1

SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES, WEST DISTRICT
MALIBU BROADBEACH, L.P., a

California limited partnership
Stephen B. Gaggero and
Billie Sue Gaggero as Trustees
of the Gaggero Family Trust
UDT 12-20-86,
)
)
)
)
)
)
)
)
versus
)
)
STATE FARM GENERAL INSURANCE
)
COMPANY, a Corporation;
)
DOES 1 through 10, inclusive,
)
)
Defendants.
)
________________________________)
Plaintiffs,
No. SC080564
DEPOSITION OF:
STEPHEN GAGGERO
TAKEN ON:
October 13, 2004
VOLUME 1:
Pages 1 through 150,

inclusive
22402
DEBRA V. HELGESON
CSR No. 3189, RPR
VOLUME 1 OF THE DEPOSITION OF
STEPHEN GAGGERO, taken on behalf of
the Defendant at 801 South Figueroa Street,
Suite 1800, Los Angeles, California, on
Wednesday, October 13, 2004, at 10:29 A.M.
before Debra V. Helgeson, CSR No. 3189, RPR.
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APPEARANCES:
For Plaintiffs:
FOLEY & BEZEK, LLP
BY: PETER J. BEZEK, ESQ.
15 West Carrillo Street
Santa Barbara, California 93101
(805) 962-9495
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For Defendant State Farm General

Insurance Company:
SEDGWICK, DETERT, MORAN & ARNOLD
BY: MARIA L. COUSINEAU, ESQ.
801 South Figueroa Street, Suite 1800
Los Angeles, California 90017
(213) 426-6900
25
2
MILLER & HELGESON REPORTERS
956-6405 ~ (800) 48-SMART
(310) 450-7795 ~ (415)

Smart People Use The Best
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I N D E X
WITNESS
PAGE
STEPHEN GAGGERO
By Ms. Cousineau
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E X H I B I T S
DEFENDANT'S
PAGE
40
Notice of Continuance
of Taking Deposition
41
Document titled
"Designee Authorization,"
8/5/02, Bates No. CF 0415
28
42
Building Permit Application,

4/16/02, no Bates number
57
43
Combination Sewer/Septic
Permit, 10/28/02, no
Bates number
59
44
Document titled "MB LB

36268 PCH Guest House
Damage Summary as of
7/28/04," Bates Nos.
MBLP0361 through MBLP0365
79
45
Invoice from Avenue

Hardware, 5/1/03, Bates
No. CF 0191
107
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Invoice from Avalon

Engineering, 4/18/03,
Bates No. CF 0190
121
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Building Permit
Application, 9/18/02, no
Bates number
126
48
Plumbing Permit
Application, 9/18/02, no
Bates number
127
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956-6405 ~ (800) 48-SMART
(310) 450-7795 ~ (415)

I N D E X (Continued)
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E X H I B I T S
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5
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8
PREVIOUSLY MARKED
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PAGE
Document titled "MB LP

32628 PCH Guest House
Damages as of 1/12/04,"
Bates Nos. CF 0099
through CF 0105
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10
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Q U E S T I O N S
M A R K E D
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PAGE
LINE
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I N F O R M A T I O N
(None.)
R E Q U E S T E D
90
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956-6405 ~ (800) 48-SMART
(310) 450-7795 ~ (415)

Los Angeles, California
Wednesday, October 13, 2004
10:29 A.M.
4
5
-oOo-
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7
STEPHEN GAGGERO,
having declared under penalty of
perjury to tell the truth,
10
was examined and testified as follows:
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12
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14
10:30:08 15
EXAMINATION
BY MS. COUSINEAU:
Q
please.
Could you state your name for the record,
16
Steven Michael Gaggero.
17
Mr. Gaggero, have you ever had your
18
deposition taken before?
19
Yes.
10:30:16 20
On how many occasions?
21
I'm not sure.
22
More than ten?
23
Yes.
24
When was the last time you were deposed?
10:30:25 25
I don't remember.
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(310) 450-7795 ~ (415)

10:30:26
10:30:37
Was it more than a year ago?
No.
And what case was that taken in?
I don't remember.
A deposition you gave within the last year
you don't remember what case it was in?
That's correct.
Was it a case against one of the companies
9
10:30:46 10
11
12
that you are involved in or a case against you

personally?
A
Well, I don't remember the deposition; so
that's why I don't remember what it was about.
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14
10:31:03 15
Well, so that we are clear, the person
sitting to your left is taking down every word that

is being stated in this deposition today.
As a
16
result of that, we have a few ground rules we have
17
to follow.
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19
10:31:13 20
21
The first is that only one of us can speak

at a time.
I request that you allow me to finish my
question before you respond, and I will allow you to

respond before I start my next question.
22
Do you understand that?
23
Yes.
24
You have taken an oath to testify under
10:31:23 25
penalty of perjury.
It is the same oath you would

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10:31:25
10:31:36
take if you were testifying in a court of -- of law;
therefore, although we are in this conference room,
I just want to make sure you understand you are
testifying under penalty of perjury.
Yes.
Should you -- you will have an opportunity
to make any changes to the testimony that you are
giving today.
The transcript, as I'm sure you are
10:31:48 10
aware, will be typed up and sent to you -- to your
11
counsel.
12
any changes and sign it under penalty of perjury.
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14
10:32:00 15
You will then have an opportunity to make
I need to caution you that, should you make

changes that are substantive in nature, I may be
entitled to redepose you to follow up on the changes
16
that you made as well as the fact that you made
17
substantive changes, and that may be the source of
18
comment of any lawyer at the time of trial.
19
10:32:15 20
Yes.
21
As a result, I would request that you give
22
us your best testimony today.
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24
10:32:23 25
Is there any reason that you cannot provide

your best testimony today?
A
No.
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(310) 450-7795 ~ (415)

10:32:26
10:32:38
As I understand it, you are here as the
person most knowledgeable from Malibu Broadbeach on
six topics that were listed in a Deposition Notice;
is that accurate?
5
6
Yes.
MS. COUSINEAU:
Okay.
I will mark as
Exhibit 39 a copy of the Deposition Notice.
THE REPORTER:
MS. COUSINEAU:
10:32:53 10
THE REPORTER:
I understand 40 is next.
Is it?
That's what I was told.
11
MS. COUSINEAU:
12
So we'll mark as Exhibit 40 the
13
Deposition Notice for today, served on October 6,
14
2004.
10:33:22 15
I have 1 through 38.
(Defendant's Exhibit 40 was marked for
16
identification by the Certified
17
Shorthand Reporter and is attached
18
hereto.)
19
BY MS. COUSINEAU:
10:33:22 20
21
And I ask you, please, Mr. Gaggero, have
you seen that before?
22
Yes.
23
Now, as I understand from your counsel, you
24
10:33:54 25
have not brought you with any of the documents

requested in that Deposition Notice; correct?
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(310) 450-7795 ~ (415)

10:33:56
1
2
3
I have not brought any documents with me,
What kind of business organization is
no.
4
10:34:31
Malibu Broadbeach?
A
6
7
MR. BEZEK:
Yeah.
The question is vague
and ambiguous.
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9
It's a limited partnership.
Go ahead.
BY MS. COUSINEAU:
10:34:37 10
Go ahead.
11
It's a limited partnership.
12
How many partners are there?
13
I'm not sure.
14
Who at Malibu Broadbeach would have that
10:34:47 15
16
information if not you, sir?

A
17
18
I don't know.
MR. BEZEK:
Calls for speculation.
BY MS. COUSINEAU:
19
Are you a partner in Malibu Broadbeach?
10:34:56 20
No.
21
Can you name anybody that is a partner --
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23
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10:35:13 25
strike that.
Are there any partners in
Malibu Broadbeach?
MR. BEZEK:
Beyond the scope of the PMK and

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(310) 450-7795 ~ (415)

10:35:17
10:35:27
calls for speculation and conjecture and lacks
foundation.
BY MS. COUSINEAU:
You can answer.
I assume so.
Do you know?
MR. BEZEK:
Just so we are clear -- I don't
have a problem with foundational questions, but it
looks to me like we are already outside the scope of
10:35:37 10
the PMK.
11
MS. COUSINEAU:
You know, Malibu Broadbeach
12
is the insured and the plaintiff.
13
that the PMK would not be able to tell me who the
14
partners are.
10:35:49 15
I didn't expect
I didn't expect that I would have to
put as a specific line item the business
16
organization of Malibu Broadbeach; but I can
17
certainly do that and have Mr. Gaggero come back.
18
Not a problem.
19
10:36:11 20
MR. BEZEK:
I mean, you can do whatever you
feel is appropriate to do.
21
My objection is it's beyond the scope of
22
the PMK.
23
Nobody has instructed him not to answer.
24
want to be sure we stay within the confines of the
10:36:18 25
You have an answer to the last question.

So I just
six itemized areas, save and except for foundational

10

956-6405 ~ (800) 48-SMART
(310) 450-7795 ~ (415)
10:36:24
questions and background that genuinely and
legitimately would be asked.
10:36:34
MS. COUSINEAU:
I assume that is a
foundational question.
doesn't have that information, he probably wouldn't
be the witness that Malibu Broadbeach would provide
for that topic anyway.
that as a separate depo notice in the future.
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10:36:52 10
Since this witness says he
So I will simply provide
Have you ever been a partner, sir, of
Malibu Broadbeach Limited Partnership?
11
No.
12
Who is Steven B. Gaggero?
13
My father.
14
Where does he live?
10:37:00 15
In San Diego County.
16
In what city?
17
In Fallbrook.
18
Is Stephen B. Gaggero a partner in
19
Malibu Broadbeach currently?
10:37:14 20
No.
21
What relationship does Stephen B. Gaggero
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23
24
have to Malibu Broadbeach Limited Partnership?

A
He's presently a -- well, no.
I don't know
that he has any relationship with Malibu Broadbeach.
10:37:33 25
Why was he a plaintiff in the case with

11

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10:37:36
Malibu Broadbeach?
10:37:44
MR. BEZEK:
Objection.
attorney-client privilege.
speculation and lacks foundation.
Violates
5
6
Calls for conjecture and
If you can answer the question without

violating attorney-client privilege, please do so.
THE WITNESS:
I was going to say you would
have to really talk to the lawyers that drafted the
Complaint.
10:37:54 10
11
I don't know.
BY MS. COUSINEAU:
Q
Does Mr. -- does your father,
12
Stephen B. Gaggero, currently own any portion of the
13
property at 32628 Pacific Coast Highway?
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10:38:05 15
No.
MR. BEZEK:
16
phrased.
17
BY MS. COUSINEAU:
18
19
10:38:16 20
21
Calls for a legal conclusion as
Does Stephen B. Gaggero own any -- have any
ownership interest whatsoever in

32628 Pacific Coast Highway presently?
MR. BEZEK:
Same objection.
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23
24
10:38:25 25
THE WITNESS:
No.
BY MS. COUSINEAU:
Q
Has Stephen B. Gaggero held any ownership
in 36268 Pacific Coast Highway in the past?

12

956-6405 ~ (800) 48-SMART
(310) 450-7795 ~ (415)

10:38:29
No.
What is his address in Fallbrook?
10:38:44
MR. BEZEK:
I represent Stephen B. Gaggero.
If you need to reach him or if you want to serve him
with a subpoena, I'm authorized to accept service.
BY MS. COUSINEAU:
Who is Billie Sue Gaggero?
My mother.
Where does she live?
10:39:02 10
With my father.
11
In Fallbrook?
12
Yes.
13
And is Billie Sue Gaggero presently a
14
partner in Malibu Broadbeach, L.P.?
10:39:17 15
No.
16
What, if any, relationship does
17
18
Billie Sue Gaggero have to Malibu Broadbeach, L.P.?

MR. BEZEK:
Overly broad.
Vague and
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10:39:29 20
ambiguous.
And, by the way, we lodged the same
objection to the PMK notice, Items 4 and 5.
21
MS. COUSINEAU:
Well, since no objections
22
were received in response to the depo notice sent on
23
October 6 and I have no recollection of receiving
24
this one two months earlier, I will note it for the
10:39:48 25
record; but I do not believe it was preserved.

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(310) 450-7795 ~ (415)

10:39:51
1
2
3
10:40:04
Nonetheless, can you answer the question,
please.
A
I don't know that she has a relationship
with MDLP.
Malibu Broadbeach, L.P.
BY MS. COUSINEAU:
7
8
And I'm abbreviating MBLP for
Does Billie Sue Gaggero presently have an
ownership interest in 32628 Pacific Coast Highway?
No.
10:40:16 10
Has Billie Sue Gaggero ever held an
11
ownership interest in 32628 Pacific Coast Highway?
12
No.
13
Does Malibu Broadbeach still own the
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10:40:33 15
property 32628 Pacific Coast Highway?

A
Yes.
16
It is for sale; correct?
17
For sale or lease.
18
Does Malibu Broadbeach have any employees?
19
No.
10:41:06 20
Does Malibu Broadbeach employ a person or
21
entity to manage its properties?
22
Yes.
23
Who or what does it employ?
24
Pacific Coast Management.
10:41:24 25
What is Pacific Coast Management?

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956-6405 ~ (800) 48-SMART
(310) 450-7795 ~ (415)

10:41:27
Management company.
To your knowledge, is Pacific Coast
10:41:50
Management a corporation?
I think it is.
What affiliation do you, Mr. Gaggero, have
with Pacific Coast Management?
I'm a consultant.
Are you an officer or director of that
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10:42:03 10
company?
A
No.
I may be a director.
11
actually.
12
director or not.
I'm not sure
I'm not a hundred percent sure if I'm a

I thought I was the managing
13
director, and I was told there was no such thing as
14
a managing director in the corporation.
10:42:20 15
16
say that any longer; but -- so I may be a director.

I don't know.
17
18
Are you the shareholder that -- the sole
shareholder of Pacific Coast Management?
19
No.
10:42:31 20
Are there others?
21
22
So I don't
MR. BEZEK:
Lacks
foundation.
23
THE WITNESS:
24
shareholder.
25
///
Makes an implication I am a
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(310) 450-7795 ~ (415)

10:42:42
1
2
3
10:42:51
BY MS. COUSINEAU:
Q
Are you a shareholder in Pacific Coast
Management?
No.
You, though, Mr. Gaggero, manage the
operations of Pacific Coast Management; correct?
Yes.
And as I understand it from the testimony
of others in this case already, Pacific Coast
10:43:12 10
11
Management then has numerous independent contractors

that does work for it; is that correct?
12
MR. BEZEK:
Wait a minute.
I'm going to
13
object to the question as vague and ambiguous as to
14
what counsel's understanding might be.
10:43:26 15
how you could speculate as to what her understanding
16
might be.
17
BY MS. COUSINEAU:
18
19
10:43:38 20
I don't know
Well, is that correct?
Does Pacific Coast
Management have numerous independent contractors

that work for it?
21
MR. BEZEK:
22
THE WITNESS:
It's vague and ambiguous.

It's a property management
23
company; and so we hire people to do work on various
24
properties.
25
///
People and, I should say, entities.
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10:44:05
1
2
3
10:44:13
BY MS. COUSINEAU:
Q
How were you first -- strike that.

How did you become aware of the car
accident which occurred at the property at
32628 PCH?
MR. BEZEK:
The one on 9/8/02?
MS. COUSINEAU:
THE WITNESS:
9
10:44:24 10
11
date exactly.
Yes.
Well, I don't remember the
But you mean the car that drove
through the garage?

BY MS. COUSINEAU:
12
Correct.
13
I got a phone call -- actually, on my cell
14
10:44:32 15
phone -- from somebody that drove by and said that

it was -- that there had been a car accident.
16
don't remember if fire trucks and things were there
17
then or when they drove by or they just saw the
18
whole -- but I got a phone call on my cell phone,
19
anyway.
10:44:49 20
From whom did you get the call?
21
I don't remember.
Somebody called me and
22
said that the -- there had been a car there driven
23
through the property.
24
10:44:59 25
How long after the car accident was it
before you saw the site?

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10:45:03
days.
Several days.
I don't remember how many
What, if anything, did you do upon learning
4
10:45:17
of the car accident there?

A
I asked -- I forget -- I asked somebody to
get it boarded up right away, to get the holes
boarded up and to make sure -- if it was a dangerous
situation, to shore it up and take care of any
electrical or plumbing problems and to board up the
10:45:40 10
11
fence because it was my understanding it went

through both fences on either side of the property.
12
13
that?
14
10:45:56 15
Was that Dan Armstrong you asked to do
I don't know if I spoke to Dan directly or
if I spoke to somebody else in the office to have it
16
done.
17
I just don't remember.

Was it your understanding that
18
Dan Armstrong was going to be the person that did
19
the boarding up?
10:46:07 20
I don't remember who I spoke to; so it's
21
possible I spoke to somebody else and said, "Whoever
22
we can get to board it up, do it."
23
For example, if Dan wasn't available, we
24
would have had to shore it up and board it up, and
10:46:19 25
they would have presumably gotten somebody else to

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10:46:21
do it; but since I don't remember if I spoke to Dan
directly or if I spoke to somebody else, I can't be
certain about that.
4
10:46:31
Is Dan Armstrong an individual that does
work for Pacific Coast Management?
Yes.
Is he on a salary with Pacific Coast
8
9
10:46:41 10
11
Management?
A
His financial relationship with
Pacific Coast Management is confidential, in my

opinion.
12
Confidential to whom?
13
Confidential to Pacific Coast Management
14
and confidential to Dan Armstrong.
10:46:52 15
MR. BEZEK:
16
of confidentiality.
17
18
MS. COUSINEAU:
Are you instructing him not
to answer?
19
10:47:02 20
We would object on the grounds
MR. BEZEK:
just objected.
No.
I didn't instruct him.
If I instruct him not to answer, I
21
will say, "You are instructed not to answer."
22
BY MS. COUSINEAU:
23
24
10:47:10 25
Is Mr. Armstrong on salary with
Pacific Coast Management?

MR. BEZEK:
Same objections.
It's a -19

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10:47:12
10:47:24
MS. COUSINEAU:
MR. BEZEK:
It's noted.
Maria, please don't -- I'm
not -- I don't want to get into a tussle here.
just making my record, and when do I that, it's
helpful if you just simply allow me to do it.
don't need to argue about it now.
about it later.
8
9
So go ahead.
question.
10:47:36 10
I'm
We
We can argue
You have now asked the
I've lodged an objection.

THE WITNESS:
Unless the attorneys for
11
Pacific Coast Management and for Dan Armstrong are
12
present, I don't feel I have the right to disclose
13
their financial arrangements.
14
BY MS. COUSINEAU:
10:47:45 15
16
17
18
19
10:47:57 20
21
22
Who are the attorneys for Pacific Coast
Management?
A
I don't know specifically.
It would depend
on what the issue at hand was.

MR. BEZEK:
We would also object on the
grounds it's not likely to lead to the discovery of

admissible evidence.
MS. COUSINEAU:
Well, in light of the fact
23
that Mr. Armstrong's invoices for a certain dollar
24
amount were submitted as part of this claim, I
10:48:10 25
believe it is directly relevant to this case.

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10:48:13
10:48:21
MR. BEZEK:
No.
I would disagree.
If you
want to talk about it, I can explain to you why I
disagree.
talk about it, and I'm happy to do it.
5
6
7
But you tell me when and if you want to
MS. COUSINEAU:
Q
Very well.
So are you refusing to tell me whether
Mr. Armstrong is on salary with PCM?
Yes.
Who if -- to your knowledge, who submitted
10:48:44 10
11
a claim to State Farm for the loss which occurred on

June 8th, 2002?
12
MR. BEZEK:
13
THE WITNESS:
14
The question is vague.

I don't remember.
BY MS. COUSINEAU:
10:48:53 15
Was it you?
16
I don't remember.
17
Did you have -- during the course of the
18
claim with State Farm, did you personally have any
19
discussions with anyone from State Farm?
10:49:07 20
I met an adjuster out there at some point.
21
And did you speak to this -- that adjuster
22
when you met him?
23
I think so.
24
How many times did you meet him?
10:49:17 25
I don't remember.
I think once.
But I'm
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10:49:23
10:49:31
not sure.
Did you speak to anybody on the phone that
you understood to be from State Farm during the
course of this claim?
Not that I recall.
Did you ask somebody to act on
Malibu Broadbeach's behalf in submitting the claim
to State Farm?
I don't remember.
10:49:47 10
To your knowledge, was somebody authorized
11
to act on behalf of Malibu Broadbeach for purposes
12
of the claim?
13
14
MR. BEZEK:
foundation.
10:49:57 15
16
Calls for speculation and lacks
THE WITNESS:
I don't remember.
BY MS. COUSINEAU:
17
Who is Robert Haber?
18
What do you know about -- what did you mean
19
10:50:18 20
21
by who he is.
Q
He's a man.
He's --
What is Mr. Haber's affiliation with
Malibu Broadbeach?
22
I don't really know how to answer that.
23
Does Mr. Haber have a relationship with
24
Malibu Broadbeach?
10:50:31 25
MR. BEZEK:
The question is overly broad.

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10:50:33
Vague and ambiguous.
10:50:38
THE WITNESS:
I don't really understand
what you mean by "relationship."
BY MS. COUSINEAU:
6
7
Well, let me ask you this.

Is Mr. Haber a partner of Malibu Broadbeach
Limited Partnership?
No.
Is he employed by Malibu Broadbeach?
10:50:47 10
No.
11
12
13
14
10:51:02 15
Well, I don't know.
I don't think so,
but I'm not sure.

Q
Is Mr. Haber employed by Pacific Coast
Management?
A
He does work for Pacific Coast Management.
I wouldn't say that he's an employee of but he does
16
17
work for Pacific Coast Management.

Q
Did -- to your knowledge, was Mr. Haber
18
asked to represent Malibu Broadbeach in the
19
presentation of the claim to State Farm?
10:51:44 20
21
MR. BEZEK:
ambiguous.
22
23
24
10:52:04 25
The question is vague and
THE WITNESS:
I don't remember or know.
BY MS. COUSINEAU:
Q
To your knowledge, who would be the person
that has the most knowledge of the presentation of

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10:52:08
Malibu Broadbeach's claim to State Farm?
MR. BEZEK:
ambiguous on "presentation."
4
10:52:17
THE WITNESS:
I would say David Chatfield.
BY MS. COUSINEAU:
Who is Mr. Chatfield?
An attorney.
Why you would say that he had the most
9
10:52:25 10
11
12
knowledge -- are you saying he would have the most

knowledge of the presentation of the claim or he
would know who would?
A
No.
I answered your question.
13
14
10:52:33 15
16
17
18
You said, to my knowledge, who would have

the most knowledge about the presentation of the
claim?
David Chatfield.
Q
privilege.
10:53:01 25
Objection.
Attorney-client
Also work product privilege.
If you can answer the question without

revealing what Mr. Chatfield told you, please do so.
23
24
Why do you say Mr. Chatfield would
MR. BEZEK:
21
22
Okay.
have the most knowledge?
19
10:52:43 20
And, to my knowledge, it would be
THE WITNESS:
I don't understand the
parameters specific to attorney-client privilege; so

I'll respectfully not answer any further in that
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regard.
BY MS. COUSINEAU:
3
4
10:53:12
5
6
7
Did Malibu Broadbeach ask Mr. Chatfield to
present Malibu's claim to State Farm?

A
I don't know.
MR. BEZEK:
Objection.
Attorney-client
privilege.
Your answer is in.
THE WITNESS:
Sorry.
That's okay.
10:53:18 10
11
BY MS. COUSINEAU:
Q
Do you know whether Mr. Chatfield was, in
12
fact, the person who communicated with State Farm
13
about the claim?
14
I don't know.
10:53:34 15
During the course of the claim with
16
State Farm, were you provided by anyone copies of
17
any communications back and forth between Malibu and
18
State Farm?
19
10:53:53 20
21
MR. BEZEK:
for me, please.
Can you read that question back
I think the question was was he
provided copies of communications?
22
MS. COUSINEAU:
23
MR. BEZEK:
24
10:54:05 25
Correct.
If that is the question -- the
question, I object on the grounds of vague and

ambiguous.
I don't know what you mean by a

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10:54:06
10:54:14
"communication."
BY MS. COUSINEAU:
Do you understand the question?
Not specifically because -- not only
Mr. Bezek's objection, but you're making an
assumption that there was a communication between
Malibu Broadbeach and State Farm and there is a
specific person you are talking about or just the
entity.
10:54:30 10
I don't quite understand.

Well, is it correct that Mr. Chatfield was
11
the person that Malibu Broadbeach designated to
12
communicate with State Farm?
13
MR. BEZEK:
14
Objection.
Attorney-client
privilege.
10:54:43 15
MS. COUSINEAU:
Well, you know what?
If
16
they authorize a lawyer to do so, I think they
17
waived the -- the privilege as it relates to the
18
presentation of the claim.
19
noted; and if you are instructing him not to answer,
10:54:58 20
we'll deal with it at a later time.
21
22
23
24
10:55:08 25
But your objection is
Are you instructing him not to answer the

question?
MR. BEZEK:
Let me -- I can repeat what I
said earlier.
When I instruct him not to answer, I will
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10:55:17
say, "You are instructed not to answer."
MS. COUSINEAU:
MR. BEZEK:
Okay.
I've lodged an attorney-client
10:55:18
privilege objection here.
have just said about the attorney-client privilege,
and unless and until it becomes a real issue, there
is nothing to really argue about it, and I don't
want to argue.
and allow you to proceed with your deposition.
10:55:29 10
11
I disagree with what you
I just want to lodge my objections
BY MS. COUSINEAU:
Q
Okay.
Isn't it true, Mr. Gaggero, that
12
Malibu Broadbeach authorized David Chatfield to
13
communicate with State Farm about the loss at the
14
PCH property?
10:55:48 15
MR. BEZEK:
I'm going to object to the
16
question on the grounds of attorney-client
17
privilege.
18
let me rephrase that.
19
10:55:57 20
If the only basis for your knowledge --
If you have an answer to that question and

that answer can only come from and does come from --
21
exclusively from conversations you had with your
22
lawyers, then it's an attorney-client communication.
23
If you know the answer to that outside of
24
communications you had with your lawyer, then please
10:56:11 25
answer the question.

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10:56:12
10:56:26
THE WITNESS:
I don't have a good enough
recollection to answer that question, and I'm
afraid, if I speculate or answer with some vague
recollection, I may violate attorney-client
privilege.
BY MS. COUSINEAU:
And so I -- I just can't answer it.
Have you ever seen the authorization that
was sent to State Farm authorizing Mr. Chatfield to
speak on behalf of Malibu Broadbeach?
10:56:38 10
The way the question is presented to me,
11
you're -- you're stating there is such an
12
authorization; so if you have it, I'm happy to look
13
at it.
14
10:56:51 15
Maybe that will refresh my recollect.

MS. COUSINEAU:
moment.
Let's take a break for a
I'll go get it.
16
(Off the record.)
17
MS. COUSINEAU:
18
Marked as Exhibit 41 designee authorization
19
Back on the record.
dated 8/5/02.
11:01:20 20
21
22
23
hereto.)
24
BY MS. COUSINEAU:
11:01:21 25
Have you ever seen that before,

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11:01:22
11:01:29
Mr. Gaggero?
I don't think so.
Who is Stephen -- Joseph Praske?
He's a lawyer.
Is he a partner within the
No.
Do you know why Mr. Praske designated
9
11:01:53 10
David Chatfield to address the claim with

State Farm?
11
MR. BEZEK:
You can answer that yes or no
12
before we determine whether or not there is an
13
attorney-client privilege issue here.
14
THE WITNESS:
11:02:11 15
16
17
MR. BEZEK:
No.
Okay.
BY MS. COUSINEAU:
Q
Do you know who authorized Mr. Praske to
18
authorize Mr. Chatfield to negotiate the claim on
19
behalf of Malibu Broadbeach?
11:02:24 20
MR. BEZEK:
Assume facts not in evidence.
21
Lacks foundation.
22
And again that's a yes or no until we determine
23
whether there is an attorney-client privilege here.
24
It's argumentative as phrased.
THE WITNESS:
No.
25
///
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11:02:43
BY MS. COUSINEAU:
Did you do so?
No.
You told me earlier you didn't know who the
partners were in Malibu Broadbeach Limited
Partnership, but then you later said that neither
Billie Sue Gaggero nor Stephen B. Gaggero were
partners; correct?
That's correct.
11:02:57 10
How do you know that they are not?
11
Well, that's partially correct because I am
12
not sure who the partners are, and I know my parents
13
are not partners in that limited partnership.
14
are my parents.
11:03:10 15
You said you are not sure who the partners
16
are.
17
might be?
18
19
11:03:24 20
21
They
Do you have some understanding of who they
I just don't remember specifically.
think I knew at one time, and I have just forgotten

actually.
Q
Might you be a partner in
22
Malibu Broadbeach?
23
24
I think you already asked me that question,
and I told you I'm not.
11:03:32 25
Is Mr. Praske a -- an attorney on behalf of

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11:03:37
11:04:04
Malibu Broadbeach?
Yes.
And where are Mr. Praske's offices?
In Santa Monica and in La Canada.
The P.O. box -- do you recognize that
P.O. box address that is on this designee
authorization?
Yes.
What do you recognize it as?
11:04:14 10
That's the P.O. box for Pacific Coast
11
Management.
12
13
Pacific Coast Management in August of 2002?
14
11:04:41 15
Is -- was Mr. Praske also a lawyer for
I don't know if he was a lawyer for
Pacific Coast Management, frankly.
16
Did Malibu Broadbeach share that P.O. box
17
address with Pacific Coast Management in August,
18
'02?
19
I don't know what you mean by "share."
11:05:00 20
Did Malibu Broadbeach also use that same
21
P.O. box number as its address in August of 2002?
22
Probably.
Probably.
23
You keep those.
24
You want these?
11:05:29 25
That's fine.
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11:05:33
1
2
11:05:44
When did Malibu Broadbeach first purchase

the property at 32628 Pacific Coast Highway?
I don't remember the date.
Can you estimate it for me.
No.
MR. BEZEK:
of this line of questioning.
of the PMK.
us down the road, I want the record clear that I am
11:05:58 10
11
I'm going to object to the bulk

It's outside the scope
So whatever importance it may have to
objecting to this process.

MS. COUSINEAU:
I think it's foundation to
12
Question No. 2, which asks for construction activity
13
since it became an owner.
14
11:06:13 15
MR. BEZEK:
BY MS. COUSINEAU:
I understand your point.
16
17
Can you tell me the year that
Malibu Broadbeach became the owner of 32628?
18
No.
19
Focusing on Category No. 6 for a moment,
11:06:39 20
21
I don't remember.
can you tell me every person, whether an employee or

agent of Malibu Broadbeach, who has any --
22
Go ahead.
23
-- who has any knowledge or involvement
24
with that property?
11:06:53 25
MR. BEZEK:
Your question.
The question calls for

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11:06:55
11:07:06
conjecture and speculation as phrased.
foundation.
the internal content of the question.
BY MS. COUSINEAU:
Lacks
Also calls for a legal conclusion from
Go ahead.
Would you tell me the last part of that
7
8
9
11:07:16 10
11
12
question again, please.

Q
Certainly.
Can you identify any employees or agents of
Malibu Broadbeach that have any information or

knowledge of the property on Pacific Coast Highway?
MR. BEZEK:
Same objections.
13
14
11:07:29 15
16
THE WITNESS:
question.
I -- that's such a broad
Could you narrow that down for me.
BY MS. COUSINEAU:
Q
17
I'm not sure how to do so, sir.

Can you identify -- other than
18
Pacific Coast Management -- that is an example,
19
perhaps, of an agent of Malibu Broadbeach with
11:07:38 20
knowledge of the property.
21
Can you identify any other agents or
22
employees of Malibu Broadbeach that have knowledge
23
of that property?
24
MR. BEZEK:
11:07:46 25
THE WITNESS:
Same objections.
What do you mean by
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11:07:47
"knowledge of the property"?
BY MS. COUSINEAU:
11:07:59
That -- let's start with "involvement in
the property."
Let's say the involvement in the
construction of the property, reconstruction of the
property.
MR. BEZEK:
If I didn't add "overly broad," then I'm
Same objections.
adding "overly broad" now.
11:08:10 10
THE WITNESS:
And I don't understand what
11
would constitute an "agent" of Malibu Broadbeach.
12
Malibu Broadbeach doesn't have any employees, first
13
of all; so we can say that.
14
11:08:31 15
And what do you mean by an "agent of

Malibu Broadbeach that would have knowledge of the
16
construction"?
17
BY MS. COUSINEAU:
18
19
11:08:41 20
construction?
MR. BEZEK:
11:08:49 25
phrased.
23
24
Well, would you consider Colleen O'Brien an
agent of Malibu Broadbeach that has knowledge of the
21
22
I just can't -- there is probably --
THE WITNESS:
I don't know if she's an
agent of Malibu Broadbeach or an agent of

I'm not sure.

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11:08:51
1
2
11:09:00
BY MS. COUSINEAU:
Q
Well, did Colleen O'Brien obtain building
permits on behalf of Malibu Broadbeach to do
reconstruction at the property?
5
6
I don't know if it was on behalf of the
Malibu Broadbeach or if it was on behalf of
Pacific Coast Management retained her to get the
permits.
11:09:17 10
11
12
I'm not sure whether the
But I don't know if -- if that makes her
an agent of Malibu Broadbeach or not.
That is a
legal issue that I'm just not capable of answering

Q
Can you identify any other persons that
13
either are agents of Malibu Broadbeach or agents of
14
its agent Pacific Coast Management that are involved
11:09:34 15
16
in the reconstruction process other than

Colleen O'Brien?
17
MR. BEZEK:
18
THE WITNESS:
19
11:09:48 20
21
22
Same objections.
It's my understanding we sent
quite a few invoices that identify all those

entities and individuals.
BY MS. COUSINEAU:
Q
Okay.
I'm here to get your knowledge, sir,
23
of, not your attorney's knowledge, invoices that
24
were sent.
11:09:58 25
Who do you know was an agent of

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11:10:03
Malibu Broadbeach either directly or through
Pacific Coast Management that was involved in the
reconstruction of the property on
4
11:10:13
Pacific Coast Highway?
MR. BEZEK:
Do you mind, Maria, if I use the shorthand
Same objections.
of "Same objections" to save time?
MS. COUSINEAU:
MR. BEZEK:
11:10:21 10
Not a bit.
THE WITNESS:
Okay.
If you want to give me the
11
stack of invoices that were sent to you -- I guess
12
several different times they were sent to you -- if
13
you want to give them all to me, I'll read the names
14
off the top for you, if that would make you happy,
11:10:35 15
16
17
18
19
11:10:44 20
21
22
in this -- this deposition.

BY MS. COUSINEAU:
Q
Well, I just want to get your recollection
first.
A
I don't -- I don't have anybody on the top
of my mind; so if you -- like I said, if you want me

to read them off to you, I will be happy to.
Q
You didn't bring those documents -- the
23
original of those documents today as requested in
24
the depo notice; is that correct?
11:10:56 25
We've already discussed this, haven't we?

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11:10:59
11:11:05
Just making sure.

MR. BEZEK:
We have not produced any
additional documents here today.
BY MS. COUSINEAU:
5
6
Is Colleen O'Brien a partner in
No.
To your knowledge, has she ever been?
I'm not sure.
11:11:45 10
Does Malibu Broadbeach own any other
11
properties besides 32628 Pacific Coast Highway?
12
MR. BEZEK:
I'm going to object on the
13
grounds of financial privilege.
Confidential.
14
don't know how that would tend to lead to the
11:11:58 15
discovery of admissible evidence related to this
16
incident and the coverage issues and the cost of
17
construction.
18
BY MS. COUSINEAU:
19
Go ahead.
11:12:09 20
I'm afraid I'm not going to be able to
21
answer that question for you.
22
Why not?
23
Because I really don't think it's relevant
24
11:12:19 25
to this insurance claim, and I think that I have to

protect our clients' privacy rights.
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11:12:21
11:12:36
And which clients are you referring to?
Malibu Broadbeach, any clients that we
represent.
It's, like, any clients you would
represent.
I think they are entitled to privacy.
6
7
Okay.
I'm confused here.
Are you saying Malibu Broadbeach is your

client?
It's a client of Pacific Coast Management.
So are you here as a representative of
11:12:44 10
Malibu Broadbeach or of Pacific Coast Management?
11
I'm here under the subpoena.
12
Correct.
13
14
11:12:55 15
16
Malibu Broadbeach; correct?

A
And so I will restate my question.

What other properties does
Malibu Broadbeach own currently?
19
11:13:13 20
I'm here as a person most knowledgeable
about Malibu Broadbeach.
17
18
As a representative of
MR. BEZEK:
Same objections.
And I don't
know if his answer is going to be any different.
21
You want to incorporate your answer?
22
THE WITNESS:
23
24
Yeah.
Please.
BY MS. COUSINEAU:
Q
I don't think that's an appropriate answer.
11:13:21 25
If you can answer the question, please, or refuse to

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11:13:23
answer it; but you don't just incorporate something.
That makes for a very unclear record, especially
when I seek to compel a response.
4
11:13:33
MR. BEZEK:
Maria, you have a very clear
record as of right now.
cannot reveal information about other properties.
have given you my objection.
I'm wrong.
9
11:13:45 10
11
12
He has told you he feels he

I
I'm either right or
I haven't heard from you as to how

ownership of other properties would tend to lead to
the discovery of admissible evidence.
And the issues that are before the court in
13
this case, as I understand them to be, which are is
14
there coverage and what was the cost to repair?
11:14:00 15
So ownership of other properties, it would
16
seem to me, is wholly irrelevant even under the
17
broader standard of discovery and juxtapose that
18
against financial privacy.
19
11:14:15 20
21
And I think we have an issue; but I'm happy

to hear what -- either off the record or on the
record or at some future date, what you think the
22
peg of relevancy is here.
23
24
11:14:30 25
MS. COUSINEAU:
Well, in light of the
allegations in the Complaint, that especially the

failure to communicate coverages, whether
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11:14:35
11:14:48
Malibu Broadbeach owns other products and their
insurance is directly relevant to this case, and
that's a foundational question to that.
MR. BEZEK:
(Whereupon, the witness and his attorney
confer out of the hearing of the
reporter.)
MR. BEZEK:
9
11:15:19 10
Hold on just one second.
Okay.
We understand your
position, and if you feel compelled to -- that basis

that you have just explained, if you feel that you
11
have a basis to compel, I'm happy to talk to you
12
further.
13
14
11:15:31 15
But as of right now, the witness is still

concerned about financial privacy.
And I frankly
don't see yet the relevancy peg even under the
16
broader discovery standard and it's -- it would
17
strike me -- I'm certainly not accusing anybody of
18
this, but it would strike me that we are a bit off
19
the reservation -- I shouldn't say "a bit" -- we are
11:15:49 20
off the reservation by a lot, and it would appear to
21
me it's also outside the scope of the PMK.
22
23
So, in any case, I think we both know our

respective positions.
24
Do you have another question?
11:16:00 25
MS. COUSINEAU:
No.
I just need a
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11:16:02
1
2
11:16:20
clarification.
Q
Just so I'm clear, Mr. Gaggero, it is the
privacy right of Malibu Broadbeach you are
asserting?
I don't even know from a legal standpoint
whether it's limited to the privacy right; but as I
have indicated, I just don't know what
Malibu Broadbeach's other interests, if any, have to
do with this insurance claim.
11:16:40 10
11
12
And -- and I think that there needs to be a

ruling by the court in this regard.
Q
Okay.
But just so I'm clear -- it's
13
Malibu Broadbeach's financial interest or financial
14
interests that you are seeking to protect at this
11:16:54 15
point and refusing to explain; correct?
16
MR. BEZEK:
Well, first of all, that is a
17
legal objection that has been made, and I have made
18
the legal objection.
19
practical concerns are, and that is in the record;
11:17:05 20
21
He has told you what his
so you are asking him for a legal conclusion.

MS. COUSINEAU:
I'm not intending to.
I'm
22
just trying to clarify because there was some
23
confusion in my mind on whether or not he was
24
asserting these rights not as a lawyer but asserting
11:17:20 25
these rights on behalf of Malibu Broadbeach or

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11:17:23
1
2
11:17:32

And I'm just clarifying that it is
Malibu Broadbeach's financial interest that you are
asserting and you don't intend to respond to
questions about.
MR. BEZEK:
Well, again, you are asking him
for a legal conclusion; and I will tell you, from my
perspective as the lawyer, that he is not waiving
any claims -- either PCM's claims or
11:17:44 10
11
12
Malibu Broadbeach's claims -- PCM -- or any other

entity that is involved here.
What he has said to you is he is concerned
13
about revealing information he believes to be
14
confidential.
11:17:57 15
He's either right or he's wrong.
We
are concerned about revealing that confidential
16
information without permission from those entities
17
that would have a right to allow that information to
18
be revealed.
19
11:18:08 20
He has a duty to protect that interest in

and above that or in addition to this -- that there
21
is the whole question of discovery relevancy.
22
have asked for a peg of relevancy.
23
24
11:18:28 25
You have given me your statement.
And I
disagree with your comment; but you made your

statement, and I understand it.
I'm happy to talk

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11:18:28
11:18:35
to you a bit further at any time you want, either on
the record, off the record, today, tomorrow, on the
phone -- it makes no difference.
I think, in order to preserve the concerns of the
witness, you and I are going to have to have further
discussion, and hopefully one can convince the
other, and I'm happy to do that.
MS. COUSINEAU:
Okay.
Just so I'm clear --
But at this point,
11:18:47 10
And please just allow the witness to
11
respond without anything further.
12
legal objection, but you did not instruct him not to
13
answer.
14
11:18:59 15
I understand your
And I am just trying to understand,

Mr. Gaggero, why it is you are refusing to answer
16
the question about Malibu Broadbeach's other
17
properties?
18
MR. BEZEK:
19
THE WITNESS:
Asked and answered.

Maybe you could help me a
11:19:10 20
little bit by showing me in your Item 1 through 6 in
21
the subpoena for the person most knowledgeable which
22
of those six categories does this question fall
23
under because I'm just not prepared to talk about
24
Malibu Broadbeach's financial position here today.
11:19:27 25
Could you show me which of the six it falls

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11:19:30
11:19:35
under?
BY MS. COUSINEAU:
I am considering it to be a foundational
question.
it falls within one of these categories, I am happy
to redo -- do a new depo notice to Malibu Broadbeach
And if you, Mr. Gaggero, do not believe
for that particular category.
MR. BEZEK:
MS. COUSINEAU:
Let's not mess up the
That's enough.
If you want to add
11:19:50 10
record.
And maybe as part of that --
11
something to me later, please let's just proceed
12
with this deposition.
13
14
11:20:00 15
MR. BEZEK:
clear here.
Let's make sure the record is
I've objected -- one of the bases for
the objection was "outside the scope."
I'm going to
16
suggest that, as part of our discussions before yet
17
another deposition is scheduled, that we talk by
18
phone to narrow so that you get what you are
19
legitimately entitled to get but we don't get off
11:20:16 20
the reservation either; so I would invite that call,
21
and we can talk about it after we are off the record
22
today.
23
24
11:20:28 25
So when you are ready to do that, let me

know, and we can rearrange another PMK if it's
appropriate.
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11:20:28
1
2
3
BY MS. COUSINEAU:
Q
At the time of the accident on June 8th,
2002, were there any tenants living in the garage
4
11:20:41
apartment units?
No.
When had those units been vacated?
7
8
MR. BEZEK:
11
Vague and
ambiguous.
9
11:20:51 10
Overly broad.
THE WITNESS:
I don't remember specifically
but just a few days before, I think.

BY MS. COUSINEAU:
12
And --
13
Well, I think one was a few days and one
14
11:21:06 15
16
may have been a few weeks, but I don't remember

specifically.
Q
It's my best recollection.
And is it true that those units were
17
vacated because of the intended remodeling of that
18
structure?
19
11:21:23 20
MR. BEZEK:
Conjecture.
21
22
THE WITNESS:
How do you define "remodel"?
BY MS. COUSINEAU:
23
Do you not understand the word "remodel"?
24
That's a broad word and --
11:21:40 25
Isn't it true, Mr. Gaggero, that the

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11:21:42
tenants vacated that property because there was
going to be reconstruction of that garage unit?
3
4
11:21:51
MR. BEZEK:
Call for conjecture and
speculation as phrased.
THE WITNESS:
I -- I -- you are going to
have to -- let me tell you why I'm a little
concerned about the way you are asking the question.
8
9
First of all, you said that "garage unit,"

and there are two units.
11:22:05 10
Second of all, you said "remodel" and
11
"reconstruction" combined with the position that
12
State Farm has been taking, on denying that claim,
13
gives me concern about answering this question in a
14
manner that would be prejudicial to
11:22:18 15
Malibu Broadbeach L.P.
16
So I would like you to define with specific
17
particularity the -- the meaning of the word
18
"remodel" as you are asking it and meaning of
19
"reconstruction" as you are asking it, if you would,
11:22:33 20
21
22
please.
BY MS. COUSINEAU:
Q
Sir, isn't it true that long -- that prior
23
to the June 8th accident, it was the intention of
24
Malibu Broadbeach to do some remodeling of the
11:22:47 25
guesthouse -- guest units?

46

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11:22:56
1
2
3
11:23:08
Again, I will ask you to be specific with
the word "remodeling."

Q
You know, I'm sorry.
I'm going to just
suspend this deposition and ask for somebody to be
here because, if this person -- please don't leave
yet --
MR. BEZEK:
THE WITNESS:
MS. COUSINEAU:
11:23:13 10
11
You -You said "remodeled."

If you cannot understand
the word "remodel" when you are in the construction

business, I think it's ridiculous.
12
MR. BEZEK:
13
Just let us know when you want to talk
14
She's terminated.
All right.
about it.
11:23:24 15
MS. COUSINEAU:
I'm giving you notice now
16
for an ex parte on Friday for someone to attend this
17
deposition.
18
MR. BEZEK:
19
MS. COUSINEAU:
11:23:34 20
MR. BEZEK:
21
client.
22
referee here.
23
24
You mean you want a referee?

Yes.
Okay.
I'll talk with my
We may very well be willing to have a
MS. COUSINEAU:
That last statement he made
is just telling of this whole lawsuit.
11:23:43 25
MR. BEZEK:
Well, Maria, actually I think

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11:23:46
11:24:03
his point is exceptionally well taken; and when the
emotion leaves your -- your logic, you can talk
about it, and I will be happy to explain to you why
his concern is valid.
MS. COUSINEAU:
Let's go off the record
right now, and you can tell me why his concern is
valid that he might -- by testifying to the truth,
might affect his case.
9
11:24:10 10
MR. BEZEK:
Well, now, when you put it in a
pejorative way and argumentative way, it makes it
11
difficult for me to have an open-ended logical
12
conversation --
13
MS. COUSINEAU:
14
MR. BEZEK:
11:24:18 15
MS. COUSINEAU:
MR. BEZEK:
yet.
Let's go off the record.
We haven't gone off the record
I'm fine to do that.
11:24:26 20
21
If
Then I'm all ears.
18
19
-- discussing it with you.
you are prepared to discuss this --
16
17
I'm all ears.
Let's discuss two things when we go off the

record.
Let's get a referee because I think this is
22
the first time that an issue is going to come up,
23
and it's been entirely possible that there will be
24
more.
11:24:38 25
And I want you to get what you are entitled
to get at the time you ask your question.

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11:24:42
11:24:52
I don't want my client, however, to be
prejudiced in the process; so I think we agree to
get a referee.
Let's go do that.
Two --
reporter.)
MR. BEZEK:
We haven't talked about that
yet.
11:24:56 10
Two, let's talk about this issue of your
11
concern about or your use of terminologies.
12
terminologies is going to be important.
13
talk about both those things off the record.
14
can --
11:25:14 15
MS. COUSINEAU:
16
THE REPORTER:
17
MS. COUSINEAU:
18
MR. BEZEK:
I think
So can we
Absolutely.
Now we
Okay?
Yes.
Yes.
Off the record?
19
(Off the record.)
11:32:44 20
MR. BEZEK:
Back on the record.
21
We have talked off the record, and I think
22
Maria has decided she does want to proceed with the
23
deposition today.
24
that.
11:32:56 25
We are certainly willing to do
We did discuss off the record our varying
points of view on definitions and that type of

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11:32:59
11:33:09
thing.
So if you want to put on the record what we
talked about Maria, I'm happy to do it, or we can go
right back to questioning.
continue on today.
rather do.
7
8
11
So you tell me what you would
MS. COUSINEAU:
I'm just going to proceed
with the deposition.
9
11:33:14 10
My client is willing to
MR. BEZEK:
All right.
BY MS. COUSINEAU:
Q
Mr. Gaggero, what were Malibu Broadbeach's
12
plans for the garage and apartment unit above the
13
garage prior to June 8th, 2002?
14
11:33:29 15
MR. BEZEK:
Calls for speculation as
phrased and conjecture.
Lacks foundation.
16
17
18
19
11:33:47 20
THE WITNESS:
What apartment unit?
BY MS. COUSINEAU:
Q
What were Malibu Broadbeach's plans for the
structure -- the entire structure of the garage and

the units above it prior to June 8, 2002?
21
MR. BEZEK:
22
ambiguous.
23
Calls for speculation and conjecture and lacks
24
foundation.
11:34:01 25
Internally unintelligible at this point.
THE WITNESS:
I don't remember
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11:34:01
11:34:17
specifically, but I know that they were going to
repaint it.
to replace the windows in it or not.
to look through the records.
BY MS. COUSINEAU:
6
7
8
9
11:34:27 10
And I don't recall if they were going

I would have
Now, there was to be reconstruction on the
main house; correct?

A
Again, I would like you to define the word
"reconstruction" for me first.

Q
Okay.
There was some plan to do some
11
building construction -- whether remodeling or
12
reconstruction, there was some plan to do something
13
to the main house prior to June 8, 2002; correct?
14
11:34:45 15
16
MR. BEZEK:
Objection.
It's compound.
The
question is vague and ambiguous and lacks

foundation.
17
THE WITNESS:
Prior to June 8, I think we
18
were going to -- I would have to check the records
19
to be sure; but I think we were going to have the
11:35:01 20
windows and doors replaced and the plumbing fixtures
21
and cabinets replaced, and I think we were going to
22
paint it.
23
to see if there was anything else that we were going
24
to do.
25
///
And I would have to look at the documents
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11:35:21
1
2
11:35:30
BY MS. COUSINEAU:
Q
The work that Malibu Broadbeach intended to
do on the main house prior to June 8, did that
require a building permit?
Yes.
And was one obtained?
I believe so, yes.
So all you recall as of this moment for the
garage structure was repainting?
11:35:43 10
11
Well, you can read back my answer, if you
would like.
12
MR. BEZEK:
And I'm going to object to the
13
question as these questions being outside the scope
14
of the PMK.
11:35:52 15
MS. COUSINEAU:
16
loss that was suffered.
17
MR. BEZEK:
It goes directly to the
I'm not here to argue about it.
18
I'm just making my objection.
19
BY MS. COUSINEAU:
11:36:00 20
What specifically do you recall
21
Malibu Broadbeach intended to do with the garage
22
structure prior to the accident?
23
24
I have already answered that question for
you just a few minutes ago.
11:36:14 25
MR. BEZEK:
Asked and answered.

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11:36:15
1
2
3
BY MS. COUSINEAU:
Q
response to some of these things.
4
11:36:23
Well, you said "there may have been" in
There may have been plans to do windows and
doors.
I just want to know what you specifically
recall was going to be done.
7
8
MR. BEZEK:
Asked and answered.
It's now argumentative.
9
11:36:35 10
Objection.
THE WITNESS:
documents.
I would have to look at the
I don't have a specific recollection.
11
Certainly we were going to paint it, and -- and I
12
think it was replace the windows as indicated.
13
I would have to look at the documents to see if
14
there was anything else.
11:36:49 15
BY MS. COUSINEAU:
16
What documents would you look at?
17
I would look at the file.
18
What file?
19
The file on this property.
11:36:57 20
And whose file is that that you are
21
And
referring to?
22
It's Malibu Broadbeach's file.
23
Malibu Broadbeach has a file specific to
24
11:37:14 25
the property at 32628 Pacific Coast Highway?

A
I don't understand your question.

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11:37:15
Is that a file that is maintained by
Malibu Broadbeach Limited Partnership that is
specific to the property at
4
11:37:24
5
6
7
8
9
32628 Pacific Coast Highway?

A
I think it's actually maintained by the
attorneys for MBLP.

Q
Prior to this lawsuit, by whom was it
maintained?
A
11:37:39 10
By Pacific Coast Management.

MR. BEZEK:
11
Go ahead.
12
BY MS. COUSINEAU:
13
14
11:37:53 15
Pacific Coast Management?

MR. BEZEK:
ambiguous.
18
19
So is this file that you are referring to
one and the same with a file belonging to
16
17
It's unintelligible.
Are your client files your client's or are

they yours?
22
BY MS. COUSINEAU:
11:38:11 25
I think it also requires a
legal conclusion.
21
24
THE WITNESS:
11:38:02 20
23
Assumes facts not in evidence.
I'm referring to two different companies.
You said that PCM maintained it prior to this

litigation.
I'm trying to figure out if we are

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11:38:13
talking about one and the same file.
2
3
Did Malibu Broadbeach have a separate file

from any file that PCM had?
4
11:38:22
MR. BEZEK:
6
7
That question is overly broad.
THE WITNESS:
I don't know.
BY MS. COUSINEAU:
Who would know the answer to that question?
I don't know.
11:38:28 10
MR. BEZEK:
11
speculation.
12
BY MS. COUSINEAU:
13
14
11:38:37 15
When was the last time you saw the file --
first of all, how would you define this file?
What
is it labeled or called?
16
MR. BEZEK:
17
THE WITNESS:

I assume it has -- I don't
18
remember whether it says "Bluff House" -- part of it
19
says "Bluff House" on it and part of it says
11:38:54 20
21
22
23
24
11:39:12 25
"32628 PCH" on it.

BY MS. COUSINEAU:
Q
Where was it maintained the last time you
saw it?
A
I -- I don't remember.
I don't have a
clear recollection of looking at the file -- you

55

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11:39:15
11:39:28
know, seeing it somewhere.
specifically.
documents now; so you could or may have already
spoken to them about it.
I just don't remember
I know that the lawyers have all the
And you're saying the documents in that
file would help you refresh your recollection of
what was intended to be done to the garage structure
prior to June 8, 2002?
Yes.
11:39:42 10
And can you recall specifically what was in
11
that file that would help you refresh your
12
recollection?
13
No.
14
What documents would you look for?
11:39:53 15
I don't know.
I would just read the file,
16
and presumably there would be things that would
17
trigger my memory.
18
19
11:40:08 20
Were there architectural plans drawn for
the main house prior to June 8, 2002?

MR. BEZEK:
21
Vague and ambiguous as to time.
22
THE WITNESS:
23
MR. BEZEK:
24
I don't remember.
While you are going through
your papers there, Maria, and before your next
11:40:38 25
question, I want to confer.

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11:40:40
11:40:58
reporter.)
MS. COUSINEAU:
Have you finished
conferring?
MR. BEZEK:
I have.
Thank you.
While you are looking for your documents,
is this a good time to take a short break, then, or
do you have your documents ready?
11:41:24 10
11
MS. COUSINEAU:
now.
Thank you.
12
MR. BEZEK:
13
MS. COUSINEAU:
14
I've got my documents right
All right.
Let me hand you what I have
marked as Exhibit 42.
11:41:34 15
16
17
18
hereto.)
19
BY MS. COUSINEAU:
11:41:34 20
21
Do you recognize that building permit
application?
22
MR. BEZEK:
23
copying on it.
24
us?
11:41:54 25
Maria, this one has yellow
Is that the one you wanted to give
MS. COUSINEAU:
It doesn't matter.
I'll
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11:41:57
11:42:09
give that one to you.
MR. BEZEK:
MS. COUSINEAU:
MR. BEZEK:
up.
BY MS. COUSINEAU:
7
8
That one also has blood on it.

Which one?
The one in your hand, midway
Do you recognize this document,
Mr. Gaggero?
Yes.
11:44:23 10
And is this the building permit application
11
12
that was submitted for the main house?

A
I don't know if it was submitted for the
13
main house only.
14
this was the main house only or the main house and
11:44:41 15
16
17
18
I think it was -- I'm not sure if
the guesthouses.
Q
And Colleen O'Brien was authorized to sign
on behalf of Malibu Broadbeach?

A
Yes.
19
Is that your understanding?
11:44:52 20
Yes.
21
Does that refresh your recollection of
22
whether or not she was, in fact, an agent of
23
Malibu Broadbeach?
24
Not necessarily.
11:45:00 25
It's -- I suppose it's some sort of a legal

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11:45:07
11:45:27
connotation you're looking for, and I don't think
I'm qualified to comment on the legal ramifications
of whether she was or was not an agent for
Malibu Broadbeach.
MS. COUSINEAU:
I've marked as Exhibit 43 a
combination sewer septic permit.
11:45:37 10
hereto.)
11
BY MS. COUSINEAU:
12
13
Have you ever seen that before,
Mr. Gaggero?
14
I'm not sure if I have seen it before.
11:46:27 15
Do you know who signed on behalf of
16
Malibu Broadbeach there on October 28, '02, on the
17
left-hand side?
18
I can't make out the signature.
19
It does not appear to be Ms. O'Brien's,
11:46:38 20
does it?
21
You're asking me does it look like the
22
signature on the Exhibit 42?
23
not.
24
11:46:50 25
I would say it does
Well, are you familiar with
Colleen O'Brien's signature separate and apart from

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11:46:53
1
2
I can see what it looks like on Exhibit 42.
Do you know for certain -- do you recognize
4
11:47:04
looking at Exhibit 42?
the signature on 42 as Colleen O'Brien's?
I'm not a signature expert.
Do you recognize that as Colleen O'Brien's?
I'm not a signature expert.
if that is Colleen O'Brien's for sure.
know.
11:47:14 10
I don't know
11
12
Have you seen Colleen O'Brien's signature
in the past?
A
I don't
Yes.
13
14
11:47:24 15
And does that appear to you to be similar
to hers?
A
I would have to look at other documents or
16
look at her signature to verify if that is or not,
17
and then I couldn't verify it for sure because I'm
18
not a signature expert.
19
11:47:37 20
21
I'm not asking you to make sure there is no
fraud here.
I'm just trying to see if you recognize
Exhibit 42 as Colleen O'Brien's signature.
22
When I asked you about 43, you -- you
23
wanted to compare them; so I assume that you
24
believed 42 to have been signed by Colleen; is that
11:47:53 25
correct?
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11:47:55
1
2
MR. BEZEK:
What is the question you want him to
answer?
BY MS. COUSINEAU:
6
7
8
9
Move to strike all the
argumentative portion.
11:48:01
Okay.
Do you recognize the signature on
Exhibit 42 as Colleen O'Brien's?

MR. BEZEK:
BY MS. COUSINEAU:
Asked and answered.
11:48:16 10
Go ahead.
11
I've given you all the answers to this line
12
13
of questioning.
Q
14
11:48:30 15
Why did Malibu Broadbeach -- strike that.

Do you know why Colleen O'Brien is listed
as the owner on Exhibit 43?
16
MR. BEZEK:
17
THE WITNESS:
18
19
11:48:53 20
Hold on.
No.
BY MS. COUSINEAU:
Q
Was Colleen O'Brien the owner of
32628 Pacific Coast Highway on October 28, 2002?
21
No.
22
Why did Malibu Broadbeach abandon the
23
septic system in October of 2002?
24
11:49:13 25
MR. BEZEK:
Lacks foundation.

Conjecture.
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11:49:21
11:49:29
THE WITNESS:
What did you say?
BY MS. COUSINEAU:
In what year?
What month?
October, 2002, is the date of this permit.
Okay.
You need me to rephrase the question?
No.
I just don't understand your question.
I don't know that MBLP abandoned a septic system in
October of '02.
11:49:43 10
Why did Malibu Broadbeach file a septic
11
permit application identifying the description of
12
the work abandonment of the septic system.
13
14
MR. BEZEK:
Lacks foundation.
11:49:58 15
THE WITNESS:
I don't know that
16
Malibu Broadbeach did file this permit application,
17
if that is what you are referring to, Exhibit 43.
18
BY MS. COUSINEAU:
19
11:50:10 20
21
Do you believe that somebody that was not
authorized to act on behalf of Malibu Broadbeach

filed this permit application?
22
I don't know what to believe.
23
In fact, didn't Malibu Broadbeach abandon
24
11:50:27 25
the septic system and put in a new system?

A
Which system are you speaking of?

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11:50:28
1
2
3
The septic system at
32628 Pacific Coast Highway.

A
There were two.
4
11:50:36
Well, wasn't there just one connected to
both facilities?
No.
Okay.
8
9
11:50:44 10
Explain to me what two septic
systems were there.

A
There was one for the guesthouses, and
there was one for the main house.
11
And which one was abandoned?
12
Both.
13
Why was the septic system for the main
14
11:51:10 15
16
17
18
19
11:51:24 20
21
22
house abandoned?
A
I don't remember specifically.
I don't
remember whether -- I don't remember.

Q
Why was the one for the guesthouse
abandoned?
A
The department -- the building department
made us abandon it.

Q
Who at the building department made you
abandon it?
23
I don't remember.
24
Did you -- were you involved in any
11:51:32 25
conversations with anyone at the building department

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11:51:34
11:51:41
about that topic?
No.
Did you receive any documents from the
building department telling you -- telling
Malibu Broadbeach that they would have to abandon
the septic system that was tied into the guesthouse.
I may have.
And would those be in the Malibu Broadbeach
file that you referred to earlier?
11:51:54 10
11
MR. BEZEK:
14
11:52:01 15
16
THE WITNESS:
21
Why did the building department make you
abandon the septic system applicable to the

guesthouse?
MR. BEZEK:
19
11:52:13 20
I don't know.
BY MS. COUSINEAU:
17
18
Lacks
foundation.
12
13
THE WITNESS:
I don't know.
BY MS. COUSINEAU:
Q
Did you have any discussion with anybody
22
about why you had to abandon the septic system at
23
the guesthouse?
24
You do not need to raise your voice at me.
11:52:21 25
I'm not intending to.

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11:52:23
Did you have any conversations with anybody
about why the building department required you to
abandon the septic system at the guesthouse?
4
11:52:35
MR. BEZEK:
To the extent that violates the
attorney-client privilege, you don't have to answer
that question.
please answer.
8
9
If you have any knowledge otherwise,
THE WITNESS:
I was involved in some
conversations about the abandonment or about the
11:52:53 10
requirement to abandon the guesthouse septic system.
11
I don't recall who those conversations were with, as
12
I sit here today.
13
14
But do you recall the substance of those
conversations?
11:53:10 15
Vaguely.
16
What do you recall about those
17
18
19
11:53:33 20
21
22
23
24
conversations?
A
I recall that the City wanted a new septic
system put in for the guesthouse.

Q
When did the City say that it wanted a new
septic system for the guesthouse?

A
"Apartments" if that is a better word, not
"guesthouse."
11:53:50 25
Prior to the accident on June 8, 2002, was

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11:53:54
11:54:06
it Malibu Broadbeach's intention to change the
two units into a single unit?
No.
When did Malibu Broadbeach decide to change
the two units into a single unit?
MR. BEZEK:
Objection.
conjecture and speculation.
evidence.
9
11:54:29 10
Calls for
Assumes facts not in
It's argumentative as phrased.

THE WITNESS:
When the City told us that we
could not -- well, that's not that simple.
11
Around the time where the City told us that
12
the only way we could have electricity in the garage
13
structure, as you pointed out, was -- that's the
14
word you used for the garage structure -- the only
11:54:52 15
way we could have electricity turned on there again
16
was to permit the structure as a guesthouse, and the
17
only way it would become a legal guesthouse was to
18
have one unit and not two.
19
11:55:19 20
21
And so I suppose that that -- at or about

that time, Malibu Broadbeach made the decision to
open up the wall between -- it was actually, I
22
think, the City that suggested how we would combine
23
the units to put a doorway between the two units and
24
remove a kitchen in one of the units.
25
///
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11:55:38
1
2
3
4
11:55:48
BY MS. COUSINEAU:
Q
Why was the electricity turned off to the
garage structure?
A
Because the car drove through it and the --
I guess the electrical and the power company and the
Department of Building and Safety felt it was a
prudent thing to do.
8
9
Was that a conversation that you had with
somebody from the Department of Building and Safety?
11:56:04 10
No.
11
Do you recall whether it was the
12
Building and Safety Department or the power company
13
that said the electricity needed to be turned off?
14
11:56:18 15
I wasn't present when the electricity was
turned off.
I don't know which of them or if both
16
of them made that determination, but I know that
17
they both had a hand in it.
18
How long after the accident was it that the
19
electricity was turned off to the guest structure?
11:56:34 20
MR. BEZEK:
21
"Garage structure"?
22
23
MS. COUSINEAU:
"Garage structure."
Thank
you.
24
11:56:43 25
Did you say "guest structure"?
THE WITNESS:
I don't know because I wasn't
there.
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11:56:45
1
2
11:56:52
BY MS. COUSINEAU:
Q
Well, was the electricity turned off the
first time that you saw the garage structure after
the accident?
Yes.
Do you know whether the septic permit
application that is marked as Exhibit 43 -- was that
for the main house or the guesthouse?
MR. BEZEK:
11:57:21 10
THE WITNESS:
Asked and answered.
11
house.
12
BY MS. COUSINEAU:
I think it was for the main
13
Eventually, were the two systems combined?
14
Yes.
11:57:37 15
And was that at the requirement of the
16
Building and Safety Department?
17
Yes.
18
From your conversations about abandoning
19
11:58:09 20
21
the septic system, do you recall why the

Building Department was requiring the systems to be
combined?
22
23
MR. BEZEK:
and see -- "from the conversations"?
24
11:58:22 25
Can you read that back, please,
MS. COUSINEAU:
Yes.
He said that he
recalled certain conversations regarding abandoning

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11:58:27
1
2
3
4
11:58:46
the septic system.

Q
He didn't recall who they were.
My question is do you recall why the
systems had to be combined?

A
It was my understanding there is an
individual that runs the health department at the
City of Malibu and he can dictate how he wants
systems set up on -- homes and the size of them
and -- and so forth; and it's my understanding that
the City required that they -- this individual in
11:59:10 10
the City required that they be combined.
11
Do you recall that individual's name?
12
No.
13
14
11:59:27 15
To your knowledge, is he still the person
at the health department that dictates the septic

systems in Malibu?
16
I don't know.
17
Is it true that the systems needed to be
18
combined regardless of what happened at the -- to
19
the garage structure?
11:59:47 20
21
No.
MR. BEZEK:
22
ambiguous.
23
BY MS. COUSINEAU:
Objection.
Vague and
24
So if I --
11:59:58 25
When you say "What happened to the garage

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12:00:00
structure?" you mean the accident; right?
Yes.
Yes.
4
12:00:16
5
6
That would be a "No."

Q
If I asked this already, I apologize; but
prior to June 8, 2002 -- strike that.
Never mind.
Eventually, Malibu Broadbeach broadened the
remodeling plans at the main house; is that correct?
MR. BEZEK:
The question is vague.
12:00:57 10
THE WITNESS:
11
again, please.
12
BY MS. COUSINEAU:
13
14
12:01:05 15
Would you ask the question
Certainly.
Eventually, Malibu Broadbeach broadened the
plans to remodel the main house beyond those plans
16
that are in the building permit application of
17
April 17, 2002; correct?
18
MR. BEZEK:
19
THE WITNESS:
12:01:21 20
Still vague.
you are talking about.
I don't even know what plans

If you could show those to
21
me, that would be helpful.
22
you mean by "broadened," that would be helpful as
23
well.
24
BY MS. COUSINEAU:
12:01:31 25
If you could define what
Sometime after Exhibit 42 was filed with

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12:01:34
12:01:54
the City of Malibu, is it true that
Malibu Broadbeach decided to increase the square
footage of the main house?
Not to my recollection.
Was there a covered patio that was enclosed
at the main house?
Yes.
And by enclosing that covered patio, did
the square footage of the main house increase?
12:02:16 10
MR. BEZEK:
The question now is internally
11
vague and ambiguous, particularly in relation to the
12
question that was just asked and answered prior to
13
that.
14
THE WITNESS:
I would assume that, when the
12:02:28 15
patio was enclosed and incorporated into the main
16
house, that it did increase the square footage of
17
the main house.
18
BY MS. COUSINEAU:
19
12:02:39 20
And was a new building permit application
filed for that increased square footage?
21
I don't know.
22
To your knowledge, was a planning review
23
required by the City of Malibu because of the
24
increased square footage to the main house?
12:02:55 25
MR. BEZEK:

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12:02:58
1
2
3
Conjecture and speculation.

THE WITNESS:
BY MS. COUSINEAU:
Lacks foundation.
I don't know.
4
12:03:08
Was there a planning review done of any
remodel at the main house?
MR. BEZEK:
THE WITNESS:
8
9
12:03:32 10
11
Same objections.
I don't know.
BY MS. COUSINEAU:
Q
So you don't know whether Malibu Broadbeach
had to go before any planning commission in order to

increase the square footage of the main house?
12
MR. BEZEK:
13
THE WITNESS:
14
12:03:45 15
Argumentative.
I do know the answer to that
question.
BY MS. COUSINEAU:
16
What is it?
17
No.
I mean, no, they did not have to go
18
before any planning commission.
19
you are assuming that -- what was the last part of
12:03:59 20
21
your question?
But that's -- but
That they added square footage to
the house?
22
Correct.
23
I don't know that Malibu Broadbeach added
24
12:04:07 25
square footage to the house, but I know they never

had to go before a planning commission.
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12:04:08
1
2
12:04:21
Okay.
was increased?
But the square footage of the house

Am I mistaken there?
MR. BEZEK:
THE WITNESS:
was.
BY MS. COUSINEAU:
7
8

At some point in time, it
While Malibu Broadbeach owned it, the main
house square footage was increased?
I don't think so.
12:04:30 10
Okay.
11
Then I'm confused.
When the covered patio of the main house
12
was enclosed, did that increase the square footage
13
of the main house?
14
12:04:41 15
MR. BEZEK:
16
17
12:04:56 20
Asked and answered.
MS. COUSINEAU:
Q
18
19
Yes.
Okay.
So maybe -- maybe I'm confused.

Did Malibu Broadbeach -- was
Malibu Broadbeach the owner of the main house when

the patio was enclosed?
21
No.
22
Who was?
23
I don't know.
24
Was it prior to Malibu Broadbeach's
12:05:07 25
ownership of the property?

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12:05:08
12:05:45
Yes.
So at the time that Malibu Broadbeach
purchased the property at
32628 Pacific Coast Highway, the covered patio was
already an enclosed space?
That's correct.
Was it a habitable space, to your
knowledge?
Yes.
12:05:53 10
And was it space that was recognized by the
11
12
City of Malibu as square footage of the property?

A
I don't know.
13
14
12:06:08 15
reporter.)
16
MS. COUSINEAU:
17
MR. BEZEK:
18
19
12:07:20 20
(No audible response.)
BY MS. COUSINEAU:
Q
Prior to the date of the accident, did
Malibu Broadbeach have -- strike that.
21
22
Are you finished?
Prior to June 8, 2002, the two units were

vacant; correct?
23
You already asked that question.
24
I'm just trying to put this in relative
12:07:44 25
space here so that it makes sense in light of my

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12:07:47
12:07:53
questions to follow.
Okay.
So they were vacant?
June 8 being the date of accident -- you
represented that to me.
specifically to be true -- but, yes, the
two apartments were vacant prior to the accident.
8
9
What did Malibu Broadbeach tell the
tenants -- strike that.
12:08:10 10
11
I don't know that
Did you -- did Malibu Broadbeach ask the

tenants to vacate those two units?
12
Yes.
13
Why?
14
12:08:28 15
Do you have any general recollection?
16
No.
17
Who on behalf of Malibu Broadbeach asked
18
those tenants to vacate the property?
19
I don't remember.
12:08:44 20
How long did Malibu Broadbeach expect those
21
units to be vacant?
22
Until they could clean them up.
23
And by "cleaning them up," you mean
24
12:09:14 25
repainting and possibly replacing windows?

A
To the best of my recollection.
There may
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12:09:17
12:09:32
have been other things that were required to get
them in shape.
But you don't recall what those are today?
Not as I sit here.
How many people were living in each of the
units above the garage?
7
8
MR. BEZEK:
9
12:09:46 10
THE WITNESS:
Three.
BY MS. COUSINEAU:
11
Two in one unit and one in the other?
12
Yes.
13
Do you recall the names of either -- any of
14
12:09:52 15
those people?
A
16
No.
17
18
MR. BEZEK:
Before -- before your next
question.
19
12:10:03 20
21
reporter.)
BY MS. COUSINEAU:
22
23
Prior to June 8, 2002, had there been a
tenant in the main house?
24
I don't know.
12:10:31 25
When Malibu Broadbeach purchased this

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12:10:34
12:10:53
property, was it the intention to fix it up to sell
it?
MR. BEZEK:
THE WITNESS:
It's been asked and answered.

It was an investment, and
there was no predetermined disposition of the
property.
BY MS. COUSINEAU:
8
9
It was contemplated.
Is the guest- -- is the guesthouse now
available for rent?
12:11:14 10
The entire property is available for rent.
11
Is the guesthouse available for rent
12
separate and apart from the front house?
13
I don't see why not.
14
Is it offered for rent that way?
12:11:26 15
The property is offered for lease, and if
16
somebody wanted to lease just the guesthouse, we
17
would entertain that.
18
19
What realty company, if there is one, has
the listing for the house?
12:11:46 20
Pritchett Rapf Realty.
21
And is there a separate price for the lease
22
of the guesthouse?
23
I don't think so.
24
So you are saying if, in fact, somebody
12:12:07 25
came to you and wanted to lease just the guesthouse

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12:12:10
12:12:19
right now -- let's say for one year -- that is
something that Malibu Broadbeach would entertain?
That's correct.
Would that require you to take it off the
market for sale?
It would depend on the terms of the lease.
Do you know what the market price is
currently for the rental of that unit?
Not without doing some research.
12:12:49 10
What was the rent Malibu Broadbeach was
11
12
getting prior to June 8, 2002, for those two units?

A
I don't remember.
13
14
12:13:48 15
16
Is it your -- strike that.

How much rent has Malibu Broadbeach lost as
a result of the accident?

A
Again, I'm not prepared to comment on that
17
today because I didn't see it in the subpoena;
18
but -- so I just didn't read the files to look at
19
that.
12:14:04 20
21
22
23
24
Could you show me which numbers that falls

under.
Q
It goes to No. 1, the loss that was
suffered at the property.

A
12:14:11 25
Oh, I see.
Wasn't that already tendered to you?
That
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12:14:14
1
2
amount in the claim?

Q
12:14:31
I have received rental agreements.

My question to you is how long -- what is
the lost rent that Malibu Broadbeach believes it has
suffered as a result of this -- the car accident on
June 8?
7
8
9
I believe that claim was mailed to
State Farm.
Q
Well, as the person designated to speak to
12:14:45 10
11
that, can you tell me what the basis of that claim

is.
12
Oh, the basis of that claim is the rental
13
amount of the two units over the term until we got a
14
certificate of occupancy again.
12:15:11 15
shouldn't say "again."
For the -- I
Until we got a certificate
16
of occupancy for the apartment or guesthouse
17
upstairs above the garage.
18
19
MS. COUSINEAU:
Well, I'm going mark as
Exhibit 44 a damage summary dated July 28, 2004.
12:15:33 20
21
22
23
hereto.)
24
BY MS. COUSINEAU:
12:15:35 25
Have you seen that before?

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12:16:01
I have seen it.
I -- I can't tell you that
I have gone through it thoroughly, but I have seen
it.
4
12:16:08
5
6
Well, there is a line item there that says
"Rental loss through July, 2004, of $78,130."

Do you see that?
Yes.
Is that what you understand to be
Malibu Broadbeach's claim for lost rents?
12:16:22 10
Yes.
11
And how was that number calculated?
12
As I indicated earlier, from the accident
13
14
12:16:39 15
through the certificate of occupancy.

Q
Okay.
So the -- the start date for the
rental loss is the date of the accident, June 8,
16
2002?
17
It should be right around there.
18
What does that mean?
19
Well, I don't know that it's specifically
12:16:52 20
that date.
Maybe it was from July 1st.
21
was prorated.
I don't know.
22
don't remember right now.
I did know.
Maybe it
I just
23
Well, who would know?
24
I think Tom Stevens did the calculation on
12:17:04 25
this at my instruction, but I just don't recall if

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12:17:07
it was from June 8th or if it was from June 15th or
it was from July 1st.
June 8th through the date of the certificate of
It should have been from
4
12:17:21
occupancy.
was used?
8
9
12:17:41 10
And what rate was used?
What monthly rate
The monthly rates that were in effect with
the prior tenants.

Q
And you don't recall what those are,
sitting here today?
11
No, I don't.
12
And those two units, then, you combined
13
that figure and calculated from some time after
14
June 8, 2002, through sometime in July of 2004 for
12:17:55 15
16
the figure of 78,130?

A
I've answered that question as specifically
17
as I can, and I didn't -- don't recall phrasing it
18
like that.
19
12:18:10 20
I'm just trying to understand if, in fact,
the two numbers were combined and then applied for
21
the duration that you have described as sometime
22
after the date of the accident?
23
July 1st or June 15, you can't say, though, as to
24
this, July 4th -- July of 2004; correct?
12:18:30 25
MR. BEZEK:
Wait.
Whether it's
I'm going to object to

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12:18:32
the question.
Unintelligible.
3
4
12:18:47
It's vague.
Ambiguous.
Compound.
If you understand the question -questions, you can answer either/or both.
THE WITNESS:
your question pretty clearly.
succinct in what you don't understand, I'll try to
help you.
BY MS. COUSINEAU:
12:18:53 10
11
I -- I think I have answered

If you can be more
Were both of the rental amounts combined
for the duration that you have calculated a loss?
12
You mean both units?
13
Yes.
14
Yes.
12:19:01 15
And do you know when in July of 2004 the
16
rental loss ended?
17
MR. BEZEK:
18
THE WITNESS:
19
12:19:16 20
21
22
23
24
12:19:26 25
Asked and answered.

It would be the date of the
certificate of occupancy for the third time or it

should have been, if it wasn't calculated.
BY MS. COUSINEAU:
Q
And you can't tell me whether it was or
wasn't?
A
It should have been.
I didn't do the
actual preparation of this document, nor did I

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12:19:29
manipulate the calculator.
12:19:42
So I know what my instructions were and
whether they were followed through -- I did not have
this audited afterwards to ensure that it is what I
instructed the calculation and formula to be.
7
8
When you -- strike that.

Did you give that instruction to
Mr. Stevens?
I did.
12:19:55 10
And when you instructed Mr. Stevens to
11
calculate this amount, did you first look at the
12
policy to see what, if anything, the policy covers
13
with regard to lost rents?
14
MR. BEZEK:
12:20:08 15
Calls for a legal conclusion.
MS. COUSINEAU:
16
looked at the policy.
17
THE WITNESS:
18
MR. BEZEK:
19
12:20:17 20
him.
I'm just asking him if he
No.
No, that's not what you asked
You asked him if he looked at the policy for
the purposes you specified.
21
MS. COUSINEAU:
22
MR. BEZEK:
Correct.
23
conclusion.
24
making my objections.
And that does call for a legal
I'm not arguing you with.
I'm just
25
///
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12:20:26
1
2
12:20:34
BY MS. COUSINEAU:
Q
So, as you sit here today, do you know what
the State Farm policy provides with regard to lost
rents?
MR. BEZEK:
THE WITNESS:
policy?
BY MS. COUSINEAU:
9
12:20:48 10
11
Calls for a legal conclusion.

The "policy" meaning which
The State Farm policy of insurance that was
in force on the day of the accident.

A
12
I don't know.
You mean the State Farm policy that was in
13
force for this building?
14
for -- I mean, isn't there two policies on this
12:21:09 15
Not that was in force
property?
16
I don't believe so.
17
I think there is.
18
Okay.
19
But -- and I'm not sure on that either.
12:21:15 20
21
think there were two policies in force.
"This
policy" -- that's why I asked you which policy.
So
22
23
24
12:21:28 25
I -- I don't know for sure.

Q
It's your belief that there is a separate
policy for the main house and -- and a separate

policy for the garage structure?
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12:21:30
1
2
3
4
12:21:42
structure, yes.
Q
Were you involved in the negotiations --
strike that.
5
6
For the apartments and the garage
Were you involved in obtaining the policy

on the property on PCH?
Peripherally.
And what was your peripheral involvement?
I think I need the question to be more
12:22:10 10
11
specific than that.

Q
You said you were peripherally involved in
12
obtaining the policy for this property.
13
your peripheral involvement?
14
12:22:19 15
16
17
18
What was
I had knowledge that the policy was being
obtained from State Farm.

Q
And who was doing -- who was obtaining that
on behalf of the Malibu Broadbeach?

A
19
12:22:35 20
21
Was there somebody in particular at
Pacific Coast Management that was responsible for

doing that?
22
Doing what?
23
Getting the policy on the property on the
24
Pacific Coast Highway property.
12:22:50 25
It was a combination between Bob Haber and

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myself, as I recall -- a combination of efforts
between Bob Haber and myself.
12:23:12
Prior to the property on
Pacific Coast Highway, had you ever obtained a
State Farm policy from Mr. Forbing before?
No.
Were all of your prior State Farm policies
obtained through Darvin Howell?
9
12:23:26 10
You are talking about me as an individual
now?
11
You or any of your entities.
12
What entities are you assuming I have?
13
I'm not assuming any.
14
12:23:36 15
You said you were
involved in this one -- you and Bob Haber.

Prior to this, when you either as an
16
individual or on behalf of the business obtained a
17
State Farm policy had that been through
18
Darvin Howell?
19
12:23:51 20
21
22
Exclusive or were there other agents?
don't recall.
Q
How is it that you came to use Mr. Forbing
on this particular property?
23
He was the agent of the seller.
24
Did you have any communications with
12:24:08 25
Mr. Forbing?
You directly?
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At what point in time?
Prior to the issuance of the policy on
12:24:31
I don't recall.
Did you request that PCM -- that
Pacific Coast Management -- strike that.
7
8
Did you ask Mr. Forbing for any particular

type of policy?
You specifically.
12:24:48 10
Prior to the initial policy on
11
12

A
You mean when the seller owned the
13
property?
14
I'm sorry?
12:25:02 15
You mean when the seller owned the
16
property?
17
18
Well, you have -- is it true that you have
no recollection of speaking to Mr. Forbing directly?
19
No.
12:25:13 20
Do you have a recollection of ever speaking
21
to Mr. Forbing directly?
22
Yes.
23
When was that conversation?
24
There were several conversations, and I
12:25:26 25
recall several conversations.
They are all sort of

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1
2
3
4
12:25:35
5
6
blending together right now.

Q
Well, tell me the first one that you
recall.
A
As I indicated, they are blended together;
so I can't put them into first, second, third, last.

Q
Okay.
Tell me everything you recall about
your conversations with Mr. Forbing, regardless of
when those conversations took place.
I don't recall any specifics.
12:25:55 10
11
Were all of your conversations with
Mr. Forbing on the telephone?
12
Yes.
13
Can you estimate how many times you spoke
14
to him?
12:26:01 15
No.
16
Can you tell me whether any of these
17
conversations took place prior to the policy being
18
issued to Malibu Broadbeach for
19
12:26:15 20
I'm not sure.
21
Can you tell me anything about the
22
substance of any conversation you had with
23
Mr. Forbing?
24
12:26:29 25
I just don't recall the substance of my
conversations with Mr. Forbing.
I know I have
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12:26:51
spoken with him on multiple occasions, and I don't
remember if I spoke to him before this policy was
issued or not; but I know I have spoken with him and
at such time as I read through all of the files and
immerse myself back into this again, I will
undoubtedly be a little more clear on what and when.
Do you recall why you spoke to Mr. Forbing?
No.
Do you know whether you spoke to
12:27:06 10
11
12
Mr. Forbing about the loss which was the car going
through the garage?
A
I'm not sure.
13
MS. COUSINEAU:
14
THE WITNESS:
12:27:32 15
16
Can we take a break.

Lunch break?
MS. COUSINEAU:
Sure.
We can take a quick
lunch break.
17
(The proceedings were adjourned for
18
lunch from 12:27 P.M. to 1:40 P.M.)
19
13:40:49 20
BY MS. COUSINEAU:
Q
Mr. Gaggero, what documents did you review
21
prior to coming here today to prepare for this
22
deposition?
23
The Notice of Deposition.
24
Anything else?
13:41:00 25
No.
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MS. COUSINEAU:
I'm going to show you what
was previously marked as Exhibit 17 and ask you if
you have ever seen that before.
13:41:23
(Defendant's Exhibit 17, which was
previously marked for identification, is
attached hereto.)
THE WITNESS:
Yes.
BY MS. COUSINEAU:
And when did you last see it?
13:41:45 10
I don't -- probably -- I don't remember
11
specifically.
12
between David Chatfield and State Farm and
13
State Farm refused to extend the -- the cutoff date
14
for making a claim or the statute of limitations or
13:42:11 15
I know there was some communication
something like that.
16
So we had to put together a -- sort of a
17
damages up to about that point so that we could
18
quickly get the claim in so that we didn't lose our
19
right to make a claim.
13:42:27 20
21
22
23
So whenever that was,
whenever that all happened is about the time I saw

it.
Q
You understood that State Farm refused to
extend the cutoff date to submit the claim?
24
Yes.
13:42:36 25
How did you come to that understanding?

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13:42:50
MR. BEZEK:
If we have an agreement that
it's not a waiver of the privilege and it's limited
to this one particular area, he can answer that
question.
MS. COUSINEAU:
Well, this is what I was
saying earlier -- that to the extent an attorney is
presenting the claim on behalf of an insured, I
think any communications between that attorney and
the insured, as it relates to what the insured
13:43:05 10
11
knows, is no longer privileged.
It can't be.
How can an insured ever present a claim
12
or -- I would never be able to understand what the
13
insured is making their claims based on.
14
13:43:16 15
MR. BEZEK:
the analysis.
Well, again, I disagree with
And to give you some idea of why I
16
disagree, I think it depends upon how that lawyer
17
presents the claim and what his role is in the
18
preparation of the claim and whether he is acting
19
outside his role as an advisor or whether he is
13:43:34 20
actually placed into a testimonial capacity.
21
So -- and that still is separable from
22
conversations that they had had with his client
23
about the contents of the claim.
24
MS. COUSINEAU:
13:43:49 25
But I think --
Just to respond to that.
In light of the fact that he was designated

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13:44:05
as the person to communicate with on behalf of
Malibu Broadbeach, I think it does get into that
testimonial capacity.
Malibu, and anything that Malibu knows from him as
part of that claim process, I believe, is
discoverable.
MR. BEZEK:
He is then representing
See, that's where I think maybe
we have another division.
example -- well, I guess we can talk about this at a
13:44:16 10
11
later time.
If the lawyer, for
I understand your position.
I don't
want to take up your deposition time discussing it.
12
However, on this particular question that
13
you have asked, if we can enter that agreement and
14
thereby preserve everybody's rights, I don't have a
13:44:30 15
problem with him answering your question.
16
MS. COUSINEAU:
17
MR. BEZEK:
Okay.
So we have an agreement that --
18
that the other side -- that is, the insurance
19
company -- will not argue that this is a waiver of
13:44:43 20
the privilege; that they will be estopped from
21
making such an argument; and that the question is
22
not, in fact, a waiver of the privilege.
23
24
Can you read the question back to the

witness, please.
13:44:50 25
MS. COUSINEAU:
Let's make this clear.

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13:45:04
I'm still going to reserve my right to
argue that the privilege doesn't apply, but his
testifying to it will not act as a waiver either way
to my right to still claim that the privilege
doesn't apply to the right of Malibu Broadbeach to
assert the privilege.
reporter.)
13:45:31 10
MR. BEZEK:
11
12
MS. COUSINEAU:
13:45:39 15
Do I need to ask the
question again?
13
14
So with --
MR. BEZEK:
reread.
We will probably have it
What counsel has said and what I have said,
blending those two together, if you could read the
16
question back now to the witness, he can answer
17
subject to what we have blendedly agreed to.
18
Is that a word?
19
(The record was read as follows:
13:46:13 20
21
"QUESTION:
"Blendedly"?
You understood that
State Farm refused to extend the cutoff
22
date to submit the claim?
23
ANSWER:
24
QUESTION:
13:42:37 25
Yes.
How did you come to that
understanding?")
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13:46:25
THE WITNESS:
I don't remember if it was
through Mr. Chatfield or through a -- some letters
between Mr. Chatfield and State Farm, but it was one
or the other or both.
BY MS. COUSINEAU:
Does the Malibu Broadbeach file that you
described earlier contain letters between
Mr. Chatfield and State Farm?
Portions of the file I'm sure could.
13:46:45 10
Is there a separate file that
11
Malibu Broadbeach has that is specific to the
12
insurance claim that was presented as a result of
13
this loss?
14
13:47:00 15
16
17
18
I don't know how the files are kept
anymore.
Q
At some point, did you know how the files
were kept?
A
Which files?
19
13:47:19 20
Well, you just said, "I don't know how the
files are maintained anymore."
21
That indicates to me at some point you had
22
that knowledge and you no longer have that
23
knowledge; is that correct?
24
13:47:30 25
Well, at some point, the files would be
much different; so if you can give me a specific

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13:47:33
time, at what point you are talking about, I can
tell you whether I had a knowledge of how they were
kept then or not.
4
13:47:44
But at some point -- for example, I have
knowledge how they were kept perhaps when the first
piece of paper ever went into something called
"Malibu Broadbeach file" or whatever it was
entitled.
needed to be filed, more files were developed within
13:48:04 10
11
But as more things occurred and -- that
the main file.

So how the main file is kept and -- and who
12
is keeping it now is something that you would have
13
to have to talk to the lawyers about.
14
talking about before the lawyers' having custody or
13:48:20 15
If you are
control over the file, I would need to know
16
specifically at what point in time.
17
your question right, I didn't know exactly what
18
point in time you are talking about as to whether I
19
had a complete understanding of how the files were
13:48:32 20
If I understood
kept or not.
21
When did the lawyers take custody of the
22
file?
23
Which portion of the file?
24
Any portion.
13:48:42 25
At some point after the accident.

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13:48:46
1
2
3
13:49:01
What portion of the file did the lawyers
take custody of after the accident?

A
I'm not sure specifically what portion
you're talking about or when in time because the
accident happened -- what? -- two years ago more or
less, and the lawyers have taken control of more and
more of the file as the time has gone on.
Okay.
Just so I'm understanding because my
questions are -- are pretty much feeding off of your
13:49:19 10
answers; so to say that you don't understand it, I'm
11
just trying to understand how this file is
12
maintained, what is maintained.
13
14
Is there a file for the Malibu Broadbeach

property on PCH?
13:49:36 15
16
MR. BEZEK:
17
18
19
13:49:46 20
THE WITNESS:
13:49:58 25
Is there more than one file that relates to

MR. BEZEK:
speculation.
23
24
Yes.
BY MS. COUSINEAU:
21
22
Overly broad.
Calls for
Lacks foundation.
THE WITNESS:
Well, you better define what
you mean by "file" now, and then I'll be able to

talk to you about it or respond to that.
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13:50:00
1
2
3
4
13:50:11
BY MS. COUSINEAU:
Q
Okay.
I don't have a meaning.
I'm using
the word as you used it.

When -- you said that there is a -- you
were familiar with the file when the first piece of
paper went into it.
what documents Malibu Broadbeach maintains with
regard to this property and whether it's one file
with many subparts or it's various files.
I'm just trying to figure out
I am just
13:50:32 10
11
trying to understand what Malibu Broadbeach has.

A
I don't know what Malibu Broadbeach has.
12
MR. BEZEK:
13
MS. COUSINEAU:
14
MR. BEZEK:
13:50:46 15
Can I make a suggestion, Maria?

Sure.
I think that where the
confusion -- confusion -- I think what you are
16
trying to make sure of is that you have received all
17
the documents you are entitled to -- to have
18
received.
19
13:50:56 20
MS. COUSINEAU:
No.
That's actually not
what I'm trying to do at this point.
21
MR. BEZEK:
Okay.
Never mind, then.
I had
22
a suggestion on how to solve what I thought was the
23
issue, but that's okay.
24
BY MS. COUSINEAU:
13:51:05 25
Go ahead.
Mr. Gaggero, is there a separate set of

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13:51:08
documents that relate specifically to the claim
presentation to State Farm?
3
4
13:51:22
5
6
MR. BEZEK:
Objection.
speculation and conclusion.

THE WITNESS:
Calls for
Overly broad.
It's my understanding that
the documents, as best as they could be assimilated
up to the point they were given to State Farm, were
given to State Farm; so if that is the grouping of
documents you are talking about, then I suppose
13:51:40 10
there is a grouping of documents.
11
12
Are there additional documents that should

be included in that claim?
13
14
Perhaps.
Are there documents included in that claim

that shouldn't be in that claim?
13:51:54 15
Perhaps.
But is there a grouping of documents that
16
exists that was tendered to State Farm?
17
BY MS. COUSINEAU:
18
19
13:52:09 20
21
22
23
24
13:52:29 25
Yes.
And are you referring to the -- the
documents that accompanied Exhibit 17 -- the back-up

data for Exhibit 17?
A
It's my understanding there were several
submissions to State Farm.

Q
Okay.
And with that documentation, are
there letters by and between State Farm and

Mr. Chatfield?
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13:52:34
You tell me.
Well, certainly Mr. Chatfield has never --
excuse me.
4
13:52:42
Certainly Malibu Broadbeach has not
produced in this case that I'm aware of additional
communication, and maybe it has.
7
8
Are those maintained in one file?

know?
9
13:52:54 10
MR. BEZEK:
13
14
THE WITNESS:
17
18
19
13:53:36 20
21
22
23
24
13:53:51 25
I don't know.
BY MS. COUSINEAU:
Q
Okay.
Other than the lawyers -- actually,
let me ask you this.
13:53:10 15
16
ambiguous.
11
12
Do you
When you say the lawyers maintained these

files or these documents, who are you referring to?
A
David Chatfield, Pamela Voich, and
Ryan Vos, and now Foley & Bezek.

Q
Other than those four lawyers or law firms,
are there documents of Malibu Broadbeach that

pertain to this property in somebody else's custody?
MR. BEZEK:

THE WITNESS:
That pertain to this property
in general?
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13:53:51
13:54:05
I mean, in -- the City of Malibu probably
has some.
The tax accounting -- assessor probably
has some.
The seller probably has some.
Coastal Commission probably has some.
there are some files that -- there may be some the
aerial photography group has on it.
probably has some on it.
it.
the property before have some files on it.
The
I'm sure
Caltrans
Jack Pritchett has some on
Perhaps people that have expressed interest on
13:54:21 10
I mean, it's -- it's -- a great deal of
11
people may have files pertaining to this property.
12
BY MS. COUSINEAU:
13
14
13:54:31 15
pertaining to the claim other than the documents

that are in the custody of its lawyers?
16
17
MR. BEZEK:
13:54:44 20
Lacks foundation.
Calls for
speculation.
18
19
Does Malibu Broadbeach have any documents
THE WITNESS:
I would say no, to the best
of my knowledge.
BY MS. COUSINEAU:
21
Who prepared Exhibit 17?
22
Tom Stevens.
23
At your direction?
24
You are talking about the -- yes, at my
13:54:57 25
direction.
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13:54:59
1
2
3
13:55:28
And what specifically did you direct
Mr. Stevens to do in compiling Exhibit 17?

A
To add up all of the invoices that pertain
to the apartments and, you know, the garage
buildings and put a standard overhead and profit on
it and find out what the legal costs were to date;
to put his accounting hours on it; and to calculate
the rental losses through, it looks like,
November 3rd and to make a notation of any payments
13:56:05 10
that we had received from State Farm and to make a
11
list of items that we estimated still needed to be
12
done on the property.
13
14
13:56:30 15
And I gave him some estimated costs for

those items that still needed to be done to complete
the work on that building, and -- and it looks like
16
here from this schedule that the rental was from
17
June 7, '02, until June 30th, '02, as the prorated
18
month of June, 2002, and then this one went through
19
February 24, '04.
13:57:01 20
So this was probably what I instructed him
21
to do on the -- on the calculation of the lost
22
rents.
23
24
Q
correct?
Actually, it went through February 28;
13:57:19 25
I'm just looking at the schedule here, and

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13:57:31
it says February', 04.
February 28 on it.
I don't know where it says
The very last line of that last page.
Yeah, that's right.
Through the 28th.
Are there 28 days in February?
Yes.
So that's the end of February.
That's 2520 assigned to the month of June;
9
13:57:41 10
11
I see.
correct?
A
2520 assigned to the month of June.
There
is -- there is two months of June.
12
June, '02.
13
Yes.
14
But the apartments were vacant at the time
13:57:56 15
of the accident; correct?
16
That's correct.
17
Okay.
You said to add -- you instructed
18
Mr. Stevens to add up all the invoices that
19
pertained to the garage structure.
13:58:09 20
21
How is it that invoices were assigned to

either the garage structure or the main house?
22
Some invoices applied only to the
23
apartments and garage, and some invoices applied
24
only to the main house.
13:58:34 25
Some invoice applied to
both.
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13:58:36
13:59:04
Invoices that applied to both that were --
that the maker of the invoice was not asked to or
was not capable of separating out the allocation, I
did my best to allocate it fairly based on a -- a
but-for analysis, and invoices that were generated
by individuals that could distinguish how much time
they spent on the guesthouse apartments and how much
they spent on the garage and how much time they
spent on the main house or areas unrelated to the
13:59:31 10
11
guesthouse building and areas surrounding the

guesthouse, they so noted their times.
12
And then I would go through those times and
13
do my best to try and figure out what was applicable
14
to the accident and -- and what was not applicable
13:59:54 15
to the accident, using again the but-for analysis.
16
Okay.
17
But for the car going through the garage,
18
Explain to me your but-for analysis.
we would not have had to do this.
19
14:00:12 20
Okay.
But for the car going through the
garage, then -- do I understand that the latticework
21
above -- on the outside of the -- let me ask that
22
question again.
23
24
14:00:36 25
Is it your testimony that, but for the

accident, the garage structure would not have
required the lattice structure that is now above the
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14:00:40
1
2
3
4
14:00:49
walkway?
A
What is -- I don't -- I'm not familiar with
any lattice structure.

Q
Okay.
Perhaps I'm using incorrect
language, and let me just show it to you.
show you Exhibit 31 from the original deposition.
7
8
Let me
Is that, in fact, a picture of the

structure as it exists now?
Yes.
14:01:02 10
And on the upper walkway outside the
11
12
13
14
14:01:18 15
apartment, there is a lattice structure; correct?

A
That's correct -- well, it's not a lattice
structure; but it is a trellis, if you will.

Q
Okay.
That trellis didn't exist on the
original structure, did it?
16
No.
17
And did the car accident require you to put
18
up that trellis structure?
19
In a manner of speaking, yes.
14:01:29 20
In what manner of speaking?
21
Well, it used to be a solid overhang, and
22
the City required us to remove the solid overhang
23
because the solid overhang caused the square footage
24
of the upstairs to exceed the legal limit allowed by
14:01:47 25
the City of Malibu for guesthouses.

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14:01:53
1
2
14:02:02
So because there was a solid roof, that was
considered part of the square footage by the City?
Yes.
And how did you learn that?
The City of Malibu.
Is there somebody in particular?
I don't remember -- I didn't speak with
anybody specifically at the City of Malibu, and I
don't recall who my conversations were with at that
14:02:14 10
time; but it was conveyed by the City of Malibu that
11
we could not permit the -- this building until and
12
unless it complied with the City of Malibu's
13
criteria for a guesthouse.
14
14:02:42 15
And they -- the City of Malibu -- and I may

be wrong on these numbers -- but I think the
16
City of Malibu allows a -- 900-some-odd square foot
17
guesthouses; and this building, with the solid
18
overhang, was over a thousand square feet.
19
14:03:03 20
21
22
23
24
14:03:22 25
And so the City of Malibu said, "You will

have to do something to eliminate the solid roof
above the walkway out here.
Q
Did the City require you to enclose the
stairway in stucco?
A
They required us to rebuild the stairway in
its entirety because it was not -- it was not safe,

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14:03:28
1
2
14:03:39
for lack of a better word.

Q
Are there communications with the
City of Malibu that would show that the City
required you to rebuild that stairway?
5
6
MR. BEZEK:
speculation.
7
8
9
THE WITNESS:
I'm not sure.
BY MS. COUSINEAU:
Q
Did you yourself have any discussions with
14:03:46 10
11
anyone at the City regarding the -- the nature of

the structure of the stairs?
12
No.
13
Did the --
14
I think in -- pardon me.
14:04:00 15
I think, in addition to not being safe, it
16
was -- also had an illegal rise in run and --
17
according to their -- their guesthouse or stairway
18
policies.
19
14:04:19 20
Do you recall what the rise in run were on
the original stairway?
21
No, I don't.
22
Did the City require the garage doors to be
23
glass?
24
No.
14:04:32 25
Was the garage door to the backside of this

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1
2
3
14:05:05
property affected by this loss?

A
No.
MS. COUSINEAU:
I'm going to mark as
Exhibit 45 a document dated May 1, '03, from
Avenue Hardware and represent to you this is one of
the documents submitted along with Exhibit 17 in --
if you track through, you will find it.
14:05:15 10
11
hereto.)
12
BY MS. COUSINEAU:
13
14
14:05:23 15
16
How is it that a -- an invoice such as this
would be posted to the guesthouse as opposed to the

main house?
A
When the truck went through the garage, it
17
destroyed some of our supplies.
18
best of my recollection, a ladder, a couple of
19
shovels, some irrigation materials, and some paint,
14:05:40 20
maybe a few other things.
It ran over, to the
But it -- we were storing
21
some of it in the garage that got broken or ruined
22
by the -- by the truck that drove through it.
23
24
14:05:54 25
Okay.
So this was to replace shovels that
were actually damaged when the car went through?

A
That's correct.
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14:05:57
Or it could have been two shovels were
damaged when the car went through, and this was an
invoice -- we had recently purchased two shovels to
14:06:09
work out there, and maybe there were three shovels.
You know what I mean?
6
7
8
9
I don't know.
But I know two shovels got damaged, and

there was an invoice for two shovels; so -Q
Were there hardwood floors in the original
two units?
14:06:32 10
No.
11
Did the City require you to put in hardwood
12
floors?
13
No.
14
Did the City require you to do anything to
14:06:46 15
16
the stairs down to the beach as a result of any of

the work being done on the guesthouse?
17
No.
18
Did the City require you to restucco the
19
garage structure?
14:07:18 20
In part.
21
Was the garage structure restuccoed
22
entirely or just in part after the accident?
23
Entirely.
24
And in submitting the estimates to
14:07:33 25
State Farm or the claim to State Farm, was the

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1
2
3
4
14:07:49
5
6
entire stucco bill submitted or just in part?

A
I would have to look at the bill and the
tally to give you that answer.

Q
Do you recall what portion the City
required be restuccoed?
A
It would have been certainly the holes
where the car went through on both sides and -- and
then the areas that required construction due to the
City's other requirements such as the perimeter
14:08:21 10
around the roof; the perimeter of the balcony; and
11
then, tying into the stairway, the areas around
12
where new plumbing had to be put in.
13
to --
14
What --
14:08:43 15
-- think of -- if there is anything else.
16
I'm sorry?
17
There may have been some other areas; but
I would have
18
essentially many areas of this building were
19
affected by other requirements of the City, which
14:08:53 20
caused so much stucco work that it would be
21
imprudent to just simply patch it and leave it.
22
I -- not even imprudent.
23
poor workmanship.
24
14:09:08 25
It would just be poor --
But I still don't know if the entire bill

was put in for claim as a result of that or whether
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14:09:12
14:09:21
there was some adjustment unless I look.
the roof?
Yes.
What did the City require?
They required us to put a new roof on after
7
8
9
14:09:38 10
Did the City require you to do anything to
we cut back the -- the overhang.

Q
What is your understanding of why a new
roof was required?

A
Well, if you don't -- if you -- it would be
11
an uninhabitable structure if a roof was not on the
12
property.
13
know, for all intents and purpose, off to
14
accommodate the requirement that we open up that
14:10:01 15
16
And the roof had to be torn back and, you
area above the balcony.

Q
So you are saying, because the overhang had
17
to be removed, there was no way to just repair the
18
roof that was on there?
19
14:10:13 20
It had to be replaced?
There was other framing conversations that
entered into that, structural conversations that
21
entered into that.
The City wanted to see a lot of
22
the framing that was involved here.
23
recall, it rained shortly after we did this, and it
24
rained shortly after we cut back that eave or that
And, as I
14:10:41 25
overhang.
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14:10:41
14:10:54
And when we're getting into fixing the
framing there, we had a lot of rain, and that rain
caused lot of damage to the material underneath the
roof.
the units, and it caused a great deal of damage that
had to be replaced or repaired.
7
8
It caused all the drywall to cave in inside
Was there a particular building inspector
that was involved in the guesthouse structure?
I think there was two or three.
14:11:18 10
Can you recall any of their names?
11
No.
12
Did you yourself discuss the construction
13
14
14:11:32 15
16
with any of them?

A
No.
Well, I might have discussed some of
it with one of them.

Q
Was there a particular person that was
17
responsible for discussing or interfacing with the
18
building instructor -- inspector during the
19
construction of the guesthouse?
14:11:47 20
21
MR. BEZEK:
speculation.
Lacks foundation.
Calls for
22
THE WITNESS:
23
again, please.
24
BY MS. COUSINEAU:
14:11:54 25
Can you ask me the question
Certainly.
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14:11:54
14:12:09
Was there a particular person who was
responsible for discussing the garage construction
with the Building Department?
MR. BEZEK:
THE WITNESS:
6
7
Same objections.
No.
BY MS. COUSINEAU:
Q
Who on behalf of Malibu Broadbeach was
discussing the garage construction with anyone in
the City of Malibu?
14:12:24 10
11
I'm not sure what people were, as I sit
here today.
12
Can you name any of them.
13
Dan Armstrong spoke with the inspectors.
14
14:12:46 15
Various independent contractors may have spoken with

the inspectors.
Colleen O'Brien, I believe, spoke
16
with the inspectors.
17
the inspectors.
18
inspectors.
Bob Haber may have spoke with
Michael Kent may have spoke went
There may be others.
I just can't
19
14:13:14 20
think of it now.
Q
As I understand it from the documents
21
submitted with the invoice that is Exhibit 17, a
22
retaining wall had to be built behind the structure;
23
is that correct?
24
14:13:32 25
MR. BEZEK:
Well, that's speculation at
this point as to what her understanding might be.

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14:13:34
Is there a question?
MS. COUSINEAU:
3
4
14:13:43
Is it correct that a retaining wall was
built behind this house?

A
Built or rebuilt?
6
7
Yeah.
There was one that existed, and it had to

be rebuilt or partially rebuilt, as I recall.
Why did it have to be rebuilt?
14:14:08 10
The vehicle didn't touch it, did it?
11
No, I don't think so.
12
So as far as you know, it was not rebuilt
13
14
14:14:24 15
because of the car accident?

A
about it.
Not necessarily.
I would have to think
16
17
Did the City require you to replace all the
doors and windows in the structure?
18
No.
19
You mentioned earlier something about
14:14:54 20
plumbing -- that plumbing had to be done and
21
therefore stucco may have been required because of
22
that.
23
Do you recall that testimony?
24
Yes.
14:15:01 25
What plumbing was required by the City in

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1
2
14:15:26
the garage structure?

A
The -- the waste lines.
Then we had some
roof drainage.
apartment -- guesthouse, if you will -- and a sewer
tie-in, gas lines; and I think we had to rerun the
water as well in some areas.
water in the kitchen, the kitchen we had to
eliminate, the kitchen we had to remodel; and in the
garage we had to rerun the water.
14:15:57 10
11
12
I think waste lines for the
Was there an HVAC system in the original
garage structure?
A
We did a rerun of the
No.
13
Did the City require you to put that system
14:16:07 15
Yes.
16
Do you know why?
17
Yes.
18
Why?
19
Because they wouldn't allow us to occupy it
14
14:16:15 20
21
in?
without -- wouldn't allow us to have a certificate

of occupancy without it.
22
Without an air conditioning system as well?
23
There is no air conditioning system.
24
It's just forced air or heat?
14:16:27 25
It's just heat, yes.

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14:16:30
1
2
14:16:43
Prior to the accident, what was the method
of heating those units?
I'm not sure.
Was there one?
I don't know.
You mentioned a couple of times that -- the
phrase "to make this unit legal."
Is it your understanding that the
guesthouse structure, as it existed on June 7, 2002,
14:16:58 10
11
12
13
14
14:17:12 15
did not comply with the Building Department codes?

A
14:17:52 20
Okay.
Is it your understanding that those
two apartments, that structure itself, was

noncompliant with City of Malibu building codes?
MR. BEZEK:
Your question is vague
internally on time and therefore ambiguous.
18
19
It was
two apartments.
16
17
It wasn't a guesthouse structure.
THE WITNESS:
It -- it did not comply with
their zoning codes.

BY MS. COUSINEAU:
21
Is that all?
22
Well, that's the thing I think that was the
23
greatest cause because it didn't comply with their
24
zoning codes, their planning and zoning codes.
14:18:20 25
I --
the building had to be brought into planning and

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14:18:23
zoning conformity; and in order to bring it into
planning and zoning conformity, a legal guesthouse
had to be constructed there.
4
14:18:47
Were you aware, prior to June 7, 2002, that
the garage structure did not comply with planning
and zoning codes of the City of Malibu?
7
8
MR. BEZEK:
THE WITNESS:
or not.
12
BY MS. COUSINEAU:
14
14:19:27 15
16
I'm not sure if I was or -- I
didn't know whether it was a legal nonconforming use
11
13
Were there any disclosures to
Malibu Broadbeach in the sale of the property

regarding the compliance of that garage structure
with any Malibu codes?
17
MR. BEZEK:
As phrased, calls for a legal
18
conclusion.
19
14:19:40 20
21
Vague and
ambiguous.
9
14:19:11 10
Overly broad.
Also lacks foundation.
THE WITNESS:
Calls for
I don't know.
BY MS. COUSINEAU:
22
What is a "legal nonconforming use"?
23
A grandfathered use.
24
14:19:55 25
In other words, those two apartments were

there for, as far as we could determine in
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14:19:58
attempting to get this resolved with the City, since
the early 1970s; and but for the car driving through
it, they would have remained there for many years to
14:20:22
come.
You --
And the City allows things to exist
sometimes even though they don't conform to current
codes if they are just existing -- if they had been
existing.
14:20:34 10
For example, those apartments existed
11
before the City of Malibu became the City of Malibu,
12
and there is probably hundreds if not thousands of
13
situations like that in Malibu.
14
14:20:58 15
16
17
You said that one of the things
Malibu Broadbeach intended to do with that garage

structure was to replace its window and doors?
A
I said "I think."
I'm not sure.
I have to
18
go back and look at the file to refresh my memory.
19
I'm not sure if they intended to replace the doors
14:21:07 20
21
22
in the main house or here as well.
And "here" being
at the apartments as well.

Q
Who else besides yourself was involved in
23
the decision of what to do with this investment
24
property on behalf of Malibu Broadbeach?
14:21:26 25

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14:21:28
14:21:54
Prior to June, 2002.
Pretty much just me.
Okay.
So when you say you don't know if
they intended to replace the doors and windows just
of the main house, are you referring to only
yourself?
8
9
14:22:02 10
11
No.
You asked me two different questions.
You
asked me what -- the disposition of an investment

property, i.e., an asset management.
Q
Okay.
Who other than yourself was involved
12
in the decisions in -- in, say, June of 2002, on
13
what construction or remodel or refurbishing was
14
going to take place in this property?
14:22:21 15
16
Properties or just the -- the garage
building and apartments?
17
The property.
18
I think Michael Kent was involved in the
19
14:22:36 20
21
design of -- of -- kind of spruce the place up, for

lack of a better word.
Q
Okay.
Was -- was he affiliated with
22
Malibu Broadbeach or just simply the architect hired
23
by Malibu Broadbeach?
24
14:22:48 25
Just simply the architect hired by
Malibu Broadbeach.
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14:22:49
Was there any --
Actually not hired by Malibu Broadbeach but
3
4
14:22:59
hired by Pacific Coast Management.

Q
Was there anyone other than yourself making
the decision on what changes are to be made to this
investment property?
From time to time, yes.
There were
decisions made in the field from time to time that
had to be made.
14:23:18 10
had to be made.
11
12
13
Wouldn't be up to me.
They just
But in terms of expenditures of money, are
you the person that made those decisions?

A
14
No.
Are you saying prior to the incident?
14:23:27 15
Yes.
16
No.
Because then oftentimes I wouldn't be
17
able to have the ability to just make that decision.
18
For example, if the -- when we are doing some work
19
on the inside, changing the windows and doors out of
14:23:49 20
the main house, we would come across an unsafe
21
framing situation or something that was eaten out by
22
termites that would have to replaced, and that would
23
be a decision that we made in the field but by
24
Dan Armstrong or somebody else that was
14:24:07 25
knowledgeable about these situations.
That simply
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14:24:10
14:24:22
had to be addressed.
I -- I couldn't say, "Oh, don't fix that
beam that is termite eaten and may fall in and --
and cause a great deal of problems at some later
date."
repaired by anybody who is knowledgeable about the
work that they were doing and saw that it could be a
safety hazard.
9
14:24:42 10
That would just automatically have to be
Was there anyone other than yourself with
Malibu Broadbeach that was responsible for the --
11
the bigger picture items on, let's say, taking down
12
the roof structure on the guesthouse and replacing
13
it with a trellis?
14
14:24:59 15
16
I didn't make that decision.
The -- the
City of Malibu made that decision.

Q
Did the City describe how it would be
17
accomplished?
18
footage?
The elimination of that square
19
I'm not following your question.
14:25:11 20
Okay.
21
Can I use the bathroom real quick.
Let me ask a different question.
22
Of course.
23
All that ice tea at lunch is taking its
24
toll.
14:25:22 25
(A brief recess was taken.)

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14:30:42
14:30:50
MS. COUSINEAU:
I have handed you what I
have marked as Exhibit 46, which is an invoice,
dated April 18, 2003, that was also part of the
original submission.
hereto.)
BY MS. COUSINEAU:
14:30:51 10
Do you recognize that invoice?
11
Yes.
12
And was Avalon Engineering an entity with
13
which you are affiliated?
14
What do you mean by "affiliation"?
14:31:16 15
Do you have any ownership interest in
16
Avalon Engineering?
17
No.
18
Are you a consultant to Avalon Engineering?
19
14:31:34 20
I'm not a paid consultant, but I have
consulted them from time to time.
21
Is it a corporation?
22
I think so.
23
Are you an officer --
24
Does it say?
14:31:50 25
Are you an officer or director of that
I'm not sure.
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14:31:52
1
2
No.
This invoice for $1,740 is to remove the
4
14:32:14
corporation?
block walls, concrete, and asphalt.
5
6
Can -- are you able to tell me what this

invoice represents?
Yes.
What?
The removal of the asphalt, concrete, and
14:32:24 10
block walls in front of the apartments.
And -- and
11
I don't know -- without looking through all the
12
invoices, I don't know if this is for the entire
13
driveway area or only a portion of it.
14
14:32:46 15
And why is it that -- strike that.

Did the City require you to remove the
16
17
block walls, concrete, and asphalt?

A
Again, but for the requirement of the City
18
to put in a septic system that was the size of a
19
sedan -- I mean, a -- a huge, huge septic system --
14:33:13 20
we wouldn't have had to remove any of that.
21
Where did the septic system go?
22
In the middle of the property more or less.
23
The tank -- the septic system spreads out all over
24
the property.
14:33:30 25
There are pits, reserve pits, lines,
kind of a junction box.
There is the tank itself.

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14:33:33
There is the sewer line that goes to it from what is
now the guesthouse, used to be the apartments, and
then also from the main house.
4
14:33:48
In looking at Exhibit 31, is the tank
maintained under the grass somewhere?
No.
Where is it?
It's down sort at the bottom of this
9
14:34:01 10
11
12
picture where you can't see it.

Q
Do you know what the City was going to
require you to do if -- for the main house only?

A
Yes.
13
What?
14
Put in a smaller tank in front of -- in --
14:34:20 15
in the appropriate legal location, located by the
16
main house; but that wasn't -- initially, that was
17
something we elected to do after looking at the --
18
maybe it was a condition.
19
have been a condition or something we elected to do
14:34:35 20
I've forgotten.
It may
when we saw that the tank -- existing tank for the
21
main house was too old to rely upon -- too old to be
22
relied upon.
23
24
14:34:54 25
Okay.
And was the same person that you
told us about earlier at -- at the City, was that

the person that -- strike that.
Let me try this

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14:34:58
again.
2
3
4
14:35:09
It's a long day.

How do you know what the City was going to
require for the main house only?

A
Because they had formulas and -- based on,
I think, a combination of bedrooms and fixtures as
to what size the tank should be and what size the
leach field or seepage pit should be; and then we
also -- and I -- and I think that system was
designed -- it was either designed or in the process
14:35:36 10
11
of being designed.
And so we knew what size it was, the
12
location of it, and how many pits there had to be.
13
And then when this incident occurred and all the
14
resulting problems and the City involvement
14:35:51 15
thereafter, we were then told that we couldn't have
16
two separate systems anymore.
17
they wanted it designed to be this monstrous system.
18
And we had to have a lot of pits and reserve pits,
19
and that required the sewer line to be trenched
14:36:11 20
It had to be one, and
down -- from a new sewer line to be trenched from
21
the apartments, soon to become a guesthouse, down to
22
the -- down to the new tank.
23
24
14:36:32 25
The only way we could get in and dig this

pit that was, I think, 25 or 30 feet deep and -- and
to be able to stockpile all the soil that it had
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14:36:36
14:36:47
generated and also to stockpile all the soil, to be
able to get in and drill the seepage pits -- and I
think there were three or five of them -- was to be
able to come in and have full access of the lot with
all this large equipment; so roads had to be graded.
They had -- pads had to be graded, and it was a
pretty big endeavor.
8
9
14:37:00 10
And then the sewer line, of course, that

had to be run from the now guesthouse, then
apartments, had to come down through where the
11
driveway used to be and through where the wall and
12
the asphalt and everything used to be.
13
14
14:37:18 15
So essentially everything that was a hard

surface in front of the apartments and on the way
down to the main house had to be torn up and -- and
16
the lot completely regraded to be able to
17
accommodate the -- the installation of the sewer
18
line and this massive system.
19
14:37:45 20
that.
21
Sometime after the car accident -- strike
When Malibu Broadbeach decided to enclose
22
the covered porch area and make that habitable
23
space, did the City require you to change any plans
24
that you had for the septic system?
14:38:00 25
MR. BEZEK:
I'm going to object to the

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14:38:01
question.
It assumes facts not in evidence.
It
mischaracterizes the witness's earlier testimony.
It is therefore argumentative.
And it's internally
14:38:12
inconsistent.
BY MS. COUSINEAU:
I am sorry.
Yes.
In what way?
In many different ways but --
14:38:22 10
Perhaps we'll take a break, and I'll just
11
Did I misstate your testimony?
get the building permit.
12
There is a building permit dated July 3,
13
2002, for the interior remodel of the main house,
14
enclosing the covered porch to a habitable bedroom,
14:38:36 15
16
17
living, and dining.

But let me just go grab it.
quick break.
18
MR. BEZEK:
19
THE WITNESS:
14:38:45 20
21
22
We'll take a
Okay.
Appreciate it.
Thanks.

MS. COUSINEAU:
I've marked as Exhibit 47 a
building permit application dated 9/18/02.
23
24
14:41:55 25

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14:41:55
hereto.)
BY MS. COUSINEAU:
3
4
14:43:26
application?
5
6
7
Do you recognize that building permit
A
not.
I'm not sure if I have seen this before or

Probably have, but I'm not positive.
Does it refresh your recollection that in
September of 2002 Malibu Broadbeach submitted an
application to increase the square footage of the
14:43:44 10
11
main house by 936 feet?

A
12
13
No.
MS. COUSINEAU:
Let me show you Exhibit 48.
See if you recognize that one.
14
14:44:00 15
16
17
hereto.)
18
THE WITNESS:
19
No, I don't recognize it.
BY MS. COUSINEAU:
14:44:37 20
Who is Jeff Moore?
21
A plumber.
22
Do you recall that in September of 2002
23
Malibu Broadbeach submitted a plumbing permit
24
application for the remodel of the main house?
14:44:59 25
Is that the question you asked before you

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handed me this recent exhibit?
No.
You asked me if there was a September --
This is --
-- permit for opening -- adding square
footage, I think was your earlier question.
That's right.
Now, you handed me this exhibit.
a question about this exhibit you just handed me?
14:45:17 10
Yes.
11
Okay.
12
14:45:22 15
What is the question about this
exhibit?
13
14
Is there
MR. BEZEK:
Exhibit 48.
BY MS. COUSINEAU:
Q
Does this refresh your recollection that in
16
September of 2002 Malibu Broadbeach sought a
17
plumbing permit for the remodel of the plumbing in
18
the main house?
19
MR. BEZEK:
14:45:37 20
ambiguous as phrased.
21
THE WITNESS:
That question is vague and
22
not in evidence.
23
24
Is that what you said?
MR. BEZEK:
evidence.
Well, it also assumes facts
It assumes facts not in
14:45:55 25
THE WITNESS:
You asked me if it refreshes

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my recollection if Malibu Broadbeach did, in fact,
do something; and with that kind of question, you
are making a statement that that is something that
occurred.
BY MS. COUSINEAU:
Okay.
I understood you to tell me you
didn't recall that a permit such as this had been
submitted to the City sometime in 2002.
I am mistaken, let me start the question again.
14:46:23 10
So if -- if
Did Malibu Broadbeach submit a plumbing
11
permit to the City of Malibu in September of 2002 as
12
a result of the remodel that was planned of the main
13
house?
14
Not to my knowledge.
14:46:47 15
Do you have any reason to believe that
16
Jeff Moore submitted the plumbing permit application
17
that is marked as Exhibit 48 without the
18
authorization of Malibu Broadbeach?
19
No.
14:47:03 20
After -- some -- any time after
21
September 20, 2002 -- strike that.
22
Did Malibu Broadbeach's plans for the
23
septic system change any time after September, 2002,
24
as a result of either of these building permits?
14:47:31 25
MR. BEZEK:

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Calls for conjecture and speculation.
2
3
4
14:47:56
THE WITNESS:
No.
BY MS. COUSINEAU:
Q
Now, let me ask the question that I asked
that caused me to go retrieve these
Building Department records.
Did the City of Malibu require you to do
anything to the septic system at 32628 PCH as a
result of the increase in square footage that is
14:48:14 10
11
reflected on the building permit of 9/18/02?

MR. BEZEK:
Move to strike the introductory
12
comment as not being a part of the question and
13
therefore is argumentative.
14
14:48:28 15
16
17
18
You can ignore the introduction but answer

the question, which is, by the way, vague and
ambiguous.
THE WITNESS:
As I indicated in my earlier
testimony, I don't know if the City required us or
19
14:48:42 20
if we elected to change the septic system on the

main house.
I believe we elected to change it, and
21
I don't think the square footage is one of the
22
factors that is used to -- by the City to determine
23
the need for a new or different septic system.
24
think there are other factors.
25
///
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1
2
3
4
14:49:09
5
6
BY MS. COUSINEAU:
Q
Well, isn't it true that the addition of a
bedroom is one of those factors?

A
It could be.
It would depend on a lot of
other factors.
Q
You indicated you asked Mr. Stevens to
apply an overhead and profit figure to the invoice
submitted to State Farm; is that correct?
No.
14:50:03 10
What do you mean by "our normal overhead
11
12
13
14
14:50:19 15
I said our normal overhead and profit.
and profit"?
A
Pacific Coast Management's normal overhead
and profit.
Q
And how many management jobs did
Pacific Coast Management have prior to January 12,
16
2004?
17
I don't know.
18
19
MR. BEZEK:
ambiguous.
14:50:30 20
21
22
As phrased, it's vague and
THE WITNESS:
I don't know.
BY MS. COUSINEAU:
Q
How many times prior to January 12, 2004,
23
did Pacific Coast Management charge an overhead
24
profit -- and profit figure of 25 percent?
14:50:44 25
Many, many, many, many, many, many, many

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times.
so many -- but I don't know how many but all the
time with a rare exception.
4
14:51:03
5
6
7
8
9
14:51:29 10
I'm not trying to be rude by saying "many"
What do you understand the overhead and
profit to -- to reflect?
A
What is it?
It's the internal policy of Pacific Coast
Management.
Q
An estimate based on a figure and overhead
and profit, is that something that is typically

submitted as an alternative to a time and materials
11
estimate?
12
No.
13
What is included in overhead?
14
Administrative overhead of the company.
14:52:02 15
And what is included in the administrative
16
overhead of the company?
17
The administrative overhead in any company.
18
I'm not sure what that means.
19
me what that means.
14:52:15 20
MR. BEZEK:
Please tell
Well, we are going to be
21
getting into an area here where it would be helpful
22
if we either had our referee or we can work out an
23
arrangement between us.
24
14:52:35 25
And the issue here is trade secrets and

competitive disadvantage, so to speak.
The -- I
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14:52:57
believe that the issue here is going to be whether
or not the profit and overhead is a typical
component in the industry and, if so, what is a
reasonable profit and overhead?
To get into PCM's precise calculations of
how they arrived at their profit and overhead,
raising questions of trade secrets, which are not
relevant to the question of the reasonableness of
the profit and overhead charged -- and that is
14:53:23 10
something that no doubt you and I will see
11
differently but something that is going have to be
12
resolved before we disclose anything that is
13
confidential and before the cat is out of the bag,
14
so to speak.
14:53:38 15
16
17
MS. COUSINEAU:
I'm willing to make this
portion of the deposition transcript confidential.

MR. BEZEK:
Well, I appreciate that.
But I
18
don't know that that necessarily solves the problem.
19
While it may be confidential between us, there is
14:53:50 20
nothing that precludes another outside party under
21
one circumstance or another from getting a copy of
22
this potentially, and then the cat is definitely out
23
of the bag.
24
14:54:01 25
MS. COUSINEAU:
Not if we actually make
this portion of the transcript confidential, that

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1
2
14:54:13
can't happen.
MR. BEZEK:
Well, then, perhaps you haven't
been victimized by what I have been victimized by in
the past where this information gets out.
5
6
So the first question I think that I -- I

think we need to address is what -- how this is
relevant to the discovery of admissible evidence
with regards to what a reasonable overhead and
profit is on the assumption that there is, in fact,
14:54:33 10
11
12
13
14
14:54:43 15
an industry standard for the assessment of profit

and overhead.
MS. COUSINEAU:
The industry standard may,
in fact -(Whereupon, the witness and his attorney

16
reporter.)
17
MS. COUSINEAU:
The industry standard may,
18
in fact, apply; but the industry standard does not
19
typically include management fees on top of overhead
14:54:56 20
and profit and put overhead and profit on those
21
management fees as well as the architect's fees, the
22
contractor himself charging fees; so we are getting
23
overhead and profit on top of overhead.
24
14:55:15 25
And I'm entitled to explore how that figure

is derived, and if -- if you wish, we can address
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14:55:21
this with the court and deal with it that way.
don't want to waste any more time on it.
MR. BEZEK:
Well, the -- I think you may
14:55:30
have made my point in your comment just a moment
ago.
industry standard to include each of those elements
and also have a profit and overhead or, to say it
differently, that those are elements that go into
profit and overhead -- that is a conclusion that is
14:55:47 10
11
If what you said is accurate, that it is not
drawn by industry standard, not by the methodology

by which profit and overhead is determined.
12
So by way of example, if profit and
13
overhead is a -- is a formula that says A plus B
14
plus C equal D and A plus B plus C are the thing you
14:56:09 15
just identify, and focusing those three things would
16
be one way of approaching it, or ignoring those
17
things and concluding that the profit and overhead
18
subsumes those things would be another way to go.
19
14:56:22 20
21
22
23
24
14:56:39 25
But how those were calculated is irrelevant

to the question of what the industry standard is.
BY MS. COUSINEAU:
Q
Mr. Gaggero, how did you arrive at the
25 percent figure?
A
That has been a standard policy for the
type of work that Pacific Coast Management was doing

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14:56:43
in everything I have been involved with as it
pertains to construction and real property
management for over 20 years.
4
14:56:57
Did Malibu Broadbeach actually pay
25 percent overhead and profit to Pacific Coast
Management for this work?
I believe so.
And what documents do you have that would
support that?
14:57:12 10
I don't have any documents.
11
Where would you go to look to determine
12
whether Malibu Broadbeach paid Pacific Coast
13
Management 25 percent overhead and profit on top of
14
the labor and materials?
14:57:28 15
MR. BEZEK:
I'm going to object to the use
16
of the word "paid" as it's ambiguous as to what you
17
mean by "paid."
18
paid or an account receivable has been created?
19
14:57:41 20
Do you mean actually physically
MS. COUSINEAU:
The record speaks for
itself.
21
MR. BEZEK:
Then I object on the grounds
22
it's vague and ambiguous.
23
BY MS. COUSINEAU:
24
Go ahead.
14:57:47 25
I'm not sure where I would look.
I would
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talk to Tom Stevens about it and find out where he
would look to make that determination.
14:58:08
Well, Mr. Stevens was prevented from
responding to that question in his deposition; so
perhaps, if we can resolve that prior to his
resumption -- the resumption of his deposition, that
would probably be appropriate.
8
9
MR. BEZEK:
He was precluded from
identifying if he had documents?
14:58:19 10
MS. COUSINEAU:
11
MR. BEZEK:
No.
If it was paid.
Oh, I'm happy to talk to you
12
about it.
I just came new on the scene; so I'm
13
happy to talk to you about any of those issues.
14
BY MS. COUSINEAU:
14:58:29 15
What is included in the legal costs here?
16
Do you have bills that support that cover
17
18
19
sheet that came with the claim?

Q
I don't recall offhand.
the generic.
14:58:47 20
What were you thinking in including the
21
legal costs?
22
claim?
23
24
I'm asking more of
Anything that Mr. Chatfield did in the
I don't -- "anything" is a broad statement.

But I think wrestling with State Farm's
14:59:08 25
claims adjuster would be one way of identifying it.

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1
2
3
14:59:26
And why do you characterize it as
"wrestling"?
A
Because it -- it was my experience in
meeting the gentleman and my experience later
through various information sources that lead me to
believe that State Farm's adjuster was typically
State Farm.
And what does that mean?
Belligerent and out for the company and not
14:59:40 10
11
12
13
14
15:00:08 15
16
out for the insured.

Q
What do you include in "claim accounting"?
What does that category mean?

A
That would mean that the accounting that
was required specifically to put together this

claim.
Q
So the time it took Mr. Stevens to compile
17
lists and total all of the invoices that pertained
18
to this guesthouse?
Is that included in accounting?
19
That would be included in it, yes.
15:00:28 20
Is there anything else that I included in
21
accounting?
22
Yes.
23
What?
24
I think Mr. Maravelas worked on it, and
15:00:35 25
there is more effort than the three items you

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15:00:38
15:00:47
mentioned, which are compiling something else and
something else.
that.
There is a great deal more than
Tell me what effort -- what other items
were required to compile the -- the documents to
send to State Farm?
MR. BEZEK:
I am -- you want to do this off
the top of his head without the claims booklet that
he gave to State Farm, where all that is broken out?
15:01:02 10
11
MS. COUSINEAU:
with him, yes.
12
MR. BEZEK:
No.
13
You are looking at it.
14
BY MS. COUSINEAU:
15:01:08 15
16
17
18
Since he didn't bring it
You have it right there.
You've got Exhibit 17 in front of you.
that is what you mean, certainly.
If
No.
There was support that gave the
back-up for that amount of money and that you are
19
15:01:18 20
not giving to me; so you are keeping that to

yourself.
21
22
MS. COUSINEAU:
for you if it will help you answer the question.
23
MR. BEZEK:
24
THE WITNESS:
15:01:27 25
I'm happy to go get that
It would be helpful.
You wouldn't need to ask me
the question if you read it.

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15:01:28
1
2
15:01:40
BY MS. COUSINEAU:
Q
Sir, all I'm trying to find out is what it
is that you are including in claim accounting, and
certainly there is an invoice -- if there is an
invoice from Mr. Stevens or anyone else, all it says
is a time.
is included in the accounting.
8
9
MR. BEZEK:
Are you going to go get the
claims packet as you offered a moment ago?
15:02:07 10
11
I'm trying to figure out what it is that
MS. COUSINEAU:
If it will help you answer
the question.
12
Will it?
13
It may.
14
In what way?
15:02:12 15
I won't know until I look at it.
16
MR. BEZEK:
We would certainly appreciate
17
that just so we can take a look at it to see if it's
18
helpful.
19
15:02:27 20
21
MS. COUSINEAU:
Let's look at this one.
This is Exhibit 32 to the deposition.

Q
Does it mean that Mr. Stevens's invoice
22
will allow you to answer that question better of
23
what went into the claim accounting figure that is
24
in Exhibit 17?
15:02:59 25
Well, these could certainly be additional

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15:03:08
15:03:15
tasks that were not included in the three that you
mentioned.
What tasks, sir?
What tasks what?
You said these could be additional tasks?
Yeah.
7
8
9
15:03:28 10
Added to the three that you
mentioned.
Q
Okay.
I mentioned, as I recall, gathering
all the invoices that pertain to the guesthouse,

listing them on the summary that is Exhibit 17 or
11
44, and totaling those items to come to a total to
12
present to State Farm.
13
Please share with me any other tasks that
14
you can think of that go into the claim accounting
15:03:47 15
16
category.
MR. BEZEK:
Well, I'm going to object on
17
the grounds that the witness has assented to your
18
offer to see the claims booklet that was submitted
19
to see if that will help refresh his recollection.
15:03:58 20
And I note that on Exhibit 17, claim
21
accounting, it's $3,712.
22
Exhibit 32 -- even if I add both pages of Exhibit 32
23
together, it's only $1,500.
24
source documents that were supplied as part of the
15:04:20 25
When I look at
If there are more
claims accounting -- and that is in the -- the claim

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15:04:22
15:04:37
that was submitted to State Farm -- it would be
helpful to see, which is why I assume the witness
accepted your offer to look at that to help refresh
his memory to see if it would refresh his memory on
what is in claim accounting.
MS. COUSINEAU:
That's why I requested that
the plaintiff bring the original documents
submitted.
while because it is broken up for my use in this
I will go get it.
It will take me a
15:04:49 10
11
case, and that's why I requested that the plaintiff

bring it with him.
12
Let's take a break.
13
MR. BEZEK:
14
much.
We all right.
Thank you very
Appreciate that.
15:04:58 15
16
MS. COUSINEAU:
For the record, I am
17
handing Mr. Gaggero pages 0097 through 0343 from the
18
claim file, which is the submission by plaintiff of
19
the loss.
15:10:41 20
Perhaps now you can answer the question.
21
Which submission?
22
January 21, 2004.
23
Were there other submissions?
24
There was a later one.
15:10:51 25
I'm talking about
this one that accompanied No. 17, which is right

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15:10:56
below that letter, and I'm asking you, sir, to tell
me what is included in claim accounting.
MS. COUSINEAU:
MR. BEZEK:
(Off the record.)
BY MS. COUSINEAU:
Let's go off the record.
Okay.
7
8
9
15:59:40 10
Back on the record.

Mr. Gaggero has now spent the last almost
hour going through the documents that were requested

of him in this deposition.
Even though I told
11
him -- pointed out to him that the documents that
12
related to the particular category that he was
13
looking for was at the very back, I -- I do want to
14
ask a couple of questions before he leaves, even
15:59:58 15
though he has not concluded reviewing those
16
documents that were submitted on behalf of
17
Malibu Broadbeach.
18
Mr. Gaggero?
19
MR. BEZEK:
16:00:07 20
21
Before you do, just one second,
because the comment you had may -- are you time

stamping these by any chance?
22
THE REPORTER:
23
MR. BEZEK:
24
16:00:17 25
Yes.
-- as long as the
court reporter is time stamping, we can check the

hour estimate that you said a moment ago.
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16:00:19
THE WITNESS:
I want to clarify.
You did
not tell me the documents I am looking for were at
the back of the stack; so let's not try to put false
16:00:26
information on the record.
BY MS. COUSINEAU:
Excuse me.
Did I not tell you that the
documents that related to the claim accounting were
at the very bottom of that stack?
No.
02:06:17 10
You are denying that I said that?
11
I am.
You gave me this entire stack to
12
looking through for my information to see what in
13
all these documents could possibly pertain to the
14
accounting.
16:00:47 15
Are you saying now that I didn't need to
16
look through all these and I only needed to look at
17
something at the back?
18
19
16:00:59 20
Yes, which I specifically said.
And I
think perhaps your attorney will back me up here,

that I suggested that the claim accounting records
21
are the last five or six pages.
I didn't say that
22
said they are at the very back of that, after
23
looking at my spreadsheet of these documents.
24
Why set all this in front of me, then?
16:01:13 25
Because you wanted to see what documents

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16:01:14
were submitted to State Farm.
16:01:24
MR. BEZEK:
You requested this.
Rather than get into a
disagreement at this point, you said you had some
more questions to ask, and then I would like to
talk -- we can do this by phone.
this morning, he has to leave at 4:00.
can talk by phone, setting up the next go-round of
this; and maybe we can talk about -- some issues
about how to expedite this process a bit, including
16:01:37 10
So you had some more questions you wanted
12
to ask?
13
BY MS. COUSINEAU:
16:01:43 15
You and I
this deposition.
11
14
As we told you
Can you tell me, Mr. Gaggero, why it is
that Billie Sue Gaggero and Stephen B. Gaggero were
16
added as additional insureds to the
17
Malibu Broadbeach policy for this property?
18
When?
19
Whenever they were added.
16:01:58 20
No.
21
Were they added on more than one occasion?
22
I don't know.
23
Are they currently insureds under the
24
16:02:11 25
I need a time.
policy governing 32628 Pacific Coast Highway?

MR. BEZEK:

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16:02:19
phrased.
THE WITNESS:
I don't know.
MS. COUSINEAU:
Then I am not going to
agree to withdraw the Deposition Notices of those
two since they are insureds under the policy.
MR. BEZEK:
You can -- you can do whatever
you wish.
look at it.
agree, we will be here with Mr. and Mrs. Gaggero.
16:02:34 10
I don't know what the issue is yet till I
11
If I disagree, I'll let you know.
MS. COUSINEAU:
I was trying to shortcut
this.
12
THE WITNESS:
13
an argument you can have later.
14
present for this argument.
16:02:43 15
16
I've got to go now.
MS. COUSINEAU:
MR. BEZEK:
18
MS. COUSINEAU:
16:02:52 20
This is
I don't need to be
Perhaps you can bring your
parents.
17
19
If I
That's fine.
Okay.
We'll go by Code
because he's leaving before a stipulation can even

be proposed.
21
MR. BEZEK:
I think what we will do is
22
we'll make this -- there is going to be a
23
continuation -- I assume you want to do more depo
24
with him?
16:03:00 25
MS. COUSINEAU:
Yes.
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16:03:01
1
2
MR. BEZEK:
the conclusion of the deposition, and with that --
16:03:12
We'll put a stipulation on at
MS. COUSINEAU:
I am suspending the
deposition, but I'm not going to suspend the
compiling of this deposition transcript until some
later time.
we'll just go by Code in terms of the signing of
this deposition.
9
16:03:24 10
So if we don't have a stipulation,
MR. BEZEK:
Well, I don't -- again, I'm not
going to argue with you about it.
If you want to
11
have this transcript prepared, that is your choice.
12
If you are contending that triggers some obligation
13
for signing and correcting and requires him to go
14
down to the court reporter's office, we can deal
16:03:36 15
with that when and if that really becomes an issue.
16
But let's see if we can get another date
17
and time by phone.
18
to complete this.
19
16:03:48 20
21
We'll talk about a date and time
THE WITNESS:
this?
It's No. 269.
rest of those.
You want to save my place on

I have to look through the
22
MS. COUSINEAU:
Perhaps you can do so
23
before you arrive and bring the originals as
24
requested in the depo notice.
16:03:59 25
MR. BEZEK:
I'm happy to talk to you about

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16:04:01
1
2
3
all of those things.

MS. COUSINEAU:
Thank you.
Off the record.
Thank you.
4
16:04:09
(The deposition was adjourned at
4:04 P.M.)
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956-6405 ~ (800) 48-SMART
(310) 450-7795 ~ (415)


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SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES, WEST DISTRICT

MALIBU BROADBEACH, L.P., a

October 13, 2004

Pages 1 through 150,

VOLUME 1 OF THE DEPOSITION OF

STEPHEN GAGGERO, taken on behalf of

the Defendant at 801 South Figueroa Street,

Suite 1800, Los Angeles, California, on

Wednesday, October 13, 2004, at 10:29 A.M.

before Debra V. Helgeson, CSR No. 3189, RPR.

For Defendant State Farm General

(310) 450-7795 ~ (415)

Building Permit Application,

Document titled "MB LB

Invoice from Avenue

Invoice from Avalon

(310) 450-7795 ~ (415)

Document titled "MB LP

(310) 450-7795 ~ (415)

Los Angeles, California

Wednesday, October 13, 2004

having declared under penalty of

perjury to tell the truth,

was examined and testified as follows:

Could you state your name for the record,

Steven Michael Gaggero.

Mr. Gaggero, have you ever had your

deposition taken before?

On how many occasions?

I'm not sure.

More than ten?

When was the last time you were deposed?

MILLER & HELGESON REPORTERS

(310) 450-7795 ~ (415)

Was it more than a year ago?

And what case was that taken in?

A deposition you gave within the last year

you don't remember what case it was in?

Was it a case against one of the companies

that you are involved in or a case against you

Well, I don't remember the deposition; so

that's why I don't remember what it was about.

Well, so that we are clear, the person

sitting to your left is taking down every word that

result of that, we have a few ground rules we have

The first is that only one of us can speak

I request that you allow me to finish my

question before you respond, and I will allow you to

Do you understand that?

You have taken an oath to testify under

It is the same oath you would

MILLER & HELGESON REPORTERS

(310) 450-7795 ~ (415)

take if you were testifying in a court of -- of law;

therefore, although we are in this conference room,

I just want to make sure you understand you are

testifying under penalty of perjury.

Do you understand that?

Should you -- you will have an opportunity

to make any changes to the testimony that you are

The transcript, as I'm sure you are

aware, will be typed up and sent to you -- to your