
Agent Address:
2802 SANTA MONICA BLVD.
State's database.
agent may be requested by ordering a status report.
• For information on ordering certificates, copies of documents and/or status
Privacv Statement Free Document Readers
1---_ _~~=h"-'ttp~://k'_==e,pler.sos.ca.gov/cbs.aspx 4/3/2012

Entity Name:
Entity Nuniber:
Date Filed:
Status:
Jurisdiction:
Entity Address:
I~LIBU BROADBEACH L.P.
199803500010
02/04/1998
ACTIVE
CALIFORNIA
Agent for Service of Process: JOSEPH PRASKE
Agent Address:
State's database.
reports or to, request a more extensive search, refer to Information Requests.
Prj~vacv Statement Free Document Readers
t--______h--'.,ttp://kepler.sos.ca.gov/cbs.aspx 4/3/2012

Entity Name:
Entity Number:
Date Filed:
Status:
Jurisdiction:
Entity Address:
I~INA GLENCOE L.P.
199803600001
02/04/1998
ACTIVE
CALIFORNIA
SANTA MONICl.I... CA 90404
Agent Address:
State's database.
Privacy Staterr~nt Free Document Reade~s
http://kepler.sos.ca.gov/cbs.aspx~~~~~-
4/3/2012

Entity Name:
Entity Number:
Date Filed:
Status:
Jurisdiction:
Entity Address:
511 OFW L.P.
199807300002
03/12/1998
ACTIVE
CALIFORNIA
Agent Address:
State's database.
agent may be requested by_ordering a status report.
http://kepler.sos.ca.gov/cbs.aspx 4/3/2012

Entity Name:
Entity Number:
Date Filed:
Status:
Jurisdiction:
Entity Address:
GINGERBREAD COURT L.P.
199807300001
03/12/1998
ACTIVE
CALIFORNIA
Agent Address:
State's database.
Descriptions and Status Definitions. ---
http://kepler.sos.ca.govlcbs.aspx 4/3/2012

EXHIBIT Q
RESPONSES REQUEST FOR PRODUCTION
OF DOCUMENTS SET (ONE)
(Case No. BC286925)

EXHIBIT R
RESPONSES REQUEST FOR PRODUCTION
OF DOCUMENTS SET (TWO)
(Case No. BC286925)

1 WESTLAKE LAW GROUP
2 David Blake Chatfield (State Bar No. 88991)
2625 Townsgate Road, Suite 330
Westlake Village, CA 91361
3 Telephone: (805) 267-1220
4 Facsimile: (805) 267-1211
Attorneys for Plaintiff
5 Stephen M. Gaggero
6
7
8
9
10 STEPHEN M. GAGGERO, an individual, )
)
)
)
)
)
11 Plaintiff,
12 vs.
13 KNAPP, PETERSEN AND CLARKE, a )
California corporation; STEVEN RAY )
14 GARCIA, an individual; STEPHEN M. )
HARRIS, an individual; ANDRE JARDINI, )
15 an individual; DOES 1 through 50, inclusive, )
16
17
Defendants.
)
CASE NO.: BC286925
PLAINTIFF STEPHEN M. GAGGERO'S
RESPONSES TO DEFENDANT KNAPP,
PETERSEN & CLARK'S REQUEST FOR
PRODUCTION OF DOCUMENTS
[PURSUANT TO CODE OF CIVIL
PROCEDURE § 708.030]
18 PROPOUNDING PARTY:
19 RESPONDING PARTY:
20 SET NUMBER:
DEFENDANT KNAPP, PETERSEN & CLARKE
PLAINTIFF STEPHEN M. GAGGERO
21
22
23
24
25
26
27 .....
2g- I- - - - - -
ONE

'r
1 Plaintiff Stephen M. Gaggero ("Plaintiff') hereby responds and objects to Defendant
2 Knapp, Petersen & Clarke's ("Defendant") Request for Production ofDocuments. The response
3 contains both general and specific objections, which are incorporated into each individual
4 response.
5 PRELIMINARY STATEMENT
6 Nothing in this response shall be construed as waiving any rights or objections that might
7 otherwise be available to Plaintiff, Plaintiffmakes this response subject to and without waiver of:
8 (1) the right to make additional objections or seek protective orders in the event additional
9 review of files results in further information;
10 (2) the right to object to other discovery directed to the subject matter ofthe Requests; and
11 (3) the right to revise, correct, supplement, or clarify the response.
12 GENERAL OBJECTIONS
13 1. Plaintiff objects generally to the Requests, and to each individual Request, on the
14 grounds that they are overly broad and unduly burdensome and harassing in that they are clearly
15 not limited to documents necessary to aid in the enforcement ofthe judgment for fees and costs in
16 this matter. Requests for documents relating to assets transferred, sold or liquidated over a decade
17 ago are clearly irrelevant to this judgment enforcement and will not be produced by plaintiff.
18 2. Plaintiff objects generally to the Requests, and to each individual Request, to the
19 extent that they call for information protected from discovery or disclosure by any privilege or
20 doctrine, including, without limitation, the attorney-client privilege, the attorney work product
21 doctrine, and any privilege or doctrine that protects information from discovery or disclosure
22 because it otherwise reflects the impressions, conclusions, opinions, legal research, litigation plans
23 or theories ofPlaintiffs attorneys. By providing certain information requested herein, Plaintiff
24 does not waive any privilege or protection that is or may be applicable to such information.
26 extent that they call for information protected from discovery or disclosure by the rights ofprivacy
--27 -guaranfeedbyllieCiillromi-aC6iislituti6fiand-tneUmted Stat~s-C(Jnstitution;Byproviding-certain-
2-8 -infOFIE:ati011-requested-hereiIl,F-lainti-f£-doeS-llotwai¥e-all-y"-priYilege_oLpro1e_ctionJhaj:j_s_or may be ____
1

I applicable to such infonnation.
3 extent that they purport to impose upon Plaintiff obligations beyond those imposed under the Code
4 of Civil Procedure or Court Rules.
6 extent that they request infonnation that is in the possession, custody or control ofDefendants.
8 extent that they seek infonnation that is not in the custody or control ofPlaintiff. Plaintiff further
9 objects generally to the Requests to the extent that they seek infonnation that is publicly available,
10 or to wbich Plaintiffhas access equal to as Plaintiff, or which Plaintiff or Plaintiffs counsel could
11 obtain with equal effort.
12 7. Plaintiff objects generally to the Requests, and to each individual request, to the
13 extent that they seek disclosure ofinfonnation that is confidential and/or proprietary.
14 8. Plaintiff objects generally to the Requests, and to each Request, because they are
15 vague, ambiguous, unintelligible, undated, unsigned, and overly broad, in that they contain
16 undefined terms or purport to impose definitions that are both internally inconsistent and
-t7~ ~incompattlJle witlf o-rdinary, -com:mon~ or~established-meanings:~ Accordingly; ininterpreting-and~-~· ----
18 construing the requests, Plaintiffwill give words their ordinary meaning, common, and established
19 meanings, so that the responses and objections will not be subject to misinterpretation. When the
20 response uses the present tense, plaintiffwill presume that defendants are referring to the present
21 time. When the request uses the word "since" plaintiffunderstands the word to have the meaning
22 set forth in Webster's dictionary "after a time in the past."
23 9. Plaintiff objects to the definition ofthe terms "you" and "your" set forth in
24 Paragraph 1 ofDefendant's Definitions in that it collectively refers to Plaintiff, together with his
25 agents, employee, employer, attorney, accountant, investigator, or anyone else acting on Plaintiffs
26 behalf, on the ground that such an expansive use imposes a burden greater than what is required by
~ --27 - -tlie-Ca1iforni-aRll1es~orCivil-PrQcedure-anl:hIJ:ake~,-ib:e-YeqlIests~overlybroad,-unduly-burdensome,
r--~~28- andlQT-nQt-othe:t:Wise~reasonably-calcn1ate~cLto~e.ad_tD_the_dis-'Lover)!: of evidence relevant to th_e___1
i
2

1 claims or defenses ofthe parties. Plaintiffwill respond to the requests only on behalfofhimself.
2 Because the definition includes Plaintiffs attorneys, Plaintiff also objects to the extent that the
3 requests seek information protected from disclosure by the attorney-client privilege, the attorney
4 work product doctrine, and any other applicable privileges.
5 10. Plaintiff objects to each and every request on the grounds, and to the extent, that it
6 seeks information outside the relevant time period.
7 11. Plaintiff objects to the definition ofthe definition ofESTATE PLAN set forth in
8 Defendant's Definitions in that it includes but is not limited to the preparation of any plan of
9 administration and disposition ofPlaintiffs property, owned by Plaintiff at any time in any
10 capacity, before or after death including will, trust, gifts, or power of attorney, or any other method
11 of estate planning and further refers to the transfer of any assets owned by Plaintiff at any time to
12 any PERSON or ENTITY collectively on the ground that such an expansive group of definitions
13 imposes a burden greater than what is required by the California Rules of Civil Procedure and
14 makes the requests overly broad, unduly burdensome, and/or not otherwise reasonably calculated
15 to lead to the disc'overy of evidence relevant to the inquiry into Plaintiffs current assets, which is
16 the sole subject ofthis discovery.
---IT ~ ----~ ___ n ---RESP0NSESTODOeUMENTR:E0HESTS--~- n _ _ _ _ _ _ _ _ _ U n _ _ _ _ _ _ _ _
18 DOCUMENT REQUEST NO.1:
19 All DOCUMENTS that RELATE to the Arenzano Trust.
20 RESPONSE TO DOCUMENT REQUEST NO.1:
21 Plaintiffincorporates by reference each and every General Objection set forth above as
22 though fully set forth herein. Plaintiff objects to this request on the grounds that it is overly broad,
23 unduly burdensome and harassing. Plaintiff further objects to this request on the grounds that it
24 seeks documents that are neither relevant nor reasonably calculated to lead to the discovery of
25 admissible evidence in this action. Plaintiff further objects to this request on the grounds that it
26 calls for the production ofirrelevant documents that are protected from disclosure by plaintiffs
- --- - -----ZT --aild1liir-a-parties"" -ConstlfITttonally prot:ecte-:-drightof-priva:cy.-Plaintifffurther-objects-to-tbis-request- - -
~.-----2g- -0n-the-gr0unds-that~it-seeks-documents-that.are_pIOteded£ro.m.dis-,~lOj;ure by the attQrney'-clienL___~_
3

1 privilege and/or the attorney work-product doctrine.
2 Subject to and without waiving the foregoing objections and limitations, Plaintiffresponds
3 as follows: Plaintiffhas no documents responsive to this request in his possession or control.
5 All DOCUMENTS that RELATE to the Giganin Trust.
11 admissible evidence in this action. Plaintifffurther objects to this request on the grounds that it
13 and third parties' Constitutionally protected rights ofprivacy. Plaintiff further objects to this
14 request on the grounds that it seeks documents that are protected from disclosure by the attorney-
15 client privilege and/or the attorney work-product doctrine.
-,
---~- -~~--- --~ --t7-- --asf6116W-g-:-Plainttff-has-no-do·cum-ents-re-sp·onsive-tothis Tequest-in~-his possession-er- control~
19 AllDOCUMENTS that RELATE to the Aquasante Foundation.
23 unduly burdensome and harassing. Plaintifffurther objects to this request on the grounds that it
26 calls for the production ofirrelevant documtmts that are protected from disclosure by plaintiff's
-27- -:iiid1liira-pa:fties-'Cofisfirutionallyprotecte-dnghtuf-vrivacy:Pla:mtifffurtherobjects-tothis-request .
2g- -on-th€-gr<;lUllds-that.it-seeks-documents-thaLare_pro.tec.tedJ:ronLdis.clQs.ur.e_b_Y' the attorne),-c""l"",ie"",n=t--1----
4

1 privilege andlor the attorney work-product doctrine.
5 All DOCUMENTS that RELATE to any trust or foundation that is part ofYOUR ESTATE
6 PLAN.
14 and third parties' Constitutionally protected right ofprivacy. Plaintiff further objects to this request
15 on the grounds that it seeks documents that are protected from disclosure by the attorney-client
-17 ---- - --- -Suojecno-and-withoutwaivingthe-foregoing objections-and limitations;-Plaintiffrespends---- --.- ----
20 All DOCUMENTS that RELATE to YOUR ESTATE PLAN.
.- ----2T--calls fortlleproductloo-ufirrelevant UQCl.11IIents-tnat-are protected-fromdise1osure-byplaintiff'-s-
28-and-tbir:d-parties~ConstitutionalLy_pIO.te_c.te_d.nghLQ[p-rivac)'. Plaintiff further gQjects tothis request _ __
5

6 All DOCUMENTS RELATING to any COMMUNICATION REFERENCING YOUR
7 ESTATE PLAN.
10 though fully set forth herein. Plaintiff objects to this request on the grounds that it is overly broad
11 in time and scope and as such are unduly burdensome and harassing. Plaintiff further objects that
12 the request on the grounds is vague and ambiguous such that plaintiff cannot form a meaningful
13 response. Plaintiff further objects to this request on the grounds that it seeks documents that are
14 neither relevant nor reasonably calculated to lead to the discovery of admissible evidence in this
15 action. Plaintiff further objects to this request on the grounds that it calls for the production of
16 irrelevant documents that are protected from disclosure by plaintiffs and third parties'
n--Cciil.stitutioffatly protected-righU)fprivacy.Plaintifffurtherobjectsto this-request on--thegrounds . - ----
18 that it seeks documents that are protected from disclosure by the attorney-client privilege andlor
19 the attorney work-product doctrine.
21 All DOCUMENTS that RELATE to any trust in which YOU are the trustor regardless of
22 YOUR present income or financial interest.
26 unduly burdensome and harassing, Plaintifffurther objects to this request on the grounds that it
-'IT -seeks-doc:umehtsLbarareneitlier felevantnorr-e-a-suTIa:hly-c-alCl.llatedto-leadiothe-discoveryof . ---
6

6 as follows: Plaintiffhas no documents responsive to this request in his possession or controL
8 All DOCUMENTS that RELATE to any trust in which YOU are a TRUST PROTECTOR.
11 though fully set forth herein. Plaintiffobjects to this request on the grounds that it is overly broad,
15 calls for the production of irrelevant documents that are protected from disclosure by plaintiffs
16 and third parties' Constitutionally protected right ofprivacy. Plaintifffurther objects to this request
~ 17-- -o:l:flne groUfLa.stlratitseeks-documentsihat-are-protected-fromdisc1osurebytheattomey-client ~. -~ ~-~- ~-- -
20 as follows: Plaintiffhas no documents responsive to this request in his possession or controL
22 All DOCUMENTS that RELATE to any trust in which YOU are a beneficiary, regardless
23 ofregardless of YOUR present income or financial interest.
-- ~27 -- -ill1-aU1yoilidefis6mellnctl1aras~sin-g;--Plaintifffurtlrerubjects-to-this-requeston-the-grert1llds-that-it--.-- --~- ~-- -----
7

I admissible evidence in this action. Plaintifffurther objects to this request on the grounds that it
2 calls for the production ofirrelevant documents that are protected from disclosure by plaintiff's
8 DOCUMENT REQUEST NO. 10:
9 All DOCUMENTS that RELATE to any trust in which YOU are in class ofbeneficiaries,
10 regardless ofYOUR present income or financial interest.
11 RESPONSE TO DOCUMENT REQUEST NO. 10:
~ .. ~··17~ ~calls f6ttlieptoduction ofirretevantdocuments~thatare-protected fromdisclosureby-plaintiff's .~..-~.~- -- ...
24 All DOCUMENTS that RELATE to bills, fees, invoices, or charges paid on YOUR behalf
25 by any PERSON or ENTITY including, but not limited to, Pacific Coast Management and Avalon
26 Corporation since 2001.
.. -~---·-2T- lmSPONSETODOCUMENT-REQl1ESTNtt-l1:
~-~---2g--II---
8

1 though fully set forth herein. Plaintiffobjects to this request on the grounds that it is overly broad
2 as to time and scope as to be unduly burdensome and harassing. Plaintifffurther objects to this
3 request on the grounds that it seeks documents that are neither relevant nor reasonably calculated
4 to lead to the discovery of admissible evidence in this action. Plaintiff further objects to this
5
6
request on the grounds that it calls for the production ofirrelevant documents that are protected
from disclosure by plainti~f s and third parties' Constitutionally protected right ofprivacy. Plaintiff
7 further objects to this request on the grounds that it seeks documents that are protected from
8 disclosure by the attorney-client privilege andlor the attorney work-product doctrine.
10 All DOCUMENTS that RELATE to travel expenses paid by YOU or any PERSON or
11 ENTITY on your behalf since 2001.
13 Plaintiff incorporates by reference each and every General Objection set forth above as
- --17 to leadtcrtnea.lscoveryofadmissibIe-evidencein this-action. Plaintiff-further objects to-this . -- ---- -_.-
18 request on the grounds that it calls for the production ofirrelevant documents that are protected
19 from disclosure by plaintiffs and third parties' Constitutionally protected right ofprivacy. Plaintiff
20 further objects to this request on the grounds that it seeks documents· that are protected from
23 All DOCUMENTS that RELATE to litigation expenses paid by YOU or any PERSON or
24 ENTITY on your behalf since 2001.
r- ----2-7 - --thoug111ul1y--set-fOfth-herem~-- Plainttff-obj-e-cts-to-this-re-qu-e-st-on-th~--grounds -that-it-is overly-broad-- --
9

2 to lead to the discovery of admissible evidence in this action. Plaintifffurther objects to this
6 disclosure by the attorney-client privilege and/or the attorney work-product doctrine.
8 All DOCUMENTS that RELATE to the transfer of any asset owned at any time by YOU in
9 any capacity.
10 RESPONSE TO DOCUMENT 'REQUEST NO. 14:
13 as to time and scope so as to be unduly burdensome and harassing. Plaintiff further objects to this
.... - -17 -from aisc108uTebyplaintiffsandthird-parties1
-Constitutionally protected·right ofprivacy.·Plaintiff
21 All DOCUMENTS that RELATE to the transfer ofany asset owned at any time by YOU as
22 part ofYOUR ESTATE PLANNING.
26 as to both time and scope that is unduly burdensome and harassing. Plaintiff further objects to this
-27-feqllesfonThe grounastrratit-seeksu:crClJ]:ITentsthatare-neither-relevant-nor-reasonahly-ealoulated- - ... -. --.--
_~i_ _ _ _ --28 -to-lead-to-the-clisco¥er~'-Of.admissible_eY:id_enc_e in this action. Plaintifffurther 0Qjects to t~______.
10

6 All DOCUMENTS that RELATE to any post judgment discovery in any matter to which YOU
7 responded.
-------17 )disclbsme15ylne-attomey:.clientprivilegeandlortheattorneywork"-productdoctrine;----
19 All DOCUMENTS that RELATE to any judgment debtor exam ofYOU since 2001.
-- ---- ZT- fromaisCIosmeoyp1a:intlffsana:-tlllra: parties'-Corrstituttoua:l1yprotectedright-ofpnvacy-;-Plamtiff
11

3 All DOCUMENTS that RELATE to any ENTITY ofwhich YOU are an officer or member.
7 as to time and scope and therefore unduly burdensome and harassing. Plaintiff further objects to
8 this request on the grounds that it seeks documents that are neither relevant nor reasonably
9 calculated to lead to the discovery of admissible evidence in this action. Plaintifffurther objects to
10 this request on the grounds that it calls for the production ofirrelevant documents that are
11 protected from disclosure by plaintiffs and third parties' Constitutionally protected right of
12 privacy. Plaintifffurther objects to this request on the grounds that it seeks documents that are
13 protected from disclosure by the attorney-client privilege and/or the attorney work-product
14 doctrine.
16 as follows: Plaintiffhas no documents responsive to this request.
-lTDOCUMENTREQUESTNO.-19: ---- _ U
m
. _ - - - - - - - - - - • •- - - - - - - - - - u u _ -
18 All DOCUMENTS that RELATE to any property at which YOU have resided since January
19 201l.
--2T- .anuthifapaiiies-'~Cotistifuubna11yprotecte<i riglInrfprivacy.-Ptaintifffurtherobjects-to-tbis-request -..-
12

- ...- ----~-
3 as follows: Plaintiffdoes not own any real property.
5 All DOCUMENTS that RELATE to real property located at 3501 Canada Larga, Ventura
6 California, 93001.
7
8
9
10
11
12
13
14
15
16
17- -
18
RESPONSE TO DOCUMENT REQUEST NO. 20:
Plaintiffincorporates by reference each and every General Objection set forth above as
though fully set forth herein. Plaintiff objects to this request on the grounds that it is overly broad,
unduly burdensome and harassing. Plaintifffurther objects to this request on the grounds that it
seeks documents that are neither relevant nor reasonably calculated to lead to the discovery of
admissible evidence in this action. Plaintiff further objects to this request on the grounds that it
calls for the production ofirrelevant documents that are protected from disclosure by plaintiffs
and third parties' Constitutionally protected right ofprivacy. Plaintiff further objects to this request
on the grounds that it seeks documents that are protected from disclosure by the attorney-client
pJjvilege and/or the attorney work-product doctrine.
-. Subject to -and-witnout-waiving the foregoing objections-and-limitations,-Plaintiffresponds
as follows: Plaintiffhas no documents responsive to this request.
20 All DOCUMENTS that RELATE to any tax DOCUMENTS filed by YOU or on YOUR
21 behalf.
13

5 All DOCUMENTS that RELATE to any taxes paid on YOUR behalf, including but not limited
6 to, in YOUR capacity as the equitable owner ofany ENTITY.
.. . .··17· .. .... ··Subjectto andwithout·waivirrgthe foregoingobjections and limitations,PlaintiffTesponcis ............ .....
18 as follows: Plaintiffis not the owner of any Entity, and therefore, has no responsive documents in
19 his possession or control.
21 All DOCUMENTS that RELATE to any income tax returns including, but not limited to, W
22 2's, 1099's, K-l 's, whether prepared for federal, state, or municipal that RELATE to YOU since
23 January 1, 2005.
. ·2T iii.o.ruyDfuuensomeafidliai'assIDg.-Plaintill-£artlTenybj~·cts TQ-thiSTequest-on~he·groundsthat-it· ....-.-.. .
-'------2g- -seek-s·docllments.that.are..neither-rele:lantnoLLeasonably_calcn1ate.d_tQ.ka.d to the diSCOY~.1'y_oL__ .___
14

-- -"-- -.-~ ..
7
8
9
10
11
12
13
14
15
16
All DOCUMENTS that RELATE to any money given to YOU for any purpose since 2010.
though fully set forth herein. Plaintiffobjects to this request on the grounds that it is vague and
ambiguous, overly broad, unduly burdensome and harassing. Plaintiff further objects to this
request on the grounds that it seeks documents that are neither relevant nor reasonably calculated
to lead to the discovery of admissible evidence in this action. Plaintiff further objects to this
request on the grounds that it calls for the production ofirrelevant documents that are protected
from disclosure by plaintiffs and third parties' Constitutionally protected right ofprivacy. Plaintiff
further objects to this request on the grounds that it seeks documents that are protected from
-t7-- -dlsclosure bythe-attomey-=dient privilege and!or the attorneywork~productdoctrine~
19 All DOCUMENTS that RELATE to any income earned by YOUR since 2010.
--~- -.--- - ----- ---27-- -allatliirdparties'~Constitutianal1yprote~cte~dTight-of pri~acy~-f:llainti-ff-~her-obj-ee-ts--t0--thi-s-i~EJ.uest-
-'------.28- -on-the-grounds-thatiLseeks_dD-c_uments_thaLaLe_pLO_te_cJe_d~om disclosure by the attorney-client
15

3 as follows: Plaintiffwill produce any documents responsive to this in his possession and control if
4 the propounding party agrees to limit the document request to the relevant time period.
6 All banks statements for any personal or business account in which YOU have legal or
7 equitable interest.
9 Plaintiff incorporates by reference each and every General Objection set forth above as
--- --1T -privilege and16fthe-attomeywork:~prbduct d(}ctrine.-- ---- --- ------- - - - --- ---------
19 as fogs>ws: ~laintiffhas no documents responsive to this request.
21 All savings accounts in institutions that represent accounts in which YOU have an
22 equitable interest.
25 though fully set forth herein. Plaintiff objects to this request on the grounds that it is overly broad;
--------- --'IT- --S€€KS-aocUmeriIslliaxare·neitlietfelevant nor reasonal:Yly-calculaLe-d-tQ-lead-to-the-discQvery-of----- ----------
16

,
- ~----.----. --
1 calls for the production of irrelevant documents that are protected from disclosure by plaintiffs
8 All deeds, leases, mortgages, or any other DOCUMENT evidencing any interest or
9 ownership, including equitable interest or ownership, by YOU in real property at any time since
10 1997.
11
12
13
14
15
16
··17
18
19
20
21
22
though fully set forth herein. Plaintiff objects to this request on the grounds that it is overly broad
as to scope and time that it is unduly burdensome and harassing. Plaintiff further objects to this
request on the grounds that it seeks documents that are neither relevant nor reasonably calculated
to lead to the discovery of admissible evidence in this action. Plaintiff further objects to this
..tequeston~thegroundsthat itc·alls forthe~roduction ufirrelevant documents-that are·protected
from disclosure by plaintiffs and third parties' Constitutionally protected right ofprivacy. Plaintiff
further.objects to this request on the grounds that it seeks documents that are protected from
disclosure by the attorney-client privilege andlor the attorney work-product doctrine.
Subject to and without waiving the foregoing objections and limitations, Plaintiffresponds
as follows: Plaintiffhas no documents responsive to this request in his possession or control.
24 All DOCUMENTS evidencing any interest or ownership, including equitable interest or
25 ownership, by YOU in any asset at any time since 1997.
~ ...... -~ ... -2T .._.···Pla.infiJfYncorporatesoyrefeyeIfc-e-:e·a-ch~and~eyery{Je:rreralObjection·setforthabove·as-
17

1 unduly burdensome and harassing in both time and scope. Plaintifffurther objects to this request
2 on the grounds that it seeks documents that are neither relevant nor reasonably calculated to lead to
3 the discovery of admissible evidence in this action. Plaintiff further objects to this request on the
4 grounds that it calls for the production of irrelevant documents that are protected from disclosure
5 by plaintiffs and third parties' Constitutionally protected right ofprivacy. Plaintiff further objects
6 to this request on the grounds that it seeks documents that are protected from disclosure by the
7 attorney-client privilege and/or the attorney work-product doctrine.
9 All stock certificates or other DOCUMENTS evidencing ownership of stocks and bonds
10 held by YOU in any capacity.
t - -- - ---- -17 ---calls fortheproauctlon ofirreleva-ntnocuments-that are-protectedfromdisc1osure byplaintiff-s- -- - --- ---
19 on the gr01!11ds_that it se~ks_do~uments that are protected from disclosure by the attorney-client
24 All DOCUMENTS RELATING to Pacific Coast Management Corporation.
_26 Plaintiffincorporates by reference each and every General Objection set forth above as
-27 -- 1110liglifUllY serf5ftlIlierem: Plainttffoojects-to thisrequ:estDlline-groundsthatit-is-overl-y-breadi- -- --
-------o2g- -UIlduly-bur:densQme-and-harassing~Ela:intiff£urtheLo.bj.e_cts_tD_this_Le_quest on the grounds that it
18

4 and third parties' Constitutionally protected right ofprivacy. Plaintifffurther objects to this
10 All DOCUMENTS RELATING to Avalon Corporation.
T7· .calls for-the ptodrrction·ofirrelevantdu-cumentsthat are protected from- disclosure by plaintiff's·
19 on th~ grounds that it seeks documents that are protected from disclosure by the attorney-client
24 All DOCUMENTS RELATING to any ENTITY in which Pacific Cost Management
25 Corporation is a general partner.
26 RESPONSE-'I'O DOCUMENT REQUEST NO. 33:
--~------- - ---~- -----~2-7- ~~--- -----prainfifflncorp.orates byr.eferenc-ee-ach-a-rrd--eve-ry-Ge-rreral--0bj-e-ctiQl'r-setforth--~b-oy~--~s---
28- thQugh-full.:y-setforth.herem~Ela:intif£obJec.ts-to--thisJ.equesLon..the_gro_unds_thatiUs_oye.rl.Ji: broad,
19

~-.- - -~ -_. ---
11 All DOCUMENTS RELATING to any ENTITY in which Avalon Corporation is a general
12 partner.
13
14
15
16
1-7.
18
19
20
21
Plaintiff incorporates by reference each and every General Objection set forth above as
though fully set forth herein. Plaintiff objects to this request on the grounds that it is overly broad.
Plaintiff further objects to this request on the grounds that it seeks documents that are neither
relevantnor reasonably-ca1culatedto leadto the discovery-ofadmissible evidence~in~thisaetion.
Plaintifffurther objects to this request on the grounds that it calls for the production ofirrelevant
documents that are protected from disclosure by plaintiffs and third parties' Constitutionally
protected right ofprivacy. Plaintifffurther objects to this request on the grounds that it seeks
documents that are protected from disclosure by the attorney-client privilege andlor the attorney
22 work-product doctrine.
26 All DOCUMENTS RELATING to any lawsuit in which YOU are involved as a representative
-_ .. ~-~ --'27 -Ior any PERSON-cYrENTITY-:-~
~------~28_li--------------------------------_________________________________________~_____
20

4 burdensome and oppressive. Plaintifffurther objects to this request on the grounds that it seeks
5 documents that are neither relevant nor reasonably calculated to lead to the discovery of admissible
6 evidence in this action. Plaintifffurther objects to this request on the grounds that it calls for the
7 production ofirrelevant documents that are protected from disclosure by plaintiffs and third
8 parties' Constitutionally protected right ofprivacy. Plaintiff further objects to this request on the
9 grounds that it seeks documents that are protected from disclosure by the attorney-client privilege
10 andlor the attorney work-product doctrine.
12 All DOCUMENTS that RELATE to insurance policies that insure loss to any property, real or
13 personal, which YOU own, including equitable ownership, individually or jointly with any other
14 PERSON.
-17-- tnoughfully-setforth herein. Plaintiffobjectsto this-requeston the grounds-that ihsoverly broad;- -_.
20 and third parties' Constitutionally protected right ofprivacy. Plaintiff further objects to this
26 as follows: Plaintiffhas no doGuments responsive to this request in his possession or control.
21

3 though fully set forth herein. Plaintiff objects to this request on the grounds that by its failure to
4 limit the scope ofthe request it is overly broad, unduly burdensome and harassing. Plaintifffurther
5 objects to this request on the grounds that it calls for the production of irrelevant documents that
6 are protected from disclosure by plaintiff's and third parties' Constitutionally protected right of
7 privacy. Plaintiff further objects to this request on the grounds that it seeks documents that are
8 neither relevant nor reasonably calculated to lead to the discovery of admissible evidence in this
9 action. Plaintifffurther objects to this request on the grounds that it seeks documents that are
10 protected from disclosure by the attorney-client privilege and/or the attorney work-product
11 doctrine.
15 All DOCUMENTS that RELATE to payment ofany debt incurred by YOu.
---- -- --17 - -- -- - Pla-intiffincorporatesbyreferenceeachand-every6eneral 0bjection-set forth above-as -- - ---- -
18 though fully set forth herein. Plaintiff objects to this request on the grounds that by failing to limit
19 the scope and time period of the request it is overly broad, unduly burdensome and harassing.
20 Plaintiff further objects to this request on the grounds that it calls for the production ofirrelevant
21 documents that are protected from disclosure by plaintiff's and third parties' Constitutionally
22 protected right ofprivacy. Plaintifffurther objects to this request on the grounds that it seeks
23 documents that are neither relevant nor reasonably calculated to lead to the discovery of admissible
24 evidence in this action. Plaintifffurther objects to this request on the grounds that it seeks
25 documents that are protected from disclosure by the attorney-client privilege and/or the attorney
26 work-product doctrine.
--------- --- ----~-- ------- ------~~~~-~~~-~-~;~l~e~~--------
---28 -as-follows:-ElaintifLhas-no-doc-umentsJesp-Onslli:e_to_this-Le_quesrJnJlls_p_Qs_s_e_ssion o"-"'r-"c"-"o"""n""tr""o""-I.___I____
22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Dated:
-- -17 -- --- - --
18
19
20
21
22
23
24
25
26
----=:.5_.--_2_°_-', 2012
--- --------2-7- --- ----------- --------
28
WESTLAKE LAW GROUP
~.
- + -- -
i
1
i!
----------- - --.---- -------- --- -- - -- .- -- -~--- ------ ---- -------- ----------- --- --------- ------ ---------f----
23

VERIFICATION
2 STATE OF CALTFORNf~ COUNTY OF VENTURA
3 Jhave read the foregoing document described as:
4 PLAINTIFF STEPHEN M~ GAGGERO'S RESPONSES TO DEFENDANT KNAPP,
PETERSEN & CLARK'S REQUEST FOR PRODUCTION OF DOCUMENTS
5 LPURSUANT TO CODE OF CIVIL PROCEDURE § 708.030]
6
7
8
9
10
11
12
13
L4
and know its contents.
2L-[am a party to th1s action. The matters stated in it are true ofmy own knowledge except as
to iliose rnaUets t1wi are slated on information :and beliefautl, as to lhose matters1 I believe them to
be true.
I am officcr~ djrector~ partner, and/ormanaging agent ofa party to this action:, and am
authori?..ed to make this verification fOT and 011 its beha1t~ and Jmake thi<; verification for that
reason. I am informed and believe. and onthat basis allege thatthe matters stated in it are trot:: and
I
i correct.
I I
15 I I
.-16-- ~- rarn o11e()fthe :;J:ito:rneys fa;- ~party_toJllis_ac!i(}J:I... Su(:llP~is~_se~t fr?Ill~~5?uu.ty._ -- .-1---
17
18
19
20
21
where such attorneys have their offices., and I make this verificationfor and on behalfofthat party
fO'r that reason. I am informed and believe~ and on that basis allege that the matters stated in it are
I declare under penalty ofperjury under the Jaws ofthe State ofCalifomia thatthe foregoing
I is that the foregoing is true and correct.
22 II
i
23 I
24
Executed on ~ ;,.f~.I:-:- ._.._,2012, at Westlake.,. CaHfomia.
25

1
2
3
PROOF OF SERVICE
(C.C.P. §1013a; 2015.5)--" - ,', ~ . ",' ',. ",' .
•• ,< • '.;i"" ..
--- - ------ - -- ------- -------1-
- STATE OF CALIFORNIA, COUNTY OF VENTURA:
4
I am employed in the CountYofVeritUra~--state ofCalifornia I am over the age ofeighteen and not a
5 party to the within action. My business address is 2625 Townsgate Road, Suite 330, Westlake Village,
California 91361.
6
On March 20,2012, I served the foregoing document(s) described as: PLAINTIFF
7 STEPHEN M. GAGGERO'S RESPONSES TO DEFENDANT KNAPP, PETERSEN &
CLARK'S REQUEST FOR PRODUCTION OF DOCUMENTS on the interested parties in this
8 action as follows:
9 Randall A. Miller
Scott Newman
10 Austa Wakily
MILLERLLP
11 515 South Flower Street, Suite 2150
Los Angeles, CA 90071-2201
12ph~ 800-720-2126
13
14
15
16
- ---.--~- ..---. _.. --
17
18
-19
20
21
22
23
24
25
Fax 888-749-5812
---L
-
--
.lL
-----
BY MAIL I placed the above document(s) in sealed envelopes that I placed for deposit withthe U.S.
-Postal Service at Westlake Village, California, with postage thereon fully prepaid. I am readily
familiar with the finn's practice of collection and processing documents for mailing. Under that
practice it would be deposited with U.S. Postal Service on that same day with postage thereon fully
prepaid at Westlake Village, California in the ordinary course of business. I am aware that on
-motion-ofthe party-sefVeQ~sefVice-is presumedirivalid ifpostal-cancellati6ii-date6fpOStagemeter--
date is more than one day after date ofdeposit for mailing in affidavit.
BY FEDERAL EXPRESS I placed the above document(s) in sealed envelopes and placed them
____ fOI depositVithF~9-eraLE~ress, pn~paid f()r next gaydelivt;:ry._ _
BY FACSIMILE I transmitted the above document(s) by facsimile transmission to the parties and
facsimile numbers set forth herein,
BY PERSONAL SERVICE
State: I declare under penalty-ofperjury under the laws ofthe State ofCalifornia that the above is
true and correct.
Federal: I declare that I am employed in the office of a member ofthe bar ofthis court at whose
direction the service was made.
Executed on March 20, 2012 at Westlake Village, California.
26 ~------------;;----------------~------~-- _....un__.-u-n-~J}==.=-_-n- -------IH----------------------Hawn-Mas r-s:~-------~I---
28
1
PROOF OF SERVICE

EXHIBIT S
THIRD PARTY DEBTOR EXAM
JOSEPH PRASKE
(Case No. BC286925)

June 8, 2009 (40-49, 53-55, 69-70, 80-81)

~
2
3
4
5
6
7
8
9
~o
~~
~2
~3
~4
~5
~6
~7
~8
~9
20
2~
22
23
24
25
CERTIFIED COpy
STEPHEN M. GAGGERO,
Plaintiff,
vs.
KNAPP, PETERSON & CLARK; STEVEN
RAY GARCIA, STEPHEN HARRIS, ANDRE
JARDINI and DOES ~ through 50,
inclusive,
Defendants.
)
)
)
)
) No. BC 286925
)
)
)
)
)
)
)
-----------------------------------------)
THIRD PARTY JUDGMENT DEBTOR EXAMINATION OF
JOSEPH PRASKE, noticed by Sedgwick, Detert,
Moran & Arnold, LLP, taken at ~~~ North Hill
Street, Los Ange~es, California, at 9:~2 a.m.,
on Monday, June 8, 2009, before
Heidi Hummel-Grant, CSR ~2556.
Hutchings Number 222~48
HUTEHINGS
- --CQtJR:r-REP-O-RIERS--~--------------~----
800-691-3210 www.hutchings.com
Forbestresults,we recommend Adobe AcrobatorAdobe Reader(free at: http://get.adobe.com/reader/).

1---
STEPHEN M. GAGGERO vs. KNAPP, PETERSON & CLARK
Praske, Joseph on 06/08/2009
1
2
3
approximately 3,000 per month.
MS. CaBO:
Q. Is this money paid to Stephen Gaggero
4 personally?
5 A. I don't know.
6 Q. When was the last time that you remember
7 Pacific Coast Management making any payment to
8 Mr. Gaggero?
9 MR. CHATFIELD: Objection. Asked and answered.
10:18
10:18
10 THE WITNESS: I don't know. 10:19
MS. CaBO:11
12 Q. As a consultant for Pacific Coast Management,
13 what type of functions did you hire Mr. Gaggero to
14 perform?
15 A. To advise me regarding real property
16 transactions.
Q. Anything else?
A. No, I don't think so.
17
18
19 Q. Have you ever hired Mr. Gaggero for anything
20
21
22
23
24
25
else before?
A. No.
Q. Are you familiar with 511 OFW LP?
A. Yes.
A. It's a limited~PCirtnership.
Hutchings Court Reporters - Global Legal Services
800-697-3210
Page 40
10:19
10:20
10:21

1
2
Q. What is the nature of 511 OFW's business?
A. It owns property at 511 Ocean Front Walk.
Q. What city is that in?
A. Venice.
Q. Does it own any other properties?
A. I think so.
3
4
5
6
7
8
Q. Do you have a role in that limited partnership?
A. Well, why are you asking about me? I'm not the
9 judgment debtor.
10 Q. I know. But I'm asking your role in the
11 company so that I can ask you other questions from your
12 knowledge based on that role.
13
14
15
16
MR. CHATFIELD: Well, let's clear it up.
-EXAMINATION-
BY MR. CHATFIELD:17
18 Q. Does Mr. Gaggero own 511 Ocean Front Walk LP?
19
20
21
22
A.
Q.
A.
Q.
No.
Does he control 511 Ocean Front Walk?
No.
Does he have any ownership interest in
23 Ocean Front Walk, Venice, property?
. -- 24·
25
A. No.·
800-697-3210
the 511
Page 41
10:21
10:21
10:22
10:22
10:22

1 MR. CHATFIELD: Okay.
2 So on that basis lIm going to object to any further
3 questions about the operations of 511 Ocean Front Walk
4 LP on the basis of 511 Ocean Front Walkls privacy rights
5 and trade secrets.
6 And instruct the witness not to answer any more
7 questions.
8 It is not relevant to the subject matter of this
9
10
judgment debtor exam, which is according to your
subpoena -- about property of the judgment debtor and
11 Mr. Praskels possession or control concerning debt
12 Mr. Praske owes the judgment debtor. Now, I wish I
13 would confine your questions to that. Thank you.
14 THE WITNESS: Can I also -- Let me just state it
15 clearly, because I wrote this statement at a time:
16 I, the person ordered to appear under this
17 document, I do not have any property of the judgment
18 debtor in my possession or control, and I do not have a
19 debt owed to the judgment debtor.
10:22
10:22
10:22
10:23
20 10:23
21 -EXAMINATION-
BY MS. COBO:
22
23
24... Q. Does Mr. Gaggero have allY particJpatory _role in _._ ._._.
25 511 OFW LP?
800-697-3210
10:23
Page 42

A. No.1
2 Q. Does he work as a consultant for that limited
3 partnership?
4 A. No.
5
6
7
Q. Are you familiar with Gingerbread Court?
(A discussion is held off the record.)
MS. COBO: Sorry. Strike that.
8 Q. Does Mr. Gaggero have any ownership interest in
9 any entity that has an interest in 511 OFW?
10 A. No.
11 Q. Are you familiar with Gingerbread Court LP?
12 A. Yes.
13 Q. What is it?
14 A. Limited partnership.
Q. What's the nature of the business?15
16 A. Ownership of real property located at 517 Ocean
17 Front Walk, Venice, California.
18 Q. Does Mr. Gaggero have any ownership interest in
19 that property?
20
21
A. No.
Q. Does Mr. Gaggero have any ownership interest in
22 Gingerbread Court LP?
23
24---
25
A. No.
Q-. Does Mr. GaggerG ha-ve---any financial interes-t in
any entity that owns the property --
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1
2
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7
8
9
10
A. No.
Q. -- at 517 Ocean Front Walk?
A. No.
MS. COBO:
Q. Did he ever?
A. Yes.
Q. And when did that change?
A. In approximately 1997, 1998.
Q. And what happened to his ownership?
11 A. He transferred it to Gingerbread Court LP.
12 Q. What did he receive in exchange for that?
13 MR. CHATFIELD: Objection. Attorney-client
14 privilege.
10:25
10:25
10:26
15 THE WITNESS: I don't recall all the details of the 10:26
16 transaction. It was 12 years ago.
17 MR. CHATFIELD: You shouldn't answer when I object
18 on attorney-client privilege. It's okay, though.
19
20
MS. COBO:
Q. Is Mr. Gaggero currently associated with
21 Gingerbread Court LP in an~ way?
22 A. No.
23 Q. Does Mr. Gaggero provide any services for
...... 24. - . GingerbreadCour.t LP?
25 A. No.
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10:26
10:27

,
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9
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15
16
17
18
19
20
21
22
23
24--
25
Q. Has he ever worked as a consultant for
Gingerbread Court?
A. No.
Q. Are you familiar with Blue House LLC?
A. Yes.
It's a limited liability company whose business is
the ownership of real property at 523 Ocean Front Walk,
Venice, California.
Blue House LLC.
A. No.
Q. Does he have any role in Blue House LLC?
A. No.
the property at 523 Ocean Front Walk, Venice,
California?
A. No.
Q. Did he ever?
A. Yes.
Q. When was that?
A. I believe 1997.
Q. And how did ownership change? .
A. He transferred the property to Blue House LLC.··
Q~-- Does-Mr;-Gaggero- have-any-participa'to~y--r01 e--in-
Blue House LLC?
800-697-3210
Page 45
10:27
10:27
10:27
10:28
10:28
10:28

1 A. No.
2 Q. Does he work for Blue House LLC as a
3 consultant?
4 A. No.
5 Q. Has Mr. Gaggero ever?
6 A. No.
7 Q. Does any business or entity that Mr. Gaggero
8 has an interest in have an interest in Blue House LLC?
9
10
11
12
A. No.
MS. CaBO:
Q. What did he receive when he transferred the
13 property to Blue House LLC? [QUES]
14
15
16
17
18
19
20
21
M.R. CHATFIELD: Objection. Attorney-client
privilege. Invades right of privacy.
And instruct the witness not to answer.
MS. CaBO:
Q. Was a deed of --
MS. CaBO:
Q. Are you going to follow his instruction not to
22 answer?
23
..... ··24
25
A. Yes.
Q~ Did you handle the transfer ofprope-rt-yf-rom
Mr. Gaggero to Blue House LLC?
800-697-3210
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10:28
10:29
10:29
10:30
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1 A. No.
2 Q. Do you know who did?
3 A. No.
4 Q. No?
5 A. No.
6
7
Q. Are you familiar with Boardwalk Sunset LLC?
A. Yes. It's a limited liability company whose
8 business is the ownership of real property at 601 Ocean
9 Front Walk, Venice, California.
10 Q. Does Mr. Gaggero have any role in Boardwalk
11 Sunset LLC?
12 A. No.
13 Q. Does Mr. Gaggero have any financial interest in
14 Boardwalk Sunset LLC?
A. No.15
16 Q. Does Mr. Gaggero have any financial interest in
17 the property. at 601 Ocean Front Walk, Venice,
18 California?
19
20
A. No.
Q. Has he ever?
21 A. Yes, prior to 1997, I believe.
22 Q. And what was that interest?
23 A. I think he was -- Can you read the question
.. 24 .. again'[
25 Q. Did Mr. Gaggero have an ownership. interest in
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10:30
10:31
10:31
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10:31

- - - ---- -
1 601 Ocean Front Walk, Venice, California, at any time?
2 A. Yes. Prior to 1997 I believe he was the owner
3 of the property.
4 Q. How did that change?
10:31
5 A. I believe that he transferred ownership by deed 10:32
6 to Boardwalk Sunset LLC.
7 Q. Did you draft that deed?
A. No.
Q. Do you know who did?
A. No.
8
9
10
11 Q. Do you know what he received in exchange for
12 transferring the deed? [QUES]
13 MR. CHATFIELD: Objection. Attorney-client
14 privilege. Right of privacy.
15 And I'm instructing the witness not to answer.
16 MS. COBO:
17 Q. Are you going to follow that instruction?
18 A. Yes.
19
20
MS. COBO:
21 Q. Do you know what he received -- it's a yes or
22 no question -- in exchange for transferring the deed
23 to
-24------- (A-discussion -is held off--the -record.)-
25 - MS. COBO: Sorry. Strike that.
800-697-3210
Page 48
10:32
10:32
10:32
10:33

STEPHEN M. GAGGERO VS. KNAPP, PETERSON & CLARK
1 Q. Do you know if he received anything in exchange 10:33
2 for transferring the deed to Boardwalk Sunset LLC?
3
4
5
6
7
8
9
10
11
12
A. I don't know.
Q. Do you know if Mr. Gaggero has any
participatory role in Boardwalk Sunset LLC?
A. Yes, I do know.
Q. Can you tell me whether he does?
A. No, he doesn't.
Q. Has he ever been hired as a consultant for
Boardwalk Sunset LLC?
A. No.
Q. Does Mr. Gaggero have any financial interest in
13 any business or entity that has a financial interest in
14 Boardwalk Sunset LLC?
15
16
17
18
19
20
A. No.
Q. Are you familiar with Montecito Properties?
A. No.
Q. Are you familiar with Monticello Properties?
A. No.
Q. Are you familiar with Sulfer Mountain Land &
21 Livestock Company?
22
23
A. Yes.
Q. Can you tell me what that is, pleaSe?
24---·· A.- .. It!s ·-a-limi-ted-liability--coropanywhose-business
25 is the operat.ion of someranch.property in Ventura,
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10:33
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10:35
10:35

1
2
3
4
5
6
7
8
Q. Have you ever heard of Workhorse LP?
A. No.
Q. Are you familiar with Malibu Broad Beach LP?
A. Yes.
Q. What is it?
A. Limited partnership.
Q. What's the nature its business?
A. It owned property on Broad Beach Road in
9 Malibu, California.
10:41
10:41
10 Q. Does Mr. Gaggero have a financial interest in 10:42
11 Malibu Broad Beach?
A. No.
Q. Did he ever?
12
13
14
15 Q. Does Mr. Gaggero have a financial interest in 10:42
16 the property located on Broadbeach Road?
17
18
19
20
21
A. No.
Q. Did he ever?
A. Yes, I think so.
Q. And what was that financial interest?
A. I think he was the owner of the property, and
22 he transferred it to Malibu Broad Beach LP.
23
24
25
Q. Do you know when that took place?
A.· I believe- approximately_.l~ '}'"ears.ago.... ___.
Q. Would that be in 1'97?
800-697-3210
Page 53
10:42
10:43

STEPHEN M. GAGGERO VS. KNAPP, PETERSON & CLARK
1 A. '97 or '98 I b"elieve.
2 Q. Do you know if he received any compensation for
3 transferring that property?
A. He may have, but I don't recall.4
5 Q. Does any business or entity that Mr. Gaggero
6 has financial interest in have a financial interest in
7 Malibu Broad Beach?
A. No. The property was sold many years ago.
Q. Has Mr. Gaggero ever been hired by Malibu
Broadbeach?
A. No.
8
9
10
11
12 Q. Has Mr. Gaggero ever been used as a consultant
13 for Malibu Broad Beach?
14 A. No.
15 Q. Are you familiar with Marina Glencoe LP?
16 A. Yes.
17 Q. What is it?
18 A. A limited partnership. Its business was the
19 ownership of real property on Glencoe Avenue in
20
21
22
Marina del Rey.
Q. Is it still in existence?
A. The property was sold many years ago.
23 Q. Does Mr. Gaggero have a financial interest in
I~------- 24---Marina -Glencoe?-
25 A. No.
800-697-3210
Page 54
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Q. Did he ever?
A. No.
1
2
3
4
5
Q. Does Mr. Gaggero have a role in Marina Glencoe?
A. No.
Q. Did he ever?
6 A. No.
7 Q. Does Mr. Gaggero have a financial interest
8 the property owned in Marina del Rey on Glencoe?
9
10
A. No.
Q. Did he ever?
11 A. Yes, I think so, prior to 1997 or 1998.
12 Q. What was that?
in
13 A.. I believe he was the owner of the property.
Q. And how did that change?14
15 A. He transferred the property by deed to Marina
16 Glencoe LP.
17
18
19
20
Q. Did you draft that deed?
A. Yes, I believe so.
Q. Do you know if Mr. Gaggero received any
compensation in exchange for that deed?
21 A. I believe there was -- Well, yes.
22 Q. What was it? [QUES]
23
2~--
25
THE WITNESS: Do I have to answer?
MR-. CHATFIELD :- .. No~-
I'~:m going to obj ect on the grounds of the
800-697-321 0
Page 55
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---- -- - - ----
1
2
3
4
5
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8
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12
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17
18
19
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21
22
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2'4--
25
As I said earlier, I am the trustee of the Arenzano 11:10
Trusti it1s an irrevocable trust that was created in
1997i it is a discretionary trust that was created under
the law of a foreign jurisdictioni it is not a
California Trusti Steve Gaggero is not a beneficiary but 11:11
rather he, along with every other relative, is merely
within a class of beneficiariesi the trustee, that1s me,
has complete and unlimited authority to decide when and
if anyone within the class received a distributioni
Steve Gaggero has no right whatsoever to any property in 11:11
the possession or control of the trust.
MS. COBO:
Q. Has Mr. Gaggero received money from the
Arenzano Trust?
A. No. 11:12
Q. Has he ever?
A. No.
Q. Has Mr. Gaggero ever received any assets from
the Arenzano Trust?
A. No. 11:12
Q. Has he ever?
A. No.
MS~ COBO:
- ---
Q. Could we mark that paper that you brought with 11:13
800-697-3210
Page 69

1
2
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4
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6
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10
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12
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14
15
16
17
18
19
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21
22
23
- - -- -- ----
24-
25
you as Exhibit 3? 11:13
A. No.
THE WITNESS: I read it completely.
MS. COBO: 11:13
Q. Can I see it, please?
A. Sure.
Q. Under what laws is the Arenzano Trust created?
A. The laws of Anguilla, A-N-G-U-I-L-L-A.
Q. Have any businesses or entities that 11:14
Mr. Gaggero has financial interest in ever received any
distribution of assets from the Arenzano Trust?
A. No.
Q. Has the Arenzano Trust ever made any
distributions to any of the - - Mr. Gaggero' s family 11:15
members?
A. I don't recall.
Q. Have any distributions of assets ever been made
from the Arenzano Trust?
Q. What is held in the trust by the Arenzano
Trust? [QUES]
A. Can I discuss with my attorney?
(A-aiscussion is -h-eld off the re-cord-~)-
MS. COBO: Could you read back the question,
800-697-3210
Page 70
11:15
11:17

1 Q. Do you know whether Mr. Gaggero has any
2 collections of paintings or artwork?
3
4
5
6
7
8
A. No, I don't know.
Q. Any collections of books?
A. I don't know.
Q. Any collections of stamps?
A. I don't know.
Q. Do you know if Mr. Gaggero has any collections
9 of coins?
10
11
A. I don't know.
Q. Do you know if Mr. Gaggero has any collections
12 of antiques?
13
14
A. I don't know.
Q. Do you know whether Mr. Gaggero has any
15 collections of guns?
16
17
18
19
20
21
22
23
24--- ..----
A. I don't know.
Q. Do you know whether Mr. Gaggero owns a car?
Q. Do you know whether he leases a car?
Q. Have you ever known Mr. Gaggero to use a car?
A. Yes.
Q. Do you know whether he owned it?
k;--·· Theonlyvehicle-tha-t--I- -knew-abeut.-is -a--t-~uGk---
11:36
11:37
11:37
11:37
11:37
25 . -.. 11:37-
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Page 80

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Q. And when was that truck provided to him?
A. I don't know. I don't recall.
Q. Does Mr. Gaggero still have use of that truck?
A. Yes, I believe so.
One second.
MS. COBO:
Q. How long has Mr. Gaggero had use of the truck?
A. I think for several years.
Q. Can you give me an estimate?
A. I would say approximately ten years.
Q. Is there automobile insurance on that truck?
A. Yes, I think so.
Q. Do you know who pays for that automobile
insurance?
A. I think Pacific Coast Management.
Q. Do you know if Mr. Gaggero has automobile
18 insurance?
19
20
A. I don't know.
Q. Do you know who at Pacific Coast Management
21 would pay for the automobile insurance?
22
23
24
25
A. The bookkeeper, I believe.
Q. Is that Mr. Maravelas?
A. Yes.
Q. Now, you said that Mr. Maravela.sf no longer
800-697-3210
Page 81
11:37
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11:39
11:39
11:39

~ STATE OF C~IFORNIA ) ss
2
3 I, Heidi Hummel-Grant, CSR ~2556, do hereby
4 declare:
5
6 That the above foregoing one hundred and one
7 ( 101) pages contain a full r true and correct
8 transcription of the proceedings.
9
10 I further declare that I have no interest in the
~~ event of the action.
12
~3 I declare under penalty of perjury under the laws
14 of the State of California that the foregoing is true
15 and correct.
16
17
18
WITNESS my hand this 2nd day of
-.;9'u1y 2009
102
HUTCHINGS COURT REPORTERS/ LLC - GLOBAL LEGAL SERVICES '
800.697.3210

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