UNITED 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 II
Debtor. ) Pages 180 to 362
)
)
) Monday, September 30, 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
Electronic Court United States Bankruptcy Court
Recorder: Clerk of the Court
LaKeska Blue and 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
Witnesses:
Direct Cross Redirect Recross
Victoria Arel Lucas
By Mr. Zlotoff
(resumed): 183
By Mr. Rosen: 343
Exhibits: Received in Evidence
Creditor's Exhibits 1 - 14, 16 - 18,
20 - 22, 25, 27 - 37, 39 - 44, 46 - 48,
53 - 62, 65 - 69, 72, 73, 75 - 78,
80 - 84, 86, 88 - 100, 104, 107, 109,
111 - 116, 121, 122, 124 - 130,
133 - 135, 140 - 160, 164 - 168, 171,
173, 174, 177 - 180, 182, 183,
186 - 189, 191, 194 - 207, 209 - 213,
215, 216, 221, 222, 224 - 226,
239 - 234, 236, 238, 249 - 251,
253 - 256, 257, 258, 260 - 262,
264 - 270, 272 - 279, and 286: page 248
Debtor's Exhibits A and B: page 286
Debtor's Exhibits C and D: page 287
Debtor's Exhibit F: page 288
Debtor's Exhibits G and H: page 289
Debtor's Exhibit L: page 286
182
1 Monday, September 30, 2002 10:41 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 in session.
6 THE COURT: Good morning, ladies and gentlemen.
7 Please be seated.
8 This is the case of Keith Henson. May I have
9 appearances of counsel.
10 MR. ZLOTOFF: Stan Zlotoff for the debtor.
11 MR. ROSEN: For creditor Religious Technology Center,
12 Samuel D. Rosen, Paul, Hastings, Janofsky and Walker.
13 THE COURT: Good morning, counsel.
14 MR. ROSEN: Good morning, Your Honor.
15 MS. SEID: Elaine Seid, McPharlin, Sprinkles and
16 Thomas, also appearing on behalf of the creditor.
17 MR. ROSEN: And, Your Honor, Ms. Kobrin, as you can
18 see is not physically here. She's on her way, so we will note
19 her appearance as well.
20 THE COURT: Yeah.
21 Shall we call Ms. Lucas to the stand?
22 MR. ZLOTOFF: Yes. Why don't we do that, Your Honor.
23 Ms. Lucas.
24 VICTORIA AREL LUCAS, DEBTOR'S WITNESS, PREVIOUSLY SWORN
25 THE COURT: Good morning, Ms. Lucas. You were sworn
183
1 in yesterday. I remind you that you're under oath. You may
2 take the stand.
3 MR. ROSEN: Friday.
4 THE COURT: Oh, it was Friday. That's right.
5 That's fine. Thank you.
6 Go ahead, counsel.
7 MR. ZLOTOFF: Thank you, Your Honor.
8 THE COURT: For the record, it was Friday. Today's
9 Monday morning.
10 DIRECT EXAMINATION, resumed
11 BY MR. ZLOTOFF:
12 Q. Ms. Lucas, were you present with - with Mr. Henson at the
13 moment when he was served with RTC's lawsuit for copyright
14 infringement?
15 A. I don't remember. He was served so many times that I can't
16 remember all the specific instances.
17 Q. Do you know why he filed Chapter 13?
18 MR. ROSEN: Objection.
19 THE COURT: Overruled.
20 MR. ROSEN: Not only is it hearsay, it calls for
21 mind-reading.
22 THE COURT: No. It calls for a yes or no.
23 And you can answer it yes or no.
24 THE WITNESS: Yes.
25 BY MR. ZLOTOFF:
184
1 Q. What - what are the reasons, as you know them, of your own
2 personal knowledge?
3 MR. ROSEN: Objection.
4 THE COURT: Sustained.
5 BY MR. ZLOTOFF:
6 Q. Ms. Lucas, are you aware of someone named Grady Ward?
7 A. Yes.
8 Q. And who is Grady Ward?
9 MR. ROSEN: Objection, irrelevant.
10 MR. ZLOTOFF: Your Honor, it's relevant on the issue
11 of Mr. Henson's perceived need to file a Chapter 13. Grady Ward
12 is an individual similarly situated, we believe.
13 MR. ROSEN: I bet to differ.
14 MR. ZLOTOFF: In - in other words, someone who was
15 sued by RTC, filed bankruptcy.
16 MR. ROSEN: Your Honor, I not only beg to differ but I
17 must object most strenuously to counsel testifying about matters
18 that are not before you. The record in this case before you
19 consists of exhibits and any testimony that's been offered.
20 Counsel's testimony from the counsel table as to who Mr. Ward is
21 or what - that he was sued by RTC is not only irrelevant but it
22 is beyond this record.
23 If counsel wants to make that proposition and he
24 believes it's relevant, he ought to put somebody on the witness
25 stand.
185
1 MR. ZLOTOFF: Your Honor, -
2 THE COURT: The objection is simply does she know who
3 he is, and the objection's overruled.
4 BY MR. ZLOTOFF:
5 Q. Of your own knowledge -
6 THE COURT: Wait.
7 You can answer the question. Do you know who he is?
8 THE WITNESS: Yes.
9 BY MR. ZLOTOFF:
10 Q. Okay. Of your own knowledge, could you explain what you
11 know about Grady Ward and RTC?
12 MR. ROSEN: Objection. Calls for -
13 THE COURT: What's the relevance, counsel?
14 MR. ZLOTOFF: The relevance -
15 THE COURT: He filed for bankruptcy? Many people file
16 for bankruptcy. Why is it relevant to what you're trying to
17 prove in this case?
18 MR. ZLOTOFF: Because one of - because one of -
19 because I read the Eisen case, Your Honor. And one of the - one
20 of the - one of the key things, I think, is going to be why did
21 he file bankruptcy. There's an allegation that he didn't need
22 to file bankruptcy. And - and I'm going to show with this
23 testimony of Grady Ward that there was a legitimate reason to
24 file bankruptcy.
25 THE COURT: You're not showing it with the testimony
186
1 of Grady Ward, are you?
2 MR. ZLOTOFF: No.
3 MR. ROSEN: Nor, Your Honor, is he showing you any
4 bankruptcy filing by Mr. Ward.
5 MR. ZLOTOFF: I don't have to. That's not the point.
6 That's not the point. The point is generally what was known
7 about Grady Ward.
8 MR. ROSEN: Your Honor, with all due respect, what was
9 known about Grady Ward, to the extent it has any relevance, and
10 I see none, the proper inquiry would be what was known about
11 Grady Ward by Mr. Henson; to the extent that had anything to do
12 with the operation of his mind in filing a bankruptcy petition
13 in February of 1998. That's not this witness.
14 And, again, counsel is simply - it is very
15 transparent. Counsel is simply trying to put in through this
16 witness evidence which, if it came in at all, it would be
17 properly offered through Mr. Henson, who is not here.
18 MR. ZLOTOFF: Your Honor, -
19 THE COURT: Well, Mr. Zlotoff, I haven't decided
20 whether to let in any evidence about Grady Ward, but you've
21 established no foundation whatsoever. And on that ground I'm
22 not going to let any testimony in until you establish a
23 foundation. You haven't even established that she knows him.
24 You haven't established anything that would provide a basis for
25 me even to consider the testimony.
187
1 You said from her personal knowledge, which means
2 nothing. You haven't established a foundation. From what
3 people have told her? I have no idea what this is intended to
4 do -
5 MR. ZLOTOFF: Well, -
6 THE COURT: - and therefore the objection's sustained
7 at this point.
8 MR. ZLOTOFF: Well, but may I - may I try to establish
9 foundation, Your Honor?
10 THE COURT: Sure.
11 BY MR. ZLOTOFF:
12 Q. Okay. Of your own personal knowledge what do you know about
13 Grady Moore -
14 MR. ROSEN: Objection.
15 BY MR. ZLOTOFF:
16 Q. - Grady Ward?
17 MR. ROSEN: That's not a foundation.
18 THE COURT: That's not a foundation question.
19 BY MR. ZLOTOFF:
20 Q. Do you have - are you aware of Grady Ward's having been sued
21 by RTC?
22 MR. ROSEN: Objection. Relevance, no foundation,
23 calls for hearsay.
24 THE COURT: Overruled.
25 THE WITNESS: Yes.
188
1 BY MR. ZLOTOFF:
2 Q. Are you aware whether that happened - are you aware of the
3 timeframe when that happened?
4 MR. ROSEN: Objection. The same objection:
5 Relevance, foundation. She hasn't - counsel has not even
6 established were you aware of whether or not this is hearsay.
7 There's no basis - no foundation laid that this witness has any
8 firsthand knowledge even assuming relevance.
9 THE COURT: Sustained.
10 MR. ROSEN: A lot of people were aware of it.
11 THE COURT: Sustained.
12 BY MR. ZLOTOFF:
13 Q. How did you come to know of RTC litigation with Grady Ward?
14 A. I first heard about it from my husband and later I talked
15 with Mr. Ward. I met him and talked with him personally and
16 over the telephone.
17 Q. And what did you find out from Mr. Ward regarding litigation
18 with RTC?
19 MR. ROSEN: Objection. Calls for hearsay.
20 THE COURT: Sustained.
21 BY MR. ZLOTOFF:
22 Q. Did you find out that Mr. Grad- - Mr. Ward filed a
23 bankruptcy petition?
24 MR. ROSEN: Objection. Not only relevance, hearsay
25 and best evidence rule. Rule - Federal Rule of Evidence 1001 to
189
1 1007.
2 THE COURT: Sustained.
3 BY MR. ZLOTOFF:
4 Q. Was - at the point - are you aware of the time when Mr.
5 Henson filed his Chapter 13? Are you aware of the date when
6 that happened?
7 A. I believe the initial filing was in February of '98 and I
8 think it was reinstated in April or June of the same year.
9 THE COURT: If you would back up from the mic just an
10 inch you won't create the static.
11 THE WITNESS: Sorry. Sorry.
12 Is that better?
13 BY MR. ZLOTOFF:
14 Q. Are you aware of what bank accounts Mr. Henson had at the
15 time?
16 MR. ROSEN: Objection. No firsthand - no foundation.
17 This is hearsay, number one.
18 THE COURT: Overruled.
19 MR. ROSEN: And, number two, - Your Honor, may I just
20 state my objection for the record?
21 THE COURT: Sure.
22 MR. ROSEN: The best evidence of what bank accounts
23 Mr. Henson had at the time are the statements from the bank. It
24 doesn't have to coincide with the exact date of filing because
25 it never does, but if the question is what bank accounts Mr.
190
1 Henson had -
2 THE COURT: That wasn't the question.
3 MR. ROSEN: Yeah. He asked whether she was aware of
4 what bank accounts he had.
5 THE COURT: That's right. And the objection's
6 overruled.
7 BY MR. ZLOTOFF:
8 Q. How many bank accounts did he have at the point of
9 commencement of the bankruptcy -
10 MR. ROSEN: Objection.
11 THE COURT: Overruled.
12 THE WITNESS: He had an account at Wells Fargo which
13 was a joint account with me.
14 I'm sorry. How far do I have to get from this thing?
15 Is this good?
16 THE COURT: Probably about - I think that's good.
17 THE WITNESS: This is good? Okay.
18 BY MR. ZLOTOFF:
19 Q. Are you aware of your own recollection at this point how
20 much roughly was in that bank account at that time?
21 THE COURT: Which time, Mr. Zlotoff?
22 MR. ZLOTOFF: At or about the time when he filed, when
23 he commenced his Chapter 13 petition.
24 THE WITNESS: I have seen the papers, so that did
25 refresh my memory, and it seems to be correct to me that it was
191
1 around 1500.
2 MR. ROSEN: Objection. Move to strike it. The
3 witness had no independent knowledge of this on Monday - on
4 Friday.
5 MR. ZLOTOFF: And she refreshed her recollection, Your
6 Honor.
7 THE COURT: Overruled.
8 BY MR. ZLOTOFF:
9 Q. Are you aware of balances - the range of balances subsequent
10 to that date, let's say on through roughly August of that year
11 of 1998?
12 MR. ROSEN: Objection, best evidence rule. The best
13 evidence what the balances were at any given time or at any
14 month end cycle are the documents.
15 Your Honor, I must press this objection. I mean it is
16 so clear under Federal Rule of Evidence 101 to 107, she cannot
17 testify to this. And I - and I have a case right on point which
18 I - which I'm willing to give Your Honor as to what the best
19 evidence rule means. This is absolutely improper for the
20 witness to testify as to what a document - as to information
21 that's contained in a document.
22 MR. ZLOTOFF: First of all, I - I'm not asking about
23 terms of the document. I'm simply asking whether she has
24 independent recollection of balances, rough balances,
25 approximate balances during a certain period of time. I'm not
192
1 asking her to quote line and verse of a what particular balance
2 was.
3 MR. ROSEN: Excuse me, but -
4 MR. ZLOTOFF: Nonetheless I have bank balances and
5 I've given copies to Mr. Rosen. And these were documents he
6 subpoenaed, RTC subpoenaed. I have copies of them. I've given
7 him copies. They were in his book of evidence before, I think,
8 at 187 and 188.
9 And - and I'm prepared to give the witness -
10 THE COURT: You have to give it to my Deputy to mark
11 it the next in line, but then you can proffer it if you want.
12 MR. ZLOTOFF: Okay.
13 MR. ROSEN: Your Honor?
14 THE COURT: Wait a second.
15 MR. ROSEN: Sure.
16 THE COURT: It hasn't been proffered.
17 MR. ZLOTOFF: Yeah.
18 It would be O, I think.
19 THE CLERK: Yes.
20 (Creditor's counsel confer off record.)
21 THE CLERK: Mr. Zlotoff?
22 MR. ZLOTOFF: I'm sorry. What?
23 THE COURT: It's a statement, what do you - the
24 description -
25 MR. ZLOTOFF: A Wells Fargo statement - statements.
193
1 MR. ROSEN: Could we not show it - may I ask it not be
2 shown to the witness yet?
3 THE COURT: No, you may not.
4 Give it to the witness.
5 THE WITNESS: Thank you.
6 THE COURT: Mr. Zlotoff.
7 MR. ROSEN: Your Honor, may I see the original?
8 THE COURT: Do you have the original?
9 MR. ZLOTOFF: Do I have the original of the statement?
10 No, I do not. I believe duplicates are acceptable for Federal
11 Rules of Evidence, though.
12 MR. ROSEN: I object on two grounds to this, and this
13 is going to carry through because apparently from the folder I'm
14 assuming Mr. Zlotoff has other documents he's going to offer.
15 The first ground is that this is not on his witness
16 list. This Court has been extraordinarily gracious, and I can
17 go through every order of the Court respecting pretrial
18 proceedings that Mr. Zlotoff has not complied with. This one is
19 untenable.
20 This witness - this document was supposed to be on the
21 witness list in the joint pretrial order filed in March of 2001;
22 it was not. It was supposed to be on the witness list in
23 August; it was not. It was supposed to be delivered to us, as
24 Your Honor ordered an exchange of exhibits; it was not.
25 Your Honor has before you Mr. Zlotoff's witness list
194
1 of August 1, 2002. It is not on there. That's the first
2 objection.
3 The second objection is contrary to what Mr. Zlotoff
4 just said, that copies are admissible in lieu of originals, I
5 direct Your Honor's attention to Federal Rule of Evidence 1002.
6 I will read it since it's very short. "To prove the content of
7 a writing, recording, or photograph, the original writing,
8 recording, or photograph is required, except as otherwise
9 provided in these Rules or by an act of Congress."
10 I haven't heard anything from Mr. Zlotoff by way of
11 the "except as otherwise required." The rule is exactly
12 contrary to what Mr. Zlotoff just said.
13 THE COURT: First, is it in any of these volumes, this
14 already?
15 MR. ROSEN: Those are ours.
16 THE COURT: I understand. Is it in any of those
17 volumes?
18 MR. ROSEN: I think - I don't know if it was - no, I
19 think it was removed. It was originally - when we filed our
20 exhibit list, Your Honor, in March of 2001, before Mr. Henson
21 fled, we put in documents that we anticipated using if he were
22 on the witness stand. When it thereafter became apparent of
23 recent times that Mr. Henson was not appearing at trial, when
24 Your Honor was not going to let him testify, we then withdrew
25 documents that we did not need. And if - and they - and those
195
1 documents are not part of the exhibits, number one.
2 Number two, and even if they were, they're not on Mr.
3 Zlotoff's witness list. They never were.
4 THE COURT: How about addressing the issue of
5 prejudice?
6 MR. ROSEN: What is the number, by the way, that
7 counsel says is - this is our Exhibit Number 1?
8 MR. ZLOTOFF: It's either 1 - it was formerly 1- -
9 either 186, 187, or 188.
10 MR. ROSEN: Well, if Your Honor will give me a second,
11 I have them, as - as do you.
12 MR. ZLOTOFF: I don't have them in -
13 MR. ROSEN: 186 is a transcript of proceedings before
14 this Court of 1 - of July 10, 2002.
15 MR. ZLOTOFF: No, no, no. The former - in the former
16 trial binder -
17 MR. ROSEN: The former trial binders are withdrawn.
18 THE COURT: Wait a second. Gentlemen, I've told you
19 again. Now it's you, Mr. Zlotoff. You cannot address each
20 other. You can only address the Court.
21 I've asked you to address the question of prejudice.
22 That's to you, Mr. Rosen. What prejudice would - would there be
23 in admitting this bank record subject to a certification from
24 the bank that it's a valid record?
25 MR. ROSEN: Are you asking me, Your Honor?
196
1 THE COURT: Yes.
2 MR. ROSEN: The prejudice is we're in the middle of
3 trial. This is surprise. And I don't believe I have to show
4 prejudice in the face of a series of outstanding orders by this
5 Court which Mr. Zlotoff has not complied with.
6 I will start with the order which preceded the March
7 13, 2001 pretrial con- -
8 THE COURT: But he admits it's not on the exhibit
9 list, Mr. -
10 MR. ROSEN: And he admits that even as of the time he
11 was supposed to give his exhibits, a couple of weeks ago, he
12 didn't give it to us. And -
13 THE COURT: Do you have any prejudice to allege?
14 MR. ROSEN: Yes. Of course I have prejudice to
15 allege.
16 THE COURT: Well, then you should allege it.
17 MR. ROSEN: Okay. I will now have to deal with this
18 additional evidence. And I don't know how quickly I can deal
19 with it. I don't know if I'm going to need witnesses to deal
20 with it. I am prejudiced by the fact I don't have Mr. Henson
21 here to examine.
22 What if I have to call witnesses or offer additional
23 documents to - to refute this statement?
24 I'm also prejudiced by the fact that now I have to
25 deal with this in the context of 20 hours that Your Honor has
197
1 allocated. I have no idea if Your - if Your Honor admits this,
2 what additional time and witnesses and exhibits I am going to
3 have to offer to refute anything that's in there. That is
4 prejudice in the middle of trial and I would respectfully submit
5 that prejudice exists as a matter of law. It's not even an
6 issue when Your Honor has issued a series of specific orders
7 going back to early 2001, one after the other after the other on
8 exhibits, and Mr. Zlotoff has not complied.
9 THE COURT: The objection is overruled. The prejudice
10 - the prejudice that's alleged is purely speculative. This is
11 subject to providing a certified copy, and it should be done
12 promptly.
13 MR. ROSEN: Your Honor, to save ourselves some time on
14 this, is this going to be the same with respect to anything else
15 that Mr. Zlotoff pulls out of his bag that's not on his witness
16 list?
17 THE COURT: I rule on documents as they come in.
18 BY MR. ZLOTOFF:
19 Q. Do you have Exhibit O in front of you, Ms. Lucas?
20 A. Yes.
21 Q. Is this the bank account to which you had previously
22 referred?
23 A. Yes.
24 THE COURT: Do you want to make an offer of proof of
25 how you got this, Mr. Zlotoff?
198
1 MR. ZLOTOFF: I got this from the subpoenaed documents
2 of RTC from Wells Fargo Bank.
3 THE COURT: Do you deny that these were subpoenaed by
4 you from Wells Fargo Bank?
5 MR. ROSEN: I have no recollection. We don't if we
6 got -
7 THE COURT: But Ms. - what about Ms. Kobrin?
8 MR. ROSEN: I just asked her. She doesn't remember
9 either.
10 MR. ZLOTOFF: It was Mr. Hogan who subpoenaed them.
11 MR. ROSEN: Excuse me. I wasn't even involved in the
12 case at the time. But I don't know if these documents were
13 produced by Mr. Henson or by the bank. And I would have -
14 (Creditor's counsel confer briefly off record.)
15 MR. ROSEN: And I would have to make an inquiry. I
16 mean if counsel has a - this - I'm at a distinct disadvantage
17 because this occurred before I entered the case, so if counsel -
18 THE COURT: Not before Ms. Kobrin, who is sitting by
19 your left side, entered the case.
20 Do you want to enter your appearance? Could you enter
21 your appearance?
22 MS. KOBRIN: Your Honor, I have not memorized -
23 THE COURT: Could you enter your appearance, please?
24 MS. KOBRIN: Yes. Helena Kobrin from Religious
25 Technology Center.
199
1 I have not memorized what documents were produced by
2 whom. I can't answer -
3 THE COURT: And you have no recollection?
4 MS. KOBRIN: I've - I - looking at these documents, I
5 don't know which - what the source was.
6 THE COURT: Okay. Do you - do you... Do you know
7 whether they were produced by Wells Fargo or by Mr. Henson?
8 MR. ZLOTOFF: I know that they were produced by Wells
9 Fargo Bank because our - because Mr. Hogan or his office
10 delivered copies to me. Ms. -
11 THE COURT: Okay.
12 MR. ZLOTOFF: You know, -
13 THE COURT: The objection's overruled subject to
14 certification.
15 MR. ZLOTOFF: May I bring in copies of the subpoena
16 with all the documents attached that I received? Would that be
17 sufficient verification, Your Honor?
18 THE COURT: Frankly I would - if you could bring - I
19 think that that's okay, but I would have to look that up, Mr.
20 Zlotoff.
21 MR. ZLOTOFF: Okay.
22 THE COURT: So bring it with a case -
23 MR. ZLOTOFF: All right.
24 THE COURT: - if you're going to bring that.
25 MR. ZLOTOFF: Okay. Thank you, Your Honor.
200
1 Now the offer of proof is that these statements are
2 for the period June '98, July '98, August '98, with each
3 statement bearing a zero balance in the account.
4 BY MR. ZLOTOFF:
5 Q. Do you know why the balance was zero for all those three
6 months?
7 A. I can think of two reasons.
8 MR. ROSEN: I object, Your Honor. This is obviously
9 speculation. The question is does she know why. And if the
10 answer is yes, I'd ask counsel to provide a foundation before
11 the witness provides her speculation as to two reasons.
12 MR. ZLOTOFF: Your Honor, -
13 THE COURT: It does sound like speculation, -
14 MR. ZLOTOFF: Right.
15 THE COURT: - the way she phrases herself. So -
16 MR. ZLOTOFF: Okay.
17 BY MR. ZLOTOFF:
18 Q. Do you - okay.
19 THE COURT: So you need - you need to ask questions.
20 BY MR. ZLOTOFF:
21 Q. Do you know why the balance was zero during those three
22 months?
23 A. Yes. There were a couple of reasons. One was that RTC had
24 confiscated funds from that account and -
25 MR. ROSEN: I object and move to strike it. There's
201
1 no evidence that RTC confiscated funds. This is hearsay. The
2 best evidence of whether RTC confiscated funds is a copy of a
3 notice of levy or execution.
4 I - I must continue to insist that Your Honor note
5 that this is nowhere in this record, it's nowhere in the
6 exhibits. It's not before you. And this is just an attempt to
7 try to load up the record with hearsay and to blatantly violate
8 the best evidence rule.
9 MR. ZLOTOFF: Your Honor, it seems to me that these
10 are all matters that Ms. Lucas could be cross-examined on.
11 It's -
12 THE COURT: But she can't - she's testifying as to
13 something that would be a matter of paper record. If she has an
14 independent knowledge that that was done, she can say what was
15 done, if she knows. That's -
16 MR. ZLOTOFF: That's what she's trying to do, Your
17 Honor.
18 THE COURT: Well, - okay.
19 Do you know in fact that that was done?
20 THE WITNESS: Yes.
21 THE COURT: Yeah, you can testify.
22 BY MR. ZLOTOFF:
23 Q. How do you know it was done?
24 A. We received documents to that effect.
25 MR. ROSEN: I move to strike this. Again, if the
202
1 basis of her knowledge is she received some document, where is
2 the document?
3 MR. ZLOTOFF: We don't need - we're not - we - the
4 doc- -
5 THE COURT: Overruled. It's overruled.
6 MR. ZLOTOFF: Okay.
7 BY MR. ZLOTOFF:
8 Q. And -
9 A. Another reason was that my husband had lost his largest
10 client and had little to no income during that period of time.
11 MR. ROSEN: I object, Your Honor, and move to strike
12 it. There was no question before the witness and this is
13 obviously hearsay. She doesn't know anything about her
14 husband's largest client or that he lost it. This is nothing
15 but an attempt to get through this witness' mouth what Mr.
16 Henson would - might testify to if he were not a fugitive.
17 MR. ZLOTOFF: Your Honor, he - she can be
18 cross-examined about this. She - the - she -
19 MR. ROSEN: That's not a - I'm sorry.
20 MR. ZLOTOFF: Your Honor, they were husband and wife.
21 They lived together for - for - I mean maybe he's right, but he
22 can cross-examine her and rip her to shreds, I guess. But it
23 seems to me that it's - most husbands or most wives would know
24 or would likely know what - what kind of business affairs, if
25 any, their spouses are engaged in.
203
1 MR. ROSEN: Your Honor, -
2 THE COURT: You need to be at the microphone, please.
3 MR. ROSEN: Your Honor, the argument that she can be
4 cross-examined on it is a non sequitur. It has nothing to do
5 with the admissibility of evidence. For that matter then
6 everything is in and we don't need this book. We can throw away
7 the Federal Rules of Evidence and just say, okay, cross-examine.
8 That's the first thing.
9 The second thing is, as we established on Friday, this
10 witness and her husband enjoyed a relationship where they didn't
11 even know where each other worked. And I don't care what
12 counsel says from counsel table and testifying as to husband and
13 wife, this is the relationship between Mr. Henson and this
14 woman.
15 THE WITNESS: Your Honor, -
16 THE COURT: Oh, the object- - no, you can't speak.
17 THE WITNESS: All right.
18 THE COURT: The objection's overruled.
19 And there was a question on the table because she was
20 starting to finish her answer that there were two reasons that
21 the balance was zero, and that was the second reason.
22 BY MR. ZLOTOFF:
23 Q. And -
24 MR. ROSEN: And, Your Honor, by the way, I'm sorry,
25 there's a third objection. And it - perhaps it's inherent in
204
1 it. The statement is, "My husband lost his largest client."
2 That's hearsay. There is no foundation. There is no showing
3 that this witness was - has any firsthand knowledge of the
4 largest clear or her husband having lost it.
5 MR. ZLOTOFF: Let me establish -
6 MR. ROSEN: By definition, anything she says on this
7 subject is not of her personal knowledge. It is blatant
8 hearsay.
9 MR. ZLOTOFF: Can I try to establish, Your Honor?
10 THE COURT: Sure.
11 BY MR. ZLOTOFF:
12 Q. Who opened the letters, the bills, the mail most of the time
13 during -
14 A. I did.
15 Q. - your relationship?
16 Was that true during 1998?
17 A. Yes.
18 Q. Who opened, if you recall, any letters containing W-2 forms
19 or 1099 forms?
20 MR. ROSEN: Objection.
21 THE COURT: Overruled.
22 THE WITNESS: I did.
23 BY MR. ZLOTOFF:
24 Q. Did you open - did you happen to open any envelopes
25 containing 1099 forms in which your husband was the - the named
205
1 party?
2 A. Yes.
3 Q. Do you remember how many such forms you opened -
4 MR. ROSEN: Objection.
5 BY MR. ZLOTOFF:
6 Q. - in 1998?
7 THE COURT: Overruled.
8 MR. ROSEN: Irrelevant as to whether she opened it.
9 The - the question is what the documents says. Where is the
10 document?
11 THE COURT: Overruled.
12 THE WITNESS: I believe there were - and you say in
13 1998?
14 BY MR. ZLOTOFF:
15 Q. Yes. This would be for the prior year.
16 A. For 1998, I remember one or two 1099s.
17 Q. And do you remember the - the amounts and the names of the
18 payors, the employers?
19 A. One was Cubic -
20 THE COURT: No. He's saying -
21 MR. ROSEN: Object- -
22 THE COURT: It's a yes or no question.
23 THE WITNESS: Yes.
24 BY MR. ZLOTOFF:
25 Q. And of your recollection, who were they?
206
1 MR. ROSEN: Objection.
2 THE COURT: Sustained.
3 MR. ZLOTOFF: Your Honor, -
4 THE COURT: It's all hearsay. It is hearsay, what she
5 read months ago. If it's offered for the truth and you're
6 offering it for the truth. You're trying to establish what a
7 document you haven't introduced into evidence, which hasn't been
8 authenticated said, that she remembers it said. Even the
9 document would be hearsay unless you authenticated it. And
10 you're trying to go from her recollection of what the document
11 said, so you have two problems.
12 MR. ZLOTOFF: Well, I -
13 THE COURT: The answer - I don't see how it could be -
14 how her testimony about what she read off some document can be
15 relevant for - I mean can be admitted for the truth. That she -
16 that she opened the document? Fine. And it - and if it's only
17 being offered for the truth, then it is irrelevant because it
18 can't be admitted for the truth. The testimony can't be
19 admitted for the truth. The document if properly authenticated
20 could be admitted.
21 MR. ZLOTOFF: Well, could I just respond briefly, Your
22 Honor?
23 I believe that her opening the letter, the envelope in
24 which the 1099 was located is a proper authentication, because
25 it establishes, essentially like a chain of - a chain of
207
1 possession.
2 THE COURT: That may be. I don't need to rule on
3 that.
4 MR. ZLOTOFF: And I also contend that such a document
5 would be - ought to be an exception to the hearsay rule based -
6 THE COURT: We don't have the document. We have her
7 telling what a document she read years ago, in 197- - '98, said.
8 MR. ZLOTOFF: Well, if I may, Your Honor.
9 Well, may I ask her if she remembers the names on the
10 - on the W- - on the 1099s?
11 THE COURT: Yes. You can ask her if she remembers the
12 names.
13 BY MR. ZLOTOFF:
14 Q. Do you remember the names on the 1099s?
15 THE COURT: It's a yes or no question.
16 THE WITNESS: Yes.
17 BY MR. ZLOTOFF:
18 Q. And can you say what those names - who those names were -
19 MR. ROSEN: Objection.
20 THE COURT: Sustained.
21 If offered to prove that those were the names on it,
22 it's hearsay.
23 BY MR. ZLOTOFF:
24 Q. Do you have personal knowledge of which - which client Mr.
25 Henson lost during 1998?
208
1 A. Yes.
2 Q. Who was that?
3 MR. ROSEN: Objection.
4 THE COURT: Sustained. Lack of foundation.
5 MR. ZLOTOFF: Your Honor, she's testified that the -
6 one of the reasons the bank account dwindled was because Mr.
7 Henson was not making money. She may have knowledge with regard
8 to what happened to one of these particular clients.
9 THE COURT: Absolutely.
10 BY MR. ZLOTOFF:
11 Q. Do you have -
12 MR. ZLOTOFF: May I ask her if she had knowledge on
13 her own of what happened, if anything, to one of the clients
14 that Mr. Henson had during 1997?
15 THE COURT: You can ask her, and it will be a yes or
16 no question.
17 THE WITNESS: Yes.
18 THE COURT: But - well, that's not a - I don't think
19 that was the question, Ms. Lucas.
20 THE WITNESS: I'm sorry.
21 THE COURT: Go ahead and ask.
22 MR. ZLOTOFF: Okay.
23 BY MR. ZLOTOFF:
24 Q. On your -
25 THE COURT: But that's - okay.
209
1 BY MR. ZLOTOFF:
2 Q. Of your own knowledge do you know what happened to any of
3 Mr. - any of the clients Mr. Henson had in 1997?
4 A. Yes.
5 Q. Can you tell us what happened?
6 MR. ROSEN: Objection.
7 THE COURT: Sustained. There's lack of foundation for
8 the basis of her knowledge.
9 BY MR. ZLOTOFF:
10 Q. How do you have knowledge of what happened to one of Mr. -
11 one of Mr. Henson's clients that he had during 1997?
12 A. I knew the people who started the company and who worked for
13 it.
14 Q. And what happened to this particular company?
15 MR. ROSEN: Objection, calls for hearsay.
16 THE COURT: Sustained.
17 BY MR. ZLOTOFF:
18 Q. Do you - were you aware of the location of this particular
19 company in 1997?
20 MR. ROSEN: Objection, relevance.
21 THE COURT: Subject to the relevance.
22 THE WITNESS: Yes.
23 BY MR. ZLOTOFF:
24 Q. And did this particular company have the same location in
25 1998?
210
1 MR. ROSEN: The same objection.
2 THE COURT: The same - still subject to relevance -
3 subject to being brought relevant.
4 THE WITNESS: It had no location in 1998.
5 MR. ROSEN: Objection, witness is not competent to
6 testify to that.
7 BY MR. ZLOTOFF:
8 Q. Did - did -
9 THE COURT: There's a lack of foundation.
10 BY MR. ZLOTOFF:
11 Q. Did you know where the location of this particular client
12 was?
13 A. Yes.
14 Q. Did you personally visit this location sometime in 1998?
15 A. Yes.
16 Q. At all points in 1998 was it still at the same location?
17 A. No.
18 Q. To your knowledge was it at any other location?
19 MR. ROSEN: Objection.
20 THE COURT: Overruled. She's testifying as to her
21 knowledge.
22 THE WITNESS: It had no other location, to my
23 knowledge.
24 BY MR. ZLOTOFF:
25 Q. Thank you.
211
1 In - for 1999 did you also most of the time open the
2 letters and envelopes that came to the house?
3 A. Yes.
4 Q. And in 1999 do you recall who opened any envelopes
5 containing 1099s or W-2s?
6 A. Yes, I did.
7 MR. ROSEN: Point of clarification. Is the - is
8 counsel asking the witness if she opened envelopes addressed to
9 Mr. Henson or just herself?
10 BY MR. ZLOTOFF:
11 Q. To - to Mr. Henson.
12 MR. ROSEN: Thank you.
13 THE WITNESS: Yes, to Mr. Henson.
14 BY MR. ZLOTOFF:
15 Q. And do you recall opening any envelopes containing Mr.
16 Henson's 1099 forms?
17 MR. ROSEN: Objection. We're going down the same
18 route, Judge.
19 THE COURT: I don't know if we're going down the same
20 route. If we're going down the same route, we shouldn't do
21 that, Mr. Zlotoff.
22 MR. ZLOTOFF: Well, for the...
23 THE COURT: If you have the 1099, that's a different
24 question.
25 MR. ZLOTOFF: I - I do have I think the 1099.
212
1 Yes, I do.
2 THE COURT: Do you want it marked - or it is marked?
3 MR. ZLOTOFF: It is already marked.
4 MR. ROSEN: So we're - what number is it, may I ask
5 the Court?
6 THE COURT: But let him handle his own examination, if
7 he's going to refer to it. Now I don't know whether he is.
8 MR. ZLOTOFF: Now I'm going to try.
9 BY MR. ZLOTOFF:
10 Q. Do you recall opening in 1999 - do you recall opening
11 envelopes containing any 1099 forms that were Mr. Henson's 1099
12 forms?
13 A. Yes.
14 Q. Do you recall of your own recollection how many envelopes -
15 A. In 1999?
16 Q. This would have been '99 for 1998.
17 A. For 1998. I think there were two.
18 Q. All right. I'm going to refer you to Exhibit J.
19 MR. ROSEN: Your Honor, -
20 THE COURT: Wait a minute. I haven't even gotten to
21 it yet.
22 MR. ZLOTOFF: We've got the document in.
23 THE COURT: And there's no question on the table.
24 There's no basis to object to.
25 MR. ROSEN: With all due respect, I have an objection
213
1 to showing the witness a document. I don't have to wait for a
2 question to object to the witness being - looking at the
3 document.
4 THE COURT: Okay. What's your objection, Mr. Rosen?
5 MR. ROSEN: This is a document Your Honor ruled
6 already in limine on September 11th is not admissible. If the
7 document is not admissible how could you possibly show the
8 document to the witness other than perhaps in a
9 refreshing-recollection mode? But how do you - I don't
10 understand this. Are we now going back and revisiting motions?
11 Mr. - Mr. Zlotoff argued this among his other
12 exhibits. You ruled expressly on September 11th this document
13 is not admissible. Now what's the basis for showing a witness a
14 document that's already been ruled inadmissible.
15 THE COURT: I just want to make sure we're talking
16 about the same thing. We're talking about a 10- - two 1099s
17 from two companies; is that what we're talking about?
18 MR. ZLOTOFF: That's right.
19 MR. ROSEN: He said Exhibit J.
20 THE COURT: No, but it's multipage.
21 MR. ROSEN: And -
22 THE COURT: And he's only talking about one page;
23 that's what I understand.
24 MR. ROSEN: And you ruled it was inadmissible.
25 THE COURT: Okay. But -
214
1 MR. ZLOTOFF: Your Honor, -
2 THE COURT: Go ahead.
3 MR. ZLOTOFF: My recollection is you ruled it was
4 inadmissible hearsay, but I would like the opportunity to try
5 to...
6 MR. ROSEN: Your Honor, as a matter of law there is no
7 way on God's Earth that this witness could overcome hearsay.
8 Mr. Henson, perhaps. The person who issued, the company that
9 issued a 1099, definitely. But there is no way. No one can -
10 you can not even conjure up testimony that could come out of
11 this witness' mouth which would overcome it.
12 And - and, Your Honor, the entirety of the exhibit was
13 moved in limine by us. We moved in limine to exclude the entire
14 Exhibit J, not a page, not two pages, the entirety of it. Your
15 Honor's ruling was Exhibit J, the motion in limine to exclude,
16 it was granted.
17 If Mr. Zlotoff wanted to argue about a particular
18 page, that should have a different ruling than the - the rest of
19 the exhibit, he had an opportunity on September 11th and did
20 not.
21 We have a transcript that says this exhibit is in
22 limine ruled not admissible. Not certain pages are
23 inadmissible, that the exhibit's not admissible.
24 THE COURT: Okay. Let's go back -
25 MR. ZLOTOFF: Your Honor, -
215
1 THE COURT: - a second.
2 MR. ZLOTOFF: Okay.
3 THE COURT: I'm not ruling that there may not be
4 admissible portions of multipaginated documents that I ruled on
5 in limine. I'm certainly not making that ruling now. It may be
6 that none of it is admissible, but I haven't - it was not my
7 intention necessarily to rule that every sentence in every
8 document is inadmissible for every purpose.
9 Having said that, how do you get over the hearsay
10 objection for this?
11 MR. ZLOTOFF: Rule 80324. The document is, I believe,
12 should qualify as an exception because of its trustworthiness.
13 MR. ROSEN: That requires prior notice. None was
14 given.
15 MR. ZLOTOFF: This document was given -
16 MR. ROSEN: Prior not- - Your Honor, 80324 -
17 THE COURT: Mr. - Mr. Rosen, I need to tell you both,
18 you can't just shout out this stuff to me.
19 You've made your statement. I respond. If I want to
20 hear from you, I'll say, "Mr. Rosen."
21 MR. ROSEN: Thank you.
22 THE COURT: Do you have reason to believe that these
23 are incorrect, Mr. Rosen?
24 MR. ROSEN: I have no idea. I have reason to believe
25 that they are incomplete.
216
1 THE COURT: That that - that's not a complete 1099?
2 MR. ROSEN: I have no idea.
3 THE COURT: Okay.
4 MR. ROSEN: This is a man who has destroyed his
5 records.
6 THE COURT: And -
7 MR. ROSEN: And, by the way, just to respond further,
8 there is no 80324.
9 THE COURT: The 80324 that I have - well, let me see.
10 I may have to get some - I may have to get another book from
11 chambers, but...
12 MR. ZLOTOFF: Well, could be.
13 THE COURT: Do you have 80324 handy?
14 MR. ZLOTOFF: Well, yeah, but it's in a 1987 book that
15 I'm looking at, so maybe I'm not as up to date as Mr. -
16 THE COURT: All right. Go off the record a minute.
17 We'll take five minutes.
18 (Recess taken from 11:21 a.m. to 11:36 a.m.)
19 THE COURT: Thank you. Please be seated.
20 Mr. Rosen, do you have any reason to believe that this
21 is not a correct copy of the 1099 that the Hensons received?
22 MR. ROSEN: I believe -
23 THE COURT: Specifically this document.
24 MR. ROSEN: I haven't seen the document so I don't
25 know.
217
1 THE COURT: Have you not provided a copy?
2 MR. ZLOTOFF: Oh, it's in the trial book, Your Honor.
3 As I said, it's J, four pages in -
4 THE COURT: Yeah, it's -
5 MR. ROSEN: It's J?
6 THE COURT: Right. And you objected to it in your
7 motion in limine, so it must have been something that -
8 MR. ROSEN: And you - and you ruled that the entire
9 exhibit was out, now that we've checked the transcript, Judge.
10 MR. ZLOTOFF: Five pages in. I'm sorry.
11 MR. ROSEN: Your Honor, in answer to your question, I
12 have no reason to know except, here is my concern. And to the
13 extent the Rules of Evidence are discretionary, which I don't
14 believe they are, Mr. Henson - of the documents Mr. Henson
15 purposely - admitted destroying, purposely, in the face of not
16 only a discovery request but an order of this Court to - to
17 produce them, are all of the back-up data for his 1998 tax
18 return.
19 In his July 13, 2000 2004 examination Mr. Henson was
20 questioned concerning the back-up, which would include the
21 original records of how much he received from these companies
22 for his 1998 tax return. He testified that he, quote:
23 Suspected that because of his litigation he decided that
24 hassling with the IRS was less trouble, and threw them away.
25 That is Exhibit 27- - our Trial Exhibit 279 at page
218
1 343.
2 These documents, these very documents that back up to
3 his 1998 tax return were ordered produced by these Court - by
4 this Court. We have - we had a document request, two of them,
5 in October of '99 and May of 2000 for, quote, 1998 tax return,
6 including all attachments, W-2s and 1099s, and worksheets used
7 in preparing them.
8 He never complied. He destroyed them, by his own
9 admission. And that deprives me of the opportunity to answer
10 your question as to whether or not these are accurate, because
11 the only way to know whether they're accurate is to compare the
12 document with Mr. Henson's underlying records, which would be
13 checks and bills, et cetera of - of his payments by these
14 companies. And I don't have them because he threw them in the
15 fireplace, Judge.
16 MR. ZLOTOFF: Your Honor, it's not true. I mean if
17 you look at the first page of Exhibit J, in - on November 22nd,
18 1999 they were given copies of these documents.
19 MR. ROSEN: When - excuse me. I'm not talking about -
20 THE COURT: Wait. Mr. Rosen, please. Let him finish.
21 He let you finish, -
22 MR. ROSEN: Sure.
23 THE COURT: - now let him finish -
24 MR. ROSEN: I thought he was done. I thought he was
25 done, Your Honor.
219
1 THE COURT: Yeah. He said he's had copies of them,
2 Mr. Zlotoff.
3 Let's go back. The -
4 MR. ROSEN: But, Your Honor, that's wrong.
5 THE COURT: But wait a minute. Be quiet, please, Mr.
6 Rosen.
7 The - the 1099 is a business record, but there isn't
8 any foundation for it. And if you had a witness - you don't
9 need to provide every check he ever got, it seems to me. You
10 need to have somebody from Cubic Industries - Enterprises or
11 MediaGate come in and testify that this is a business record and
12 they indeed issued this 1099 to Mr. Henson. You don't have that
13 person here, and so the document can't be admitted without that
14 person here.
15 If - if - frankly if you can obtain such a witness,
16 then I would consider it. But at this point it's excluded.
17 MR. ZLOTOFF: All right, Your Honor.
18 BY MR. ZLOTOFF:
19 Q. Ms. Lucas, can you describe the house that you - you reside
20 in on College Avenue in Palo Alto?
21 A. It was - it's about 64 years old. It is about a thousand
22 square feet. It's a half-size corner lot. It's stucco
23 construction, single-family dwelling. I - I don't know what
24 kind of further description is required.
25 Q. Is it up to code in all respects?
220
1 THE COURT: Is it what?
2 THE WITNESS: No.
3 THE COURT: I didn't hear you.
4 BY MR. ZLOTOFF:
5 Q. Is it up to code in all respects?
6 MR. ROSEN: Objection. That calls for a legal
7 conclusion, doesn't it?
8 THE COURT: Sustained.
9 BY MR. ZLOTOFF:
10 Q. Are there anything that you are aware of that's wrong with
11 the house?
12 A. Yes.
13 Q. Can you name the things that are wrong with the house?
14 MR. ROSEN: Your Honor, may I - may I interpose an
15 objection to this line on relevance? What is the relevance of
16 this whole line to the issue of a motion to dismiss under 1307?
17 This may very well be relevant to a motion on sale of
18 the house or appraisal value, but what does it have to do with
19 today's case?
20 THE COURT: Well, we're talking about confirmation of
21 the plan.
22 MR. ROSEN: Well, how - how does this have anything to
23 do with confirmation?
24 THE COURT: I don't know. I don't know if it does
25 yet.
221
1 MR. ZLOTOFF: Well, -
2 THE COURT: But I don't want you to exclude the issue
3 - the other issue that we're trying.
4 MR. ROSEN: I apologize. We are trying two issues,
5 and I - for the life of me, I can't see how this is relevant to
6 either of the two.
7 It may very well be relevant to the issue of the - of
8 the motion by the debtor to sell - for an order allowing the
9 sale of the house and its appraised value, or whatever. But it
10 has nothing to do with the two issues that we're trying.
11 MR. ZLOTOFF: Well, my - my feeling of it is that it
12 was relevant because Mr. Rosen was painting a picture of the
13 debtor as someone who had the means, the wherewithal to satisfy
14 any judgment of the RTC. And I'm trying to portray his
15 circumstance, and part of the circumstance would be the house
16 that he lived in. I'm trying to show that - or trying to
17 describe whether it was a small house or a mansion, essentially.
18 THE COURT: Yeah, the objection's overruled. She can
19 testify about the house.
20 THE WITNESS: So the question is what's wrong with it?
21 BY MR. ZLOTOFF:
22 Q. Well, any - are there any major defects to the house that
23 you know of, of your own knowledge?
24 MR. ROSEN: Is the question directed as of today?
25 MR. ZLOTOFF: No. As of - I'm sorry -
222
1 MR. ROSEN: Or as of 1998?
2 MR. ZLOTOFF: As of 1998, early 1998.
3 MR. ROSEN: February of '98?
4 MR. ZLOTOFF: Yes.
5 MR. ROSEN: Thank you.
6 THE WITNESS: There was - there is a back room and a
7 renovation of the garage that was not - there is no permit that
8 I have been able to find.
9 And the - all of the agents and appraisers with whom I
10 have talked have told me that there is -
11 MR. ROSEN: Objection, move to strike what they have
12 told her.
13 THE COURT: Sustained.
14 BY MR. ZLOTOFF:
15 Q. Can you -
16 MR. ROSEN: I also move to strike the statement about
17 she hasn't been able to find a permit. That's an issue of law
18 as to whether a permit is even required.
19 THE COURT: Overruled. She said that she hasn't been
20 able to find a permit. It doesn't -
21 MR. ROSEN: Well, -
22 THE COURT: - mean that a permit is required or isn't
23 required.
24 MR. ROSEN: Well, then it's irrelevant, isn't - Your
25 Honor. There's nothing in this record as to whether a permit is
223
1 or is not required, then the statement she hasn't been able to
2 find a permit is a total non sequitur. It has no relevance to
3 the - to this case.
4 BY MR. ZLOTOFF:
5 Q. Do -
6 MR. ZLOTOFF: Your Honor, I would say that it's
7 probably common knowledge that if - if you have to build a
8 structure on a lot in the city, that you're going to need a
9 permit. But I can ask her, if you want.
10 THE COURT: I'll - the objection's overruled.
11 MR. ZLOTOFF: All right.
12 BY MR. ZLOTOFF:
13 Q. Can you describe the household goods and the interior of the
14 house?
15 MR. ROSEN: As of - Your Honor, again may I ask -
16 BY MR. ZLOTOFF:
17 Q. As of 1998.
18 MR. ROSEN: As of February of '98?
19 MR. ZLOTOFF: Right.
20 THE COURT: Okay. Let's make the clear that I haven't
21 ruled on the effect- - on the date for valuation of the house
22 for this plan under these circumstances. So I haven't ruled
23 that it's on the date of the petition. I haven't ruled it would
24 be the date of confirmation. I have not ruled on that issue.
25 MR. ZLOTOFF: I understand. We've stipulated to
224
1 value, so it's - that's not - I'm not going to there - to that
2 issue at all.
3 THE COURT: Yes, you may answer.
4 THE WITNESS: There was used furniture, furniture that
5 we had constructed ourselves. There was - there was a mixture
6 of belongings, belonging to our daughter, belonging to me
7 personally, belonging to Mr. Henson. And some things like some
8 of the furniture that we jointly furnished - jointly paid for,
9 such as the bed, -
10 BY MR. ZLOTOFF:
11 Q. Of the furniture that was purchased, how - how old or how
12 long prior to 1998 had it been purchased?
13 A. We purchased the bed in different components. We purchased
14 the mattress and box spring in '96 or '97, early '97. All of
15 the other items were purchased secondhand, before we moved into
16 that house or they were constructed by us second - by giving -
17 by kits before we moved in.
18 I don't remember any item being purchased after we
19 moved into that house except the mattress and box spring.
20 Q. Can you give - as of that date, in 1998, can you give an
21 estimate of value of household goods owned by yourself and your
22 husband? And this would be, let's say, at a garage-sale type
23 value.
24 MR. ROSEN: Objection.
25 THE COURT: Basis?
225
1 MR. ROSEN: Relevance, garage sale, number one.
2 Number two, witness incompetent to provide any
3 testimony as to her view of the value of property of personlty
4 as of 1998.
5 And, finally, if Your Honor is going to allow this,
6 the witness has already testified that the contents of the house
7 include property which are four different characters: Her
8 personal property - her separate property, Mr. Henson's separate
9 property, their joint property, and her daughter's property.
10 So the answer is - assuming - if Your Honor is going
11 to overrule my - my first two grounds for objection, I would ask
12 that the question be rephrased to specify what property it is,
13 what personal property it is that counsel is eliciting an
14 opinion on as to value.
15 MR. ZLOTOFF: All right. Let me just modify the
16 question then slightly.
17 BY MR. ZLOTOFF:
18 Q. I'm referring now to property owned either by Mr. Henson or
19 jointly by you and Mr. Henson.
20 MR. ROSEN: Objection. No foundation to know what Mr.
21 Henson owns, even in the house.
22 And I repeat my other two objections: Garage sale is
23 not a standard nor is this witness shown to have any basis to be
24 able to estimate what the value of property is.
25 MR. ZLOTOFF: Your Honor, she's an owner. And she's
226
1 competent obviously to know what's hers versus what's her
2 husband's. No, I don't think it needs any special expertise to
3 know what the garage-sale value of furniture is.
4 MR. ROSEN: Your Honor, counsel misunderstands my
5 objection.
6 THE COURT: I understand. His objection is that the
7 garage-sale value is not a value for any legal purpose.
8 Now you may be able to argue that that's the value
9 that should be used, but that's not the standard under any legal
10 test.
11 MR. ZLOTOFF: I would argue that it is, though, Your
12 Honor. I mean that's -
13 THE COURT: So that's the value you're interested in
14 obtaining?
15 MR. ZLOTOFF: Yes. I mean that is -
16 THE COURT: The objection - the other objection -
17 MR. ZLOTOFF: - for bankruptcy purposes.
18 THE COURT: The other objections are overruled.
19 THE WITNESS: I would estimate that his belongings and
20 the belongings that we held jointly might have fetched 500, most
21 of that being for the bed.
22 MR. ROSEN: I didn't hear the answer. Your Honor, may
23 I have the court reporter read back the answer, please?
24 THE COURT: Sure.
25 THE REPORTER: Do you want me to go back?
227
1 THE COURT: Yes, please. Just her last answer.
2 MR. ROSEN: I don't need the question. I just need
3 the answer.
4 THE COURT: Well, you can do the question, too. It
5 will probably be easier.
6 (Pause in the proceedings.)
7 MR. ROSEN: Your Honor, in view of this technology
8 would it be easier to just ask the witness to repeat it?
9 Meaning no disrespect to the court reporter. Would it be
10 quicker?
11 (Comments out of range of microphone pick-up.)
12 (Record playing.)
13 THE COURT: It's a little further, LaKeska.
14 (Record playing.)
15 THE COURT: Turn the sound up, somebody.
16 (Record playing.)
17 THE COURT: This is where it's going to go.)
18 (Record playing.)
19 THE COURT: Turn it up.
20 (Record played: "THE WITNESS: I would estimate that his
21 belongings and the belongings that we held jointly might have
22 fetched 500, most of that being for the bed.")
23 THE COURT: That's fine, LaKeska. That's it.
24 MR. ROSEN: I still didn't get it, 500 most except for
25 the bed?
228
1 MS. KOBRIN: Most of that before the bed.
2 THE COURT: It would fetch $500, most of that would be
3 for the bed.
4 MR. ROSEN: Oh, I - okay. Five hundred -
5 (Comments off the record.)
6 THE COURT: No, it's fine. He's - that's all we need.
7 Thank you very much.
8 MR. ROSEN: Your Honor, may I ask? I have a problem
9 in the sense that I do have a certain difficulty with hearing -
10 THE COURT: Yeah, we're not on the record. I'll let
11 you say it on the record.
12 MR. ROSEN: Is - okay. I have a problem, and as Your
13 Honor may have observed, in terms of hearing in my right ear.
14 If - if we can ask the witness to just keep her voice up, that
15 would alleviate, you know, the need to - for me to ask for
16 question or answer read back?
17 THE COURT: Yeah, to the extent that you can talk a
18 little louder that would be fine. Thank you.
19 BY MR. ZLOTOFF:
20 Q. Ms. Lucas, were you aware of any books owned by Your Honor
21 in or about 1998, located in the residence?
22 A. Yes.
23 Q. And can you - can you give an opinion of value as to the
24 books?
25 MR. ROSEN: Objection. Not only is this improper, not
229
1 only is there no basis for asking this witness what her
2 valuation is of the books, but the worst part of this is, this
3 is an attempt to impeach the sworn schedule signed by Mr. Henson
4 and filed with this Court.
5 He has listed his books specifically on the schedule,
6 which is - which is Debtor's Exhibit A, and he has placed a
7 value on these books. And now counsel is going to elicit from
8 this witness to a different number to contradict a sworn
9 statement in - in his bankruptcy schedule? I just don't get it,
10 Judge. I'm sorry.
11 MR. ZLOTOFF: Your Honor, the - one of the tests with
12 regard to dismissal is whether there has been proper disclosure
13 on the schedules. We went down this road before and the easy
14 way, I thought, was to have her look at the schedules and say
15 was accurate, it wasn't accurate.
16 Mr. Rosen decided we shouldn't go down the road, and
17 so I had her close up her book, and now we're doing it the hard
18 way. I mean I'm happy to go back and do it the easy way, but
19 then I'm going to run into a road block there, too. So it seems
20 to me that this would be an appropriate line of questioning -
21 not my - not by my desire, but by necessity I think.
22 MR. ROSEN: Your Honor, counsel misunderstands my
23 position. Let me make it clear. I have a sworn statement filed
24 in this court. It is part of Exhibit A. It is titled,
25 "Schedule B, Personal Property." It is filed out in the
230
1 debtor's own hand. It is signed by the debtor. It lists his
2 personal property and it lists the value under the last column,
3 "Current Market Value of Debtor's Property," not garage-sale
4 value, current market value. That's the what the form calls
5 for.
6 The debtor has a specific listing of his books. That
7 is estoppel. There is no way that this Court could find, based
8 on the preferred testimony of this witness, that the value of
9 these books are any more or less than what the debtor said.
10 This is estoppel. You cannot contradict this document
11 with the testimony of the woman who comes in now, 'Let me tell
12 you, my husband was wrong. The books are only worth 50 bucks or
13 a hundred dollars.'
14 THE COURT: Overruled. The objection's overruled.
15 MR. ROSEN: May I have a basis for the ruling of
16 impeaching the schedule?
17 MR. ZLOTOFF: Well, you know if Mr. Rosen wants the
18 schedules to come in for the truth of the matter asserted,
19 that's fine.
20 THE COURT: That's - he's not - you don't need to
21 respond to that.
22 If there's - there's an independent person who's
23 presenting a value as to an item in the schedules. And the
24 objection's overruled.
25 MR. ROSEN: Can we have a basis for her valuation
231
1 opinion? Does she have - does she have a list of the books?
2 Has she any expertise in valuing books?
3 THE COURT: Do you want to establish -
4 BY MR. ZLOTOFF:
5 Q. Do you -
6 THE COURT: - any further basis?
7 MR. ZLOTOFF: All right.
8 BY MR. ZLOTOFF:
9 Q. Do you - what's your occupation, Ms. Lucas?
10 A. I'm an archivist.
11 Q. Do you have occasion to be around books?
12 A. Yes.
13 Q. Used books?
14 A. Yes.
15 Q. Do you on occasion buy used books?
16 A. Not currently.
17 Q. Do you have occasion to know values of used books?
18 MR. ROSEN: All used books?
19 THE COURT: Wait. Mr. Rosen, you cannot -
20 MR. ROSEN: Objection.
21 THE COURT: You can cross. You cannot interrupt like
22 that.
23 MR. ROSEN: Objection. All used - is it -
24 THE COURT: He's not finished.
25 MR. ROSEN: Yes, he did. He -
232
1 THE COURT: I don't know whether he has or not. Let's
2 see.
3 Are you finished? Do you have something else to ask?
4 MR. ZLOTOFF: I thought there was a question on the
5 table, but -
6 THE COURT: No. Do you have a -
7 BY MR. ZLOTOFF:
8 Q. Have you - have you had the occasion to go to book sales?
9 MR. ROSEN: Objection.
10 THE COURT: Overruled.
11 THE WITNESS: Yes, I have.
12 BY MR. ZLOTOFF:
13 Q. Do you have an opinion of - do you think you are competent
14 to give an opinion of the value of Mr. Henson's books?
15 MR. ROSEN: Objection. Expert testimony, the witness
16 is not designated as an expert. Under the Federal Rules -
17 THE COURT: She's not testifying as an expert, but the
18 objection is sustained if this is offered as expert testimony.
19 She's just testifying as his wife.
20 I don't have any problem with letting her testify as
21 to the value of the books, Mr. Zlotoff.
22 MR. ZLOTOFF: All right. I think there's a question
23 on the table then. I would - could -
24 THE COURT: I don't remember the question.
25 MR. ZLOTOFF: I don't either, but -
233
1 THE COURT: What's the - what's the question?
2 BY MR. ZLOTOFF:
3 Q. Are there any antique books or rather books, books of, you
4 know, obvious value beyond just used-book type value?
5 MR. ROSEN: Objection. How could a witness possibly
6 testifying without even identifying the books whether there are
7 any books of value. With all due respect, I would value Mr. -
8 Mr. Zlotoff's copy of the Federal Rules of 1987. I don't have a
9 copy from that year.
10 THE COURT: Overruled.
11 THE WITNESS: I did not see anything that I would
12 consider to be rare enough to fetch a large price.
13 MR. ROSEN: Objection, move to strike.
14 THE COURT: Overruled.
15 MR. ROSEN: That's expert testimony as to whether in
16 her opinion anything would be rare or would fetch a, quote,
17 large price. That is clear expert testimony.
18 THE COURT: Overruled.
19 BY MR. ZLOTOFF:
20 Q. Can you - can you give us a value then of Mr. Henson's books
21 at or about 1998?
22 A. I suppose 4- or 500 under the best conditions.
23 Q. Can you describe for us as of 1998 Mr. Henson's wearing
24 apparel?
25 A. He had a couple of old suits. One that he had since before
234
1 we were married -
2 MR. ROSEN: Objection, move to -
3 THE COURT: Overruled.
4 MR. ROSEN: May I have a foun- -
5 THE COURT: He had a couple of old suits, one which he
6 had before they were married, overruled.
7 THE WITNESS: He had slacks, a couple of blazers. His
8 clothing was except for the suits secondhand. I went shopping
9 with him at Goodwill and other places, and he brought back
10 clothing from places when I wasn't with him that still had the
11 tags on them.
12 MR. ROSEN: Objection. That's hearsay.
13 THE COURT: Did you see the tags?
14 THE WITNESS: Yes.
15 THE COURT: Overruled.
16 THE WITNESS: I cut them off -
17 MR. ROSEN: Tags are self-authenticating documents,
18 Your Honor?
19 THE COURT: Pardon me? What did you say?
20 THE WITNESS: I cut the tags off myself.
21 THE COURT: Overruled.
22 BY MR. ZLOTOFF:
23 Q. Ms. Lucas, can you tell us about an insurance policy through
24 Continental General Insurance Company?
25 A. Yes.
235
1 Q. Did you have such an insurance policy?
2 A. Yes.
3 Q. Did your husband?
4 MR. ROSEN: Objection.
5 BY MR. ZLOTOFF:
6 Q. Did -
7 THE COURT: A foundational problem.
8 BY MR. ZLOTOFF:
9 Q. When did you buy your insurance?
10 A. It was a joint policy. And, as I remember, we bought it in
11 about 1983, '84.
12 MR. ROSEN: Your Honor, I move to strike. Best
13 evidence rule. It's a joint policy. Let's see this joint
14 policy.
15 THE COURT: Overruled.
16 BY MR. ZLOTOFF:
17 Q. When you say it was a joint policy, what do you mean by
18 joint policy?
19 A. It covers both of us.
20 MR. ROSEN: A s- -
21 BY MR. ZLOTOFF:
22 Q. What -
23 MR. ROSEN: I'm sorry, Your Honor.
24 BY MR. ZLOTOFF:
25 Q. Does that mean there - were there two premiums or one
236
1 premium?
2 A. One premium.
3 Q. Was - what was the purpose of this insurance?
4 MR. ROSEN: Objection.
5 MR. ZLOTOFF: What's the reas- -
6 THE COURT: Basis, what's the basis of the objection?
7 MR. ROSEN: What is the relevance of the purpose of
8 insurance, of a life insurance policy; and to the extent counsel
9 is asking this witness what Mr. Henson's purpose was, again we
10 are in hearsay, mind-reading, and a blatant attempt to avoid the
11 obvious, which is Mr. Henson's a fugitive.
12 THE COURT: The objection's overruled except insofar
13 as it asks what Mr. Henson's purpose was. And there's no
14 foundation for her answering what his purpose is or was.
15 MR. ZLOTOFF: Right.
16 BY MR. ZLOTOFF:
17 Q. What was your purpose in buying the insurance?
18 A. It was to insure our cryonic suspension at our deaths.
19 THE COURT: I'm sorry. What did you just say?
20 THE WITNESS: It was to insure our cryonic suspension
21 at our deaths. It - we regarded it as burial insurance because
22 it takes care of our complete remains.
23 BY MR. ZLOTOFF:
24 Q. And how - how would the insurance accomplish that, to your
25 knowledge?
237
1 A. We gave it to the Alcor Life Extension Foundation. We
2 assigned it completely to them. It was a gift -
3 MR. ROSEN: Objection, move to strike the "we." If
4 she - if Your Honor sees some relevance in what she did, fine.
5 To the extent she's testifying about what Mr. Henson does or
6 would he, quote, gave, it is improper.
7 MR. ZLOTOFF: It's not, Your Honor. It's not hearsay.
8 It's an act. It's a verbal act. He gave -
9 MR. ROSEN: No, -
10 MR. ZLOTOFF: It's just like a part of a contract.
11 THE COURT: Both did it.
12 MR. ZLOTOFF: They both did it.
13 THE COURT: It's something that they both did.
14 MR. ZLOTOFF: Right.
15 MR. ROSEN: And - and your -
16 THE COURT: Wait a second. Wait a second.
17 Can you just say what you did again?
18 THE WITNESS: We gifted the policy to the Life
19 Extension Foundation.
20 THE COURT: And is that - was that done in writing?
21 THE WITNESS: Yes.
22 MR. ROSEN: Objection, best evidence rule.
23 Can we see the writing, Your Honor?
24 THE COURT: Go ahead, Mr. Zlotoff.
25 MR. ZLOTOFF: Well, Your Honor, I'm sorry. What was -
238
1 what did you say, Your Honor?
2 THE COURT: He objected because you haven't yet
3 introduced the document underlying the gifting.
4 MR. ZLOTOFF: All right. Let me come back to that,
5 Your Honor, if I may.
6 MR. ROSEN: Do you need some help with the number?
7 MR. ZLOTOFF: No, I know the - I know the number. I'm
8 just see whether it's...
9 BY MR. ZLOTOFF:
10 Q. I think my question was how was the insurance going to
11 accomplish what you wanted with regard to taking care of your
12 remains?
13 How was it going to work, in other words, that it
14 would see your purpose to its end?
15 MR. ROSEN: Objection. The best evidence is the
16 document signed with Alcor.
17 THE COURT: Overruled.
18 THE WITNESS: It's a common way that people fund
19 cryonic suspension, that the payments are made into a life
20 insurance policy. And on the patient's death, the money goes to
21 the Alcor Life Extension Foundation to pay for suspension and
22 care until such hypothetical time as the person could be revived
23 using future medical science.
24 MR. ROSEN: Move to strike it. This is all hearsay.
25 There are no documents. And the witness' testimony as to this
239
1 is, quote, a common thing to do, no basis for this.
2 THE COURT: Overruled.
3 BY MR. ZLOTOFF:
4 Q. Was it your understanding that there was a cash value built
5 up in the life insurance?
6 MR. ROSEN: Objection. What she understands or not is
7 irrelevant.
8 MR. ZLOTOFF: All right.
9 BY MR. ZLOTOFF:
10 Q. Could you turn to 191, Exhibit 191, please.
11 THE COURT: 191, they're in the black books. It would
12 be Volume III.
13 BY MR. ZLOTOFF:
14 Q. Do you have it?
15 A. Yes.
16 Q. Can you identify the documents there?
17 A. I see a letter dated September 22nd, 2000 to Mr. Hogan from
18 a corporate services analyst of Continental General.
19 Q. All right. If you turn in - actually just two pages down, I
20 think you can start seeing a - the series of computer printouts?
21 A. Yes.
22 Q. And can you see on the far right?
23 A. Yes.
24 Q. A column entitled, "Cash Surrender Value"?
25 A. Yes.
240
1 Q. And if you flip through the various reports, I think they go
2 chronologically from earliest to latest the more you flip.
3 Do you see that?
4 A. Yes.
5 Q. And can you - can you get to the last of that computer
6 printout?
7 A. Yes.
8 Q. And do you find a cash value there?
9 THE COURT: I'm sorry. What page are you on, Mr.
10 Zlotoff?
11 How do I find that? From -
12 MR. ZLOTOFF: It would be -
13 THE COURT: - the top? I mean going from the back or
14 from the front?
15 MR. ZLOTOFF: Yeah. It would be, it looks like two
16 pages in from a document called "Life Insurance Policy."
17 THE COURT: But I don't know where that is.
18 MR. ZLOTOFF: Oh, okay.
19 THE COURT: Do you want to take my book and find it?
20 MR. ZLOTOFF: All right.
21 THE WITNESS: Are you referring to the date 2000 or to
22 an earlier date?
23 MR. ZLOTOFF: Right before that.
24 THE COURT: Just give it to him.
25 THE WITNESS: '98?
241
1 MR. ZLOTOFF: '99. Year ending, October 22nd, 1999.
2 THE WITNESS: '99.
3 BY MR. ZLOTOFF:
4 Q. You see the document I'm talking about?
5 A. Yes. October 22nd, 1999, the Summary for Year Ending?
6 Q. Right.
7 And as of that date what is the cash surrender value?
8 MR. ROSEN: Objection. What is the point of having a
9 witness read a document that's in evidence?
10 THE COURT: Has this document been admitted?
11 MR. ZLOTOFF: Yes.
12 THE COURT: Right. So then it's admitted for all
13 purposes, including the cash surrender value.
14 MR. ZLOTOFF: Right.
15 BY MR. ZLOTOFF:
16 Q. Am I correct in reading it as 7,802.14 as of the last date
17 entered?
18 A. I see that, yes.
19 Q. And that - does that accord with your recollection as the
20 approximately cash value as of that time?
21 MR. ROSEN: Objection. This is not recollection. The
22 witness - it's a reading test. Why doesn't counsel ask the
23 witness the question before he showed her the document if there
24 was some reason to establish her independent knowledge of it?
25 THE COURT: As of yesterday none of the exhibits were
242
1 admitted, so it's not in evidence.
2 MR. ROSEN: I moved them in evidence and there was no
3 objection. So can Your Honor say admitted?
4 THE COURT: No. There was - there was a reservation
5 of objections -
6 MR. ROSEN: I'm sorry. Let me address that. During -
7 THE COURT: I - I don't want you to address it now. I
8 want to do the - this, but there's nothing in evidence at this
9 point.
10 MR. ROSEN: All right. Well, let me -
11 THE COURT: Sit down, please.
12 MR. ROSEN: Can I address the Court for a moment?
13 Sure, I'll sit down.
14 On Friday Mr. Zlotoff identified certain documents as
15 to which he had relevance objections. On Friday after court Mr.
16 Zlotoff and I agreed that he would go through and see if there
17 were any other ones that he didn't identify on Friday as to
18 which he has relevance objections.
19 Mr. Zlotoff then faxed to us a list of those documents
20 - of those exhibits to which he had relevance objections. And
21 Your Honor will recall, this is the only objection, relevance.
22 And he was good enough to fax that to our hotel on Sunday
23 afternoon.
24 We have that list. It is part of a memorandum I'd
25 like to hand up. This document is not on it.
243
1 I moved for the introduction of all the documents I
2 offered on Friday.
3 THE COURT: Well, why didn't you do that as
4 preliminary matter rather than in the middle of his examination
5 of a witness?
6 MR. ROSEN: Because you just raised it, Judge. I
7 thought that you were receiving documents subject -
8 THE COURT: But how would I know what you had done on
9 Sunday -
10 MR. ROSEN: No, I'm sorry. I thought - not that you
11 knew what happened on Sunday. I thought you had received the
12 documents subject to any relevance objections he has.
13 If I may hand up now, Your Honor. This is a memo -
14 the memo you asked for on ready of relevance in, quote,
15 connecting the dots. And you'll see Exhibit 2 - excuse me -
16 page 2 at the bottom is a list of the exhibits to which Mr. -
17 Mr. Zlotoff has objected on grounds of relevance.
18 I should take a moment to point out what this is.
19 You had asked on Friday that we connect the dots, so
20 to speak, in terms of what exhibits go with which. We've done
21 that. We've not only done it but we've demonstrated the
22 relevance or at least argued relevance.
23 And to make it easier for Your Honor, we have attached
24 to the back of it what is essentially a table of contents. May
25 I hand it up?
244
1 THE COURT: Have you filed this?
2 MR. ROSEN: No. We have - we're going to file it if
3 you want us to in the Clerk's Office, but what we did is this.
4 Just so Your Honor understands it, to make it easier for you.
5 This is like one would have a table of authorities. For every
6 exhibit we identify the page of the brief, of the memorandum on
7 which we - we have addressed that exhibit and described it. And
8 therefore Your Honor will know by going through this the
9 relevance of each exhibits.
10 We obviously have text within the memorandum
11 explaining the - the reason for the exhibits.
12 The only exhibits that are - we've left off here, and
13 you'll see some notations on the list at the back, "No reason to
14 address here," either - and that's either because the document
15 is obvious, what the relevance is. Like, for example, the
16 bankruptcy petition. Or because there is no objection to it and
17 there's no reason to be - and there's no reason to be addressing
18 it. Or that it's already been addressed by Your Honor last
19 Friday.
20 So these are Mr. - if you look at page 2, the
21 footnote, these are Mr. Zlotoff's relevance objections.
22 We move for the introduction of all of the exhibits we
23 tendered last Friday, including those as to which he's objected.
24 He's provided no grounds other relevance. We made it clear on
25 the record, you did, that the only ground - or he did that the
245
1 only ground was relevance. And we've - and we've shown the
2 relevance.
3 More importantly to the issue at hand, this is not a
4 document, 1- - Exhibit 190 even - that he even objected to.
5 THE COURT: Is - Mr. Zlotoff, it's hard to put all
6 this together because there were arguments about specific
7 documents that I excluded.
8 And I don't know how good the minutes are about the
9 exclusion, Tanya. Were doc- - were they written, did she write
10 down which documents were excluded for a particular reason?
11 (Creditor's counsel confer off record.)
12 THE CLERK: I don't have the minutes from Friday.
13 THE COURT: I can't hear you.
14 THE COURT: I don't have the minutes from Friday in
15 here.
16 THE COURT: Okay. So we'll have to deal that once my
17 Deputy has the minutes.
18 In terms of the exhibits we didn't discuss, and I -
19 it's going to be hard for me to make a ruling now until I have
20 the minutes, are you objecting only, Mr. Zlotoff, on relevance
21 ground to the exhibits in footnote 1 of a document - on page 2
22 of a document called "RTC's Memorandum Re Relevance" that has
23 not yet been filed but will be filed during the lunch hour?
24 MR. ROSEN: Yes.
25 MR. ZLOTOFF: Let me just make sure I understand. Mr.
246
1 Rosen is representing that what is reproduced here on the back
2 of his brief is what I -
3 THE COURT: You're referring to -
4 MR. ZLOTOFF: - what I faxed -
5 THE COURT: - to the chart at the back of the brief?
6 MR. ROSEN: No.
7 MR. ZLOTOFF: - is - is what I faxed to him?
8 MR. ROSEN: If I may - may I just show, Mr. Zlotoff,
9 Your Honor?
10 THE COURT: Yeah.
11 Let's go off the record, and you show him. Go off the
12 record, please.
13 (Off the record from 12:17 p.m. to 12:18 p.m.)
14 MR. ZLOTOFF: His footnote accurately represents those
15 items that I faxed to him expressing my objection regarding
16 relevancy. Yeah, that's it. Those are the only objections to
17 anything.
18 THE COURT: Okay. But there were certain exhibits -
19 MR. ZLOTOFF: Yes.
20 THE COURT: - that we discussed yesterday that I did
21 not let in subject to various problems.
22 MR. ZLOTOFF: Right.
23 MS. KOBRIN: Your Honor, there were two.
24 THE COURT: Okay.
25 MS. KOBRIN: I'll tell you which ones they were.
247
1 THE COURT: Mr. Zlotoff, do you have notes of that as
2 well?
3 MR. ZLOTOFF: Yes, I do.
4 MS. KOBRIN: It's Number 87.
5 MR. ZLOTOFF: That's correct.
6 MS. KOBRIN: And -
7 MR. ZLOTOFF: 110 was -
8 MS. KOBRIN: - 185.
9 MR. ZLOTOFF: 110 was withdrawn.
10 MS. KOBRIN: A few were withdrawn, but the two that
11 you excluded were 187 and 185.
12 THE COURT: Okay. And when you say were withdrawn,
13 was the withdrawal subsequent to the withdrawal in the book?
14 MS. KOBRIN: Yes, but we withdrew at the hearing -
15 THE COURT: Okay. Can you tell me - give me a list of
16 the ones that were withdrawn?
17 MS. KOBRIN: Yes. 110, 212, 214, 244, and I believe
18 that's it.
19 THE COURT: Okay.
20 MR. ZLOTOFF: That's what my notes show.
21 THE COURT: Okay. So subject to my checking the Court
22 minutes, double-checking them if there's - my understanding is
23 that we are not admitting at this time all of the exhibits
24 listed on Mr. Zlotoff's list, which now appears as footnote 2 to
25 the RTC's brief, which they will file today at lunch time,
248
1 "Memorandum Re Relevance." We're not admitting 110, 212, 214,
2 or 244. That's 110, 212, 214, and 244. We're not admitting 87
3 and 185. And the RTC has moved in all of its - all of the other
4 exhibits in its binders.
5 Do you have any objection to any of the other exhibits
6 in the RTC binders?
7 MR. ZLOTOFF: No.
8 THE COURT: They are all now hereby admitted.
9 (All Creditor's Exhibits submitted to the Court for
10 admission during day 1 of the trial except for 87, 110, 185,
11 212, 214, and 244 were received in evidence.)
12 MR. ROSEN: Thank you.
13 THE COURT: Now that includes 193.
14 MR. ROSEN: I believe it's 191 which you're on now,
15 Your Honor. Is that - are you referring to the policy? There
16 is 193.
17 THE COURT: Oh, I see. That's confusing. I looked at
18 194 in front of it, and moved back.
19 MR. ROSEN: Right.
20 THE COURT: So - okay. So that - that includes 191,
21 because it's not on this likes -
22 MR. ROSEN: Correct.
23 THE COURT: - and it wasn't otherwise named. So 191
24 is in evidence.
25 And it's true that you don't need to ask her about
249
1 things in - if the information's in evidence except if you need
2 some kind of clarification.
3 MR. ZLOTOFF: All right. Just one more question then
4 on it.
5 BY MR. ZLOTOFF:
6 Q. The last - the next-to-the-last page of the exhibit, if
7 you'd look at that, please.
8 Do you have that - can you identify that document?
9 A. It says, "Request for transfer of ownership or designation
10 of contingent owner."
11 Q. And what did that - what was the purpose of that document?
12 MR. ROSEN: Objection. She didn't even sign the
13 document. How could she possibly testify as to the purpose of a
14 document that her name does not appear on and she didn't sign?
15 BY MR. ZLOTOFF:
16 Q. Was this document a part of all of the other documents that
17 you and your husband looked at and reviewed?
18 MR. ROSEN: Objection. What difference does it make
19 if her husband showed it to her? I just - I apologize, Your
20 Honor. It's very frustrating. I'm used to dealing with the
21 Federal Rules of Evidence.
22 THE COURT: Well, how do you deal with the objections?
23 At the time of the transfer -
24 MR. ZLOTOFF: All right.
25 THE COURT: - did you agree that her husband could
250
1 review - that your husband could sign this?
2 THE WITNESS: Yes.
3 THE COURT: And was he, as far as you were concerned,
4 signing for both of you?
5 THE WITNESS: We - as I remember, we each had to sign
6 a separate document, but they were the same document.
7 MR. ROSEN: Your Honor, if I may, this underscores my
8 objection. This - this exhibit, this insurance policy is not a
9 joint insurance policy. This is not a joint insurance policy
10 that it was - that covered both husband and wife. On the face
11 of it, the owner of this policy is Mr. Henson. And the
12 transfer, which the wit- - the page, the next-to-the-last page
13 of the exhibit, which Mr. Zlotoff just directed our collective
14 attention to, is a designation, transfer of ownership, of a
15 policy which is owned by Howard Keith Henson.
16 And throughout this, Your Honor, if you go back to the
17 beginning of this, this is a policy on the life of Howard Keith
18 Henson. Go to page 2 of the document, after the covering letter
19 for Mr. Hogan, you'll see two inches down on the left-hand side,
20 "Insured: Keith Henson."
21 THE WITNESS: Excuse me -
22 MR. ROSEN: And this witness is - you're allowing this
23 witness to testify presumably on the basis of a statement that
24 this is a jointly-owned policy. This witness' interest in the
25 policy is not as a joint owner. It is as an additional,
251
1 secondary insured, meaning if Mr. Henson dies, then the policy
2 would cover her. It's only - it's one policy. And the only
3 owner and the only, quote, primary insured, as you'll see from
4 the third page and every page after it, is Mr. Henson.
5 And yet this witness sits here and tells us in
6 response to her counsel's questions this is a joint policy
7 which, quote, we gifted. Well, we - there ain't no "we" here.
8 There's a Mr. Henson who gifted.
9 THE COURT: That's fine. You can ask her those
10 questions on cross.
11 BY MR. ZLOTOFF:
12 Q. All right. Ms. Lucas, can you describe what kind of - if
13 any, artwork Mr. Henson owned? This would be as of 1998.
14 MR. ROSEN: Objection -
15 THE COURT: February of 1998?
16 MR. ZLOTOFF: Yes.
17 MR. ROSEN: Judge, -
18 THE COURT: Can you do that every time, please?
19 MR. ZLOTOFF: I'm sorry, Your Honor. Yes, I'll try.
20 MR. ROSEN: Objection, no foundation. And let me be
21 specific. This witness has testified that Mr. Henson was a very
22 private person who maintained his own possessions separately
23 from his wife.
24 She's testified that Mr. Henson keep - kept his
25 personal possessions in a 1,000-pound safe, a 1,000-pound safe
252
1 at or about the house that she did not have access to.
2 He secreted his papers, his -
3 THE COURT: Please get to a microphone.
4 MR. ROSEN: I'm sorry.
5 He secreted his papers, his assets, and this witness -
6 in the 1,000-pound safe on this - at their home. And this
7 witness has testified she had no access. There was only one
8 key; Mr. Henson had the key.
9 MR. ZLOTOFF: Your Honor, he's testifying. Can't he
10 bring this up at cross-examination? I don't know if any of this
11 is true, what he's saying -
12 THE COURT: I understand, but, Mr. Zlotoff, he's
13 established enough, if that's an offer of proof, that that's
14 what she testified, merely to make me say to you: You ought to
15 prove that she's had access to his artwork.
16 MR. ZLOTOFF: All right.
17 THE COURT: It's a foundational -
18 MR. ZLOTOFF: Okay.
19 THE COURT: - objection that went on and on.
20 BY MR. ZLOTOFF:
21 Q. Did you have access to - first of all, do - do you know of
22 this locker that Mr. Rosen is talking about?
23 MR. ROSEN: Objection. I didn't talk about any
24 locker. I talked about a 1,000-pound safe.
25 BY MR. ZLOTOFF:
253
1 Q. Okay. The 1,000-pound safe, are you familiar with that?
2 A. There was a fire safe kept in the backyard that weighed 600
3 pounds, as they told me when they carried it away. It
4 contained -
5 Q. Wait a minute. As of February '98 do you know what it
6 contained?
7 A. Yes. Yes.
8 Q. And how do you know what it contained?
9 A. Well, I don't know that I - I did not know what it contained
10 except I was - as I was granted access to it during certain
11 periods when Mr. Henson wished to keep his matters private
12 because we were being called to 2004 examination.
13 In February '98 I did have access to the safe and I
14 knew what was in it.
15 Q. Okay. And what was in it as of February '98?
16 A. There were mostly memorabilia, photographs. There were some
17 private documents, such as the deed to the house. I certainly
18 couldn't detail it down to the last item, but it was all papers
19 and photographs and memorabilia.
20 Q. All right. Any artwork?
21 A. No.
22 Q. Now this brings up a point because Mr. Rosen keeps
23 interjecting that - he seems to leave the impression that you
24 never knew anything about Mr. Henson's affairs, that you and he
25 always - forever always kept your affairs separate. Is that
254
1 true or did it begin at a certain point in time?
2 A. What he refers to in terms of not knowing where he worked
3 and his not knowing where I worked was something that we did as
4 it became clear that our employers were being harassed and
5 prosecuted -
6 MR. ROSEN: Objection, move to strike this.
7 THE COURT: Overruled.
8 THE WITNESS: We did not begin this practice until it
9 was clear that we needed to protect our employers, our fellow
10 employees, our family and friends.
11 BY MR. ZLOTOFF:
12 Q. Can you give a date to that, when you started that practice?
13 A. It was certainly after the summer of 1998, the 2004
14 examinations that began after we had been picketed privately and
15 at work -
16 MR. ROSEN: Objection, I move to strike this.
17 THE COURT: Overruled.
18 MR. ROSEN: It's not responsive and it's hearsay.
19 THE COURT: Overruled - it is not responsive for that
20 - it is. All you've asked for her is a date, and that - so that
21 is stricken. And she needs to tell you the date if she knows
22 the date.
23 THE WITNESS: I don't remember a specific date.
24 THE COURT: Or an approximate date.
25 THE WITNESS: It was after the summer of '98, possibly
255
1 '99 or even 2000.
2 THE COURT: Pardon me?
3 THE WITNESS: It might even have been as late as 2000
4 that we instituted this practice, I don't remember.
5 BY MR. ZLOTOFF:
6 Q. And so up until the summer of '98 you had full access to Mr.
7 Henson's papers, effects, and possessions?
8 A. I had full access to possessions. There may have been some
9 papers that he reserved from me.
10 Q. With regard to artwork, was there any in the house?
11 A. Yes.
12 Q. Was there any in the house that Mr. Henson owned?
13 A. Yes.
14 THE COURT: Are we talking about the same house, Mr.
15 Zlotoff?
16 MR. ZLOTOFF: The house on 302 College Ave. And this
17 would have been in February of '98 -
18 THE COURT: You said was there any in the house and
19 then you said was there any in the house that Mr. Henson owned.
20 So I was a little confused.
21 MR. ZLOTOFF: Right.
22 THE COURT: She said yes to both. I now want to know
23 if there's one house or two we're talking about.
24 MR. ZLOTOFF: Right.
25 BY MR. ZLOTOFF:
256
1 Q. What artwork was there in this house in February of '98 at
2 302 College Avenue that you both lived in?
3 A. There were prints. There were computer printouts. There
4 were drawings. There were engravings. As I said, these
5 belonged to all three of us, but not jointly.
6 Q. Who lived in the house as of February '98?
7 A. My husband and I and our daughter.
8 Q. Did you each own separate pieces of artwork?
9 A. Yes.
10 Q. If you refer to Exhibit 182.
11 A. That's from Allstate?
12 Q. Yes.
13 Do you recognize the - the pieces identified here on
14 this document?
15 A. Yes, I do.
16 Q. And do you know to whom those were owned?
17 A. Yes. They were belonging to my daughter - our daughter.
18 Q. Now is there a reason why they - these pieces appear on your
19 insurance policy?
20 MR. ROSEN: Objection, no foundation. No foundation
21 that she even knew that they appeared on her insurance policy
22 until her counsel told her.
23 BY MR. ZLOTOFF:
24 Q. Ms. - okay. Let me ask some more questions.
25 Ms. Lucas, can you identify this document?
257
1 A. Yes. It's a schedule from an insurance policy, a home
2 owner's policy.
3 Q. And are you personally - were you personally familiar with
4 this policy as of February of '98?
5 A. Yes. I arranged for it.
6 Q. You personally arranged for it?
7 A. Yes.
8 Q. Were you instrumental in including these pieces in the
9 insurance coverage?
10 A. Yes.
11 Q. And why did you do that?
12 A. Because they were valuable and I wanted to make certain that
13 they would be covered.
14 Q. Now there is no other artwork included, although I think you
15 did say that Mr. Henson owned a print or prints?
16 A. Yes.
17 Q. And why did you not choose to include Mr. Henson's prints in
18 this coverage?
19 A. Because they cost perhaps 20 to $25 each and he just had a
20 few -
21 MR. ROSEN: Objection, move to strike.
22 BY MR. ZLOTOFF:
23 Q. How -
24 MR. ROSEN: There's no foundation for this witness
25 testifying as to what Mr. Henson's prints cost.
258
1 BY MR. ZLOTOFF:
2 Q. Ms. -
3 THE COURT: Go ahead. You want to establish a
4 foundation.
5 MR. ZLOTOFF: Let me - let me try it, Your Honor.
6 BY MR. ZLOTOFF:
7 Q. Ms. Lucas, do you have personal knowledge as to the costs of
8 Mr. Henson's prints?
9 A. I went with him to purchase them.
10 Q. And you were there when the purchase was consummated?
11 A. Yes.
12 Q. Thank you.
13 THE COURT: Tanya.
14 And they were - and they were worth about 20 or $25
15 each; is that what you said?
16 THE WITNESS: Yes.
17 MR. ROSEN: Can we identify what they are, Judge?
18 THE COURT: You will have that on cross.
19 BY MR. ZLOTOFF:
20 Q. Why don't we also look at Exhibit 160. Are you there?
21 A. Yes.
22 Q. Okay.
23 THE COURT: Let me just announce that we're going to
24 break at 12:45 and reconvene at 1:45.
25 MR. ZLOTOFF: All right, Your Honor. I have a two
259
1 o'clock prehearing in Judge Grube's court.
2 THE COURT: Have you arranged for the priority
3 setting?
4 MR. ZLOTOFF: I didn't do that yet, no.
5 THE COURT: Well, you'll do it during lunch.
6 MR. ZLOTOFF: Right.
7 THE CLERK: Millie's taking care of that -
8 MR. ZLOTOFF: Oh, Millie's taking care of - well, she
9 was here, so she heard.
10 THE COURT: She won't know, she won't remember
11 necessarily.
12 MR. ZLOTOFF: All right. Okay. I'll take care of
13 that.
14 THE COURT: You'll be here and they just can call you
15 when they're ready for you.
16 MR. ZLOTOFF: Right. It's usually not a problem.
17 BY MR. ZLOTOFF:
18 Q. All right. Then again we're looking at Exhibit 160. Now
19 can you identify what this - this document purports to
20 represent?
21 A. Yes. I asked for Purple Gallery to give us an appraisal of
22 the art for insurance purposes, and this is the certification
23 that they returned to me.
24 MR. ROSEN: Your Honor, I'm confused. Is this the
25 valuation of the art that is covered by the last exhibit,
260
1 Exhibit 182, the insurance policy?
2 MR. ZLOTOFF: That - that was going to be my next
3 question.
4 MR. ROSEN: Oh, thank you.
5 BY MR. ZLOTOFF:
6 Q. Is it the same art?
7 A. No.
8 Q. It is not the same art, okay.
9 What happened to this - these pieces here that are
10 identified in Exhibit 160?
11 MR. ROSEN: Piece.
12 THE WITNESS: They were traded -
13 BY MR. ZLOTOFF:
14 Q. Piece.
15 A. Well, it's a tryptic, but it is one single piece. It was
16 traded in to the Gallery for other pieces of my daughter's
17 selection.
18 Q. And did she select those that are - that we previously
19 looked at on the Allstate endorsement?
20 A. Yes.
21 MR. ROSEN: That's Exhibit 182, just for the record,
22 that counsel's referring to?
23 BY MR. ZLOTOFF:
24 Q. Is that true, 182 is the -
25 A. That was the -
261
1 MR. ROSEN: Insurance endorsement.
2 THE WITNESS: - Allstate schedule.
3 BY MR. ZLOTOFF:
4 Q. And the ones -
5 MR. ROSEN: Thank you.
6 BY MR. ZLOTOFF:
7 Q. - listed on 182 were the ones that she traded for?
8 A. Yes.
9 Q. Okay. And then if you would look at Exhibit 234.
10 THE COURT: That's in another book.
11 THE WITNESS: Oh.
12 BY MR. ZLOTOFF:
13 Q. Are you there?
14 A. Yes.
15 Q. Can you identify what this document purports to represent?
16 A. This appears to be a document, it says, "Removal of Works,"
17 and so it's basically our receipt received from Purple Gallery.
18 And it is these - I believe it's the same set of artwork that we
19 just saw in whatever that was -
20 Q. 182?
21 A. - 182, yes.
22 Q. Okay. So these were -
23 A. Along with a videotape of how another artwork was produced.
24 Q. Okay. So these again identify the - the pieces that were
25 traded for?
262
1 A. Yes.
2 Q. Okay. If you would please look at Exhibit 221.
3 Are you there?
4 A. Yes.
5 Q. Can you identify that check at all?
6 A. It was a check that I saw -
7 MR. ROSEN: I believe the question is can she identify
8 it.
9 THE COURT: And it's a yes or no question.
10 THE WITNESS: Yes, I can.
11 BY MR. ZLOTOFF:
12 Q. Can you explain what it - what it was for?
13 MR. ROSEN: Objection. This is a check signed by the
14 absent debtor.
15 BY MR. ZLOTOFF:
16 Q. At -
17 MR. ROSEN: I'm not finish. I'm sorry.
18 MR. ZLOTOFF: Okay.
19 MR. ROSEN: I had something in my throat.
20 The absent debtor perhaps might be able to testify as
21 to what his purpose was in writing these checks. Might be able
22 to. This witness cannot.
23 And, gosh, I just hope that if a foundation is sought,
24 that this witness doesn't say, 'Gee, I was there and I heard him
25 say what the purpose was.'
263
1 THE COURT: That's argument.
2 MR. ROSEN: Yeah, I know. Well, -
3 THE COURT: And it's sarcastic and it's inappropriate.
4 MR. ROSEN: It's what?
5 THE COURT: Inappropriate.
6 MR. ROSEN: Yeah, okay. Well, I object.
7 THE COURT: Not, "Yeah, okay." "Yes, Your Honor, I
8 won't do it again."
9 MR. ROSEN: Yes, Your Honor, it's - I - I have heard
10 Your Honor and I purge my objection.
11 MR. ZLOTOFF: I'm sorry. Where - is there an
12 objection on the table -
13 THE COURT: He objects to this on the grounds that she
14 couldn't testify as to what it was for, -
15 MR. ZLOTOFF: Okay.
16 THE COURT: - because it's not signed by her.
17 MR. ZLOTOFF: Right.
18 BY MR. ZLOTOFF:
19 Q. Is - can you make out the name of the - of the payee on the
20 check?
21 A. I believe it says, "WarpNet, Inc."
22 THE COURT: Can you spell it for me?
23 THE WITNESS: It's W-a-r-p, as in Paul, N-, as in
24 Nancy, e-t. And it looks like the "N" was capitalized, Inc.
25 BY MR. ZLOTOFF:
264
1 Q. And can you make out the date of the check?
2 A. 10-7-97.
3 Q. And the amount of the check, can you read it?
4 A. Seventy-five hundred dollars.
5 Q. Does the name WarpNet, Inc. - of your own knowledge, not
6 from anything that Mr. Henson told you, of your own knowledge,
7 does it - as of that date, did it mean anything to you?
8 A. Yes.
9 Q. And of your own knowledge, what did you know of WarpNet,
10 Inc.?
11 A. It was a company with which my husband had worked in - not
12 on a consultant pas- - capacity, maybe an advisory capacity.
13 MR. ROSEN: Objection, no foun- - foundation. Your
14 Honor, counsel asks a questions of the witness, and I believe a
15 proper fashion, "of your own knowledge." This witness ignores
16 it and proceeds to testify as to what's not of her own
17 knowledge.
18 How could she possibly be tes- - be - have her own
19 knowledge? And maybe the problem, Your Honor, is one of
20 linguistics. Maybe Your Honor needs to explain to this witness
21 what the words "of your own personal knowledge" mean as opposed
22 to what her husband told her.
23 MR. ZLOTOFF: Well, Your Honor, she has testified that
24 up into the summer of 1998 she was conversant with Mr. Henson's
25 affairs. And I mean I could ask her some more questions about
265
1 whether she ever saw 1099s or receipts or invoices from WarpNet,
2 Inc. or other documents that would evidence his employment
3 there. If you want, I'll be happy to do that.
4 MR. ROSEN: Your Honor, counsel misunderstands my
5 objection. The problem is not -
6 THE COURT: The -
7 MR. ROSEN: - that she's going - he's going to ask
8 this witness what she knows from her husband about WarpNet, Inc.
9 The problem is that she doesn't - doesn't understand what "of
10 your personal knowledge" means. And by the answers to her
11 questions, obviously she assumes, she is misinterpreting
12 counsel's question "of your own personal knowledge" as including
13 'it's my personal knowledge because my husband told me.' That's
14 what this testimony is about.
15 And I would ask Your Honor to instruct the witness as
16 to what "personal knowledge" means. And it doesn't mean what
17 somebody else told her, whether it's her husband or anyone else.
18 THE COURT: That's the problem, Mr. Zlotoff. Unless
19 you can establish a basis upon which she knows, you know, for
20 example, on a previous one, she was there when they issued the
21 policy. But unless this is something other than -
22 MR. ZLOTOFF: Okay.
23 THE COURT: - what somebody has told her, -
24 MR. ZLOTOFF: All right.
25 THE COURT: - it's not admissible.
266
1 MR. ZLOTOFF: Okay. We'll -
2 THE COURT: If it's something - she has independent
3 knowledge other than what somebody told her, -
4 MR. ZLOTOFF: Okay.
5 THE COURT: - that might be admissible.
6 MR. ZLOTOFF: I'll ask.
7 BY MR. ZLOTOFF:
8 Q. Do you have independent knowledge other than what somebody
9 told you of what WarpNet, Inc. was as of October 7th, 1997?
10 A. I saw paperwork from them.
11 Q. Okay. Well, what kind of paperwork did you see?
12 MR. ROSEN: Objection. Now that calls for hearsay.
13 THE COURT: No. Telling you what kind of paper
14 doesn't - would you please refrain from throwing down your pen
15 every time you don't like something?
16 MR. ROSEN: I don't have a pen, Your Honor. I'm not
17 holding one -
18 THE COURT: You're throwing something down. Your
19 glasses perhaps?
20 MR. ROSEN: No, Your Honor. My glasses are on the
21 table here. Here are my hands in plain sight. I'm not throwing
22 anything down.
23 THE COURT: Good.
24 MR. ROSEN: I leaned back in my chair is what I did.
25 THE COURT: Go ahead. You can ask her the last
267
1 question you asked her. I think it was what papers she saw.
2 MR. ZLOTOFF: Right.
3 BY MR. ZLOTOFF:
4 Q. What papers did you see?
5 A. I saw - the only thing I remember right now is that I saw a
6 check come back from WarpNet -
7 Q. Oh, okay.
8 A. - in this same amount.
9 Q. Okay.
10 MR. ROSEN: I object, move to strike it. That is
11 hearsay.
12 MR. ZLOTOFF: It's not -
13 MR. ROSEN: As to what the amount of the check was or
14 if there was a check.
15 MR. ZLOTOFF: But, wait, -
16 THE COURT: If the check isn't here -
17 MR. ZLOTOFF: - it's not hearsay.
18 THE COURT: - and she's testifying she saw a check
19 from WarpNet come to her house, that's not hearsay. Overruled -
20 MR. ROSEN: Should just testified to the amount of the
21 check.
22 THE COURT: I understand. The objection's -
23 MR. ROSEN: That's what I'm arguing is hearsay, Your
24 Honor.
25 THE COURT: That she - that they received - she saw a
268
1 check in the amount of $7500?
2 MR. ROSEN: Yes, that's the objection. Where's the
3 check?
4 THE COURT: But the check isn't being sought to be
5 introduced for the truth, she's just recalling her recollection
6 that she saw a check. So there's no - there's no check here
7 that she's talking -
8 MR. ROSEN: Your Honor, are you accepting as for the
9 truth the testimony that - that there was a check from WarpNet
10 back to Mr. Henson in the amount of $7500? Is that being
11 accepted for the truth that such a document existed?
12 MR. ZLOTOFF: No, it's -
13 MR. ROSEN: Because that's my problem.
14 MR. ZLOTOFF: It's not being offered for the truth.
15 It's being offered, I would say, to show - I would call it a
16 verbal act. I would - I would say that what it shows is that
17 this check was really in the nature of a loan, and the money
18 that she got back was the repayment of a loan.
19 MR. ROSEN: And how do we - how are we going to prove
20 that other than you saying it, counsel?
21 THE COURT: I don't understand that at all. I agree
22 with that. I agree that that's all inadmissible with that -
23 unless you have some evidence for it. This -
24 MR. ZLOTOFF: Well, Your Honor, this is, with all due
25 respect, this is her bank account. Are we here - are we going
269
1 to say that she is ignorant of when there is a check coming into
2 her bank account of $7500? I mean that is -
3 THE COURT: This is a check going out.
4 MR. ZLOTOFF: No, no, no. She's being barred from
5 testifying that she got a check from WarpNet, Inc. in the amount
6 of $7500 that was deposited in her bank account. I mean I -
7 maybe we need to flesh that out more, but it seems to me that's
8 what Mr. Rosen is trying to exclude, is the fact of her receipt
9 of money. And it's - I mean to say that she didn't know that
10 she got money is beyond -
11 THE COURT: And why don't you have -
12 MR. ZLOTOFF: - the pale -
13 THE COURT: - the bank account showing a $7500
14 deposit? If she got $7500 why doesn't - why don't you have the
15 check?
16 MR. ZLOTOFF: I - I don't know why I don't have the
17 check, Your Honor. I don't make a thousand dollars an hour on
18 this case. I - there are lots of things that if - if I were
19 paid the way a case like this should be paid, then I'm sure I
20 would - I would have more here. I'd have more witnesses. I'd
21 have more evidence, but that's, you know, - that's just the way
22 - the way -
23 MR. ROSEN: With all due respect, -
24 THE COURT: Be quiet, please.
25 The objection's sustained.
270
1 MR. ZLOTOFF: And that was the objection to the
2 question of her testifying that she got a check back of $7500?
3 That's what's being objected to?
4 THE COURT: Without the check.
5 MR. ZLOTOFF: Without the check.
6 THE COURT: When that would be reasonably within your
7 control.
8 BY MR. ZLOTOFF:
9 Q. Was - to your knowledge, did Mr. Henson - is it possible
10 that Mr. Henson bought stocks on his own without -
11 MR. ROSEN: Objection.
12 BY MR. ZLOTOFF:
13 Q. - your knowledge -
14 THE COURT: Let him finish. Do not interrupt him or
15 her, please.
16 Finish your question, and you - because I produce a
17 terrible record. You overlap his question, and the record is
18 terrible every time.
19 MR. ROSEN: With all due respect, Your Honor, after
20 the first three words it was obvious that anything that came
21 after it was going to be objectionable.
22 THE COURT: I happen to agree with you -
23 MR. ROSEN: Any question which begins with, "is it
24 possible," to -
25 THE COURT: I agree.
271
1 MR. ROSEN: I don't mean to be rude to Mr. Zlotoff,
2 but he could save us the time for - that it takes to complete
3 the question because we know the answer to the objection once we
4 hear the opening three words.
5 THE COURT: I agree, but I will instruct you never to
6 interrupt his question, even if you think you're right.
7 BY MR. ZLOTOFF:
8 Q. Did - did you and Mr. Henson jointly purchase any stocks?
9 This would be - or did you - I'm sorry. Let me ask that
10 differently.
11 Did you and Mr. Henson jointly own shares of stock as
12 of February of 1998?
13 A. No.
14 Q. Are you aware of any stock purchases made through your bank
15 account, this Wells Fargo Bank account, during - any time during
16 1997 or up through February 1998?
17 A. No.
18 THE COURT: That - that takes us to a little after
19 1:45. So we'll meet at 2:20 - I'm sorry, 2:50 in - and I would
20 ask you to quickly leave the courtroom so - I'm sorry. We're
21 now 12:50. 1:50, yes. So my staff can have its lunch.
22 (Luncheon recess taken from 12:50 p.m. to 2:13 p.m.)
23 THE COURT: Please remain seated. Thank you.
24 Are you finished with Judge Grube, Mr. Zlotoff?
25 MR. ZLOTOFF: Yes, I am.
272
1 THE COURT: All right. You may proceed.
2 MR. ROSEN: Your Honor, before Ms. Lucas resumes her
3 testimony I was hopeful that Your Honor could clarify something
4 for us. We have a little bit of disagreement as to what Your
5 Honor said.
6 With respect to the exhibits we offered before the
7 lunch break, did Your Honor say that you were admitting only
8 those that Mr. Zlotoff did not object to?
9 THE COURT: Yes.
10 MR. ROSEN: Is it Your Honor's intention to rule on
11 those before we rest? I would like to know what exhibits are in
12 or not in before we - before it comes back to us and we rest our
13 case, and is that Your Honor's intention?
14 THE COURT: Unless you're not going to rest until
15 after the briefing. I'd hate to have that happen.
16 MR. ROSEN: Well, -
17 THE COURT: You're going to just - I assume you're
18 each going to take a few days and file a brief that will tell me
19 the basis for the relevance objection. Mr. - Mr. Zlotoff is
20 going to give you his response to the brief you filed and then
21 you're going to reply to it if you want to reply. If you give
22 up a reply, not that you're necessarily entitled to a reply, but
23 if there's an agreement that Mr. Zlotoff's paper is the last
24 paper, then I would rule after I'd had a chance to review it.
25 But I can't rule on relevance objections until I've seen what
273
1 Mr. Zlotoff has to say.
2 MR. ROSEN: Well, my problem is that that would mean
3 that I would be resting probably tomorrow or the next day
4 without knowing what the rulings are, unless Mr. Zlotoff will
5 get his brief in tomorrow morning and we can - and we can
6 address it and Your Honor can rule.
7 But I don't really feel comfortable, and I've never, I
8 must tell you, -
9 THE COURT: Why can't -
10 MR. ROSEN: - I've never rested, you know, without
11 knowing what exhibits are received into evidence and which ones
12 are rejected.
13 THE COURT: Well, you're going to have an opportunity
14 for rebuttal after he's finished his case. The timing, you and
15 Mr. Zlotoff should work out, in the first instance. If you
16 can't agree I'll have to resolve any outstanding dispute. But
17 you know where we are. And there's no way that I can rule
18 without knowing Mr. Zlotoff's objection.
19 MR. ROSEN: All right. Well, since it's obvious we're
20 not going to finish today, my - my request then is for Mr.
21 Zlotoff to present to you whatever he wants by way of in support
22 of his relevance objections when we resume tomorrow. And if he
23 does that, I will waive any right to file a reply brief. And,
24 instead, if there's anything I feel impelled to reply to in his
25 papers, I will do so orally.
274
1 But the alternative of resting without knowing what
2 the - what exhibits have been received into evidence is
3 something which is anathema.
4 THE COURT: But I'm not going to be able to review Mr.
5 Zlotoff's objections and your oral response on the bench.
6 There's - there are, what, five volumes, 286 exhibits. There
7 are about 50 or 60 at issue.
8 MR. ROSEN: Yeah. I think they basically fall into
9 categories. For example, Mr. -
10 THE COURT: I don't want to argue the exhibits.
11 MR. ROSEN: Okay.
12 THE COURT: I don't think it's - I don't think that
13 that procedure is going to work.
14 MR. ROSEN: All right. Well, I'd just like the record
15 to reflect, you know, my desire that I - I think it's
16 appropriate that I know the rulings before I rest.
17 The other thing I wanted to raise is yes- - is on
18 Friday, Your Honor, I handed you a copy of Judge Whyte's order
19 of September 26th and asked for your permission that either you
20 or we file it under seal in accordance with Judge Whyte's
21 expressed desires in that order.
22 I need a Court order in order to do that, and I don't
23 know if Your Honor is - will file it or whether you want us to
24 file it, but my understanding is that in order for us to file it
25 with the Bankruptcy Court's office, we need Your Honor to issue
275
1 an order allowing us to do so.
2 THE COURT: Do you have any objection to Judge Whyte's
3 decision being filed under seal?
4 MR. ROSEN: Can we assign that Exhibit - just so it'll
5 need a number - 288, Your Honor?
6 THE COURT: That's fine. But we have - we have
7 special procedures as far as filing a sealed document. And the
8 best - and you have my permission to file it under seal. The
9 best person to work with is Valeria Barbour in the Clerk's
10 Office, who will help you with the mechanics of filing it under
11 seal.
12 MR. ROSEN: Okay. Your Honor, on the same subject we
13 have and we've marked and I've given Mr. Zlotoff a copy, we've
14 marked as Exhibit 287. This is a posting respecting that
15 September 26th order by Judge Whyte, which I will also ask that
16 be filed under seal, because it violates Judge Whyte's order.
17 So that to file this without - I'm handing up two copies - to
18 file it without a seal would, in effect, compound the - the
19 violation of it.
20 And my I have permission to file that as Exhibit 287
21 under seal, Your Honor?
22 THE COURT: Have you seen it?
23 MR. ZLOTOFF: I've seen it. It really - to my mind
24 it's objectionable -
25 THE COURT: Well, I'm not admitting it.
276
1 MR. ZLOTOFF: I -
2 THE COURT: It's just being marked as an exhibit for
3 identification under seal.
4 MR. ROSEN: I'll -
5 THE COURT: But I need a copy of it for my use at -
6 MR. ROSEN: I've handed two copies to your Clerk.
7 And, Your Honor, I do move the admission of both 287
8 and 288.
9 THE COURT: Okay. But we're not going to do this in
10 the middle of Ms. Lucas' testimony.
11 MR. ROSEN: Okay. Your Honor, may I - may I just -
12 THE REPORTER: Excuse me. Mr. Zlotoff's binder is on
13 top of the bar.
14 THE COURT: Oh, do you see, you've got the binder on
15 top of the bar, and the bar on the microphone has a function.
16 See, look under the microphone.
17 MR. ZLOTOFF: Oh, okay.
18 THE COURT: You're okay, just keep papers off of that
19 bottom of the microphone.
20 MR. ROSEN: Your Honor, the last item of housekeeping,
21 if you will, before Ms. Lucas resumes her testimony, is I made
22 reference prior to the lunch break to a case on the best
23 evidence rule. And I just want the record to reflect that
24 these -
25 THE COURT: Do you have copies for Mr. Zlotoff and me?
277
1 MR. ROSEN: I think we gave it -
2 MR. ZLOTOFF: That was on the Lucas- -
3 MR. ROSEN: No, I don't have copies. I'm sorry. We
4 gave him the cite on Friday.
5 The case is entitled, Seiler, S-e-i-l-e-r, v.
6 Lucasfilm, one word, L-u-c-a-s-f-i-l-m, LTD. And it is a
7 decision of the Ninth Circuit Court of Appeals of 1987. And the
8 only part I would bring to Your Honor's attention on the
9 subject, it contains an extensive discussion of the history of
10 Federal Rules of Evidence 1001 to what then was 1008, now is
11 1007.
12 And the one part I would bring to Your Honor's
13 attention is as follows, quote: -
14 THE COURT: What page?
15 MR. ROSEN: This is on page 1319 of the Official
16 Reporter, of the F.2d Reporter, and the - the couple of lines I
17 would urge Your Honor to, is that as follows: "When the
18 contents of a writing are at issue, oral testimony is that to
19 the terms of the writing is subject to a greater risk of error
20 than oral testimony as to events or other situations. The human
21 memory is not often capable of reciting the precise terms of a
22 writing. And when the terms are in dispute, only the writing
23 itself or a true copy provides reliable evidence."
24 That is only one part of the discussion, but this is
25 the Ninth Circuit's principal articulation following the
278
1 adoption of Federal Rules 1001 to 1000- - what was then 1008.
2 And it goes on for quite a while, including the Advisory
3 Committee note, and the analysis of what is the history of the
4 rule and what the purpose of the rule is.
5 And - and that's my last item, Your Honor.
6 THE COURT: Mr. Zlotoff.
7 MR. ZLOTOFF: Yes, Your Honor. I - yeah, why don't we
8 call Ms. Lucas again.
9 THE COURT: Ms. Lucas, if you would please retake the
10 stand. I remind you that you're under oath.
11 BY MR. ZLOTOFF:
12 Q. Ms. Lucas, are you aware of any patents held by - of your
13 own personal knowledge now, are you aware of - and by this I
14 mean would you have, because you looked at the patents and you
15 know of your own knowledge what the patents are about, would you
16 happen to know as of February 1998 whether Mr. Henson had any
17 patents?
18 MR. ROSEN: Several objections, Your Honor. One is
19 the best evidence rule. The best evidence of whether Mr. Henson
20 has a patent is a certified copy - is a certified copy from the
21 United States Patent and Trademark Office, number one.
22 And, number two, the def- - the question itself
23 elicits hearsay, "would you... know" from looking at a document.
24 Under that standard this witness would be competent to testify
25 as to anything. She could go out and read the Rubaiyat this
279
1 afternoon and come back and testify from her, quote, personal
2 knowledge, close quote, as to what it says.
3 MR. ZLOTOFF: Let me withdraw the question.
4 BY MR. ZLOTOFF:
5 Q. Are you aware of any moneys deposited into your Wells Fargo
6 Bank during 1987 [sic] to February 1998 from any source with
7 respect to royalties or moneys from patents?
8 MR. ROSEN: Objection, no foundation that she would be
9 aware of what a check is for, if the check is made out to Mr.
10 Henson, number one.
11 Number two, again best evidence rule. The best
12 evidence is the check or some document which shows it is for
13 royalties on a patent.
14 MR. ZLOTOFF: Your Honor, I'm not asking about any
15 patent or document at this point. I'm simply asking whether she
16 is aware of any moneys. She could say no. If she's not aware,
17 that's fine. If she's -
18 MR. ROSEN: Well, he's asking about a check, and
19 that's a document.
20 THE COURT: Yeah. She can testify as to whether she
21 is aware that Mr. Henson - whether Mr. Henson received any
22 royalties during - what period did you say, Mr. Zlotoff?
23 MR. ZLOTOFF: 1997 through February '98.
24 THE WITNESS: I am not aware that Mr. Henson received
25 any money from any patent - patents.
280
1 BY MR. ZLOTOFF:
2 Q. What cars are there owned either by you or Mr. Henson? This
3 would be during 1997 and 1998.
4 A. At that time he had an '86 Oldsmobile stationwagon that I'm
5 still driving. I had a 1987 Ford Escort that I was - that I
6 owned at that time.
7 Q. And what happened to the Escort?
8 MR. ROSEN: Objection, -
9 THE WITNESS: It died last year.
10 MR. ROSEN: - what difference does it make?
11 THE COURT: Wait. Wait, wait. Wait a second.
12 When there's an objection, you stop.
13 THE WITNESS: Sorry. Sorry.
14 THE COURT: The question was what happened to the
15 Escort and the objection is what?
16 MR. ROSEN: Relevance. What difference does it make
17 what happened to it? We're not alleging -
18 THE COURT: Overruled.
19 Go ahead, you may answer.
20 THE WITNESS: It died last year.
21 BY MR. ZLOTOFF:
22 Q. Can you give us the - again based on your knowledge, the
23 condition of the - as best you can. I don't expect you to
24 testify as a mechanic or an expert or anything, just based on
25 your perception, the condition of the '86 Oldsmobile in or about
281
1 February of '98.
2 A. It had been purchased as a salvage vehicle and it needed a
3 lot of work. It was not driven very much because it was in very
4 bad shape.
5 Q. Can you describe any kind of office - office equipment or
6 computers that was located in the house or at February of '98?
7 A. I believe at that time there was a PC which was running an
8 old operating system, Windows 3.0. He had been lent a laptop
9 which died I think during that time.
10 MR. ROSEN: Objection, Your Honor. The content of the
11 testimony is obviously - shows it's hearsay.
12 MR. ZLOTOFF: I'm sorry. She's testifying about what
13 is in the house in the way of computers or equipment.
14 MR. ROSEN: No, excuse me, -
15 MR. ZLOTOFF: She's testifying based on perception.
16 MR. ROSEN: Your Honor, my - my -
17 THE COURT: Mr. Zlotoff, let's go back a second. Some
18 of this, there was a PC running on 3.0 isn't hearsay unless she
19 didn't know that it was 3.0, she relied on somebody to tell her
20 that.
21 Where he received this laptop may be hearsay or may
22 not, and you haven't established a foundation that it is or
23 isn't. And it's not clear how she knows. She could have
24 watched the transaction of the lending or not watched the
25 transaction of the lending. So there is a foundational problem
282
1 with some of this. There's mostly not a foundational problem.
2 MR. ZLOTOFF: All right. It's - I don't think it's
3 really important, so we can just - we can strike that part of it
4 then. I don't - I don't care.
5 THE COURT: Okay. The part which said he was lent a
6 laptop goes out, but not that he had a laptop and that it died.
7 BY MR. ZLOTOFF:
8 Q. Could you turn to Exhibit A and look at three pages in. We
9 looked at that the other day.
10 A. Page 3?
11 Q. On the top it will say, "Schedule B, Personal Property."
12 And the first entry was the Wells Fargo Bank.
13 A. Oh, yes.
14 Q. You see on the right-hand side there are some numbers?
15 A. Yes.
16 Q. Starting from the third from the bottom, can you read those
17 numbers?
18 A. From the third from the bottom?
19 Q. Right.
20 A. The "Books located at debtor's residence"?
21 Q. Yeah. And then just go over to the far right column and
22 read the numbers.
23 A. That's $500. It's got a peculiar comma in there that looks
24 - makes it look like 5,000, but I -
25 MR. ROSEN: I object, Your Honor. There is no basis
283
1 for this witness to testify as to what a document says.
2 MR. ZLOTOFF: Can I ask her some questions, Your
3 Honor?
4 THE COURT: Sure.
5 BY MR. ZLOTOFF:
6 Q. Can you identify the handwriting on this document?
7 A. Yes.
8 Q. And whose handwriting is it?
9 A. It's my husband's handwriting.
10 Q. Are you familiar with the way that he normally writes
11 numbers?
12 A. Yes.
13 Q. Is this the normal way he writes numbers?
14 MR. ROSEN: Objection, totally irrelevant. Attempting
15 to impeach a court filing filed under oath.
16 THE COURT: Not necessarily to impeach; overruled.
17 BY MR. ZLOTOFF:
18 Q. Were you with him when he filled out the documents, the
19 schedules, the Schedule B?
20 A. He came in and out of where I was working with the documents
21 and asked me questions.
22 Q. Can you describe his state of mind at the time that he was
23 filling out the documents?
24 MR. ROSEN: Objection, no, she can't.
25 MR. ZLOTOFF: Why? Why can't she describe a
284
1 perception?
2 THE COURT: She can describe behavior. She can't
3 describe his state of mind.
4 THE WITNESS: He appeared to be agitated, exhausted,
5 and very worried.
6 MR. ROSEN: I move to strike this, Your Honor.
7 THE COURT: You have to ask him - her - the way this
8 works, gentlemen, is that you can describe behavior. You can
9 describe what he was doing with his hands, what he was doing
10 physically, not interpret his innerself.
11 MR. ZLOTOFF: I understand, but I thought that's what
12 she did.
13 BY MR. ZLOTOFF:
14 Q. Can you describe his behavior? And, again, don't look into
15 his mind, just describe to us what you perceived, the physical
16 manifestations of what you perceived?
17 A. He was moving jerkily. He was moving hurriedly. He tended
18 to thrust things in my direction and to disappear. And he would
19 skip from one topic to another. His face was drawn. I did not
20 notice that he was - he did not come to bed to sleep until late,
21 and he got up early.
22 Q. In or about February of 1998 can you state what your house
23 payment was?
24 A. 1998?
25 Q. Right.
285
1 A. It's not a fixed mortgage, it's an adjustable, and so it
2 fluctuated between 17- something and almost 1900 a month. And I
3 don't remember without looking what it was at that specific
4 time.
5 Q. Why don't you look at Exhibit L.
6 MR. ROSEN: Your Honor, the document Exhibit L
7 reflects what the house payment is. It's already in evidence.
8 We didn't -
9 MR. ZLOTOFF: Did we -
10 MR. ROSEN: We don't have any objection to it. Is it
11 necessary to have the witness reading the document to us?
12 MR. ZLOTOFF: All right. Well, let me - let me just -
13 THE COURT: Have we admitted -
14 MR. ZLOTOFF: I don't -
15 THE COURT: - Mr. Zlotoff's exhibits?
16 MR. ZLOTOFF: I don't remember. I don't think we did,
17 but let's - let's go through it -
18 MR. ROSEN: Well, it -
19 THE COURT: Wait, wait. Be quiet, gentlemen.
20 Tanya, what has been in off of Mr. Zlotoff's exhibits?
21 THE CLERK: I have -
22 THE COURT: I need to hear you. I can't hear you.
23 THE CLERK: I have nothing.
24 J is excluded; is that correct? O is - the objection
25 to it was overruled subject to certification. And then I don't
286
1 have any of the others in.
2 THE COURT: Okay. Make sure the microphone is close
3 to you so we have -
4 MR. ROSEN: I apologize. What I meant to say was is
5 as follows. Exhibit L came up in the September 11th hearing on
6 in limine motions. And if recollection serves, I know that he
7 had no objection to it because I think we have the same exhibit
8 in ours. So whether it has been formally received into evidence
9 in this hearing I can tell you from our records of September
10 11th and the transcript, that we didn't have any objection to
11 the receipt of that document.
12 THE COURT: Mr. Zlotoff, do you want to admit L?
13 MR. ZLOTOFF: Yes. May we move - I move to admit
14 Exhibit L.
15 MR. ROSEN: No - no objection.
16 THE COURT: L is admitted.
17 (Debtor's Exhibit L received in evidence.)
18 MR. ZLOTOFF: All right. Let me take of a couple of
19 other ones that I think we agreed on.
20 A and B I think we agreed could be admitted but not
21 for the truth of the matter -
22 MR. ROSEN: Correct.
23 MR. ZLOTOFF: - asserted.
24 THE COURT: A and B admitted, but not for the truth.
25 (Debtor's Exhibits A and B, admitted not for the truth,
287
1 received in evidence.)
2 MR. ZLOTOFF: And then I believe C was okay.
3 MR. ROSEN: No.
4 MR. ZLOTOFF: No?
5 MR. ROSEN: C's the same thing. It's a proposed
6 amended plan, -
7 MR. ZLOTOFF: Okay.
8 MR. ROSEN: - admitted solely for the purposes of
9 showing that this is what was filed with the Court, and not -
10 MR. ZLOTOFF: All right.
11 MR. ROSEN: - for the truth.
12 MR. ZLOTOFF: All right. D I believe was -
13 THE COURT: Wait. Do you want it admitted for that
14 purpose?
15 MR. ZLOTOFF: Yes, that's fine.
16 THE COURT: Okay. C is admitted showing that this was
17 filed, but not for the truth.
18 (Debtor's Exhibit C, admitted not for the truth, received
19 in evidence.)
20 MR. ZLOTOFF: And D I believe was admitted. I move to
21 admit Exhibit D.
22 MR. ROSEN: No objection.
23 THE COURT: D is admitted.
24 (Debtor's Exhibit D received in evidence.)
25 MR. ZLOTOFF: I think F was - I move to admit F.
288
1 MR. ROSEN: No objection.
2 THE COURT: F is admitted.
3 (Debtor's Exhibit F received in evidence.)
4 THE CLERK: What about E?
5 THE COURT: We don't have to go in order. He's doing
6 whatever he's doing.
7 THE CLERK: Okay.
8 MR. ZLOTOFF: E was not admitted.
9 THE CLERK: Now F is admitted.
10 THE COURT: F is admitted.
11 THE CLERK: Oh, thank you.
12 MR. ZLOTOFF: G, just record judgment and order.
13 Did you have a problem with that?
14 MR. ROSEN: The ruling on September 11th was as
15 follows -
16 THE COURT: Wait a second. You're telling me what the
17 ruling was? He's asking whether G is admitted.
18 MR. ZLOTOFF: This was -
19 MR. ROSEN: Well, he just asked me -
20 MR. ZLOTOFF: No, this was subject to -
21 MR. ROSEN: - if I objected to it.
22 THE COURT: Right.
23 MR. ROSEN: I'm responding to you to his question.
24 THE COURT: But it's either yes or no.
25 MR. ROSEN: No, it's not yes or no.
289
1 THE COURT: It's not?
2 MR. ROSEN: No.
3 THE COURT: All right.
4 MR. ROSEN: Because what happened on September 11th,
5 my recollection, and we have the transcript, is as follows: The
6 fee - the portion of the exhibit which was the fee order was
7 out. That's the one that was reversed by the Ninth Circuit.
8 The portion of the exhibit which constitutes the
9 District Court's judgment was in on consent, so it's not yes or
10 no. It's half and half.
11 THE COURT: Do you agree?
12 MR. ZLOTOFF: I - yes, he's right.
13 THE COURT: G admitted except for the fee award.
14 (Debtor's Exhibit G, excluding fee award, received in
15 evidence.)
16 MR. ROSEN: The fee order, right.
17 MR. ZLOTOFF: All right. And then the jury
18 instruction, H, I believe was okay.
19 MR. ROSEN: Yes, no objection.
20 MR. ZLOTOFF: Okay. I move for that admittance.
21 THE COURT: G is admitted for the purpose I said. And
22 H is admitted.
23 (Debtor's Exhibit H received in evidence.)
24 MR. ZLOTOFF: I was out. J and K were out. M was
25 out, N was out.
290
1 MR. ROSEN: Right.
2 MR. ZLOTOFF: Now that leaves us with O, Your Honor,
3 and I - you asked me to bring some verification. What I brought
4 was copies of the subpoena. I gave - I served Mr. Rosen a copy
5 of that. And I could -
6 THE COURT: It's subpoena on the bank?
7 MR. ZLOTOFF: Yes. But it was done by RTC. So - oh,
8 I'll lodge that with the Clerk.
9 THE CLERK: Did you say M and N were out?
10 THE COURT: Let me see what he has there for the O.
11 MR. ZLOTOFF: Right, M and N are out.
12 THE CLERK: Okay.
13 THE COURT: Go ahead, Mr. Rosen.
14 MR. ROSEN: I wasn't saying anything, Judge. I'm
15 sorry.
16 THE COURT: Well, are you going to respond, because -
17 to my taking this in?
18 MR. ROSEN: Yeah, I already did - I believe I objected
19 earlier.
20 THE COURT: I understand, but now what we have is a
21 subpoena with Wells Fargo apparently sending to you or your
22 client, another lawyer of your client, a certification that
23 these are true copies of bank records in the custodian's
24 possession as described in the above-referenced legal order, and
25 they include the documents which are the bank statements.
291
1 MR. ROSEN: Here's my problem, and perhaps Mr. Zlotoff
2 can clarify it or relieve my problem by representation. You
3 have before you as Exhibit O a document of World Savings Bank -
4 THE COURT: Wells Fargo.
5 MR. ROSEN: I'm sorry. - Wells Fargo's statements for
6 certain months that Mr. Zlotoff offered - excuse me - marked for
7 identification and offered as Exhibit O.
8 The document that you're holding now, the subpoena and
9 the compliance with the subpoena by the bank, I have not
10 compared that to Exhibit O. If Mr. Zlotoff is representing that
11 the documents sent to Mr. Hogan before my time, by the way, are
12 exactly the same as what he's offered as Exhibit O, I don't have
13 any objection. But I don't know that without having to sit down
14 and compare them, and Mr. Zlotoff just gave me the subpoena.
15 THE COURT: Okay. Well, during our next break you can
16 sit down and compare them, and that'll work fine.
17 MR. ROSEN: I'll take Mr. Zlotoff's representation if
18 he's done that.
19 THE COURT: Yeah. I don't know if he's had the time
20 to do it either.
21 MR. ROSEN: Okay.
22 MR. ZLOTOFF: All right. Finally, Your Honor, -
23 THE COURT: So O isn't admitted it. It's admitted
24 subject to them getting together on this.
25 MR. ZLOTOFF: Right.
292
1 P was - I augmented the list. P is a Court docket or
2 a Court calendar.
3 THE COURT: Yeah. It's a Court calendar for September
4 9 at 2:00 p.m. with a - is that okay, Mr. Rosen?
5 MR. ROSEN: Well, other than my objection that I've
6 expressed earlier, that -
7 THE COURT: I don't remember what you're talking
8 about.
9 MR. ROSEN: Well, -
10 THE COURT: This is just a calendar. What - what was
11 the objection you expressed earlier vis-a-vis the calendar?
12 MR. ROSEN: It's not on the exhibit list.
13 THE COURT: Oh, are you prejudiced in the slightest by
14 this?
15 MR. ROSEN: I have no idea. I don't know what the
16 argument that Mr. Zlotoff intends to make from it. All it is is
17 a - is Your Honor's posting of a docket as to what you're
18 hearing on a particular day. I haven't got the slightest idea
19 what argument he's going to make, and therefore I cannot respond
20 to a question of whether I'm prejudiced.
21 And I might say one other thing, Your Honor, because
22 you asked me that before. There is no - in my view,
23 respectfully, there is no basis to turn to me and ask if I'm
24 prejudiced. My prejudice would only occur if Mr. Zlotoff
25 demonstrated good cause for why a document he's now offering was
293
1 not tendered to us in compliance with Your Honor's order. I
2 would understand at that point, Your Honor, turning to me. But
3 you've now reversed the cart and the horse, and you put the
4 burden on me.
5 There's been no showing of good cause with respect to
6 any document, O or P, that was not in Mr. Zlotoff's original
7 exhibit list.
8 MR. ZLOTOFF: Well, let me explain this document P. I
9 actually offer it simply that the Court take judicial notice of
10 the fact that the trustee withdrew her objection to
11 confirmation. That's - it's noted there on the Court's
12 calendar. I offer it because I think it's pertinent to the
13 hearing today.
14 THE COURT: Yeah. That must be a written objection
15 that was submitted on September 1st, see, and it would be part
16 of the Court's file of which you've asked me to take judicial
17 notice, because it says "Withdrawn with oral amendment on
18 September 1st." So the trustee must have done some on September
19 1st and then done something on the record on that day.
20 MR. ZLOTOFF: Right.
21 THE COURT: And I don't know what that is.
22 MR. ROSEN: Your Honor, I have another problem. I
23 don't know what plan it refers to. As the test- - as the
24 argument before you on Friday has already demonstrated, I think
25 we're up to plan number four, starting with the very first one
294
1 that the debtor filed on his own, and then there was an
2 amendment, then there was one that Mr. Zlotoff was involved in,
3 then there was a fourth one.
4 So to look at something and say the trustee had
5 withdrawn an objection to a plan, I haven't got the slightest
6 idea what plan it is.
7 MR. ZLOTOFF: Yeah. All right. We - this is part for
8 argument because the fact of the matter is the trustee on the
9 record withdrew her objection. That's the only reason I'm
10 offering it. And it's -
11 THE COURT: But something must have happened. Was it
12 the objection of September 1st that she withdrew?
13 MR. ZLOTOFF: She - she withdrew an objection to
14 confirmation. That's all.
15 THE COURT: I know, but do you see the reference to
16 the September 1st date?
17 MR. ZLOTOFF: Right. That's when it happened several
18 years ago.
19 THE COURT: No. The calendar was on September 9.
20 MR. ZLOTOFF: Right.
21 THE COURT: Right?
22 MR. ZLOTOFF: I don't know. What did I do with it.
23 THE COURT: Oh, I see, the objection - I guess the
24 objection was the previous year.
25 MR. ZLOTOFF: Right.
295
1 THE COURT: Because - okay. I don't know what the
2 objection refers to, so without the help of the transcript of
3 that hearing, it would be hard to know what she was withdrawing
4 her objection to. But I agree that it was whatever plan was on
5 the table at that time, -
6 MR. ZLOTOFF: Right.
7 THE COURT: - and I don't know what that was.
8 MR. ZLOTOFF: Okay. The plans haven't changed
9 substantially since then.
10 All right. And then Q was a copy of a transcript and
11 a copy of an order made by this Court.
12 THE COURT: Any objection?
13 MR. ROSEN: I have two objections to Q.
14 MR. ZLOTOFF: I can explain the relevancy of that and
15 why it wasn't provided earlier.
16 THE COURT: Yes, that would be good.
17 MR. ROSEN: Well, -
18 MR. ZLOTOFF: Okay.
19 MR. ROSEN: - why don't I defer to -
20 THE COURT: If he has no objection, then there would
21 be no problem.
22 But go ahead.
23 MR. ROSEN: I have an objection, but if Mr. Zlotoff
24 wants to tell you the relevance, I'm all ears, Judge.
25 MR. ZLOTOFF: All right. The reason is that RTC in
296
1 its claims, both the original and its amended claim filed not
2 too long, continues to assert an unsecured claim notwithstanding
3 the fact that it also apparently asserts a secured claim.
4 And so there's a quandary and I felt a need to delve
5 into the record in order to try to sort of the quandary. And
6 this transcript helps because it is at the point when the - the
7 unsecured claim may have become secured.
8 MR. ROSEN: Your Honor, my objections are as follows.
9 This is a portion, an excerpt of a transcript of the proceedings
10 before Your Honor on July 13th, 1998 on, among other things, the
11 debtor's request to reinstate a previously-withdrawn/dismissed
12 petition of February of 1998.
13 Mr. Zlotoff mentioned this on Friday and he offers
14 this, I presume, and in particular page 52 to suggest that Your
15 Honor was reinstating the petition retroactively so as to suck
16 up, if you will, under the automatic stay provision the judgment
17 and lien that we filed between the dismissal of the petition and
18 Your Honor's order of reinstatement.
19 As Your Honor may recall when Mr. Zlotoff made this
20 pitch on Friday, I specifically advised him that he is offering
21 exhibits which are - an exhibit which is incomplete and that the
22 rest of the transcript conforms to Your Honor's order which is -
23 which is - it specifically says that it operates perspective
24 only.
25 So my first objection is that this is incomplete and
297
1 Mr. Zlotoff has offered a snippet out of context of what Your
2 Honor said on July 13th.
3 Applying Rule 32, if it were a deposition, we would
4 have the right to put in the entirety of the transcript to show
5 in context what Your Honor said.
6 My second objection goes to relevance and that is the
7 issue of whether we filed a lien which Your Honor retroactively
8 invalidated is not an issue in these hearings. It's not an
9 issue on the motion to dismiss nor is it an issue on the motion
10 to confirm. No motion has been filed with Your Honor to set
11 aside the lien. And any - any argument that the lien is invalid
12 is not one properly made in this proceeding.
13 I objected to it last time because if Mr. Zlotoff is
14 going to take the position that our lien - our judgment lien
15 ought be vacated for any reason, I don't care if the reason is
16 362 or any other reason, we're entitled to notice and
17 opportunity to be heard. There is no motion pending. And,
18 quite frankly, I cannot see any possible relevance to either of
19 the two matters before Your Honor in this trial on that subject.
20 It may very well be relevant when we get to a
21 sale-of-the-house issue in October, but even that motion doesn't
22 ask for a determination to vacate the lien. It only asks to
23 transfer the lien to - to proceeds. So there's been nothing
24 before the Court which would - by way of Mr. Zlotoff - a motion
25 by Mr. Zlotoff to vacate the lien.
298
1 And I would only add one last thing, and I don't want
2 to keep saying this because I'm starting to feel like I'm a
3 broken record. Mr. Zlotoff keeps saying what he said on Friday
4 and that is some - some confusion in his mind as to whether
5 we're a secured or unsecured creditor. I made it quite clear on
6 Friday that we are both.
7 And as to the time that this - of this hearing on July
8 13th, 1998, I believe the only judgment we had was the judgment
9 for on the jury verdict, as to which we were secured. However,
10 as our notice of claim shows, we have additional judgments which
11 are arguably prepetition, including the attorneys' fee award,
12 because it arose out of facts prepetition, that make us an
13 unsecured creditor.
14 So I don't understand Mr. Zlotoff's confusion. We are
15 a secured creditor to the extent of $75,000, subject to any
16 motion to vacate our lien or security interest respecting the
17 judgment of the - entered on the jury verdict for damages.
18 We're an unsecured creditor for other matters, including the
19 award of attorneys' fees that was granted by Judge Whyte, after
20 July 13th, 1998.
21 And I just don't understand what the confusion is.
22 MR. ZLOTOFF: All right, Your Honor. I'm not going to
23 belabor it. I - I understand what he's saying, and that's fine.
24 I don't need it in at this point in time.
25 THE COURT: Are you ready to go back to Ms. Lucas?
299
1 MR. ZLOTOFF: I am. I'm going to try, though, I
2 probably won't succeed, because it's going to bore me to tears
3 to do this otherwise, but I'm going to see if I can't have -
4 THE COURT: What exhibit book are we in?
5 MR. ZLOTOFF: We're at exhibit -
6 THE COURT: What exhibit book are we in?
7 MR. ZLOTOFF: The blue one.
8 THE COURT: Thank you.
9 MR. ZLOTOFF: Exhibit B.
10 And I'm going to - I'm going to see whether it's - I'm
11 going to ask if Ms. Lucas can look at this schedule and see if
12 this seems within the range of values for various expenses as
13 noted.
14 MR. ROSEN: I'm sorry. Exhibit B?
15 MR. ZLOTOFF: I'm sorry. Exhibit - Exhibit B,
16 Schedule J. That would be one, two, three, four, five pages in.
17 MR. ROSEN: Just give me a second to get it, Your
18 Honor.
19 I object. This - you've already ruled on this. You
20 ruled in limine, and we just repeated it on this record, this
21 exhibit comes in only to show that this is what was filed with
22 the Court, not for the truth. And now counsel is going to ask
23 this witness to say whether these items are correct?
24 MR. ZLOTOFF: Of her own opinion, right. I'm not
25 asking her to affirm under penalty of perjury that these are
300
1 accurate. I'm saying are they within a range of - of numbers
2 that are - that approximate the expense categories for each item
3 indicated.
4 MR. ROSEN: How would she even know that?
5 MR. ZLOTOFF: Because she lives in the house in which
6 the expenses are incurred.
7 THE COURT: Look, you have to establish a foundation
8 that she would know it.
9 MR. ZLOTOFF: Okay.
10 THE COURT: And then I'll consider the objection.
11 MR. ROSEN: And, Your Honor, can we have - it looks to
12 me from where I'm sitting that the witness has the exhibit open.
13 MR. ZLOTOFF: All right.
14 MR. ROSEN: We went through this on Friday. This is
15 not a reading test. May we ask that the exhibit be closed?
16 THE COURT: Please close the book, Ms. - Ms. Lucas,
17 for now.
18 BY MR. ZLOTOFF:
19 Q. All right. Ms. Lucas, can you give us the range as of
20 February of '98 for your electricity and heating bill?
21 A. I don't have a specific recollection for that year. It
22 usually ranged between about $60 in the summer and a hundred and
23 something in the winter.
24 Q. And can you give us - how would you know this? How would
25 you know anything about your utility bills?
301
1 A. I paid the bills.
2 MR. ROSEN: Objection, best evidence rule. The best
3 evidence of what the actual expenditure is, is the bills.
4 THE COURT: Overruled.
5 BY MR. ZLOTOFF:
6 Q. And do you have knowledge with regard to the range of water
7 and sewer bills for 1998?
8 A. The - the utilities in Palo Alto are actually all in one
9 bill, so the water and sewer and trash collection and
10 electricity and gas are a single entity still. And the figure
11 that I gave is - is actually the whole of all of those services.
12 Q. All right. And of your own personal knowledge, do you know
13 how many household telephone - telephones there were, telephone
14 numbers, telephone accounts?
15 MR. ROSEN: Objection, Your Honor.
16 THE WITNESS: There -
17 MR. ROSEN: May I just state my objection, my
18 additional objection to this?
19 The debtor filed Exhibit B with this Court. It is not
20 only sworn to, it is certified by his counsel. This is
21 supposedly an accurate representation of what the expenses of
22 the household and of the debtor were at the time this was filed.
23 To offer - to allow any evidence by this witness to
24 contradict any figure here is to allow - is to - is to ignore
25 the estoppel effect of the debtor and his counsel's signature on
302
1 this document. You simply cannot - indeed, Your Honor, you
2 wouldn't even let the debtor do it if he were here.
3 You can't have a debtor get up on the stand and say,
4 'You know, I swore that my electricity bill was x. I signed it.
5 I swore to it. My counsel filed it and he swore and he
6 certified to its accuracy, and now I'm going to get up here and
7 tell you something else.' That is estoppel.
8 THE COURT: We don't have the debtor here. And if I
9 find that I'm incorrect in some of these rulings along the way,
10 then I will be in a position where I will have to not rely on
11 the information. And so we have a situation in which the person
12 who signed this is not available for trial. They could be not
13 available for the reason that this person is not available or
14 not available for some other reason.
15 But at this point there's a challenge to the numbers.
16 And the debtor's wife is a reasonable person to testify as to
17 the range of figures that estimate the correct numbers. If that
18 turns out to be incorrect upon further research, then the Court
19 won't rely on it.
20 MR. ROSEN: Your Honor, I -
21 THE COURT: I'm going to take the testimony.
22 MR. ROSEN: I accept the ruling. I don't want to
23 argue with you further except I ask Your Honor to please note if
24 it was an inartful choice of words. You said, quote: The
25 debtor is not available. "Not available" under law doesn't -
303
1 THE COURT: No, I don't mean that. He's not here.
2 MR. ROSEN: Yeah, he's not here because he's a
3 fugitive.
4 THE COURT: I know you've said that over and over and
5 over again, Mr. Rosen.
6 MR. ROSEN: Well, is there any dispute about it?
7 THE COURT: And you like to say, and I have no problem
8 with - with - nobody's arguing that point.
9 MR. ROSEN: All right. Because I - I didn't want the
10 record to reflect "not available." As Your Honor knows, "not
11 available" is a term of art under Rule 32. It means that the -
12 it excludes the - the debtor having procured the absence from
13 the jurisdiction of, in this case, himself. And that does not
14 qualify as "not available."
15 So I just wanted to make sure Your Honor was not using
16 the term in the legal sense that it's used under the Federal
17 Rules, including Rule 32.
18 THE COURT: I simply meant that he wasn't here.
19 MR. ROSEN: And, Your Honor, my point is you cannot -
20 THE COURT: I know. I've heard it already. You've
21 said it several times. Unless you're going to say something you
22 haven't said before, I don't want to hear it -
23 MR. ROSEN: Yeah. I - I was about to. I was about to
24 say, Your Honor, you cannot get away from the fact as to why the
25 debtor is not here. To allow this witness to testify because
304
1 the debtor is improperly not here is simply wrong.
2 THE COURT: Okay. Thank you for that.
3 MR. ROSEN: Okay.
4 BY MR. ZLOTOFF:
5 Q. Ms. Lucas, did - did you pay telephone bills in or about
6 1998?
7 A. Yes.
8 Q. And can you recall the range of charges for telephone bills
9 monthly during that period of time?
10 MR. ROSEN: Your Honor, may we have a specification as
11 to whether she's talking about the home phone, Mr. Henson's
12 separate phone, her separate phone?
13 THE COURT: Mr. Zlotoff, -
14 MR. ZLOTOFF: Right.
15 THE COURT: - you'll clarify that.
16 MR. ZLOTOFF: Right.
17 BY MR. ZLOTOFF:
18 Q. What - what phone bills do you recall paying during that
19 period of time?
20 A. The bills were from Pacific Bell and there - they were for
21 two lines that came into the house and the area used as an
22 office in the back of the office. One was basically for use
23 with the computer modem. And there were very few calls made for
24 that. It was mostly just the monthly fee. The other was a
25 phone used for both long distance and for local distance.
305
1 MR. ROSEN: The same objection, Your Honor, on best
2 evidence.
3 THE COURT: The objection's overruled. We don't have
4 a number yet.
5 MR. ZLOTOFF: Right.
6 BY MR. ZLOTOFF:
7 Q. Do you have a recollection at all about what the combined
8 amount of those phone bills was - on the average. I don't want
9 you to - in fact, I'm not even asking about a specific bill,
10 because it's - I'm asking about a range that may have occurred
11 over a whole year.
12 MR. ROSEN: I object to "over a whole year." The
13 issue is the date that this document was filed. And it was
14 filed on August, looks like, 4th, signed by Mr. Zlotoff. And if
15 he wants to ask her about what the telephone bill was at that
16 time, subject to my other objections, let him do so.
17 But to talk about a year which would include a period
18 of time before the petition and a period of time well after the
19 petition and well after this document was filed with the Court I
20 think is inappropriate.
21 MR. ZLOTOFF: Well, -
22 MR. ROSEN: And I don't see any relevance to asking
23 for a range over a year. If the issue is whether these entries
24 on this document filed with this Court are true, then anything
25 the witness can say about a range or what the bill is over the
306
1 course of a year is irrelevant.
2 MR. ZLOTOFF: I disagree because of the fact that
3 we're talking about households here and we're talking about
4 people who generally will not have the same bills for
5 necessities one month versus the next. I think it would be
6 highly inappropriate and inaccurate and not to the spirit of
7 what's requested by the schedule to simply give the last or the
8 most recent statement and say that's what my expense is. I
9 think that might be bad faith, quite frankly, if it was not
10 typical -
11 THE COURT: Look, I disagree with most of what Mr.
12 Rosen said. People generally try to figure out what their
13 monthly bills approximately on average when they file. They
14 don't just figure the prior month.
15 But if she's relying on knowledge she obtained after
16 this was filed, that probably - well, that has to be excluded.
17 MR. ZLOTOFF: Right.
18 THE COURT: It has to be -
19 MR. ZLOTOFF: Right.
20 THE COURT: - from the period that he signed this and
21 before, obviously.
22 MR. ZLOTOFF: Right, right, right. I misspoke. So
23 actually -
24 MR. ROSEN: I did too. I meant to say from the date
25 it was filed, August 4th, '98, and going backwards.
307
1 THE COURT: Right. And that's okay. She can testify.
2 And I disagree about a range as well.
3 We're not - the goal is not necessarily to find
4 whether this exact number is right by the penny, because it's an
5 estimate in any event.
6 BY MR. ZLOTOFF:
7 Q. All right. I think the question was whether you - you have
8 any recollection at all about the combined amount of those bills
9 for that period of time. This would have been around February
10 of '98 or before that for a period of several months.
11 A. I remember that the bills would tend to range from somewhere
12 between 80 and $90 to 3- or $400 a month depending on the
13 long-distance fees of - of all of us, all three of us.
14 MR. ROSEN: The same objection as to best evidence,
15 Your Honor.
16 THE COURT: Overruled.
17 BY MR. ZLOTOFF:
18 Q. Who paid for food, groceries during the period of time in or
19 about February of '98 - 1998?
20 A. We both did. We both shopped.
21 Q. And were purchases made by check or credit card, or what was
22 the manner of purchase?
23 A. Usually cash or ATM.
24 Q. Was there ever a month when you yourself made all of the
25 purchases for food?
308
1 A. In 1998?
2 Q. In or about 1998 or before that.
3 MR. ROSEN: Object to the "before that," unspecified.
4 BY MR. ZLOTOFF:
5 Q. It could have been, let's say, a few months before 1998, to
6 a few months after 1998.
7 MR. ROSEN: I object to the timeframe.
8 BY MR. ZLOTOFF:
9 Q. Were you living with - did your household change at all in
10 any manner in terms of who's living there or your needs at any
11 point during 1997 and 1998?
12 A. Not as to who was living there, but it changed quite a bit
13 in my work schedule and ability to shop; and in the habits of
14 our daughter, who was in high school at the time.
15 Q. Okay. So you may not have a recollection then as far as to
16 how much was spent for food right about 199- - February '98?
17 A. I think we worked out that it was at maximum maybe 400 a
18 week, depending -
19 MR. ROSEN: Objection, -
20 THE WITNESS: - on how many teenagers were there.
21 MR. ROSEN: Objection, move to strike. "we worked
22 out" discloses that this is some conversion that she had with
23 somebody, whether it was Mr. Zlotoff or the debtor, number one.
24 Number two, she's already testify that she didn't make
25 the purchases during this period. So what she's now testifying
309
1 to is the amount of money that Mr. Henson separately paid for
2 food, as to which this is blatant hearsay, apart from best
3 evidence.
4 MR. ZLOTOFF: All right. Let me try to ask it a
5 different way.
6 BY MR. ZLOTOFF:
7 Q. Do you remember how much you yourself, just yourself, not
8 Mr. Henson paid for food, groceries in or about February 1998?
9 A. No. It was probably very little because I was trying to get
10 into my last months of my master's degree. I did see all of the
11 grocery receipts.
12 THE COURT: I need to take a five-minute break and
13 then we'll come back.
14 (Recess taken from 3:03 p.m. to 3:15 p.m.)
15 THE CLERK: Please rise.
16 THE COURT: Please be seated.
17 Counsel, when you came in here on Friday and - is that
18 when we started - and Mr. Rosen announced that he didn't have
19 any witnesses, I didn't time you, because it didn't seem like
20 timing was going to be necessary. It looked like we were going
21 to finish that day, but things have moved on, so I'm going to
22 start timing you. And I just want to let you know that.
23 MR. ZLOTOFF: How much more time do I have, Your
24 Honor?
25 (Laughter.)
310
1 THE COURT: I don't know, Mr. Zlotoff.
2 MR. ROSEN: The answer is 20 hours minus what you
3 used.
4 THE COURT: Right.
5 MR. ZLOTOFF: All right. I hope to be not needing all
6 that time.
7 THE COURT: I honestly thought you were going to
8 finish today.
9 MR. ZLOTOFF: That's what I thought.
10 THE COURT: I thought you were going to finish Friday
11 and then I thought you were going to finish today.
12 MR. ZLOTOFF: I could have sworn that - in fact, if I
13 were betting, I would have bet that it would have been finished
14 by now.
15 We're on the record?
16 THE COURT: Yes, please proceed.
17 BY MR. ZLOTOFF:
18 Q. Okay. Ms. Lucas, in or about February of 1998, explain
19 again who was - who your household consisted of.
20 A. Our - my husband, myself, and our daughter.
21 Q. Okay. And your daughter was how old at that time?
22 A. 1998, 16 and 17.
23 Q. Was she a dependent of yours at that time?
24 A. Yes.
25 Q. Can you describe the health of the persons in your family?
311
1 MR. ROSEN: Objection.
2 THE COURT: Overruled.
3 THE WITNESS: We were in generally good health. I
4 remember we had some illnesses and accidents.
5 BY MR. ZLOTOFF:
6 Q. For - let's go back even to the year of 1997. Was there any
7 extraordinary - well, first of all, who - who paid medical
8 bills? Who paid prescriptions in the family, for the family,
9 during 1997 up to 19- - up to February 1998.
10 A. '97, '98. We had health insurance. We had a health
11 insurance policy which covered all three of us. We had a health
12 - health insurance policies that came and went with my
13 employment. And, in general, I purchased prescriptions except
14 that Keith also purchased prescriptions. For himself,
15 generally.
16 Q. Okay. One second.
17 A. I don't remember if that was the time during which we had
18 orthodontic work done on our daughter. It may have been. That
19 was an expensive business.
20 Q. Can you recall of your own recollection how much in total
21 was spent during 1997 for medical expenses and prescriptions?
22 A. Not anything specific. I know it was several thousand.
23 Q. I'm going to -
24 MR. ROSEN: The same objection, by the way, Your
25 Honor. Hearsay and best evidence.
312
1 THE COURT: Overruled.
2 MR. ROSEN: Your Honor, I apologize. I don't want to
3 sound like a broken record. I just want to make sure that my
4 objections are noted.
5 BY MR. ZLOTOFF:
6 Q. I'm going to request you turn to - to Exhibit I, the fourth
7 page in.
8 MR. ZLOTOFF: I'm not intending to introduce this for
9 - for anything, really.
10 BY MR. ZLOTOFF:
11 Q. I just want you to look at this document, Schedule A of the
12 199- - what purports to be a 1997 income tax return, 1040.
13 A. Yes.
14 Q. Did you prepare this form, this -
15 A. Yes.
16 Q. And if you look on the Schedule A?
17 A. Yes.
18 Q. Under "Medical and Dental Expenses," does that refresh your
19 recollection with respect to medical and dental for that year?
20 MR. ROSEN: Objection. The witness didn't testify her
21 recollection needed refreshing. The last answer was she
22 provided an answer as to what the expenses were.
23 THE COURT: Overruled. She told us she didn't
24 remember what the - when the orthodontic hit.
25 MR. ROSEN: That was two questions ago, Judge. It
313
1 wasn't the last question.
2 THE COURT: The ruling stands.
3 THE WITNESS: I'm sorry. What was the question?
4 BY MR. ZLOTOFF:
5 Q. The question was in the Medical and Dental expense column on
6 Schedule A, does that refresh your - there are numbers there.
7 A. Yes.
8 Q. Did you prepare the numbers?
9 A. Yes.
10 Q. Does this refresh your recollection with regard to how much
11 was spent during that year and for what?
12 A. Yes.
13 Q. And can you, of your own recollection now, can you tell us
14 now what...
15 A. Given the amount, it probably did include dental work for
16 our daughter. In 1997 I can't remember specifically what
17 accidents we sustained. I do have - on Friday I brought our
18 1997 expenses, and I have all the medical receipts in there. It
19 included both preventive visits, vaccinations, physical
20 examinations. I can't remember if that was one of the years I
21 broke a bone. My husband's hypertension medications. Both
22 ordinary and extraordinary prescriptions and medical travel
23 and -
24 Q. Would it have included - did you have -
25 MR. ROSEN: Excuse me, Your Honor. I'm sorry, Mr.
314
1 Zlotoff. I move to strike this on several grounds. Number one,
2 you've already ruled this document is not in evidence. The
3 witness is now just reading from the document, number one.
4 Number two, this is an attempt to impeach the schedule
5 signed and sworn to by the debtor, which is again collateral
6 attack on - on what the debtor told the Court.
7 Number three, these are the very documents that the
8 witness has now testified that she's recently reviewed which we
9 were told by Mr. Henson he destroyed. And I will read it to you
10 again if Your Honor wants, but when we deposed him in the year
11 2000 in a 2004 examination, his testimony was the underlying
12 documents of the tax return, he said, "I'll take my chances with
13 the IRS. I'm going to destroy them."
14 And my fourth - so to allow this witness to now
15 testify as to what these expenditures were, it strikes me as
16 just being absolutely improper. And the last objection -
17 THE COURT: Haven't you had this - haven't you had
18 this exhibit for a long time?
19 MR. ROSEN: What exhibit? The one she's talking
20 about, the underlying records?
21 THE COURT: No. The exhibit from which she's
22 testified.
23 MR. ROSEN: The tax return?
24 THE COURT: Yes.
25 MR. ROSEN: Yes, but the tax return is not admitted
315
1 for the truth of what's in there. She's testifying that she
2 went back recently and reviewed the underlying records of the
3 medical expenses. And I'm saying how can you possibly do that
4 when - when Mr. Henson testified in 2004 that they had been
5 destroyed?
6 And my last objection, Your Honor, is I'm - I must be
7 missing something, but I am looking at this exhibit, Schedule A,
8 and there is no differentiation here, as near as I can see,
9 between Mr. Henson's expenses versus the expenses of Ms. Lucas,
10 who paid what expenses, how much of this is insurance, how much
11 of this was reimbursed. I have no idea.
12 THE COURT: Well, I -
13 MR. ZLOTOFF: Your Honor, -
14 THE COURT: Okay. Go ahead.
15 MR. ZLOTOFF: Well, all of this is great for
16 cross-examination. I simply gave her a document that had just
17 some bare numbers on it. There wasn't any underlying
18 documentation or - that she's testifying about. This is just
19 used to jog her memory.
20 And based on the - the magnitude, she was able to, for
21 example, remember about the dental and other things.
22 THE WITNESS: Excuse me,, Your Honor. I did bring
23 with me on Friday -
24 THE COURT: You need to - you need to get to the
25 microphone. I can't -
316
1 THE WITNESS: I did bring with me on Friday the 1997
2 records that Mr. Rosen is saying were destroyed. I can bring
3 them back with me tomorrow. I'll be glad to. They were not
4 destroyed.
5 MR. ROSEN: I didn't say they were destroyed. I said
6 Mr. Henson testified they were.
7 BY MR. ZLOTOFF:
8 Q. Okay. Oh, I was going to ask you when you were -
9 THE COURT: Wait a second. So you're testifying from
10 exhibits that weren't provided to the other side?
11 THE WITNESS: I -
12 THE COURT: From documents that weren't provided to
13 the other side?
14 THE WITNESS: I thought they were provided.
15 MR. ZLOTOFF: Your Honor, I - honestly I don't know
16 what Mr. Rosen is referring to. I honestly don't.
17 And I thought that all documents were provided as
18 well. So I - I don't know -
19 THE COURT: Okay. So I'll take the testimony. If he
20 wants to make a motion to strike, he can include it in a
21 posttrial brief, because there's no way to deal with all this
22 instantaneously.
23 BY MR. ZLOTOFF:
24 Q. All right. I was going to ask you with regard to the
25 medical whether that included health insurance premiums?
317
1 THE COURT: And, by the way, for the tax purposes -
2 well, that's all right. I - I can deal with that in this issue.
3 Never mind.
4 Go ahead.
5 THE WITNESS: As I remember, a portion of the tax,
6 because it was for self-employed purposes, was included here and
7 a portion was included on a previous page, where it's allowed to
8 take it off the top, more or less. We were self-insured except
9 where my - I had insurance of my own and covered my family when
10 I could from my own employment.
11 THE COURT: I just have a question to clarify
12 something in response to something Mr. Rosen said.
13 When you list medical - and I'm not asking you about
14 any particular document. When you would list medical and dental
15 expenses on a tax form, do you include those that were
16 reimbursed as well as those that were unreimbursed?
17 THE WITNESS: No.
18 THE COURT: What do you include?
19 THE WITNESS: Everything that we actually paid. And
20 if - I subtract out what was reimbursed.
21 BY MR. ZLOTOFF:
22 Q. Ms. Lucas, did you make the mortgage payments in or about
23 February of '98?
24 A. Yes.
25 Q. Did the mortgage payments include property tax and
318
1 insurance, home insurance?
2 A. No.
3 Q. Those were separate payments?
4 A. Yes.
5 Q. Do you remember how much a year those were at that time?
6 A. They've gone up considerably. I think then they were 2,- or
7 3,000 a year.
8 MR. ROSEN: Objection, Your Honor. Hearsay, best
9 evidence rule. The question is how much the tax payments were,
10 real estate tax payments were. At this point in time the best
11 evidence is the tax bill.
12 MR. ZLOTOFF: Let me - let me see if I can address
13 that.
14 BY MR. ZLOTOFF:
15 Q. Do you -
16 THE COURT: If we were seeking the exact number, that
17 would be the case. If we're - if we're satisfied for this
18 purpose with a range, and Mr. Zlotoff apparent is, then the
19 objection's overruled.
20 MR. ROSEN: Well, Your Honor, if - my objection to the
21 range is that a range is irrelevant. The issue is whether or
22 not the statement contained in the debtor's schedules is
23 accurate. And a range leaves us nowhere.
24 For example, if the debtor says that his particular
25 expense was a thousand dollars a month and the witness says the
319
1 range for that expense was 500 to $1500, that is irrelevant to
2 whether or not the - the debtor's statement of a thousand
3 dollars a month is accurate. So again I mean if we're talking
4 about a range, it's irrelevant.
5 THE COURT: I hear you, Mr. Rosen. I'm not convinced
6 that it's irrelevant, but it may be on a - answers to particular
7 questions may be irrelevant.
8 BY MR. ZLOTOFF:
9 Q. I'm sorry. Did we get an answer as far as what - what you
10 recall paying in or about that time per year for taxes and
11 insurance?
12 A. I have -
13 Q. If you recall.
14 A. - remembered that it was around 2,- or 3,000.
15 Q. Okay. Were you involved in - this again refers to 1997,
16 1998, up until I guess the summer of '98, were you involved in -
17 in assisting your husband with any kind of tax payments that
18 were required?
19 A. How do you mean, "assisting"?
20 Q. Well, was - did you assist him with regard to any quarterly
21 tax payments?
22 A. Oh, yes. I figured them out. Usually up through '97, at
23 least '97 if not '98, I used software to figure the quarterly
24 tax payments.
25 Q. Now do you have any recollection now as to what those
320
1 quarterlies amounted to, if you remember, in 1998, I guess the
2 quarterly next nearest the filing would have been, what, that
3 March, the end of March of '98?
4 MR. ROSEN: Objection. Not only is it best evidence -
5 THE COURT: Yes or no first. Let's see what she says.
6 THE WITNESS: Yes.
7 BY MR. ZLOTOFF:
8 Q. Okay. Can you recall what - what the amount of the
9 quarterlies were that - for that time?
10 MR. ROSEN: Objection. Your Honor, not only best
11 evidence rule, but this witness - there's no foundation laid
12 that this witness knows anything about Mr. Henson's earnings,
13 which would supposedly be required to be reflected in quarterly
14 tax payments to the IRS or the State of California.
15 She's testifying that she wrote down what he told her.
16 That hasn't - that's not proof that - of the fact of what - of
17 what his earnings were.
18 MR. ZLOTOFF: No. She said she used a program. I
19 don't - I mean I'm not asking her -
20 THE COURT: Ms. - Ms. Lucas, did you learn what the
21 quarterly tax payments were because Mr. Henson told you?
22 THE WITNESS: No. I estimated on the basis of
23 invoices that I saw and checks coming in. And then I asked him
24 what he might estimate, whether this was going to be a
25 reasonable projection based on what I had seen.
321
1 MR. ROSEN: All right. That's hearsay, Judge.
2 THE COURT: The latter part is.
3 MR. ROSEN: What she saw in documents as well as what
4 he told her is hearsay.
5 She's now testifying that she prepared a quarterly tax
6 statement based on some, quote, documents, unspecified documents
7 that she saw.
8 THE COURT: Right.
9 MR. ZLOTOFF: Well, -
10 THE COURT: But the amount that she paid for quarterly
11 tax payments, whether they were right or wrong, she can testify
12 to.
13 MR. ROSEN: That's all. And -
14 THE COURT: Right.
15 MR. ROSEN: - and I don't have any objection to that.
16 THE COURT: Right.
17 BY MR. ZLOTOFF:
18 Q. Okay. Yeah. So do you have a recollection of - just a
19 number?
20 A. I remember that in that year, for the first time in - in
21 several years since he had his large - worked regularly for
22 large clients, that it fell below a thousand dollars a quarter.
23 MR. ROSEN: Objection. Move to strike comments about
24 large clients, not responsive to the question. The question is
25 what he reported, she reported is that - as the quarterly tax
322
1 payment. If she wants to say a thousand dollars, I don't have
2 any objection to that.
3 THE COURT: Is that the way you remember?
4 THE WITNESS: Yes.
5 THE COURT: Overruled.
6 BY MR. ZLOTOFF:
7 Q. Ms. Henson, - Ms. Lucas, do you recall, again during 1997,
8 1998, whether Mr. - Mr. - well, you and Mr. Henson in connection
9 with your tax returns took any kind of write-offs for travel
10 expenses?
11 A. In 1997, 1998?
12 Q. Let's say 1997. I'm sorry.
13 A. '97.
14 Q. 1997.
15 A. He -
16 THE COURT: But he's not asking you what happened.
17 It's a yes or no question.
18 THE WITNESS: Yes. I'm sorry.
19 Yes.
20 BY MR. ZLOTOFF:
21 Q. And again who - for purposes of figuring out at the year end
22 what amounts were used for travel expenses, whose job was that,
23 yours -
24 A. That was -
25 Q. - or Mr. - or Mr. Henson?
323
1 A. Sorry. That was mine.
2 Q. And in doing that job what did you - what did you look at?
3 What did you - how did you put together that information?
4 A. Receipts.
5 Q. And where did you get the receipts?
6 A. I had either obtained receipts, for instance airline
7 receipts, tickets through the mail, credit card bills that I
8 opened and recorded, or receipt slips that I obtained from my
9 husband.
10 MR. ROSEN: Your Honor, can I ask for clarification?
11 They -
12 THE COURT: You can ask me.
13 MR. ROSEN: Yes. That's what I am. I said Your
14 Honor.
15 THE COURT: You're looking at her, so I'm afraid she's
16 going to answer you.
17 MR. ROSEN: No, no.
18 THE COURT: Go ahead.
19 MR. ROSEN: Your Honor, may I ask that the witness be
20 asked for clarification, and I don't understand the answer as to
21 whether the travel expenses she's talking about are expenses of
22 Mr. Henson or of her.
23 And the second clarification I would ask Your Honor to
24 have the witness provide is she said she opened credit card
25 bills. Is she talking about her credit card bills or Mr.
324
1 Henson's?
2 THE COURT: Or both.
3 MR. ROSEN: Or both.
4 THE COURT: Do you want to provide clarification, Mr.
5 Zlotoff?
6 MR. ZLOTOFF: Yeah. I think she testified that she -
7 well, go ahead. I - are we -
8 THE COURT: No, that's fine. Say whatever you want.
9 I'm sorry.
10 BY MR. ZLOTOFF:
11 Q. Were you compiling information for the year 1997 for just
12 you or for you and Mr. Henson or either of your or...
13 A. I filed out Schedule C which is for an owner-run business,
14 self-employment form. And so I separated out my expenses and
15 Mr. Henson's expenses according to the promptings on the
16 software.
17 Q. Okay. And do you - do you recall - of your own
18 recollection, do you recall - let me ask you this.
19 Was the amount that you recall having spent for
20 travel-related work expense in 1997 greater or less than what
21 was spent in 1998 for travel-related work -
22 A. Great-
23 MR. ROSEN: Objection.
24 THE WITNESS: Excuse me.
25 MR. ROSEN: Is - is counsel talking only about the
325
1 witness' own travel expense for business or is she talking about
2 Mr. Henson's?
3 MR. ZLOTOFF: I'm talking about both.
4 THE WITNESS: As to Mr. Henson's expenses, I remember
5 that it was less for business purposes. As to mine, I remember
6 that it was - 1998 - that it was more.
7 MR. ROSEN: Move to strike, best evidence rule.
8 THE COURT: Overruled.
9 MR. ROSEN: I should also say no foundation and
10 hearsay, just to complete my objection, Your Honor.
11 BY MR. ZLOTOFF:
12 Q. Were - Ms. Lucas, in or about February of - actually in or
13 about - well, let's say February of '98, were you employed?
14 A. February.
15 Q. '98.
16 A. Yes.
17 Q. And where was that?
18 A. Stanford University.
19 Q. Okay. And at some point later on that year in '98 did - did
20 you seek other employment?
21 A. Yes.
22 Q. And somewhere around, let's say, August of '98 were you at a
23 different employment?
24 A. Yes.
25 Q. And where were you employed then?
326
1 A. I - in August of 1998 I was employed by EBSCO, EBSCO doc.
2 And -
3 THE COURT: EBSCO what?
4 THE WITNESS: It's called EBSCO. E- - it's all
5 capitals, E-B-S-C-O and then small letters d-o-c. They are no
6 longer in business. They went out of business that year.
7 I believe in August I also sought employment and
8 received employment back at Stanford University in another
9 capacity in another department.
10 BY MR. ZLOTOFF:
11 Q. All right. For how many months were you at EBSCO?
12 A. I believe it was three.
13 Q. All right. And where was EBSCO located?
14 A. Burlingame, California.
15 Q. Were you paid a salary or an hourly wage?
16 MR. ROSEN: Objection, Your Honor. What possible
17 relevance does this have to anything? She's not the debtor.
18 THE COURT: Are we talking about family income?
19 MR. ZLOTOFF: Right.
20 MR. ROSEN: Family income at the time the petition was
21 filed?
22 MR. ZLOTOFF: No. At the time -
23 THE COURT: Why is her income in August relevant?
24 MR. ZLOTOFF: Because that's when the schedule was
25 filed, an amended schedule.
327
1 THE COURT: You can answer.
2 THE WITNESS: I'm sorry. I lost the question. What
3 was it again?
4 BY MR. ZLOTOFF:
5 Q. Do -
6 THE COURT: Were you paid a salary -
7 THE WITNESS: Oh. Oh.
8 THE COURT: - or were you paid an hourly at EBSCO?
9 THE WITNESS: Hourly wage.
10 BY MR. ZLOTOFF:
11 Q. All right. And do you recall roughly your gross and net per
12 month, on the average, if you recall -
13 MR. ROSEN: At what point in time is this, Your Honor?
14 MR. ZLOTOFF: This - when - she only worked there for
15 three months, so.
16 THE WITNESS: It was, I believe, $12 an hour.
17 BY MR. ZLOTOFF:
18 Q. Do you remember any paychecks?
19 A. Not - I remember getting them, but I don't remember the
20 exact amounts.
21 Q. Do you remember approximately?
22 A. I'd just have to multiply it out. I began working in August
23 two jobs, and that kept on going up to three jobs, and so that's
24 a very blurry period for me, as I eventually worked 72 hours a
25 week.
328
1 Q. Is there a reason you worked so often - so much?
2 MR. ROSEN: Objection. What does this have -
3 THE COURT: Overruled.
4 MR. ROSEN: - to do with anything?
5 This is long after any period of relevance.
6 THE COURT: It's approximately during when the
7 schedule were being filed -
8 MR. ZLOTOFF: The schedule - the amended schedules
9 were filed August of 1998.
10 MR. ROSEN: August 4th. And she's testifying to a
11 period which she did after August 4th.
12 THE COURT: Is that true, are you testifying for the
13 period after August 4th?
14 THE WITNESS: As far as the third job was concerned,
15 yes.
16 THE COURT: Were you working two jobs as of August 4?
17 THE WITNESS: Yes.
18 THE COURT: It seems to me that - I don't see any
19 relevance to anything that happened after the schedule was
20 filed -
21 MR. ZLOTOFF: I withdraw the question, Your Honor.
22 BY MR. ZLOTOFF:
23 Q. Did you work 40-hour weeks?
24 A. I worked more than 40 hours.
25 Q. Okay. Did your daughter attend private school or public
329
1 school?
2 A. Public school.
3 Q. Were there, as you recall, any school-related expenses you
4 had to pay, fees or whatnot that she incurred or you had to pay
5 for her?
6 A. Yes.
7 MR. ROSEN: Objection - objection, best evidence.
8 Also can we have a time? I assume, and perhaps I just want to
9 make sure that we're talking about the period in 1998 up till
10 August 4th of '98. That's what the question, -
11 MR. ZLOTOFF: Yes.
12 MR. ROSEN: - the time referenced in the question and
13 the answer?
14 MR. ZLOTOFF: Yes.
15 MR. ROSEN: Okay.
16 BY MR. ZLOTOFF:
17 Q. Do you recall handling or paying - again this would be as
18 of, let's say, August of '98, automobile insurance, did you take
19 care of paying that bill?
20 A. Yes.
21 Q. Do you recall what that was at that time?
22 A. I seem to remember it was something like $800 a year.
23 MR. ROSEN: The same objection, Your Honor -
24 objections I should say. Best evidence, hearsay, and attempt to
25 impeach the sworn statement of Mr. Henson.
330
1 MR. ZLOTOFF: I'm not trying to impeach anything.
2 She's giving her impression based upon her having paid bills,
3 what she recalls as being an average amount, not this specific
4 amount, but an average amount at - at the period of time.
5 That's all that the law requires as far as I'm concerned with
6 regard -
7 THE COURT: The objection's overruled.
8 BY MR. ZLOTOFF:
9 Q. I don't recall, but can you refresh our recollection as far
10 - as far as the life insurance, the Al- - the Alcor -
11 THE COURT: The witness is now refreshing the lawyer's
12 recollection.
13 BY MR. ZLOTOFF:
14 Q. As far as the Alcor, was that - did you have to pay a
15 premium on that or was that - was the premium paid by the cash -
16 the cash value that was built up?
17 A. It was paid each month.
18 Q. You had to pay it?
19 A. Yes.
20 Q. I see. And do you remember - did you handle that payment to
21 those?
22 A. Yes.
23 Q. Okay. And that - did you notice that on the schedule, or do
24 you remember off your own recollection what the amounts were?
25 MR. ROSEN: Objection. Is the question how much the
331
1 premium was for the witness or how much the premium was for Mr.
2 Henson?
3 MR. ZLOTOFF: Both. What the premiums were - they
4 were the same.
5 BY MR. ZLOTOFF:
6 Q. You had - you had a policy; is that right? You had your
7 insurance and Mr. Henson had a similar one; is that right?
8 A. I had thought of them as being separate at that time. I
9 knew that they were billed together. I learned later that
10 apparently they're the same policy, which surprised me.
11 Q. Okay.
12 THE COURT: Do you remember how much it was?
13 THE WITNESS: Yes. Seventy dollars a month.
14 THE COURT: Is that for - covering both you and Mr.
15 Henson?
16 THE WITNESS: Yes, that's right.
17 BY MR. ZLOTOFF:
18 Q. Do you recall having - again this would be during 1998,
19 specifically in or around February - February '98 - I'm sorry -
20 March - August '98, having to outlay funds at all for upkeep or
21 maintenance of the house?
22 A. Yes.
23 Q. And do you remember any specific projects or things that
24 were required with regard to that type of expense -
25 MR. ROSEN: In - in August of '98; is that the
332
1 question?
2 MR. ZLOTOFF: Yes.
3 THE WITNESS: I don't remember any specific outlays.
4 There were constant maintenance problems.
5 BY MR. ZLOTOFF:
6 Q. Okay. Did Keith have - again, in or around August of '98,
7 did Keith have an office in the house, in your house there at
8 College Avenue?
9 A. Yes.
10 Q. Did he do a lot of his work there in the house?
11 MR. ROSEN: Objection. No basis for this witness to
12 testify. She's out working two jobs, according to her own
13 testimony. How would she possibly know how much her work does
14 in the house versus out of the house?
15 THE COURT: Overruled.
16 THE WITNESS: Yes. He did a lot of work in the house.
17 He also did work outside the house.
18 MR. ZLOTOFF: I'm - I'm going to see if I can do it
19 again. I'll probably not succeed. But I'm going to ask based
20 upon her clearly having a close connection with the invoices,
21 the receipts, the bills, the computer, the tax returns, his
22 having an office in the house, I'm going to ask whether she -
23 THE COURT: Ask.
24 MR. ZLOTOFF: - whether she knew -
25 THE COURT: Are you - who are you talking to?
333
1 MR. ZLOTOFF: Whether she knew what - what -
2 approximately what his income was in or about August of 1998.
3 MR. ROSEN: Objection. This has already been ruled
4 on.
5 THE COURT: Wait, the question wasn't finished even
6 before you said your objection.
7 In or - what? In or about -
8 BY MR. ZLOTOFF:
9 Q. In or about August of 1998, what -
10 THE COURT: What Mr. Henson's was or what Mrs.
11 Henson's was or what -
12 MR. ZLOTOFF: What Ms. - Ms. -
13 THE COURT: - the combined income of the family -
14 MR. ZLOTOFF: No, no.
15 THE COURT: - was?
16 MR. ZLOTOFF: No, no. Mr. Henson, what his income
17 was.
18 MR. ROSEN: Objection. The question was already
19 answered. Your Honor sustained the objection to it.
20 MR. ZLOTOFF: That was before there was a good deal of
21 foundation laid by -
22 MR. ROSEN: There's no foundation laid to show that
23 this witness has any firsthand knowledge of what her husband
24 made. There's no documents, there's nothing. And if she has
25 any knowledge at all it is solely based on what her husband told
334
1 her, which is hearsay.
2 THE COURT: Did - wait.
3 MR. ZLOTOFF: No, she -
4 THE COURT: Wait a second.
5 I'm not - I don't want you to answer anything about
6 how much your husband made or didn't make. But do you have
7 knowledge of what your husband made?
8 THE WITNESS: Yes.
9 THE COURT: Okay. And what is that based?
10 THE WITNESS: The fact that he didn't go to work
11 during August of that year.
12 THE COURT: At all?
13 THE WITNESS: He was -
14 THE COURT: No, we're talking about for the year,
15 right? Or you want to know -
16 THE WITNESS: No, in August -
17 THE COURT: - just about August?
18 MR. ZLOTOFF: Just August.
19 THE COURT: What do you want to know, just August?
20 BY MR. ZLOTOFF:
21 Q. Let's start with August.
22 THE COURT: Okay.
23 THE WITNESS: He was looking for work.
24 THE COURT: So he was unemployed in August?
25 THE WITNESS: Yes.
335
1 MR. ROSEN: I object and ask to strike "He was looking
2 for work." That's hearsay. This witness doesn't have any
3 firsthand knowledge of whether her husband was looking for work
4 or not.
5 MR. ZLOTOFF: How could she not - how could you say
6 that?
7 BY MR. ZLOTOFF:
8 Q. I mean did you perceive him looking for work?
9 A. Yes. I saw him at the computer sending out email to
10 employers. I helped him remember his appointments with
11 prospective employers. I assisted him in every way I could to
12 get his r‚sum‚ together, anything that he needed.
13 Q. Did you have any direct knowledge of any - on your own,
14 without having discussions with Mr. Henson, with regard to any
15 employment engagements that he next obtained after August?
16 MR. ROSEN: Hearsay.
17 MR. ZLOTOFF: I'm saying not hearsay. I don't want
18 her to tell me any hearsay. It's either yes or no. She either
19 knows or she doesn't, of her own.
20 For all I know, she could have been -
21 THE COURT: Let's not give her suggestions.
22 MR. ZLOTOFF: All right.
23 THE WITNESS: I did -
24 THE COURT: It's a yes or no, right?
25 THE WITNESS: Yes.
336
1 BY MR. ZLOTOFF:
2 Q. And -
3 THE COURT: Say it again because our voices
4 overlapped.
5 THE WITNESS: Yes.
6 BY MR. ZLOTOFF:
7 Q. And just - don't tell me what it is. Just tell me what the
8 basis is for having personal knowledge, what facts, what
9 perceptions did you personally witness with regard to any
10 employment?
11 A. I saw his invoices and I talked with his employers when he
12 had them.
13 MR. ROSEN: I move to strike that on the grounds that
14 it's hearsay and not best evidence. How could this witness
15 possibly be allowed to testify that she saw invoices that have
16 not been produced?
17 THE COURT: Because she hasn't testified anything from
18 the invoices.
19 MR. ROSEN: Yes, she does. She has.
20 THE COURT: She hasn't testified as to what invoices
21 said.
22 MR. ROSEN: She's testified -
23 THE COURT: She's just said that he was looking for
24 work before.
25 MR. ROSEN: She testified the - the truth of the - of
337
1 the testimony, which has already been offered is that he was
2 working, as evidenced by the fact that she saw invoices from his
3 employers. That testimony that she saw invoices is offered for
4 the truth, to support her testimony that she is - that he was
5 working.
6 THE COURT: Yeah, but her perception that he was
7 working, I understand. It's overruled.
8 BY MR. ZLOTOFF:
9 Q. Ms. - Ms. Lucas, -
10 THE COURT: Was he - okay. That's fine. Go ahead.
11 BY MR. ZLOTOFF:
12 Q. Ms. Lucas, again you prepared the 1997 income tax return.
13 Do you recall what the total gross income was for both of you
14 for that year?
15 A. Not with -
16 MR. ROSEN: I object. This is a backdoor way of
17 avoiding an in limine motion. The in limine ruling was this
18 docket. The tax return does not come in for the truth, and this
19 is just a backdoor way of putting in in the exact same
20 information.
21 MR. ZLOTOFF: I'm - Your Honor, I'm - we don't have to
22 have the document. She can tes- - she filled out her tax
23 return. It was an event that she did at the time and it happens
24 to have relevance, I think.
25 THE COURT: If she signed a tax return she can testify
338
1 that she signed a tax return that went in. That's not a
2 problem. If - if he's not here, then he obviously can't - the
3 document cannot come in without supporting testimony. But if
4 she says, 'This is the tax return that I sent to the IRS,' that
5 can come in.
6 MR. ROSEN: And it can't come in for the truth of
7 what's in it. If there's some relevance to showing she sent it
8 to the IRS, yes. But it's being offered - being offered in
9 contradiction to the in limine ruling presumably to show how
10 much income was reported.
11 THE COURT: I understand, but how much income was
12 reported is - also can come in, because it was reported, how
13 much income was reported because she sent it in and she's here.
14 Your in limine motion presumed that the document by
15 itself could not come in, and that's true. There was nobody who
16 sent it in. But if she says, 'This is my tax return and this is
17 what I sent to the IRS,' it does show what was reported to the
18 IRS by her.
19 MR. ROSEN: Your Honor, I - you're absolutely correct.
20 If the issue is and if it has any relevance what she reported to
21 the IRS as opposed to what the truth is then the tax return
22 comes in to show what she reported. I don't think what she
23 reported to the IRS has any relevance to the issues before you
24 because, as Your Honor just said, even if you let the tax return
25 in or her testimony in as showing what she reported to the IRS,
339
1 that does not show what the truth is respecting Mr. Henson's
2 earnings.
3 So if we understand that, that it cannot come in for
4 the - neither the return nor her testimony, for the truth of how
5 much Mr. Henson made that year, then I respectfully suggest
6 there is no relevance to the proposition of what was reported to
7 the IRS. And - and -
8 THE COURT: We'll see whether -
9 MR. ROSEN: And my -
10 THE COURT: - whether it's relevant or not from what
11 comes later, but in terms of the document itself, if she - I've
12 already what I said what I think about the document itself.
13 MR. ROSEN: Well, I just want Your Honor to note this
14 because what's going to happen at this end of this proceeding is
15 Mr. Zlotoff is going to argue that the document, you can find
16 from the document what Mr. Henson's true income was. And I
17 wanted to make - to make this perfectly clear, if the issue is
18 what she told the IRS in the document and Your Honor sees some
19 relevance to that, that's fine. But I'm telling you that that's
20 not what's going on here.
21 This is - this is an attempt to get around the - the
22 in limine ruling, and I suspect you will hear Mr. Zlotoff argue
23 at the end of this case, 'Look at the tax return. That shows
24 Mr. Henson's income.' And it does not come in for the truth of
25 what that income is.
340
1 MR. ZLOTOFF: I don't even think I've asked her to
2 look at the tax return. I've asked her, I think, -
3 MR. ROSEN: What to say what it is. I'm sorry.
4 MR. ZLOTOFF: - just ask - I know I asked her what of
5 her own recollection she remembers reporting to the IRS for that
6 tax return for total gross family income.
7 THE WITNESS: I guess it was somewhere around 85,- or
8 90,000.
9 BY MR. ZLOTOFF:
10 Q. All right. Do you remember how much you made for 1997?
11 A. It wasn't very much of that. I was working half-time and I
12 think it was under 10,000.
13 THE COURT: How much longer do you have with this
14 witness approximately?
15 MR. ZLOTOFF: I may - I may almost be done, Your
16 Honor, to tell you the truth.
17 THE COURT: You wouldn't tell me anything but the
18 truth, would you?
19 MR. ZLOTOFF: I'm going to hedge my bet here.
20 BY MR. ZLOTOFF:
21 Q. Ms. Lucas, outside of - we've talked about the house and
22 we've gone over some personal possessions. Is there - was there
23 anything else that you can recall that you saw in the house of
24 value that we haven't discussed that was in the house in or
25 about February of 1998? Something tangible that had some kind
341
1 of value that we haven't talked about.
2 A. I can't think of anything.
3 MR. ZLOTOFF: Okay. No further questions, Your Honor.
4 THE COURT: Okay. I just have a couple of
5 housekeeping matters. First, as you recall, I have a morning
6 calendar tomorrow, so we'll start at 1:30.
7 Secondly, is she the only witness you intend to
8 produce? I'm just trying to figure out where we are, and Mr.
9 Rosen originally said he might need as much as four hours to
10 cross -
11 MR. ROSEN: More. More.
12 THE COURT: Okay. You want a hundred, Mr. Rosen? Two
13 hundred?
14 MR. ZLOTOFF: Is he -
15 MR. ROSEN: You know, every time you - she's allowed
16 to testify to something, that one answer may require four or
17 five questions on cross.
18 MR. ZLOTOFF: Does he get to use some of my hours,
19 Your Honor?
20 THE COURT: I - I don't know.
21 MR. ZLOTOFF: I hope not.
22 THE COURT: Are you offering, Mr. Zlotoff?
23 MR. ZLOTOFF: No, I'm not offering.
24 THE COURT: Okay. So - so - okay. So we don't know.
25 Would you like a little break before we go back on?
342
1 THE WITNESS: Sure.
2 THE COURT: Okay. Is 10 minutes sufficient?
3 Okay. So we'll take a 10-minute break and then we'll
4 go till 4:30 and then we'll reconvene tomorrow at 1:30.
5 MR. ZLOTOFF: Can -
6 MR. ROSEN: Before we go off the record, Your Honor,
7 you started to ask Mr. Zlotoff a question and I don't think you
8 or I heard an answer.
9 THE COURT: He didn't give me an answer, Mr. Rosen.
10 MR. ROSEN: Is this his only witness.
11 THE COURT: Yeah, I know. He didn't give me an
12 answer.
13 MR. ROSEN: Well, Your Honor required a disclosure,
14 unless this comes under the category of another thing that you
15 don't hold attorneys to -
16 THE COURT: Well, you walked in and told me you had
17 all these witnesses and you needed, I don't know, 20 days or
18 something for - then you -
19 MR. ROSEN: I'm talking about a month -
20 THE COURT: And then -
21 MR. ROSEN: - ago Your Honor required a witness list.
22 This is the only witness on the list. Mr. Zlotoff removed,
23 withdrew all of his other witnesses on his original list. So if
24 he's got somebody that he's planning on calling despite having
25 told us and you that this is the only witness, I'd sure like to
343
1 know about it.
2 THE COURT: I understand.
3 MR. ZLOTOFF: Right now I don't have anybody else that
4 I have an intention of calling. I mean I might toss and turn at
5 night at 2:00 a.m. and have a brainstorm -
6 THE COURT: Call us immediately, Mr. Zlotoff, -
7 MR. ZLOTOFF: - and then - and then I'll waltz in -
8 waltz in with -
9 THE COURT: - if that happens. And we'll look forward
10 to the call.
11 Thank you. We're in recess until five after 4:00.
12 (Recess taken from 3:58 p.m. to 4:12 p.m.)
13 THE CLERK: Please rise.
14 THE COURT: Thank you. Please be seated.
15 Ms. Lucas, could you retake the stand, please? And
16 you can't bring anything with you.
17 You're finished with this witness, Mr. Zlotoff, and
18 you turn the witness over?
19 MR. ZLOTOFF: Yes.
20 THE COURT: Thank you.
21 Go ahead, Mr. Rosen.
22 CROSS-EXAMINATION
23 BY MR. ROSEN:
24 Q. Ms. Lucas, you have in front of you a series of books with
25 exhibits including the blue-covered one, the smaller one of Mr.
344
1 Henson - Mr. Zlotoff's exhibits, right?
2 A. Yes.
3 Q. I'm going to ask you to do me a favor. Do not look at those
4 unless I ask you to. And if I ask you to look at a particular
5 page, look just at that page and don't thumb through the folder.
6 Can you do that for me, ma'am?
7 A. Yes.
8 Q. Okay. I'd like to start with - I'd like to direct your
9 attention to Exhibit A in the small folder, the third page. The
10 one that says, "Schedule B, Personal Property." Could you turn
11 to that, please?
12 A. The third page or the one marked page 3?
13 Q. It's - I believe it's the third page in the exhibit after
14 the tab. It is headed, "Schedule B, Personal Property."
15 A. Okay.
16 Q. Now I believe you testified in response to Mr. Zlotoff's
17 questions that this is the handwriting of your husband
18 throughout this page?
19 A. Yes.
20 Q. And of course you've been - you and Mr. Henson have been
21 married since 1982, is it?
22 A. Yes.
23 Q. So during the course of that time you would have had many,
24 many opportunities to observe your husband's handwriting?
25 A. Yes.
345
1 Q. And it is your sworn testimony that this is your husband's
2 handwriting?
3 A. It looks like it to me.
4 Q. It looks like it to you, okay.
5 Now Mr. Zlotoff asked you a question that involved
6 putting a comma in the wrong place. And I - I don't remember
7 which entry it was, but let's take the one that's the third one
8 down as "Books." And it looks like $5100, 5-1-O-O point zero.
9 Is it your testimony that - that the second writing
10 character after the 5 is a comma?
11 A. It - that's what it looks like to me.
12 Q. And I believe you testified that your husband has this habit
13 of putting commas in the wrong places in numbers, right?
14 A. I don't think so. I just think it's in the wrong place
15 here.
16 Q. Have you known your husband in the 20-odd years that you've
17 been married to have in other instances put commas in the wrong
18 place, namely between the first and the second digit in a
19 three-digit number?
20 A. I've known him to make a lot of mistakes of different kinds.
21 Q. Have you - I'll repeat my question. Have you ever known
22 your husband to erroneously place a comma after the first digit
23 in a three-digit number?
24 A. I don't remember.
25 Q. Well, if you look at the top entry on that page, "Savings
346
1 and Checking Accounts, Wells Fargo," the comma is in the right
2 place, isn't it?
3 A. Apparently.
4 Q. Uh-huh. And if you look at the second entry, "Household
5 Goods and Furnishings," the comma is in the right place?
6 A. Apparently.
7 Q. Well, is it or isn't it, Mrs. Lucas?
8 A. I assume it's in the right place.
9 Q. Okay. But it's your testimony that with respect to the next
10 entry, the "Books," that your husband somehow put the comma in
11 the wrong place? There shouldn't be any comma at all if the
12 figure is $500, right?
13 A. That's correct.
14 Q. And, sir, - excuse me, not sir. Ma'am, we're talking about
15 a gentleman, your husband, who has how many degrees?
16 A. One.
17 Q. College degree?
18 A. Yes.
19 Q. Educated?
20 A. Yes.
21 Q. Writes numbers all the time?
22 A. Yes. Mainly on the computer.
23 Q. This isn't written on a computer, is it?
24 A. No, but he is -
25 Q. Okay.
347
1 A. - more accurate on the computer.
2 Q. All right. Now you testified in response to Mr. Zlotoff's
3 questions that you were there when your husband physically
4 filled out this - this schedule; do you recall that?
5 A. I was in and out. He came in and out of where I was working
6 to show it to me.
7 Q. Okay. And is that where - is the "where" in your answer
8 your home?
9 A. Yes.
10 Q. And can you recall what time of day this was?
11 A. Evening.
12 Q. Can you do any better than that?
13 A. Late at night.
14 Q. Okay. Now where were you working in the house at that time?
15 A. In the office which is an out building.
16 Q. And Mr. Henson was working in some other part of the - of
17 the home?
18 A. I believe at the dining room table.
19 Q. And from time to time he would come in as he was filling out
20 these documents and you would have occasion to observe what he
21 was writing?
22 A. Mostly he would ask me questions. I didn't always see what
23 he was actually writing.
24 Q. During any of this period of time that he was coming in and
25 going back and forth, did you have an occasion to observe in
348
1 Exhibit B that he was writing on it? Schedule B. I'm sorry.
2 A. I don't remember the specific page.
3 Q. Do you recall whether during any of this period of time on
4 this evening that he was going back and forth between the dining
5 room and the office that you were working at, whether you
6 observed any portion of Exhibit A, which begins with the bank- -
7 the first page with the bankruptcy petition and continues on
8 through a series of schedules? Did you see any of these?
9 A. I think so.
10 Q. Can you tell us which ones you saw?
11 A. I don't remember.
12 Q. Can you tell us any one that you saw? Forget about all of
13 them. Can you testify to any single one that you saw?
14 A. I remember seeing the blacks ones, but I don't remember
15 seeing the ones after he filled them out.
16 Q. All right. If I can ask you to turn back to the third page,
17 the one that's headed "Schedule B, Personal Property"; have you
18 done that, ma'am?
19 A. Yes.
20 Q. Now with respect to the questions he was coming in and
21 asking you that evening, did any of them include any of the item
22 so Schedule B, on page 1 of Schedule B?
23 A. I believe so because we consulted about how much was in - I
24 usually kept track of the - in fact, I always kept track of the
25 checkbook, so he would have asked me what the balance was and
349
1 what checks had been written.
2 Q. That refers to the first entry respecting Wells Fargo?
3 A. Yes.
4 Q. Okay. So if I understand your testimony, Ms. Lucas, and
5 please tell me if I'm wrong, on this particular evening your
6 husband is busily filling out these bankruptcy schedules,
7 including Exhibit B and from time to time he comes to you when
8 he asks you for information to include on it, right?
9 A. Yes.
10 Q. And then he fills all of these schedules out in his own
11 hand?
12 A. Yes. I don't remember that he did it all in a single
13 evening. I remember one evening in particular; I think it took
14 him several days.
15 Q. Okay. And then he filled out all of these schedules in his
16 own hand?
17 A. Yes.
18 Q. And his handwriting is familiar to you and you're swearing
19 under oath that's his handwriting, including on Schedule B,
20 right?
21 A. Yes.
22 Q. Okay. Can you tell me, ma'am, what date was this?
23 A. I believe it was over a series of days. I can't remember
24 the specific day.
25 Q. Well, when you say a series of days, what you described
350
1 before in response to Mr. Zlotoff's question and my question
2 about you being out in the office and he working at the table in
3 the dining room and coming out periodically to ask you
4 questions, are you telling me this happened more than one day,
5 more than one evening?
6 A. Either that or there were other times when I was working in
7 the house and he was in the office and we would exchange
8 positions.
9 Q. Are you saying that it was more than one day on which he was
10 filling this out and in the course of doing so came into you and
11 asked you for information?
12 A. Yes.
13 Q. It happened - how many different days did that happen on?
14 A. I don't remember, several.
15 Q. Can you tell me any of the dates?
16 A. I think it was January, February '98.
17 Q. I see. Is that the best you could do for us, ma'am - ma'am,
18 sometime in January or February of '98?
19 A. Without looking at the dates on the - on the -
20 Q. Um-hum. And if I understand correctly then, how many days -
21 different days were there that he was working on filling out
22 this schedule and periodically coming to you, whether you were
23 in the dining room or you were in the office, and getting
24 information from you to include on these schedules? How many
25 different days?
351
1 A. Three or four.
2 Q. Were they in the same week or different weeks?
3 A. The same week, I think, unless it was over a weekend.
4 Q. Uh-huh. And what - do you recall what day of this week this
5 started on?
6 A. No.
7 Q. Well, was it on the weekend, was it during the week? How
8 about just that. Help me out. Was it a workday or was it a
9 weekend?
10 A. I seem to remember it starting on a weekday.
11 Q. And continued for four - about four consecutive days?
12 A. I don't remember the days even being consecutive.
13 Q. Were they within - were they within a one-week period?
14 A. I believe so.
15 Q. Okay. If I can ask you to turn to the first page of the
16 exhibit, there is handwriting on this exhibit. The exhibit is
17 labeled "Summary of Schedules." You see that?
18 THE COURT: Are we -
19 THE WITNESS: Yes.
20 THE COURT: Okay.
21 BY MR. ROSEN:
22 Q. And is all of the handwriting including the numbers written
23 on that one, on that page, to your testimony, based on your 20
24 years over having observed your husband's handwriting, is that
25 all his?
352
1 A. I believe so. His handwriting changed. It looks to me as
2 though he is being very careful here. I mean it's not his usual
3 scribbling.
4 Q. And you'll notice of the four dollar amounts appearing on
5 this page, the comma's not in the wrong place on any one of
6 them, is it?
7 THE COURT: I'm - I've lost you. Can you tell me
8 exactly what page you're on?
9 MR. ROSEN: The first page of Exhibit A, Your Honor.
10 THE COURT: That's what I was on.
11 MR. ROSEN: Headed, "Summary of Schedules."
12 THE COURT: Okay. I'm with you.
13 BY MR. ROSEN:
14 Q. The one that's headed, by the way, "Central District of
15 California." So you notice there are four different dollar
16 amounts there, each over a thousand dollars, and the comma is in
17 the right place on every one, isn't it?
18 A. Apparently.
19 Q. Yeah. And turn to the second page, ma'am, and I will ask
20 you the same question as to this page: Is this the entirety of
21 - in your husband's hand, words and numbers?
22 A. I believe so.
23 Q. And the third page, you've already testified to that, right?
24 Everything on the third page is your husband's hand?
25 A. As far as I can tell.
353
1 Q. And turn to the fourth page. Is everything on there your
2 husband's hand, numbers and words?
3 A. Yes.
4 Q. And you'll notice there are no commas misplaced on this
5 page, right?
6 A. There's just one comma, yes, it looks to be in the right
7 place -
8 Q. And it's in the right place? Okay.
9 Let's turn to the next page.
10 THE COURT: For the record, could you identify the
11 heading on the page as we go through so it's -
12 MR. ROSEN: Sure.
13 THE COURT: - clear what we're doing?
14 MR. ROSEN: Page 3 is Schedule B, Personal Property.
15 Page 4 of the exhibit is Schedule B, Personal Property
16 Continuation Sheet.
17 I'm now on the next page which is Schedule B, Personal
18 Property Continuation Sheet. It has a Bates number on the
19 bottom of 336.
20 BY MR. ROSEN:
21 Q. Okay. Is this also entirely in your husband's hand?
22 A. Yes.
23 Q. Okay. And the next page, "Schedule C, Property Claimed as
24 Exempt."
25 A. Yes.
354
1 Q. So all of the - all of the entries on this one are words and
2 numbers in your husband's hand?
3 A. They appear to be, yes.
4 Q. And the next one, "Schedule D, Creditors Holding Secured
5 Claims," is that all in your husband's hand, both words and
6 numbers?
7 A. Yes.
8 Q. And the next one is "Schedule E," not much on there, but
9 there is something. Is that all in your husband's hand?
10 A. Yes.
11 Q. And the next one is "Schedule E, Creditors Holding Unsecured
12 Priority Claims," is that all in your husband's hand?
13 A. Yes.
14 Q. And the next one is "Schedule F," all the entries on that,
15 handwritten entries, in your husband's hand?
16 A. Yes.
17 Q. The next one is "Schedule G," that's all in your husband's
18 hand, all of the entries?
19 A. Yes.
20 Q. The next one is "Schedule H," that's all in your husband's
21 hand?
22 A. Yes.
23 Q. The next is "Schedule I," the same question?
24 A. Looks like it to me.
25 Q. Okay. Next is "Declaration Concerning Debtor's Schedules."
355
1 Is that all in your husband's hand?
2 A. Yes.
3 Q. Take a moment, so we don't have to go through this page by
4 page, just look through the remainder of the documents, the
5 pages that constitute Exhibit A, at the end of which I will ask
6 you if they're all in your husband's hand or if anybody other
7 than your husband has made any entry on any of these pages,
8 whether it be words or numbers.
9 A. (Pause.) It appears to me to be - it's - it's a little
10 strange.
11 Q. Will you explain what you mean by it's a little strange?
12 A. Well, just that the - I'm looking at the - the Bates number
13 346, the number at the top of the page is more typical of his
14 handwriting. I - and - and the federal taxes and so on. It's
15 just the right of it looks a little labored or possibly as
16 though he had put things down in pencil and then gone over them
17 laboriously in pen.
18 Q. Okay. Other than that one exception is the answer to my
19 question then that the entirety of the remaining pages of this
20 document are all in your husband's hand?
21 A. Yes.
22 Q. Now, Ms. Lucas, you have sworn under oath that based on 20
23 years of knowing your husband's handwriting that all of the
24 entries on these - on this document are your husband's. You
25 understand you're swearing to that under oath?
356
1 A. Yes, I do.
2 Q. When was the last time you saw the - when after the document
3 was filed was the first time you ever saw it?
4 A. I - I'm trying to remember and I can't remember when it was.
5 Q. Well, let me help you out. The document bears on page 1 a
6 file statement of the Clerk of this Court of March 10th, 1998.
7 A. Um-hum.
8 Q. Did you see this document or any part of it in the form it
9 appears today, meaning filled out before it was filed on March
10 10th, 1998?
11 A. Yes.
12 Q. When?
13 A. Well, I just remember it being around and his sort of
14 flashing it at me, you know, just he would have it in his hand
15 and he would come in and ask me questions. And I don't remember
16 poring over it, just seeing it.
17 Q. Did you read any of the pages prior to March 10th of 1998, -
18 A. No.
19 Q. - other than that he was flashing it at you?
20 A. Not really. I don't remember doing that.
21 Q. When was the first time after this was filed that you did
22 read any portion of this?
23 A. That - the first time I remember is when it was furnished to
24 me by his attorney.
25 Q. And when was that?
357
1 A. It may have been last week.
2 Q. Okay. Ms. Henson, - excuse me. I'm sorry. You prefer to
3 be called Ms. Lucas, right?
4 A. Yes.
5 Q. I apologize.
6 Ms. Lucas, you understand the importance of testifying
7 truthfully under oath?
8 A. Yes.
9 Q. If I were to tell you your husband has given sworn testimony
10 that he didn't fill out any part of this document, that it was
11 filled out by somebody in the office of Graham Berry, -
12 A. Oh.
13 Q. - would that cause you to change any of your testimony?
14 A. Well, it would explain that it - that some of it looks
15 funny. There is - there are - the figures look different in
16 some of it -
17 Q. Ms. Lucas, excuse me. Listen to my question.
18 If I were to tell you your husband has testified under
19 oath that the entirety of this document was filled out by
20 someone in the offices of Attorney Graham Berry, would that
21 cause you to change your sworn testimony vouching for the fact
22 that these are entries in your husband's hand?
23 A. I would say that I must have been mistaken.
24 Q. Uh-huh. And that's quite -
25 THE COURT: Mr. Rosen, -
358
1 MR. ROSEN: Yeah.
2 THE COURT: - are you including this page that's
3 before the Statement of Financial Affairs, the one just before
4 the Statement of Financial Affairs?
5 MR. ROSEN: Which - which page number are you
6 referring to, Your Honor?
7 THE COURT: Bates 346.
8 MR. ROSEN: Yeah.
9 THE COURT: I just wanted -
10 BY MR. ROSEN:
11 Q. Well, Ms. Lucas, now bear with me a moment. The name Graham
12 Berry is familiar to you, right?
13 A. Yes.
14 Q. And he was an attorney for your husband, right?
15 A. Yes.
16 Q. And his office is in Los Angeles, right?
17 A. Yes.
18 Q. In the Central District of California, right?
19 A. I believe so.
20 THE COURT: Okay.
21 MR. ROSEN: Okay.
22 THE COURT: It's 4:30. We're going to stop because
23 this involves the staff and so I'm going to let them go and I'll
24 see you tomorrow at 1:30.
25 MR. ROSEN: Your Honor, can I be allowed two minutes
359
1 just to finish this line of questioning?
2 THE COURT: If it can finish in two minutes.
3 MR. ROSEN: This line of questioning I can finish in
4 two minutes. Thank you. Just not to break it up.
5 BY MR. ROSEN:
6 Q. Ms. Lucas, if your husband testified under oath that he
7 didn't fill these out, that somebody in Mr. Berry's office
8 filled them out, then would you please explain to the Court your
9 tes- - the basis of your testimony that you have vouched for his
10 sign- - for his - his handwriting?
11 MR. ZLOTOFF: Your Honor, I'm going to object. This -
12 you know, we're delving into speculation. I haven't seen what
13 he's - what Mr. Rosen's talking about. We're accepting on faith
14 what he's -
15 THE COURT: Sustained. She doesn't have to do
16 anything to me.
17 MR. ZLOTOFF: All right.
18 BY MR. ROSEN:
19 Q. Will you explain to us, ma'am, the basis of your testimony
20 that this document is written in your husband's hand?
21 A. There are some figures that are undoubtedly in his hand,
22 like on 346. And I had assumed that what he had done was to put
23 things in in pencil and then write over them, which always makes
24 things look strange.
25 Q. Ms. Lucas, -
360
1 A. But his handwriting, the handwriting -
2 THE COURT: You can't interrupt -
3 THE WITNESS: - looked strange to me.
4 BY MR. ROSEN:
5 Q. Ms. Lucas, you testified in response to Mr. Zlotoff's
6 questions that the third page, Schedule B, Personal Property, -
7 A. Um-hum.
8 Q. - was in your husband's hand. Do you now recant that
9 testimony?
10 A. If my husband testified that someone in someone else's
11 office filled it out, then that must be the case.
12 Q. And, Ms. Lucas, in fact within the last week or two you got
13 together by phone with your husband and came up with this story,
14 that he tes- - that he wrote this, and you're now swearing to
15 it; isn't that right?
16 A. No. I haven't discussed these papers with him at all.
17 Q. Have you discussed your testimony that this is your
18 husband's hand on Schedule B and the rest of this document with
19 anyone before giving it in court today?
20 A. No.
21 Q. Other than -
22 THE COURT: Mr. -
23 BY MR. ROSEN:
24 Q. Other than counsel?
25 A. No.
361
1 Q. By the way, does Mr. Zlotoff represent you?
2 A. No.
3 Q. Have you discussed this testimony you gave in court today on
4 - on your vouching for your husband's sign- - handwriting on
5 these documents with Mr. Zlotoff?
6 A. I think he may have asked me if it was Keith's handwriting.
7 Q. And what did you tell him?
8 A. I thought it was.
9 MR. ROSEN: Okay. This is a convenient time to break,
10 Your Honor.
11 THE COURT: See you at 1:30 tomorrow, everybody.
12 MR. ROSEN: Your Honor, just for scheduling purposes,
13 how -
14 THE COURT: The court will be full in the morning, so
15 take everything out of here, please.
16 MR. ROSEN: I was going to ask something else.
17 THE COURT: Sure. I understand, but I wanted to make
18 sure as people were gathering -
19 MR. ROSEN: Well, we'll take them out anyway, but my
20 question is, is Your Honor planning on going until - what time
21 is Your Honor planning on going till tomorrow?
22 THE COURT: It will depend on factors beyond my
23 control, but somewhere between 4:15 and five o'clock.
24 MR. ROSEN: Okay. Thank you.
25 And, Your Honor, may we -
362
1 THE COURT: Unless, you know, it happens that we're
2 within 15 minutes of finishing, and then I reserve the right -
3 or some other reasonable time - then I reserve the right to do
4 whatever seems appropriate. So you shouldn't take these
5 comments as a commitment, only an estimate.
6 MR. ROSEN: And may - on the same subject, may I again
7 reiterate my request that since we have the morning off, that
8 Mr. Zlotoff provide us with anything he wants to give the Court?
9 His - his submissions are usually very short, a page or two, on
10 relevance so that Your Honor may consider them tomorrow.
11 THE COURT: If he's ready - I don't know when you
12 think I'm going to consider them, but - because I have a morning
13 calendar, but - so I'm probably not going to consider anything
14 because I'll be in court with other people. But if you can
15 provide your brief on relevance tomorrow morning, that would be
16 fine, and I'll get to it when I can get to it.
17 MR. ROSEN: Thank you, Your Honor.
18 MR. ZLOTOFF: All right. Thank you, Your Honor. I'm
19 not going to burn the midnight oil, though, I don't think,
20 unless - unless I'm ordered to do that.
21 MR. ROSEN: The morning oil. The morning oil.
22 (Trial was adjourned for the day at 4:36 o'clock p.m.)
23 -o0o-
24
25