On Mon, 07 Oct 2002 00:17:07 GMT, hkhenson@cogeco.ca (Keith Henson) wrote:
>snip
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>Block 4, Camino Venganza
snipUNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
BEFORE THE HONORABLE ARTHUR S. WEISSBRODT, JUDGE
In Re: ) Case No. 98-51326-ASW ) Chapter 13 ) HOWARD KEITH HENSON, ) ) TRIAL ) Volume IV Debtor. ) Pages 493 to 725 ) ) ) Wednesday, October 2, 2002 ) San Jose, California
Appearances:
For the Debtor: Law Offices of Stanley A. Zlotoff By: Stanley A. Zlotoff, Attorney at Law 300 South First Street, Suite 215 San Jose, California 95113
For Creditor Religious Moxon & Kobrin Technology Center: By: Helena K. Kobrin, Attorney at Law 3055 Wilshire Boulevard, Suite 900 Los Angeles, California 90010
McPharlin, Sprinkles & Thomas By: Elaine M. Seid, Attorney at Law 10 Almaden Boulevard, Suite 1460 San Jose, California 95113
Paul, Hastings, Janofsky & Walker LLP By: Samuel D. Rosen, Attorney at Law 75 East 55th Street New York, New York 10022-4597
For Witness Lucas: Howard Hibbard, Attorney at Law
Electronic Court United States Bankruptcy Court Recorder: Clerk of the Court Liz Armendariz 280 South First Street, Room 3035 San Jose, California 95113 (408) 535-5003
Certified Electronic Palmer Reporting Services Transcriber: P. O. Box 30727 Stockton, California 95213-0727
Proceedings recorded by digital recording; transcript produced by federally-approved transcription service. I N D E X
Debtor's Objections to Creditor's Exhibits: page 495Court's Decision on Debtor's Objections and Creditor's Exhibits: page 506
Agreements of the Parties: page 595
Witnesses: Direct Cross Redirect RecrossVictoria Arel Lucas
By Mr. Rosen: (Resumed): 540 605
By Mr. Hibbard: 689
By Mr. Zlotoff: 689
By Mr. Rosen: 709
Exhibits: Received in Evidence
Creditor's Exhibit 290: page 523Creditor's Exhibit 292: page 671
Debtor's Exhibit R: page 534Debtor's Exhibit S: page 535
Debtor's Exhibit O: page 536
Debtor's Exhibit P: page 536
Debtor's Exhibit Q: page 537
495
1 Wednesday, October 2, 2002 9:13 o'clock a.m.
2 P R O C E E D I N G S
3 THE CLERK: Please rise. This is the United States
4 Bankruptcy Court for the Northern District of California. Court
5 is now session.
6 THE COURT: Good morning, ladies and gentlemen. Sorry
7 for the brief delay. I had something I had to take care of.
8 This is the case of Keith Henson.
9 May I have appearances of counsel?
10 MR. ZLOTOFF: Stan Zlotoff for debtor.
11 MR. ROSEN: For Religious Technology Center, Samuel D.
12 Rosen, Paul, Hastings, Janofsky and Walker.
13 MS. KOBRIN: Also for Religious Technology Center,
14 Helena Kobrin, Moxon and Kobrin.
15 MS. SEID: Elaine Seid of McFarland, Sprinkles and
16 Thomas, also for Religious Technology Center.
17 THE COURT: Good morning.
18 Are you ready to present your argument?
19 MR. ZLOTOFF: Yes, Your Honor. I think the easiest
20 way to do this would be if you - if you have a copy of Mr.
21 Rosen's brief.
22 THE COURT: I do.
23 MR. ZLOTOFF: Okay. And then we have certain
24 headings. And so the first headings is at page 6. And actually
25 the first exhibits of interest are on page 7. There's nothing
496
1 that's really stated before page 7 that's of any pertinence at
2 all to the exhibits.
3 On page 7, these are - these are all objectionable
4 with the exception of 168. They're - all of these references,
5 that is Exhibits 121, 124, 140, 142, 159, 230, 231, 232, 266,
6 267, 268, those of the ones that I had objected to. And all of
7 those represent postings at one time or another by Mr. Henson.
8 And you can gather from certain quotations set forth here the
9 general tenor of those postings.
10 For example 140: The excerpt is "Killing the
11 organization off entirely is the best way to change the future
12 of Scientology."
13 Number 230, Exhibit 230: "Activities of Henson and
14 his cronies will only end when Scientology is ground into the
15 dirt or spent its last dollar on lawyers."
16 266: "We are out to break the COS."
17 268: "The annihilation of COS and all its fronts is a
18 worthy goal."
19 All those to my mind are free speech. I mean they
20 might be cartoonish. To my mind it's a bit like the Wiley
21 Coyote complaining that the Roadrunner - or I guess the reverse
22 - the Roadrunner complaining the Wiley Coyote's after him, but
23 it's cartoonish.
24 I mean to me it makes no difference; except the only
25 way it could possibly be relevant is if these are supposed to be
497
1 bad acts and based upon these bad somehow we're supposed to
2 infer some kind of what? Bad faith Chapter 13 character that is
3 somehow relevant to the issue of confirmation.
4 In other words, none of these postings have anything
5 to do with the debt that RTC holds. None of them have to do
6 with any kind of budgetary analysis. None of them have to do
7 with any net worth. They're just ramblings by somebody on the
8 Internet.
9 168 was also objectionable, but that's not a posting.
10 That's the protective order. And again it was a protective
11 order entered in either the District Court case or related
12 District Court case. And the protective order was granted, I
13 believe, to exclude Mr. Henson from the deposition because of
14 some alleged threats that someone had perceived had been made.
15 And again to the extent it has any interest it's to
16 approve an alleged bad act or conduct on behalf of Henson at
17 some time in the past, utterly unrelated to either the debt
18 that's before the Court or anything having to do with the
19 Chapter 13. And it's totally irrelevant for that purpose.
20 THE COURT: Why don't you complete your argument as to
21 all the exhibits?
22 MR. ZLOTOFF: Okay. I'm going forward.
23 Number 257. If you down the page under the next
24 heading, "Contempt and threatened contempts." 257 is just
25 another internet posting, which to me is nothing other than free
498
1 speech and not objectionable for the same reasons I indicated.
2 I didn't have - a lot of these I didn't have any
3 objection to. Can I just state the ones I have objection to?
4 THE COURT: Sure.
5 MR. ZLOTOFF: Because they pretty much wrote out a
6 trial brief rather than just limiting their objections to the
7 ones that I had a problem with.
8 Number 22. At the bottom, Exhibit 22, I withdraw - I
9 withdraw any objection for that.
10 THE COURT: What page of their brief is Exhibit 22?
11 MR. ZLOTOFF: I'm sorry. What page of their brief?
12 It's page 7.
13 THE COURT: Yeah. You're asking me to follow their
14 brief, and I'm trying -
15 MR. ZLOTOFF: Yeah, I'm sorry.
16 THE COURT: - trying to follow.
17 MR. ZLOTOFF: That's page 7 at the bottom.
18 THE COURT: Oh, yes, I see it. Excuse me a second.
19 Ms. Lucas, I noticed that you just came into the
20 courtroom. We are going to be dealing with these legal issues
21 about the exhibits for at least another 20, 25 minutes. So if
22 you need to make calls or do anything, we can come out in the
23 hall and find you.
24 MR. ROSEN: Your Honor, may I refer you to the back of
25 the brief which has the equivalent of the table of authorities -
499
1 THE COURT: You need your mic, to be at your mic.
2 MR. ROSEN: - which has the equivalent of a table of
3 authorities, functionally. So, for example, on the question you
4 just asked, obviously if after - when you consider these in your
5 chambers, if you have any questions of the kind that was just
6 asked, you'll see that Exhibit Number 22 appears on page 7.
7 That's what the table in the back is for. So Your Honor can
8 locate it in the brief.
9 MR. ZLOTOFF: Your Honor, actually you don't even know
10 the ones that I made objection to. So it's - why don't I just
11 not even mention 22 and you just assume that there's no issue on
12 that. I think that would be easiest way to proceed.
13 THE COURT: I do know from a footnote.
14 MR. ZLOTOFF: Oh, that's right, you're right. Okay.
15 I withdraw any objection to 22.
16 On the next page, page 8, Exhibit 80 - I'm sorry
17 Exhibit 25 is withdrawn. No objection as to 25.
18 Exhibit 80, Exhibit 269, 270, 274 are still
19 objectionable on relevance grounds. They're postings. And
20 again to me they just evidence free speech. Or if they suggest
21 bad conduct, it's irrelevant to prove some kind of character
22 that's wrongful with regard to Chapter 13.
23 Exhibit 274. I have no objection to 274. I'm not
24 sure whether that was one of the ones I objected to or not.
25 MR. ROSEN: Yeah.
500
1 MR. ZLOTOFF: It was? I withdraw objection to 274.
2 Then the next batch is Number 3 on page 8: "Henson's
3 repeated efforts to derail the copyright trial." I don't have
4 any objections in that category - in that - under that heading.
5 So either I didn't make objections as to the ones indicated or I
6 withdraw whatever objections I may have had.
7 Is that clear, Your Honor?
8 THE COURT: I guess so. It's 9 and 4.
9 MR. ROSEN: And 6, Judge.
10 THE COURT: Yes.
11 MR. ROSEN: He didn't object to any of those. And
12 also 7, I see. It's on line 14 under - in that heading. No
13 objection to that one either. And 8 on line 16, no objection to
14 that one either.
15 MR. ZLOTOFF: The next heading, Number 4, on page 8.
16 No objections in that category. So I did have an objection to
17 256 earlier; that's withdrawn. And the other exhibits indicate
18 I never objected to in the first place.
19 The next heading on page 9 is Heading Number 5. And
20 this gets into - the first paragraph Exhibits 5 and 258 are
21 exhibits pertaining to other trials or orders made in other
22 cases. And to me for that reason they lack relevance to this
23 particular case.
24 Exhibit 96 is a posting that to me again is nothing
25 other than free speech posting and doesn't suggest one thing or
501
1 the other. And for that reason it is irrelevant, as with the
2 next paragraph on page 9. So that would include Exhibits 94,
3 93, 81 and Exhibits 147 to 158. They're all free speech
4 postings. And, you know, he's talking about the amusement value
5 of the litigation and explaining his picketing activities and so
6 forth. And it's, you know, it's - it's irrelevant. I don't see
7 any point to - it has to the trial.
8 The last paragraph are a series of exhibits that
9 pertain to the criminal trial. And, remember, the criminal
10 trial happened postpetition. I think a couple of years
11 postpetition, regarding postpetition conduct. Mr. Henson at
12 some kind of a Scientology or RTC headquarters, I think, in
13 Riverside. It's irrelevant.
14 I don't understand why any kind of - it was a
15 misdemeanor conviction, as I recall. So, in the first place, I
16 don't think misdemeanor convictions are admissible. It's
17 irrelevant because it doesn't bear on either the debt or assets
18 or any pertinent confirmation standard. To the extent that it
19 shows anything that RTC is trying to squeeze into a relevancy
20 category, it's that he was a bad person, he committed a bad act,
21 therefore he again has some kind of character flaw that carries
22 into Chapter 13. And so he must be doing bad things while in
23 Chapter 13. To me it just doesn't follow.
24 And you - as a matter of law, as I recall - Mr. Rosen
25 I'm sure will correct me on my evidence, but I don't think you
502
1 can prove character from an instance of bad conduct.
2 So, anyway, we were talking here about again the last
3 paragraph on page 9. This will be Exhibit 183, misdemeanor
4 complaint; 129 a docket sheet; 260, again having to do with the
5 criminal trial. And also 134. I'm on page 10 now.
6 THE COURT: Um-hum.
7 MR. ZLOTOFF: Exhibits 133, 134, 135, 141, they're all
8 postings. And to me, looking at them without any narrative
9 supplied by RTC, they're just postings, again free speech. RTC
10 tries to tie them in by saying, 'Well, they were part of the
11 criminal trial.' And again I say so what. They were a part of
12 the criminal trial, not relevant.
13 On that line, line 8, page 10, 164 to 167 and 261 to
14 262. Again I read them and I - I just see free speech. I don't
15 even see context to them. I mean they're just - some of are
16 just two sentences long that don't have any significance to me
17 at all - except RTC supplies a context and says they were used
18 in the criminal trial. And I say, okay, if they were used in a
19 criminal trial, so what, they're still irrelevant.
20 The next line down, 273, is the dismissal of his
21 criminal appeal. And I say so what. It's irrelevant. I don't
22 care about the criminal appeal or that it was dismissed based on
23 the fugitive disentitlement doctrine. We've already talked
24 about fugitive disentitlement in the Degan case and how that's
25 not - it's not relevant in our circumstance here.
503
1 The next paragraph, again Exhibit 250. It's something
2 from the criminal case. Not relevant for that reason.
3 Exhibit 249, the next sentence again, that's from the
4 criminal case and not relevant to this proceeding.
5 The next paragraph at line 15 of page 10, Exhibit 114
6 pertains to a tax case that Mr. Henson filed against RTC. It
7 may be interesting, but I don't see the relevance at all. I
8 mean certainly someone has got a constitutional right to file a
9 lawsuit, rightly or wrongly. I don't see what it proves one way
10 or the other.
11 Exhibit 233, the same thing. It has to do with R- -
12 with Henson's action against the RTC.
13 The next batch is headed Number 6, "Inaccurate
14 Schedules." I have no objection to anything in that category -
15 I'm sorry - on that page. On page 10, on that category, I don't
16 have any objection. In fact, I don't have anything in that
17 whole heading except for Number - this is on line 6 of page 11,
18 215 and 216 just appear to be postings without free - again free
19 speech postings without any particular context that makes any
20 significance, so far as I can see.
21 But except for those two, the remainder of the
22 exhibits noted, if I had an objection I withdraw the objection,
23 otherwise I didn't have objection. And RTC just chose to ramble
24 on about the - about these exhibits.
25 THE COURT: Okay.
504
1 MR. ZLOTOFF: Turning to page 12, the next heading is
2 Number 7. I have no objection to anything - any evidence or any
3 exhibit mentioned in that heading, nor did I ever.
4 Down the page on heading 8, there's nothing on page
5 12.
6 On page 13, there's a footnote, which is footnote 11,
7 in which is noted Exhibit 95. I withdraw the objection I had to
8 Exhibit 95. I didn't - I don't think I ever had an objection to
9 Exhibit 98 mentioned right next to it. Nor did I to the other
10 exhibits noted.
11 Back to the top of the page on page 13 -
12 THE COURT: 14?
13 MR. ROSEN: No, page 13, the top of the page 13.
14 Again, we're on -
15 THE COURT: I see. Yeah, because you went to the
16 footnote.
17 MR. ROSEN: - Heading 8. Exhibits 125 and 126 pertain
18 to model plans. And to me those are irrelevant. And they're
19 irrelevant because I could take a model plan, I could cross out
20 lines and add lines. And, you know what, I'd end up with our
21 model plan. And what difference does it make? What does it
22 prove? What does it show?
23 You could do anything with the plan and the issue is
24 what's in a plan and was it objected to? And that's all. I
25 mean the fact that somebody uses one form or another doesn't
505
1 mean you can't add or delete to a model plan. And so the issue
2 is really what's before the Court; and the others are utterly
3 irrelevant. They don't prove anything. The other exhibits
4 noted I had no objection to, in any event.
5 Going to the next heading, Number 9, "Misconduct." No
6 objections to anything in that batch. I had objected to 222 and
7 224 to 226. I withdraw my objections to those. The others
8 noted, I don't think I had any objection to, to begin with.
9 Page 14, the next heading, Heading 10. No objections.
10 Again, I don't think I had any to begin with in that - in that
11 series. Oh, I'm sorry, except for again at the bottom, 215 and
12 216. I previously noted as they were in another - another
13 heading. So except for Exhibits 215 and 216, which are noted at
14 the bottom of page 14, I don't have any objection to any of the
15 other exhibits noted. And the 215 and 216 were postings,
16 Internet postings which I contend are just free speech.
17 Page 15, Heading 11, I have no objections to anything
18 in that. If I objected to 272, I withdraw that. The others I
19 don't think I objected to, to begin with.
20 Heading Number 12, I had no objection, to begin with,
21 with anything in that column.
22 Heading 13 on page 15, the last one. Again, all of
23 these indicated here have to do with - I think almost all of -
24 are more recent postings. And to me they're just free speech
25 postings. We're talking about 2- - Exhibit 253, 254, 188, 238,
506
1 251, 255, and 265. And those are all again free speech postings
2 and not relevant. And that's...
3 THE COURT: I know you are ready to argue, Mr. Rosen.
4 Are you finished, Mr. Zlotoff?
5 MR. ZLOTOFF: I think so, yes.
6 THE COURT: But I intended to admit almost all of
7 these documents. Maybe you ought to hear my decision before you
8 make an argument.
9 Essentially all of the exhibits - and I'm not able to
10 switch back and forth between what was in the footnote, what
11 RTC's brief says, and what you just said. So I'm going to have
12 to do this more broad brush. But essentially they're almost all
13 admitted.
14 I'm faced with the totality-of-the-circumstances test
15 which I have to apply. And that includes Mr. Henson's alleged
16 motive for filing bankruptcy. RTC says it's not to reorganize
17 but to continue to harass the creditor and to try to destroy the
18 creditor by stopping the District Court trial, and running up
19 the creditor's expenses, et cetera, et cetera, is alleged
20 manipulation of the bankruptcy law to suit his own alleged
21 purposes of destroying the church, his alleged overall disregard
22 of the law.
23 And so essentially all of this comes in under the
24 totality-of-the-circumstances test, both the prepetition conduct
25 and the postpetition conduct, under the caselaw.
507
1 Mr. Zlotoff has alleged that certain, especially
2 postings, but perhaps other documents are free speech. And I
3 make no ruling on Mr. Henson's free speech. The fact that it
4 may be - Mr. Henson may be entitled under the free speech
5 doctrine to write something really is not what I'm focusing on.
6 What I'm focusing on is whether or not, under the
7 totality-of-circumstances test, a statement, a posting, a
8 writing, essentially any - any of these documents come in under
9 the totality-of-the-circumstances test, and I think that they
10 do.
11 There - and I can go through some of these, but
12 certainly what happened vis-a-vis the criminal trial, what
13 happened in these postings, and what happened in the District
14 Court are admissible under the totality-of-the-circumstances
15 test. The weight is a different matter, but I'm not going to
16 the weight at this point. I'm only talking about what's
17 admissible.
18 Exhibits 125 and 126 are model plans from other
19 districts and information regarding those model plans. Those
20 aren't relevant to whether the debtor acted in bad faith by
21 using the model plan that he's required to use in this district.
22 And efforts to avoid a lien as an impairment of a homestead
23 objection - homestead exemption, which the Bankruptcy Code
24 specifically permits, is not relevant to whether bankruptcy was
25 filed in bad faith. So those don't come in. In fact, there's
508
1 no knowledge that Mr. Henson even knew about the model plans in
2 any other district.
3 MR. ROSEN: What exhibit are you referring to?
4 THE COURT: I think they're 125 and 126.
5 MR. ROSEN: No, I know those as the model plans. But
6 you then said efforts to avoid a lien. Do you have an exhibit
7 that you are referring to, Your Honor?
8 THE COURT: I don't have a number. I think it's 122
9 and 187, and the claims filed by the creditor, 194 and 195. But
10 I believe 122 and 187 involve efforts to avoid the creditor's
11 lien.
12 MR. ROSEN: I don't - I don't believe so, Judge.
13 THE COURT: Well, we'll check.
14 MR. ROSEN: Okay.
15 THE COURT: We'll check. But, in any event, the - and
16 again, Mr. Zlotoff, I'm not able to go through all of the ones
17 that you've withdrawn. So I may discuss some of the ones that
18 you've withdrawn an objection to, or which were not listed in
19 your footnote but were referred to in RTC's brief. But under
20 the time I did the best that could.
21 The - Exhibit 275, page - is submitted to show the
22 debtor allegedly knew before publishing the creditor's work,
23 that it was copyrighted, and someone else had been enjoined from
24 publishing it, but went ahead and published it anyway.
25 Exhibit 1 is a de- - cease-and-desist letter to the
509
1 debtor. 2 is his refusal to stop. 99 is the District Court
2 summary judgment for the creditor. 3 is the June '97 permanent
3 injunction.
4 The District Court trial was May 5th, '98. Exhibit 20
5 are trial excerpts of a tape played for the jury. 213 is a tape
6 and transcript of excerpts played.
7 21 is debtor's answer to his attorney's question as to
8 whether he had been deterred from doing it again, "At least I
9 wouldn't do it openly."
10 36 is jury instruction regarding willfulness. 18 is
11 the jury's special verdict finding, willfulness. 173 is the
12 District Court judgment. 115 is the Ninth Circuit order
13 affirming.
14 100 is the Ninth Circuit order awarding creditor fees
15 for deterrence purposes.
16 Exhibits 112, 113, 116, 121, 124, 140, 142, 159, 168,
17 184, 213, 229, 230, 231, 232, 266, 267, 268, 275, and 279 are
18 statements by the debtor introduced to demonstrate his desire to
19 destroy the Scientology religion by various means.
20 107, 257, and 10 are debtor's alleged threats to
21 violate the injunction. Exhibit 109 is the District Court's
22 order expanding the injunction.
23 210 is this Court's order of relief from stay to allow
24 the creditor to go to state court regarding debtor's alleged
25 contempt of the injunction.
510
1 12 is the District Court order granting emergency
2 relief to stop threatened violation. 111 are findings of fact
3 by the District Court regarding contempt.
4 22 is the District Court contempt order. 25 is the
5 Ninth Circuit Court order affirming. 80 is debtor's statement
6 blaming other parties for those orders.
7 269, 270, and 274 are recent statements by the debtor
8 allegedly showing violation of injunction and intent to drive up
9 creditor's cost to enforce.
10 Exhibit 4 allegedly shows the District Court trial was
11 originally set for 12-97. And the debtor originally dated his
12 bankruptcy petition 12-1-97.
13 Exhibit 4 is the District Court's continuation of
14 trial due to its own schedule. Exhibit 6, 7, and 8 are debtor's
15 attempts to continue the trial again. 9 is the bankruptcy
16 petition filed after the continued efforts - the efforts to
17 continue failed.
18 256, the debtor's Bankruptcy Court notice to the
19 District Court within a very short time after filing bankruptcy.
20 209 is the Bankruptcy Court's March 23, 1998 relief-from-stay
21 order permitting the District Court to proceed.
22 211 is the debtor's notice of voluntary dismissal of
23 the bankruptcy case on March 24, '98.
24 5 and 28 - 5 and 258 are restraining orders issued
25 October '97 and December '97 to prevent the debtor from
511
1 harassing and picketing.
2 96 and 91 are the debtor's expression of appreciation
3 to those who supported picketing, and requests for additional
4 help.
5 94 and 93 are debtor's statements about amusing
6 himself and others at creditor's expense.
7 Exhibits 279 is his deposition about his picketing.
8 Exhibits 147 through 158 are statements by the debtor about his
9 picketing.
10 Exhibit 183 is a misdemeanor complaint which, of
11 course, isn't for the truth, but is relevant. 129 is a docket
12 sheet from that criminal case.
13 269 is part of the trial transcript from that case of
14 what the debtor did and why he did it. Exhibits 133, 34, 35 and
15 141, and 164 through 167 and 261 and 262 are published
16 statements by the debtor that were exhibits at the criminal
17 trial.
18 273 is a dismissal of the debtor's appeal from
19 conviction. 250 and 264 showed jury conviction of a hate crime.
20 249 shows sentencing.
21 114 is the District Court's dismissal of the debtor's
22 suit against IRS seeking to revoke Scientology Church tax-exempt
23 status. 233 is the Ninth Circuit's order affirming.
24 Exhibit 16 is the debtor's original schedules. 2 - 27
25 are amended schedules. Other information - other exhibits
512
1 attack the information in the schedules.
2 Exhibit 16 and 277 allegedly show that the house - the
3 value of the house is the purchase price. 91 is an appraisal
4 purporting to show it to be worth less - I'm sorry - more on the
5 date of bankruptcy.
6 81 through 83 and 93, 94, 96, 189, 215, 216, 276, 277,
7 278, and 279 are statements by the debtor that he's received
8 money from others that allegedly were not scheduled as assets.
9 279 and 179 allegedly show that the daughter's school
10 expenses are much higher than scheduled, which - and which were
11 paid by a credit card.
12 98, 278 - 98 and 278 are offered to show that the
13 scheduled phone expense is 50 percent of what it really is.
14 Exhibits 35, 47, 56, 67, 177, 178, 191, 286, 278
15 allegedly show that he denied having a life insurance policy
16 with cash value.
17 Exhibit 276 is allegedly his denial that he owns
18 artwork, but Exhibit 89, 160, 234 allegedly show that he does.
19 Exhibit 221, 89 show - allegedly show that he owns
20 stock bought shortly prepetition that isn't scheduled. 276 and
21 279 are his admissions that he had a credit card or credit cards
22 when he filed - or credit card. And allegedly shows that he
23 purposely didn't disclose it.
24 Exhibit 278 and 279 are tax returns, allegedly without
25 certain information. 171 is his effort to explain.
513
1 174 is an application to the District Court for pauper
2 status. 277 is - allegedly is Mr. Henson's admission that the
3 information - that it isn't correct.
4 Exhibit 187 shows the debtor suffered to sell his
5 house without marketing it, without notice to creditors, the
6 trustee, or the Court. That's what it's intended to show.
7 Exhibit 18, 28, 92 are proposed plans allegedly
8 offering nothing to the creditor after administrative expenses
9 are provided for.
10 122 and 187 are the ones, I believe - and we'll check
11 those - reflecting efforts to avoid the creditor's lien under
12 the Bankruptcy Code. And we should check those.
13 And then I talked about 125 and 126.
14 The debtor's conduct in discovery is part of the
15 circumstances alleged to show his bad faith. And that's 13, 14,
16 29, 35, 37, 39 to 44, 46 to 48, 53, 59, 61, 62, 64, 65, 66, 67,
17 68, 69, 72, 73, 75, 86, 222, 224, 225, 226, 276, 277, 278, 279,
18 30, 31, 32, 33, 34, 59, 61, 78, 97, 122.
19 He allegedly admitted he destroyed relevant records
20 rather than produce them in discovery and/or to the IRS, Exhibit
21 279, 58, 60, 61, 75, 81, 83, 93, 94, 96, 215, 216, 279.
22 He allegedly caused himself to be under unemployed,
23 and that's relevant, 84, 275, 272, 278, 279, 76, 77, 278.
24 279 shows the debtor making what is characterized by
25 the creditor as an extortionate - extortionate demand on the
514
1 creditor.
2 253 is debtor's statement from Canada regarding
3 whether he will return or not.
4 254 is his statement complaining about his criminal
5 case.
6 188 is his statement about being in Canada.
7 238 is a letter saying he won't appear for sentencing.
8 251 shows that he didn't appear.
9 255 and 265 are his statement that he was arrested in
10 Canada for having entered without revealing his fugitive status.
11 And they are introduced to attempt to show that he continues to
12 mock the law.
13 Now let's turned to 125 and 126 -
14 MR. ROSEN: Your Honor, I think I can save you some
15 time. The first two that you are not - I gather from your
16 comments, are not admitting because you don't believe they're
17 relevant, are 125 and 126, those are the model plans. Let me -
18 those are a matter of public record. But let me just -
19 THE COURT: Sure.
20 MR. ROSEN: - tell you why they were offered.
21 It was our recollection that Your Honor, not in a
22 ruling but in rumination, in comments from the bench a long time
23 ago in this case, had indicated that under the model plan of
24 this district the valuation date for the house, which under the
25 statute is the effective date of the plan, is the date of the
515
1 filing of the petition. Your Honor is going to have to decide
2 that issue at some point. I don't know necessarily in this one
3 or in the next motion.
4 But assuming Your Honor needs to decide, we put this
5 in only to show the model plans of other districts in the
6 following way: If Your Honor were to write a decision which
7 says the model plan of this district says this and therefore I'm
8 going to follow it, we would want the record to show that the
9 model plans of other districts don't follow it. If Your Honor
10 has no intention of doing that, and saying as you just did, the
11 model plan is a model plan, and both debtors and the Court are
12 free to ignore it, to follow it, do whatever they want, then the
13 other plans in the other districts are indeed irrelevant.
14 But we put it in only because it appeared to us that
15 Your Honor's nonbinding comments, if you will, of observations
16 on the subject in the past, were that this is what your - the
17 model plan in this district says.
18 So with that understanding, if Your Honor wants to
19 exclude them, they're matters of public record anyway. But
20 that's the only purpose that we put them in for. That's 125 and
21 126.
22 Respecting 122, Your Honor, it's a transcript -
23 THE COURT: I need to get it before you start talking.
24 (Pause in the proceedings.)
25 THE COURT: Had you objected to 122 and 187?
516
1 MR. ROSEN: He objected to neither.
2 THE COURT: Okay. So there's no issue, they come in.
3 MR. ROSEN: Okay. Takes care
4 Okay. So, if I understand correctly, that all of our
5 exhibits are now -
6 THE COURT: Except the model plan.
7 MR. ROSEN: - received, except for the 125 and 126.
8 (Creditor's counsel confer briefly off record.)
9 MR. ROSEN: And, Your Honor, if I may, we have one
10 more exhibit. May I hand up what's been marked as Plaintiff's
11 Exhibit 290? And I will have only a brief word on this exhibit.
12 THE COURT: Do we have the whole exhibit, the whole
13 deposition here?
14 MR. ROSEN: No. No.
15 THE COURT: Well, so if I want to read this in context
16 how do I do that?
17 MR. ROSEN: You can't.
18 Exhibit 290 and the purpose of offering it is as
19 follows. Yesterday Mr. Zlotoff suggested to the Court that the
20 bankruptcy schedules, Exhibit - Schedule B, "A personal
21 property," et cetera, that Ms. Lucas had testified Mr. Henson
22 was frantically filling out and running to her for information,
23 were not necessarily the same one as was filed. And that there
24 was some bankruptcy schedules prepared by Mr. Henson earlier in
25 December. That was the representation by counsel.
517
1 This is the second time in this relatively short trial
2 we have had to deal with a representation by counsel that has no
3 basis in fact and the second time we've had to put in an exhibit
4 to disprove it.
5 This is the witness' testimony. There were no papers
6 filed in December. There were no papers prepared in December.
7 And the only thing which he has testified, he prepared in
8 December, is the petition itself, the two pages. And it bears
9 the date, December 1, which he then put in his pocket after
10 Judge Whyte postponed the trial. And then re- - and then filed
11 it in February.
12 So this is second time I've had to spend time
13 responding to these statements by opposing counsel that have no
14 basis in fact. I would hope that in the remainder of this
15 trial, if counsel is going to represent something as a fact,
16 that he has some evidence to support it.
17 THE COURT: Do you object to this document?
18 MR. ZLOTOFF: Right. I object. It's not complete,
19 not a complete transcript. I - you know, when I wanted to admit
20 an exhibit the other day about a transcript that was actually in
21 the court file, I got an objection that, well, you have to pay
22 50 cents a copy and copy all hundred pages, or whatever, because
23 it's not in context, even though it was plainly clear what I was
24 trying to admit - admit it for; and the pith of what I wanted
25 was in the two pages. So I'm going to object for the same
518
1 reason.
2 MR. ROSEN: Counsel mis- - misunderstands the
3 objection. When he tried to offer a page, I believe it was page
4 52 from the hearing before Your Honor in July of '98, to
5 represent to the Court that Your Honor had made the
6 reinstatement of the bankruptcy petition retroactive. I said
7 that representation is false.
8 And in fact we have, already marked in our exhibits,
9 the relevant portions of the transcript of that very hearing, in
10 which Your Honor said exactly to the contrary. I didn't object
11 on the grounds that he wasn't putting the whole thing in. I
12 objected on the grounds that he was misrepresenting what
13 happened at that hearing by offering a one snippet out of
14 context. And I approved it by putting in the portions of that
15 transcript which show that that's not what Your Honor said.
16 There is no grounds for objection, as was just stated
17 and as Your Honor had inquired, that you have to put in the
18 whole transcript. Never has.
19 MR. ZLOTOFF: Well, Your Honor, here's the problem -
20 MR. ROSEN: There's no basis.
21 THE COURT: Let me tell you what I think.
22 MR. ROSEN: I'm sorry. He interrupted me.
23 THE COURT: I thought you were finished. Go ahead.
24 MR. ROSEN: I forgot where I was.
25 THE COURT: You said there is no basis.
519
1 MR. ROSEN: Oh.
2 THE COURT: It sounded like you were repeating
3 yourself.
4 MR. ROSEN: There's - there's no basis in the Federal
5 Rules of Evidence. And if counsel believes there is I would
6 invite him to point us to where in the Federal Rules of Evidence
7 it is even suggested that to offer a part of a deposition you
8 need to offer all of it.
9 And, in fact, let me help counsel out. Rule 32 says
10 we can offer any part of a deposition of a party. And if you
11 think it's out of context, it's your job to offer what's called
12 the fairness designations. It's your job, meaning the debtor,
13 not Your Honor of course. And debtor can certainly offer any
14 fairness designations he wants that go with this exhibit.
15 That's his prerogative.
16 THE COURT: The problem is that all exhibits were
17 supposed to be to me by a certain time. You may well have a
18 reason to want to introduce this late. But without the whole
19 transcript, it's prejudicial. And so at this point I'm not
20 going to introduce it until you have produced the whole
21 transcript for everybody to review. And then he can - he can at
22 least have an opportunity to decide, in the middle trial,
23 whether or not he wants to introduce other excerpts. So at this
24 point it's excluded.
25 MR. ROSEN: Your Honor, may I just say in view of your
520
1 comments, number one, we didn't delay the offer of this. This
2 issue came up yesterday.
3 THE COURT: I - I didn't say you did. I just said
4 that it otherwise means prejudice if he doesn't have an
5 opportunity to review the whole -
6 MR. ROSEN: It's not prejudice. He had the
7 opportunity to get the transcript three years ago.
8 THE COURT: But maybe he didn't need it three years
9 ago. And now all of a sudden you're seeking to introduce it.
10 And it becomes prejudicial in the -
11 MR. ROSEN: Excuse me, Your Honor, -
12 THE COURT: - middle of trial.
13 MR. ROSEN: Your Honor, you're making arguments for
14 Mr. Zlotoff, which he will not make himself. Don't -
15 THE COURT: I'm not making an argument for anybody.
16 MR. ROSEN: You are.
17 THE COURT: He objected because it's not the whole
18 transcript.
19 MR. ROSEN: And, Your Honor, you just offer, as an
20 excuse for Mr. Zlotoff, that maybe he didn't need the whole
21 transcript three years ago.
22 THE COURT: I don't know whether he did or didn't -
23 MR. ROSEN: Well, I'm telling you that -
24 THE COURT: - Mr. Rosen. You try to take me on as if
25 - as if I'm your colleague.
521
1 MR. ROSEN: What -
2 THE COURT: I'm not.
3 MR. ROSEN: Your Honor, -
4 THE COURT: And I'm telling you I've ruled. And I'd
5 like you to be quiet.
6 MR. ROSEN: Your Honor, I'd like to make a record,
7 just if I may have the privilege of speaking for 30 seconds on
8 this. You just offered as an additional ground that perhaps Mr.
9 Zlotoff is prejudiced because he didn't know he had to get it to
10 before now. Our trial exhibits, which he's had a long time
11 include excerpts from this very same deposition. There is no
12 basis for Your Honor suggesting - and indeed Mr. Zlotoff is not
13 claiming - that his need to get this transcript arose just now.
14 That's number one.
15 Number two - and it's my last comment - I find it
16 extremely disheartening that Your Honor would say to me this is
17 being offered late. Mr. Zlotoff yesterday has offered documents
18 which he didn't comply with, he had before. He didn't comply
19 with your order. And that's okay.
20 THE COURT: No. The standard is prejudice.
21 MR. ROSEN: No. The standard is good cause, Your
22 Honor, for not complying.
23 THE COURT: Yes, that is good cause -
24 MR. ROSEN: That's not prejudice.
25 THE COURT: - and prejudice. Anyway, if there's - if
522
1 there's no prejudice then there's a different - well, anyway.
2 Here there is possible prejudice. And all you have to do is let
3 him see the transcript.
4 MR. ROSEN: Your Honor already ruled on a motion he
5 made before trial. He asked that we'd be required to produce
6 the transcripts to him. We said no. Your Honor ruled in our
7 favor.
8 We have a transcript that says - in which you said to
9 Mr. Zlotoff he doesn't have any obligation to produce them to
10 you.
11 THE COURT: I understand, but that's not in the middle
12 of trial.
13 MR. ROSEN: Well, I don't understand the difference.
14 THE COURT: It's a new - it's a new excerpt that
15 you're seeking to introduce in the middle trial.
16 MR. ROSEN: Okay. Well, Your Honor, now that we know
17 that new excerpts cannot be offered during trial, -
18 THE COURT: I didn't say that.
19 MR. ROSEN: Yeah.
20 THE COURT: They can. All you have to do is let him
21 read the -
22 MR. ROSEN: Excuse me.
23 THE COURT: - transcript.
24 MR. ROSEN: Now that we know -
25 THE COURT: You can do it during the break.
523
1 MR. ROSEN: - I can't offer it without doing something
2 that I have no obligation to do, does Your Honor have any
3 authority, I would beg the Court to give me so I can argue
4 against it, for the proposition I have to show him a transcript
5 in order to introduce this?
6 THE COURT: Or I would -
7 MR. ROSEN: I would love to have -
8 THE COURT: - adjourn the trial for him to go read the
9 transcript. I'm going to avoid prejudice.
10 MR. ROSEN: He doesn't have the transcript.
11 MR. ZLOTOFF: Your Honor, I'm going to withdraw it.
12 It's not worth the argument to me.
13 THE COURT: I see. All right.
14 MR. ZLOTOFF: I'm sorry - I'm sorry for the problem.
15 He just - he set me off and I probably shouldn't have objected
16 in the first place, because it's - it's not that meaningful.
17 MR. ROSEN: But - and that -
18 MR. ZLOTOFF: Because it doesn't go to anything that
19 he said, in the first place, because it - nothing here rebuts
20 the fact that Mr. Henson could have had a worksheet, a separate
21 worksheet, that Ms. Lucas testified she saw him waving around.
22 Nothing -
23 THE COURT: 290 is admitted.
24 MR. ZLOTOFF: - in here is contrary to that.
25 (Creditor's Exhibit 290 received in evidence.)
524
1 MR. ROSEN: Your Honor, there is now, as long as
2 you're on the subject of late-offered exhibits, I was handed two
3 exhibits by Mr. - by Mr. Zlotoff yesterday. So perhaps - and
4 they are - he marked them Exhibits R and S. I assume he wants
5 to for them, so let him do so I would suppose at this time
6 before we put Ms. Lucas back on the stand.
7 And, by the way, my opening objection is these were
8 never produced earlier. And the prejudice is there's no good
9 cause. There is no such thing as prejudice. The burden is on
10 the party who is moving the exhibits in in violation of an order
11 to show good cause why he didn't comply. I don't ever have to
12 show prejudice until he satisfies the burden of good cause.
13 That's the law in the Ninth Circuit and it's the law in every
14 court in this country.
15 THE COURT: I don't have R and S.
16 MR. ZLOTOFF: All right.
17 THE COURT: And so you don't have to - in any event,
18 you don't have to introduce R and S now because he tells you to.
19 You have - you decide -
20 MR. ZLOTOFF: Well, -
21 THE COURT: - when you want to introduce R and S.
22 MR. ZLOTOFF: If it's appropriate we could do it now.
23 It doesn't matter to me. Or, in fact, I'm -
24 THE COURT: Wait a second. I haven't - I didn't even
25 know I had it.
525
1 MR. ZLOTOFF: Okay.
2 THE COURT: This is a complaint by RTC against Mr.
3 Henson?
4 MR. ZLOTOFF: It's a certified complaint, and I just
5 request that the Court take judicial notice of it.
6 THE COURT: And what's the S?
7 MR. ZLOTOFF: S?
8 THE COURT: S.
9 MR. ZLOTOFF: Oh, Exhibit S. Oh, that's the notice of
10 amendment to motion to sell that was filed 9-25-02, and I asked
11 the Court to take judicial notice of that.
12 THE COURT: Is there -
13 MR. ZLOTOFF: It's simply a one-sentence statement
14 that - do you want me to read it, Your Honor?
15 THE COURT: I understand what the notice is. It says,
16 "Debtor hereby amends the prayer of his motion to sell free and
17 clear to provide that his plan shall be paid off from the
18 proceeds of such sale." I understand what it is.
19 Why are we getting this at this time?
20 MR. ZLOTOFF: Just housekeeping, Your Honor. There's
21 no - no special reason why now - oh, why as opposed to why not -
22 THE COURT: Well, this is after -
23 MR. ZLOTOFF: - a month - a month ago.
24 THE COURT: I mean this is dated a few days ago.
25 MR. ZLOTOFF: That's right.
526
1 THE COURT: Okay. So -
2 MR. ZLOTOFF: So I couldn't possibly have put it in my
3 trial binder because it's a new document.
4 THE COURT: And what about this other thing? This -
5 why is this being offered, this verified complaint?
6 MR. ZLOTOFF: The verified complaint goes to - to the
7 issue that Your Honor brought up, I thought, with regard to
8 Eisen, for - with regard to the reason for filing the Chapter
9 13. There was -
10 THE COURT: What does it say that's relevant, in your
11 view?
12 MR. ZLOTOFF: That there wasn't a prayer for damages.
13 I think at some point during the trial Your Honor asked whether
14 Mr. Henson was aware of - that there were - there was a
15 potential for a large damage award against him. And Mr. Rosen
16 said, 'Well, you know, statutory. Could be 50 cents,' or
17 whatever he said, which he could have paid out of his own
18 pocket. Well, it's not true. If you read this, you can see
19 that the damage request is for I think a hundred thousand
20 dollars per bad act or something like that.
21 So he was put on notice, if you look at the prayer.
22 For example, the prayer on the second claim for relief on page
23 10 for an award of statutory - statutory damages of a hundred
24 thousand dollars for each of the works infringed, so - and
25 there's a request further down as well for attorneys' fees. So
527
1 I think that it's relevant for that purpose, Your Honor.
2 MR. ROSEN: I have three objections. I'll start with
3 the complaint.
4 The complaint is dated April 4th, 1996. I haven't
5 heard anything that even approaches good cause for noncompliance
6 with Your Honor's order. I assume that you're going to ask me
7 what the prejudice is. And my prejudice is I comply with Court
8 orders, Mr. Zlotoff doesn't. That's prejudice, in addition to
9 everything else I've said yesterday -
10 THE COURT: How about on the merits?
11 MR. ROSEN: On the merits, of course it's -
12 THE COURT: What's the prejudice?
13 MR. ROSEN: Of course it's prejudicial on the merits.
14 This is being - the critical issue here is as follows. And it's
15 the same - and there are two cases that we talk about in our
16 brief.
17 At the point in time when the debtor filed the
18 petition in February of 1998 what was he facing. Was there a
19 reason, a legitimate reason that he conceived that he's facing a
20 claim that he was going to be unable to pay. To the extent -
21 and I think that that probably is of course the standard.
22 That's what I argued in my opening argument.
23 The fact that a complaint demands the maximum in a
24 statutory range of 500 to a hundred thousand dollars does not
25 mean that the creditor believed - that it could reasonably
528
1 believe that he was exposed for a hundred thousand dollars when
2 the creditor is - is fiercely contesting the fact that he, A,
3 infringed; B, that the infringement was willful. So you can't
4 just take and damages from a complaint.
5 But let me tell you the part that really offends me
6 about this. This is being offered to you as the pleading I
7 presume which is before - which the debtor is faced with in
8 February of 1998, about 22 months after this action was filed,
9 and which caused him to file the bankruptcy petition. If that
10 is the proposition that Mr. Zlotoff is presenting to you, it is
11 a fraud on the Court.
12 This is the first complaint in the case. Long before
13 February of 1998, we withdrew portions of this pleading. When
14 the Judge - when Judge Whyte granted us permanent injunction in
15 June of 1997 on a copyright claim, at or about that same time we
16 withdrew portions of this, including, by the way, if I remember
17 correctly, and we do have a record, the entirety of claim 3.
18 And for counsel to stand here and offer you this and
19 say this is what the debtor was faced with in February of 1998 -
20 because what he was faced with in '96 is meaningless. He didn't
21 file a bankruptcy petition in '96. What we was faced with in
22 '97 is meaningless.
23 If there is anything that's relevant it's what he was
24 faced with in February of 1998. And for counsel to offer this
25 knowing that it is - it is false, knowing that the - that
529
1 portions of this complaint were withdrawn, and including the
2 entirety of - of the third claim for relief constitutes a fraud
3 on the Court.
4 MR. ZLOTOFF: Your Honor, I don't know anything. All
5 I know is I went upstairs - or downstairs to the District Court
6 Clerk's Office and I said, 'Gee, what I can figure out from this
7 file with regard to what kind of action in the District Court
8 Mr. Henson had knowledge of or constructive knowledge of,' and
9 this is what I pulled out, the first document of the file.
10 MR. ROSEN: And may I respond to that as follows.
11 Counsel as an attorney is charged with the knowledge of what is
12 in the District Court file. He went to the District Court
13 Clerk's Office, he pulled out this document. If he had bothered
14 to read the Docket he would have seen the withdrawal, for
15 example, of the third claim for relief.
16 Counsel cannot say, 'Gee, I didn't do my job. I saw
17 June of '96' - 'April of '96, and I didn't go further.' He's
18 charged with knowledge of what's in that Docket. He went to the
19 Clerk to get it, and he should have looked at it, and I don't
20 know whether he did or not. But he's certainly responsible for
21 doing so, because he's made a representation to this Court that
22 it's false.
23 THE COURT: What about S -
24 MR. ROSEN: I don't have any objection to this
25 document because it is in the Court's - it's a public record in
530
1 the - in the Clerk of the District Court's file -
2 THE COURT: Wait. S we're talking about.
3 MR. ROSEN: R.
4 THE COURT: R, you have no objection?
5 MR. ROSEN: No, you interrupted me. I have no
6 objection to Your Honor seeing this document per se. What I
7 object to, as I said, is the lateness of it. It wasn't on the
8 list, number one.
9 If Your Honor believes it's relevant, then Mr. Zlotoff
10 should be directed to produce the rest of the Docket showing the
11 withdrawal of claim 3.
12 THE COURT: Or just the amended complaint. Was there
13 an amended complaint -
14 MR. ROSEN: No. There's not an amended complaint
15 because when you withdraw a cause of action you don't have to
16 file an amended complaint. You file a notice of withdrawal of
17 the Court's -
18 THE COURT: That's all you did, is to file a
19 withdrawal -
20 MR. ROSEN: Isn't that right, hm?
21 (Creditor's counsel confer briefly off record.)
22 THE COURT: There was no amended complaint?
23 MR. ROSEN: Of course not.
24 THE COURT: Well, I don't know what you did. It's not
25 "Of course not." Sometimes you do more than just withdraw. You
531
1 do something else. So now here I'm asking you was there an
2 amended complaint?
3 MR. ROSEN: No.
4 THE COURT: Thank you.
5 MR. ROSEN: There was a notice of withdrawal of the
6 third claim for relief.
7 THE COURT: That's fine.
8 MR. ROSEN: That's on the Docket.
9 With respect to Exhibit S, this is being put in,
10 according to Mr. Zlotoff, to show something, I have no idea what
11 it is. This purports to be a notice of amendment to a motion
12 that had already been set on the 10th of September for the 10th
13 of October, that we filed our opposing papers. We - we asked
14 for it, and Your Honor gave us a total of nine days to respond,
15 despite the fact that the Bankruptcy Rules, the Local Bankruptcy
16 Rules require 28-days notice for a motion to sell free and
17 clear.
18 THE COURT: Why are we - why are you arguing that now?
19 MR. ROSEN: I don't want - because I want to go a step
20 further.
21 I don't have any idea what Mr. Zlotoff used as the
22 relevance of this motion. I view it as relevant for one reason.
23 This is a continuation of - I don't want to say bad faith on the
24 part of Mr. Zlotoff. There is no such as a notice of amendment
25 to a motion. It is unknown in federal practice. It is not in
532
1 the Federal Rules, it's not in the Bankruptcy Rules.
2 You want to amend a motion, you withdraw the motion
3 and you file a new one. You start over again. You cannot just
4 with - with the - the aid of a pencil and a piece of paper
5 create a document called "notice of amendment to motion."
6 THE COURT: The legal sufficiency of the notice is not
7 before me.
8 MR. ROSEN: No. I'm saying if Mr. Zlotoff -
9 THE COURT: Then why are you going through this? I
10 don't understand -
11 MR. ROSEN: I'll say - I'll say it again.
12 THE COURT: - why you're - why you're - you're - why
13 are you objecting to the admission of the document, because the
14 document is legally deficient?
15 MR. ROSEN: No. To the contrary, I just said to you,
16 I don't know why Mr. Zlotoff is offering it, but if you admit it
17 into evidence it's okay with me because I will argue from it, -
18 THE COURT: Okay. That's fine.
19 MR. ROSEN: - as I just have, -
20 THE COURT: Then that's it.
21 MR. ROSEN: - that it is improper.
22 THE COURT: Then the answer is no objection.
23 MR. ROSEN: Other than the fact that it wasn't timely
24 produced, which I said earlier -
25 THE COURT: Well, it couldn't have been timely
533
1 produced. It occurred the month after the deadline, right?
2 MR. ROSEN: It's dated September 24th. It could have
3 been presented to us before this trial started.
4 THE COURT: Oh, I see. Okay. That's fine.
5 The - was RTC served with this document?
6 MR. ZLOTOFF: Which one, Your Honor?
7 THE COURT: With 20 - with S.
8 MR. ZLOTOFF: Yes.
9 THE COURT: Okay.
10 MR. ZLOTOFF: Yes.
11 THE COURT: And after that long lecture, I - or
12 whatever it was by Mr. Rosen, I understand that he doesn't
13 object to the introduction of R on the merits other than he
14 wants you to correct it, and I think that's correct. So that to
15 the extent you want to accept - if he'll make an offer of proof
16 that this was amended, in essence, by withdrawal of the third
17 claim for relief and that's the only way in which it was
18 changed, and you want to accept that, then there's no reason to
19 go to the District Court. If you want to go to the District
20 Court and check it, you can check it. But otherwise I would -
21 if you won't accept what he's saying, then I would order you to
22 go to the District Court.
23 MR. ZLOTOFF: No. You know, I spent about an hour
24 looking at the Docket, and I don't remember seeing a withdrawal.
25 I remember seeing an order, I think by Judge Whyte, denying a
534
1 claim for trade secrets, or something like that. But I didn't
2 read from the third cause of action, which was the trade
3 secrets.
4 THE COURT: Did -
5 MR. ZLOTOFF: It was the - it was the second cause of
6 action for copyright infringement. So, yeah, I accept what he
7 says, and - but I still don't understand why -
8 THE COURT: Do we have the Docket here, Tanya?
9 THE CLERK: For District Court?
10 THE COURT: Do we have anything that shows regarding
11 claim 3?
12 (The Court and Clerk confer off record.)
13 THE COURT: Okay. Fine. You make an offer of proof
14 that you withdrew claim 3 or that it was denied?
15 MR. ROSEN: Not an offer of proof. I made a
16 representation.
17 THE COURT: Right. Okay. That's fine.
18 Then you withdrew it voluntarily?
19 MR. ROSEN: Yes, I'm told -
20 THE COURT: Thank you. That's fine.
21 MR. ROSEN: I wasn't there. My - that's why, I'm not
22 being impolite. I had to lean over and ask Ms. Kobrin. I
23 wasn't at the - involved in the case at that time.
24 THE COURT: That's fine. R is admitted.
25 (Debtor's Exhibit R received in evidence.)
535
1 MR. ZLOTOFF: Shall I go through one other
2 housekeeping matter or -
3 THE COURT: Sure.
4 MR. ZLOTOFF: There was -
5 THE COURT: What do you need, Tanya?
6 THE CLERK: I just wondered about S.
7 THE COURT: S is admitted.
8 THE CLERK: Okay.
9 (Debtor's Exhibit S received in evidence.)
10 MR. ZLOTOFF: Wells Fargo statements. That was O.
11 And I think that is hanging on a thread. I was supposed to
12 represent that those were true copies of the subpoena that I
13 got, and they are. And so I think they have actually been
14 referred to by Mr. - by Mr. Rosen as cross-examination of Ms.
15 Lucas. So I would move for their admission as well.
16 THE COURT: Any opposition now?
17 MR. ROSEN: Yeah, but I think you already ruled on it.
18 You overruled my opposition. You allowed it in.
19 MR. ZLOTOFF: Oh, okay.
20 THE COURT: What does it show, Tanya? O.
21 THE CLERK: Objection overruled subject to
22 certification.
23 MR. ROSEN: You overruled my objection. You told Mr.
24 Zlotoff he had to get certification for the subpoena.
25 THE COURT: Okay. It's admitted now.
536
1 (Debtor's Exhibit O received in evidence.)
2 THE COURT: Are we ready for Ms. Lucas?
3 MR. ROSEN: Yes, I am.
4 THE CLERK: I still show P and Q out there. P and Q,
5 Exhibits P and Q -
6 MR. ZLOTOFF: P and Q? Both - Q Mr. Rosen objected
7 to. That was the transcript that we had talked about.
8 THE CLERK: It was a copy of the Court's calendar.
9 THE COURT: Yeah, Q -
10 THE CLERK: Oh. Q. Excuse me.
11 MR. ZLOTOFF: That was Q -
12 THE COURT: P. I'll take P if it's my calendar. It's
13 not a problem. I don't see why that would be a problem. But -
14 so P, if you want it, can come in.
15 MR. ZLOTOFF: Yes, I do.
16 THE COURT: Okay. P is in. It's the Court's
17 calendar.
18 (Debtor's Exhibit P received in evidence.)
19 THE COURT: And what about Q?
20 MR. ZLOTOFF: That was the - a part of the Court
21 transcript of a proceeding that Mr. Rosen said was out of
22 context and so inaccurate. And so we objected to it.
23 THE COURT: Okay. So do we have the whole transcript?
24 MR. ZLOTOFF: The whole transcript is in - is in a
25 court file. That's where I copied it from, from a court file.
537
1 So I don't know why the Court can't take judicial notice of it,
2 but -
3 THE COURT: I could take judicial notice of the
4 transcript before me - in my file. And if you're agreeable that
5 the whole transcript comes in or that you want to do counter
6 excerpts, what do you want to do?
7 MR. ROSEN: We've already offered the portions of that
8 very transcript. They're in our books.
9 THE COURT: So is there any problem with admitting
10 this portion as well?
11 MR. ROSEN: Yes, of course.
12 THE COURT: And what is that, because it's late? What
13 is the reason?
14 MR. ROSEN: Yeah. Because it's not in compliance with
15 your order, of a transcript of a hearing that goes back four
16 years, number one. And, number two, because the portion of the
17 transcript which is offered is deceptive.
18 THE COURT: But your excerpts clear up the deception,
19 you say?
20 MR. ROSEN: Yes.
21 THE COURT: Okay. I'll take Q.
22 (Debtor's Exhibit Q received in evidence.)
23 THE CLERK: I show E still out there too.
24 MR. ZLOTOFF: No, no, no. That was out.
25 THE CLERK: Out? Okay. Thank you.
538
1 MR. ZLOTOFF: That was in limine excluded.
2 THE CLERK: Okay.
3 THE COURT: Okay. Yeah. Why don't we see if Ms.
4 Lucas is available.
5 Go off the record, please.
6 (Off the record at 10:57 a.m.)
7 THE COURT: Yeah. In ruling on any of these exhibits
8 that RTC claimed were relevant and Mr. Zlotoff on behalf of the
9 debtor claimed that he didn't think they were relevant, I'm not
10 limited to whether something bears on a debt or assets.
11 Obviously I'm not determining any free speech issues and I'm
12 determining anybody is a good or a bad person, character flaw.
13 It has to do with relationship between two parties,
14 and that is the debtor and the RTC.
15 MR. ZLOTOFF: I understand. I appreciate all the work
16 you put into that, Your Honor. Thank you.
17 THE COURT: Ms. Lucas, are you ready to step forward
18 and testify? But you need to be at a microphone?
19 MS. LUCAS: I have been trying to reach attorneys,
20 Your Honor. My attorney, who had appeared before in this case,
21 is not available. And he referred me to another attorney in
22 Palo Alto and I was just waiting for a call back from him.
23 I feel as if I've gotten in over my head and I would
24 prefer not to testify further if there is any way that can be
25 postponed until my attorney can help me.
539
1 THE COURT: Yeah. But we need to know when, Ms.
2 Lucas.
3 MS. LUCAS: Yes. If - if I can find out him from him
4 when he is available, then I - I can tell you.
5 THE COURT: What have you done? Have you called -
6 MS. LUCAS: I called several attorneys.
7 THE COURT: No, I know. But -
8 MS. LUCAS: Yes.
9 THE COURT: - you say you're waiting for somebody in
10 Palo Alto?
11 MS. LUCAS: Yes. I -
12 THE COURT: Or - but what -
13 MS. LUCAS: I reached somebody about 15 minutes ago
14 who is supposed to call me right back, but he was on the phone,
15 and I don't know what his situation is.
16 THE COURT: I'll give you permission to leave your
17 cell phone on and then we're going to go forward. Mr. Rosen has
18 agreed to try not to deal with anything dealing with joint
19 tenancy, that issue, and then I'll break again if I need to.
20 But you can leave your cell phone on if you've given
21 him your cell phone to call you back.
22 MS. LUCAS: Thank you.
23 THE COURT: I remind you that you're under oath.
24 Could you say that on the record?
25 VICTORIA AREL LUCAS, DEBTOR'S WITNESS, PREVIOUSLY SWORN
540
1 THE WITNESS: Yes, Your Honor.
2 THE COURT: Mr. Rosen, your witness.
3 MR. ROSEN: Thank you, Your Honor.
4 CROSS-EXAMINATION, resumed
5 BY MR. ROSEN:
6 Q. Ms. Lucas, yesterday we were talking about your check book
7 register. And I was about to ask you a question. I think we
8 got sidetracked, so let me come back to it.
9 If you wanted to know how much money you had in an
10 account as of any given time, like today, you could open your
11 checkbook register and see how much is available, meaning that
12 there may be checks that you've written which albeit not yet
13 been presented, but you could open your checkbook register and
14 tell us that, couldn't you?
15 A. Not really.
16 Q. Why not?
17 A. Because I don't always write everything down and because I
18 have different accounts. And my - the joint account I have with
19 my husband, he has expenses that he tells me about or that he
20 emails me about. And I don't always know at the moment what the
21 commitments are.
22 Q. Ms. Lucas, didn't you testify yesterday afternoon that you
23 could open the checkbook, and assuming the math was correct, you
24 could tell us what the balance was in the household account, the
25 Wells Fargo account? Didn't you say that yesterday?
541
1 A. I may have. That assumed that the math was correct.
2 Q. Right, okay. So now tell me something, Ms. Lucas. As I
3 read Exhibit A, the third page, Schedule B - and you can
4 certainly open to it, ma'am. The page that's headed "Schedule
5 B, Personal Property." This account is identified with a
6 balance of $1500.
7 A. It's exhibit - excuse me. It's Exhibit A?
8 Q. Exhibit A, third page of the exhibit.
9 A. And what was the question?
10 Q. The - the account you've identified is the household account
11 at Wells Fargo.
12 A. Yes.
13 Q. It's shown on here as having a balance of precisely $1500.
14 A. Yes.
15 Q. Now we know from your testimony yesterday, even though your
16 husband described it as, quote, savings and checking accounts,
17 that the savings account balance at that time in March of 1998
18 was zero, right?
19 A. That's what I recollect.
20 Q. So are you - is it your recollection, as you sit here today,
21 that the balance in your checking account at Wells Fargo on
22 March 10th of 1998 was $1500?
23 A. I'm not sure. It looks right, but without actually looking
24 at any records I can't be sure.
25 Q. But if you wanted to, to make sure it was right, ma'am, you
542
1 could have before taking the witness stand in this case, and
2 after conferring with Mr. Zlotoff, you could have gone back to
3 your checkbooks and found a checkbook that covered this period
4 of time, couldn't you?
5 A. I -
6 Q. And then you wouldn't have to guess, right?
7 A. I don't know where - whether my current - my current
8 checkbook doesn't cover this period. And I don't know whether
9 that checkbook is in Canada or where it physically is.
10 Q. So, in other words, if you don't have it, it's because you
11 shipped it to Canada when?
12 A. Possibly a couple of weeks ago or I might have left it with
13 my husband earlier.
14 Q. You left your 1998 checkbook up in Canada with your husband?
15 A. It's possible. I'm not sure.
16 Q. Ms. Lucas, please, this is a court of law. Anything is
17 possible, okay? And to use the example from the textbook, it's
18 possible that a dog ate the exhibit. But we only deal in
19 probability, so if I might ask you, ma'am, is it likely, do you
20 believe it is more likely than not, meaning 51 percent
21 certainty, that you took this document out of the United States
22 and gave it to your husband in Canada?
23 A. All I can tell you is that I think it is unlikely that I
24 have it in my possession at the moment.
25 Q. Yeah, I know. My question is when did you last have it in
543
1 your possession, ma'am?
2 A. I don't know.
3 Q. All right. Now let me see if I understand something. Apart
4 from the separate accounts that you have, your testimony
5 yesterday was that your husband maintained no separate bank
6 accounts of any kind, not savings or checking, right?
7 A. That's correct.
8 Q. And again we're in this period of 1998. Unless I say
9 differently, please understand my questions relate to this
10 period of time.
11 Well, if I'm understanding you correctly, ma'am, then
12 putting aside whatever money you had in your separate account,
13 the grand total of the amount of cash you and your husband had,
14 total cash you and your husband had on March 10th, 1998 is
15 $1500, right?
16 A. It seems correct.
17 Q. Okay. All right. Now you testified that you opened all of
18 the correspondence, including the credit card bills and the like
19 and invoices that came to your husband, that were addressed to
20 him, right?
21 A. During that period of time.
22 Q. What was - what credit cards did your husband have as of
23 March of 1998?
24 A. I think he may have had an American Express, but I'm not
25 sure. At some point, I - I think it was an American Express.
544
1 There was a - I believe there was a card from Wells Fargo.
2 There was a card which at that time may have been
3 called a More Card. I think the company that owned it has been
4 bought and sold several times since then.
5 THE COURT: I didn't understand the word.
6 MR. ROSEN: M-o-r-e.
7 THE WITNESS: More. It was called - at that time it
8 was called M-o-r-e, More Card.
9 BY MR. ROSEN:
10 Q. Now these are all credit cards you're -
11 A. Yes.
12 Q. - talking about, right?
13 A. Yes.
14 Q. Because when you said a Wells Fargo card, you're not talking
15 about a card that allows you to access an ATM. You're talking
16 about a card that you can give to a merchant and charge a
17 purchase and then you have to pay the bank?
18 A. Yes.
19 Q. Like a Visa or MasterCard, right?
20 A. Yes.
21 Q. Okay. So we got three cards so far. More, Wells Fargo, and
22 American Express, right?
23 A. Yes.
24 Q. Is the American Express a green, was it a green or gold?
25 A. Green.
545
1 Q. Green. Any other credit cards your husband had at that
2 time?
3 A. He may have had some gasoline credit cards. I think he was
4 listed on my - what used to be called Beacon, Ultamar Diamond,
5 whatever they are these days -
6 Q. Ma'am, I'm only - I've only asked you for the credit cards
7 that your husband had -
8 A. Not joint.
9 Q. I'm not interested in joint credit cards.
10 A. Okay.
11 Q. I'll ask you that separately. The only - these are only
12 credit cards that are in your husband's name, not yours.
13 They're not joint cards. So of any others that he had?
14 THE COURT: Was that clear to you? Are these other
15 cards solely his?
16 THE WITNESS: Yes. Thank you, Your Honor.
17 I don't remember if he had gasoline cards. I don't
18 think of anything else.
19 BY MR. ROSEN:
20 Q. Okay.
21 A. Oh, he had a Sears card I think.
22 Q. Okay. So we have - let me see if I've got this right now.
23 At this time in February, March of 1998 your husband had
24 separately not a joint card, a credit - the following credit
25 cards: Sears, More, Wells Fargo, American Express green, and
546
1 possibly a gasoline credit card, like a Mobil or an Exxon card?
2 A. Well, - well, wait. Now the Wells card was joint, so that -
3 you said -
4 Q. Okay.
5 A. - you would ask me that separately.
6 Q. Okay. So we have four: Sears, More, American Express
7 green, and possibly a gas - gasoline company credit card, like a
8 Mobil card or a Gulf card or something?
9 A. Maybe - I know at one point he had a Shell -
10 Q. Oh, that's fine. I don't care what gas company it was.
11 A. I think -
12 Q. I'll accept Shell.
13 A. I think he may have had a card with Montgomery Ward.
14 Q. Okay. That's another one, Montgomery Ward.
15 Okay. If that taxes your recollection, that's fine.
16 If as we go through this you remember any other cards that your
17 husband had alone, not joint cards, you let me know and we can
18 ad did it.
19 Okay. Let's start with the Montgomery Ward credit
20 card. What was the balance owed on that credit card by your
21 husband in February of 1998?
22 A. I don't know.
23 Q. What was the balance in March of 1998?
24 A. I don't know. The best I could do is an estimate.
25 Q. Well, when you say estimate are you just guessing and
547
1 plucking a number out of the air or do you have a basis to
2 believe that it is more likely or not to be correct?
3 A. I know that for a number of years, but I don't know if it
4 was during this period, our balances ran about a hundred
5 dollars.
6 Q. But you don't know what your balance - the balance on your
7 husband's Montgomery Ward card was in February or March of '98,
8 right?
9 A. That's correct.
10 Q. What was the balance due on your husband's More credit card
11 in February of 1998?
12 A. I don't know.
13 Q. How about his American Express card?
14 A. He had to pay that off every month. So any balance that he
15 might have had would have just been until the next bill was
16 paid, so I - I don't know.
17 Q. So, in other words, he paid all the American Express cards
18 bills - bills on time?
19 A. He had to. With the - that was the terms. Of the terms of
20 the green card are that you have to pay them, -
21 Q. No. I - I -
22 A. - they're due when paid. They are due -
23 Q. I understand. And that's American Express' stated terms.
24 I'm asking you whether your husband complied with those stated
25 terms?
548
1 A. If he could.
2 Q. Okay. Now - now let's talk about joint cards. And you
3 mentioned one card that is a joint account, meaning that one
4 bill comes to the house for charges placed on the card either by
5 you or your husband, right?
6 A. Yes.
7 Q. And that's a Wells Fargo card. What other credit cards were
8 there that were joint in the sense of both you and your husband
9 had access to them?
10 Again, remember my period of time we're focusing on,
11 ma'am, is March - February, March of 1998.
12 THE COURT: Are you including gas cards?
13 MR. ROSEN: If there is one, sure.
14 THE WITNESS: The only one I remember is the gas card,
15 the Ultramar.
16 BY MR. ROSEN:
17 Q. So two credit cards in joint name, Wells Fargo and a gas
18 company card, right?
19 A. That's all I remember right now.
20 Q. Okay. And you have records of these credit card charges,
21 right?
22 A. Yes.
23 Q. So if you wanted to know exactly what they were you could
24 have brought them in or you could have looked at the records
25 before you testified, right?
549
1 Or are they in Canada, too, ma'am?
2 A. I believe that - I don't believe I'm in possession of 1998
3 records at this time.
4 Q. Is that because you threw them out?
5 A. No.
6 Q. Then tell me how you came to be dispossessed, that's - I
7 don't think that's a word - out of possession of?
8 A. I'm in the process of moving. I'm trying to move back East
9 to get closer to my husband.
10 Q. So does that mean in the process of moving you threw out
11 some of these records?
12 A. No.
13 Q. Does it mean in the process of moving you sent them to your
14 husband or gave them to him in Canada?
15 A. I sent some of them to him.
16 Q. What about the rest of them?
17 A. They went on a truck or I sent them by - by shipment, by box
18 shipment.
19 Q. Okay. So you didn't throw any out. All of these -
20 A. I - I haven't -
21 Q. - records that you don't have, to your knowledge, are now in
22 the possession of your husband in Canada, right?
23 A. Or they're in storage just where I have sent some of my
24 records.
25 Q. And where is that?
550
1 A. It's in the United States.
2 Q. Can you tell me what state it's in?
3 A. New York.
4 Q. So you have sent some of the records from your home for - to
5 some storage facility or some person to store for you in the
6 state of New York?
7 A. Yes.
8 Q. And those include records of the financial affairs of you
9 and your husband covering the period of time that includes
10 February, March of 1998?
11 A. They might be. I don't know, I was just packing and sending
12 it. I don't remember what went in which box.
13 Q. Got you. Okay. What was - in February of '98 what was the
14 balance due on the Wells Fargo card?
15 A. I don't remember.
16 Q. What was the balance due on the gasoline card in February of
17 '98?
18 A. I don't remember specifically. I know what it tended to run
19 from month to month.
20 Q. Now I'm asking you for a recollection of what it was that
21 month.
22 A. I don't remember.
23 Q. What was the balance due on the Wells Fargo credit card for
24 - in the month of March 1998?
25 A. I don't remember.
551
1 Q. What's the balance due today on that card?
2 A. On the Wells card?
3 Q. On the Wells Fargo card, what's the balance due today?
4 A. I couldn't tell you exactly, but it may be $10,000.
5 Q. Now when was the last - when did you last get your statement
6 from Wells Fargo?
7 A. Two or three weeks.
8 Q. And I assume you opened the statement and looked at it,
9 right?
10 A. Yes.
11 Q. Did you make a payment on that - on that statement, that
12 credit card statement?
13 A. It's a complex question because they have had the wrong
14 address and they called me up and told me what the balance was.
15 I didn't get the statement until after they told me, so I made
16 the payment by transferring funds at their request over the
17 phone. I didn't pay the - I didn't pay for the bill.
18 Q. The bank had the wrong address.
19 A. Um-hum.
20 Q. I thought your address was the same addresses of the house
21 that you and Mr. Henson had been living in since 1996?
22 A. No.
23 Q. You have a different address?
24 A. Yes.
25 Q. Since when have you had a different address?
552
1 A. Since almost two - two months after we moved to the house.
2 Q. You've had a different residence address from your husband
3 since 1996?
4 A. No.
5 Q. You've had a different mailing address?
6 A. We have had -
7 THE COURT: Excuse me. This sounds like it's going to
8 go into the joint tenancy issue.
9 MR. ROSEN: No, it's not. No, it has - I think the
10 witness has just said, she's lived in the house. It's not a
11 question of abandonment of her residence.
12 But I think what she's saying is she had a different
13 mailing address.
14 BY MR. ROSEN:
15 Q. Is that what you're saying?
16 THE COURT: Well, let's - I don't - I don't think you
17 should ask her about the house, I've just decided myself.
18 BY MR. ROSEN:
19 Q. Okay. All right. You say the bank sent this bill to the
20 wrong address. Is the address that the bank sent the bill to,
21 Wells Fargo, the same address it had been sending the bill to
22 all along?
23 A. No.
24 Q. It - it changed and sent to a different address?
25 THE COURT: Stop with the addresses, please. I'm
553
1 serious, Mr. Rosen. Don't ask her about addresses and mailing
2 and living, because I'm concerned that that may be used in the
3 context of the joint -
4 MR. ROSEN: All right. I'll just make a note and ask
5 it in the afternoon, okay.
6 THE COURT: Right.
7 MR. ROSEN: Okay. I don't see how, Your Honor, but
8 I'll defer to your -
9 THE COURT: I don't - I don't know -
10 MR. ROSEN: - your concern.
11 THE COURT: - for sure either.
12 MR. ROSEN: Yeah, okay.
13 THE COURT: I'm being extra cautious.
14 BY MR. ROSEN:
15 Q. Okay. Let's go onto something else.
16 Ms. - Ms. Lucas, is it correct that whatever credit
17 card balance you and your husband had as of February of 1998,
18 you know, the amount that you owed in total on all credit cards,
19 that subsequent to that that balance increased, yes or no?
20 THE COURT: From when to when?
21 MR. ROSEN: After February of '98.
22 THE COURT: To today? I mean compared -
23 MR. ROSEN: Yeah, to today.
24 THE COURT: - February '98 to today?
25 MR. ROSEN: To today.
554
1 THE WITNESS: I believe that the balance went up and
2 down.
3 BY MR. ROSEN:
4 Q. Let me ask the question this way. Do you and your husband
5 owe more money on credit cards today than you did in February of
6 1998?
7 A. I owe more on my credit cards.
8 (Witness' cell phone ringing.)
9 THE WITNESS: Please excuse me.
10 THE COURT: Okay. Go ahead. If you want to take it
11 outside, you can.
12 THE WITNESS: Thank you, sir.
13 THE COURT: If it's a personal call, come right back.
14 THE COURT: Go off the record.
15 (Recess taken from 11:18 a.m. to 11:36 a.m.)
16 THE COURT: Ms. Lucas.
17 THE WITNESS: Your Honor, I found an attorney who says
18 he can appear and that he will meet me this afternoon at 12:30.
19 I'll require a little time to try to bring him up to speed.
20 THE COURT: Okay. And you understand - are we on the
21 record, Liz? Yeah.
22 You understand I don't know that you need an attorney
23 for this. You have to decide with him whether or not - or her
24 whether you need anybody for this. I just want you to know that
25 the issues, because Mr. Rosen has said there are issues that are
555
1 going go into - that may be relevant to whether or not RTC
2 thinks that you have a joint interest in the Palo Alto property.
3 THE WITNESS: Yes, Your Honor. Thank you.
4 THE COURT: That's fine.
5 Can you go into a totally unrelated area for a while?
6 MR. ROSEN: Yeah.
7 THE COURT: And then we'll break for lunch.
8 MR. ROSEN: Well, I was going to suggest that I think
9 I can be close to finishing by 12:30. So if that would be a
10 good time to break for lunch and at the same time per what Ms.
11 Lucas said, she can meet with her counsel, and then we can
12 resume at 1:30 and finish. As I say, I'm - I expect we're going
13 to finish today.
14 THE COURT: Why don't you go ahead.
15 MR. ROSEN: Okay.
16 BY MR. ROSEN:
17 Q. Ms. Lucas, a moment ago, before the break when I asked you
18 about the credit card balances, you said, quote, they went up
19 and down. I just want to make sure I understand what you mean
20 by that.
21 The - you get a bill for - on a credit card. And
22 let's say for argument's sake it says you owe $5,000. But you
23 have an option of paying a minimum amount. Whatever it might
24 be, a hundred dollars. You don't have to pay the entire thing.
25 And you can carry that balance forward month to month as long as
556
1 you make the minimum payments.
2 So is that what you're referring to when you say the
3 balances went up and down?
4 A. That's part of it, yes.
5 Q. Okay. And the practice of paying less than a hundred
6 percent of what is due on the credit card, of carrying a balance
7 from month to month and paying either a minimum or something
8 less than the entire amount due, is that a practice that existed
9 with respect to you and your husband's credit cards in February,
10 March of 1998?
11 A. 1998. At that time, yes, I believe it was.
12 Q. Okay. And, in fact, that practice existed going back to at
13 least the middle of '97, that you and your husband were making
14 payments of less than the entire bill on your credit cards;
15 isn't that true?
16 A. During some period, I don't remember when, but when we had
17 money we paid them off every month.
18 Q. Yeah. But I'm saying the practice - your not having money
19 and paying something less than the entire amount of the bill,
20 that practice dated back to some time in the summer of '97,
21 didn't it?
22 A. It seems likely because I believe it was in early '97 that
23 he lost his - his main client.
24 Q. Okay. Now yesterday, ma'am, you testified that you engaged
25 the movers, this moving truck to move, among other things,
557
1 papers, files respecting the litigation your husband was engaged
2 in, and some family memorabilia that I believe you said you and
3 your husband are the respective family members in charge of
4 maintaining that. Do you recall that testimony?
5 A. Yes.
6 Q. Okay. Let me - I don't want to go into the contents of it,
7 but I would like you to try and help me out. What I'm holding
8 up here is what lawyers call a transfile box or a banker's box.
9 Do you see it?
10 A. Yes.
11 Q. And you see the capacity of this box?
12 A. Yes.
13 MR. ROSEN: And the let the record reflect it is I
14 believe the standard of sizes of 18 inches by 12 inches with a
15 depth of 18 inches.
16 BY MR. ROSEN:
17 Q. How many - approximately how many of these boxes by way of
18 trying to get an idea of the content of files and papers and
19 family memorabilia did you pack up to put - and put on the
20 moving truck to go to Canada, roughly?
21 A. I - this is such a stressful period and other people were
22 moving the boxes.
23 Q. I'm only asking for the boxes that went on the truck. The
24 truck -
25 A. I understand that.
558
1 Q. - that was loaded about 10 days or two weeks ago.
2 A. I understand that. I'm just - like I say, it's a very
3 stressful period and I had other - I had friends moving boxes
4 from different places at different times.
5 Q. No. I'm not asking about moving boxes from different
6 places. I'm only asking for the ones the went on this U-Pack.
7 A. Yes. But they came from different places -
8 Q. Okay.
9 A. - at different times over three days.
10 Q. All right. And as they went on the U-Pack, how many of
11 these size boxes were the equivalent content was there in these
12 files and papers and personal papers and memorabilia, family
13 memorabilia, what's the total here?
14 A. I don't know. I - I'd estimate maybe three dozen.
15 Q. Okay. How much does it cost to mail a box like this Parcel
16 Post to Canada?
17 A. I don't know.
18 Q. Well, you have mailed packages to your husband in Canada?
19 A. I haven't used Parcel Post, and where any large box was
20 concerned, I haven't used mail.
21 Q. Okay. What manner have you used in terms of sending
22 materials to your husband, things like papers from his cases and
23 books? What have you used, if not Parcel Post?
24 A. I've only mailed smaller packages to him. Small packages.
25 Anything larger than that I've sent to my own facility. I've
559
1 sent to another facility inside the United States.
2 Q. Okay. So of the larger ones that go in a box, let's say of
3 this size, that you sent to your facility in New York, what does
4 it cost to mail that, a box like this?
5 A. I don't know about mail, but FedEx Ground, if it weighs 30,
6 30, 40 pounds, 15 or $20 maybe.
7 Q. Is that how you sent it, FedEx?
8 A. Ground.
9 Q. Is that how you sent it?
10 A. That's how I've been -
11 Q. FedEx Ground?
12 A. - sending papers that did not make it onto the truck, except
13 for small packages.
14 Q. The papers that you're talking about you sent FedEx Ground
15 were ones that you sent to this other person or storage facility
16 in New York?
17 A. That I sent FedEx Ground, yes.
18 Q. Okay. How many packages would you say, small - whether
19 they're small or large, you sent to your husband in Canada? And
20 I'm not talking about what was on the moving truck, but
21 separately, how many packages?
22 You testified, for example, yesterday about there were
23 some books that you sent to him, some magazines, some papers
24 from the files, the litigation files. How many packages did you
25 send to him?
560
1 A. I mailed him small packages, perhaps once a week since he
2 left. And I went to Canada, I would take him papers and
3 anything that was - that I thought he should have.
4 Q. Okay. Did you take him money?
5 Ma'am, did you take him money?
6 A. Yes.
7 Q. And did you also send him money?
8 A. No.
9 Q. Okay. How many times have you been to Canada to see your
10 husband since he left the United States in May of 9- - of 2001?
11 A. About eight times.
12 Q. And would it be your intention then, ma'am, that you would
13 continue to either send or take him money as - as he needed it?
14 That would be your intention?
15 A. I don't have any money to take him.
16 Q. If you were to have money and he needed it, -
17 MR. ZLOTOFF: I'm going to object. It's speculation.
18 THE COURT: Sustained.
19 BY MR. ROSEN:
20 Q. You don't have any money at the moment; is that what you
21 mean?
22 A. I'm unemployed.
23 Q. How long have you been unemployed, ma'am?
24 A. Since August 30.
25 Q. Okay. How many times have you taken money to your husband?
561
1 A. Possibly twice.
2 Q. And if - if you were to receive money by virtue of the sale
3 of the house, would you then take that money to Canada?
4 A. There would be a separate transfer of our differing funds.
5 Q. My question is would you take that money to Canada?
6 MR. ZLOTOFF: Whoa, whoa. Objection.
7 THE COURT: Sustained.
8 BY MR. ROSEN:
9 Q. If you were allowed to enter Canada - I think you testified
10 yesterday you've applied for some - to immigration or some sort,
11 would you take that money to Canada?
12 MR. ZLOTOFF: Which money? Objection.
13 THE COURT: Sustained.
14 MR. ROSEN: The money that she would get -
15 THE COURT: The problem is that you're not making a
16 differentiation between her separate money that she would get
17 and his money that he would get.
18 MR. ROSEN: Of course I did. It's - it's inherent in
19 the question.
20 THE COURT: Well, it wasn't -
21 MR. ROSEN: It's money she would get.
22 THE COURT: - and it was ambiguous. And I am
23 therefore sustaining the objection. And you should rephrase the
24 question rather than arguing with me.
25 BY MR. ROSEN:
562
1 Q. Okay. With respect to the portion of the money that you
2 would get from the sale of the house, would it be your intention
3 then to take the money to Canada?
4 A. In the first place, I have made no application for status in
5 Canada.
6 In the second, it's my intention to take money
7 wherever I will be moving. If I get a job somewhere, then that
8 is where I will take it.
9 Q. But your present intention and desire is to move to Canada
10 to be with your husband, right?
11 A. That's my desire, but immediately all I can do is visit him.
12 Q. Right. And if you do move to Canada or if you just go to
13 visit him, would it be your intention to take the money of your
14 share of the sale of the house to Canada?
15 A. I don't have any plans about the money at this point.
16 Q. And if Mr. Henson were to receive any money from the sale of
17 the house and for some reason it was entrusted to you, would you
18 then get - bring it to him or send it to him?
19 MR. ZLOTOFF: Objection, speculation.
20 THE COURT: Sustained.
21 MR. ROSEN: Speculation?
22 THE COURT: And "if...some reason," "for some reason
23 it was entrusted to you," that's speculation.
24 MR. ROSEN: Okay.
25 THE COURT: That's based on facts not in evidence.
563
1 BY MR. ROSEN:
2 Q. If - if Mr. Henson receives what he has claimed by way of
3 funds from the sale of the house, that he has already claimed by
4 way of his exemption, if that money were given to you, would you
5 take it to Canada for him?
6 MR. ZLOTOFF: Objection.
7 THE COURT: Sustained.
8 MR. ZLOTOFF: Why would the money be given to her?
9 THE COURT: Sustained. Sustained. Sustained.
10 Speculative.
11 BY MR. ROSEN:
12 Q. Other than the box -
13 MR. ROSEN: I'm sorry. Did you say something?
14 THE COURT: Speculative, based on facts not in
15 evidence.
16 BY MR. ROSEN:
17 Q. Other than the three dozen boxes you said of papers and
18 files and memorabilia that went on the moving truck, the - for
19 Canada, can you describe what else was on that truck?
20 A. I described some of it yesterday. There is a chest of
21 drawers with personal items in the drawers to - to give a
22 structural - it's by linear foot, so it's nine feet tall, so
23 it's good to stack it as high as you can.
24 There was a mattress and box springs, two portions of
25 the bottom of the bed to hold them. A tool chest, a large tool
564
1 chest. Tools. Computers. Various electronic bits and pieces,
2 electronic test equipment.
3 There was flatware, kitchen utensils, clothing, a
4 couple of small rugs, bedding, a telephone.
5 There were books and magazines.
6 Q. Mr. Henson's books and magazines?
7 A. There were some of mine.
8 Q. Okay. Have you finished describing the contents of the
9 moving van?
10 A. I'm just trying to remember as I speak. I'm -
11 Q. Okay. If you think of anything else you can let me know.
12 What would you say is the total fair market value of
13 the entirety of what you've just described as being on the
14 moving van? And I'm excluding the box - the three dozen boxes
15 of paper and files and family memorabilia? What is the fair
16 market value of everything else, tools and tool boxes and pieces
17 of a bed?
18 A. I don't know what is meant by fair market value.
19 Q. Fair market value as I mean it, ma'am, if I can clarify my
20 question is what a willing buyer is willing to pay a willing
21 seller.
22 THE COURT: Do you - under nonpressured circumstances,
23 right?
24 MR. ROSEN: Arm's-length transaction.
25 THE COURT: Right. So it's under nonpressured
565
1 circumstances.
2 MR. ROSEN: It's not a fire sale.
3 THE COURT: And we're not talking about a store
4 selling. We're talking about somebody in your position selling.
5 THE WITNESS: Thank you, Your Honor.
6 We did make an estimate of the goods for Customs
7 purposes, and I'm trying to remember what that estimate was.
8 BY MR. ROSEN:
9 Q. And, in fact, the estimate you were required to pay for
10 Customs is fair market value, isn't it?
11 A. I don't know.
12 Q. Well, did you make it?
13 A. I conferred with my husband about it -
14 Q. And -
15 A. - and with friends.
16 Q. And you filled out the form for Customs?
17 A. I filled out a list of what was on the truck.
18 Q. And you also filled out a form that says, 'The fair market
19 value of these items listed is' blank, and you wrote in a dollar
20 amount, right?
21 A. I didn't fill out the Customs form.
22 Q. Who did?
23 A. Mr. Henson did.
24 Q. Did you see the Customs form?
25 A. Yes.
566
1 Q. How much was the amount of money written on there as the
2 fair market value of these items that were enumerated as being
3 in the truck?
4 A. I don't recollect. I would have to look at it.
5 Q. When did you see it, ma'am?
6 A. The last time that I looked at - well, the - the - I didn't
7 keep a copy of the form, it went with the truck, but the last
8 time that I looked at the list of items was - and looked at the
9 total was the day that it went, the truck went, -
10 Q. And what day was that?
11 A. - which was September - that was September 15th.
12 Q. So on September 15th, take your mind back to September 15,
13 two weeks ago. At that time you saw the Customs form with the
14 list of - excuse me - with the fair market value of the items on
15 the truck shown on the form, right?
16 A. Yes.
17 Q. What was that number?
18 A. I don't recollect.
19 Q. Well, ma'am, please help me out. Try to think. Was it -
20 did it have a comma in it?
21 A. Probably - yes, it was -
22 Q. Probably.
23 A. - it was over a thousand, but - but I don't remember -
24 Q. Okay. It was over a thousand. Was it over 3,000?
25 A. No.
567
1 Q. Okay. So it's somewhere between a thousand and 3,000?
2 A. I think so.
3 Q. And that includes all of your personal effects that are on
4 that truck, right?
5 A. It included the personal effects of mine that were on the
6 truck, yes.
7 Q. And do you have any personal effects that have any value?
8 A. Not really.
9 Q. You have - I don't - I don't want to be personal, and I will
10 try to be very delicate. Your tastes and your attire in
11 purchasing clothes, is it the same as Mr. Henson's, as you've
12 described in buying secondhand clothes?
13 A. Yes.
14 Q. That's the way you - that's what you purchase for yourself?
15 A. When I do. I haven't purchased any clothes in three years,
16 but yes.
17 Q. When you purchased clothes back in February - in the period
18 of February, March 1998, is that the way you purchased clothes?
19 A. Yes.
20 Q. Okay. Ms. Lucas, are you aware that your husband has
21 received money in the way of, let's call them contributions,
22 from people who are, let me see, more sympathetic to his view of
23 life than they are the Scientology?
24 A. He has received some contributions, I believe.
25 Q. And has he received contributions by mail?
568
1 A. I believe so.
2 Q. Well, you opened the mail, so you tell me. How much has he
3 received since February of 1998?
4 A. I wasn't keeping track.
5 Q. Okay. What do you remember?
6 A. I remember seeing - opening an envelope that had a $20 bill
7 in it. I remember opening an envelope that had a check in it,
8 maybe a hundred dollars. Generally when I saw that an envelope
9 was a contribution to him, I turned - it just gave it to him and
10 I didn't take any note of it.
11 Q. But you opened it?
12 A. Yes.
13 Q. Uh-huh. Now in addition to mail I assume that Mr. Henson
14 informed you when he received contributions from another source
15 other than mail?
16 A. No.
17 Q. Well, you - you're aware that Mr. Henson received
18 contributions other than by mail? Are you aware of that?
19 A. I think people might have given him cash, but I don't know.
20 Q. And are you aware that he has received contributions by way
21 of payment to Paypal or another internet commerce repository?
22 A. He has mentioned that.
23 Q. How much has he mentioned he's received?
24 A. He hasn't told me any amounts.
25 Q. And have you not asked him?
569
1 A. No.
2 Q. You don't have any interest in how much?
3 A. No.
4 Q. Your husband recently was the beneficiary of an award, a
5 grant by some people in Germany for fighting Scientology, wasn't
6 he?
7 A. Yes, I saw the press release.
8 Q. How much did he get for that?
9 A. I don't know.
10 Q. Is that because you haven't bothered to ask him, that you
11 don't know?
12 A. I haven't asked him.
13 Q. And he's not mentioned it to you, his wife, how much he
14 received by way of this grant; is that right?
15 A. Mr. Henson does not tell me information that I might -
16 THE COURT: You should just -
17 THE WITNESS: - be required -
18 THE COURT: You should just answer yes or no, because
19 he told you how much of the grant and - answer yes or no,
20 otherwise he'll object. See, you have to answer yes or no,
21 unless you can't answer yes or no.
22 All he asked you was did he tell you how much the
23 grant was. Did Mr. Henson tell you how much the grant was?
24 THE WITNESS: No, he did them.
25 BY MR. ROSEN:
570
1 Q. All right. Ms. Lucas, before the Judge stopped you, you
2 were about to say something. Could I ask you to complete your
3 answer?
4 A. Mr. Henson tends to not tell me things that I might be
5 forced to divulge in testimony, deposition, or whatever, before
6 OSA.
7 Q. And he tends to do that - he has tended to do that from what
8 point in time, ma'am?
9 A. Some time in possibly '99 when we began to be picketed,
10 harassed, abused, persecuted, sued, et cetera, and deposed.
11 Q. You were used in 1996, not 1999, ma'am. Does that help
12 refresh your memory?
13 A. It helps me refresh my memory in that we were picketed. And
14 it came to our attention that our employers were being picketed
15 and that our neighbors -
16 MR. ROSEN: I move to strike. It's not responsive.
17 THE COURT: Your -
18 MR. ROSEN: The question was, was she - was Mr. Henson
19 sued in 1996.
20 THE COURT: No. Then there was a subsequent question.
21 MR. ROSEN: No. There - that's my pending question:
22 Would it help refresh your memory if I told you Mr. Henson was
23 sued in 1996.
24 THE COURT: Something came after that.
25 MR. ROSEN: I don't believe so. This witness is
571
1 making soapbox speeches again. I ask to strike it.
2 THE COURT: Wait, wait, wait.
3 Go back, Liz. Play it.
4 (Record played.)
5 THE COURT: Motion to strike is granted.
6 As I understand it, you were explaining why you and
7 Mr. Henson - Mr. Henson weren't disclosing information to you -
8 Mr. Henson wasn't disclosing information to you that could be
9 the subject of your having to testify about; is that right? Is
10 that what you said?
11 THE WITNESS: Yes, Your Honor.
12 BY MR. ROSEN:
13 Q. Ms. Lucas, how long has it been that back in - to what point
14 in time that you were responsible, as you've described to this
15 Court, for opening the mail, opening the bills, paying the
16 bills, maintaining the household account? How long?
17 A. Since about the time we were married.
18 Q. Okay. Ms. Lucas, do you remember being deposed on December
19 17th, 1998?
20 A. How could I forget.
21 Q. Good. Do you remember where it was?
22 A. I thought I was deposed only in the offices of Mr. Hogan.
23 Q. Do you remember who questioned you at that time?
24 A. 1998?
25 Q. Yeah.
572
1 A. I -
2 THE COURT: What month was it?
3 What month was it?
4 MR. ROSEN: I said December 17th.
5 THE WITNESS: If that was the first deposition or the
6 first 2004 examination, it was Ms. Kobrin and Mr. Cartwright,
7 but I don't remember if that was the date.
8 BY MR. ROSEN:
9 Q. Ms. Lucas, do you recall at that examination being shown
10 your bank records from this joint account, this household
11 account from 1995, and being asked the following question,
12 giving the following question, starting on the first page of
13 these, and the "these" refers to Exhibit 5, which I'll be happy
14 to hand up, the bank records from Wells Fargo, it reflects
15 deposits that say "NDMA" next to them.
16 "Are those payroll deposits?
17 "ANSWER: I don't know what that means."
18 Do you remember giving that answer?
19 A. Not that particular answer, no.
20 Q. It doesn't sound at all familiar to you?
21 A. Well, I remember that there were several acronyms that I
22 couldn't figure out what they were, I didn't know what they
23 were.
24 Q. Acronyms by way of letters that appeared on your bank
25 statements for the household account that was under your
573
1 control, right?
2 A. Yes.
3 Q. And continuing on in that deposition you were then asked for
4 an entry on the bank statement of November 15 - November 18,
5 1995. An entry at the bottom of the checking account that says,
6 quote, deposit AD, close quote.
7 Do you recall testifying you didn't know what that
8 was?
9 A. I probably did because I don't know what it is now.
10 Q. Okay. Do you recall - let's go - let's get more closer to
11 the filing date.
12 Do you recall being asked the following question and
13 giving the following answer:
14 "QUESTION: The next statement, April 16th, '97 to
15 20th of May '97 in the liquid assets section there's a 17 April
16 withdrawal of - it's the same account - of $3500. Do you know
17 what that was for?
18 "ANSWER: Not without - I don't remember what it was
19 for specifically. It may have gone into housekeeping account to
20 reimburse the payments my husband had made."
21 Do you remember giving that answer?
22 A. I don't remember that answer specifically.
23 Q. Remember being asked this question and giving this answer:
24 "Then below in the checking account box there's an
25 item, 5-95, $3,000 deposit on 25 of April. Do you know what
574
1 that was for
2 "ANSWER: Is that a deposit or a check? It must be a
3 check.
4 "QUESTION: It's a check. Do you know what that was
5 for?
6 "Well, I would guess that the money from the liquid
7 asset went into the checking account."
8 THE COURT: You know, I can't follow this at all. I
9 don't have a copy of this. I don't know what you're reading
10 from.
11 MR. ROSEN: I told you what I was reading from.
12 THE COURT: But I don't have it. So there's no way I
13 know whether what you're asking her is an accurate
14 representation of anything.
15 MR. ROSEN: Oh, I'm sorry, Your Honor. I represent it
16 as accurate if I'm purporting to read from a transcript. That's
17 inherent in what I'm doing.
18 THE COURT: Yeah, the -
19 MR. ROSEN: Okay.
20 THE COURT: The whole process is inappropriate.
21 BY MR. ROSEN:
22 Q. Okay. Let's go on. Let me take you up and I'm -
23 MR. ROSEN: I'm at 69. If Your Honor wants a copy
24 I'll be happy to photostat it during the lunch break.
25 BY MR. ROSEN:
575
1 Q. You now ask Ms. Henson about Mr. - excuse me, Ms. Lucas -
2 about Mr. Henson's bankruptcy schedule.
3 "QUESTION: Now Mr. Henson put in this, on this
4 document that his regular income from operation of business
5 Professional of Farm [phonetic], is $4200 a month. Do you know
6 if that's an accurate number?
7 "ANSWER: No.
8 "QUESTION: Does that mean, 'No, I don't know.'
9 "ANSWER: It means, 'No, I don't know.'
10 "QUESTION: Do you know what he was making at the time
11 he filed this August 1998 - this is the amended schedule?
12 "ANSWER: No, he did not tell me."
13 Do you remember giving those answers, ma'am?
14 A. I don't remember them particularly.
15 Q. Well, I'm confused now because you've testified in this
16 court that you knew what your husband was making, that you
17 looked at the invoices, that you opened the envelopes, that you
18 saw the invoices he sent out, you saw the checks he received and
19 the 1099 forms. You testified to all of that, right?
20 A. Yes, for different time periods.
21 Q. Well, let's look at the time period of August 1998. Here
22 you don't have any idea what your husband's making?
23 A. Didn't you say that deposition was in December?
24 Q. Right. And you were asked about events of August '98, the
25 August 4th, 1998 Schedule in Bankruptcy.
576
1 So are you saying in August of 1998 you weren't
2 opening the mail, you weren't checking your husband's invoices,
3 you weren't looking - seeing the checks that he was being paid;
4 is that what you're saying?
5 MR. ZLOTOFF: Your Honor, I'm going to - I'm going to
6 object because I thought that deposition transcripts except for
7 rebuttal were supposed to be marked and provided as part of
8 the -
9 THE COURT: The whole thing is inappropriate, what
10 he's doing. You have to ask a question and then if you want to
11 use it for impeachment, you have to provide the witness with a
12 copy of it. And - and then ask, when you're impeaching, ask
13 whether that was her testimony and whether she - she agrees that
14 it's the correct thing now. Nobody has copies of any of this,
15 and it hasn't been shown to impeach.
16 MR. ROSEN: Your Honor, I'm - I must beg Your Honor's
17 indulgence, since this is the first time I've ever appeared in
18 this court. I have appeared in 56 federal district courts of
19 the United States. I've never shown a witness an impeachment
20 testimony transcript.
21 I can certainly do it the way you want which is first
22 elicit the testimony and then read her the testimony, which is
23 inconsistent. Certainly I could do that.
24 THE COURT: And then I could follow along to find out
25 whether or not it was real or not.
577
1 MR. ROSEN: Yeah. Well, except Your Honor is now
2 telling me a rule that you apparently have that I must say is
3 foreign to the entire federal practice of my 34 years.
4 So let's try it this way.
5 BY MR. ROSEN:
6 Q. Ms. Henson - excuse me. Ms. Lucas, did you know how much
7 your husband was making in August of 1998? Yes or no.
8 A. I don't know.
9 Q. Did you know how much income your husband was receiving in
10 August of 1998?
11 A. I don't know.
12 Q. As of August of 1998 did you know what your husband's
13 monthly income was for the seven or eight months of that year?
14 You know, so much per month. Did you know that then?
15 A. I probably -
16 THE COURT: Did she know it then, in August of '98; is
17 that the question -
18 MR. ROSEN: In August of '98.
19 THE COURT: Not whether she knows it now, if she knows
20 it then.
21 BY MR. ROSEN:
22 Q. I'm sorry. Do you know it now?
23 THE COURT: Well, I just want to know what the
24 question is. You can ask whatever question you want. I just
25 want to know -
578
1 MR. ROSEN: I thank you. You corrected me.
2 BY MR. ROSEN:
3 Q. Do you know today as you're sitting here the amount, the
4 monthly income your husband had been received in the - in the
5 year 1998 as of August of '98 - up to August?
6 A. I don't remember.
7 Q. Ms. - Ms. Lucas, were you opening the mail addressed to your
8 husband in August of '98?
9 A. Yes.
10 Q. Were you examining the invoices your husband sent to clients
11 in 1998?
12 A. I occas- -
13 Q. Yes or no, ma'am.
14 A. I can't answer it yes or no.
15 Q. Well, I think the question can be answered yes or no.
16 THE COURT: If you'll let her explain why she can't
17 answer yes or no, you may get an answer.
18 MR. ROSEN: Okay.
19 THE COURT: I'm not going to direct her unless you ask
20 her that.
21 BY MR. ROSEN:
22 Q. The question is were - in August of '98 were you looking at,
23 did you have an opportunity to see invoices that your husband
24 sent to clients?
25 A. My husband sometimes made copies of his invoices. He
579
1 generally sent them by electronic mail. He also received checks
2 not through the mail, as a general rule. So I can't tell you
3 when I saw an invoice and when I didn't because he was
4 inconsistent about showing me copies.
5 If I asked him, because I was having to make a
6 quarterly report for income tax purpose, "What are you making,"
7 "What's" - you know, "What" - "What kind of estimate can we give
8 them," then he would sometimes produce some copies of invoices.
9 I would usually know approximately what he was making at any one
10 time.
11 There are certainly times when he did not - he
12 purposely did not tell me where he was working or what he was
13 making so that his employers would not be harassed.
14 MR. ROSEN: Objection, move to strike that.
15 THE COURT: Overruled.
16 MR. ROSEN: The question was whether she knew in
17 August of '98, had she seen the invoices her husband sent. It
18 was a simple question. It could have been answered yes or no.
19 THE COURT: Overruled.
20 MR. ROSEN: Your Honor, do I have to deal with - I'm
21 confused about something. You have allowed over my objection
22 testimony from this witness about harassment of some
23 unidentified sort - kind. Are you taking that for the truth of
24 it, that I have to rebut this? Because that's the reason I move
25 to strike it.
580
1 THE COURT: I don't tell you what's in my mind during
2 a trial. I make evidentiary rulings.
3 MR. ROSEN: But, Your Honor, I'm entitled to have
4 notice of whether or not you are taking these speeches about
5 harassment as for the truth.
6 THE COURT: No, you're not. You're not entitled to
7 anything. I make evidentiary rulings. You're not entitled to
8 know what's in my mind.
9 MR. ROSEN: May I ask that - may I then move that Your
10 Honor exclude these speeches about threats and harassment for
11 the truth of the matter asserted, that they not be received for
12 truth of the matter asserted by - by this witness?
13 MR. ZLOTOFF: I would object, Your Honor. I mean what
14 are they supposed to be admitted for? For the lies? You know,
15 she's saying - she's saying what she's saying and she's under
16 oath, so I don't know it shouldn't be accepted for the truth.
17 MR. ROSEN: Her own testimony shows it's hearsay. Do
18 I have to then go into the hearsay of 'Somebody told me' - 'My
19 husband told me that his employer had done' - 'had been
20 threatened'? That's the problem, Your Honor. You just open up
21 a whole can of worms.
22 If you want me to, I'll - I'll go through this, but
23 that's the essential problem of allowing this testimony in.
24 MR. ZLOTOFF: This is the first I've heard that it's
25 hearsay. I don't know that it's hearsay or not. I mean we
581
1 could - she - he could certainly find out whether it's hearsay,
2 but that's a different matter.
3 MR. ROSEN: Is Your Honor admitting this for the
4 truth?
5 THE COURT: I have no intention of telling you that at
6 this point, Mr. Rosen. You should -
7 MR. ROSEN: Okay. Well, we can -
8 THE COURT: You should make your own decision as to
9 what you want to do on the record -
10 MR. ROSEN: No. I think it's terribly unfair for the
11 Court to allow this testimony in backdoor when the witness
12 provides it, not responsive to a question, and then say, 'Mr.
13 Rosen, I'm not going to tell you if' - 'when I consider this
14 transcript and write my decision whether I've accepted that for
15 the truth of it.' I think that's terribly unfair.
16 I'm entitled to notice of what the claim is against
17 me. This is a defense. Am I entitled to notice of a defense?
18 am I entitled to a pretrial order that Mr. Zlotoff has to live
19 by of the evidence he's presenting?
20 Your Honor's looking at me. You - I assume that from
21 that you're not going to respond; is that right? Shall I go on?
22 THE COURT: You're questioning a witness and you might
23 as well ask your questions.
24 BY MR. ROSEN:
25 Q. Okay. Ms. Lucas, tell me the names of - withdraw that.
582
1 From your personal experience, not what you read, not
2 what somebody told you, what you saw with your own eyes, tell me
3 the names of the employees of RTC who have in any way threatened
4 or harassed you, your husband, or anybody else.
5 A. People would not give their names.
6 Q. Okay. Now did they have signs on them that said "Religious
7 Technology Center"?
8 A. There were picket signs -
9 Q. Yes or no. Were there signs that said, "I work for
10 Religious Technology Center"?
11 THE COURT: If they have a picket sign, that's a sign.
12 Would you let her answer. That is a sign.
13 MR. ROSEN: No, it's not.
14 THE COURT: If it's - well, I don't want to argue with
15 you. If she wants to answer that question about whether they
16 were carrying a sign, I'll let her answer it "carrying a sign."
17 You've said were there signs.
18 BY MR. ROSEN:
19 Q. Was the person wearing some sort of badge or identification
20 that identified that person as a - Religious Technology Center?
21 Like a cop wears a badge, was there anything on the person that
22 identified them as Religious Technology Center?
23 A. Not as Religious Technology Center, no.
24 Q. Thank you.
25 Now with respect to - the comments that you've been
583
1 making about being threatened and harassed and picketed, and all
2 of that, you're talking about conduct that was directed at you
3 or your husband by, quote Scientology? By the -
4 A. By the -
5 Q. - by OSA?
6 A. By the office of special affairs.
7 Q. All right. Now, ma'am, do you have any basis to say that
8 the office of special affairs is even a part of RTC?
9 A. RTC and the office of special affairs are by other courts'
10 rulings part of the global Scientology Corporation, 150 global
11 corporations.
12 Q. Ms. -
13 A. It has been recognized by other judges that this is the
14 case.
15 MR. ROSEN: Your Honor, I move to strike. Another
16 speech. I asked a question, 'Do you have any basis to say that
17 the office of special affairs is part of RTC.'
18 THE COURT: Well, she told her basis. It may be
19 invalid, but she told you her basis.
20 BY MR. ROSEN:
21 Q. All right. Show me the case that says that OSA, O-S-A, is
22 part of RTC?
23 A. I didn't say it was. I said that they -
24 Q. Thank you.
25 A. - were part of the same organization.
584
1 Q. Right. Just like the Archdiocese of San Francisco is part
2 of the same organization as the Archdiocese of New York, right?
3 A. No.
4 Q. You made statements about threats made to employers or
5 prospective employers. I want you to tell me the name of one
6 single person who works for RTC that you have any personal
7 knowledge of who even contacted any of your husband's employers
8 or prospective employers. Tell me the name of that RTC person.
9 A. RTC's business is not in that - RTC is the litigation arm of
10 the Church of Scientology -
11 Q. You're telling - how do you know that, ma'am?
12 THE COURT: If you're going to -
13 THE WITNESS: I have been reading the internet -
14 THE COURT: - ask her these - wait a minute. Be
15 quiet. Be quiet.
16 THE WITNESS: Yes, Your Honor.
17 THE COURT: If you're going to ask her these
18 questions, then you have to let her finish her answer.
19 And you have to let him finish his question.
20 THE WITNESS: Yes, Your Honor.
21 BY MR. ROSEN:
22 Q. My question is -
23 THE COURT: You can't interrupt each other.
24 BY MR. ROSEN:
25 Q. My question is not whether you think RTC is the litigation
585
1 arm. I'll repeat my question.
2 Please tell me, ma'am the name of any RTC employee who
3 has ever contacted any of your husband's employers or
4 prospective employers from your personal knowledge. Not what
5 your husband told you, but from your personal knowledge. Tell
6 me the name of that RTC employee.
7 A. RTC is not the whole issue here.
8 MR. ROSEN: Your - I move to strike that. That's a
9 yes -
10 THE COURT: Sustained.
11 MR. ROSEN: Thank you.
12 BY MR. ROSEN:
13 Q. Now -
14 THE COURT: But keep your voice down.
15 MR. ROSEN: Sorry, Your Honor. Just not used to
16 having trials conduct in this fashion.
17 BY MR. ROSEN:
18 Q. At or about August of 1998 did your husband ever tell you
19 how much he was making at that time, either -
20 A. I don't remember.
21 Q. Okay. Now I'll read from page 69 of your deposition,
22 December 17th, 1998:
23 "QUESTION: Do you know what he was making at the time
24 he filed this - this is the bankruptcy schedule - in August of
25 1998?
586
1 "ANSWER: No. He did not tell me."
2 Does that refresh your recollection as to whether you
3 knew how much he was making?
4 A. No, it does not.
5 MR. ROSEN: Okay. I'm going to - we'll have to make
6 up an exhibit and offer this, Your Honor.
7 THE COURT: You're going to make me a copy of the
8 whole thing, you promised me.
9 MR. ROSEN: No, I'm not. I did not.
10 THE COURT: Yes, you did. You said you would make it
11 for me during the break.
12 MR. ROSEN: Of the portions I'm reading from.
13 THE COURT: Of the whole transcript so that -
14 MR. ROSEN: No, I didn't say that. I did not say
15 that.
16 THE COURT: Oh, then I misunderstood you.
17 MR. ROSEN: Yeah. Okay.
18 BY MR. ROSEN:
19 Q. Ms. Lucas, as of the time you would - withdraw that.
20 Do you know today what companies your husband owned
21 stock in?
22 THE COURT: At what time?
23 BY MR. ROSEN:
24 Q. Do you know today?
25 THE COURT: What he owns today?
587
1 MR. ROSEN: No.
2 BY MR. ROSEN:
3 Q. Do you -
4 THE COURT: I'm - I didn't -
5 MR. ROSEN: I'm sorry. I will withdraw that. Thank
6 you, Your Honor.
7 BY MR. ROSEN:
8 Q. Do you - do you know today as you're sitting here what
9 companies your husband owned stock in in the year 1998?
10 A. He may have owned stock in companies. I - my belief it was
11 not worth anything.
12 MR. ROSEN: Move to strike it. I haven't asked her
13 anything about worth.
14 THE COURT: Sustained.
15 BY MR. ROSEN:
16 Q. Ms. Lucas, isn't it a fact -
17 THE COURT: "He may have owned stock in companies,"
18 period. That stays, "...it wasn't worth anything" doesn't stay.
19 BY MR. ROSEN:
20 Q. Ms. Lucas, in fact, you have testified previously in
21 December of 1998 that you had no idea what stock your husband
22 owned; isn't that right?
23 A. I don't know. All I said just a moment ago was that he may
24 have owned stock.
25 Q. But you testified previously that you did not know whether
588
1 he owned any stock; isn't that right?
2 A. Perhaps.
3 Q. Let me see if I can refresh your recollection. I read from
4 page 71:
5 "QUESTION: Do you know what companies your husband
6 owned stock in?
7 "ANSWER: You already asked me whether I know if he
8 owns stock, and I told you that I don't know.
9 "QUESTION: Do you know of any companies in which he
10 owned stock?
11 "ANSWER: No, I don't."
12 Does that help refresh your recollection, ma'am?
13 A. No.
14 Q. You testified in response to a question from Mr. Zlotoff
15 about some patents that your husband owns. And I think there
16 were a series of questions about he owns patents, but he doesn't
17 get any income stream from them, no payments.
18 Do you remember that testimony in this courtroom?
19 A. I think so.
20 Q. Ma'am, when did you first learn that your husband owned
21 patents, held any patents?
22 A. I don't remember.
23 Q. Did you learn about it before or after this petition for
24 bankruptcy was filed?
25 A. I don't remember.
589
1 Q. Did you learn about it about a week ago when you met with
2 Mr. Zlotoff to prepare your testimony; is that when you learned
3 about the patents?
4 A. No.
5 Q. Ma'am, how many patents does your husband own -
6 A. I don't know.
7 Q. - hold?
8 You know he holds patents, letters patent from the
9 United States Patent Office, but you don't know how many they
10 are?
11 A. No.
12 Q. Is that right?
13 A. That's right.
14 Q. What do you - how many do you think he owns?
15 A. A couple.
16 Q. And what do they cover? What invention?
17 A. There's - I think there's one about - oh, it's - they're
18 both about space.
19 Q. Okay. Ma'am, is it correct that you obtained this knowledge
20 about your husband's patents after the bankruptcy petition was
21 filed?
22 A. I don't remember.
23 Q. In fact, you obtained this information solely for the
24 purposes of being a surrogate witness here in this courtroom to
25 testify in the absence of your husband, didn't you?
590
1 A. No.
2 Q. Let me see if I can refresh your recollection as to what you
3 knew and when you knew it. I read from page 71:
4 "Do you" - "QUESTION: Do you know what patents he
5 owns?
6 "ANSWER: I don't know about any patents that he may
7 own or not own."
8 Does that help refresh your recollection, that as of
9 December 17th, 1998 you didn't know anything about your
10 husband's patents?
11 Does that refresh your recollection, ma'am?
12 A. No, but I do remember that in some of the exhibits that were
13 introduced into the cases in Hemitt and since that there was a
14 copy of a - of a payload launch patent.
15 Q. Now that was in the year 2001, right?
16 A. I think so.
17 Q. And that's the first time you found out about this
18 particular letter patent that your husband holds, right?
19 A. I don't think so.
20 Q. Let me see if I understand this. At least as of December
21 1998 this man who lived with - who you live with, your husband,
22 never told you that he had any patents; isn't that right?
23 A. I don't think that's correct.
24 Q. Well, ma'am, I just read to you, if you'd like me to read it
25 again, your testimony, that you didn't know about any patents he
591
1 owned December 17th, 1998?
2 A. I perhaps said "No," when I should have mis- - said
3 "recollect." I may have misspoken.
4 Q. Yeah, okay. Well, let's talk about the next thing you
5 misspoke under oath.
6 You testified in this courtroom about computers that
7 your husband owned as of 1998. In fact, we even went over them
8 on the - on the schedule. Remember that?
9 A. I think so.
10 Q. And you testified to the computers that your husband owned
11 versus another computer that he didn't own and somebody had
12 loaned to him, right?
13 A. I think so.
14 Q. And all of that testimony, ma'am, all of that testimony was
15 concocted after 1998 because you knew nothing about your
16 husband's computers in 1998; isn't that right?
17 A. I'm confused by that logic -
18 Q. All of this knowledge that you've provided to the Court of
19 what your husband owned and - by way of computers and how much
20 it was worth, and that he had a computer that somebody had
21 loaned to him, all of this testimony has - is not derived from
22 any knowledge you had in 1998, is it?
23 In other words, you learned about all of this after
24 1998, right?
25 A. What I remember about 1998 -
592
1 Q. Well, let me see if I can refresh your recollection -
2 THE COURT: Let her answer your question. You didn't
3 let her answer your question.
4 MR. ROSEN: Oh, I'm sorry. I thought she was done.
5 THE COURT: No. She just started. "What I remember
6 about 1998," and you wouldn't let her answer.
7 MR. ROSEN: I - you know, Judge, I didn't interrupt
8 her personally. I thought she said, "I don't remember."
9 THE COURT: She started to say, "What I remember about
10 1998."
11 BY MR. ROSEN:
12 Q. Okay. I apologize, Ms. Lucas. Please finish your answer.
13 On the subject of what you knew in 1998 about your
14 husband's computers.
15 A. I didn't know which ones he owned and which ones had been
16 lent to him.
17 Q. So who told you about that after 1998?
18 A. I'm still confused about it to some extent.
19 Q. Then -
20 A. Still one that -
21 Q. - what's the basis for you having testified to that of your
22 personal knowledge on the witness stand in this courtroom? What
23 is the basis for that testimony, ma'am?
24 A. There is one computer that I'm still not sure about, but I
25 testified as to what I think I know.
593
1 Q. Let me see if I can refresh your recollection, ma'am.
2 December - December 17th, 1998, page 71:
3 "QUESTION: Does your husband own any computers?
4 "ANSWER: I don't know what kind of ownership he has
5 in computers that I have seen and used.
6 "QUESTION: Well, if he does not own them who would
7 own them?
8 "ANSWER: I don't know."
9 Do you remember giving that testimony under oath?
10 A. I don't recollect it specifically.
11 Q. Ms. Lucas, you do recall raising your right hand at the
12 beginning of this deposition on December 17th, 1998 -
13 THE COURT: Is it a deposition or is that a 2004 -
14 THE WITNESS: It's a 2004.
15 THE COURT: - in this court? What is it?
16 MR. ROSEN: 2004.
17 THE COURT: In this court?
18 MR. ROSEN: In this court, in this case. In this
19 bankruptcy case.
20 BY MR. ROSEN:
21 Q. You recall at the beginning of this raising your right hand
22 and swearing to the truth, the whole truth, and nothing but the
23 truth?
24 A. Not specifically.
25 Q. Do you recall the same oath you took when you took the
594
1 witness stand in this case?
2 A. I recall the oath in this case, yes.
3 Q. Did you tell the truth when you were examined in December of
4 1998, ma'am?
5 A. I did what I could.
6 Q. Well, what you could was, 'I don't know anything about my
7 husband's computer' -
8 THE COURT: Mr. Rosen, it's 12:30 and we're going to
9 stop. we agreed that we're going till 12:30.
10 MR. ROSEN: Can I finish the question?
11 THE COURT: No. We agreed we're going to go till
12 12:30. It's now 12:30.
13 MR. ROSEN: Okay.
14 THE COURT: Now do you want to see whether somebody's
15 here and we'll figure out how long we should break.
16 Will 1:45 work for you - I mean, yeah, 1:45.
17 THE WITNESS: I think so.
18 THE COURT: Okay. We'll reconvene at 1:45.
19 MR. ROSEN: Your Honor, can we have access to the
20 courtroom at 1:30?
21 THE COURT: No. You can - unless somebody wants to
22 come back early, but otherwise, no, you can come back at 1:45.
23 We could start at 2:00. I want to give them their regular
24 lunch. The answer is no. You can come back at 1:45 and then
25 we'll start at 2:00 if you like.
595
1 MR. ROSEN: No. I'll - if you tell me, I'll come back
2 at 1:45, I'll start at 1:45.
3 THE COURT: But you can take any papers with you to
4 the conference rooms if you like.
5 MR. ROSEN: Thank you.
6 THE COURT: I want to give my staff their regular
7 lunch. Thank you.
8 MR. ROSEN: Right. I understand. Thank you.
9 THE CLERK: Please rise.
10 (Luncheon recess taken from 12:31 p.m. to 1:51 p.m.)
11 THE CLERK: Please rise.
12 THE COURT: Thank you, ladies and gentlemen. Please
13 seated - please be seated.
14 MR. ROSEN: Your Honor, I have some news to report
15 which may make Your Honor in a perhaps slightly better frame of
16 mind than you were before lunch. Let me tell you what it is.
17 First of all, I think counsel wishes to make an
18 appearance and then I will address what -
19 MR. HIBBARD: Good afternoon, Your Honor. My name is
20 Howard Hibbard.
21 THE COURT: Could you spell that, please, sir?
22 MR. HIBBARD: H-i, double b-, as in boy, a-r-d.
23 THE COURT: Thank you, sir.
24 MR. ROSEN: Your Honor, during the luncheon recess we
25 consulted with Mr. Hibbard, who is here representing Ms. Lucas.
596
1 We have decided and we have agreed, and Mr. Zlotoff has agreed
2 as well, to the following:
3 Number one, we will withdraw for purposes of this 1307
4 motion any claim respecting the joint ownership. So we'll take
5 that off the table. We'll get this hearing done today.
6 Number two, Mr. Hibbard has made a proposal that would
7 resolve the motion to sell the house. And he and I have
8 discussed the terms. And I have - I will be candid in the sense
9 of I have told him that it sounds okay to me, but we're going to
10 need a little bit of time to get approval of our client and to
11 let him know if this deal will fly.
12 We have got down to even the nitty-gritty, if you
13 will, of who a real estate broker would be who would have the
14 listing for the house. So we have - we have addressed the
15 deletes in painstakingly detail, not to sound redundant.
16 And the burden is now on me to speak with our client
17 and see if we can get approval for this. If we can get approval
18 for this, that would obviate the October 10th hearing on the
19 motion to sell and the second half of the motion really, which
20 is to distribute the money as opposed to escrowing the money.
21 I will commit as follows. That hearing is on Your
22 Honor's calendar for October 10th. And I will - today is -
23 obviously here in court and I'm on my way out of town. I will
24 commit to get back to both Mr. Zlotoff and Mr. Hibbard by
25 Monday. And that would be October 6th, I think, or 7th.
597
1 THE COURT: The 7th.
2 MR. ROSEN: The 7th, as to whether we have an
3 agreement and, if so, we're going to have to draft some
4 documents that - that go with it.
5 Yeah, we don't have to get to the details. Counsel is
6 reminding me we have agreed even on the identity of who the
7 broker is going to be.
8 THE COURT: You had already said that.
9 MR. ROSEN: Yeah, okay. And if we do not reach
10 agreement for any reason then the matter will be on Your Honor's
11 calendar for October 10th, and Mr. - and part of that motion may
12 or may not be, depending upon what Your Honor wants to do with
13 it, the litigation of this issue that we're taking out of this
14 case at the moment, the - the joint - the concept of joint name
15 and Ms. Lucas' claim to half of the net proceeds of the house.
16 The reason I say that is because it's going to be up
17 to Your Honor. I'm not sure that it's necessary to decide that
18 on the October 10th motion. Your Honor may decide it may be,
19 because the principal point of the motion is for an order to
20 sell the house and then comes the second half, which is the
21 question of what happens to the proceeds, are they distributed
22 versus escrowed.
23 In any event, I've agreed, all counsel have agreed
24 that if we do not have an agreement, if it breaks down along the
25 way in any way, shape, or form, or - or whatever, we will advise
598
1 counsel on Monday. And then the hearing can go forward.
2 Mr. Hibbard has asked me that in the event that the
3 hearing does go forward, would I be good enough to give him a
4 supplemental brief beyond the brief that we've already filed
5 identifying these issues that relate to his client in terms of
6 the joint tenancy. And my answer to that is with Your Honor's
7 consent I will do that. And I don't believe I have the right to
8 file an additional brief, but I don't have any problem doing -
9 accommodating Mr. Hibbard's request.
10 And if - if that - if what I've just described to you
11 is consistent with Mr. Hibbard's understanding of the
12 arrangement, and Mr. Zlotoff's - I have purposely not got into
13 the details. I don't think it's appropriate to put on the
14 record the details of what we have agreed to or tentatively
15 agreed to or I've said, "It sounds okay to me, I'll - you know,
16 I'll discuss with my client," - if that's the case then all we
17 have left now is to continue to cross on non- - of Ms. Lucas on
18 nonjoint tenancy issues for purposes of this proceeding.
19 MR. HIBBARD: There are only two small issues, Your
20 Honor. Basically all we're doing is going to hire a realtor,
21 let them list it for 60 days. If they can get a better price,
22 then - then fine, it goes to them. If it doesn't, it goes to
23 either their buyer or my client's buyer.
24 And that would have to come back and get confirmed by
25 you of course. That's the fundamentals of the deal.
599
1 Also we're going to request, and I could just see the
2 look in your eye, Your Honor, that if my client needs a living
3 allowance, that she make an application to withdraw at least
4 from one of - from her proceeds, which she'll need to survive.
5 but those are the only two issues that we're really - we're
6 really dealing with.
7 Is the Court amenable to that?
8 THE COURT: Well, Mr. Zlotoff, do you agree to all
9 this? And you need to be at a microphone.
10 MR. ZLOTOFF: Yeah. It all sounds fine to me. Just
11 one little housekeeping matter, is I had a response due Friday,
12 and -
13 THE COURT: On what?
14 MR. ZLOTOFF: On - for the October 10th hearing. And
15 if - if it's possible it's going to be resolved, I'd just as
16 soon not have to file it on October -
17 MR. ROSEN: Well, I've - I've undertaken, Your Honor,
18 as I just said, to advise counsel on Monday if we have an
19 agreement or not. And if Your Honor can tolerate Mr. Zlotoff
20 waiting until Tuesday morning to file his reply brief, I can
21 certainly do that.
22 THE COURT: Well, if he's not going to know until
23 Monday close of business what your position is, then filing it
24 Tuesday first thing in the morning is a little onerous.
25 MR. ROSEN: Well, except -
600
1 THE COURT: But you can - you can file - if you file
2 your reply brief by the end of the day Tuesday, that'll be fine
3 for me. And you should know by Monday, but I don't know what
4 your other schedule is, you know, what else you've got. But the
5 end of the day, you get it to me, and you don't even have to
6 file it. If you fax it to chambers and file it the next day and
7 fax it to the other side, or both of these parties, then that'll
8 be fine, too. It's just a matter of physically receiving it.
9 MR. ZLOTOFF: I understand. Thank you. I appreciate
10 that.
11 MR. HIBBARD: And also, Your Honor, I need to know, to
12 have a date set for me to receive his brief on the specific
13 issues of the joint tenancy ownership and my time to respond.
14 But if you have it to me by -
15 THE COURT: I have to hold this back a second. I
16 don't think - first of all, I'm not sure that I can decide the
17 joint tenancy issue in the context of a motion to sell free and
18 clear.
19 What normally happens is that you're sold free and
20 clear and normally - I haven't researched this in the context
21 that this is coming up, but normally the right, title, and
22 interest in real property is solved by adversary proceeding.
23 So whether this can all play out to be resolved on
24 Thursday, the 10th, is dubious.
25 MR. ROSEN: Your Honor, your comments I think reflect
601
1 the comment I made a moment ago. The motion that is before you,
2 if it were necessary to go to a decision, that the motion is
3 returnable on the 10th, is for an order allowing the sale of the
4 house.
5 Whether or not we agree to a listing or whether it's a
6 contested motion Your Honor has to decide, the issue of joint -
7 of Ms. Lucas' interest only comes up on the occasion of now the
8 house has been sold, and the question is the distribution of the
9 proceeds.
10 THE COURT: Well, normally if - if there's a - whether
11 you would then have to file - you might have to file a request
12 for an injunction if - because there's been no - there's been no
13 objection to the proceeds being distributed as far as I'm
14 aware -
15 MR. ROSEN: Yeah, there is. I'm pretty sure our
16 opposing papers do object to it and ask for an escrow.
17 THE COURT: Okay. Well, I don't -
18 MR. ROSEN: But -
19 THE COURT: I'm not ruling on any of this. The
20 concern I have only is if I start getting briefs on the 8th and
21 the 9th for a hearing on the 10th, on which I'll have 30 or 40
22 other matters probably, and you're briefing joint tenancy and
23 you're putting in facts in your brief, the idea that I'm going
24 to resolve this Thursday seems unlikely.
25 MR. HIBBARD: Well, of course, Your Honor. Actually
602
1 what I thought we would set up - the Court is correct, it should
2 be a separate adversary action.
3 THE COURT: Right.
4 MR. HIBBARD: As a way to get my client more of the
5 proceeds, we just may be would agree to waive all - all those
6 proceedings. And maybe on the 10th, if we do have an agreement,
7 put the agreement on the calendar for the 10th. And then once
8 you have an agreement, then maybe set another date just for the
9 joint tenancy issues or distribution of the proceeds.
10 THE COURT: Yeah. That's fine. That's no problem.
11 MR. ROSEN: Yeah, that makes sense, Judge.
12 THE COURT: That's no problem. But we still don't
13 have a brief. So if you want a brief by Mr. Rosen before the
14 10th and you and he have to agree, I'm just not promising to
15 resolve the issue on the 10th. I don't think that's realistic.
16 MR. HIBBARD: No, -
17 MR. ROSEN: I think that what Your Honor just said and
18 what Mr. Hibbard just said abates the need for that, because Mr.
19 Hibbard's concern, if I understand correctly, to me was he
20 wanted to brief on the joint tenancy issues if they were being
21 heard and determined on the 10th.
22 If, as he's now suggested, and I think it's a good
23 suggestion, that that - that that issue will be determined at
24 some point after the 10th, then I will certainly give him a
25 brief, you know, when we figure out where that issue - when that
603
1 issue's going to be tried and when Your Honor sets the schedule
2 for briefing.
3 So, if I understand correctly, if I may ask Mr.
4 Hibbard through Your Honor, if it's agreed that the issue of
5 joint tenancy will not be presented to the Court on the motion
6 that's returnable on the 10th, assuming we don't have an
7 agreement to abate that motion, that it will be some other time.
8 Do I understand that Mr. Hibbard can do without our having a
9 brief on joint tenancy next week?
10 MR. HIBBARD: Yes. That's correct as far as I'm
11 concerned.
12 THE REPORTER: Excuse me. If you could keep back a
13 little from the microphone.
14 MR. HIBBARD: Okay. Sorry.
15 Yes. That's - that's fine as far as I'm concerned.
16 THE COURT: Okay. So as of this point the motion for
17 sale free and clear of liens is on for the 10th. And you agree
18 that if there is an objection to the distribution of Ms. Lucas'
19 joint tenancy share, then that money will be escrowed
20 temporarily pending further proceedings in the court?
21 MR. HIBBARD: That's correct, Your Honor.
22 THE COURT: Okay. And you're appearing specially for
23 her today?
24 MR. HIBBARD: That's correct.
25 THE COURT: Okay. That's fine.
604
1 MR. ROSEN: Your Honor, with that I think I would
2 like -
3 THE COURT: Now, Mr. Hibbard, I just have to say
4 something to you. Mr. Rosen has been saying that - and I - I
5 haven't analyzed the issue. He's been saying basically that the
6 type of marriage that Mr. and Mrs. Henson had relates somehow to
7 - and her joint tenancy interest. And he's been asking
8 questions throughout the proceeding about the type of marriage.
9 He was just about - he asked her - he started to ask her
10 questions about where she's been living, whether she has two
11 residences or one residence and when, and all of that.
12 It's my understanding pursuant to your agreement that
13 there aren't going to be any such questions anymore -
14 MR. ROSEN: That's correct, Your Honor.
15 And I - if I may just beg to differ with you, the
16 questions about her residence do relate, and Your Honor
17 instructed no answer on where she's living and whether - where
18 her residence is at the moment.
19 But the question on the communications with her
20 husband and what kind of marriage she has don't relate to the
21 joint tenancy issue at all.
22 THE COURT: Okay.
23 MR. ROSEN: They are cross-examination respecting her
24 direct testimony as to her knowledge of her husband's affairs,
25 his earnings, expenses, et cetera. They have no relationship in
605
1 my mind to joint tenancy issues.
2 THE COURT: Okay. That's fine. Thank you for that
3 clarification.
4 MR. HIBBARD: Thank you, Your Honor.
5 THE COURT: Thank you, Mr. Hibbard.
6 Now, Ms. Lucas, if you would retake the stand, please.
7 VICTORIA AREL LUCAS, DEBTOR'S WITNESS, PREVIOUSLY SWORN
8 THE COURT: Good afternoon.
9 You may proceed.
10 MR. ROSEN: Thank you, Your Honor.
11 CROSS-EXAMINATION, resumed
12 BY MR. ROSEN:
13 Q. Ms. Lucas, you testified I believe in response to Mr.
14 Zlotoff's questions that there came a point in time at which a
15 subpoena was served on you to produce documents and appear for
16 an examination in this case. I think that's one you said was
17 left on your property and you didn't want to touch it or
18 something; am I remembering that correctly?
19 A. There was one like that.
20 Q. Yeah. And you were - and that subpoena related to the
21 examination that was conduct of you of December 17th, 1998. It
22 asked for cer- - for you to produce certain documents?
23 A. I remember one like that.
24 Q. Okay. And, Ms. Lucas, is it correct that in preparation for
25 that deposition - that examination -
606
1 MR. ROSEN: I'm sorry, Your Honor. I keep saying -
2 when I see a transcript, it's a deposition.
3 BY MR. ROSEN:
4 Q. - to that examination, you went over the list of documents
5 with your husband and he directed you which documents not to
6 produce; is that right?
7 A. I don't remember whether we went over every specific
8 document.
9 Q. Did you go over the list of the documents, meaning the
10 subpoena, and - and discuss with your husband whether or not you
11 were going to produce - you should produce any of them?
12 A. I think we tried to find them and discuss what they were and
13 what the significance of them - of them was.
14 Q. Did your husband tell you at any time that these are joint
15 documents and that he refuses to consent to allow you to produce
16 them, or words to that effect?
17 A. I remember it for one of the examinations that there were
18 some documents and I felt that it was not wholly my
19 responsibility to give them up since they didn't wholly belong
20 to me.
21 Q. And because of your belief you then asked your husband if it
22 was okay if you produce them?
23 A. Yes.
24 Q. And he said no?
25 A. Yes.
607
1 Q. And you then appeared at the deposition - excuse me - at the
2 examination on December 17th, 1998 and you testified, ma'am,
3 that there were documents that were responsive to the subpoena
4 which you did not produce because your husband told you not to,
5 right?
6 A. I'm not sure if those were the words I used.
7 Q. Well, no. I'm not talking about - I'm not putting the words
8 in quotes, ma'am. I'm talking about in substance. Is that the
9 substance of the testimony you gave, that you discussed -
10 MR. HIBBARD: Your Honor, I'm going to have to object.
11 If he wants to question her about the hearing, he can show her
12 and ask her if it refreshes her recollection on what she said or
13 didn't say. This is improper.
14 THE COURT: Sustained.
15 BY MR. ROSEN:
16 Q. Is it a fact that you refused to produce documents on the
17 grounds that your husband told you not to?
18 A. I believe so.
19 Q. Okay. Ms. Lucas, do you - are you aware that your husband
20 owned stock in a company called Xanadu, X-a-n-a-d-u,
21 Corporation, by the name of Xanadu Operating Company?
22 THE COURT: Did you say "owns" or "owned"?
23 MR. ROSEN: "Owned."
24 THE COURT: When?
25 MR. ROSEN: As of August of 1998 - as of 1998,
608
1 throughout the year.
2 THE WITNESS: I believe that he owned some stock in
3 that company at some point, I don't know when.
4 BY MR. ROSEN:
5 Q. When did you first learn that he owned stock in that
6 company, ma'am?
7 A. I don't remember.
8 Q. Did you know that in the - at the time - in 1998, that he
9 owned stock or were you told about it afterwards in preparation
10 for your testimony here?
11 A. Sounds like a "beating your wife" question. I don't
12 remember - I know that he was involved in the company as a
13 consultant, as an unpaid consultant, but as to whether he owned
14 stock in it, I'm still not sure.
15 Q. Okay. And you - is it correct then that - that you would
16 not know because the stock - any company that he owned stock in
17 was his affair, his private affair?
18 A. No, just because I'm not involved.
19 Q. Is it correct that in your relationship with your husband at
20 least during the year 1998 that your husband would not tell you
21 what company he owned stock in because - and you - and you
22 understood that because you considered to be his affair, not
23 your affair?
24 A. For the most part, if I didn't ask him things, it was
25 because I didn't want to know.
609
1 Q. I - I'm not sure that answers my question.
2 Is the reason that you didn't want to know because you
3 considered any stock ownership he had to be his affair, and not
4 yours or "ours" affair?
5 A. Partly.
6 Q. Ma'am, as you sit here today do you know if during the year
7 1998 your husband owned any bonds or other securities?
8 A. As far as I know, he did not.
9 Q. And when did you first learn that he did not?
10 A. I don't remember.
11 Q. Did you - did you know in the year 1998 whether he did or
12 did not own any bonds or other securities?
13 A. I don't remember.
14 Q. Let me see if I can refresh your recollection. I read from
15 page 24 of the same dep- - examination of December 17th, 1998.
16 THE COURT: Which none of us have, by the way, Mr.
17 Hibbard.
18 MR. HIBBARD: No, it -
19 THE COURT: Neither the Court, nor the witness, none
20 of us have this.
21 MR. ROSEN: Oh, you - I told you I was going to give
22 you a copy.
23 THE COURT: Yeah. But I can't follow along, so I have
24 no idea whether what you're reading is accurate.
25 MR. HIBBARD: Well, Your Honor, with that statement,
610
1 but if that's the case, then perhaps counsel should approach the
2 witness and show her the passage.
3 THE COURT: I suggested that; he absolutely refused.
4 MR. HIBBARD: Well, if he refuses then I'm going to
5 object to the whole line of questioning.
6 THE COURT: And I would sustain it.
7 MR. ROSEN: I was going to read her something to see
8 if it refreshes her recollection.
9 MR. HIBBARD: Well, then -
10 MR. ROSEN: Do I have to show her something to refresh
11 her recollection or can I ask her anything to refresh her
12 recollection? Her answer is she doesn't remember.
13 THE COURT: You can ask her anything to refresh her
14 recollection.
15 MR. ROSEN: Thank you.
16 THE COURT: But whether it's an accurate
17 representation of what's written there, nobody knows.
18 MR. ROSEN: Thank you. Except that I'm an officer of
19 the court.
20 THE COURT: Except that you can make mistakes in
21 reading, just like everybody else.
22 BY MR. ROSEN:
23 Q. Okay. Let me see if this refreshes your recollection. Do
24 you recall these questions and answers being asked of you on
25 December 17th, 1998, page 24, starting at line 1.
611
1 "Do you know if he owned" - "he" meaning your husband
2 - "owns any bonds or other securities?
3 "ANSWER: I don't know."
4 Does that refresh your recollection as to whether in
5 the year 1998 you knew if your husband owned any bonds or other
6 securities?
7 A. No.
8 Q. Okay. Did you know whether in the year 1998 your husband
9 owned any mortgages or deeds of trust?
10 A. Owned - owned somebody else's mortgage or somebody else's
11 deed of trust?
12 Q. Correct. In other words, that he - he was the holder of the
13 - of the interest.
14 A. I don't believe that he did. I don't know what I knew then.
15 Q. Okay. And is the reason that you didn't know because it was
16 not the practice for you to have knowledge of your husband's
17 affairs?
18 A. It -
19 Q. Again, I'm talking about 1998.
20 A. It was not his practice to have mortgages or deeds of trust
21 belonging to other people.
22 Q. No. That's not my question. Was it the practice between
23 the two of you in 1998 that your husband would or would not tell
24 you of things that he owned?
25 A. He would tell me about some things that he owned and not
612
1 about others.
2 Q. Okay. Do you know as you're sitting here today, ma'am, if
3 your husband owned - held any interest in promissory notes? In
4 other words, if he had made a loan to somebody and they had
5 given him a note or in drafts or checks, or any commercial
6 instruments, bills of exchange or any other commercial
7 instruments?
8 Do you know as you sit here today whether your husband
9 owned any of those things in 1998?
10 A. No.
11 Q. Do you know as you sit here today whether in 1998 your
12 husband held any liens or any security interests respecting
13 personal property?
14 A. I don't believe that he did.
15 Q. Okay. Did you know - do you know whether he does or
16 doesn't?
17 THE COURT: I don't understand the question. Do you
18 know now whether he does now?
19 MR. ROSEN: I'm asking her as she sits here now does
20 she know, yes or no, whether he owned any of these things in
21 1998.
22 THE WITNESS: I can't be sure.
23 BY MR. ROSEN:
24 Q. Okay. Do you know as you sit here now whether in the year
25 1998 your husband held any judgment against anybody who owned
613
1 him money?
2 A. I'm pretty sure he didn't.
3 Q. Did you know in 1998 whether he did?
4 A. I think I felt sure that he didn't.
5 Q. Let me see if I can - you said you think. Let me see if I
6 can refresh your recollection. Page 24, line 22:
7 "QUESTION: Do you know if he owns any judgments that
8 will allow him to collect money?
9 "ANSWER: That is his affair."
10 Does that refresh your recollection as whether - as to
11 whether you knew in 1998 if he - if he had any judgments that he
12 held for debts owing by others?
13 A. Not really.
14 Q. It doesn't - doesn't refresh your memory at all?
15 Is that right?
16 A. No.
17 Q. Okay. Do you know today, ma'am, what clients or contracts,
18 arrangements your husband had to perform services for other
19 people in the year 1998?
20 I'm talking about his professional occupation as a
21 computer expert.
22 A. I don't know to what extent he had contracts or informal
23 arrangements or what kinds of business arrangements he may have
24 had with people.
25 Q. Do you know now as you sit here whether your husband had any
614
1 contracts or any arrangements with clients to perform work for
2 them in 1998?
3 A. I think that during the year he had a couple.
4 Q. You think that as you say - as you sit here today?
5 Okay. Did you know in 1998 whether he had any
6 contracts or arrangements to perform work for anybody?
7 A. It seems to me that during August he wasn't working at all.
8 Q. Yeah. But my question is 1998, ma'am. It's got 12 months
9 in the year. So I'll repeat the question.
10 Did you know at any time in 1998 whether your husband
11 had any contracts, any arrangements to perform work for anyone?
12 A. I think he may have had some time during that year -
13 Q. Okay.
14 A. - arrangements to work for a couple of different companies.
15 Q. Okay. Let me - since your - you have a reservation in your
16 answer of you think so, let me see if this refreshes your
17 recollection. The bottom of page 24, line 20- - starting at
18 line 25:
19 "QUESTION: Do you know if Mr. Henson has any
20 contracts with anyone to perform any work?
21 "ANSWER: I don't know."
22 Does that help refresh your memory?
23 A. No.
24 Q. Ms. Lucas, as you sit here today do you know if Mr. Henson
25 has a will?
615
1 A. I believe he does.
2 Q. And do you know as you sit here today whether you are named
3 in that will?
4 MR. HIBBARD: Objection, Your Honor. It's completely
5 irrelevant these proceedings, the testimony - her testimony -
6 THE COURT: Whether she's named in his will. Why is
7 that relevant?
8 MR. ROSEN: This goes to the whole - this witness has
9 testified over our objections on direct as to her knowledge of
10 her husband's affairs. I've told you from the beginning this
11 marriage is not one that Your Honor apparently assumed to be
12 like marriages you may be familiar with. I've told you these
13 people lived separate existences.
14 And it would certainly support that proposition and
15 would undercut all of her direct testimony if, for example, she
16 doesn't even know if her husband has named her in a will.
17 MR. HIBBARD: That's absurd. Please. What - whether
18 it's named - whether she's named in the will or not is
19 completely irrelevant to what their relationship is.
20 MR. ROSEN: The issue is not whether she's named in
21 the will. The issue is whether she knows, because every husband
22 and wife I would know would certainly know what the other one -
23 you know, if they're named in their - in their spouse's will.
24 THE COURT: So you don't want to know whether - what -
25 whether she's named or not. You just want to know whether she
616
1 knows?
2 MR. ROSEN: Correct.
3 THE COURT: Okay. So that's the question, whether she
4 knows, not -
5 MR. ROSEN: Right.
6 THE COURT: - not whether - not whether she is, in
7 fact, named in the will.
8 MR. ROSEN: Correct.
9 THE COURT: Any objection?
10 MR. HIBBARD: Your Honor, I still think it's
11 confidential information one way or the other, but -
12 THE COURT: Whether she knows.
13 MR. HIBBARD: Whether she knows.
14 THE COURT: Is confidential?
15 MR. HIBBARD: Yes.
16 THE COURT: Overruled.
17 You can state whether you know whether you're named in
18 his will, but not whether in fact you're named in his will. Do
19 you understand the difference?
20 THE WITNESS: Yes.
21 THE COURT: You understand the difference?
22 THE WITNESS: It's - it's what I believe versus what
23 may be fact.
24 THE COURT: No.
25 THE WITNESS: Oh, sorry.
617
1 MR. ROSEN: Let me try the question.
2 THE COURT: No. Let me - let me state this because I
3 want to make sure she understands it.
4 I'm not asking you whether you really are named in the
5 will. I'm asking whether you know whether you're named in the
6 will.
7 THE WITNESS: Oh.
8 BY MR. ROSEN:
9 Q. You can answer that yes or no.
10 THE COURT: And that's what Mr. Rosen's question is.
11 In other words, you could know whether or not you're
12 named in the will, not - but you don't have to disclose whether
13 or not you're named in any will.
14 THE WITNESS: Okay.
15 THE COURT: There may not even be a will.
16 MR. HIBBARD: And that's my point exactly -
17 THE COURT: Well, then there's -
18 MR. ROSEN: Well, she already testified it was.
19 THE COURT: In what year?
20 MR. ROSEN: 1998.
21 THE WITNESS: Yes.
22 THE COURT: You know?
23 THE WITNESS: Yes.
24 THE COURT: Thank you.
25 MR. ROSEN: Page 25. I'm now at the point of offering
618
1 - I've been asking questions from this this afternoon for
2 purposes of refreshing recollection. I'm now going to offer
3 portions of this examination, December 17th, 1998, as evidence
4 for purposes of impeaching this witness' testimony.
5 And for that purpose I will do what Your Honor asked.
6 I am handing up two copies of what we've marked as plaintiff's
7 [sic] Exhibit 291. And I would point out that these are all the
8 excerpts, many of them I haven't even gotten to yet -
9 THE COURT: Could you get to the microphone?
10 MR. ROSEN: Yeah.
11 THE COURT: Do you want to see this, Mr. Hibbard?
12 I'll let you see them. Go -
13 MR. HIBBARD: Thank you, Your Honor.
14 THE COURT: My copy.
15 MR. HIBBARD: I also think that unless it's certified
16 it's not going to come into evidence.
17 THE COURT: It's a 2004 that was - should be in this
18 court's file. That's the problem with it. And we have to -
19 I've just given my Deputy a note.
20 MR. ROSEN: Your Honor, may we not show it to the
21 witness? This is impeachment -
22 THE COURT: Yeah. Counsel - counsel is looking at it
23 now.
24 MR. HIBBARD: Well, I've possibly got some issues, but
25 I'm going to object to this, that this entire testimony the way
619
1 this was, because if counsel has copies of this, he hasn't
2 followed the correct procedures in impeaching someone -
3 someone's testimony. The copy should have been offered to me
4 and to the witness. He didn't ask -
5 THE COURT: You didn't exist until a few minutes ago.
6 MR. HIBBARD: I understand that, Your Honor, but I
7 still have to raise the objection that this entire testimony is
8 improper and it all should be thrown out. Particularly if he
9 hasn't presented copies to everyone during the process.
10 THE COURT: He hasn't.
11 MR. HIBBARD: Then I respectfully submit that the
12 whole thing is objectionable as improper testimony, improper
13 examination.
14 MR. ROSEN: I'd like some clarification. I thought
15 counsel was appearing specially on the issue of Ms. Henson's
16 interests in - excuse me - Ms. Lucas' interest in the joint
17 tenancy. Is he now appearing as counsel for Ms. Lucas for all
18 purposes in this hearing?
19 MR. HIBBARD: Yes, -
20 THE COURT: Well, he can appear specially for all
21 purposes.
22 MR. HIBBARD: Yes.
23 MR. ROSEN: I don't believe the Federal Rules
24 recognize such a special appearance, Your Honor. If you could
25 point me to a section of the Federal Rules of Civil Procedure
620
1 that do, I would greatly appreciate it.
2 MR. HIBBARD: Well, interestingly enough, Your Honor,
3 that's not your burden, that's his burden to bring it up. If
4 he's got one, let him show the rule.
5 THE COURT: Yeah. And I have no problem with your
6 appearing specially for all purposes for Ms. Lucas today.
7 MR. HIBBARD: Thank you, Your Honor.
8 THE COURT: Given that you just received notice of
9 this a few minutes ago.
10 BY MR. ROSEN:
11 Q. Page 25, lines 4 and 5. Ms. Lucas, do you recall being
12 asked the following question and giving the following answer
13 under oath:
14 "QUESTION: Are you the beneficiary of his will?
15 "ANSWER: I don't know."
16 Do you recall giving that answer?
17 A. Not specifically.
18 Q. Do you deny it?
19 A. No.
20 Q. Was the answer true at the time you gave it?
21 A. Yes.
22 Q. Ms. Lucas, by the way, you indicated earlier in response to
23 a question that you don't remember taking an oath when you were
24 examined in December - on December 17th, 1998.
25 MR. ROSEN: Your Honor, may I approach the witness and
621
1 show her page 4 to see if that refreshes her recollection?
2 THE COURT: You can give it to my Deputy.
3 MR. ROSEN: Well, I think you've got the extra copy
4 there.
5 THE COURT: Page 4?
6 MR. ROSEN: Yes.
7 THE COURT: Of?
8 MR. ROSEN: Page 4 of the exhibit, Your Honor. I'm
9 sorry. It bears a number "4" at the bottom.
10 BY MR. ROSEN:
11 Q. Do you see that, Ms. Lucas?
12 A. Yes.
13 Q. Does that refresh your recollection -
14 THE COURT: I don't see it. Wait a second, Mr. Rosen.
15 Oh, this is related to the oath.
16 BY MR. ROSEN:
17 Q. Having looked at page 4, Ms. Lucas, does that refresh your
18 recollection as to whether the testimony you gave on December
19 17th, 1998 was under oath?
20 A. Yes.
21 Q. You now recall that you did affirm as opposed to swear to
22 provide truthful testimony, right? The whole truth, and nothing
23 but the truth, right?
24 A. Yes.
25 Q. And did you do that, Ms. Lucas?
622
1 A. I tried to tell the whole truth.
2 Q. Okay.
3 A. I was prevented in many instances.
4 Q. You - you didn't purposely say anything in here, to your
5 knowledge, that was untrue, did you?
6 A. I may have misspoken, but I didn't purposely saying anything
7 untrue.
8 Q. Okay. Ms. Lucas, do you know today if your husband owned
9 any - had any brokerage accounts, stock brokerage accounts in
10 the year 1998?
11 You can just answer yes or no.
12 THE COURT: Do you know today whether he owned in
13 1998 -
14 MR. ROSEN: Correct.
15 THE COURT: That's the question.
16 MR. ROSEN: That the question.
17 THE WITNESS: I can't really answer it yes or no
18 because I don't know the - I don't know what you would call his
19 IRA account. Other than that he held bro- - accounts that might
20 be -
21 BY MR. ROSEN:
22 Q. I can't hear you.
23 A. I can't - I don't know what his IRA account is. I - or what
24 the status of it is - was at that time. I don't know if it
25 would count as a brokerage account. Other than that, he - he
623
1 did not have one to my knowledge at this time.
2 Q. And did you know in 1998 that he did not - did you know then
3 that he did not have a brokerage account other than possibly an
4 IRA?
5 A. I don't think I did.
6 Q. So you learned about it after 1998, right?
7 A. Yes.
8 Q. Now his IRA, as long as you mentioned it, who was the
9 depository on the IRA? In other words, who held the funds?
10 A. I think it's been the same people, at this point I believe
11 it's Charles Schwab.
12 Q. Okay. And that was true in 1998?
13 A. I think so.
14 Q. Okay.
15 MR. HIBBARD: Your Honor, I'm also going to raise an
16 objection. This is the best evidence - what we're having here
17 is a memory test. If we have this, why doesn't he just submit
18 the transcript in support of his motion? I don't understand why
19 we're going over it - why we're reviewing a memory test. I
20 couldn't remember what I testified to in 1998. I mean this is -
21 this is absurd.
22 MR. ROSEN: Counsel is misunderstanding, Your Honor.
23 It's not a memory test. I'm reading only for purposes of either
24 refreshes the witness' recollection as she answers that she
25 doesn't remember or she thinks, or to impeach her if she
624
1 provides an answer which is different than that.
2 The issue is not what she testified to in 1998 per se.
3 The issue is the 1998 testimony becomes relevant for either of
4 those two reasons, either refresh her recollection if she
5 doesn't remember or to impeach her based on testimony she's
6 given here in the courtroom.
7 MR. HIBBARD: Well, then I would request an offer of
8 proof of why this witness is on the stand at all.
9 THE COURT: She was offered by Mr. Henson, her
10 husband. She wasn't offered by Mr. Rosen.
11 MR. HIBBARD: True, but we still have her previous
12 testimony of 1998 which can be substantially more in line with
13 the two to the time then putting her on a memory test right now.
14 THE COURT: Except that Mr. Zlotoff asked many of
15 these same questions or types of questions, as I recall. He
16 could correct me if I'm wrong, and so now Mr. Rosen is entitled
17 to cross.
18 MR. HIBBARD: All right.
19 MR. ROSEN: That's a - Your Honor, I thank you for the
20 ruling. You might also point out, if I might respectfully -
21 THE COURT: Mr. Rosen, you don't have to do -
22 MR. ROSEN: - suggest, they could withdraw the
23 witness -
24 THE COURT: - rulings for me. Please just ask her
25 questions.
625
1 MR. ROSEN: No. I said they cannot certainly withdraw
2 the witness.
3 THE COURT: Yeah, thanks, Mr. Rosen. Just answer -
4 ask the questions.
5 BY MR. ROSEN:
6 Q. Ms. Lucas, do you know now as to how much income your
7 husband earned in the year 1998?
8 You could just say yes or no.
9 A. I'm not sure that I remember a correct figure.
10 Q. Okay. Do you - did you know in 1998 how much your husband
11 earned in that year?
12 A. I don't remember.
13 Q. Did you - let me see if I can help refresh your
14 recollection. Page 41, line 14:
15 "QUESTION: All right. Talking about this year only"
16 - and that is obviously 1998 - "how much income has your husband
17 made as an independent contractor?
18 "ANSWER: I do not know."
19 Does that help refresh your recollection?
20 MR. HIBBARD: Well, I'm going to object to this
21 because there's no point in refreshing her recollection. She
22 gave the same answer.
23 THE COURT: Anything can refresh her recollection.
24 The problem is - a dog bone could refresh your recollection. So
25 the - the objection is overruled.
626
1 MR. HIBBARD: Thank you, Your Honor.
2 BY MR. ROSEN:
3 Q. Does that refresh your recollection, ma'am?
4 A. The question is reflects - refresh my intel- - my
5 recollection of what? Making the testimony?
6 Q. No, ma'am. Does it refresh your recollection on the subject
7 of whether you knew in 1998 how much your husband had earned in
8 1998. Whether you knew on December 17th, 1998 how much your
9 husband had earned in that year?
10 A. I don't think I knew at that point.
11 Q. Okay. At - at that point in time, did you have any concept
12 of the magnitude of what Mr. Henson had earned, even a range?
13 THE COURT: For that year?
14 MR. ROSEN: For that year.
15 THE COURT: At that time. So we're talking about -
16 because you can't know what he earned in '98 until we're at the
17 end of '98.
18 MR. ROSEN: No. Up to December 17th, because that's
19 the date of this deposition - the examination.
20 THE COURT: The 2004.
21 MR. ROSEN: Yeah. I'm sorry, Your Honor. I keep
22 forgetting it.
23 THE WITNESS: All I remember knowing is that he made
24 so little that I had to go out and get three jobs -
25 BY MR. ROSEN:
627
1 Q. Three jobs or four jobs, ma'am?
2 A. Three and - and - I think it was three and then I did some
3 volunteering to try to build up my credentials.
4 Q. So in the year 1998 you worked three jobs at the same time?
5 A. Yes.
6 Q. But you didn't work four jobs?
7 A. I'd have to cast my mind back to exactly who I worked for -
8 THE COURT: The job paid or unpaid, Mr. Rosen?
9 MR. ROSEN: A job is paid. Volunteer work is not a
10 job.
11 THE COURT: Well, I don't know whether that's true,
12 Mr. Rosen. A job - a volunteer job may be - may be a job just
13 like any other job.
14 MR. ROSEN: Thank you, Your Honor. I was going by the
15 dictionary definition.
16 THE COURT: I'm sure you have it memorized, Mr. Rosen,
17 for this purpose.
18 BY MR. ROSEN:
19 Q. Do you remember?
20 A. I was working for EBSCO and Stanford and volunteering for
21 San Francisco State and Arlene Guerrero. So if you count the
22 volunteer work it was four simultaneously.
23 Q. And that was all four in the year 1998 at the same time?
24 A. At the same time, yes. I worked -
25 Q. Okay.
628
1 A. - at two other jobs earlier in 1998, -
2 Q. Okay.
3 A. - and later, another job.
4 Q. So the p- - I believe my question was: Did you have any
5 idea of the magnitude, even a range, of what your husband earned
6 in 1998?
7 You've now told us that he didn't make much because
8 you had to go out and work four jobs. That doesn't answer my
9 question, ma'am, so I'll repeat it.
10 Did you have any idea of the magnitude of your
11 husband's earnings in 1998? A range?
12 A. I think it was about a quarter of what he had earned the
13 year before.
14 Q. When I ask of a magnitude could you give us a range in
15 dollars?
16 A. No.
17 Q. And the belief that you have that it was a quarter of what
18 he earned the year earlier, is that a belief that you formed
19 after 1998, in preparation for your testimony here?
20 A. In preparation for doing the tax returns for 1998.
21 Q. In the year 1998 did you have any idea as to even the
22 magnitude, the range of your husband's income for that year? In
23 the - in the year 1998 and specifically as of December 17th of
24 that year?
25 And can you just say yes or no, if you had an idea of
629
1 the magnitude or not.
2 A. Well, the number 40,000 sticks in my mind, but I don't know
3 if that's the case. This would have been gross earnings.
4 Q. And that's your recollection as to your knowledge in 1998 as
5 to what your husband had earned in that year, 1998, right?
6 A. And you're asking me what I remembered then?
7 Q. Yes.
8 A. I don't think I had a good memory at that point.
9 Q. Let me see if I can assist you. Page 42, line 1:
10 "QUESTION: Do you have some concept of the magnitude
11 of Mr. Henson has earned as an independent contractor? I'm not
12 asking for an exact number, but 5,000, 10,000, 50,000, something
13 like that.
14 "ANSWER: Not really, no.
15 "QUESTION: No concept of the order of magnitude?
16 "ANSWER: No."
17 Do you remember being asked those questions and giving
18 those answers?
19 A. Not specifically.
20 Q. You have - you have that in front of you?
21 A. Yes.
22 Q. Okay. Now that I've read it and now that you've seen it, is
23 that - was that testimony truthful, ma'am?
24 A. I certainly did my best to tell the truth.
25 Q. Was this testimony truthful?
630
1 THE COURT: Which testimony was truthful -
2 MR. HIBBARD: Your Honor, objection, argumentative.
3 MR. ROSEN: What I just read.
4 THE COURT: Didn't you just ask her that?
5 MR. ROSEN: No - yeah, I did. She didn't answer the
6 question.
7 THE COURT: Yes, she did.
8 MR. ROSEN: Oh, I'm sorry. I heard a nonresponsive
9 answer.
10 THE COURT: She said, "I...did my best to tell the
11 truth," or to say something -
12 BY MR. ROSEN:
13 Q. When -
14 THE COURT: - to that effect.
15 BY MR. ROSEN:
16 Q. When is it that you prepared the tax returns for 1998?
17 A. I think it was October of '99.
18 Q. And you prepared Mr. Henson's tax return at that time or
19 just prepared your own, ma'am?
20 A. I prepared my own, but we had to sit down together and look
21 at joint information such as the mortgage and the child care
22 expenses, so I -
23 Q. Ms. Lucas, - I'm sorry -
24 THE COURT: Don't interrupt her answer.
25 BY MR. ROSEN:
631
1 Q. I thought you were done.
2 THE COURT: Go ahead. You can finish. If you're
3 finished, fine.
4 THE WITNESS: I think I'm finished.
5 BY MR. ROSEN:
6 Q. Are you done, ma'am?
7 A. Yes.
8 Q. Ms. Lucas, the fact of the matter is that in 1998 you and
9 your husband filed separate tax returns, right?
10 A. I believe that was the first year we did that.
11 Q. Okay. And you're telling me that you had to sit down and
12 discuss with your husband matters that relate to both returns,
13 such as deducting a child, right?
14 A. Yes.
15 Q. Did you see Mr. Henson's tax return, the portion of it that
16 reported his income for that year?
17 A. I saw the papers, but I don't think I saw the figures.
18 Q. Okay. Well, a moment ago, ma'am, you said that you did not
19 know his income in 1998 until, quote, I prepared the tax
20 returns.
21 You didn't prepare his tax return for 1998, did you,
22 ma'am?
23 MR. HIBBARD: Well, first of all, I'm going to object.
24 That's not the quote. It misstates her testimony.
25 THE COURT: Sustained.
632
1 BY MR. ROSEN:
2 Q. You didn't prepare his tax return for 1998, did you, ma'am?
3 A. No.
4 Q. Okay. Let's go to the next thing. You've tes- -
5 MR. ROSEN: Excuse me a second, Your Honor.
6 BY MR. ROSEN:
7 Q. Ms. Lucas, you've testified here, including just before
8 lunch in response to my questions, about credit cards. Credit
9 cards that either Mr. Henson had or that the two of you had
10 jointly. Do you recall that testimony?
11 A. Yes.
12 Q. And you didn't mention a credit card called the Chase
13 Advantage Credit, did you -
14 A. No, I didn't.
15 Q. - in your testimony?
16 A. It's not a credit card.
17 Q. What is it?
18 A. It's a line of credit.
19 Q. Okay. So in 1998, including in February and March of that
20 year, your husband had a line of credit with Chase Advantage
21 Credit; is that right?
22 A. I believe so. I don't remember when that credit started.
23 Q. Okay. And you also did not mention a credit card issued by
24 GE, General Electric Card Services? You didn't mention that
25 credit card either, did you, ma'am?
633
1 A. I believe that was the one I called the More Card. It
2 transformed into GE and then into something else.
3 Q. But in 1998 it was GE, right?
4 A. I don't remember what it was called at that point. It
5 changed so many times.
6 Q. Well, let me see if I can refresh your recollection. Page
7 77, line 12:
8 "QUESTION: What about GE Card Services?
9 "ANSWER: I believe that is a credit card of my
10 husband's."
11 Does that help refresh your recollection that in 1998
12 the credit card was GE?
13 A. No more than what I just said.
14 Q. Okay. Now you testified to - in response to Mr. Zlotoff's
15 questions that the Whole Life Policy which had been, I think
16 your words, gifted to Alcor was a joint policy, you and your
17 husband. Do you remember that testimony, ma'am?
18 A. Yes.
19 Q. In fact, that testimony you gave in this court was untrue,
20 wasn't it?
21 A. I testified to the best of my knowledge.
22 Q. Ms. Lucas, did you testify to the best of my knowledge under
23 oath in December of 1998 on the very same subject?
24 A. I'm sure I did.
25 Q. Okay. Ms. Lucas, I'm going to ask you whether you remember
634
1 being asked these questions and giving these answers, starting
2 on line 20, page 92:
3 "QUESTION: Now I've referred to car insurance and
4 home owner's insurance. Is there any other insurance that you
5 have?
6 "ANSWER: You pointed out to me that there was a
7 payment to health insurance.
8 "QUESTION: Right. Is there anything besides those
9 three?
10 "ANSWER: There is some life insurance.
11 "QUESTION: On both of you?
12 "ANSWER: There is no joint life insurance."
13 Do you recall being asked those questions and giving
14 those answers, ma'am?
15 THE COURT: She said there's no joint -
16 THE WITNESS: I think so.
17 BY MR. ROSEN:
18 Q. Right. That's what it is, that's what you testified to, a
19 joint life insurance policy.
20 Do you recall giving those answers, ma'am?
21 A. I think so.
22 Q. Were they true at the time?
23 A. If I may explain, -
24 Q. No, no. I'm just asking you whether your answers given were
25 true at the time.
635
1 MR. HIBBARD: No, I'm -
2 BY MR. ROSEN:
3 Q. You left plenty of opportunity -
4 THE COURT: Let me him - let him state his objection -
5 MR. HIBBARD: Objection, argumentative.
6 THE COURT: Sustained.
7 BY MR. ROSEN:
8 Q. Were they true at the time, ma'am?
9 MR. HIBBARD: Objection, argumentative.
10 THE COURT: Sustained.
11 MR. ROSEN: That's not argument, was the - was the
12 testimony given true.
13 THE COURT: She wanted to give you an explanation, you
14 interrupted her. She will explain it to you if you want to
15 know -
16 MR. ROSEN: I haven't asked her for an explanation,
17 Judge.
18 THE COURT: Well, can you answer it yes or no?
19 THE WITNESS: Yes, I guess.
20 BY MR. ROSEN:
21 Q. Okay. And continuing on, on line 3:
22 "QUESTION: I don't mean joint, but do you each have
23 policies?
24 "ANSWER: I have a life insurance policy and I believe
25 he has his own."
636
1 Do you recall being asked that question and giving
2 that answer, ma'am?
3 A. I think so.
4 Q. And you were then asked the question on line 7:
5 "Are those term policies or" - and your answer on line
6 - beginning on line 8:
7 "I don't know what his is. Mine is a Whole Life, I
8 believe."
9 Do you recall being asked those questions and giving
10 those answers?
11 A. I think so.
12 Q. Now, ma'am, do you know whether your husband - we've already
13 talked about t patents your husband owns. Do you know whether
14 your husband owns any copyrights, trademarks, or trade secrets?
15 As you sit here today.
16 THE COURT: You're talking about in the present, does
17 he own in the present?
18 BY MR. ROSEN:
19 Q. As you sit here - no. As you sit here today do you know if
20 your husband owned at any time in 1998 any copyrights,
21 trademarks, or trade secrets?
22 A. He may have owned copyrights because copyrights incur -
23 occur when you write something, but other than that, as far as
24 having registration, I don't know. I didn't know then and I
25 don't know now.
637
1 Q. In fact, Ms. Henson, in 19- - excuse me, Ms. Lucas. I'm
2 sorry I keep doing that and I apologize for it.
3 In fact, Ms. Lucas, in 1998 you didn't know if your
4 husband owned - you didn't even - you didn't know if he owned
5 any copyrights, trademarks, or trade secrets; isn't that true?
6 A. I didn't know for certain.
7 Q. You didn't know at all, not for certain? Did you suspect
8 that he did in 1998?
9 A. I thought he might have written something that might have
10 had an inherent copyright, but other than that I was thinking
11 about whether it might be registered.
12 Q. Do you remember being asked the following question and
13 giving the following answer, page 93, line 15:
14 "Do you know if Mr. Henson owns any copyrights?
15 "ANSWER: I don't know."
16 Do you remember giving that answer?
17 A. Not specifically.
18 Q. But if you gave that answer it would have been true at the
19 time, right, ma'am?
20 A. I would have believed so.
21 Q. Okay. Do you know now as you sit here what Mr. Henson was
22 earning on a current basis in December of 1998?
23 I'm not asking you about the prior part of the year.
24 I'm just focusing on in December of 1998. Do you know what he
25 was earning at that time?
638
1 A. Do I know now?
2 Q. Yes.
3 A. No.
4 Q. Did you know then?
5 A. I probably knew what he was earning per hour, but whether he
6 was earning that at any specific time or who he was working for
7 or if he was working, but I knew what - what he charged, but I
8 don't remember specifically if he was working for someone or
9 invoicing someone.
10 Q. Can you tell us whether there was anybody he was - any
11 client he was working for at that time in December of '98?
12 A. He might have been working for MediaGate or Cubic. I know
13 he worked for them during that period of time, but I don't know
14 specifically about that time.
15 Q. Page 110, line 22:
16 "QUESTION: Do you know what income Mr. Henson is
17 currently making?
18 "ANSWER: No, I don't.
19 "QUESTION: Do you know who he's doing work for?
20 "ANSWER: No, I don't."
21 Were those answers true?
22 A. Yes.
23 Q. So let me see if I understand this relationship between you
24 and your husband. He works and you don't know who he's working
25 for. You don't know if he has any income; is that right?
639
1 A. You're putting that in the present tense, as if it has
2 always been true rather than at only specific periods.
3 Q. Excuse me. In 1998, in the year 1998, you didn't know who
4 your husband was working for and you didn't know what money he
5 was making; is that right?
6 A. Not if you're talking about the whole year.
7 Q. It's wrong?
8 A. Yes.
9 Q. When - was it right at any point in the year?
10 A. Yes.
11 Q. When?
12 A. I can't remember specific periods.
13 Q. Well, ma'am, you testified before lunch that you and your
14 husband agreed to a certain level of not exchanging information
15 and secrecy because of the disputes going on with Scie- - quote,
16 Scientology. You testified before lunch that that started in
17 the spring of 1999.
18 A. I said I couldn't remember exactly when it started.
19 Q. I see. You recall testifying before lunch that your
20 testimony was it started in the spring of '99?
21 A. I don't remember exactly. I thought I said that I wasn't
22 certain what it reminded - when it started. It might have been
23 '99, might have been '98, might have been 2000. I know there
24 were periods in those years -
25 Q. Do you have any - any better recollection as you sit here
640
1 now?
2 A. No.
3 Q. Okay. Let's talk about the artwork, if we might for a
4 moment. Now you were asked several questions about this by Mr.
5 Zlotoff; do you recall that?
6 A. By - oh, yes.
7 Q. Mr. Zlotoff.
8 A. In - in - yes.
9 Q. Stan.
10 A. Well, I mean you're talking about yesterday or the day
11 before, yes.
12 Q. Are you having trouble remembering that?
13 I'll withdraw the question.
14 Well, let me see if I understand your testimony about
15 the artwork. There was a piece of art that was given by your
16 ex-husband, Mr. Manchester, to your daughter Amber. One piece
17 of art, right?
18 A. Yes.
19 Q. And then later on that piece of art was exchanged at a
20 gallery and traded, so to speak, for four pieces of art, right?
21 A. I believe it was four, yes.
22 Q. And for this entire period of - let's start with the first
23 piece of art. So from the beginning this piece of art that was
24 - this piece of art was given by your ex-husband to your
25 daughter. And then obviously the exchange which occurred, where
641
1 one piece became four pieces, your daughter continued to own
2 that art, right?
3 A. Yes.
4 Q. Okay. What is your daughter's date of birth?
5 A. 10-12-82.
6 Q. Would you explain to this Court how - and, by the way, when
7 were you divorced from Mr. Manchester?
8 A. I think it was '81.
9 Q. Okay. Now Amber is the child of you and Mr. Henson, right?
10 A. Yes.
11 Q. I mean natural child. She's not adopted or anything, she's
12 your natural daughter?
13 A. Yes.
14 Q. And she was born in October of '82?
15 A. Yes.
16 Q. Well, Ms. - Ms. Lucas, could you explain to me how Mr.
17 Manchester made a gift of the original piece of art to your
18 daughter when - in the year 1979, three years before your
19 daughter was even born? Can you explain that?
20 A. I don't remember if that was the year, in any case I thought
21 he gave it in trust to us for her - for -
22 Q. So - I'm sorry. I thought you were done. I didn't mean to
23 interrupt you. Keep going. You thought he gave it in trust.
24 Go ahead.
25 A. I don't remember that that was the year he gave it to us. I
642
1 - to her - Mr. Manchester originally lent me that piece of art
2 for use in a business that I was running. I placed it on the
3 wall -
4 MR. ROSEN: Your Honor, I move to strike this. The
5 question - this is not responsive to my question at all.
6 MR. HIBBARD: Well, I think she needs to finish her
7 answer before you move to strike it.
8 THE COURT: Go ahead, finish your answer.
9 THE WITNESS: I don't believe that the year 1979 is
10 the correct year that he gave it to my daughter, is what I've
11 tried -
12 BY MR. ROSEN:
13 Q. When did he give it to your daughter?
14 MR. HIBBARD: Would you let her finish the -
15 THE COURT: Right. You're producing a terrible
16 record, because every time she speaks you overlap.
17 MR. ROSEN: I'm sorry, Your Honor, -
18 THE COURT: You've got to let her finish.
19 MR. ROSEN: Your Honor, I can't hear her very well.
20 She's speaking in an extraordinarily low voice and not talking
21 into the microphone. I hear silence. You're three feet away
22 from her. You may be able to hear her continuing to talk. And
23 maybe Mr. Hibbard has better hearing than I do, because I don't
24 have really good had been. But I'm hearing silence. I'm not
25 trying to interrupt her. I think she's done.
643
1 THE COURT: Just try to keep your voice up a little.
2 THE WITNESS: I think 1979 is the correct year or may
3 be close to when Mr. Manchester lent me the piece of artwork for
4 my business, because he knew it was one that I loved and that
5 with the decor of the business that I was running.
6 I don't remember the year in which he gave it to our
7 daughter. It may have been somewhere between '83 and '85, when
8 the business failed, and I was trying to give it back to him.
9 He told me that he had nowhere to put it because his
10 residence was unsuitable for a work of art. And he wished to
11 give it to my daughter instead.
12 MR. ROSEN: Move to strike. Totally nonresponsive to
13 my question.
14 MR. HIBBARD: I'd like to hear why it's not
15 responsive.
16 MR. ROSEN: The question had nothing to do with what
17 Mr. Manchester told her, which the witness has been able to in
18 the course of being nonresponsive introduced hearsay as well.
19 MR. HIBBARD: Well, the -
20 MR. ROSEN: Whatever Mr. Manchester said to her is
21 hearsay. You wouldn't allow that in, Judge, if the question
22 were asked what did Mr. Manchester say to you.
23 This witness is very practiced in terms of how to get
24 into this record by offering nonresponsive answers, testimony
25 that you would not allow in. What did Mr. Manchester say to
644
1 her. What did she say to him.
2 MR. HIBBARD: Are you through?
3 Okay. The question was how did this happen -
4 MR. ROSEN: That's not the question, Your Honor.
5 THE COURT: The question was related to when
6 Manchester gave the daughter the painting.
7 MR. ROSEN: Right.
8 MR. HIBBARD: Correct.
9 THE COURT: And -
10 MR. ROSEN: And "when" calls for a year, Your Honor.
11 As I asked this witness several times in this examination, just
12 tell me - when I start a question with the word "when," it calls
13 for a year, a date.
14 MR. HIBBARD: Well, I think it calls for whatever
15 answer the witness wants to give you is what I think it calls
16 for. And I think her - well, I'd say for sure that the
17 testimony was responsive. If you want to strike out the hearsay
18 part of it, fine. But - well, you need to make that motion,
19 though.
20 THE COURT: Yeah. What Mr. Manchester is stricken,
21 the rest of it stays.
22 BY MR. ROSEN:
23 Q. What is the year that Mr. Manchester made this gift of this
24 painting to your daughter?
25 A. I don't remember the specific year. I was saying that it
645
1 was some time between 1982 and 1985 as far as I recollect.
2 (Telephone ringing.)
3 BY MR. ROSEN:
4 Q. 198- - did you say '83?
5 THE COURT: '5.
6 BY MR. ROSEN:
7 Q. '5. Between 198- -
8 THE COURT: Between '82 and '85 she testified, if you
9 came here -
10 BY MR. ROSEN:
11 Q. In other words, - in other words, Mr. Manchester gave this
12 to your daughter, who was born in October of '82, in that year?
13 A. It's possible.
14 Q. It's possible. Is that your testimony under oath, as oppose
15 to "It's possible," ma'am?
16 MR. HIBBARD: Objection, Your Honor, argumentative.
17 THE COURT: Sustained.
18 BY MR. ROSEN:
19 Q. Okay. Now let's go over this. At the time that you - do
20 you remember when you received the painting?
21 A. I think that probably was - it was some time between '79 and
22 '81.
23 Q. And where were you living at the time?
24 A. Tucson, Arizona.
25 Q. And you were operating some sort of a business?
646
1 A. Yes.
2 Q. And Mr. Manchester, who at that time starting in '79, was
3 your ex-husband, where was he living at that time?
4 A. I'm not sure when the divorce was, it might not have been
5 until '81. He was living in British Columbia or possibly in
6 Washington.
7 Q. Washington, the state of Washington?
8 A. Yes.
9 Q. Is that where he was living at the time he - you first took
10 possession of this painting?
11 A. Yes.
12 Q. So let's see if I get this right now. This is a painting
13 that Mr. Manchester owned, right?
14 A. Yes.
15 MR. HIBBARD: Your Honor, I'm - I'm going to object to
16 this line of question as being asked and answered and also
17 argumentative. We don't need to review. I think he asked that
18 question or not, but -
19 MR. ROSEN: This is cross-examination, Your Honor.
20 THE COURT: Haven't you asked all these questions
21 before, -
22 MR. ROSEN: No. I want to make sure -
23 THE COURT: - and then you would move to strike the
24 part where she explained about Mr. Manchester.
25 MR. ROSEN: I didn't ask her anything about what Mr.
647
1 Manchester said to her.
2 THE COURT: But you - you asked her how she got the
3 painting, when. And she tried to explain it all, and now you're
4 going back through the whole story again.
5 MR. ROSEN: You know, Judge, I'm sorry, I can't -
6 that's not what I asked, and the record will show that your
7 comment is incorrect. I'm not eliciting any hearsay from her.
8 I've never asked her -
9 THE COURT: We're not talking about hearsay. You're
10 now going back to Mr. Manchester again.
11 MR. ROSEN: Yes, I am.
12 THE COURT: I'll - I'll give you a couple of
13 questions. Go ahead, let's see where you go.
14 BY MR. ROSEN:
15 Q. Okay. So let's see if I get this right now. Mr. Manchester
16 owned this painting. And some time between 1979 and 1981, he
17 loaned it to you to - while living in Washington or British
18 Columbia, for you to display in your place of business in
19 Tucson, Arizona; is that your testimony?
20 A. Yes.
21 Q. And it was some time after that that Mr. Manchester then
22 gave this same painting, which was in your possession in Tucson,
23 Arizona, that he made a gift of that to your daughter?
24 A. Yes.
25 Q. At a time when your daughter is anywhere between one and
648
1 three years old, right?
2 A. Yes.
3 Q. Okay. Now is the reason that Mr. Man- - withdraw that.
4 Did you have a home of your own in Tucson, Arizona at
5 the time you took - you got this painting?
6 MR. HIBBARD: Your Honor, I'm going to object. This
7 is completely irrelevant.
8 MR. ROSEN: I don't think so. I'm leading to
9 impeachment.
10 THE COURT: I'll allow her to answer this question.
11 BY MR. ROSEN:
12 Q. You were living someplace, right, ma'am?
13 A. Yes. But in 1985 we were in transition, so I don't remember
14 whether we had a home at that time.
15 Q. I'm not asking about 1985, ma'am. I'm asking about the time
16 you got the painting from Mr. Manchester -
17 THE COURT: She's already testified that it was some
18 time between '82 and '85.
19 MR. ROSEN: No. She's testified between '79 and '81,
20 Your Honor.
21 THE COURT: That's when she got it originally.
22 MR. ROSEN: That's what I just asked, when you got
23 the -
24 THE COURT: Okay. So you're not asking when it was
25 gifted, you're asking when she received it the first time.
649
1 MR. ROSEN: That's what my question was.
2 THE COURT: Okay.
3 BY MR. ROSEN:
4 Q. When you received the painting from Mr. Manchester, some
5 time between 1979 and 1981, you had some place you were living?
6 You weren't living in your business or in the street, right?
7 A. For part of that time I did live in the business.
8 Q. And for the rest of the time, did you have a place to live?
9 A. Yes.
10 Q. Ma'am, do you recall executing an affidavit on August 26 of
11 the year 2000, an affidavit that was submitted to this Court in
12 opposition to RTC's original motion to dismiss filed over two
13 years ago? Do you recall submitting an affidavit?
14 A. I've submitted a number of affidavits. I don't remember
15 that one specifically.
16 MR. ROSEN: Okay. I'm going to - we'll make copies of
17 this during the break, Your Honor. I wasn't anticipating that
18 we would need this for -
19 THE COURT: That's fine. We'll break for 15 minutes
20 at this point.
21 MR. ROSEN: Okay.
22 THE COURT: You can make your own copies.
23 MR. ROSEN: I don't - is there -
24 THE COURT: There's a machine right down the street at
25 Kinko's.
650
1 THE CLERK: There's a copy center by the Clerk's
2 Office.
3 MR. ROSEN: Question.
4 THE CLERK: Please rise.
5 (Recess taken from 2:48 p.m. to 3:24 p.m.)
6 THE CLERK: Please rise.
7 THE COURT: Thank you, ladies and gentlemen. Please
8 be seated.
9 You may process.
10 MR. ROSEN: Thank you, Your Honor.
11 Ms. - Your Honor, we have the exhibits being
12 photostated. In the meantime, just so we don't - I will move
13 along with different questions and then we'll get to the
14 exhibits, and we are going to introduce them.
15 BY MR. ROSEN:
16 Q. Ms. Lucas, do you recall appearing for a 2004 examination in
17 this bankruptcy proceeding on Thursday, February 17th of the
18 year 2000?
19 A. Yes.
20 Q. Do you recall being asked questions about this artwork at
21 that time?
22 A. I know that I was asked about it at some deposition, I don't
23 remember which one.
24 Q. Okay. Is it true that Mr. Manchester offered to give the
25 artwork to you, but you said, 'No, give it to my daughter
651
1 instead'?
2 A. I seem to remember that he wanted to give it to me, but that
3 it - I didn't feel proper about it because by then I was married
4 to someone else, and so he decided to give it to my daughter.
5 Q. And do you recall, ma'am, that this conversation you had
6 with Mr. Manchester in which he said, in words of substance, 'I
7 want to give it to you,' and you said, 'No' - in substance, 'No.
8 Give it to my daughter.'
9 Do you recall that that conversation occurred in 1979?
10 A. No.
11 Q. Page 276 -
12 MR. ROSEN: Your Honor, I don't have a copy of this.
13 I will - I'm going to mark it -
14 THE COURT: I thought we were going to wait until -
15 MR. ROSEN: No, this -
16 THE COURT: - to make cop- -
17 MR. ROSEN: - is something else. They're
18 photostating -
19 THE COURT: So why didn't you -
20 MR. ROSEN: - the declarations.
21 THE COURT: So why didn't you have them make copies of
22 that if you wanted to -
23 MR. ROSEN: Because I just found this in my notes.
24 And I - if there's any question about the reading of it, I -
25 THE COURT: Can you send somebody to the copy center
652
1 and just have copies made?
2 MR. ROSEN: Your Honor, -
3 THE COURT: It's right here. You have three people
4 with you, four people, -
5 MR. ROSEN: I know, Your Honor. But then we have to
6 stop the hearing and we -
7 THE COURT: For one second while you get that, and you
8 move onto something else.
9 MR. ROSEN: Your Honor, may I ask Your Honor if we can
10 use Your Honor's facilities to photostat four pages?
11 THE COURT: Why don't - it's just down the hall, Mr.
12 Rosen. And you have four people at least -
13 MR. ROSEN: Just down the hall? Okay.
14 THE COURT: Thank you.
15 MR. ROSEN: Do we need the cover page of the
16 deposition, Your Honor?
17 THE COURT: Yes.
18 MR. ROSEN: And do you want the certification or will
19 you take my representation?
20 THE COURT: I'd like the certification.
21 MR. ROSEN: You'd the reporter's certification?
22 THE COURT: Yes, so that everybody has it. So each
23 lawyer has it and there's no question.
24 MR. ROSEN: Okay. Okay.
25 BY MR. ROSEN:
653
1 Q. Ms. Lucas, this conversation that you've just testified to
2 in which Mr. Manchester offered it to you and you said, 'No,
3 give it to my daughter,' that conversation occurred, to your
4 recollection, when?
5 A. I'm not sure. It may have been not a single conversation
6 but a - it could be that when he first lent it to me, he said
7 that it was a loan but that it could become a gift at some
8 point.
9 Q. A loan that could become a gift.
10 A. And if I - if we talked about that at that point, I might
11 have said, 'Well, we can talk about it later.' I wasn't even
12 pregnant in '79 so I don't think I would have mentioned a child,
13 although I was trying to get pregnant I think by 1981, or '2, I
14 forget.
15 Q. Ms. Lucas, the conversation you just described with Mr.
16 Manchester in which he offered to give it to you and you said,
17 'No, no. I don't want it. Give it to my daughter,' what is
18 your testimony here under oath in this proceeding as to what
19 year that conversation occurred?
20 MR. HIBBARD: Your Honor, -
21 BY MR. ROSEN:
22 Q. And if it was more than one conversation, tell me the - when
23 the first part of the conversation occurred, when did this
24 dialogue begin, in other words?
25 MR. HIBBARD: Your Honor, once again this is improper.
654
1 If he wants to refresh her recollection, he's allowed to do so.
2 The witness has answered the best she can. He's got to show her
3 the document.
4 THE COURT: I'll allow the question, if you remember.
5 THE WITNESS: No, I don't remember. And '97 - '79
6 doesn't sound right because the business wasn't - there wasn't a
7 business in '79, I don't think.
8 BY MR. ROSEN:
9 Q. Ms. Lucas, do you have any recollection of what year it was
10 when this conversation occurred or when, if it may have been
11 more than one, that the conversation began?
12 A. There may have been more than one conversation and it would
13 have occurred at the time that he was talking about lending me
14 an artwork that he had just bought.
15 Q. Ms. Lucas, my question was when?
16 A. I don't remember when.
17 Q. Okay. Now, Ms. Lucas, at the time of this conversation with
18 Mr. Manchester of he wanting to give it to you, and you saying,
19 'No, no, no. Give it to my daughter instead,' had you already
20 had possession of this artwork?
21 A. I don't remember.
22 Q. Well, you testified a few moments ago that you were opening
23 a business in Tucson and Mr. Manchester loaned it to you to hang
24 in your business.
25 Now I'm trying to understand, was this conversation
655
1 about giving it to you and you saying, 'No, no. Give it to my
2 daughter,' did it occur when you first got physical possession
3 of the artwork or did it occur at some time after that, ma'am?
4 A. I think it was some time after that. There was a whole long
5 series of events in which I saw pieces of it in order to match
6 the painting of the business to the artwork, so that it would be
7 a central piece. And so he sent those to me, and it was months
8 before I actually saw the artwork.
9 MR. ROSEN: Your Honor, I move to strike. This is not
10 responsive.
11 THE COURT: Overruled. She's doing the best she can
12 to explain to you what's going on.
13 BY MR. ROSEN:
14 Q. Well, Ms. Lucas, -
15 THE COURT: Let's - excuse me. I understand - when do
16 - Mr. Zlotoff, I got a note that Mr. Zlotoff has to go to Judge
17 Grube's courtroom at 4:00. And so you'll let me know when you
18 have to go.
19 Did you arrange for a calendar placement?
20 MR. ZLOTOFF: Yes. I talked with Millie about that.
21 THE COURT: Okay.
22 BY MR. ROSEN:
23 Q. All right. I'm sorry, with the interruption I lost my train
24 of thought for a moment. Let me go back.
25 Was it at or about the same time that you first got
656
1 physical possession of the artwork that you had this
2 conversation with Mr. Manchester or was it some time -
3 MR. HIBBARD: Objection, Your Honor. I'm sorry.
4 THE COURT: Let him finish his question.
5 MR. HIBBARD: I'm sorry.
6 BY MR. ROSEN:
7 Q. - or was it some time after that?
8 MR. HIBBARD: Asked and answered. She said - she said
9 she doesn't know.
10 THE COURT: Sustained.
11 BY MR. ROSEN:
12 Q. How long was it between the time you first got the artwork
13 and the time you had this in your possession, the time you had
14 this conversation with Mr. Manchester?
15 MR. HIBBARD: The same objection, Your Honor.
16 THE COURT: Sustained.
17 BY MR. ROSEN:
18 Q. Ms. Lucas, was the artwork in your possession continuously
19 from the time you first got it from Mr. Manchester? And by that
20 I mean was there a period of time that you returned it, that he
21 was back in possession of it.
22 A. No.
23 Q. You had it continuously?
24 A. Yes. Sometimes it was in storage.
25 Q. Okay. Ms. Lucas, - well, yeah.
657
1 (Creditor's counsel confer off record.)
2 MR. ROSEN: Your Honor, may I hand up what I've marked
3 as plaintiff's Exhibit 294?
4 THE COURT: Yes. Have you given it opposing counsel?
5 MR. ROSEN: Going to. You see that -
6 THE COURT: That'll be fine.
7 MR. ROSEN: - it's - it's right in my right hand.
8 THE CLERK: My last one was 291.
9 MR. HIBBARD: Thank you.
10 THE COURT: So this is 292?
11 MS. KOBRIN: It's 292.
12 THE COURT: It's 292.
13 MR. ROSEN: No. I've offered 294 because there's
14 another one I'm going to get to later I think that has that
15 number, because I marked it out of order.
16 THE COURT: Well, what about 293?
17 MR. ROSEN: I have that marked also separately.
18 THE CLERK: 293.
19 THE COURT: Do you want to give them all to my Deputy
20 so she can mark them for you and we can have them. And we can
21 put them in the books, and every - and I'll have them and we'll
22 put the holes in them and we -
23 MR. ROSEN: I will, Your Honor, but I'd like to - if I
24 can just defer that until I get to the next exhibit. I may not
25 have to use it.
658
1 THE COURT: Well, then -
2 MR. ROSEN: It depends on the questions and the
3 answers -
4 THE COURT: Then this one should be 292.
5 MR. ROSEN: Okay. Then let's make -
6 THE COURT: If you don't - if you don't need to -
7 MR. ROSEN: - it 292.
8 THE COURT: Okay. Let's make it 292. If you may not
9 get to the others.
10 MR. ROSEN: Okay.
11 BY MR. ROSEN:
12 Q. I think I was asking you before the break, Ms. Lucas, if you
13 recall testifying on this subject in the examination on February
14 17th, 2000, on the artwork. And I now propose to read to you
15 and ask you whether or not you recall being asked these
16 questions and giving these answers. Page 276, starting on line
17 9 -
18 MR. ROSEN: And, Your Honor, I want to make something
19 clear. In the - given that we had to do this during a break, I
20 am offering for - into evidence only the portions of this
21 exhibit that I am reading from. Ordinarily we would redact the
22 portions that I'm not reading from, as we have from the other
23 exhibits. I didn't physically have time to do that. So I will
24 be offering only the portions that I'm reading from. And that's
25 why I'm identifying page and line.
659
1 BY MR. ROSEN:
2 Q. Page 276, line 9: "QUESTION: Tell me what the occasion
3 was.
4 "ANSWER: I just said it was a long story. I'll make
5 it as short as I can. I opened the business in around 1979,
6 called Date Game. And when I did so I fashioned a color scheme
7 from a work by Jesse Allen. My ex-husband knew what this color
8 scheme was, so he wanted to make that available to me." The
9 original artwork.
10 "I talked with him about it. I said, 'For goodness
11 sake, don't you,' then he was making some money. He said,
12 'Okay, I'll tell you what, I'll give it to your daughter,' and I
13 said, 'Fine.'"
14 And that ends on page - on line 19. I've just read
15 the question and answer from line 9 to line 19.
16 Do you recall being asked that question and giving
17 that answer, ma'am?
18 A. I recalled the questions and I recall trying to go through a
19 mental process of something that had happened 20 years before
20 that was very difficult for me.
21 Q. Ma'am, do you recall giving this answer I just read?
22 A. I don't recall giving that specific answer.
23 Q. I - okay. Continuing on line 20 - and, by the way, in 9- -
24 at the time you gave this answer, on February 17th, 2002, you
25 were of course aware of the birthdate of your daughter, right?
660
1 A. Not in -
2 MR. HIBBARD: Your Honor, I would object, because if
3 you read this, there's nothing in there saying she got the
4 painting in 1979. It says she opened up a business in 1979, and
5 it was a whole long story.
6 MR. ROSEN: Your Honor, I would ask that there not be
7 speaking objections that would prompt the witness. That's not
8 an objection.
9 THE COURT: It's an objection: It's not proper
10 impeachment. That's what the objection is. And it only -
11 MR. ROSEN: Well, then he can just say proper
12 impeachment. Your Honor, I just read it.
13 MR. HIBBARD: Well, it also misstates - it misstates
14 her testimony. It misstates what it says here.
15 MR. ROSEN: No. It says this is 1979.
16 MR. HIBBARD: No. It says he started -
17 THE COURT: He opened a business in 1979.
18 MR. HIBBARD: That's all it says, in '79.
19 MR. ROSEN: Continue on. And she fashioned the color
20 scheme.
21 THE COURT: Yeah.
22 MR. ROSEN: And when she opened the business.
23 MR. HIBBARD: Didn't say when she gave it to her
24 daughter.
25 THE COURT: It is what it is. I'll let it in. It's -
661
1 BY MR. ROSEN:
2 Q. Is it correct -
3 THE COURT: It's certainly ambiguous as to the date.
4 BY MR. ROSEN:
5 Q. Is it correct that you did open a business in 1979 called
6 Date Game?
7 A. Data Game, and I don't -
8 THE COURT: Data Game.
9 BY MR. ROSEN:
10 Q. Data Game.
11 A. And I don't remember - I actually think it was more like
12 1980, but I don't remember the year just now.
13 Q. Is it correct that at the time you opened the business in
14 terms of preparing and furnishing your place of business in
15 Tucson for Data Game, that you selected a color scheme?
16 A. Yes.
17 Q. Is it - is it correct that at the time you selected this
18 color scheme, as you were opening your business, that you
19 selected the color scheme to go with the work by Jessie Allen?
20 A. Yes.
21 Q. And the work that Jessie Allen - by Jessie Allen is the
22 piece of art that we're talking about, the original one piece
23 that later was traded for four pieces; is that right?
24 A. Yes.
25 Q. Is it correct that your ex-husband at the time you opened
662
1 this business knew what your color scheme was?
2 A. He knew that I was basing it on a painting which we had both
3 seen.
4 Q. Is it correct, "My husband" - "ex-husband knew what this
5 color scheme was"; is that correct?
6 A. No.
7 Q. You testified that way here, ma'am. Are you saying that
8 your testimony given under oath was wrong?
9 MR. HIBBARD: Objection, Your Honor. That's improper
10 impeachment. If he wants to -
11 THE COURT: Sustained.
12 BY MR. ROSEN:
13 Q. And you es- - and is it correct that when he - you told him
14 about the color scheme, he wanted to make this piece of art
15 available to you, right?
16 A. Yes. First he - he got some -
17 MR. ROSEN: Your Honor, I just asked if - yes or no.
18 THE COURT: If you can't answer it yes or no, say
19 that. If you can, just say yes or no.
20 THE WITNESS: There's a sequence of events. If you
21 don't care about the sequence of events, then I'll just answer
22 yes.
23 BY MR. ROSEN:
24 Q. Thank you.
25 Now let's continue on on line 20 on page 276. Do you
663
1 recall being asked these questions and giving these answers:
2 "So this was a piece of art he wanted to give to you?
3 "ANSWER: Well, it was a piece of art that he wanted
4 me to benefit from. And I said I really don't want to accept a
5 present from you, but if you want, you know, - well, he said,
6 'How about if I give it to your daughter.' And I said, 'Fine.'"
7 That ends on line 1 of 2- - page 277.
8 Do you remember being asked those questions and giving
9 those answers?
10 A. I remember this sequence of questions and answers. I don't
11 remember these specifically.
12 Q. Do you recall - and were your answers truthful?
13 A. Yes.
14 Q. Okay. Continuing on page 277, line 14:
15 "QUESTION: I'm confused. Twenty years ago, when was
16 it that he gave your daughter this piece of art? I thought it
17 was 1995.
18 "ANSWER: No. 1995 was when we traded it in.
19 "QUESTION: I see. When did you get it? When did he
20 give it to you or when did he give it to your daughter, I guess?
21 "ANSWER: I believe it was when I was pregnant with
22 her."
23 And that completes at line 20 of that page. Do you
24 remember giving - being asked those questions and giving those
25 answers?
664
1 A. In a general way, yes.
2 Q. So is it your testimony now after we've gone over this that
3 your ex-husband gave this painting to your daughter at a time
4 when she was, I think the expression is enfanter summair
5 (phonetic), when you were pregnant?
6 A. I didn't remember then and I don't specifically remember now
7 whether it was during my pregnancy or during the next three or
8 four years.
9 Q. Continuing on line 21, once you said that, the next question
10 is:
11 "So your ex-husband gave a piece of art to an unborn
12 child?
13 "ANSWER: Yes. I think what happened was that he -
14 "QUESTION: Thank you. You've answered my question."
15 Okay. Do you remember being asked that question and
16 giving that answer?
17 A. Generally.
18 Q. Okay. Let's go to - and that ends on line 24 on 277.
19 On page 278, line 2, you are saying:
20 "Just that my ex-husband had it on loan to me.
21 "QUESTION:" line 4, "What do you mean 'on loan to'
22 you?
23 "ANSWER: It was on loan in the business. It was
24 sitting there in the business."
25 And I'll stop there. That's the middle of line 6.
665
1 Well, as it was sitting there in the business, ma'am,
2 was it on loan to you or had it been gifted to your unborn
3 child?
4 A. It was on loan to me until -
5 Q. Okay.
6 A. - such time as it was given to the child.
7 Q. And continuing on, questions about the business, on line 16,
8 page 278:
9 "This is the business you started?
10 "ANSWER: Yes.
11 "QUESTION: What year
12 "ANSWER: I think it was '79, '80, somewhere in there.
13 "QUESTION: And when did the business go broke?
14 "ANSWER: I think the bankruptcy was filed in '85."
15 Do you remember giving those answers to those
16 questions?
17 A. Generally, yes.
18 Q. And does that help refresh your recollection that this
19 conversation about the painting Mr. Manchester, giving it to
20 your daughter occurred two years before your daughter was born?
21 A. I didn't say that.
22 Q. Okay.
23 A. I was trying very hard to recollect something that was a
24 very long time ago and reconstruct it when I hadn't thought
25 about it for years.
666
1 Q. Now, ma'am, from the time that you moved this piece of
2 artwork from the business to your home, this artwork hung in the
3 common portions of the room, never in your daughter's room. Is
4 that right?
5 A. My recollection is that at first it moved from the business,
6 when the business closed, to storage. And that -
7 Q. And when -
8 A. - from storage it was then taken to a different storage in
9 California, when we moved from Arizona to California. And that
10 when we had a place to hang it, we - when we had a house to hang
11 it in, we consulted our daughter about where she would like to
12 see it hung. And her room was quite small -
13 MR. ROSEN: I move to strike this. This is not
14 responsive.
15 THE COURT: I'd have to listen to the question again
16 to see whether -
17 MR. ROSEN: My question is did the - did the - this
18 piece of artwork ever hang in her daughter's bedroom.
19 THE COURT: I didn't think that was the question,
20 but -
21 THE WITNESS: I didn't think it was either.
22 THE COURT: No. I don't think it was. If you want -
23 MR. ROSEN: Can we have it read back -
24 THE COURT: Huh? Sure.
25 MR. ROSEN: Can we have it read back?
667
1 THE COURT: Sure. I knew you asked about the
2 daughter's bedroom, but I don't think that's all you asked from.
3 I think you asked whether it went from one place to another.
4 MR. ROSEN: Well, -
5 THE COURT: And she's telling you the chronology of
6 where it went.
7 MR. ROSEN: No. She's talking about a conversation
8 that she had with her daughter, which I did not ask any question
9 to elicit this hearsay.
10 (Pause in the proceedings.)
11 THE COURT: Are you going to read it -
12 THE REPORTER: Do you want me to -
13 THE COURT: Oh, yes, please.
14 THE REPORTER: I'm sorry.
15 (Record played.)
16 THE REPORTER: Okay.
17 MR. ROSEN: Called for a simple yes or no answer, Your
18 Honor.
19 MR. HIBBARD: No, it didn't.
20 THE COURT: No. The - the motion to strike is denied.
21 She - it didn't - what you asked for is - you've stated facts in
22 your question that weren't true, and she was correcting your
23 question. And that is it went directly from the business to the
24 home. And she was saying, no, it didn't do that. And she was
25 explaining to you what it did. And so that's why you got the
668
1 answer you did. You've stated facts in your question that
2 weren't correct, and she was perfectly correct in correcting the
3 question. That's, in fact, answering in a way that would
4 correct the question.
5 MR. ROSEN: Your Honor, I think you misunderstand. My
6 motion to strike had nothing to do with her explanation that the
7 artwork went from the business into storage.
8 It had to do with the end of her answer, which was
9 'and I had a conversation with my daughter and asked her where
10 she wanted it hung.'
11 THE COURT: No. That's stricken.
12 MR. ROSEN: Thank you.
13 THE COURT: The conversation is stricken.
14 BY MR. ROSEN:
15 Q. All right. So let's -
16 THE COURT: If they want to bring that back up, they
17 can bring that back up.
18 BY MR. ROSEN:
19 Q. Okay. So, Ms. Lucas, let's see if I understand this. About
20 19- - from the time you received this in '79 or '80, this piece
21 of art, it hung in your business in Tucson, Data Game, until
22 that business went broke in 1985; is that right?
23 A. Yes.
24 Q. And then in 1985 it was put into storage?
25 A. Yes.
669
1 Q. And the next time it was taken, it was placed in - the first
2 time it was placed in your home, then was when you bought your
3 first house in California, right?
4 A. No, we rented first.
5 Q. You rented, okay. And when was that?
6 A. I think it was '85, late '85.
7 Q. Okay. And was it taken out of storage and placed in the
8 house at that time?
9 A. It took a while, but, yes.
10 Q. When?
11 A. It might have been early '86 before we got it out of
12 storage.
13 Q. And is it correct that when you took it out of storage and
14 brought it to the house you rented, it was hung in the living
15 room?
16 Yes or no, ma'am.
17 A. I'm trying to remember. I believe it was, yes.
18 Q. And then you hung it in your second house, right?
19 A. Yes.
20 Q. And at the time - when did you get your second house?
21 A. '93.
22 Q. And at the time you hung it in your second house, that house
23 was in San Jose, ma'am?
24 A. The first - the first house we bought. The second house we
25 lived in in this area was in San Jose, yes.
670
1 Q. And when that artwork was hung in the second house, it was
2 hung in the living room, right?
3 A. Yes.
4 Q. And then you bought your third house in Palo Alto in 1996;
5 is that right?
6 A. Yes.
7 Q. And the artwork was then hung in the living room in that
8 house, right?
9 A. Yes.
10 Q. And it has remained in the living room of that house until
11 you removed it recently, right?
12 A. Until I guess it was 1995, when we traded it in.
13 MR. ROSEN: Okay. Okay. Your Honor, I will offer as
14 Exhibit 292 the title page of the examination; the appearances
15 page; the first four lines of page 136, showing the
16 administration of the oath; and the portions of the exhibit I
17 have read, page and line; and the last page of the Exhibit which
18 is page 389, which is the reporter's certification.
19 THE COURT: Any opposition?
20 MR. HIBBARD: Your Honor, in looking at the certified
21 copy, I don't see where the oath is administered, number one.
22 MR. ROSEN: Page - if I can help out counsel, Your
23 Honor?
24 THE COURT: 4, isn't it?
25 MR. ROSEN: Page - at the bottom. It's the third page
671
1 of the exhibit.
2 MR. HIBBARD: Well, the third page of this exhibit to
3 me is 136.
4 MR. ROSEN: Right. Look at the top.
5 MR. HIBBARD: Okay.
6 THE COURT: Any opposition, Mr. Zlotoff?
7 You need to be at the microphone.
8 MR. ZLOTOFF: No, I don't have any, Your Honor.
9 MR. HIBBARD: Your Honor, I do have other portions I'm
10 going to want to admit about her recollection of what happened
11 over 20 years ago, that he didn't get there then.
12 THE REPORTER: Excuse me. Can I ask you to repeat
13 that, please?
14 MR. HIBBARD: Okay. I'm going to want to offer other
15 items, particularly ones about her recollection of what happened
16 over 20 years ago and confusion, but that's about it. I have no
17 objection.
18 MR. ROSEN: Okay.
19 THE COURT: 292 is admitted.
20 (Creditor's Exhibit 292 received in evidence.)
21 THE COURT: Is this 242 or 292? I can't -
22 THE CLERK: '9.
23 MR. ROSEN: 292.
24 THE COURT: 2-9.
25 MR. ROSEN: Well, we had marked as 292 a declaration
672
1 of Ms. Lucas, so I'll -
2 THE COURT: Just change it.
3 MR. ROSEN: I'll have to mark it 293.
4 THE COURT: Just give it to my Deputy. She'll mark
5 all of them, -
6 MR. ROSEN: Okay.
7 THE COURT: - if you give them to her.
8 MR. ROSEN: Okay.
9 THE COURT: Mark your own copy.
10 MR. ROSEN: Sure.
11 THE COURT: And give them to my Deputy and she'll mark
12 them for you.
13 MR. ROSEN: Okay.
14 THE COURT: Just ask her to mark it next in line.
15 MR. ROSEN: Your Honor, may I hand up what - as
16 plaintiff's Exhibit 293.
17 THE CLERK: Thanks.
18 MR. ROSEN: You'll have to change it to 293.
19 MR. HIBBARD: No problem.
20 MR. ROSEN: I'm sorry. This is the wrong one.
21 THE COURT: Do you not want this?
22 MR. ROSEN: No, this is the wrong one. Just give me a
23 moment, Your Honor, and I'll get it straightened -
24 THE COURT: Is this not going to be introduced?
25 MR. ROSEN: I'm withdrawing that exhibit and we'll
673
1 substitute instead as 293. I handed up the wrong one. I
2 apologize.
3 I hand up two copies of 293 - of the right 293, and
4 retrieve the wrong ones. Thank you.
5 MR. HIBBARD: Thank you.
6 THE COURT: Yeah. For the record, this has marks on
7 it.
8 MR. ROSEN: Yes, Your Honor. I'm not offering it with
9 the marks.
10 THE COURT: And then I have...
11 MR. ROSEN: The marks are not part of the exhibit.
12 They were affixed to the exhibit afterwards.
13 BY MR. ROSEN:
14 Q. Ms. Lucas, -
15 MR. ROSEN: May I question the witness on the exhibit,
16 Your Honor?
17 THE COURT: On 293?
18 MR. ROSEN: Yes.
19 THE COURT: It's not admitted.
20 MR. ROSEN: Well, I understand. I want to have the
21 witness identify it.
22 THE COURT: That's fine.
23 BY MR. ROSEN:
24 Q. Ms. Lucas, you're being shown what's been marked as Exhibit
25 293. Ask that you turn to the last page of the declaration,
674
1 which is the one, two, three, four, five, six, the ninth page of
2 the document.
3 Is that signature?
4 THE COURT: Wait, wait. Nobody's there yet.
5 BY MR. ROSEN:
6 Q. Is that your signature?
7 A. Yes. Yes.
8 Q. And you recognize this as a declaration that you signed and
9 swore to in - on the 26th of August of the year 2000?
10 I'm sorry. Ma'am?
11 A. I'm still looking.
12 Q. Okay.
13 THE COURT: While she's looking...
14 (The Court and Clerk confer off record.)
15 THE COURT: Mr. Zlotoff, you don't need to be there
16 till 4:15 in Judge Grube's court.
17 THE WITNESS: It appears to be the declaration I
18 submitted.
19 BY MR. ROSEN:
20 Q. Let me direct your attention to paragraph 4, starting in the
21 second sentence.
22 THE COURT: What page are you on?
23 MR. ROSEN: Paragraph 4 of the declaration is the
24 third page of the exhibit, Your Honor.
25 THE COURT: Thank you.
675
1 BY MR. ROSEN:
2 Q. And let me read to you from that:
3 "Five years is a long time when one is being harassed,
4 picketed, and forced to work 50 to 72 hours a week at up to four
5 jobs in order to pay for attorneys to defend one at deposition,
6 in addition to household and personal expenses."
7 Do you see that statement, ma'am?
8 A. Yes.
9 Q. Were you working four jobs for pay in - at this period of
10 time?
11 A. I said up to - I think I may have counted a brief, short
12 position that I took, like a casual job for a few dollars.
13 Q. Ms. Lucas, didn't you testify earlier that you worked three
14 jobs for pay and you did, quote, volunteer work for San
15 Francisco State?
16 A. Yes.
17 Q. All right. Now you weren't including that in these four
18 jobs because you're talking about you're working for jobs in
19 order to pay anything else, meaning you have to get paid for
20 this job; isn't that right? Or am I reading it wrong, ma'am?
21 A. I don't remember whether...
22 Q. Okay. If you don't remember, fine.
23 Let's go to pa- - paragraph 8 on the next page. And
24 starting with the second sentence, "He" - meaning your
25 ex-husband, and this is in 1980, "He then lent it to me, and I,
676
1 having no home of my own at that time in which to place it,
2 arranged to have it hung in my place of business." That's
3 referring to the same piece of art, right?
4 THE COURT: I - I'm lost. Page 8?
5 MR. ROSEN: Paragraph 8.
6 THE COURT: Paragraph 8, okay.
7 BY MR. ROSEN:
8 Q. See it, Ms. Lucas?
9 A. Yes.
10 Q. And is that statement true?
11 A. Yes.
12 Q. So, in other words, in 1980 you did not have a home of your
13 own?
14 A. No. I just said in which to place it. I didn't have a
15 place - there was no place where I could possibly put anything
16 like this.
17 Q. Well, ma'am, can you explain what that means, there's no
18 place to place it?
19 A. 1980. It's quite possible that I was either living above
20 the - the business or that I was living with friends. I don't
21 remember exactly when that was.
22 Q. So you have no recollection of where you were living - you
23 made this affidavit two years ago, ma'am.
24 A. Yes.
25 Q. And you said in that affidavit at the time you had no home
677
1 of your own. Today you're telling us you can't remember whether
2 you did or not; is that right?
3 A. I said, "Having no home of my" - "of my own at that time in
4 which to place it," which means -
5 Q. Well, what does it mean "in which to place it"?
6 A. If you have a place that is too small or that is unsuitable
7 to put a valuable work of art, then you don't hang it.
8 Q. How big is this work of art?
9 A. Larger than anything in this room.
10 Q. Well, could you tell me what the approximate dimensions are
11 of this work of art?
12 A. It's - it's about twice the size of all of the hangings
13 here.
14 Q. No, but the record doesn't reflect the size of the hanging,
15 so -
16 A. I'm sorry. I'm very bad at estimating actual inches and
17 feet, so if somebody else could look at ones of these and tell
18 me what about size, twice the size of it would be, that would be
19 about right.
20 Q. Let's assume that the painting is three feet wide. And
21 wherever it is that you were living, was there a wall that was
22 at least three feet wide?
23 MR. HIBBARD: Your Honor, I'm going to object. This
24 is so far removed -
25 THE COURT: Sustained.
678
1 BY MR. ROSEN:
2 Q. Now if I understand this - this declaration, Ms. Lucas, what
3 you're saying is, and you tell me if I'm wrong, your ex-husband
4 lent this piece to you. And you would have hung it in your home
5 had you had a suitable place, but you didn't, and therefore
6 that's why you hung it in your business. Is that right?
7 A. That isn't quite a correct statement.
8 Q. Let me see. "He then lent it to me. And I, having no home
9 of my own at the time in which to place it, arranged to have it
10 hung in my place of business."
11 So if you had, ma'am, a home of your own sufficient in
12 which to place this piece of art, you would have hung it there
13 instead of in your business; isn't that right?
14 A. No. You're assuming that it would have been instead of. I
15 was in transition in having the business painted and fitted out.
16 Q. Ma'am, if you did have a home of your own at the time that
17 had a wall and was otherwise sufficient to hang this painting,
18 this piece of art, would it have been hung in your home or would
19 it have been hung in your business, which is - which is it?
20 A. Both.
21 Q. I'm sorry. Did I - I didn't hear.
22 A. I said both.
23 Q. Oh, both. Okay. Both are true. All right.
24 Let's continue on, next sentence, and I'll read
25 starting on line 24:
679
1 "My ex-husband was also in state of transition about
2 his own residence, which was under construction for some years.
3 He visited his art object at my place of business when he was
4 able."
5 Is that statement true?
6 A. Yes.
7 Q. So your husband - your ex-husband, his house was under
8 construction, right?
9 A. For some time.
10 Q. During this period that his residence was under
11 construction, was he living somewhere?
12 A. Yes.
13 Q. So he had some residence while his house was being - his
14 other house was - or his new house was being constructed, right?
15 He had some residence?
16 A. He was living in the home and renovating it himself.
17 Q. And is there a reason then that he was not able to hang this
18 piece of art in his own home?
19 A. Yes. It would have - it might have been damaged.
20 Q. And this is a home in the state of Washington?
21 A. No.
22 Q. Where?
23 A. British Columbia.
24 Q. Well, let's - okay. Now let me see if I got this right.
25 Your ex-husband is in the process of reconstructing his
680
1 residence in British Columbia. And he doesn't want to hang the
2 painting there because it might be damaged. So instead he gives
3 it to you to hang in your place of business in Tucson, Arizona,
4 and then he comes to visit it. Right?
5 MR. HIBBARD: Objection, Your Honor, argumentative.
6 MR. ROSEN: I don't think so.
7 THE COURT: It's not argumentative. It's okay.
8 BY MR. ROSEN:
9 Q. Is that your testimony?
10 A. Yes.
11 Q. Okay. Let's go on. Now in 1985, ma'am, you insured this
12 piece of art at the first house you had rented with Mr. Henson
13 in San Jose, right?
14 A. Yes.
15 Q. And on - and in order to get that coverage, you need to get
16 a valuation, right?
17 A. Yes.
18 Q. And you got a valuation, which is in evidence, you
19 identified the other day, which was Mr. Manchester, your
20 ex-husband, as the owner, right?
21 A. Yes.
22 Q. It doesn't say anything about Amber, your two-year-old
23 daughter, owning this, does it?
24 A. No.
25 Q. Okay. And let's continue on then.
681
1 THE COURT: Where are we, Mr. Rosen, in time?
2 MR. ROSEN: I've got five more minutes. It's the last
3 subject matter, Your Honor.
4 BY MR. ROSEN:
5 Q. And then there came a time in 1995 when a decision was made
6 to trade in this one piece of art for four other works of art;
7 is that right?
8 A. We made a decision to trade it in for what my daughter
9 wanted and what was possible.
10 Q. And that turned out to be four works of art?
11 A. Yes.
12 Q. And you daughter went to a gall- - and this art is work at
13 this time now, I think the exhibit is in, about $8,000?
14 THE COURT: At this time, where - what time are we
15 talking about?
16 MR. ROSEN: 1995.
17 THE COURT: Okay.
18 BY MR. ROSEN:
19 Q. About $8,000, right?
20 A. I don't remember how much it was worth at that time.
21 Q. Okay. So let's see if I understand this. You took your
22 12-year-old daughter to a gallery, and she selected pieces of
23 art to trade for this one valuable piece of art, right?
24 A. Yes.
25 Q. And when she obtained these four pieces of art that she
682
1 selected at the age of 12, they were then brought to the home in
2 which you and Mr. Henson and your daughter lived, right?
3 A. Yes.
4 Q. And that was in San Jose, right?
5 A. Yes.
6 Q. And those four pieces of art were then hung not in your
7 daughter's room, not in her separate bedroom, but in the living
8 area of the house, right?
9 A. I don't remember. I know that at different times she hung
10 at least one of them in her room.
11 Q. Do you remember testifying that she - that at all times they
12 were hung in the living room, ma'am?
13 A. I might have. I know that they moved around.
14 Q. Okay. Now if I understand your testimony in this hearing,
15 this - the original piece of art was a gift from Mr. Manchester
16 to your daughter, which then became transmuted into the four
17 pieces, right?
18 A. With the addition of an extra portion of money for her
19 birthday present.
20 Q. How much was the additional portion of the money for her
21 birthday present in connection with the 1995 trade-in of the
22 art?
23 A. There was a thousand dollar trade-up that the - that was
24 required by the gallery. And then there were some framing fees.
25 Q. And you paid about $600 to frame these four works of art,
683
1 right?
2 A. I thought it was somewhat less.
3 Q. Five hundred?
4 A. Four or five hundred, I'm not sure.
5 Q. So Mr. Henson then advanced as part of this transaction in
6 '95 $1500. Part of it was for the trade in the art and $500 to
7 frame these pictures, right?
8 A. No. We jointly paid for it.
9 Q. You jointly paid for it. And this $1500 was a birthday gift
10 from you and Mr. Henson to your daughter, right?
11 A. Yes.
12 Q. What was - your daughter's birthday is October 12th?
13 A. Yes.
14 Q. What was the date of this transaction?
15 A. I don't remember.
16 Q. Well, it wasn't in October, was it, Ms. Lucas?
17 A. I don't remember when it was.
18 Q. Okay. And, Ms. Lucas, 15 - approximately $1500 as a gift to
19 your daughter for her birthday, would I be correct that that is
20 greater by $1400 of any gift you and your husband has ever given
21 your daughter?
22 A. It depends on what you mean by a gift, I guess. I mean we
23 have - we have -
24 Q. Fair market value.
25 A. We have given her - her car registration, car insurance.
684
1 Q. No. I'm talking about a gift like for an occasion, like a
2 birthday, Christmas.
3 A. But those were occasions.
4 Q. You gave your daughter the cost of registering her car for
5 her birthday present?
6 A. Well, I don't know if it was birthday.
7 Q. Birthday or Christmas.
8 A. Possibly. We don't always give gifts exactly on the
9 birthdays. I gave my daughter her birthday present last month.
10 Q. So let - yeah, because you're on way to Canada, right?
11 A. No. Because I saw a present and I don't see her very often.
12 Q. Okay. Let me go back to my question because I don't think
13 you've answered it.
14 If we talk about gifts given to your daughter for
15 birthday or Christmas, forget whether they were given on her
16 birthday or Christmas. This supposed $1500 gift to your
17 daughter in 1995 is at least $1400 more than any other gift you
18 and Mr. Henson have ever given your daughter for either her
19 birthday or for Christmas; isn't that right?
20 MR. HIBBARD: Objection, asked and answered.
21 THE COURT: Sustained.
22 MR. ROSEN: I don't believe it was answered, Your
23 Honor. Okay.
24 BY MR. ROSEN:
25 Q. What is - apart from this, what is the highest market value
685
1 gift? Meaning a fair value of something, as opposed to giving
2 her love and affection, what is the highest fair market value
3 gift you and Mr. Henson have ever given your daughter for either
4 her birthday or Christmas excluding this $1500?
5 THE COURT: Okay. But, Mr. Rosen, she's just
6 testified that she gave her daughter or she and Mr. Henson gave
7 their daughter car insurance, car registrations, things like
8 that that aren't wrapped with little bows, but neither is
9 framing a picture wrapped in a little bow. So those are the
10 kinds of gifts that they apparently have given. Are you
11 including those?
12 MR. ROSEN: Yeah.
13 THE COURT: If you give somebody car insurance -
14 MR. ROSEN: She can tell me the fair value - the value
15 of the car registration, how much -
16 THE COURT: Or car insurance or whatever they're
17 giving.
18 MR. ROSEN: Yeah, sure.
19 THE COURT: Okay.
20 MR. ROSEN: Sure.
21 THE COURT: So whatever it is.
22 THE WITNESS: I'm not sure what the fair market value
23 is of - I don't remember what we paid for the car registration.
24 I do remember that one year we gave her a television set, which
25 was several hundred dollars.
686
1 BY MR. ROSEN:
2 Q. What year was that?
3 A. Probably '94 or '95.
4 Q. Do you recall giving your daughter a birthday present in
5 1997 of a $100 check - excuse me - a Christmas present of a $100
6 check that had been sent to you - you and your husband from Mr.
7 Henson's parents?
8 A. I do recall that check.
9 Q. Do you recall that at the time that was the largest
10 Christmas present you had ever given your daughter?
11 A. No.
12 Q. Now the Judge made a comment and asked a question. I want
13 to follow up on it. When you - you paid the State of California
14 for your daughter's car registration, whatever the State charges
15 to get license plates, right?
16 A. Yes.
17 Q. And did you consider that a birthday gift to your daughter?
18 A. I don't know if it was a birthday gift. I don't remember
19 when she got her car.
20 Q. Okay. Was it a Christmas gift that you gave your daughter,
21 you know, the cost of the registration of the car.
22 THE COURT: Wait a second. Mr. Zlotoff, shall we
23 stop, or do you have no objection to us proceeding in your trial
24 with you leaving?
25 MR. ZLOTOFF: Right. It would be - I'd appreciate it
687
1 if there - if there would just be a short -
2 THE COURT: Could you be at a microphone, please?
3 MR. ZLOTOFF: Yeah. I am told that I should report to
4 Judge Grube at 4:14, which means it's probably - I'm probably
5 the last one on calendar.
6 THE CLERK: No, you're first.
7 MR. ZLOTOFF: Oh, first. Okay.
8 THE COURT: Now if I recess for him to go, then how
9 long will you be there?
10 MR. ZLOTOFF: I'm assuming less than five minutes.
11 THE COURT: Okay. So we'll take a five-minute recess
12 here.
13 MR. ROSEN: Um- -
14 THE COURT: I have to let him go because -
15 MR. ROSEN: Well, Your Honor, he was halfway out the
16 door and was perfectly willing to have Mr. Hibbard continue.
17 He's not even sitting -
18 THE COURT: I don't know what he's willing to do.
19 MR. ROSEN: - until you stopped him -
20 THE COURT: I asked - I asked him whether he was
21 expecting us to recess because we said that at 4:15 he had to go
22 to another court.
23 MR. ROSEN: Your Honor, can we just - may I ask for
24 the personal privilege of allowing the record to reflect that
25 Mr. Zlotoff, for the entire afternoon, has not even sat at
688
1 counsel table, number one. That Mr. Hibbard has been handling
2 this and making every objection. And that Mr. Zlotoff was
3 literally at the door leaving when Your Honor stopped him and
4 asked him if he would like to recess.
5 And I think that that's - what I've said is correct,
6 Your Honor, isn't it?
7 THE COURT: What happened is that we agreed in advance
8 that we were going to stop, I thought, so that Mr. Zlotoff can
9 go. Now he didn't say anything to me. He started walking for
10 the door, as you said.
11 MR. ROSEN: He didn't ask for an adjournment -
12 THE COURT: We're in recess.
13 MR. ROSEN: He was walking out.
14 THE COURT: We're in recess.
15 (Recess taken from 4:15 p.m. to 4:29 p.m.)
16 THE COURT: Thank you. Please be seated.
17 MR. ROSEN: Your Honor, I have no further questions of
18 the witness.
19 THE COURT: Thank you.
20 Mr. Zlotoff, do you have any questions at this time?
21 MR. ZLOTOFF: I do.
22 But do you have some questions?
23 MR. HIBBARD: I on have questions, Your Honor.
24 THE COURT: Okay. Go ahead.
25 MR. ROSEN: Wait a minute. Are we going to have two
689
1 different counsel questioning now, Your Honor?
2 THE COURT: Yes.
3 MR. ROSEN: Okay. Just wanted to make sure I
4 understood that.
5 CROSS-EXAMINATION
6 BY MR. HIBBARD:
7 Q. Mrs. Lucas, who is the art - has all the artwork now, all
8 four pieces?
9 A. Who has it?
10 Q. Yes. Who has it now?
11 A. My daughter has it.
12 Q. And do you have trouble remembering events that happened 20
13 years ago exactly?
14 A. Yes.
15 MR. HIBBARD: Thank you.
16 THE COURT: Mr. Zlotoff.
17 REDIRECT EXAMINATION
18 BY MR. ZLOTOFF:
19 Q. Ms. Lucas, at any time did you give any of the artwork we
20 described to Keith Henson to own?
21 A. No.
22 Q. Ms. Lucas, is there any doubt in your mind that at any time
23 since 1998 that your daughter was the sole and only owner of the
24 artwork we described?
25 A. No.
690
1 Q. Where is your daughter now?
2 A. She's in college.
3 Q. And who pays her tuition?
4 MR. ROSEN: Objection, beyond the scope of
5 cross-examination.
6 MR. ZLOTOFF: No, it's not, and I'll tell you why.
7 Shall I - I'll tell you what -
8 THE COURT: That's good.
9 MR. ZLOTOFF: The question was - the question was.
10 THE COURT: I'm waiting.
11 MR. ZLOTOFF: We're all waiting. Well, it was brought
12 up by - what was asked by Mr. Rosen was whether there was any
13 gift that Ms. Lucas ever gave to her daughter in excess of
14 $1400.
15 THE COURT: Yeah. He specifically said birthday or
16 Christmas, but I'll allow it.
17 MR. ZLOTOFF: I don't think car registration, which
18 was one of the things that was a qualifier, was expected as a
19 Christmas or birthday gift, though.
20 THE COURT: So - anyway, I said she can answer the
21 question. I don't know why you're still talking.
22 MR. ZLOTOFF: Okay.
23 (Laughter.)
24 BY MR. ZLOTOFF:
25 Q. So the question is who pays - who pays - which school does
691
1 she go to?
2 A. University of Redland.
3 Q. Is that a private school?
4 A. Yes.
5 Q. Who pays her tuition?
6 A. It's paid by a combination of awards, scholarships, loans,
7 and we have had - last semester - for the current semester, we
8 had an anonymous donation to make up the rest of it -
9 Q. Have you ever had to - have you and your husband ever had to
10 dip into your own funds to pay for her -
11 A. Yes.
12 Q. - expenses?
13 A. Yes.
14 Q. When did she start college?
15 MR. ROSEN: Objection, Your Honor. This is well
16 beyond anything about a Christmas or a birthday present.
17 THE COURT: Overruled.
18 MR. ROSEN: Well beyond cross-examination.
19 BY MR. ZLOTOFF:
20 Q. Would you say that in the last - let's say of the year 2001,
21 did you pay more than a thousand dollars on account of her
22 tuition?
23 A. Yes.
24 Q. Ms. Lucas, do you remember noticing in your bank account any
25 revenues from stock dividends?
692
1 MR. ROSEN: Objection. Not only is it beyond the
2 scope, best evidence. Whether or not there were any stock
3 dividends is proved by the issuance of the dividend, notice from
4 the issuer.
5 THE COURT: First of all, the question asked whether
6 you remember, and the answer - and the question can be answered
7 yes or no.
8 THE WITNESS: The question was do I remember seeing
9 any stock dividends?
10 BY MR. ZLOTOFF:
11 Q. Did you notice any deposit of such in your bank account?
12 A. I did not notice any deposit of such, no.
13 Q. Did you notice any unusual deposited in your bank account at
14 any time during 1998?
15 MR. ROSEN: Objection, beyond the scope of
16 cross-examination.
17 THE COURT: Overruled.
18 THE WITNESS: There were some that I couldn't explain
19 and I had to ask about.
20 BY MR. ZLOTOFF:
21 Q. Can you recall the magnitude of any unusual deposit that you
22 had to ask about?
23 MR. ROSEN: Objection, best evidence.
24 THE COURT: Overruled.
25 MR. ROSEN: Now she's getting into the content.
693
1 THE COURT: Overruled.
2 THE WITNESS: They varied from $25 to several
3 thousand.
4 BY MR. ZLOTOFF:
5 Q. During 1997, is it your recollection that you or Mr. Henson
6 was the - earned more money and was - which of you was the
7 breadwinner, would you say?
8 MR. ROSEN: Objection.
9 THE COURT: Grounds?
10 MR. ROSEN: It has nothing to do with
11 cross-examination. Not only that, it's not relevant. The issue
12 is Mr. Henson's funds and his earnings. It's not this witness'
13 funds.
14 THE COURT: Overruled.
15 THE WITNESS: We were both working in 1997, but in
16 1997 he was earning a great deal more than I was.
17 BY MR. ZLOTOFF:
18 Q. Did that circumstance change in 1998?
19 A. Actually it changed in 1997. I mean it depends on - we
20 started out the year, that he was earning a great deal more than
21 I was. And then when he lost his client, then we were both out
22 of work for a while and then I was earning more than he was.
23 And it varied throughout the year.
24 MR. ROSEN: Objection. This - this testimony is being
25 offered to contradict the - Mr. Henson's Bankruptcy Court
694
1 petition. It is precluded by the principle of judicial
2 estoppel.
3 THE COURT: Is that why it's offered?
4 MR. ZLOTOFF: No. It's offered simply to establish
5 their affairs, their income affairs, their business affairs.
6 And I'm going to draw it together because I'm going to ask her
7 about the credit card balances that were used or accrued during
8 the course of the bankruptcy.
9 THE COURT: I'll give you some leeway.
10 BY MR. ZLOTOFF:
11 Q. Were there times during 1998 that Mr. Henson was unemployed?
12 MR. ROSEN: Objection.
13 THE WITNESS: Yes.
14 THE COURT: You have to state the grounds each time,
15 please. It would be easier for me.
16 MR. ROSEN: Leading. It's his witness.
17 THE COURT: Overruled.
18 But don't lead her.
19 THE WITNESS: You asked me were there times when he
20 was unemployed?
21 BY MR. ZLOTOFF:
22 Q. Yes. In 1998.
23 A. Yes.
24 THE COURT: I think she's already testified to that.
25 MR. ZLOTOFF: I believe so too, Your Honor.
695
1 BY MR. ZLOTOFF:
2 Q. During those times, let's say between the beginning of 1998
3 and August of 1998, were there times when as a result of
4 unemployment there was not enough money available to make ends
5 meet?
6 A. Yes.
7 Q. And what did you and Mr. Henson do in order to make ends
8 meet?
9 A. I got more jobs.
10 Q. Was there anything else done in order to make ends meet?
11 A. Yes. Mr. Henson was seeking employment and we used our
12 credit cards for groceries or whatever else we had to.
13 Q. Now...
14 MR. ZLOTOFF: Just a second, Your Honor.
15 BY MR. ZLOTOFF:
16 Q. Ms. Henson, were there times when before 1998 when at your -
17 at your point of employment you were the subject of any
18 picketing?
19 MR. ROSEN: Objection.
20 BY MR. ZLOTOFF:
21 Q. In that -
22 THE COURT: Let him finish the question.
23 BY MR. ZLOTOFF:
24 Q. And I don't want you to say anything other than yes or no.
25 MR. ROSEN: I object. It's irrelevant. You can't get
696
1 around it by saying just say yes or no.
2 THE COURT: Overruled.
3 THE WITNESS: I don't remember the first summer that
4 it started. My impression is that it was 1997, but I - I don't
5 remember.
6 BY MR. ZLOTOFF:
7 Q. Do you remember any picketing at your place of employment
8 during 1998?
9 MR. ROSEN: Objection. Irrelevant.
10 THE COURT: Overruled.
11 MR. ROSEN: No foundation.
12 THE COURT: Overruled.
13 THE WITNESS: Not at my place of employment in 1998.
14 It was in 2000.
15 MR. ROSEN: Move to strike.
16 THE COURT: Grounds?
17 MR. ROSEN: Not responsive. The question was -
18 THE COURT: Sustained.
19 BY MR. ZLOTOFF:
20 Q. Do you remember in the year 2000 pickets at your place of
21 employment?
22 A. Yes.
23 MR. ROSEN: Objection. Not relevant -
24 THE COURT: You've got to let her - him finish the
25 question. And then I suggest you rise. It'll make it easier,
697
1 just to state your objection.
2 Go ahead, Mr. Zlotoff. State the question again.
3 BY MR. ZLOTOFF:
4 Q. The question was: In the year 2000 do you recall any
5 pickets of any sort at your place of employment?
6 THE COURT: Don't answer.
7 MR. ROSEN: Objection. Irrelevant, beyond the scope
8 of direct examination, no - cross-examination - no foundation at
9 all.
10 THE COURT: What's - your touching the microphone with
11 your coat.
12 What's the foundation for this?
13 MR. ZLOTOFF: The purpose for which I'm asking this,
14 Your Honor? I mean the foundation is that -
15 THE COURT: Okay.
16 MR. ZLOTOFF: - she's -
17 THE COURT: Well, she would observe it. But what -
18 MR. ZLOTOFF: Right.
19 THE COURT: - what is the purpose for which you're
20 introducing this evidence?
21 MR. ZLOTOFF: Well, the purpose is that since this
22 morning you allowed in all kinds of postings with regard to Mr.
23 Henson's picketing, I think it would be in a proper context to
24 show that there were two sides to the picketing.
25 MR. HIBBARD: Your Honor, I also think it goes to
698
1 whether Mr. Henson could obtain other employment if he's being
2 picketed actively.
3 MR. ROSEN: Your Honor, I must object. Counsel for
4 the witness is making an objection on behalf of the debtor?
5 MR. HIBBARD: No.
6 MR. ROSEN: That's not an objection on behalf of Ms.
7 Lucas. We now have second counsel making seriatim arguments on
8 evidence on behalf of the debtor.
9 THE COURT: The objection's overruled.
10 And, Mr. Zlotoff, you and Mr. Tibbet (phonetic) should
11 consult, because - if you want to make objections on behalf of
12 Mr. Henson.
13 But the objection's overruled. You can answer.
14 THE WITNESS: You asked me if I remembered picketing
15 in the year 2000 -
16 BY MR. ZLOTOFF:
17 Q. That's right.
18 A. - at my place of business?
19 Q. Yes.
20 A. Yes, and I have photographs.
21 Q. And can you identify those that did picketing?
22 A. I don't know their names. I just have their pictures.
23 Q. Well, can you identify how you knew that they were
24 picketers?
25 A. They carried picket signs.
699
1 Q. And what - do you remember what the picket sign said?
2 MR. ROSEN: Objection.
3 THE COURT: Grounds?
4 MR. ROSEN: Not - beyond the scope of direct
5 examination, beyond the scope of cross-examination. And if the
6 question is whether what the sign say in the picture, the best
7 evidence is that - are the pictures.
8 Also, no foundation, Your Honor. She could have been
9 picketed by the Girls Scouts, by any number of organizations.
10 What does it have to do with this case? This witness has
11 already testified she cannot identify a single employee of RTC
12 who ever picketed.
13 And this is - this is guilt by insinuation. It really
14 is. This is like if a Scientologist picketed you, like some of
15 the Scientologists from the church in San Jose who Mr. Henson
16 picketed, if by chance they retaliated by picketing this
17 witness, it has nothing to do with RTC.
18 MR. ZLOTOFF: Your Honor, it goes to her state of
19 mind. It goes to her level of employment, both of which I think
20 were brought up previously by Mr. - or in the course of the
21 examination by Mr. Rosen.
22 THE COURT: The objection's overruled.
23 THE WITNESS: I'm sorry. I lost the question. Would
24 you mind restating it?
25 BY MR. ZLOTOFF:
700
1 Q. The question was: Do you recall what the pickets' sign
2 said?
3 A. I recall what some of them said. They called me a bigot and
4 also of course the picketers yelled at me. And they said that I
5 wanted it, they followed me personally with picket signs and
6 made other personal accusations, such as that I was a child
7 molester.
8 They accosted me in the parking lot at work and they
9 accosted my fellow workers. And they paraded up and down the
10 windows of the conference rooms where I worked.
11 Q. And did -
12 MR. ROSEN: Objection and move to strike this. Your
13 Honor, this is obscene to allow these accusations in the record.
14 I mean we have no idea who - who she's talking about that
15 picketed her. And if Mr. - if Mr. Zlotoff cannot tie this into
16 RTC, I suggest this is nothing other than an attempt to smear by
17 insinuation.
18 I assume Mr. Zlotoff is going to ask you to assume
19 that this picketing was done by Scientologists or some members
20 of the faith. And that's just wrong.
21 MR. ZLOTOFF: Were you there, Mr. Rosen?
22 MR. ROSEN: You know, how about if I get up and ask
23 her if she's a child molester.
24 THE COURT: Mr. - Mr. Rosen, please be quiet.
25 Do you have any way to tie this picketing behavior to
701
1 any - any of the objectors or people related to the objectors?
2 MR. ZLOTOFF: I intend to ask Ms. Lucas.
3 THE COURT: Okay. Well, can you make an offer of
4 proof?
5 MR. ZLOTOFF: I can't make an offer of proof, no.
6 MR. ROSEN: I move -
7 THE COURT: So you don't know what she's going to
8 testify -
9 MR. ZLOTOFF: I don't know what she's going to testify
10 to, no.
11 MR. ROSEN: Well, we do know, Your Honor, because
12 she's already testified in response to my questions. She cannot
13 identify a single -
14 THE COURT: That's not the question, whether she can
15 identify somebody who - specific - anyway, all right. I'll
16 allow it and then subject to a motion to strike. There's no
17 jury here, so I'll allow it subject to a motion to strike.
18 BY MR. ZLOTOFF:
19 Q. Ms. Lucas, do you - of your own senses, of your own
20 impressions at the time, were you - are you able to know who
21 those - or what the cause was that those picketers were in
22 support of or -
23 MR. ROSEN: Objection. How can she know the cause.
24 She can say what the sign said. She could say what was said to
25 her. Anything in terms of the cause or what motivated people to
702
1 do what they did requires the expert testimony of a mind-reader.
2 MR. ZLOTOFF: I didn't say motivated. I said could
3 she find something -
4 THE COURT: Why don't you ask her what she saw, and
5 then see what we get. And then we can figure out where we,
6 unless she can - the bottom line, gentlemen, is whether - is who
7 these people were, right?
8 MR. ZLOTOFF: Right.
9 THE COURT: So ask her.
10 BY MR. ZLOTOFF:
11 Q. Yeah. Who - can you - of your own - with your own senses at
12 the time, could you determine who these people were?
13 A. Some of the same picketers picketed my home during the same
14 period. In fact, some of them followed me home and then
15 followed me other places with their signs. I was told by at
16 least one of one, I believe two of them, that if my husband
17 would -
18 MR. ROSEN: Your Honor, I move to strike this. "I was
19 told by" somebody. This is hearsay -
20 THE COURT: By the picketers. By the picketers, she
21 said.
22 MR. ROSEN: Yes. That's hearsay, Judge.
23 THE COURT: I understand. I'm going to let her say
24 this.
25 THE WITNESS: I was told by the picketers that if my
703
1 husband ceased and desisted, that they would stop picketing me.
2 BY MR. ZLOTOFF:
3 Q. Cease and desisted from what?
4 A. From any actions against the Church of Scientology.
5 Q. Okay. Do you -
6 A. They also stopped my neighbors, and I listened to
7 conversations in which they talked about Scientology. I had
8 posted on my front gate to my neighbors a message that said: If
9 you wonder - in fact, I have it with me today. I have a copy -
10 if you wonder why picket my home, here is the reason. And it's
11 Scientology, and I spent - it's just a single page.
12 And I heard the picketers having conversations with
13 neighbors about this and explaining -
14 MR. ROSEN: Your Honor, I move to strike testimony
15 about what she heard unidentified picketers having with
16 unidentified neighbors. This is not - this is not testimony.
17 This is not evidence.
18 MR. ZLOTOFF: Your Honor, it's not offered for the
19 truth of the matter asserted, but rather to indicate her state
20 of mind.
21 MR. ROSEN: What is her state of mind in the year 2000
22 have to do with any issue in this case? It's not her good faith
23 or bad faith that's at issue, it's her husband's. What does her
24 state of mind have to do with anything?
25 MR. ZLOTOFF: Her state of mind could well affect her
704
1 ability to work, her ability to hold income.
2 MR. ROSEN: I'm not interested in her ability to work.
3 We're talking about her husband. We're talking about a petition
4 filed in bad faith, a 1307 motion. What difference does it make
5 if she's working or not working?
6 MR. ZLOTOFF: Her state of mind could affect her
7 husband. They live together and so it's entirely likely that as
8 a result of that -
9 MR. ROSEN: Well, and who's going to testify to that?
10 That her state of mind affected her husband, because her
11 husband's not here.
12 THE COURT: This home in 2000, was it just you that
13 lived there?
14 THE WITNESS: No, we were both there. My husband
15 interacted with the picketers as well.
16 THE COURT: And you saw that?
17 THE WITNESS: Yes.
18 THE COURT: The objection's overruled.
19 BY MR. ZLOTOFF:
20 Q. Ms. Lucas, in the year 2000 can you identify how many
21 instances of such picketing you witnessed, either at home or at
22 places of employment?
23 A. They were there every day for a few weeks. Probably
24 somewhere around 15 or 20 or more.
25 THE COURT: Fifteen or 20 more what?
705
1 THE WITNESS: Well, -
2 THE COURT: People or time? I don't know what 15 or
3 20 mean.
4 THE WITNESS: I'm sorry. He said instances. I - I
5 was thinking about specific days when I saw them. Sometimes
6 they came in the morning and the afternoon. They knew when I
7 left for work, and they came home.
8 And, in fact, I was followed to my place of business
9 because I didn't tell anyone at that time where I worked, not
10 even my husband, and they showed up at my work. And there would
11 be two to four people. And they were there for, it might have
12 been up, at work for up to 10 days. I got so used to seeing
13 them, I kind of lost track.
14 At home it seemed like they were there every day that
15 summer either in the morning or the afternoon or both.
16 MR. ZLOTOFF: Thank you, Your Honor.
17 MR. ROSEN: I move to strike it. It has nothing to do
18 with this case. You asked Mr. - Mr. Zlotoff for an offer of
19 proof as to what this has to do with RTC. There is none. This
20 testimony could be by anybody.
21 And indeed even if you were to credit this testimony,
22 it is by members of the Scientology religion who are mad that
23 Mr. Henson and his wife picketed churches. Isn't Mr. Zlotoff
24 the one who raised earlier today something called First
25 Amendment, free speech? Or does that protection of the
706
1 constitution only apply to Mr. Henson?
2 MR. ZLOTOFF: Well, -
3 MR. ROSEN: I move to strike it. There's no
4 connection with RTC. You asked him for an offer; he made none.
5 MR. ZLOTOFF: Well, Your Honor, I argued First
6 Amendment with regard to their - all their evidence of Mr.
7 Henson's picketing. And Your Honor said, well, everything's
8 relevant. And indeed questions regarding the minutiae of their
9 financial affairs have been gone into, including Mr. Henson's
10 ability to work or his not working and why he wasn't working and
11 whether he's picketing and earning what he can earn. And I
12 think this testimony is helpful to get a full picture of why he
13 was doing what he was doing and what his earning capacity was or
14 wasn't.
15 MR. ROSEN: There is no testimony, there is no
16 connection, correlation that any of this activity, picketing Ms.
17 Lucas allegedly at her place of work, following her, picketing
18 at her had, had in any way any impact on Mr. Henson's ability to
19 earn a living.
20 His own testimony is he volunt- - and it's already in
21 the record - he voluntarily - voluntarily elected to spend 200
22 days instead of working picketing Churches of Scientology all
23 across the country.
24 If counsel is going to suggest that this picketing
25 described by Ms. Lucas somehow caused Mr. Henson to not be able
707
1 to work, then call Mr. Henson. Counsel cannot make this
2 argument.
3 MR. ZLOTOFF: Your Honor, there's no evidence that Mr.
4 He was not available for work for 200 days. The 200 days refers
5 to even parts of a tiny day that he may have been picketing in
6 Palo Alto or perhaps he may have been on the internet giving a
7 posting somewhere. So that's entirely wrong.
8 But to say that picketing of - of a man's wife is not
9 going to in some - in some way possibly have an effect upon -
10 upon the husband is ridiculous on the face of it, I think.
11 MR. ROSEN: You just heard it, "in some way possibly."
12 Some husband may be affected by a wife being picketed. Some
13 husbands, particularly in a relationship like this, may not
14 care.
15 The only one who could say 'I was affected' or 'not
16 affected,' is Mr. Henson, and he's not here.
17 And with respect to the testimony that counsel has
18 given, Your Honor, I've made this objection before. If Mr.
19 Zlotoff wants to get on the stand and say this tes- - the
20 picketing by Mr. Henson, which is admitted for 200 days, was
21 only parts of days in Palo Alto, take the witness stand, because
22 that's not in the record before you.
23 And I truly regret that counsel stands here and makes
24 representations of fact that are not in the record. And Your
25 Honor is nodding, yes, acknowledgement. I'm not saying, yes,
708
1 agreement, but acknowledgement.
2 What Mr. Zlotoff just said is not in the record.
3 There is not one whit of evidence to support his statement.
4 THE COURT: There's nothing in the record to support
5 your statement -
6 MR. ROSEN: Of course there is.
7 THE COURT: No. That he's not working and instead is
8 picketing. There's nothing in the record to support your
9 statement that he is not working on that day and instead is
10 picketing -
11 MR. ROSEN: Your Honor, -
12 THE COURT: - on the whole day. He's -
13 MR. ROSEN: - of course there is. We have offered you
14 his deposition testimony in which he admits that for 200 days he
15 spent 200 days picketing. Those are days -
16 THE COURT: Does he say that he didn't work during
17 those days, that he didn't work at all during those days, not -
18 MR. ROSEN: No, but it doesn't say that he did work.
19 THE COURT: Right. So the record is ambiguous in its
20 argument for both of you.
21 MR. ROSEN: Oh, Your Honor, -
22 THE COURT: It's argument from both of you.
23 MR. ROSEN: Counsel is not arguing -
24 THE COURT: And you have been arguing - yes, it is.
25 MR. ROSEN: Counsel is testifying -
709
1 THE COURT: Yes, it is. It's not testimony.
2 MR. ROSEN: Okay.
3 THE COURT: I don't take anything Mr. Zlotoff says as
4 testimony. It's not testimony.
5 MR. ROSEN: Okay.
6 THE COURT: He's arguing for the record. It's
7 inappropriate argument at this point, but it's argument.
8 MR. ROSEN: Okay. Has Mr. Zlotoff passed the witness?
9 THE COURT: No. I haven't ruled on the picketing
10 question, and the ans- -
11 MR. ROSEN: I'm sorry. I move to strike it. I'm
12 sorry -
13 THE COURT: Yes. And the - the - the motion is
14 denied. The - this is not a question of First Amendment.
15 Nobody is saying that people do or don't have a right to picket.
16 The question here is the totality of the entire
17 circumstances, both pre and postpetition. And I have taken it
18 on both sides. And now the question goes to the weight.
19 MR. ROSEN: Your Honor, you are weighing, if I
20 understand correctly, -
21 THE COURT: You don't need to challenge my ruling,
22 sir. You just need to ask your questions.
23 RECROSS EXAMINATION
24 BY MR. ROSEN:
25 Q. Okay. Ms. Lucas, with respect to the First Amendment
710
1 activity of picketing, who was it that started that activity?
2 Was it Scientology or was it your husband?
3 MR. HIBBARD: Objection, Your Honor. That's really
4 irrelevant.
5 THE COURT: Why is it relevant?
6 MR. ROSEN: If you think that the totality, Your
7 Honor, of circumstances includes whether there was picketing,
8 don't you think, sir, that the issue of who started this, who
9 threw the first picket sign is relevant? Because if Mr. Henson
10 brought this on himself by picketing places where Scientologists
11 live and work, do you think Mr. Henson has a right to argue to
12 you that this picketing impacted on his ability to work? If he
13 brought this on?
14 THE COURT: Well, it may have impacted on his right to
15 - on his ability to work. He certainly has the right to argue
16 that.
17 MR. ROSEN: And do we have the right to argue that he
18 brought it upon himself by picketing first?
19 THE COURT: I think so.
20 MR. ROSEN: Thank you.
21 BY MR. ROSEN:
22 Q. Who was it that picketed first, ma'am?
23 THE COURT: If she knows.
24 MR. ROSEN: Yeah.
25 THE WITNESS: Just between those two or could we start
711
1 back in the '50s or '60s or '70s with other people?
2 BY MR. ROSEN:
3 Q. Who was it between Mr. Henson and unknown people, supposedly
4 Scientologists, who began the picketing activity, as between
5 those two?
6 A. I believe it was Mr. Henson.
7 Q. And you were with Mr. Henson on occasions when he traveled
8 to picket Scientology facilities, weren't you?
9 A. When he traveled and happened to be in the area, yes.
10 Q. Now let me ask you something. You seem to have expressed in
11 your testimony to your answers -
12 THE COURT: Please stay at the mic and stop moving
13 around or sit down at the mic.
14 BY MR. ROSEN:
15 Q. You've seen -
16 THE COURT: Just don't move around.
17 BY MR. ROSEN:
18 Q. You seem to have expressed to Mr. Zlotoff in response to his
19 question that somehow this picketing of your home was
20 disconcerting?
21 A. It was.
22 Q. You picketed, you, Ms. Lucas, picketed a facility where a
23 thousand Scientologists life and work and study their religion,
24 in Riverside County in California, did you not?
25 A. No. Three hundred - 734 people, including Mr. McShane
712
1 (phonetic) live at a paramilitary compound in Gilman Hot
2 Springs. I picketed that facility a number of times with my
3 husband, with other people, and by myself.
4 Q. You picketed a facility at which some number of members of
5 the Scientology religion life and work, right?
6 A. Actually only - by their testimony, only 14 people actually
7 live there.
8 Q. Okay. That's -
9 A. The rest live in Hemet, and I have never picketed their
10 actual barracks.
11 Q. Fair enough. Fourteen people lived at a facility, and you
12 picketed their home?
13 A. No, it's not a home. It's a paramilitary compound.
14 MR. ROSEN: Your Honor, I move to strike that.
15 THE COURT: Overruled.
16 BY MR. ROSEN:
17 Q. What is a paramilitary compound? Have you ever been -
18 withdraw that.
19 Have you ever been inside this facility?
20 A. No. Because the armed guards -
21 Q. I think it's -
22 A. The armed guards keep me out.
23 You asked me a question.
24 Q. Okay. There are armed guards at this facility; you observed
25 this, right?
713
1 A. Yes, I did.
2 Q. And so never having been in this -
3 THE COURT: Keep your voice down.
4 BY MR. ROSEN:
5 Q. Never having been in this facility, you are offering
6 testimony that this is a para- - quote, paramilitary facility,
7 right?
8 A. Yes.
9 Q. Is that right?
10 A. Yes.
11 Q. Ms. Lucas, is this building a paramilitary facility?
12 A. No.
13 Q. Did you notice armed guards downstairs when you came in?
14 A. I'm not basing -
15 Q. Yes or no, ma'am.
16 A. Yes. But I'm not basing what I said on whether there are
17 simply armed guards at the entrance.
18 THE COURT: Okay. Mr. Rosen, how much more time do
19 you need, because otherwise we're reconvene first thing in the
20 morning.
21 MR. ROSEN: None.
22 THE COURT: Are you finished?
23 MR. ROSEN: Yes.
24 THE COURT: Okay. Now what about oral argument, do we
25 start that first thing in the morning?
714
1 MR. ROSEN: Well, I'd like to do it tonight, Your
2 Honor. I -
3 THE COURT: No, I can't keep my staff here. It's five
4 o'clock already. We'd be -
5 MR. ROSEN: Somehow I was anticipating that that was
6 going to happen, so -
7 THE COURT: Well, I didn't choose it -
8 MR. ROSEN: - I'll guess I'll have to cancel my flight
9 for tomorrow.
10 THE COURT: Okay.
11 MR. ROSEN: Thank you.
12 THE COURT: What time - I can't keep them here.
13 MR. ROSEN: Yeah, I -
14 THE COURT: You said you wanted 45 minutes to an hour.
15 MR. ROSEN: Right.
16 THE COURT: And I'm not going to keep them here until
17 seven o'clock at night.
18 MR. ROSEN: I understand.
19 THE COURT: All right.
20 MR. ROSEN: I heard you, Judge.
21 THE COURT: How much time do you each need and how
22 early do you want to begin?
23 MR. ROSEN: Can I - before we get to that, I want to
24 move in exhibit -
25 THE COURT: And I also have to find out if there's any
715
1 redirect by Mr. Zlotoff or -
2 MR. ROSEN: Yeah. Or if he rests.
3 THE COURT: - of if he rests. And you haven't - have
4 you rested?
5 MR. ROSEN: It's not up to me. It's up to him.
6 THE COURT: Well, on your motions. Did you -
7 MR. ROSEN: No.
8 THE COURT: - rest completely on - yes, he's proving
9 one thing, and you're proving - then your motions, you have to
10 rest before he goes.
11 MR. ROSEN: And I was about to say I offer Exhibit
12 293. Only the portions of the declaration which I read into the
13 record. That's it. No other portion of it.
14 And it's offered for purposes of impeachment of this
15 witness.
16 THE COURT: Now if counsel want to look over the
17 record to make sure that everything's okay in terms of resting,
18 you can rest first thing in the morning, and then we can do the
19 oral arguments. But I want to make sure what we're doing, I
20 want the record to be clear as to what we're doing.
21 MR. ROSEN: Well, Your Honor, is 293 received?
22 Because I think we -
23 THE COURT: Is there any opposition to 293?
24 MR. ZLOTOFF: No, Your Honor.
25 MR. ROSEN: Well, then the proposition, it seems to
716
1 me, is as follows. I opened and put on my case. And this
2 examination is a combination of the debtor's opposition to the
3 1307 and his - his evidence in support of his motion to confirm.
4 THE COURT: Right.
5 MR. ROSEN: If Mr. Zlotoff says he rests, then he's
6 completed both his opposition to my case - to my motion and his
7 case in chief on his motion.
8 THE COURT: But you rest on your motion -
9 MR. ROSEN: How can I rest if I don't know if he's
10 offering any other evidence in opposition to my motion.
11 THE COURT: Oh, that's fair.
12 MR. ROSEN: So -
13 MR. ZLOTOFF: No, Your Honor, I'm not - I'm not
14 offering anymore.
15 THE COURT: Okay. And are all your exhibits in and
16 all are you exhibits in, Mr. Rosen?
17 MR. ROSEN: 291 and 292, yes, they have been admitted.
18 THE CLERK: 291 hasn't, and neither has -
19 MR. ROSEN: What's 291?
20 (Comments out of the of range of the microphone.)
21 MR. ROSEN: Yeah. I thought Your Honor said it was
22 admitted. I offered - that was the deposition.
23 THE CLERK: It's excerpts - 291 is excerpts of the
24 2004 from December 17th, '98 of -
25 MR. ROSEN: Yes. Those are the ones we photostated
717
1 during the break, and I thought Your Honor said they were
2 admitted.
3 THE COURT: I don't recall.
4 MR. ROSEN: There was no -
5 THE COURT: Is there any oppos- - I don't recall, Mr.
6 Rosen.
7 MR. ROSEN: Okay.
8 THE COURT: Is there any opposition to 291 or 292?
9 MR. ZLOTOFF: Is 292 the entire - I'm sorry.
10 THE CLERK: 292 is in.
11 THE COURT: No. It's just excerpts from Thursday,
12 February 17, 2000, at Hogan's office.
13 MR. ZLOTOFF: Your Honor, I think what we want is all
14 of 292 and 293.
15 THE COURT: Well, you can designate excerpts but then
16 don't rest until tomorrow, and you can look at it tonight.
17 MR. ROSEN: Can't designate excerpts.
18 THE CLERK: 292 is in.
19 MR. ROSEN: He can't.
20 THE COURT: We'll talk about that. You're not the
21 judge. If you -
22 MR. ROSEN: Your Honor, I'm not making a ruling. I'm
23 making an argument of counsel.
24 THE COURT: Okay. But - that's fine. But we can
25 still rest tomorrow, if he wants to look at it.
718
1 (The Court and Clerk confer off record.)
2 THE COURT: Apparently 292 was admitted and 291 and
3 293 have not yet been ruled upon.
4 MR. ROSEN: You just admitted 293. You asked if they
5 had any objection and they said no.
6 THE COURT: I didn't say anything in response. I
7 haven't done anything yet. They're talking. And I'll do
8 something when we're finished.
9 MR. ROSEN: I'm sorry, Your Honor. You just asked if
10 this is the declaration -
11 THE COURT: I understand. I understand.
12 MR. ROSEN: They said no objection.
13 THE COURT: I understand.
14 MR. ROSEN: Is it in?
15 THE COURT: Not yet. Wait a second.
16 You can sit down there, but you may be recalled in a
17 second. We'll see.
18 MR. ZLOTOFF: Shall we cover this tomorrow then, Your
19 Honor?
20 THE COURT: I think that makes sense.
21 MR. ZLOTOFF: This is on -
22 THE COURT: We have - we have -
23 MR. ZLOTOFF: Are we talking about two -
24 THE COURT: 292 has been admitted.
25 MR. ZLOTOFF: 290- -
719
1 THE COURT: In - only excerpts.
2 MR. ZLOTOFF: Okay.
3 THE COURT: So now the question is 291 and 293. And I
4 don't have - did you file the originals of the 2004s with the
5 court?
6 MR. ROSEN: You mean the entire transcript?
7 THE COURT: Yes.
8 MR. ROSEN: I don't think so.
9 THE COURT: Okay.
10 MR. ZLOTOFF: No. I'm going to want the entirety of
11 292. I'm going to want to designate the rest of the transcript.
12 THE COURT: Did you - did you order it? Did you order
13 it?
14 MR. ZLOTOFF: Did I order it? No, I did not.
15 THE COURT: So when you say you're going to want it, I
16 don't have it.
17 MR. ZLOTOFF: No. It's - it's attached to what I have
18 here.
19 THE COURT: The whole, the entirety?
20 MR. ZLOTOFF: The part that I want.
21 THE COURT: Oh, I see. How do you have it, if you
22 didn't -
23 MR. ZLOTOFF: I must have been given it.
24 THE COURT: Unless what you want is what Mr. Rosen
25 gave you. I don't know why you'd have anything other than what
720
1 Mr. Rosen gave you if you - if you didn't order it.
2 MR. HIBBARD: Because Mr. Rosen copied the whole thing
3 instead of -
4 MR. ROSEN: No, I didn't.
5 THE COURT: Oh, he's just talking about those few
6 pages, but it's much longer than that.
7 MR. HIBBARD: I know, Your Honor. He just wants all
8 those pages.
9 THE COURT: I see. Well, that may be - for fairness
10 we'll have to talk about whether that's appropriate tomorrow
11 morning.
12 MR. HIBBARD: Thank you, Your Honor.
13 THE COURT: Okay.
14 MR. ROSEN: Fairness under Rule 32, Your Honor?
15 THE COURT: We'll talk about it tomorrow morning.
16 MR. ROSEN: Thank you.
17 THE COURT: Now any - anybody have any further
18 questions?
19 9:30, counsel -
20 MR. ROSEN: Well, do I - do I understand that subject
21 to this, Your Honor, Mr. Zlotoff rests? And then I rest. And I
22 guess if - I'm on the point of I get to open and close, so -
23 THE COURT: Well, you're not anymore the plaintiff
24 than he is.
25 MR. ROSEN: Well, I'm the plaintiff on the motion to
721
1 dismiss, which if - which if granted -
2 THE COURT: You're a movant and he's the debtor.
3 Those terms don't have any meaning here. We're not in an
4 adversary proceeding. Nobody's the plaintiff and nobody's the
5 defendant.
6 MR. ROSEN: Excuse me. The movant, does the movant
7 have the right to open and close?
8 THE COURT: Not necessarily - only on your issue. Not
9 necessarily on his issue, certainly. On confirmation of the
10 plan.
11 MR. ROSEN: So what I will do is I will make a
12 counseling argument on my issue, namely in the same -
13 THE COURT: Your motion.
14 MR. ROSEN: In the same way that we -
15 THE COURT: Your motion went first, so why not let you
16 have your closing first, and then I'll let him have his closing
17 second.
18 MR. ROSEN: Yeah. And I was going to say if we can
19 track the way the evidence was put in, I will make an opening -
20 a closing statement on my motion to dismiss. And Mr. Zlotoff
21 can then make his combined closing, just as the evidence went
22 in, in opposition to the motion and in support of his
23 confirmation. And then I will respond.
24 THE COURT: No. I'm not going to do it that way. I'm
25 going to treat you both evenly. If you get twice up, he gets
722
1 twice up. I'm going to treat you exactly -
2 MR. ROSEN: He can have twice up.
3 THE COURT: That's fine.
4 MR. ROSEN: But how can I - how can I make a closing
5 argument first and address his motion to confirm? I haven't
6 heard any argument on that.
7 THE COURT: That's fine. That's fine. You can go
8 first. Then he'll go, then you'll go, then he'll go.
9 MR. ROSEN: Okay.
10 THE COURT: But we want to keep these - I want to keep
11 them - gentlemen, Mr. Rosen said he needed 45 minutes. That's
12 fine.
13 MR. ROSEN: No. It's going to be longer, Your Honor.
14 THE COURT: It's not going to be longer - Your Honor.
15 It'll be an hour total for each of you, no more.
16 MR. ROSEN: Well, Your Honor, I'm -
17 THE COURT: For everything.
18 MR. ROSEN: I'm sorry, Your Honor. I said 45 minutes
19 to an hour before Ms. Lucas' testimony and your rulings. I am
20 now going to have to - and I'm not anywhere near my 20 hours,
21 Judge.
22 THE COURT: I know, but I'm not going - I'm not - we
23 don't need - we've finished with the testimony. This is - this
24 is we're not out of the evidentiary portion of this. Once we're
25 out of the evidentiary portion of this, you can each have an
723
1 hour for closing.
2 MR. ROSEN: Well, Your Honor, with all due respect,
3 you told me before -
4 THE COURT: On the evidentiary portions.
5 MR. ROSEN: No, that's not what your ruling was.
6 THE COURT: Mr. - Mr. Rosen, you don't have any
7 entitlement to 20 hours for closing argument regardless of what
8 I said. And -
9 MR. ROSEN: I thought I had an entitlement to 20 hours
10 to use any way I wanted.
11 THE COURT: Yeah, but I'm not giving you that. You
12 can have an hour for closing arguments. If you think I'm wrong,
13 you know, do whatever you think is appropriate.
14 MR. ROSEN: Thanks, Judge. I will.
15 THE COURT: But an -
16 MR. ROSEN: I will take that under advisement.
17 THE COURT: Fine. But I think an hour is reasonable
18 for closing argument from each of you.
19 MR. ROSEN: All right.
20 THE COURT: And just allocate your time among your
21 various - you're each going to be up twice, so allocate your
22 time. You can each have an hour. But we're going to deal with
23 the remainder of the evidence issues and the exhibits when we
24 reconvene at 9:30 tomorrow.
25 MR. ROSEN: Well, Your Honor, am I missing something?
724
1 Is there any remainder other than to these two exhibits?
2 THE COURT: They're going to tell me tomorrow morning.
3 I'll see you to- -
4 MR. ROSEN: Other than these two exhibits, is there -
5 THE COURT: Other than this, they'll tell me tomorrow
6 morning. I'll see you tomorrow morning.
7 Nobody asked you to do anything other than show up at
8 9:30.
9 MR. ROSEN: Well, I want to be -
10 THE COURT: Court is adjourned.
11 MR. ROSEN: I want to be prepared.
12 THE COURT: I understand.
13 On the issue as to whether or not Ms. Lucas is
14 properly a joint tenant of the property, as I understand it now,
15 that issue is an issue of state law. And I think tentatively
16 that I would like to send that issue if it ever gets litigated
17 to state court, not try it in the Bankruptcy Court.
18 I suggest that counsel talk about that. If counsel
19 agree that any issue regarding the joint tenancy issue should be
20 tried in the state court, then you could tell me that you've
21 agreed on that tomorrow. If nobody agrees on it, then I'll have
22 to decide - if there is no agreement, I'll have to make my own
23 decision unless I receive a motion one way or the other. I
24 don't want any discussion right now. I just want to raise that
25 issue for you.
725
1 Thank you.
2 COUNSEL: Thank you, Your Honor.
3 (Trial was adjourned for the day at 5:09 o'clock p.m.)
4 -o0o-
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