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00001
1 SUPERIOR COURT - STATE OF CALIFORNIA
2 COUNTY OF SANTA CLARA
3 ---oOo---
4
5 RALPH SIMPSON,
6 Plaintiff,
7 -vs- NO. 105CV053398
8 LOU RAE KAGEL, LYNN O'BRIEN,
JAMES O'BRIEN, STONEHENGE
9 PROPERTIES, INC., VALLEY OF
CALIFORNIA, INC. dba COLDWELL
10 BANKER, DOUGLAS REA and DOES
ONE through TWENTY, inclusive,
11
Defendants.
12 ______________________________/
AND RELATED ACTIONS.
13 ____________________________/
14 DEPOSITION OF WILLIAM R. LEMAS
15 January 11, 2007
16
17
18 REPORTED BY:
19 MARION KENYON, CSR NO. 4381
20
21
22
23 TOOKER & ANTZ
CERTIFIED SHORTHAND REPORTERS
24 350 SANSOME STREET, SUITE 700
SAN FRANCISCO, CALIFORNIA 94104
25 (415) 392-0650
00002
1 I N D E X
2 PAGE
3 EXAMINATION BY MR. MINOLETTI 4
4
5 E X H I B I T S
6 PLAINTIFF'S
7 1 Folder of loose materials 21
provided by witness
8
Binder of materials provided 21
9 by witness
10
11 --oOo--
12
13
14
15
16
17
18
19
20
21
22
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24
25
00003
1 DEPOSITION OF WILLIAM R. LEMAS
2
3 BE IT REMEMBERED that, pursuant to Notice of
4 Taking Deposition, and on Thursday, January 11, 2007,
5 commencing at the hour of 9:35 a.m., in the Law Offices
6 of Gagen, McCoy, McMahon, Koss, Markowitz & Raines, 279
7 Front Street, Danville, CA 94526, before me, MARION
8 KENYON, duly authorized to administer oaths pursuant to
9 Section 2093(b) of the California Code of Civil
10 Procedure, personally appeared
11 WILLIAM R. LEMAS,
12 called as a witness by the Plaintiff, and the said
13 witness, having stated that he would testify the truth,
14 the whole truth, and nothing but the truth, was
15 thereupon examined and testified as hereinafter set
16 forth.
17 GREENE, CHAUVEL, DESCALSO & MINOLETTI, 951
18 Mariner's Island Boulevard, Suite 630, San Mateo, CA
19 94404, represented by PAUL G. MINOLETTI, ESQ., appeared
20 as counsel on behalf of Plaintiff Ralph Simpson.
21 GAGEN, McCOY, McMAHON, KOSS, MARKOWITZ &
22 RAINES, 279 Front Street, Danville, CA 94526,
23 represented by CHARLES A. KOSS, ESQ., appeared as
24 counsel on behalf of Defendant and Cross-Complainant Lou
25 Rae Kagel.
00004
1 WILLIAM R. LEMAS,
2 having stated that he would testify the truth,
3 the whole truth, and nothing but the truth,
4 testified as follows:
5
6 EXAMINATION BY MR. MINOLETTI
7 MR. MINOLETTI: Q. Good morning.
8 Would you state your full name for the record.
9 A. William Robert Lemas, L-e-m-a-s.
10 Q. And your business address, please?
11 A. 20406 Redwood Road, Suite B, Castro Valley,
12 California 94546.
13 Q. Mr. Lemas, you were retained, I take it, by
14 one of the attorneys for the defense in this case,
15 correct?
16 A. That is correct.
17 Q. Okay.
18 And who is it that retained you?
19 A. Mr. Steve Thomas.
20 Q. And have you worked with Mr. Thomas before?
21 A. Yes, I have.
22 Q. On how many occasions?
23 A. Several.
24 More than ten.
25 Q. And in any of those cases where you have
00005
1 worked with Mr. Thomas before, have you had your
2 deposition taken?
3 A. Yes.
4 Q. Do you recall the names of any of the cases
5 where your deposition was taken?
6 A. No, I do not.
7 Q. Have you testified in trial for Mr. Thomas?
8 A. I have not.
9 Q. And have you worked with Mr. Koss or anyone in
10 his firm before?
11 A. This is -- I believe this is the second time I
12 have worked for Mr. Koss.
13 And I have worked for Barbara Jewell in this
14 case.
15 And I don't recall any others.
16 Q. Do you recall the names of any of the cases
17 you were involved in for this firm?
18 A. Well, the most recent -- and I don't recall
19 the name -- would be regarding a property in Bollinger
20 Canyon.
21 I've worked for Barbara Jewell in Castro
22 Valley and Walnut Creek.
23 And, with regards to the names, I don't
24 recall.
25 Q. Okay.
00006
1 Have you testified in trial in any of the
2 cases you were involved with with this firm?
3 A. I have not.
4 Q. Overall, in the last, say, four years, have
5 you testified in trial?
6 A. Yes, I have.
7 Q. In what counties?
8 A. Alameda, Napa, Contra Costa, Santa Clara,
9 San Mateo, San Francisco.
10 Q. Approximately how many times have you
11 testified in trial in the last four years?
12 A. In excess of ten.
13 Q. Do you remember the names of any of the cases
14 in which you testified at trial?
15 A. Cases? No.
16 Q. Do you remember the names of any of the
17 attorneys you were working with where you testified in
18 trial?
19 A. I've testified for Mike Davidson, who is also
20 with NRT.
21 I have testified for Al Cordova, who is
22 located in San Rafael.
23 My mind goes blank with the gentleman in Napa.
24 Several attorneys with the McNamara law firm
25 whose names escape me.
00007
1 Q. The McNamara firm in Walnut Creek?
2 A. Correct.
3 (Stephen W. Thomas, Esquire, joined the
4 proceedings.)
5 (Discussion off the record.)
6 MR. MINOLETTI: Q. Any other names of counsel
7 that you recall cases in which you testified at trial?
8 A. None that I can recall further at this time.
9 Q. Of the cases in which you testified at trial
10 over the last four years, can you tell me how many were
11 on behalf of plaintiffs as opposed to a defendant or
12 cross-defendant?
13 A. I don't recall the exact numbers, but I would
14 say -- I would estimate the majority of them would be
15 for the defense.
16 Q. And your business is called what?
17 A. Conklin Lemas Appraisal Services.
18 Q. And how much of your work with Conklin Lemas
19 Appraisal Services is with respect to, I'll say,
20 legal-related work?
21 A. 50 percent at least, in that area.
22 Q. When were you hired in this particular case?
23 A. I was contacted by Mr. Thomas, I would
24 estimate -- I believe it's been approximately a year
25 ago.
00008
1 I would have to go into the file to give you
2 an exact date.
3 Q. Okay.
4 And when you were contacted by Mr. Thomas,
5 what was your understanding of what you were going to do
6 for him?
7 A. Well, initially, he explained to me it was --
8 it was just a claim and we weren't sure how far it was
9 going to go, and to go into the city, check out a few
10 things, go by the property, take a look at it, and just
11 get back to him; that was it.
12 And that's the way it stood for months, until,
13 finally, we had the site inspection, which I believe was
14 around May of last year, something like that.
15 Q. So when you say your understanding was that
16 you were to go by the city, is that the City of
17 Monte Sereno?
18 A. That's correct.
19 Q. Okay.
20 And did you do that?
21 A. Yes.
22 Q. What did you do in that respect?
23 A. I spoke with the city planner.
24 Q. Who was that?
25 A. Andrea Chelemengos, C-h-e-l-e-m-e-n-g-o-s.
00009
1 She's the City Clerk/Assistant City Planner.
2 Q. Okay.
3 And what were you referring to there?
4 A. Her business card.
5 Q. All right.
6 And what did your discussion involve?
7 A. We were looking at impervious coverage.
8 We were looking at square footage.
9 I was looking at lot size, building
10 requirements for the secondary living area, building
11 requirements for the accessory building, with regards to
12 a pool, driveway, setbacks; typical planning and zoning
13 information.
14 Q. And what is it that you found out?
15 A. Well --
16 Q. That's all in your report?
17 A. That starts at the report and kind of works it
18 way through.
19 Q. Okay.
20 A. So you understand, I've been back to see
21 her -- after my initial visit, I've been back twice, so
22 throughout the scope of the working and in the process
23 of doing that, I have gone back and touched base with
24 her a couple times to clarify certain information.
25 Q. And is all of that information contained
00010
1 within your report?
2 A. Yes.
3 Q. Before we get in your report, what is your
4 billing rate?
5 A. 125 for field work, reports, portal/portal
6 travel, anything but depositions.
7 Depositions, trial is 200 dollars an hour.
8 Q. And how much time do you have in this case at
9 this point?
10 A. My initial billing was, I think, maybe, eight
11 to ten hours, and since that time I probably have 40 to
12 50 hours into it.
13 Q. That's inclusive of the --
14 A. In addition to.
15 Q. In addition to.
16 Have you generated an invoice?
17 A. No, not yet.
18 Q. Are you planning any further work?
19 A. It would depend on what happens today.
20 It would depend if you're -- I haven't read
21 your appraiser's deposition to see if he's going to do
22 any additional work.
23 So, at this point, I would assume no, but,
24 again, it would be up to Counsel.
25 Q. Okay.
00011
1 What have you brought with you today in terms
2 of your work product?
3 A. What I have with me today is I brought the
4 books that I referred to and concluding in the reports.
5 I have a set of plans that I looked at during
6 my site inspection.
7 I have my report that I've generated myself.
8 I have computer-generated products which would
9 identify the subject.
10 I have comparable sales that were, again,
11 computer generated.
12 I have faxes that I've received from
13 Mr. Thomas.
14 I have permits that were copied at
15 Monte Sereno and zoning information that I also received
16 from the City of Monte Sereno.
17 Q. Now, some of the information that you've just
18 mentioned is contained within a binder, correct?
19 A. Correct.
20 Q. And the books and plans and some other
21 information that you've identified is with you but it's
22 contained within your briefcase at this point?
23 A. That's correct.
24 Q. Can we just identify for the record what
25 publications and other items you have with you?
00012
1 A. I have the Appraising Residential Properties,
2 it's the Third Edition, from the Appraisal Institute.
3 I have a copy of Uniform Standards of
4 Professional Appraisal Practice.
5 I have Real Estate Damages. Again, it's an
6 Appraisal Institute book.
7 I have The Appraisal of Real Estate, the
8 Twelfth Edition, again from the Appraisal Institute.
9 I have a set of plans. I think they were
10 preliminary drawings. And I don't recall the
11 architect's name, but I have them here in this cylinder.
12 Q. Okay.
13 A. (Witness removing drawings from cylinder.)
14 The architect was Quintessential Forms from
15 Moraga.
16 Q. And you have with you -- they're initially
17 dated September 29, 1999, and you have sheet numbers 38
18 of 12, 4 of 12, 7 of 12, 8 of 12, 10 of 12, and then you
19 have a site plan dated February 18th, 2000, which is
20 1 -- sheet 1 of 5, and then you have sheet 5 of 5 from
21 that same set.
22 Okay.
23 A. In -- I'm sorry.
24 Q. Is there anything in particular on the plans
25 that you took note of?
00013
1 A. Yes.
2 Q. Okay.
3 A. Can I conclude with this (indicating)?
4 This would be the last publication that I
5 have, and this is from the American National Standards,
6 and it is the approved methodology for measuring a
7 house.
8 Now, getting back to the plans, I took
9 specific note of the square footage calculations that
10 are on the energy page.
11 It shows -- first of all, it shows the square
12 footage of the secondary living area at 700 square feet
13 and it also shows the square footage of the main
14 dwelling. It shows -- let me give you the square
15 footage of that off of this. It's 4,309.
16 It should be noted that these are the
17 conditioned footage of the residence. Because this is
18 for the Title 24. This is what they used to estimate
19 the glass and the insulation, the HVAC.
20 Q. For heating and air conditioning purposes?
21 A. Correct.
22 Q. Okay.
23 A. I also noted the site plan, which showed the
24 lot area, different maximum areas. Again, it shows the
25 square footages of both the main dwelling and the
00014
1 garage. It showed the locations of the dwellings on the
2 site.
3 I noted, too, that today we have a circular
4 driveway, whereas, when this plan was initially
5 proposed, it had just a driveway up the site and a
6 walkway, and that was one of the differences that I
7 noted.
8 So that's what I -- that was my primary use of
9 the plans. In addition to looking at the square footage
10 and in doing my measurements, looking at the perimeter
11 of the subject, realizing that if I had 4,309 of
12 conditioned space, that I would have the perimeter of
13 the house at four to five inches around the perimeter
14 that would actually be calculated into the gross living
15 area.
16 Q. On the site plan it says something to the
17 effect of: See floor plan for pool site and references
18 some other item.
19 It says, "See floor plan for exact size and
20 location, dimensions of pool and court."
21 Did you see a floor plan that depicted those
22 items?
23 A. I did not.
24 Q. Anything else about the plans that you took
25 note of, other than the square footage?
00015
1 A. Well, I looked -- I mean, I looked at certain
2 things. Realizing that there was sheer on the exterior
3 of it would add to the overall gross of the building,
4 and the stucco was, you know, an inch, and the wall
5 sheathing was a half inch, so that's an inch-and-a-half,
6 roughly, on top of the three-and-a-half-inch stud, so
7 you would be out there five or six inches around the
8 perimeter.
9 Q. And you took note of that because you can't
10 count that as living space?
11 A. No; because you do include it in living space
12 because it's part of the gross living area.
13 The suggested way of measuring a house is from
14 the perimeter and you measure the exterior walls.
15 Well, noticing that the conditioned area is
16 4,309, that the gross has to be larger than that.
17 Q. Okay.
18 A. So I used that as a reference to know that in
19 my measurements -- and you can't really get into --
20 like, as an example, the garage -- and, truly, just
21 subtract the garage off, because these aren't -- it's
22 not a stick drawing, there's depth, distance there, and
23 so nothing that I used that help me calculate what I
24 believe to be the gross living area.
25 Q. Okay.
00016
1 You have another bucket file here.
2 A. Yes.
3 This is everything that I didn't want to put
4 in my work file.
5 This is just -- this is my -- when I went to
6 look at different comps, my notes, the numbers, a couple
7 of things I just copied out of a book.
8 This is MLS activity in Santa Clara during
9 2001.
10 This is a copy of the Monte Sereno development
11 standards that is actually in here (indicating).
12 This is just a key to the statistics.
13 These are some sketches I did of the subject
14 when I was there.
15 This is what I determined to be different
16 square footages at my site inspection.
17 These are my drawings.
18 A lot of math.
19 This, I believe, was something that was
20 actually done from a permit in 1992. I got it when --
21 I'm not sure when I got it, but I never -- I never
22 really looked at it.
23 Q. Is that something done on the subject
24 property?
25 A. Yes, it was definitely from the subject, but
00017
1 it was for a remodel addition, and it may have been
2 before they tore the house down, and there was some idea
3 they may have wanted to remodel it.
4 So, with that -- these are some notes that I
5 took when I was at Monte Sereno, and we talked about
6 pavers and when you took it out of the hard and put it
7 in the sand, 50 percent cleared by the city planner, who
8 is also the city manager. We talked about lot square
9 footages. She pulled up for me, actually, a Metroscan
10 for the different size buildings.
11 Again, this is just more math.
12 This is the same letter that I fired off to
13 Steve. It just has my writing on it.
14 This is the same yellow sheet that's in here
15 (indicating) that I just had another copy of.
16 Q. It's in your binder?
17 A. Yes.
18 Q. All right.
19 A. These are -- I wanted to see what the market
20 was doing in 2001, so here's the completed sales in
21 Santa Clara County in 2000. I have them here for 2001
22 and also -- this is that same sheet again.
23 This is how fiber optics works, in case we
24 want to look through that.
25 This is a fax cover sheet that I received from
00018
1 Mr. Thomas, which it is in here, just made a copy of it.
2 That's a plat map that I had.
3 Here's that same yellow sheet, keeps popping
4 back up.
5 This is -- I Googled kind of a shot of it.
6 This is an MLS listing, which is also in here
7 (indicating).
8 This is a letter that Mr. Thomas received from
9 Monte Sereno regarding impervious coverage, lot square
10 footage, house square footage. It's also in there
11 (indicating).
12 Q. It's also in the binder?
13 A. Correct.
14 Q. Okay.
15 A. This came from when I met again with the
16 planner in Monte Sereno, and she actually did the
17 calculations for me, and we talked about the secondary
18 unit, we talked about the accessory building, and the
19 accessory building, it just couldn't have a kitchen or
20 a -- any defined sleeping bedrooms. It could be a pool
21 house, a garage. It can have a full bath or bar but no
22 kitchen, no bedrooms.
23 This is my initial bill to Mr. Thomas. This
24 is from November 11th. I had seven-and-a-half hours.
25 Two hours were to collect and review data and
00019
1 five-and-a-half hours was for a drive-by of the property
2 and visit the city planner, meet with the city planner,
3 and I believed this was of -- through November 11th,
4 2005.
5 Same time I was there I took and copied
6 building permits.
7 The same majestic yellow sheet. You can never
8 get enough of this.
9 Q. The development standards for the city, is
10 that --
11 A. For that zoning -- for that particular zoning.
12 And, again, this was more -- this was,
13 actually, the unemployment rate for Santa Clara during
14 2001, 2002. I just wanted to see what was going on.
15 This is a lot of the different months of 2001.
16 And this has to do with Santa Clara County
17 again, completed sales. This is actually for the whole
18 year.
19 And then in here I have a 2003 -- oh, here it
20 is here.
21 So I have the completed sales for 2000, 2001
22 and 2002, the completed sales, and so I was able to look
23 to see whether there was an increase or decline in
24 property values in Santa Clara County but, more
25 specifically, in the Monte Sereno area during that time
00020
1 frame.
2 I have -- there are some pictures on CD.
3 Q. Some photos?
4 A. Yeah.
5 They are the same photos that are on here.
6 These are on a CD.
7 And an envelope.
8 Q. Okay.
9 If we could have that group of documents --
10 what would you call it? -- your backup data or --
11 A. There's really no backup in here, other than
12 maybe the statistics, because most of -- the majority of
13 it is in here (indicating).
14 I really can't say there is anything here that
15 isn't in here. This was just -- a lot of it was my
16 handwritten work products --
17 Q. And some from the city and --
18 A. Yes.
19 Q. Okay.
20 A. But I wanted to bring it all so --
21 Q. Sure.
22 And we could call that, perhaps, group
23 Exhibit 1, and then we'll call the binder group
24 Exhibit 2, and that way we can just copy everything.
25 (Discussion off the record.)
00021
1 (Whereupon, Plaintiff's Exhibits 1 and 2
2 were marked for identification.)
3 (Discussion off the record.)
4 MR. MINOLETTI: Q. Okay.
5 All right. Let's get to your report and the
6 contents of your binder.
7 A. It starts off with my CV, types of
8 assignments, has a copy of my broker's license, copy of
9 my appraiser's license, and a copy of my contractor's
10 card, my association with BayEast and my National
11 Association of Realtors card.
12 Q. Let me just stop you right there.
13 Is your CV current?
14 A. I believe so.
15 Q. Okay.
16 A. (Witness reviewing document.)
17 Yes.
18 Q. Okay.
19 What is next in order?
20 A. Next in order is -- it's an appraisal report
21 that I performed for Mr. Thomas.
22 The first part of it is just -- it starts off
23 with a description of what I did, the process, appraisal
24 process, listing history of the property, some of the
25 site descriptions, some of the highest and best use
00022
1 analysis. It talks about some of the methodology. It
2 describes the cost approach, the sales approach and the
3 income approach, so the reader would have an
4 understanding of that.
5 And then, on page 29, it gets into the scope
6 of work, and that's probably the meat and potatoes of
7 this report.
8 Going on to the next section, I talk about --
9 I include some grids, and I did it in several methods.
10 I used different dollar amounts, and I did the grid with
11 three different dwelling sizes, and one being what
12 public record states, the next one being what my
13 measurements indicated, and the third being what the
14 opposing appraiser indicated. So I have that in here
15 and we can go over that.
16 Q. Okay.
17 A. I have -- next is the pictures of the
18 comparable sales that I used with MLS and
19 computer-generated information regarding their
20 statistics.
21 Next I talk about -- or I don't talk about --
22 it's just more computer-generated information. And this
23 has to do with the subject property. I have information
24 here from the Santa Clara assessor's office, MLS,
25 Chicago Title. And what it indicates, it shows the
00023
1 sales price, when it closed. I have various loan
2 information where the Plaintiff has re-fi'd the property
3 at different times.
4 So, as an example, it shows that it closed
5 September 2001, it shows the sales price on the
6 purchase, and then it shows where it was re-fi'd here in
7 2005, and it was re-fi'd again as recently as
8 12-20-2005.
9 Q. On those re-fi's, does it indicate an
10 appraised value at that time?
11 A. Not appraised value.
12 I would like to get those appraisals.
13 But it has a loan amount.
14 Q. Okay.
15 A. And the loan amount has been pretty constant.
16 It doesn't appear that he has taken any funds out of the
17 house.
18 What I'm looking at here, I'm going to assume
19 that in -- let's see -- this would be April of 2005, he
20 had an adjustable rate, he went into an adjustable rate
21 of 4.87 percent on roughly his 2-million-dollar loan,
22 and last month, in December -- no; this would be 2005 --
23 in 2005, December, he re-fi'd it again and got a fixed
24 rate of 5.87.
25 Q. And what you're looking at there is called a
00024
1 Transaction --
2 A. Well, this is a Transaction History.
3 Q. And what is the source of that?
4 A. This came from Chicago Title.
5 Q. Okay.
6 A. Again, this is for MLS information; this came
7 from MLS Alliance.
8 This came, again, from Chicago Title.
9 This came from FastWeb.
10 I think that's American Title.
11 There's just -- they're different. Each one
12 of these is maybe a different title company or a
13 different computer-generated information outlet that I
14 can look and see what their records indicate as far as
15 size, lot size, loan information.
16 Q. And how are you accessing that; do you have
17 some subscription to a service?
18 A. Uh-huh (affirmative).
19 Q. Okay.
20 And --
21 A. I either have subscriptions to services or,
22 actually, some of the title companies just give it to
23 me.
24 Q. And it just shows transaction history on the
25 subject property?
00025
1 A. Well, in addition to the transaction
2 history -- I mean, as an example, Chicago Title I can go
3 in there and get a property profile that would show all
4 the property characteristics. I can get a plat map. I
5 can get the history. I can get the demographics. I can
6 get comparable sales. I can get neighbors. It's quite
7 a complete package. You know, it's just a whole
8 information data for the specific property.
9 Q. Okay.
10 A. These are -- let's see -- now I'm into where
11 I'm -- these are comparable sales that were not used for
12 the overall property sale but these were used to
13 demonstrate what the adjustments should be on the price
14 per square foot.
15 Q. And you're up to tab number 6 now?
16 A. Tab 6.
17 Q. Okay.
18 A. These are the comps that I used to extract the
19 price per foot.
20 These are sales that I didn't include in the
21 sales comparison approach, but I thought they were
22 relevant in the fact that they all sold in the similar
23 time period, they were in similar areas.
24 As an example, this one was in Cupertino. I
25 have one here in Los Altos. Again, Los Altos,
00026
1 Cupertino. And they were just different sales. And
2 what this showed me was there was 3-million-dollar
3 houses selling during that time frame in that area of
4 Santa Clara County.
5 Q. Okay.
6 And this is tab number 7 that you're talking
7 about?
8 A. Correct.
9 Q. Okay.
10 A. This is land.
11 I wanted to get a handle on what the lot was
12 worth without the -- without the structures on them, so
13 I pulled up some land comps. I have four or five sales.
14 Q. And that was tab number 8?
15 A. Yeah.
16 Q. Okay.
17 A. Tab number 9 is an appraisal that was
18 performed July of 2001 by a Randall Carlson with an
19 appraisal value at 4,250,000.
20 Tab 10 is also an appraisal. This one was
21 performed by Cindy Aldrich. I believe this must have
22 been a re-fi for Mr. Simpson. And this one was at
23 3,300,000, and that would be September of 2002.
24 Tab 11, these -- this is some -- these are
25 letters, correspondence back and forth.
00027
1 This came from Mr. Simpson to a Brian
2 Laventhal.
3 This one was to Planning from a Jim Stroupe.
4 This is another letter to Ryan Iwanaga -- Iwanaga --
5 Q. "Iwanaga."
6 A. Very good. Thank you.
7 -- from Mr. Simpson.
8 This was a letter to Mr. Simpson from a
9 Douglas Rea.
10 Starting with tab 12, this is information from
11 the -- I believe this was from the listing agent.
12 These are flyers, handouts.
13 There's also a few faxes that I received from
14 Mr. Thomas in that group.
15 Again, there's additional flyer information --
16 Q. We're up to 13 now?
17 A. Yeah, going to 13.
18 13, again, is -- this is pretty much the same
19 information that I have in tab 12, but this was -- I
20 think one was delivered and one was faxed.
21 Q. Okay.
22 A. This now is some information that I received
23 from Mr. Koss's office, and this is from the opposing
24 appraiser and his work product. Some of it I wasn't
25 able to read, and a lot of it I wasn't able to -- well,
00028
1 let's just leave it at read.
2 Q. Okay.
3 A. So -- I mean, you can see -- this is what I
4 received here (indicating).
5 Q. It didn't fax well.
6 A. It didn't fax through.
7 MR. KOSS: Actually, it didn't copy well. I
8 can't read my copies either.
9 Why I bothered to fax them to you, I don't
10 know.
11 THE WITNESS: So now with tab 15, these are
12 the properties that -- who is the appraiser? --
13 Mr. Grey -- that Mr. Grey used in determining his gross
14 rent multiplier.
15 That did come through. I was able to pull
16 these up via the MLS and I was able to get the
17 information, the sales data that I needed to, basically,
18 check the sale of these two properties.
19 That's tab --
20 Q. 15?
21 A. 15, correct.
22 Q. Okay.
23 A. Going to tab 16, these are the permits that I
24 pulled and copied from Monte Sereno regarding the
25 subject property.
00029
1 Q. Okay.
2 A. Again, page 17, this is the infamous yellow
3 sheet. This is the back of the yellow sheet.
4 This is some more information. This has to do
5 with pools, setbacks, regulations, detached secondary
6 dwelling units.
7 Q. That's the city regulations?
8 A. Uh-huh (affirmative).
9 Q. Development regulations?
10 A. Yes.
11 Because some of the comps I used were in
12 Saratoga, I went to Saratoga planning department and
13 talked to their city planner and talked about the comps,
14 and I have here the City of Saratoga planning, zoning
15 information.
16 Q. That's in tab 18?
17 A. That's included in 17.
18 Q. That's included in 17, okay.
19 A. Tab 18 is photos that I took at the time of
20 the site inspection.
21 And I believe at the end -- yes -- the last
22 grouping -- the last couple of pages of photos are
23 photos -- these last eight are photos that I took at my
24 initial site inspection from the street, when I first
25 drove by. The rest of them were from the site
00030
1 inspection when we all met. These last eight were
2 driving by.
3 Q. Okay.
4 And --
5 A. And that concludes the report.
6 Q. Are all of the photographs that you've printed
7 out and included in the binder on the CD?
8 A. No.
9 Q. Oh, okay.
10 A. The ones that are all on the CD are these
11 (indicating).
12 Q. The actual --
13 A. The subject.
14 The ones that are -- like, as an example, some
15 of the comp photos are not. They were never put on the
16 CD. And these last eight photos are not on the CD.
17 Q. Okay.
18 That's, basically, your actual site inspection
19 that's on the CD?
20 A. Correct.
21 Q. Are there any on the CD that you did not print
22 and put in the binder?
23 A. I believe they're all here.
24 Q. Okay.
25 Would it be possible to get a copy of the CD
00031
1 as well?
2 A. It's in there. You're going to get that.
3 MR. MINOLETTI: Can we copy the CD?
4 (Discussion off the record.)
5 THE WITNESS: There is a CD in there, I think,
6 from Long's -- no, it's not here.
7 Maybe this is it.
8 This was a CD that we looked at some different
9 properties. Some of these properties are not -- they
10 weren't used as comps -- they were -- but I did take
11 photos of them, and you wouldn't find those in here if
12 you look at those.
13 MR. MINOLETTI: Q. You've got a small little
14 index here --
15 A. Yes.
16 Q. -- from Long's.
17 Okay.
18 Okay.
19 Let's go back to your appraisal report.
20 A. Okay.
21 Q. Did you come to some opinions and conclusions
22 as to either the value or diminution in value of any
23 aspect of the subject property?
24 A. I did.
25 Q. Okay.
00032
1 And what are those opinions and conclusions?
2 A. Well, with regards to the square footage
3 differences, I explain myself. I explain how my work
4 was done. I don't offer an opinion of your appraiser's
5 work product, but I do offer an opinion that maybe what
6 he should have done.
7 Q. Okay.
8 And can you summarize that for me?
9 A. I could probably read it to you just as fast.
10 Q. Okay.
11 A. Okay.
12 "The subject property has, per
13 the construction plans, 400 -- 4,309
14 square feet of conditioned living
15 area. After adding the conditioned
16 area of the secondary unit of 700
17 square feet we get a final
18 conditioned space area of 5009
19 square feet. These square footage
20 figures are taken from the
21 construction plans and building
22 permits and involve the heat loss
23 calculations for estimating glass
24 exposure and heating purposes.
25 "The appraiser has estimated
00033
1 that based on his measurement
2 figures and after reviewing the
3 subject plans that the gross living
4 area for the secondary unit is 720
5 square feet and that the main living
6 area has a gross living area of
7 4,421 square feet. This is
8 calculated from" -- stop me if I'm
9 reading too fast -- okay, I'll slow
10 down.
11 "This is calculated from
12 exterior measurements and is
13 consistent with the square footage
14 measurement methodology for
15 calculating house square footage.
16 This comes from ANSI" -- which is
17 the National -- I would say American
18 National Standard Institute -- "or
19 the" -- "or the American National
20 Standards Institute. When added
21 together, the gross living area of
22 the subject property is 5,141 square
23 feet.
24 "Gross living area, as defined
25 by Fannie Mae, is calculated for all
00034
1 residential properties using the
2 exterior building dimensions.
3 "The buyer states that the
4 subject has been misrepresented at
5 approximately 5,300 square feet or
6 5,100 square feet for both the main
7 house and the secondary living unit
8 with the actual footage at 5,039
9 using the conditioned area space
10 from the plans. This leaves a
11 discrepancy of 261 square feet using
12 this appraiser's square footage.
13 When using the most common building
14 area definition, gross living area,
15 the difference is 5,300 square feet
16 less 5,100 square feet" -- I'm
17 sorry -- "5,141, square feet, for a
18 difference of 159 square feet. The
19 main house living area is concluded
20 to have a gross living area of 4,421
21 square feet.
22 "It is the initial opinion of
23 the appraiser that, based on the
24 size of the house and the secondary
25 living space, that the difference in
00035
1 square footage would result in no
2 difference in value to the subject
3 property. The appraiser placed the
4 subject property in adjustment grids
5 using, first, 4,421 square feet,
6 and, after making adjustments for
7 square footage, lot size, time of
8 sale, age and secondary unit, the
9 appraiser reconciled a value of
10 3,250,000 dollars for the subject.
11 The appraiser then placed the
12 subject at a hypothetical square
13 footage of 4,580 square fet and
14 obtained the same reconciliation of
15 value of 3,250,000 dollars.
16 "The appraiser further placed
17 the subject sale into the equation
18 using the subject as its own best
19 comparable. This methodology,
20 placing all of the emphasis on the
21 subject sale, concluded a reconciled
22 value for the subject at 35 dollars
23 per square foot difference times 159
24 square feet at 5,565 dollars.
25 "The 35 dollars per square foot
00036
1 was concluded from using three
2 properties that sold in the same
3 reasonable area, during the same
4 time period, on approximately the
5 same size lots, where the only
6 substantial difference would be the
7 square footage. One property sold
8 for 3,175,000 dollars for 3,780
9 square feet, while another property
10 of 3,820 square feet sold for the
11 same price, indicating no difference
12 in price for 60 square feet. The
13 third property sold for 3,195,000
14 for 4,416 square feet. This
15 property would be 636 square feet
16 larger than the smaller of the two
17 properties and sold for 20,000
18 dollars more than both. Dividing
19 the 20,000 dollars by 636 square
20 feet equals $31.44 per square foot.
21 Dividing the 20,000 dollars by 596
22 square feet equals $33.55 per square
23 foot.
24 "The appraiser has reconciled
25 the adjustment to be 35 dollars per
00037
1 square foot after reviewing these
2 sales and noting that the adjustment
3 is extracted from market sales."
4 Q. Okay.
5 Let me stop you for a minute.
6 A. Sure.
7 Q. The comparables that you're referencing are
8 contained in -- within the binder there?
9 A. Yes.
10 Q. Okay.
11 A. They are right here at tab 6.
12 Q. Okay.
13 All right.
14 A. Okay.
15 "The appraiser has been asked to
16 discuss the opposing appraiser's
17 methodology where he has concluded
18 that the cost approach would be the
19 better way to determine the value of
20 the subject footage. The cost
21 approach can be especially useful
22 when building additions but in
23 particular -- in this particular
24 case, the addition of the square
25 footage is hypothetical. The
00038
1 opposing appraiser has concluded
2 that 350 dollars per square foot
3 would be the correct dollar amount
4 times the approximately 232 square
5 feet for damages neighboring 81,200
6 dollars. He has identified the
7 subject property as having a total
8 of 5,068 square feet including both
9 the main house and the secondary
10 living area. In concluding 350
11 dollars per square foot, the
12 appraiser has simply deducted the
13 land value from the initial cost per
14 square foot and extracted a price
15 per foot for the conclusion.
16 "The opposing appraiser should
17 note that, number one, the cost does
18 not equate to value; number two, the
19 footage added is simply a roof,
20 drywall, floor covering, under
21 floor, et cetera, with the kitchen,
22 baths, doors, windows and main
23 structure in place. Therefore, the
24 most accurate method of cost
25 estimating would be using the
00039
1 Quantity Survey Method whereby this
2 method reflects the quantity and
3 quality of all materials used in the
4 conclusion of the 232 square feet
5 and all categories of labor
6 required. It is this appraiser's
7 opinion that the 50 dollars per
8 square foot times 232 square feet,
9 or 11,600, would, again, be the most
10 credible of the values for the
11 additional footage. The reader
12 should note that the subject would
13 require approximately 2.32 squares
14 of additional roofing, 14 sheets of
15 plywood, 25 yards of stucco, 232
16 square feet, or 25 yards, of floor
17 covering, and approximately 50
18 sheets of drywall. The labor would
19 be minimal but, say, 40 additional
20 man-hours. Therefore, the cost of
21 232 square feet of improvements
22 would be less than 10,000 dollars.
23 "The appraiser notes that the
24 subject has nine rooms not including
25 the pantry, foyer, entry to the
00040
1 master bedroom in addition to the
2 rooms at the secondary unit. The
3 average room would require
4 approximately 20 square feet added
5 to these rooms to obtain 232 square
6 feet. This would mean that each
7 room would require additional
8 four-by five area, or, in the case
9 of the library, approximately
10 12-by-13, or 156 square feet, not
11 including the bay the dimensions
12 would have to be extended
13 approximately nine inches in both
14 directions. In the master bedroom
15 it would require less than six
16 inches in both directions to obtain
17 the needed footage. In the larger
18 rooms the adjustments would be even
19 less. My point being that, since
20 the square footage addition is
21 hypothetical and the Plaintiff saw
22 what he was purchasing, addition of
23 the square footage is negligible
24 overall.
25 "The appraiser also notes that
00041
1 the opposing appraiser should have
2 tested using only the cost approach
3 against the sales comparison
4 approach for the additional footage.
5 This would have given him an
6 opportunity to re-examine his work
7 product and made the conclusions of
8 the cost approach more consistent
9 with the sales comparison approach
10 to value at the very least using a
11 matched pair analysis.
12 "Therefore, it is the opinion of
13 the appraiser that the loss of the
14 additional footage of approximately
15 230 square feet has a diminution of
16 value to the subject property in the
17 range of zero to 10,000 dollars.
18 Using this appraiser's footage of
19 159 square feet, the diminution of
20 value range would be zero to 5,000
21 dollars."
22 Now, that concludes the feedback with regards
23 to the square footage.
24 Q. Okay.
25 A. Can I grab some more water?
00042
1 (Discussion off the record.)
2 MR. MINOLETTI: Q. And the 35 dollars per
3 square foot is a figure that you extracted from the
4 value of square footage in the comparables?
5 A. Correct.
6 Q. And you've applied that 35 dollars whether it
7 be 230 square feet or -- what was it? -- 150 square
8 feet?
9 A. 159, something like that, I believe.
10 Q. And that's where you get the zero to 10,000 or
11 zero to 5,000?
12 A. Correct.
13 Q. Did you make any determination as to the
14 quality of construction out there?
15 A. I would say it's very good, good to very good.
16 Q. Okay.
17 And, in your experience, have you ever put a
18 value on the cost of construction of a similar
19 residence?
20 A. I need a better explanation of your question.
21 Q. Okay.
22 Do you have experience in, for example, doing
23 appraisals based on plans?
24 A. Correct.
25 Q. Okay.
00043
1 And do you -- when you make an appraisal based
2 on plans, do you use any particular numbers for the cost
3 to construct?
4 A. I might extract them from different
5 properties.
6 It depends on what you're asking me.
7 If you're asking me about just using the cost
8 approach only, I may take it from Marshal Swift.
9 As you know, I'm also a contractor. I've
10 built custom homes. I have a good feel for what things
11 cost.
12 But the striking point that we need to make is
13 that cost does not equate to value. And, in this
14 instance, we're looking at -- whether it's 232 square
15 feet or 159 square feet, using the market sales
16 adjustment grid, we are not going to find that it equals
17 anywhere near what the opposing appraiser uses, and if
18 he had put it into a grid and using -- using the
19 subject, again, as its only best comparable, the
20 difference would have been -- well, let me give you an
21 example.
22 In this report, the other appraisers, both of
23 them, who -- one was valuing it for a re-fi, the other
24 one was valuing it -- I really don't know why -- but one
25 of them used 125 dollars per square fat and the other
00044
1 appraiser used 75 dollars a square foot. However they
2 extracted them for the market, where they got those
3 numbers, they would seem to me to be more consistent
4 with what we would find the market reaction to be to
5 that additional square footage. It's not like it was
6 a -- a room was missing or certainly not -- we weren't
7 putting all this 232 square feet into the kitchen or
8 into a bathroom, which are typically your most expensive
9 rooms. This is a hypothetical 232 feet and we're just
10 going to sprinkle it around the house and into the
11 secondary living unit.
12 So to think that the 350 dollars per square
13 foot is reasonable, it's not. And, again, I believe the
14 opposing appraiser, if he would have applied his
15 methodology and taken it a step further and not just
16 used the cost approach but applied also the sales
17 comparison approach, he would have found that his
18 numbers weren't realistic.
19 Q. Okay.
20 Are you saying that a number of 350 dollars
21 per square foot to build this type of quality of a
22 residence is inaccurate?
23 A. No, I'm not saying that.
24 Q. Okay.
25 A. 350 dollars per square foot would be accurate.
00045
1 I really didn't break it down to what I
2 thought this whole house should cost.
3 But what I am saying is that that 350 dollars
4 includes windows, doors, kitchen, all -- all the
5 components that make up the house. This 200 feet that
6 we're looking at, roughly, is abstract. It's
7 hypothetical. It's -- again, it's spread out amongst
8 the whole house. So I'm going -- I'm assuming that
9 we're not putting this 200 feet into the kitchen,
10 because the Plaintiff saw what the kitchen was. He knew
11 exactly what appliances he was getting. He saw the
12 windows; he knew where the windows were, the size of the
13 windows. He knew where the doors were; he knew how many
14 doors he was getting.
15 So, again, it's just the basic we're going to
16 add a few sheets of sheetrock, we're going to throw down
17 a few sheets of plywood, we're going to add a little
18 roofing, we're going to extend the foundation maybe a
19 little this way, and we're going to create a little bit
20 bigger house.
21 Q. And are you assuming that that creation of a
22 little bit bigger house, making each part of the house
23 just a little bit bigger, you're assuming that's being
24 done at the time of construction as opposed to being
25 added on later?
00046
1 A. Being done at the time of construction.
2 Q. Okay.
3 What is your next opinion in order?
4 A. I have fiber optics.
5 Q. Okay.
6 And you don't have to read it if you don't
7 want. I can read the report later.
8 A. Well, the bottom line what it gets down to
9 being is that I spoke to a couple of electronics people
10 that do these type of installations, and, without the
11 benefit of them seeing the property and just by overall
12 view to them of how it could be done with regards to can
13 you crawl it, is there overhead space -- yes, yes --
14 they seemed to think maybe 5 to 10 thousand dollars,
15 but, again, we have to go back and look at the principle
16 of contribution, which states that the value of any
17 particular component is measured in terms of its
18 contribution to the value of the whole or the amount
19 that its absence would detract from the value of the
20 whole. And, therefore, it's my opinion ultimately that
21 there is no value to the fiber optics.
22 Now, it's my understanding, again, that, based
23 on the opposing appraiser's little cost breakdown that
24 he had, that the Plaintiff expected ten drops in the
25 house and two drops in the secondary unit. He estimated
00047
1 two workers at 80 dollars per hour, but he never
2 indicated how many hours they were going to work on it,
3 and trenching to the guest house, and the whole thing
4 was going to total 10,000 dollars.
5 Again, I've constructed houses. I've built
6 houses for attorneys; I've built them for doctors. I
7 have never once put fiber optics in a house. They've
8 asked for maybe CADD 5 wiring and just the normal
9 coaxial will do.
10 So I would question the value of fiber optics.
11 And so I put in here that I would say the
12 diminution of value to be zero to 10,000 dollars, with
13 the value of the fiber optics most probably at zero.
14 Q. Okay.
15 Did you look for any comparable sales that
16 included fiber optics as one of the features?
17 A. No.
18 Well, yes, I certainly did. I certainly
19 looked for them.
20 And I could not -- I could not in any of the
21 notations could I find that.
22 You know, again, Mr. Minoletti, I would assume
23 that if fiber optics were such a heavy thing and some
24 high demand thing, that we would -- in Santa Clara we
25 would need to put it in all the MLS readings and we
00048
1 would see it in adjustments in people's appraisals, but,
2 as yet, I haven't been able to find that.
3 So, in my thinking, that kind of tells me that
4 fiber optics isn't that great a deal.
5 I can truly say I don't think I have ever gone
6 in a house in Santa Clara to appraise that I've asked
7 the people living there if there are fiber optics in the
8 house and try to extract and put a market value on that;
9 I've never done it.
10 Q. Okay.
11 A. So, again, it would have to be the cost to
12 cure.
13 Q. And who did you talk to to get the 5- to
14 10-thousand-dollar cost?
15 A. The first guy I spoke with was Ernie Gibson.
16 Mr. Gibson works for a company where they primarily do
17 put fiber optics in, but they put them in hospitals,
18 hospitals, libraries, generally commercial type space.
19 Q. Okay.
20 What company is that?
21 A. You know, I don't know.
22 Q. And was there someone else who you spoke to
23 about that cost to install or just him?
24 A. I just spoke to him, but he referred me to
25 another guy and I never really got ahold of the other
00049
1 guy.
2 Q. Okay.
3 Does that cover your opinions and conclusions
4 on the fiber optics?
5 A. On the fiber optics? Yes.
6 Q. Okay.
7 What's next?
8 A. Loss of use of the pool.
9 Q. Okay.
10 Did you perform an analysis or calculation on
11 that?
12 A. Again, I did.
13 And my opinion regarding the diminution there
14 was, again, zero to 5,000 dollars, with a loss of use of
15 the pool most probably at zero.
16 Q. Okay.
17 And why is that?
18 A. Well, I noted the different -- the different
19 time frames.
20 The property closed -- I have a -- I see right
21 now this date is wrong.
22 It closed September 28, 2001.
23 Q. You want to correct something?
24 Go ahead.
25 A. (Witness marking on exhibit.)
00050
1 It closed September 28, 2001 and the permits
2 for the pool were submitted to Monte Sereno March 14th,
3 2003. So that's -- you know -- what is that? -- a
4 six-month lag right there.
5 They were finally issued on May 29th, 2003.
6 The first noted inspection was October 3rd,
7 2003, with the final inspection dated June 4th of 2004.
8 So I have those dates.
9 And then it is impossible to detect what were
10 actual delays and who was responsible for these delays
11 if, in fact, there were any.
12 Further, in the diminution of value analysis
13 for the driveway, the opposing appraiser notes one month
14 inconvenience as a cost of damages there. Therefore,
15 this appraiser assumes that the Defendant would only
16 have possibly delayed the pool one month while the
17 driveway was being completed.
18 Then I questioned the pool couldn't be worked
19 on while you were doing the driveway, so I failed to see
20 where the Defendant was responsible for any part of that
21 delay process other than maybe whatever time it took to
22 recalculate the impervious condition.
23 With regards to the diminution in value due to
24 the loss of the pool, you know, it's a question really
25 that can only be answered with market data, and, in
00051
1 general, however, when the livability of a house is
2 affected, the more likely it is the use of -- the loss
3 of use or utility would be affected with corresponding
4 effects on market value.
5 So what we see here is I really don't see that
6 there would be any loss in market value knowing that the
7 pool -- that the loss of pool wasn't there.
8 First of all, number one, the Plaintiff
9 purchased the property without a pool, so he didn't have
10 a pool for a number of months, and still paid the
11 purchase price.
12 And I think there's also mitigating factors,
13 and one would be if -- if it's 200 or whatever your
14 appraiser used, 300 dollars a month for loss of the
15 pool, the mitigating offset would be that the Plaintiff
16 would have had to heat, supply chemicals, he would have
17 had to filter it and he would have had to maintain his
18 pool, which would have equalled or surpassed the monthly
19 pool dues. That's why zero to 5,000 dollars is my
20 estimate there.
21 Q. Okay.
22 And when you say -- I understand the zero
23 part.
24 But the 5,000 part, where do you come up with
25 that?
00052
1 A. That's what your appraiser came up with.
2 Q. Okay.
3 All right.
4 A. Okay. Specific comments regarding the
5 replacement of the driveway.
6 Well, what this gets down to, again, we would
7 need market data information, but, truly, the only way
8 to do the replacement of the driveway is most likely
9 using the cost approach. And I believe your appraiser
10 said 64,000 dollars plus interest plus an
11 entrepreneurial profit and, again, five percent for loss
12 and inconvenience for one month.
13 In a letter that Mr. Simpson sent off, he said
14 he had an estimate of, I think it was, 40,000
15 something -- I'll give it to you -- let's see.
16 "The attached cost estimates add
17 up to 42,620. This amount increases
18 to 43,400 if rebar is in the
19 driveway."
20 That's a letter from Simpson to whomever.
21 So, using roughly that same methodology, if
22 you take 43,000 and add 15 percent to it, you're going
23 to be up to 50,000 dollars, so, my opinion, there was --
24 that the driveway mitigation had a range of 50,000 to
25 64,000 dollars.
00053
1 Q. Okay.
2 Any other opinions with respect to the
3 driveway?
4 A. Well, I have some other opinions, but I think
5 I pick up those opinions in the accessory building so --
6 Q. Let's go on to the accessory building.
7 A. Okay.
8 Rather than read this, I'll do it kind of in
9 reverse.
10 It's my opinion that the loss of ability to
11 construct the 800 square feet has a diminution of value
12 to the subject property in the range of zero to 25,000
13 dollars, with the lost value most probably the zero,
14 again.
15 Reason being for that is the accessory
16 building is just that, it's an accessory building. It
17 has to be subordinate to the main structure. Again, it
18 cannot have a kitchen, it cannot have defined bedrooms.
19 We already have over 5,000 square feet of living area.
20 To add an additional 800 square feet, it wouldn't add
21 any significant value, if any, to the subject, and the
22 cost to construct it would certainly outweigh the
23 benefits of having it.
24 Q. What would -- did you estimate a cost to
25 construct?
00054
1 A. No.
2 Q. Okay.
3 A. Again -- that's something that I found
4 interesting, too.
5 Again your appraiser decided to use an income
6 approach as opposed to using the sales comparison
7 approach, where typically in residential properties the
8 sales comparison approach is the way -- is what we would
9 use to extract all these components, and he found it
10 convenient, I would say, to use the income approach. I
11 have some comments regarding that. I mean, with
12 regards to income, using -- just using his numbers, it
13 would cost 200,000 dollars to build that. That would
14 come out of Mr. Simpson's pocket, because it wasn't
15 included in the sale, it was just the ability. So he
16 would have to build that at 200,000 dollars, and if he
17 was able to attract a thousand dollars per month, it
18 would take him over 16 years to recapture his
19 investment.
20 The other thing I found difficult to
21 understand was the gross rental multiplier that your
22 appraiser used and the way he extracted that from the
23 market. I mean, he used one sale that was 2700 square
24 feet and another was 3500 square feet, where in
25 appraisal practice it's totally unacceptable. It will
00055
1 say in all of these books that they don't have to be
2 identical, but they at least need to be competitive
3 and they need to be the same similar market, they need
4 to appeal to the same household size, income level, and
5 the total reliability of a gross rental multiplier
6 depends on the comparability of the properties from
7 which it is derived.
8 So him taking properties that sold for a
9 million dollars -- I think one sold for a million four,
10 one sold for 900 thousand -- and using those gross rent
11 multipliers to apply it to a 800-square-foot accessory
12 building behind a house behind a pool, I really have to
13 question his thought process there.
14 Now, again, if he had used the sales
15 comparison approach and did a matched pair analysis
16 where we would find a similar house, maybe with a
17 secondary living area but with the 800-square-foot
18 accessory building where we could extract what that
19 value placed to the market, then I would better
20 understand his work product, but the way it is now, it's
21 very difficult to understand where he comes up with a
22 loss of 130,000 dollars.
23 Q. Okay.
24 Let me ask you this: Did you find any
25 comparables in the Monte Sereno area that had two
00056
1 auxiliary structures, a main house and two auxiliary
2 structures?
3 A. No.
4 Auxiliary structures -- I mean, we are not
5 talking auxiliary structures. One here is actually a
6 secondary living area, which is legal by zoning, and
7 even the accessory building is legal by zoning, but the
8 use of it is not consistent with the living area. It's
9 hobby room, garage, pool house.
10 Q. Office?
11 A. Possibly.
12 You can condition it.
13 Q. Art studio?
14 A. Art studio, something like that.
15 Q. Okay.
16 A. So to build that -- and, you know, the other
17 way I've explained it is, even if you built it as a
18 garage and if you built it at 100 dollars per square
19 foot, it would still cost you 80,000 dollars to build
20 it, and if you used an adjustment which is typical of
21 garage space of 10,000 dollars per space for the four
22 spaces, you would still have a loss of 40,000 dollars
23 and you would have also created a super adequacy due to
24 the fact that the subject already has four garages.
25 I mean, the whole thing gets down to it -- it
00057
1 violates a lot of the economic principles, and the main
2 one being it's the law of diminishing return. He has
3 also hit the point it would not benefit him to build
4 that building because he is not going to get that return
5 on a resale. It doesn't make financial sense to build
6 that building.
7 Now, I go on to say that if he did -- in the
8 event that he did want to do -- and this is where I come
9 up with the 25,000 dollars. I believe that, truly, if
10 the Plaintiff had wanted that accessory building -- and
11 let's go back and we will talk about the flyer. The
12 flyer says pool and/or building. But my belief is that
13 if the Plaintiff had wanted the building and the pool
14 that he could have mitigated some of the damage in his
15 driveway replacement. He could have narrowed the
16 driveway down. He could have reduced the size of the
17 pool. He's the one that selected the 900-square-foot
18 pool. If he had taken that down to, say, 600 square
19 feet, got rid of the circular driveway, re-landscaped
20 the front yard, I believe he could have accomplished
21 both things, just maybe not gotten the pool he wanted,
22 but he could have gotten an accessory building that
23 would have satisfied his needs.
24 That's why I estimated the front landscaping
25 to be 25,000 dollars, pull out the circular driveway,
00058
1 cut down the driveway, and this would have all happened
2 at the same time he was taking out the pavers anyway.
3 So I place some of that back on him, that if
4 he really wanted that accessory building, there would
5 have been options for him availing.
6 So, with regards to that, I come up with zero
7 to 25,000 dollars, with a lost value most probably at
8 zero.
9 Q. Okay.
10 Now, did you in your site inspection or your
11 measurements, or even from the plans, did you do any
12 calculation as to the total amount of impervious
13 coverage on this property?
14 A. (Witness handing document to counsel.)
15 Q. And you've handed me a letter with some
16 calculations dated June 6th, 2006, and it came out of
17 your bucket file, Exhibit Number 1.
18 Okay.
19 A. Part of that comes from -- part of my thoughts
20 there, Mr. Minoletti, also comes from some of the
21 letters, and one of them, Mr. Simpson's, where he talks
22 about the size of the pool, his impervious coverage, the
23 driveway, the concrete patios. I believe Mr. Stroupe
24 was an architect. And he also included certain
25 impervious coverage measurements, and -- I think, when I
00059
1 figured it out, we were right at 41 percent. I think
2 the limit is 40 percent, so he's probably still just a
3 little bit over. But he talks about the -- you know,
4 the driveway, the circular driveway, and then, when we
5 go back and look at plans, the circular driveway wasn't
6 part of the preliminary plans. I don't know when it was
7 decided to put in the circular driveway, but certainly
8 there would be no diminution of value by getting rid of
9 that circular driveway, putting in a nice landscaped
10 front with a walkway.
11 Q. And, based on your letter here dated June 6,
12 2006, again -- again, did you obtain these measurements
13 yourself or are you relying in part on what an
14 architect --
15 A. I -- as best I could, and please understand,
16 I'm not an engineer, I'm not an architect, I'm not a
17 survey person. I did that using a tape laser, you know,
18 swinging different angles and measuring, and these are
19 the results of -- all these graph papers are the results
20 of our measurements and walking around the perimeter of
21 the house and the yards.
22 Q. All of your sketches are from the site
23 inspection?
24 A. Correct.
25 Q. And are you saying that these numbers on this
00060
1 letter we're talking about equal approximately 41
2 percent of the coverage?
3 A. I believe so.
4 I believe I saw that on one of my notes.
5 Q. Okay.
6 A. To the best of my ability.
7 Q. Okay.
8 In your investigation with the city, you
9 indicated that you pulled some of the permits?
10 A. Correct.
11 Q. Did you see a permit for any of the concrete
12 patios or walkways that were done out there?
13 A. They talk about them in some of the plans.
14 They are included. I think when we talk about -- like
15 the secondary living unit as an example, that had a
16 262-square-foot covered porch.
17 But -- right here is an approximate
18 660-square-foot concrete patio.
19 Q. And that's -- let me -- that's on a permit
20 dated January 24, 2000?
21 A. Yeah.
22 So there's that.
23 Let's see, where else did I see that?
24 Oh, when the pool -- let's see, which one is
25 for the pool?
00061
1 It seems to me -- as soon as I can find it --
2 when the pool permit was taken out, there was X amount
3 of -- no, I'm wrong -- it just says in-ground gunite
4 swimming pool and spa, 938 square feet.
5 I thought they had included --
6 Q. And what's the date of that permit?
7 A. This permit was applied for 3-14-03.
8 Q. Okay.
9 Thank you.
10 A. So I guess -- there is some but definitely not
11 all of the patio.
12 Q. Okay.
13 Have we covered all of the opinions you've put
14 together on this particular case?
15 A. I believe so.
16 I believe you'll find them in the book, or a
17 better explanation of them.
18 MR. MINOLETTI: Okay.
19 All right. I'm finished.
20 MR. KOSS: Okay.
21 (The deposition concluded at 10:11 a.m.)
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