|
1 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
2 IN AND FOR THE COUNTY OF SANTA CLARA
3 --oOo--
4
5 RALPH SIMPSON, )
Plaintiff, )
6 )
vs. ) No. 105CV053398
7 )
LOU RAE KAGEL, LYNN O'BRIEN, )
8 JAMES O'BRIEN, STONEHENGE )
PROPERTIES, INC., VALLEY OF )
9 CALIFORNIA, INC. dba COLDWELL )
BANKER, DOUGLAS REA and DOES )
10 ONE through TWENTY, inclusive, )
)
11 Defendants. )
)
12 AND RELATED CROSS-ACTIONS. )
13
14
15 DEPOSITION OF RALPH SIMPSON
16 Thursday, April 27, 2006
17
18
19
20
21 Taken before JANELL SOKOL, CSR, CM
License No. C-3443, State of California
22
23
DIABLO VALLEY REPORTING SERVICES
24 Certified Shorthand Reporters
2121 N. California Blvd., Suite 310
25 Walnut Creek, California 94596
925-930-7388 1
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 I N D E X
2 PAGE
3 EXAMINATION BY:
4 MR. KOSS 6
5 MR. GLASPY 213
6 MR. BLOYD 236
7 --oOo--
8 E X H I B I T S
9 NUMBER PAGE
10 1 PRDS Real Estate Purchase Contract 84
11 2 Freddie Mac Form 70 6-93 100
12 3 Uniform Residential Appraisal Report 100
13 4 PRDS As-Is Addendum 107
14 5 Counter Offer No. 1A 111
15 6 Counter Offer No. 2A 114
16 7 Counter Offer No. 3A 115
17 8 Addendum to Contract 120
18 9 PRDS Addendum No. 129
19 10 Addendum to Contract 130
20 11 PRDS Request for Contract Performance 135
21 12 Addendum to Contract 138
22 13 Addendum No. 4A 138
23 14 Extension Agreement 139
24 15 Escrow Instructions 140
25 (continued)
2
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 NUMBER PAGE
2 16 PRDS Addendum No. ___ 140
3 17 Walk-Through 141
4 18 Addendum to Contract 9/12/01 144
5 19 Addendum to Contract 9/25/01 147
6 20 8/25/01 PRDS Addendum No. 149
7 21 8/25/01 PRDS Addendum No. (unsigned) 149
8 22 Contingency Removal 150
9 23 Hold Harmless Agreement 151
10 24 Disclosure Obligations 171
11 25 Regional Disclosures 176
12 26 Real Estate Transfer Disclosure 180
Statement
13
27 PRDS Supplemental Seller's Checklist 181
14
28 6/9/03 letter to Ryan Iwanaga 183
15
29 Advertising brochure 193
16
30 Calwest Landscape Demo: 197
17 Estimate/Contract
18 31 Listing Data 200
19 32 E-mails between Douglas Rea/Ralph 202
Simpson
20
33 8/30/01 e-mail to Ralph from Doug Rea 205
21
34 E-mails between Douglas Rea/Ralph 206
22 Simpson
23 35 9/4/01 letter to Lou Rae 208
24 36 9/10/01 e-mail to Ralph from Doug Rea 209
25
--oOo-- 3
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 BE IT REMEMBERED, that pursuant to notice to the
2 respective parties, and on Thursday, the 27th day of April,
3 2006, commencing at the hour of 10:00 a.m. thereof, at the
4 Law Offices of GAGEN, McCOY, McMAHON & ARMSTRONG, 279 Front
5 Street, Danville, California, before me, JANELL SOKOL, a
6 Certified Shorthand Reporter, License No. C-3443, State of
7 California, there personally appeared:
8 RALPH SIMPSON,
9 called as a witness on behalf of the defendants, who, being
10 first duly sworn, was then and there examined and
11 interrogated as hereinafter set forth.
12
13 --oOo--
14
15 PAUL G. MINOLETTI, Attorney at Law, representing
16 the Law Offices of GREENE, CHAUVEL, DESCALSO & MINOLETTI,
17 951 Mariner's Island Boulevard, Suite 630, San Mateo,
18 California 94404, appeared as counsel on behalf of the
19 plaintiff;
20
21 CHARLES A. KOSS, Attorney at Law, representing the
22 Law Offices of GAGEN, McCOY, McMAHON & ARMSTRONG, 279 Front
23 Street, Danville, California 94526, appeared as counsel on
24 behalf of defendant Lou Rae Kagel;
25
4
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 PAUL C. GLASPY, Attorney at Law, representing the
2 Law Offices of GLASPY & GLASPY, INC., 1550 The Alameda,
3 Suite 200, San Jose, California 95126-2325, appeared as
4 counsel on behalf of defendants Lynn O'Brien, James O'Brien
5 and Stonehenge Properties, Inc.;
6
7 STEPHEN W. THOMAS, Attorney at Law, representing
8 the Law Division of NRT, Inc. - Western Region, 12657
9 Alcosta Boulevard, Suite 500, San Ramon, California 94583,
10 appeared as counsel on behalf of defendant Valley of
11 California, Inc. dba Coldwell Banker;
12
13 TED W. BLOYD, Attorney at Law, representing the
14 Law Offices of EDWARD L. BLUM, 201 19th Street, Suite 200,
15 Oakland, California 94612, appeared as counsel on behalf of
16 defendant Douglas Rea.
17
18 ALSO PRESENT was defendant LOU RAE KAGEL.
19
20 --oOo--
21
22
23
24
25
5
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 RALPH SIMPSON,
2 called as a witness on behalf of the defendants,
3 having first been duly sworn by the court reporter
4 to testify the truth, the whole truth and nothing
5 but the truth, testified as follows:
6 --oOo--
7 EXAMINATION
8 BY MR. KOSS:
9 Q. Good morning, Mr. Simpson. My name is Charles
10 Koss and I represent Lou Rae Kagel in an action you've
11 brought against her and others arising out of your purchase
12 of a home on Blanchard Drive in Monte Sereno. I'm here
13 today to ask you some questions about the facts and
14 circumstances that led up to your purchase and the things
15 that you believe are either misrepresented or wrong with
16 this house.
17 Before we get going, can you state your full name
18 and tell me your address.
19 A. Ralph Henry Simpson, 17682 Blanchard Drive in
20 Monte Sereno.
21 Q. Have you ever been deposed before?
22 A. No.
23 Q. Let me go through some of the ground rules just to
24 make sure we're on the same page. Okay?
25 A. Okay.
6
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. Okay. First of all, as you can see we have a
2 court reporter that's taking down everything that you say
3 or I say or, indeed, anybody in this room says. You've
4 also again given an oath to tell the truth and even though
5 this is an informal setting, you understand that's the same
6 oath you'd be given in a court of law?
7 A. Okay.
8 Q. Okay. The same penalties of perjury attach to
9 that, so I suggest to you it's important to give full and
10 complete truthful testimony today. Fair enough?
11 A. Fair enough.
12 Q. You're quite good at this already, which surprises
13 me because most witnesses aren't, but court reporters have
14 difficulty taking down things when two people talk at the
15 same time. So if you could wait for me to finish my
16 question, I'll try and wait for you to finish your answer
17 so we're not talking at the same time. Fair enough?
18 A. Fair enough.
19 Q. Okay. And you're also quite good at this; you're
20 answering out loud instead of saying uh-huh or shaking your
21 head or that kind of thing. Obviously, in a written
22 transcript shakes of the head don't translate. So if I
23 prompt you for an answer, don't think I'm being rude. I'm
24 just trying to get a clear record. Okay?
25 A. Okay.
7
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. I'm not here to try and trick you or confuse you
2 or mislead you. If you don't understand my question,
3 please let me know and I will do my level best to give you
4 a question that you understand. Okay?
5 A. Okay.
6 Q. At the conclusion of the deposition, our court
7 reporter will type up into a written booklet form
8 everything that went on here today and you'll get a chance
9 to look that over for errors and, indeed, make any
10 corrections you want to make to that transcript. Okay?
11 A. Okay.
12 Q. I should caution you that if you make changes that
13 are substantive in nature, as an example, you change a yes
14 to a no, I might be able to comment on that change at trial
15 and that might affect your credibility. Okay?
16 A. Okay.
17 Q. Is there any reason why you can't give full and
18 complete testimony here today; you're not feeling well or
19 you're under medication or anything like that?
20 A. No, nothing like that.
21 Q. Okay. If you need to take a break, let me know.
22 I suspect this is going to take some time and breaks are
23 certainly appropriate. My only request is that you don't
24 ask to take a break when a question is pending. If you
25 could first answer the question, then we could take a break
8
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 after that. Okay?
2 A. Okay.
3 Q. Any questions about the process?
4 A. No.
5 Q. Good. If you could, please describe your
6 educational background.
7 A. Well, I've got bachelor degrees in math and
8 statistics.
9 Q. And where did you obtain those degrees?
10 A. The University of Idaho.
11 Q. And what year did you obtain those degrees, year
12 or years I guess?
13 A. I graduated in 1977.
14 Q. You got both degrees at the same time?
15 A. Yes.
16 Q. And any post graduate work?
17 A. No.
18 Q. Can you describe your employment history from the
19 time you graduated from the University of Idaho?
20 A. Yes. I graduated in December, started working at
21 the beginning of February of 1978 for IBM. I worked for
22 them for 16 years until February of 1994 and have been
23 working at Cisco Systems since then, since February of '94.
24 So it's pretty simple, just two companies.
25 Q. What's your current position with Cisco Systems?
9
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 A. I'm director for technical support.
2 Q. And briefly what does that job involve?
3 A. It involves planning our strategies and future for
4 our support organization. This is the organization that
5 helps customers solve problems, so it's remote support over
6 the phone.
7 Q. When did you first move to California?
8 A. I first moved to California in '94 to start with
9 Cisco. I moved away in '95 and was overseas for six years,
10 then came back in 2001.
11 Q. When you first moved to California, did you
12 purchase a home?
13 A. Yes, I did.
14 Q. Where was that home located?
15 A. It was in Almaden in San Jose.
16 Q. Do you recall the address?
17 A. No.
18 Q. Did you have a broker assist you in the purchase
19 of that property?
20 A. Yes, I did.
21 Q. Do you remember who that was?
22 A. No.
23 Q. At some point did you sell the Almaden property?
24 A. Yes, I did.
25 Q. And what year was that?
10
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 A. 1999.
2 Q. So I take it you rented it out for a number of
3 years before you sold it.
4 A. My daughter lived in it.
5 Q. Ah, okay. And at the time you sold it, did you
6 have a broker represent you in the sale of the property?
7 A. Yes, I did.
8 Q. And then the next house you purchased in
9 California, was that the Blanchard property?
10 A. Yes.
11 Q. Had you owned any homes prior to your purchase of
12 the Almaden property?
13 A. Yes.
14 Q. How many?
15 A. Prior to Almaden, five.
16 Q. Five houses?
17 A. Yes.
18 Q. And where were they located?
19 A. Federal Way, Washington, I owned two.
20 Gaithersburg, Maryland and Raleigh, North Carolina.
21 Q. When you moved overseas in 1995, did you purchase
22 a house overseas?
23 A. I did but not in '95. I rented at first.
24 Q. At some point you purchased a home?
25 A. Yes.
11
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. And did you own more than one home when you were
2 overseas?
3 A. No, just one.
4 Q. And where was that house located?
5 A. It was in Weybridge, U.K., outside of London.
6 Q. Let me start with the five houses that you owned
7 prior to moving to California. Did you experience any
8 issues with respect to nondisclosure of any issues?
9 A. No.
10 Q. On the purchase of those houses.
11 A. No, I did not.
12 Q. Did you experience any difficulties when you sold
13 the house in terms of the buyer claiming or alleging or
14 suggesting that you failed to disclose anything?
15 A. No.
16 Q. How about the house in Weybridge? When you bought
17 that house, did you learn of any facts after you purchased
18 the house which led you to believe that the sellers had not
19 fully disclosed things?
20 A. No.
21 Q. And how about the Almaden house?
22 A. No.
23 Q. There were no facts that you discovered after you
24 purchased it which led you to believe that things had not
25 been disclosed to you?
12
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 A. No.
2 Q. Now, in any of these five houses which you
3 purchased prior to the time you were in California, did you
4 do any remodeling?
5 A. Wait a minute. I'm sorry. I said five before --
6 Q. Yes.
7 A. It was five before the current house I'm in.
8 Q. Ah, okay.
9 A. I'm sorry. So it was four before, because I've
10 owned two in California.
11 Q. Okay. Two in Washington, one in Maryland, one in
12 North Carolina?
13 A. That's right.
14 Q. Okay.
15 A. So when I said five, I meant five before first
16 moving to California.
17 Q. Okay. Fair enough.
18 The four houses that you purchased prior to the
19 time you moved to California, did you do any remodeling to
20 those houses?
21 A. I don't know if it counts as remodeling. I
22 finished a basement room in one of my homes in Washington
23 State.
24 Q. Anything else other than finishing a basement?
25 A. In Maryland I put a deck, an outside deck, on a
13
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 home.
2 Q. And how about in the North Carolina property?
3 A. I didn't do anything to that.
4 Q. Didn't add a pool to any of those properties?
5 A. No.
6 Q. Didn't add an outside structure to any of those
7 properties?
8 A. No.
9 Q. In finishing the basement in Washington did you --
10 strike that.
11 The house in Washington, did you obtain any kind
12 of governmental approval for the work you did?
13 A. No, I didn't.
14 Q. So you didn't get a permit or anything like that?
15 A. No.
16 Q. How about for the deck in Maryland?
17 A. No.
18 Q. Did you do any improvements to the house in
19 Almaden, any kind of remodeling, additions, that sort of
20 thing?
21 A. No.
22 Q. Didn't add a pool?
23 A. I added a waterfall and landscaping. That was it.
24 Q. Did you get any permits for that work?
25 A. No.
14
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. Is it correct that the first permits that you've
2 ever obtained for any work you've done to a house related
3 to work that you did on the Blanchard property?
4 A. That's correct.
5 Q. Let's start out with the two Washington houses.
6 Do you recall if you had brokers assisting you in the
7 purchase of those properties?
8 A. Yes, I did.
9 Q. On both of them?
10 A. Yes.
11 Q. And how about on the sale of those two properties,
12 did you have a broker assisting you?
13 A. Yes.
14 Q. And how about the Maryland property, did a broker
15 assist you in the purchase of that property?
16 A. Yes.
17 Q. And also with the sale of the Maryland property?
18 A. Yes.
19 Q. And how about the North Carolina property, did you
20 have a broker help you buy that property?
21 A. Yes.
22 Q. And did you also have a broker help you sell that
23 property?
24 A. Yes, I did.
25 Q. I'm not sure what the protocol is in the U.K., but
15
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 did you have a real estate broker helping you with that?
2 A. Yes, I did.
3 Q. And did you have a real estate broker helping you
4 with the sale of that property?
5 A. Yes.
6 Q. When did you learn that you were going to be
7 moving back to the U.S. from the U.K.?
8 A. It was in the summer of 2001.
9 Q. And I would understand or believe that at some
10 point then you started looking to buy a house here in
11 California, true?
12 A. Yes, yes.
13 Q. When did you first start doing that?
14 A. I don't recall.
15 Q. What steps did you take to find a house?
16 A. I looked on the internet first. I called up on a
17 few homes and then engaged with a broker from Alain Pinel
18 and he showed me around to several homes, because I was
19 interested in the Saratoga/Los Gatos area and he
20 specialized more in Saratoga; but we looked at dozens of
21 homes, I would say, and this was while my wife was still in
22 London. So I was travelling back and forth to the U.S. as
23 I was finalizing what job I would take in the U.S. and we
24 spent time in both locations, about half time during the
25 summer of 2001.
16
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. Who was the broker from Alain Pinel that you
2 originally engaged?
3 A. Earl. I don't remember his last name.
4 Q. Do you remember what office he was in?
5 A. He was in the Saratoga office of Alain Pinel.
6 Q. Did you sign any kind of engagement agreement with
7 Earl?
8 A. No, I didn't.
9 Q. And when you first started looking at houses, did
10 you have any particular criteria in mind in terms of what
11 you were looking for?
12 A. Yes, I did.
13 Q. Can you tell me what the criteria was?
14 A. Well, there was a number of things that we desired
15 and some of these would be I guess negotiable you might say
16 or, you know, depending on what we found. But we were
17 looking for a new home or at least a newer home. Most of
18 the previous homes I had bought had all been new.
19 We were looking for four to five bedrooms,
20 obviously an upscale, you know, nice -- nice home with a
21 nice size property and we wanted either a pool or room for
22 a pool, and that was made clear to both Earl as well as the
23 selling broker, who was Douglas Rea from Coldwell Banker.
24 Q. Any other criteria that you were looking for?
25 A. There were other things that I described as
17
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 nice-to-haves but weren't mandatory, that if they had those
2 it would increase the value to me. For instance, a view we
3 desired but it wasn't mandatory. I let them know I liked
4 woodwork, you know, instead of painted trim and doors,
5 things like that, and again, not mandatory; and again, the
6 new home was desirable but not mandatory.
7 Q. Did you have any criteria in terms of garage
8 space?
9 A. Three-car garage.
10 Q. Did you have any particular hobbies that you
11 wanted to accommodate, like photography or woodworking or
12 auto working or any of that kind of stuff?
13 A. No.
14 Q. During the time you worked with Earl at Alain
15 Pinel, did you make any offers on any homes?
16 A. Yes, I did.
17 Q. How many?
18 A. One.
19 Q. Do you recall where that house was located?
20 A. I don't know the address, but it was in Saratoga.
21 Q. Do you still have any paperwork relating to that
22 offer?
23 A. I don't believe I saved any, no.
24 Q. Okay. Was your offer accepted?
25 A. No, it was not.
18
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. Was there a counteroffer to your offer?
2 A. Yes.
3 Q. And to your understanding, why didn't that deal
4 come together?
5 A. I'm not sure I understand.
6 Q. Well, did you ever enter into a contract to
7 purchase that property in Saratoga?
8 A. I made an offer but it wasn't accepted.
9 Q. And they made a counteroffer and did you accept
10 the counteroffer?
11 A. No. I countered to the counter and then that was
12 not accepted.
13 Q. Was the issue price?
14 A. Yes.
15 Q. Do you recall what the listing price was?
16 A. I don't recall the exact listing price.
17 Q. Can you give me your best recollection?
18 A. My best recollection was it was in the mid 4
19 million range.
20 Q. And do you recall what your offer was?
21 A. My initial offer was in the low 3 million range.
22 Q. Do you recall what the counteroffer was?
23 A. I think it was in the high 3 million range.
24 Q. And then you submitted a counter to that counter,
25 correct?
19
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 A. Right.
2 Q. And do you recall what that was?
3 A. I could be off by 100,000 or so, but I think it
4 was around 3.4 million was my counter.
5 Q. And it's your understanding that the sellers
6 deemed that too low and didn't counter?
7 A. No. At that point another buyer came in the
8 picture and I was told that other buyer would be offering
9 more than my 3.4 million, so I elected to drop out.
10 Q. And was there a reason why you elected to drop
11 out?
12 A. I felt that that was already getting toward the
13 maximum price that that home was worth and I didn't want to
14 get into a bidding war.
15 Q. Can you describe this Saratoga property for me
16 that you put an offer on?
17 A. Well, it was a brand new home. I recall it being
18 five-bedroom, four and a half bath, three-car garage with a
19 view on over one and a half acre, very close to the village
20 of Saratoga, so a desirable area; a brand new home with a
21 view and with the woodwork that I liked, you know, all the
22 wood trim and so forth.
23 Q. Do you recall the size of the house?
24 A. I recall it was in the -- I don't recall exactly.
25 It was in the mid 4,000 range.
20
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. Did that property have a pool?
2 A. It did not.
3 Q. Did that property have room for a pool?
4 A. Yes, it did.
5 Q. At least it was represented it had room for a
6 pool?
7 A. Yes.
8 Q. In looking at that property, did you make any
9 investigation as to what it would cost to install a pool at
10 that Saratoga property?
11 A. I did not.
12 Q. In your mind in what ways was the Saratoga
13 property either nicer or less nice than the Blanchard
14 property?
15 A. Well, it had a view. It had larger -- it was a
16 larger property. It was over an acre and a half. I don't
17 remember the exact amount. The fit and finish was nicer.
18 It had nicer trim work. Doors and windows and all that
19 were solid stained wood. It was a more dramatic looking
20 property when you enter it. It looked nice. So I thought
21 it was a nicer property that way.
22 Q. Okay. How about location? Was the location any
23 better or worse than the Blanchard property?
24 A. I would say it was equivalent.
25 Q. Did the Saratoga property have a guest house?
21
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 A. It did not.
2 Q. In your mind does a guest house add some
3 difference between the two properties?
4 A. Yes.
5 Q. In your mind was that significant?
6 A. Yes, it was. It was significant.
7 Q. And then total square footage, would the Blanchard
8 house be larger than the Saratoga house you looked at?
9 A. If you add the guest house, yes.
10 Q. And what about the landscaping? Was the
11 landscaping comparable between the two properties?
12 A. Yes.
13 Q. Do you know what that house eventually sold for,
14 the Saratoga property?
15 A. I do not.
16 Q. Any other houses that you placed an offer on
17 during the time you looked at properties with Earl from
18 Alain Pinel?
19 A. No.
20 Q. At some point you stopped using Earl?
21 A. Well, after that deal fell through, then I
22 immediately offered on the Blanchard home and so, yes, I
23 stopped using Earl at that point.
24 Q. Why did you stop using Earl?
25 A. Well, it's a bit of a story here.
22
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. That's okay. Tell me the story.
2 A. Okay. Earl specialized in Saratoga homes and my
3 wife came from London to take a look at homes and so I
4 arranged for her to meet with Earl and look at these homes
5 while I was working, and so she spent several days looking
6 at homes with Earl and he showed her a lot of the homes
7 that I had already seen plus some others and they were all
8 in Saratoga; and she let Earl know that she was also
9 interested in the Monte Sereno and Los Gatos area, and he
10 recommended against that and basically said he specialized
11 in Saratoga, that's what he recommends.
12 So she, my wife, decided to call up on some homes
13 in Los Gatos, and so she saw an advertisement for a home in
14 Los Gatos. I'm not sure which one. But she called up the
15 Coldwell Banker office that was listing it and happened to
16 talk to Douglas Rea and Douglas met her immediately. He
17 was in the office. He met with her and showed her around
18 to some homes.
19 And so I went back to Earl and said my wife is
20 interested in Los Gatos, also, so if we look at a home in
21 Los Gatos from another realtor, we're going to buy that
22 home from that realtor. If we buy one that you've shown
23 us, we'll buy from you. So there's no mistake that -- or
24 no misunderstanding on how we're going to do business on
25 that.
23
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. Okay. After your wife met with Mr. Rea, did Earl
2 show you any more homes?
3 A. Yes.
4 Q. You didn't make any offers on any more homes?
5 A. Well, we were looking at Los Gatos at the time we
6 made the offer, the first offer to the home in Saratoga.
7 Q. Ah, I see. Okay.
8 A. So we were looking at both together and trying to
9 determine which home to make an offer on.
10 Q. Okay. So at the time you made an offer on the
11 Saratoga home, you had already seen the Blanchard property?
12 A. Yes.
13 Q. Do you recall when you first -- let me get one
14 thing on the record.
15 Did Mr. Rea show you any homes other than the
16 Blanchard property? By you I mean just you, not your wife.
17 A. Well, not alone. With my wife he showed me many
18 homes, yes.
19 Q. Okay. How many homes do you think that Mr. Rea
20 showed you?
21 A. I don't recall, but over a dozen.
22 Q. So between the homes shown you by Mr. Rea and the
23 homes shown by Earl, you looked at maybe 24 homes?
24 A. Probably more than that.
25 Q. And out of those more than 24 homes that you
24
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 looked at, you ended up making offers on two houses,
2 correct?
3 A. Yes.
4 Q. Okay. Do you recall when you first looked at the
5 home on Blanchard?
6 A. Yes, I do.
7 Q. And who was there when you first looked at it?
8 A. Well, Douglas took my wife and I to see it. My
9 wife had already seen it herself with Douglas and they had
10 seen a number of homes, you know, the previous days, and
11 they narrowed it down to a few that they wanted to show me.
12 I believe this was a weekend. I'm not positive
13 but it was whenever I could get off work, either in the
14 evening or on a weekend; and so Douglas, my wife and I went
15 there and Lou Rae was there showing it as an open house.
16 Q. Before you saw the home, did Mr. Rea tell you
17 anything about the home on Blanchard?
18 A. Yes, he did.
19 Q. What did he tell you?
20 A. Well, he gave me a sheet of paper with a number of
21 homes that we were going to look at that day. So there was
22 a separate sheet, I recall, for each home that we looked at
23 that had a small map on where it was and some other
24 information. It looked like it was automatically generated
25 through the computer, but there was a separate page on each
25
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 home, and so there was a page on Blanchard. He didn't talk
2 a lot about it, but I asked him questions as we were
3 driving towards that home, and I had this sheet of paper in
4 my lap, you know, reading up on each home as we went to
5 those homes.
6 Q. Do you still have that sheet of paper?
7 A. No.
8 Q. What questions do you recall asking Mr. Rea as you
9 drove to the scene of the Blanchard property?
10 A. I don't recall.
11 Q. So I guess your general recollection is you had
12 some discussion with Mr. Rea about the Blanchard home and
13 its various attributes, but you don't remember specifically
14 what was discussed?
15 A. That's correct.
16 Q. Prior to the time you actually saw the house?
17 A. That's correct.
18 Q. Do you remember anything your wife told you about
19 the house prior to the time you actually saw the house?
20 A. The only thing I recall is she did like it and she
21 definitely wanted me to see this particular home, and I
22 believe it to be one of her top one or two homes that she
23 felt was something worth seeing.
24 Q. At the time you were driving to see the Blanchard
25 property, had you already seen the Saratoga property that
26
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 you had at some point made an offer on?
2 A. I don't remember.
3 Q. So as you sit here you're not sure which of the
4 two properties you saw first?
5 A. Oh. I know I saw the Saratoga property first. I
6 just don't recall if I made the offer before I saw the
7 Blanchard property or not. It was very close timing within
8 a matter of days because my wife was visiting from London
9 for only a week and a half, two weeks, during the early
10 part of August and she went back to London in mid August.
11 So I know there was not much time in there that we looked
12 at that and then made the offers.
13 Q. Okay. Well, I probably gave you an inartfully
14 phrased question because you told me exactly what I was
15 looking for.
16 You saw Saratoga first?
17 A. Yes.
18 Q. And then you saw Blanchard?
19 A. Right.
20 Q. And I take it the Saratoga property was high on
21 your list.
22 A. Yes, yes.
23 Q. And you just don't remember if you had already
24 made an offer at the time on the Saratoga property, at the
25 time you were going to look at the Blanchard property?
27
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 A. Yes. I'm not positive on the timing there.
2 Q. When you arrived at the Blanchard property, you
3 were accompanied by Mr. Rea and your wife, correct?
4 A. That's correct.
5 Q. And what's your wife's name?
6 A. Tomasina.
7 Q. And how long have you been married?
8 A. Thirty-three years.
9 Q. Do you have kids?
10 A. Three children.
11 Q. At the time you were looking at these properties,
12 did you expect your children would be living with you?
13 A. One of them, yes.
14 Q. That was I suspect your youngest, just guessing?
15 A. Yes, right.
16 Q. Okay. And is that the one with the BMW?
17 A. Yes.
18 Q. Okay. When you arrived at the Blanchard property,
19 based upon your testimony I understand you met Lou Rae
20 Kagel, correct?
21 A. Yes.
22 Q. Did you engage in any discussion with Ms. Kagel at
23 your first visit to the Blanchard property?
24 A. Yes, I did.
25 Q. Can you describe for me those discussions?
28
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 A. I had a number of discussions with Lou Rae over
2 the ensuing weeks until the closing of the property. So
3 what we discussed on the initial visit versus other visits
4 I couldn't -- I couldn't distinguish.
5 Q. How many times have you met with Lou Rae Kagel?
6 A. I don't recall.
7 Q. In addition to meeting with her, have you also had
8 telephone discussions with her?
9 A. I don't remember any telephone discussions with
10 Lou Rae. I'm not saying I didn't have them. I just don't
11 recall ever picking up the phone and calling Lou Rae. But
12 I did meet her at the property a number of times.
13 Q. I'm not quite sure how to phrase this. Typically
14 if you have a broker and you have a question, you talk to
15 your broker and you figure he goes and does something?
16 A. Right.
17 Q. It would be unusual for you to call the seller
18 broker directly, right?
19 A. That's correct, yes.
20 Q. Okay. Do you have any reason to believe that you
21 actually did have telephone conversations with Lou Rae
22 Kagel?
23 A. No, I don't.
24 Q. On these number of occasions that you met with Lou
25 Rae Kagel, do you remember any of the discussions you had
29
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 with her?
2 A. Oh, yes, I do.
3 Q. Okay. Why don't you describe those discussions
4 for me.
5 A. Okay. There were a number of discussions around
6 the attributes of the home. So I recall when I first went
7 there, there were some brochures sitting in the kitchen and
8 I picked one up, and I still have a copy of that. It
9 described the home as 5300 square feet. It described three
10 zones of heating and cooling. It said that the city says
11 it's okay to build an 800 square foot structure in the back
12 yard and it said it had fiber optics communications, among
13 a number of other things.
14 And so I recall walking out to the back yard and
15 examining the pool house, the yard itself, and outside the
16 pool house there was a flip chart stand, you know, one of
17 those big pieces of paper, and on different days going out
18 there, there would be different things written on that flip
19 chart stand. I recall some of them being, for instance,
20 "Almost an acre," exclamation mark, "Room for a pool,"
21 "City says" -- or something about it's okay to build or
22 city says put in an 800-foot additional structure; and I
23 recall several conversations with Lou Rae discussing our
24 requirement for the pool.
25 So Lou Rae went into detail about the pool, for
30
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 instance, telling me that the ideal spot for the pool,
2 which was along the back fence where there was some
3 landscaping put in, including a couple of rows of
4 grapevines; and she described that as an ideal spot for the
5 pool because it was right outside the pool house and it was
6 also visible from the main house, which she pointed out.
7 She told me that the seller was going to put in a
8 pool but decided not to, and when I asked why she said,
9 well, the seller thought it would be better for whatever
10 buyer to design their own pool.
11 And so she walked out in the back yard with me and
12 my wife on a number of occasions, at least twice that I
13 recall, showing me that location; and when my wife
14 described possibly putting in a waterfall falling into the
15 pool, she said that would be great, so you could see it
16 from the family room of the house.
17 I recall she also told me that the seller was
18 planning on putting in a sport court but decided against
19 that, and I recall my wife asking Lou Rae and Lynn when
20 they were both there on one occasion about putting in both
21 the pool and the additional structure. They were both
22 there, both saying yes, you can do both, and my wife was
23 wondering, well, where would that go in this back yard.
24 And so we went out to the back yard and Lou Rae
25 and Lynn were both there pointing out where they would
31
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 recommend putting the pool as well as the 800-square-foot
2 structure, and what they pointed out was an area -- two
3 different areas for the 800-square-foot structure. One was
4 to the right-hand side of the rear yard, so as you exit the
5 rear door the pool would be straight ahead and the
6 800-square-foot structure I was told could be put just to
7 the right of that next to a large tree, or more ideally,
8 they recommended that I go behind the pool house.
9 I have a bit of a pie-shaped lot and it was
10 described that would be the ideal spot because there was
11 some room behind this pool house, and Lou Rae even told me
12 that I could extend my driveway and put a driveway -- put a
13 garage in this 800-square-foot structure and extend the
14 driveway to this garage; and in fact our driveway ends
15 abruptly and the pool house goes off on an angle, so it
16 does look like the driveway was made to continue on and
17 could continue on to the very rear of the property.
18 She also described three zones of heating and
19 cooling, so I asked what those three zones were. She told
20 me that one zone was the main living areas of the main
21 house, the second zone was the bedroom area of the main
22 house and the third zone was the pool house.
23 So I looked at the pool house and in fact it had a
24 thermostat that was identical to the one in the main house.
25 It has a switch for cooling and heating, so I turned it to
32
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 cooling just to see how the air conditioner would work, and
2 it didn't work.
3 So I went back into the house, into the main house
4 where Lou Rae was, and asked her about the air conditioning
5 in the pool house and she said, oh, it's there; and I said,
6 well, I didn't see an air conditioning unit and she said
7 did you look at the back of the pool house. I said yes, I
8 did. And so she said, no, it's there. Let's go there and
9 see.
10 So we walked around the pool house and of course
11 there was no air conditioning unit there. So she starts to
12 walk back into the main house and said, oh, it must be on
13 the roof.
14 And I said, Lou Rae, let's look again, because we
15 can see the entire roof if we walk around this house again.
16 So we walked around the house at a little wider angle and
17 it was obvious there was no air conditioning unit on the
18 roof.
19 At that point she said, well, it must be in the
20 garage or in the attic and, of course, I looked in the
21 garage; it wasn't there. She said, well, it's in the
22 attic. Don't worry about it, it's there. My husband is a
23 builder.
24 And when I -- well, before that I questioned
25 whether or not they would put an air conditioning unit -- I
33
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 said I had never heard of an air conditioning unit being
2 put in an attic before and she said don't worry, my husband
3 is a builder. I know that's commonly done. And that was
4 the end of the discussion and she walked back in the house.
5 Q. Anything else you remember discussing with Lou Rae
6 Kagel?
7 A. Let's see. I remember her saying for the pool, if
8 we put the pool where she recommended, we wouldn't have to
9 cut out any grass because it was all barked in and there
10 was some plants there, but it was -- it was -- the grass
11 was, you know, at an angle there where you would have room
12 to put a pool without removing any grass; and the grass, of
13 course, was sprinklered and all that, so it made a
14 convenient place to put the pool, and Lou Rae let me know
15 that that also made it an ideal spot to put the pool.
16 So we had a number of discussions around the pool.
17 It was very clear that this was a requirement. Douglas Rea
18 knew that it was a requirement. Earl knew that it was a
19 requirement for any house that we were looking at.
20 And so -- and my wife had a number of discussions
21 with Lou Rae in my presence and outside my presence,
22 because she went there a number of times without me and
23 those discussions were about the pool and other items.
24 Q. Well, where did you eventually install the pool?
25 A. In that same location Lou Rae recommended.
34
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. And the conversations you've now described to me
2 took place over what period of time?
3 A. From the time we first saw the property, and I
4 don't have the date for that but it was in August, the
5 first half of August, through until we closed on the
6 property at the end of September.
7 Q. The original offer you made on the Blanchard
8 property was on August 15, 2001?
9 A. Um-hum.
10 Q. Do you recall in relation to that date when you
11 first looked at the property?
12 A. It would have been within the previous I believe
13 two weeks or so.
14 Q. So these discussions you've described for me
15 now -- well, the closing was what, at the end of September?
16 A. Yes.
17 Q. So roughly a two-month period?
18 A. Right.
19 Q. And over that two-month period, can you give me an
20 estimate of how many times you had discussions with Lou Rae
21 Kagel?
22 A. I don't recall.
23 Q. Well, the first time you went was for an open
24 house, true?
25 A. Yes.
35
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. Do you have an estimate of how many times you went
2 to the house after that open house but before the close of
3 escrow?
4 A. I'd be guessing, but my guess is -- I was staying
5 in the hotel in Los Gatos, so it wasn't too far away, but I
6 was working full time. I was also out of town -- I was out
7 of the country for a number of days during this period. I
8 went back to London for a week. I went to Hawaii for
9 several days. So if I take the entire two-month period, I
10 was gone for about a week and a half of that period out of
11 the country. For the rest of the period I was looking at
12 other homes, especially that first two weeks while my wife
13 was visiting.
14 So I would say after my wife -- or after I
15 returned from London, which was in late August, up until
16 the closing, I probably saw the property maybe every third
17 day or so. Just -- in some cases no one was there. It
18 would be late and it would be after work and I'd just walk
19 around the back just to see what it looked like, maybe look
20 in a few windows. Other times Lou Rae would be in and I'd
21 go in because it would be an open house and I'd take a look
22 around the property.
23 I recall my wife wanted me to get some
24 measurements of the windows once and so I measured some of
25 the windows for her, and asked me about wall space in a
36
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 couple of rooms to see if -- she was thinking about, you
2 know, placing furniture.
3 And I recall one time the seller was there instead
4 of Lou Rae, and actually this was with my wife there, also.
5 So one of the times we stopped by there sort of
6 unannounced, the seller was having an open house instead of
7 Lou Rae. So I don't know the exact numbers but it's in,
8 you know, that kind of range.
9 Q. It sounds like you went to at least three open
10 houses?
11 A. It would have been more than that probably. It
12 seemed like Lou Rae was there quite a lot, because I would
13 just drive by unannounced without setting up an
14 appointment, and without Douglas necessarily with me.
15 Douglas was there with me a few times. I would guess Lou
16 Rae was there maybe half a dozen times or thereabouts.
17 Q. So you think you went to half a dozen open houses
18 in which Lou Rae Kagel was there?
19 A. Well, I don't want to characterize them all as
20 open houses. One was a walk-through, so she was there for
21 a walk-through, I believe. So I'm not exactly sure what
22 the purpose was. You know, it may have been arranged by
23 Douglas for her to be there and it wasn't necessarily open
24 to the public. I don't know. I don't really recall.
25 Q. Okay.
37
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 A. But I'm just guessing somewhere around half a
2 dozen. I could be off on that.
3 Q. And then on one occasion you went to the property
4 and Lou Rae Kagel and the seller were there?
5 A. Yes.
6 Q. And by the seller, you mean Lynn O'Brien?
7 A. Yes.
8 Q. And on another occasion you went to the property
9 and Lynn O'Brien was there?
10 A. Yes.
11 Q. Any other occasions on which you met Lynn O'Brien
12 at the property?
13 A. No. Those were the only two that I met her.
14 Q. And on some of these occasions, Douglas Rea was
15 present, some he wasn't?
16 A. That's correct.
17 Q. Let me go through some of the stuff you said was
18 told to you by Lou Rae Kagel. You mentioned you picked up
19 her brochure and it had some information written on it?
20 A. Yes.
21 Q. And then you saw a flip chart and that had some
22 information written on it?
23 A. Yes.
24 Q. Those aren't discussions you had with Lou Rae
25 Kagel?
38
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 A. Yes, they were.
2 Q. Did you go over the brochure with Lou Rae Kagel
3 kind of on a line-by-line basis to discuss the attributes
4 of the house?
5 A. No. She gave me the brochure though and she
6 discussed the attributes of the house non stop you might
7 say, to both myself and my wife.
8 Q. Did you ever have a discussion with Lou Rae Kagel
9 about the square footage of the house?
10 A. I don't recall.
11 Q. Did you ever have a discussion with Lou Rae Kagel
12 about the size of the lot?
13 A. I don't recall. I recall having those discussions
14 with Douglas Rea.
15 Q. Did you ever have any discussion with Lou Rae
16 Kagel about fiber optics?
17 A. I don't recall.
18 Q. What are fiber optics?
19 A. It's a communication cabling that uses light
20 instead of electricity, so it's much more secure and can't
21 be tapped like copper wiring, which is in the home, and
22 it's much faster, on the order of thousands of times
23 faster. So it's a way to provide future capabilities in a
24 home that would allow for video and audio over a computer
25 wire that is much faster than copper wire.
39
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. In looking at the house, to your understanding how
2 would one tell whether it does or doesn't have fiber
3 optics?
4 A. I don't know.
5 Q. To your understanding are there different switch
6 plates or anything like that that would signal a house has
7 fiber optics as opposed to some other cabling system?
8 A. I have not seen a switch plate for fiber optics,
9 so I would not have known.
10 Q. Were fiber optics of interest to you as an
11 attribute of the house at the time you looked at this
12 house?
13 A. Yes.
14 Q. For what reason?
15 A. Well, we're in Silicon Valley and obviously buying
16 a new home, I'd be in it for a number of years and this
17 would future-proof the home for any future technology that
18 comes along that requires higher band width; and the band
19 width of fiber optics I knew to be many, many times, in the
20 order of thousands of times faster than copper.
21 Q. At some point after you closed escrow, did you
22 discover that the house did not have fiber optics?
23 A. Yes, I did.
24 Q. How did you discover that?
25 A. I had a colleague come to my home who installed a
40
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 router in my home, which is a connection device to the
2 internet, and he had some test equipment that works on
3 electricity that he can test out which wires go to which
4 rooms, and he discovered that every wire in the house was
5 electrical copper wire, and he pointed that out to me.
6 Q. Who is that person?
7 A. His name is Steve Cunningham.
8 Q. Do you know what his employment is?
9 A. I believe he's still with Cisco.
10 Q. What kind of work does he do for Cisco?
11 A. I don't know his latest job. He's a personal
12 friend and he came over on the basis of being a personal
13 friend to help me out.
14 Q. Okay. I guess this is what I'm getting at. If I
15 came over to your house and said it doesn't have fiber
16 optics, I'd be talking through my hat.
17 How in your estimation does Steve know what he's
18 talking about?
19 A. He's a very technical person and that's why I
20 called him over, so he helped me configure my router, which
21 I didn't know how to do. I'm not that technical, but he's
22 very technical. In fact, the test equipment was his
23 personal test equipment, and he helps others in Cisco
24 connect up to the internet and connect up in fact directly
25 to Cisco; so that I have a direct connection, including IP
41
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 telephony and so forth, which means I can have a phone
2 service down to my home that goes through my office switch
3 and it's through data lines through DSL. All my long
4 distance calls, for instance, are free and so forth.
5 Q. Did you tell Mr. Cunningham that you had fiber
6 optics?
7 A. I asked him if I had fiber optics. I didn't tell
8 him I had it. I asked him.
9 Q. And at the time you asked him, did you have some
10 doubts about whether or not the house had fiber optics?
11 A. Yes, I did.
12 Q. And why did you have those doubts?
13 A. Because every wire I saw coming out of the wall
14 was copper wire and I didn't know if that meant it went to
15 fiber inside the wall somewhere, but I had my doubts.
16 Q. Okay. And when did you first notice that all the
17 wires coming out were copper wires?
18 A. I don't recall. I think it was in that period
19 before we closed on the house, though.
20 Q. Okay.
21 A. Because I mentioned this to Douglas Rea, that I
22 questioned that.
23 Q. And what was Mr. Rea's comment to you?
24 A. I don't recall.
25 Q. So let me try and nail down the fiber optics.
42
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 So at some point during the due diligence phase,
2 is that a fair characterization, you noticed that there
3 were copper wires coming out of the wall and you asked
4 Mr. Rea about that?
5 A. Um-hum.
6 Q. Correct?
7 A. Yes.
8 Q. Do you remember exactly what words you said to
9 Mr. Rea?
10 A. I don't recall, no.
11 Q. Can you paraphrase for me what you said to
12 Mr. Rea?
13 A. It was something to the effect of, you know, this
14 is advertised as having fiber optics and I don't see any
15 fiber optics; and I questioned him, do you know for sure if
16 fiber optics is installed, and I kind of doubt it, is what
17 I think I told him.
18 Q. Okay.
19 A. And he said no, he doesn't know. He didn't offer
20 to look into it. He didn't -- I don't recall him ever
21 coming back to me, verifying it either way.
22 Q. And you don't recall raising the issue of fiber
23 optics with Lynn O'Brien?
24 A. I don't recall that, no.
25 Q. And you don't recall raising the issue of fiber
43
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 optics with Lou Rae Kagel?
2 A. No.
3 Q. Have you ever met James O'Brien?
4 A. No.
5 Q. Have you ever talked to him?
6 A. No.
7 Q. Now, since you've configured your router with the
8 help of Mr. Cunningham, have you done anything to
9 investigate how you would install fiber optics in your
10 home?
11 A. No.
12 Q. Is there a reason why you haven't done that?
13 A. Because the cost -- I know that the cost of doing
14 so would be very prohibitive in a finished home. I'm not
15 an expert in fiber optics, but I do know that it's a much
16 more costly installation than wire, regular wire cable,
17 because you can only have bend radiuses of a certain amount
18 and you can't have a lot of pull on these kind of cables
19 because they're made of glass and you can break them very
20 easily.
21 And as you connect fiber together, you have to
22 have a specialist do this work. So it's quite a costly
23 thing and, you know, to put it into a home after it's
24 already built is -- I would call it very prohibitive.
25 Q. Did Mr. Cunningham tell you that the absence of
44
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 fiber optics would somehow lessen the performance of your
2 computer system and your router?
3 A. No.
4 Q. In your view does the absence of fiber optics
5 somehow impede your computer system or your router?
6 A. Not today. In the future very likely. But the
7 main thing is it reduces the value of the home.
8 Q. And why do you believe that?
9 A. Because, for instance, it was advertised on the
10 brochures and in the magazines and so forth as having fiber
11 optics. A home in Silicon Valley where there are a number
12 of high tech people, that's obviously a selling point; and
13 I've seen things on the internet which describe increasing
14 the value of your home at the time you build it.
15 Especially by putting in fiber optics will raise the value
16 of a home by many percent.
17 So it's a selling point. It future proofs your
18 home, or whatever capability comes in the future, we know
19 that networking is a very fast growing industry and band
20 width is growing rapidly and the needs for band width is
21 growing rapidly and fiber optics protects, you know, the
22 future that way.
23 It's also a more secure connection. It's not
24 influenced by electrical power surges and things like that,
25 so it's more reliable. So it's a much better connection
45
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 and that's why it was advertised, I'm sure. Otherwise, why
2 advertise fiber optics connectivity in the brochures?
3 Q. Do you have an opinion as to what difference fiber
4 optics would make in the value of your home at the time you
5 purchased it?
6 A. I was not sure. I don't know. But I felt that it
7 added value to the home, yes.
8 Q. Do you have an opinion in terms of the amount?
9 A. No, I don't know.
10 Q. Do you have an opinion today as to how the lack of
11 fiber optics affects the value of your home?
12 A. I don't know.
13 Q. Now, we went through a list of attributes when you
14 were looking at houses. Is it correct that fiber optics is
15 not one of the attributes you were looking for?
16 A. That's correct.
17 Q. It's something that was nice to have but wasn't a
18 significant feature to you?
19 A. It wasn't a required feature but it was definitely
20 nice to have.
21 Q. Prior to the time you closed escrow, did you have
22 any understanding as to how you could verify whether or not
23 there were fiber optics in the house?
24 A. I never had that discussion with anyone.
25 Q. As you sit here today, do you know how you would
46
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 verify whether or not there's fiber optics?
2 A. Yes, I know now, yes.
3 Q. And that would be you'd do whatever test
4 Mr. Cunningham did?
5 A. Yes.
6 Q. Let me get back to the discussions that you had
7 with Ms. Kagel. Did you discuss -- strike that.
8 You indicated that a pool was one of the
9 requirements you had in looking for a house, correct?
10 A. Yes.
11 Q. Did you discuss with Ms. Kagel what kind of pool
12 you envisioned?
13 A. I believe my wife did. I did not. Because I
14 remember her mentioning like a Jacuzzi and waterfall
15 features in a pool, but I don't know if they went into
16 details about what the design would look like.
17 I think my wife was -- had not made up her mind
18 yet on the exact design of the pool or anything like that.
19 Q. And you think your wife had this discussion, and
20 why do you think that?
21 A. Well, I was there when she had some of that
22 discussion. I remember her mentioning the waterfall and
23 seeing it from the family room. So the location that Lou
24 Rae pointed out, you know, was visible from the family room
25 looking straight out the rear glass doors.
47
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. And you think your wife may have also mentioned
2 something about a Jacuzzi but you're not sure?
3 A. I'm not sure about that.
4 Q. The pool you've installed, does it have a
5 waterfall feature?
6 A. Yes.
7 Q. And does it have a Jacuzzi feature?
8 A. Yes.
9 Q. Did you discuss with Ms. Kagel the size of the
10 pool you envisioned?
11 A. No, we did not.
12 Q. What size of a pool did you eventually put in
13 dimensions?
14 A. The dimensions? It's an odd dimension you might
15 say. There is a center rectangle with some half moons on
16 the end. The entire length is in the mid 40 feet range and
17 the width is low 20 feet, around 20 feet or 22 feet or
18 something like that at the widest section.
19 Q. And the discussion you had with -- about the pool
20 you had with Ms. Kagel, about there being a potential site
21 for a pool, correct?
22 A. Yes.
23 Q. And you also had that discussion with Lynn
24 O'Brien?
25 A. Yes.
48
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. Who was present when you had the discussion with
2 Lynn O'Brien?
3 A. My wife and Lou Rae.
4 Q. Was Mr. Rea there, also?
5 A. I don't recall.
6 Q. Was the discussion you had when Ms. O'Brien was
7 there the first discussion you had with anybody about the
8 ability to put a pool on the Blanchard property?
9 A. No.
10 Q. You had previously had a discussion with Lou Rae
11 Kagel?
12 A. Yes.
13 Q. Is there a reason why you brought up this pool
14 issue with the seller?
15 A. My wife brought it up and that was when she asked
16 the question can we do both the pool and the
17 800-square-foot structure, and the answer that came back
18 was yes, and I was there. I don't recall whether it was
19 Lou Rae or Lynn that said yes, but whoever said yes, the
20 other person nodded vigorously in the affirmative.
21 Q. Okay.
22 A. And then we went out in the back yard, and the
23 reason my wife asked the question was she wasn't sure where
24 an 800-foot-structure would fit. If you put the pool where
25 it was described as the ideal location, that would be, you
49
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 know, a nice location for a structure that wouldn't block
2 windows and things like that, and that's when it was
3 described to me that we could put it in the right hand rear
4 of the property or in the very back left corner behind the
5 pool house.
6 Q. And who was the person who described to you that
7 you could put the 800-foot-structure on the right-hand side
8 of the property?
9 A. It was Lou Rae.
10 Q. And Ms. O'Brien was there at the time?
11 A. Yes.
12 Q. Did she have any suggestions on where the
13 800-foot-structure could be put?
14 A. I don't recall what she said.
15 Q. Was there any discussion about what was meant by
16 an 800-square-foot structure?
17 A. Yes.
18 Q. And who did you have those discussions with?
19 A. With Lou Rae.
20 Q. And that was in the presence of Ms. O'Brien?
21 A. I don't believe so. The use of the structure, I
22 had several conversations with Lou Rae, but that was not at
23 the time, I don't believe, with Lynn there.
24 Q. Now, have you put in an 800-foot structure?
25 A. I'm not allowed to.
50
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. So I take it then you haven't done that.
2 A. No.
3 Q. Have you made application to any government entity
4 to put in an 800-square-foot structure?
5 A. I was told I would not be allowed to, so it would
6 be useless to put, you know, anything in.
7 Q. At some point in the process, did you hire a
8 contractor to help you -- strike that.
9 At some point did you hire an architect or a
10 contractor to help you design and build a pool?
11 A. Yes.
12 Q. Who did you hire?
13 A. Swan Pools.
14 Q. Anybody else?
15 A. Well, we looked with a couple of other pool
16 companies and then we selected Swan Pools to actually do
17 the design and so forth. So we got quotes, you might say,
18 from two other companies.
19 Q. And when did you get a quote from Swan Pools?
20 A. I don't remember exactly when but it was in -- it
21 would have been late 2002 or early 2003. I believe it was
22 in late 2002 that we got the quote from Swan Pools.
23 Q. At the time you got the quote from Swan Pools, had
24 you already gotten quotes from other contractors?
25 A. We got all three of them around the same time, so
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 I don't remember exactly the time.
2 Q. When did you first start talking to contractors
3 about building a pool on the property?
4 A. It was a fairly long process, actually, so my wife
5 did all of this, so I didn't really speak much to them, six
6 to nine months before we got the quotes.
7 So in other words, she went to visit some of the
8 homes that they had built homes for -- I'm sorry, pools
9 for. So she wanted to see the type of work they did. She
10 got -- she talked over the phone to some of the people that
11 had pools built to see their satisfaction level and she
12 also spent some time going to look at different types of
13 tile, stone. I recall going to building supply places
14 looking at tile and stone a number of times.
15 So she was really heavily involved in the creative
16 design of the pool, including some of the features around
17 what types of heater and things like that would be
18 desirable and what type of surface to put inside. For
19 instance, a Pebble Tek is what we went with on the inside
20 of the pool.
21 So she did quite a bit of that type of work and
22 she enlisted my help in actually drawing it out. So she
23 did the final design of the Jacuzzi pool and the waterfall
24 feature and worked with Swan Pool at the end, but it was
25 our exact dimensions that we used, you know, in the final
52
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 construction of the pool.
2 Q. And after -- I assume you moved into the house
3 shortly after you closed escrow.
4 A. Yes.
5 Q. How long after you moved into the house did your
6 wife start investigating building the pool?
7 A. Probably within a few months.
8 Q. And then by the fall of 2002, you started getting
9 bids to build the pool?
10 A. Yes.
11 Q. And the contract you selected was Swan?
12 A. Yes.
13 Q. After you selected Swan, did they put together
14 drawings and plans for you?
15 A. Yes, they did.
16 Q. And I take it at some point you approved their
17 drawings and plans.
18 A. Yes.
19 Q. And after that were the drawings and plans
20 submitted to the City of Monte Sereno?
21 A. Yes.
22 Q. And is that when you discovered that there was a
23 problem?
24 A. Yes. It was quite a bit after that. It took
25 quite awhile after the submission of the plans before I
53
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 knew that there was a problem.
2 In other words, I authorized them to go forward.
3 I gave them an initial deposit so they could get started on
4 the work, and I don't recall how long but it was a month to
5 a month and a half later that I finally heard that there
6 was a problem in getting the building permit.
7 Q. Now, the plans that Swan did were for a pool with
8 a waterfall and Jacuzzi?
9 A. Yes.
10 Q. Did the plans also include an 800-square-foot
11 structure?
12 A. No.
13 Q. Is there a reason why they didn't?
14 A. Well, Swan only builds pools. They don't build
15 buildings.
16 Q. Did you investigate having someone design and
17 construct an 800-square-foot structure for you?
18 A. No.
19 Q. Is there a reason why not?
20 A. I wasn't in a hurry to do such a thing.
21 Q. As you sit here today, if you could put up an
22 800-square-foot structure, what would you envision that
23 structure to be?
24 A. Well, I would envision it to be similar to the
25 pool house we have. The pool house is a self-contained
54
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 apartment, you might say, which has a one-car garage, a
2 bedroom and a bath, a living room and a full kitchen, and
3 full meaning, you know, with a side-by-side refrigerator, a
4 microwave, a full range, dishwasher, slab granite
5 countertops. I mean it's fit and finish just like the main
6 house.
7 So I could envision -- and this pool house
8 including the pool is 900 square feet. So 800 could be
9 very similar, maybe without a kitchen. I don't know that
10 another kitchen is desirable, but I could then use it as
11 another spare bedroom and maybe an office, you know.
12 I recall having that conversation with Lou Rae
13 where she described this as the capabilities could be to
14 use it as a workshop, an artist studio. You could put in a
15 four-car garage and have a showroom and have antique cars,
16 which greatly interested my son. So there was a great deal
17 of discussion around what this additional structure could
18 be.
19 Q. Did you ever discuss with Lou Rae that you could
20 build an additional guest house structure like already
21 existed on the property?
22 A. It wasn't described as a guest house. She
23 described it as you could put in a spare bedroom, you could
24 put in an office. So she described a number of uses for
25 this structure.
55
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. Now, before you closed escrow, did you talk to
2 anybody at the City of Monte Sereno in terms of what you
3 could put on the property?
4 A. No, I did not.
5 Q. Did you hire any consultants to find out what you
6 could put on the property?
7 A. No, I did not.
8 Q. Did you talk to any pool contractors in terms of
9 what kind of pool you could put on the property?
10 A. I did not.
11 Q. Now, up to the time that you approved the plans
12 with Swan, had you talked to anybody at the city?
13 A. I did not.
14 Q. Who was the person that made application to the
15 city to approve the plans for your pool?
16 A. Swan did.
17 Q. And who at Swan?
18 A. I don't know.
19 Q. Did you have a contact person at Swan?
20 A. I had a contact person, but I'm not sure if he's
21 the one that took it to the city.
22 Q. Who was your contact person at Swan?
23 A. Mike something. I don't recall his last name.
24 Q. Do you know where Swan Pools is located?
25 A. Yeah. I visited there, their office, but I don't
56
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 recall -- because I visited all three offices of these
2 companies that -- well, at least two of the three I can
3 recall going to, and so I don't recall the exact address of
4 Swan, but they're not too far from our house.
5 Q. Okay. So Los Gatos area?
6 A. Yeah, Los Gatos or -- it might have been Campbell
7 or somewhere within a few miles of our house.
8 Q. And at some point somebody from Swan Pools
9 reported back to you that there was an issue with the city
10 approving the plans?
11 A. Yes. I had to keep calling Swan to find out what
12 the delay was and they just said the city takes awhile
13 sometimes, and finally after bothering them maybe once a
14 week for a number of weeks they finally came back and said
15 we're having a problem with the building permit, and this
16 was maybe a month or a month and a half somewhere in that
17 range after they had already submitted the plans to the
18 city. So it took quite a while before they came back to me
19 and let me know that there was a problem. I think they may
20 have known before that, but I didn't know.
21 Q. When Swan Pools looked at your house, did they
22 indicate to you they thought there would be any problem in
23 getting the plans approved?
24 A. They didn't. Not that I know of, no.
25 Q. And he didn't mention any foreseeable problem with
57
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 too much impervious surface on your property?
2 A. No.
3 Q. And I take it that is what you found out was the
4 problem, was too much impervious surface on the property?
5 A. Yes.
6 Q. You were able to rectify that problem?
7 A. No. I was able to get a variance, you might say,
8 to that problem. It wasn't a true official variance, but I
9 negotiated with the city and they allowed me to put in the
10 pool in a way that -- in which I stayed over the impervious
11 structure limit but it gave me the ability to put in a
12 pool. So I had to negotiate with the city to do that.
13 Q. And is that something you personally did?
14 A. Yes.
15 Q. Do you remember who you met with at the city?
16 A. Yes. I met with Brian Leventhal. I'm not sure of
17 the spelling of that, but he is the -- he was described to
18 me -- I don't know his exact title in the city, but the
19 city is very small. I mean there's only a few people
20 there.
21 But he was described to me as the only person that
22 makes these kind of decisions at the city, and so I talked
23 to him over the phone. I talked to a couple of other
24 people at the city over a few days. But I was told I had
25 to come in and I had to meet with Brian in order to
58
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 understand what the options could be and there was nobody
2 else that was going to make that decision.
3 Q. And when you met with Brian Leventhal, did he
4 explain to you what the options might be?
5 A. Yes. But first he explained what the problem was.
6 Q. Okay. Why don't we start with that. What did
7 he -- this was on a phone conversation?
8 A. On the phone conversation, yes.
9 Q. And what did he tell you was the problem?
10 A. He told me that the problem was I was already over
11 the limits that were for impervious structure.
12 I had never heard the term "impervious structure"
13 to my knowledge at this point, so I didn't know what he was
14 talking about. Well, I can understand what impervious
15 structure means. I mean rain doesn't go through it and so
16 forth, but I didn't know exactly what would be included in
17 an impervious structure.
18 But he told me that I was already over the limit,
19 so in order to put in a pool or anything else that was
20 impervious, I would have to remove an equivalent amount of
21 hardscape.
22 And so -- and he said so in order to discuss this,
23 come out, we'll discuss it and I'll show you why, you know,
24 your application is being denied.
25 Q. Now, over the phone did Mr. Leventhal tell you how
59
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 he was able to make these calculations?
2 A. No.
3 Q. Did he tell you what documents he was looking at
4 which allowed him to make these calculations?
5 A. Well, he told me he was basing his -- he didn't
6 say it this way, but when I went there it was clear he was
7 basing it on the measurements given to him by Swan Pools.
8 Q. Okay. Well, why don't we move on to that.
9 You had a meeting with Brian Leventhal?
10 A. Yes.
11 Q. More than one or just the one?
12 A. I talked to him on the phone first and then I had
13 I believe just one in-person meeting with him.
14 Q. Can you describe for me what was discussed between
15 you and Mr. Leventhal at that meeting?
16 A. Okay. He first described -- he showed -- I recall
17 he showed me the map that Swan Pools had given him, which
18 was the same map that I had, which was a map of the
19 property and it showed the impervious structures on the
20 property; and he showed me that I was roughly 900 square
21 feet over the impervious structure limit already.
22 So what he told me was in order to put the pool
23 that I want on this property, I would have to first remove
24 900 square feet of impervious structure and then for every
25 square foot that I want to add for a pool, I have to take
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 away another foot of impervious structure.
2 The original plans we had was for over -- I don't
3 recall the exact amount but it was over 2,000 square feet
4 of impervious structure with the pool and the decking
5 around it, or the patio space around the pool, and so what
6 that meant was I was going to have to remove close to 3,000
7 square feet of impervious structure.
8 And so we discussed it a little bit and he quickly
9 told me that one of my options was to use cobblestone or
10 paver stones instead of solid concrete and he said paver
11 stones count as 50 percent of the impervious structure
12 instead of concrete. So for instance, the patio space that
13 I had envisioned around the pool which I was going to use a
14 combination of stone and concrete, he said if I used
15 cobblestone, that would count at half the amount.
16 And I said okay, that's one way to save some of
17 the space that's, you know, required for the pool; and he
18 said and also if you want to replace some of your patio
19 space or driveway with cobblestones, then you can do that.
20 So I looked at the amount of space that was --
21 would have been required and it would still have been very
22 difficult to install the pool as we had designed it. Even
23 including, you know, taking out the entire driveway,
24 including the turnaround in front of the house, I was still
25 short.
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 And at this point I recall I took with me some of
2 the marketing brochures that Lou Rae had given me and said,
3 look, when I bought the property it was described to me as
4 being able to build a pool; and he just laughed at that and
5 said, well, you know, I'm sorry you're in this mess but
6 this is -- this is not -- you know, not the city's problem,
7 you know, so this is what it requires.
8 But he did, I could tell, feel sorry for me about
9 this and at some point said, okay, you're roughly,
10 whatever, 900 square feet over the limit. If you can
11 remove enough square footage of hardscape, replace it with
12 paver stone and stay no more than 900 square feet over the
13 limit, then I'll allow you to do that so you're not any
14 worse off than where you are today.
15 And so I did some calculations right there in his
16 office and said, okay, that means if I get rid of the
17 driveway and the turnaround in front of the home and
18 replace it with cobblestone, that's about the size of the
19 pool and the decking; if I use cobblestone for the decking,
20 also, that will that all work.
21 And he said yes, it will. And he said write that
22 up in a letter and if the numbers work out, he said, I will
23 approve that.
24 Q. Okay.
25 A. And so that's what I did.
62
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. Okay. You sent him a letter saying here's what I
2 propose to do and then the city approved the pool?
3 A. Yes. And before I sent the letter, I did talk to
4 Swan Pools and we described what our options were. We did
5 look at, for instance, instead of replacing the driveway
6 and the turnaround, replacing the patio space. The patio
7 space was not enough. There was less patio space than the
8 driveway space.
9 And the patio space would have been more of a
10 problem, also, because the configuration of our house being
11 a U in the back, to remove that patio space -- there's a
12 second level stairway for a higher elevation, you know,
13 coming right out of the house all the way along the back
14 and then it steps down to the main part of the patio; and
15 so that's not conducive, you know, to putting in
16 cobblestone. Plus, you'd have to cut concrete and those
17 kind of things.
18 In addition, we did look at this but it wasn't
19 enough square footage. Some of the patio space was under a
20 roof and that, even if you remove the concrete, doesn't
21 help because the roof counts as impervious structure.
22 So we were down to very obviously the only thing
23 we could do was remove the driveway and the turnaround
24 space.
25 Q. Okay. And you spent some additional money doing
63
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 that, correct?
2 A. Yes.
3 Q. Okay. What was the surface that you originally
4 had envisioned for the pool decking?
5 A. I had envisioned a colored concrete with some
6 stone, a mixture of stone, you know, around the edging and
7 a few other places with colored concrete.
8 Q. And instead you had now cobblestone set on sand?
9 A. Yes.
10 Q. Is in your mind that a superior or inferior
11 finish?
12 A. Inferior.
13 Q. In what sense?
14 A. Well, from an esthetic point of view we don't
15 think it looks as nice, and from a functional point of
16 view, you know, you have chairs and lounge chairs and
17 things like that and, you know, it's a bit uneven when the
18 legs go into these crevices between the cobblestones.
19 And I have a maintenance issue. I've got to pull
20 out weeds between these things every once in a while.
21 Q. Could you use a surface other than cobblestone,
22 for instance, slate on sand or something like that?
23 A. That was not offered to me as an opportunity to do
24 that, no. I didn't ask, but Brian Leventhal only offered
25 the option of using pavers or cobblestones.
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. And how long was your application process delayed
2 while you worked this out with Mr. Leventhal?
3 A. Well, with Mr. Leventhal I'm not sure how much it
4 was delayed before I got involved. But from the time I
5 first called Mr. Leventhal until I got an approval, it was
6 probably a couple of months.
7 Q. Okay. And when did the construction actually
8 start on the pool?
9 A. Much later. I got approval in May, I believe, and
10 so this would have been May of 2003. I wasn't sure what to
11 do next because the cost of the driveway replacement ended
12 up being much more than the cost of the pool. So my wife
13 and I had many discussions around, well, you know, we
14 hadn't envisioned paying this much money just to put in a
15 pool, and so that's when I negotiated with Coldwell Banker.
16 Ryan Iwanaga was the manager at Coldwell Banker that I
17 negotiated with to try to get them to pay for this driveway
18 replacement.
19 When that fell through, I then contacted my
20 current attorney, the company, anyway, and they were unable
21 to get agreement on having this paid for.
22 So at some point I decided to go ahead and do it
23 anyway, and this would have been in late 2003. But in
24 order to do it -- and the reason I did this was there was a
25 time limit on this approval for the pool and I knew if I
65
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 let the time limit expire -- which I believe was one year
2 but I don't recall exactly. But if I let this expire, my
3 thought was I wouldn't get this concession from the city
4 again in order to allow me to stay 900 square feet over the
5 limit.
6 And so I decided I'd go ahead and do this because
7 it was obvious we weren't going to come to any kind of
8 immediate resolution. So I went ahead and hired a company
9 to put in the driveway. They put this in in late 2003 and
10 early 2004. It took awhile to put that in. I believe they
11 finished in January and as soon as it was finished, then we
12 had the pool construction start.
13 Q. So I take it you could have gone forward with the
14 construction at any time after May of 2002 but were delayed
15 for the reasons you've just described to me.
16 A. Well, yes. And also after discussing this with
17 Swan Pools, they let me know that they had several other --
18 up until March they could have installed the pool in a
19 fairly short amount of time and we could have used it that
20 summer, including that spring and summer. But they let me
21 know as we dragged into May that they had a number of other
22 pools that they were building and ours would not be built
23 until the fall time.
24 And so having a pool built in the fall and just
25 watching it until the following spring, I wasn't in a hurry
66
DEPOSITION OF RALPH SIMPSON - 4/27/06
1 to have it done right then. So we had it built over the
2 following winter so that it was available the following
3 spring.
4 Q. Well, how much time elapsed between the time you
5 first learned there was an issue with the city and your
6 meeting with Mr. Leventhal?
7 A. It was within two weeks and that was because I had
8 to wait -- I had to discuss this with a number of other
9 people in the city, at least two that I recall, and
10 Mr. Leventhal was not available when I first called and we
11 had to set up a meeting in which we were both available.
12 So it took a total of about two weeks. I believe that he
13 was not available that first week and I talked to a Howard
14 Bell at the city who was an inspector with the city, and I
15 talked to another individual who I don't recall her name
16 but she worked in the city office.
17 Q. The quote from Swan Pools that you accepted, do
18 you remember how much it was for?
19 A. It was in the $50,000 range.
20 Q. And did their work also include doing the decking
21 that you had contemplated?
22 A. No.
23 Q. That was to be done by another contractor?
24 A. Yes.
25 Q. And what contractor was that?
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 A. That was the contractor that put in our driveway.
2 This is West Bay Landscaping.
3 Q. Did you get a quote from them to do the cement
4 decking around the pool?
5 A. No, no.
6 Q. Do you know how much it would have cost to put in
7 the cement decking around the pool that you had originally
8 envisioned?
9 A. No, I don't know.
10 Q. Do you know if it was more or less than the
11 cobblestone you eventually ended up with?
12 A. I don't know. That was not an option at the time
13 I went to West Bay, so I didn't even try to get a quote for
14 that.
15 Q. At the time you made application to the city, you
16 didn't know what it was going to cost to put in the cement
17 decking around the pool?
18 A. Well, I had an idea because we had called a few --
19 you know, a few companies. So we knew roughly what cement
20 would cost, but we didn't know what the stone would cost.
21 Q. Okay.
22 A. And I knew that would add to the cost of this, so
23 I had envisioned it would be greater than the cost of the
24 cobblestone but I didn't know how much.
25 Q. Now, at the time you went to the city, is it
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 correct that you had already seen plans that had been given
2 to you by the O'Briens, plans for the house?
3 A. Yes.
4 Q. And did those plans include a swimming pool?
5 A. I don't think so, no.
6 Q. Do you still have those plans, by the way?
7 A. Yes.
8 Q. Did you have any discussions with anybody about
9 the O'Briens or Stonehenge originally contemplating the
10 installation of a pool?
11 A. Yes.
12 Q. And who did you have those discussions with?
13 A. With Lou Rae.
14 Q. And that was what you told me before, is that they
15 decided to allow the seller to select whatever pool they
16 wanted to put in?
17 A. Yes.
18 Q. Did you ever learn that the O'Briens made
19 application to the city for a pool?
20 A. No.
21 Q. Did you ever learn that the O'Briens made
22 application to the city and were turned down for a pool?
23 A. No, I did not learn that.
24 Q. Did you have any discussions with Mr. Leventhal
25 about that?
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 A. No.
2 Q. Do you have any information that the O'Briens were
3 aware that the property was already over the limit for
4 impervious surfaces?
5 A. Not at the time.
6 Q. Have you subsequently discovered information?
7 A. Yes, I have.
8 Q. And what have you discovered?
9 A. I discovered that in looking back -- and this was
10 after all of this was all over and we went ahead and put in
11 the pool. I happened to look back at the house plans, and
12 the house plans are the large construction drawings,
13 multiple pages of blueprints, and those were left in my
14 home and I had seen them and quickly looked through them
15 before but, you know, I'm not a construction person so I
16 didn't pay a lot of attention to it.
17 But I happened to go back through it and I found
18 that on the front page, in fact, highlighted with
19 highlighter was a little block of words that said
20 impervious structure limit or maximum, and it gave a number
21 for the amount of square feet of impervious structure, and
22 then it said impervious structure actual and it had the
23 exact same number.
24 So what it was purporting was it had the same
25 amount of impervious structure as the maximum allowable,
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 and it was in fact highlighted on this drawing, on this
2 blueprint.
3 In addition, I then noticed there was a letter
4 that was stuck inside the blueprint that came from the
5 architect and the architect had this letter addressed to
6 Stonehenge, I believe, to Lynn O'Brien, saying that the
7 house was -- or the property was already at the maximum
8 impervious structure limit; and that was the first I had
9 noticed that letter, was inside that blueprint. It was a
10 regular size piece of paper stuck inside these large pieces
11 of blueprint paper.
12 Q. Do you have any belief that Lou Rae Kagel knew
13 that the house was already over the impervious surface
14 limitation at the time you purchased the property?
15 A. I do not know.
16 Q. And how about Douglas Rea? Do you have any
17 information that he knew the property was already over the
18 impervious surface limitation?
19 A. I do not know.
20 Q. We've been going for a little while. Why don't we
21 take a break.
22 A. Sounds good.
23 (Recess at 11:42 a.m.)
24 (Resume at 12:01 p.m.)
25 MR. KOSS: Okay. Back on the record.
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. What was the surface of your driveway before you
2 replaced it?
3 A. It was mainly concrete and there was some paver
4 stones in it.
5 Q. And now it's all paver stones?
6 A. Yes.
7 Q. In your opinion is that more or less desirable
8 than the way the driveway was originally constructed?
9 A. I would say it was slightly more desirable.
10 Q. It looks nicer?
11 A. Yes.
12 Q. Do you have an opinion as to how the inability to
13 construct this 800-foot-structure would impact the value of
14 the property at the time you bought it?
15 A. Well, I knew that there would be value in this
16 property, in this additional 800 square foot. I remember
17 having a discussion with Douglas Rea around that, not
18 specifically around this additional property but around
19 value of homes and the square footage.
20 So for instance, in the Los Gatos Saratoga area I
21 know that there's limitations on the square footage that
22 you're allowed to build based on the size of the lot, and
23 he described to me that, you know, the homes that I was
24 looking for, which were, you know, the higher, you know,
25 square footage type of homes, they demanded a premium
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 because you also needed a larger lot, and there weren't as
2 many of those around.
3 And so being able to build a home that had a
4 greater size than -- you know, adding 800 square feet, for
5 instance, would dramatically increase the value of the home
6 because there's fewer homes of that type of size in the
7 area.
8 Q. Can you quantify that value for me? Do you have
9 an opinion?
10 A. My opinion at the time was based on what I was
11 looking at, you know, around the area, and the area said
12 homes were going for, you know, it looked like in the 700
13 to 1,000 square foot range. So I quantified this to mean
14 if I built this 800-square-foot structure, it may be worth
15 another $800,000.
16 Q. And did you have an expectation as to how much you
17 would spend to build the structure?
18 A. I didn't know what it would cost to build it, but
19 I knew it would be a lot less than that. I mean
20 construction cost of something like this, that I was
21 expecting in the 100, $150 a foot range.
22 Q. So you expected that building this 800-square-foot
23 structure would increase the value by in excess of 20
24 percent?
25 A. Yes.
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. Do you have any plans to move from your present
2 home?
3 A. Yes.
4 Q. What are your plans?
5 A. I'm planning on building a new home and so I
6 bought -- I bought some property on an empty lot and I'm in
7 the process of designing that home now.
8 Q. And when do you think you'll start construction on
9 that new home?
10 A. Well, we haven't submitted anything to the city
11 yet, so I'm told that it may take up to a year to get
12 building approval. So we probably won't start construction
13 for a year or so.
14 Q. Where is the lot?
15 A. It's in Los Gatos.
16 Q. Have you hired an architect?
17 A. Yes.
18 Q. Who have you hired?
19 A. Craftsman Skilled.
20 Q. And is there a reason why you've decided to buy a
21 lot and build a home?
22 A. Well, the homes we've bought previously have all
23 been completed homes, most of them new, and we felt, you
24 know, it would be nice for once to build our own home, sort
25 of our dream home you might say, so we get to select
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 everything.
2 Q. Do you have at least preliminary drawings on what
3 you want to do?
4 A. Yes.
5 Q. Do you have finished drawings on what you want to
6 do?
7 A. No.
8 Q. And the preliminary drawings envision what size of
9 a house?
10 A. I'm envisioning over 8,000 square feet.
11 Q. Are there any auxiliary buildings envisioned?
12 A. Not right now. We may add that later, but
13 currently I'm only envisioning the main house.
14 Q. Do you envision installing a swimming pool?
15 A. Yes, I do.
16 Q. Do you envision installing a pool house?
17 A. That's open right now. We may or may not.
18 Q. As you sit here today, do you have some
19 expectation as to when your current house will go on the
20 market?
21 A. My expectation is maybe a couple of years from
22 now.
23 Q. Do you have an opinion as to how the lack of an
24 800-square-foot structure impacts the value of your house
25 today?
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 A. Today?
2 Q. Yes.
3 A. Well, it's much less desirable not having the
4 additional 800 square feet. You know, I mean 800 -- these
5 homes are looked at based on value -- or cost per square
6 foot. That's the way it was represented to me. So you
7 know, I would envision advertising 5,000 versus 5,800 would
8 have a pretty dramatic impact on the value of the home.
9 Q. Do you have an opinion as to what that dramatic
10 value would be in terms of dollars and cents?
11 A. Proportional to the current size, so 800 over
12 5,000 is the additional amount that I would expect.
13 Q. And I take it you would subtract from that the
14 amount it would cost to build the structure?
15 A. Yes.
16 Q. And it's correct, is it not, that you've never
17 gone to the effort to design any type of 800-foot structure
18 and that's because you were told about a year after you
19 bought the property that you couldn't do that?
20 A. That's correct.
21 Q. Have you ever investigated seeking some kind of
22 variance from the city from the impervious limit
23 requirements in order to build an 800-square-foot
24 structure?
25 A. Yes, I did.
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 Q. And what did you do to do that?
2 A. That was the day I talked to Brian Leventhal. I
3 asked him first could I get a variance, to which he laughed
4 at me and said you can always apply for that but it's not
5 going to happen.
6 Q. And did he say why it would not happen?
7 A. He said we just don't -- he said nowadays we're
8 not giving variances for this. So he said you can apply,
9 you can pay the money, but you'll be rejected.
10 Q. Did you show Mr. Leventhal the flier that said
11 something about being able to build a structure?
12 A. Yes, I did.
13 Q. And that didn't seem to have an impact on him?
14 A. Oh, it did have an impact on him.
15 Q. And that's why you think he let you slide, if you
16 will, on the amount of impervious surface when you came
17 around to building your pool?
18 A. That's my belief. I don't have any -- he didn't
19 say that, but he saw those things and we discussed it and
20 he made some comment about overzealous salespeople, real
21 estate people, and then he came up with the idea that I
22 could stay 900 square feet over the limit as long as I
23 reduced foot for foot what I wanted to put in for the pool.
24 Q. And you currently have how many square feet of
25 impervious decking?
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DEPOSITION OF RALPH SIMPSON - 4/27/06
1 A. Currently?
2 Q. Yes.
3 A. I don't know exactly. What I recall before we put
4 in the pool was the driveway was roughly 3,000 square feet
5 and the impervious decking, including sidewalks and
6 everything else, was around 2,400 square feet, if I recall
7 correctly; and so it wasn't quite enough but some of that
8 2,400 square feet I could not remove anyways because it was
9 under a roof so that didn't count, and some of it was
10 elevated so that you could walk out the door and walk onto
11 an elevated platform, and it was just not convenient
12 because it went right
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