DS9 Document EFTA01080992

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 JEFFREY EPSTEIN, Plaintiff, vs. IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT, IN AND FOR PALM BEACH COUNTY, FLORIDA CASE NO.: 502009 CA 040800XXXMBAG SCOTT ROTHSTEIN, individually, BRADLEY J. EDWARDS, individually, and L.M., individually Defendants. HEARING BEFORE: THE HONORABLE DAVID F. CROW DATE TAKEN: Wednesday, September 28, 2011 TIME: 8:15 a.m. - 8:45 a.m. PLACE: Palm Beach County Courthouse 205 North Dixie Highway West Palm Beach, Florida 33401 REPORTED BY: BARBARA L. KENT, RMR, RPR, FPR, CSR-MI Court Reporter and Notary Public ORANGE REPORTING 800.275.7991 EFTA01080992 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 APPEARANCES JOSEPH L. ACKERMAN, JR., ESQUIRE CHRISTOPHER E. KNIGHT, ESQUIRE OF: Fowler, White, Burnett, P.A. APPEARING ON BEHALF OF THE PLAINTIFF, JACK SCAROLA, ESQUIRE OF: Searcy, Denney, Scarola, Barnhart & Shipley APPEARING ON BEHALF OF BRADLEY J. EDWARDS. ALSO PRESENT: Bradley J. Edwards. ORANGE REPORTING 800.275.7991 EFTA01080993 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PROCEEDINGS • * * * THE COURT: Okay. Have a seat, please. We're here on Epstein versus Rothstein, and it's the Motion to Dismiss. I guess, the second point, as well as your new Motion for Punitive Damages. I have read the motions. I have read all the cases you guys provided to me, and I have read them, too, when they were submitted to me earlier, at least most of them. So I think we should deal with the Motion to Dismiss, first. So, I guess, that is your motion. Mr. Scarola. MR. SCAROLA: Thank you, Your Honor. With the Court's permission, may I address the Court from counsel table? THE COURT: That's fine, yes. Certainly. MR. SCAROLA: Thank you very much. Your Honor, what I think will be most helpful is, if we went through the second amended complaint and addressed what that complaint does or does not do in some detail. Obviously, the introduction, which is ORANGE REPORTING 800.275.7991 EFTA01080994 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 unnumbered, and does not constitute any of the allegations against Mr. Edwards, is nothing more than a press release incorporated into a pleading, for purposes of cloaking it in litigation, in unity. I think we can effectively ignore it. The first five numbered paragraphs are, basically, jurisdictional, and then paragraphs six, seven, eight, nine, ten, 11, 12, 13, 14, all the way through paragraph 22, are paragraphs that describe in substantial detail the uncontested misconduct of Scott Rothstein, and his involvement in a Ponzi scheme. Paragraph 21 alleges that Mr. Edwards was aware that RRA's offices were monitored and recorded various discussions. Obviously, that is immaterial to any claim of abusive process. And paragraph 22 talks about the level of communications going on within the firm, relating to the prosecution of what clearly was, and continued to be, an extremely important case within the firm. The substantive allegations on which I suggest we must focus, to the extent there's any substance in them at all, begin at paragraph 23. And that paragraph says that, that there were a lot ORANGE REPORTING 800.275.7991 EFTA01080995 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of e-mails that went back and forth with regard to the prosecution of this -- these major pending cases within the law firm. There is nothing about that exchange of e-mails that would suggest Mr. Edwards' knowledge of, or involvement in an Ponzi scheme. Paragraph 24 describes a variety of events that clearly have, from Mr. Edwards' perspective, an entirely innocent explanation, and dove-tie him into that Ponzi scheme. But as we're going to see, even if Mr. Edwards were tied into the Ponzi scheme, that's got nothing to do with any damage suffered by the plaintiff, Mr. Epstein. Paragraph 25 says that, given the interdependence of so many RRA lawyers, investigators, and other staff, the wide communications that necessarily accompanied the involvement of so many people, Edwards knew or should have known, there was a Ponzi scheme going on. Well, that clearly is a conclusion that is based upon the pyramiding of a variety of inferences, and is not a reasonable conclusion, based upon the preceding allegations about nothing more than an exchange of e-mails and meetings going ORANGE REPORTING 800.275.7991 EFTA01080996 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 on, none of which, Edwards is alleged to have been involved in, in terms of the -- the attempt to sell investments. Then we get to paragraphs 26, 27, and 28, and we're back to Mr. Rothstein, again. And now we have the abusive process claim against Mr. Edwards. In paragraph 30, we learned that on September 11, 2008, Mr. Edwards filed a state court action on behalf of a client seeking damages. Now, we know that those were legitimate claims. There's no allegation anywhere in this complaint that they were anything other than well-founded legitimate claims. 30 B says that there was a federal court complaint that was filed against somebody with a different name, that because it was filed against somebody with a different name, Mr. Epstein never learned about it. Because not only was it filed against somebody with a different name, it was never served, according to the allegations in the complaint on Mr. Epstein. Now, clearly, there can be no abuse of process, and no damages arising out of a complaint against someone else with a different name that is never served on this plaintiff. ORANGE REPORTING 800.275.7991 EFTA01080997 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Then we have allegations in 30 C, that state what Mr. Epstein believes about the federal complaint; and he believes that it was filed to show to prospective Ponzi scheme investors. Well, again, assuming those -- assuming that belief to be accurate, and a belief is not an allegation of fact, except as to the subjective understanding of Mr. Epstein. It doesn't say, this is what did occur, it says that's what Mr. Epstein believed occurred. Even assuming that to be the case, the filing of a federal court action to show to somebody else, to defraud someone else, clearly cannot produce damages to Mr. Epstein. And, in fact, when we get to the damage allegations, the only allegation of damages are, that Mr. Epstein was obliged to pay attorney's fees to defend against state court actions taken in the prosecution of the filed and served state court claim. So there can be no causal connection between what is alleged in paragraph 30 C, and any damages to Mr. Epstein. Now, the same is true when we get to paragraph 32. Edwards also made illegal, improper, and perverted use of civil process in order to bolster the case to investors by using it to ORANGE REPORTING 800.275.7991 EFTA01080998 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 conduct unreasonable and unnecessary discovery, making unfounded allegations, and we're going to get to that. That clearly can't be the federal court case, because the federal court case is never served. So we must be talking about the state court case, and paragraph 31 makes reference to the state court case. Then, we take a look at what it is that Mr. Edwards is alleged to have done, that constituted abuse of process. And we go to subparagraphs one through ten, about actions alleged to have been taken directly in the state court action during the course of the prosecution of the state court action, that are alleged to have caused Mr. Epstein to spend money on attorney's fees to defend against those actions alleged to have been directly involved in the prosecution of the state court claim. Now, there is an allegation in paragraph 33 that Mr. Edwards had ulterior motives. Significantly, there is no allegation that these "ulterior" motives were the sole motives involved in all of the actions described in paragraph 32. And these ulterior motives are maintaining a Ponzi scheme, of which Mr. Epstein was never, and could ORANGE REPORTING 800.275.7991 EFTA01080999 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 not have been a victim, because he didn't know about it. So, that's got no relevance, and it's not alleged that it was the sole motive. And then there are two other very curious motives alleged; obtaining funds for the continued investigation and prosecution of the Epstein actions, and obtaining operating revenues so that RRA could continue to operate. Now, I don't know how the plaintiff's law firm business is conducted, but there isn't any law firm that I'm aware of, that doesn't engage in the practice of law for purposes of obtaining funds to investigate and prosecute other cases; or to obtain operating revenue so that the firm could continue to operate. I don't know how that constitutes some form of improper motive, that you are in business to make a profit, and to continue to be able to fund other cases to make profits. So those allegations, even if they were allegations that those were the sole motives, are not allegations of some malicious and improper motivation. That's where the allegations of wrongdoing end, and then paragraph 34 is the -- is the damage paragraph, as a result of Mr. Edwards doing all of ORANGE REPORTING 800.275.7991 EFTA01081000 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 these things to prosecute his legitimate claims. It is alleged that the plaintiff suffered damages by incurring additional and unnecessary attorney's fees. There are four cases that are entirely dispositive of this third attempt to try to fabricate some justification for the extortion attempt that Mr. Epstein began back in 2009, and continues to pursue today. The first of those is, SI Investments versus Payless Flea Market, it appears at tab 18 in the notebook that Your Honor was provided by the defendants. You might just make THE COURT: Okay. Because I didn't see any cases, other than the litigation for those cases cited in your motion. MR. SCAROLA: Your Honor, the Motion to Dismiss incorporates the legal authorities that are described in detail in the Motion to Assert a Claim for Punitive Damages, and all of these cases are cited by both parties. So, SI Investments stands for the following propositions, and these are quotes. Plaintiff must prove that the process was used for an immediate purpose other than that for which it was designed. ORANGE REPORTING 800.275.7991 EFTA01081001 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Where the process was used to accomplish the result for which it was intended, regardless of an incidental or concurrent motive of spite or ulterior purpose, there is no abusive process. That's the case the defendants themselves are relying upon. So if you have two motives, one's a good one, because what you want to do is, you want to recover damages against Mr. Epstein for his serial abuse of young children. If you have -- THE COURT: Well, isn't the -- isn't the distinction, or as I understand it, correct me if I'm wrong, but the -- while the initial process may be for profit purpose, the issue on abuse of process is something occurring subsequent. Even though it may be filed for legitimate purpose, the abuse process occurs, as compared to malicious prosecution when it's filed for an improper purpose; right? MR. SCAROLA: In order for an abusive process claim. THE COURT: Right. MR. SCAROLA: To be based upon an initial filing. THE COURT: Right. ORANGE REPORTING 800.275.7991 EFTA01081002 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. SCAROLA: It must be demonstrated that the sole purpose was an improper purpose. And the case law is, that subsequent use of process where there is a concurrent legitimate purpose, does not constitute an abuse of process. That's the Fourth DCA, 2010 recent law, that clearly describes the scope of an abuse of process claim and the elements involved. THE COURT: Well, it also says, the mere filing of a complaint having process served is not enough to show abusive process. The plaintiff must prove improper use of the process after it issues. MR. SCAROLA: Yes, sir, that's correct. THE COURT: Okay. MR. SCAROLA: Okay. And that's what they attempt to do, when they lay out in paragraph 32, all of these alleged improper uses of the litigation. THE COURT: Where -- where -- I mean, I don't mean to cut you off, but I mean you're running short of time here, and, you know, if we started right on time -- but I do have to give them an opportunity. You said this is the dispositive -- SI Investments is dispositive. I thought you were ORANGE REPORTING 800.275.7991 EFTA01081003 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 going to talk about damages, but is there something about damages in here? MR. SCAROLA: There are. Your Honor, there are four cases, which together, I suggest are diapositive. THE COURT: Give me the names of them, because I want to read them. MR. SCAROLA: Yes, sir. The next case, and I will hand Your Honor a copy of these others. THE COURT: Are they all in the book here? MR. SCAROLA: They are. Two of them are in the book, I think the third one is, as well. THE COURT: Okay. MR. SCAROLA: Tab number four Levin-Middlebrook is tab number 18. THE COURT: Gotcha. I've read that 1,000 times. MR. SCAROLA: Yes, sir, I'm sure you have. And -- THE COURT: You can give it to me, again, though. MR. SCAROLA: I will be happy to do that. THE COURT: Yeah. This deals with litigation privilege. ORANGE REPORTING 800.275.7991 EFTA01081004 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. SCAROLA: Yes, sir. It does deal with litigation privilege. Echevarria also deals with the litigation privilege, and Delmonico stands for the proposition that the issues with regard for privilege, are issues of law for the court to determine. And I've provided Your Honor with highlighted copies, I'm providing opposing counsel with highlighted copies, as well. THE COURT: Okay. MR. SCAROLA: The basic point here is, Your Honor, that the litigation privilege is an absolute privilege. Once it is established that the actions occur within the course and scope of the litigation, the privilege applies absolutely as a matter of public policy. The basis of those decisions is, that if there's misconduct in the course of the litigation, if you're taking improper discovery, if you're filing improper motions, there are remedies that are available to the court through the court's inherent power to control its own litigation, through the contempt powers of the court, through Florida Statute 57.105, and through the filing of bar grievances, and it will cripple the system, if ORANGE REPORTING 800.275.7991 EFTA01081005 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 litigants are obliged to respond to separate litigation, just because somebody is alleged, you notice the deposition that shouldn't have been noticed, you filed a motion that shouldn't have been filed. THE COURT: Are you saying it's a matter of law, there can be no abuse of process by an attorney, then? MR. SCAROLA: No, sir. I'm not saying as a matter of law there can be no abuse of process by an attorney. THE COURT: Just the -- MR. SCAROLA: Because if there -- because the test is, it must be related to the litigation. So, if I were to issue a subpoena to my next-door neighbor in a pending case, just because I want to inconvenience him and bring him down to the courthouse, knowing that he just moved to Florida two weeks ago, and this case involves an automobile accident that occurred three years ago, that he couldn't absolutely know anything about, that would be an abuse of process. THE COURT: Here's my question. MR. SCAROLA: Yes. THE COURT: Whether or not that litigation -- ORANGE REPORTING 800.275.7991 EFTA01081006 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and generally speaking, a privilege is an affirmative defense. Whether or not something is, or is not within the process, or within the lawsuit, and falls within the immunity, is certainly something that the judge will have to decide rather than the jury. But it may be dependent on specific facts under specific circumstances, may it not? MR. SCAROLA: It may be. THE COURT: Okay. But you're saying, as a matter of law -- I'm sorry. MR. SCAROLA: I am sorry. I didn't mean to interrupt the Court. THE COURT: I guess what you're saying, it's a matter of law, these allegations are such that I can determine from the law -- looking at the pleadings themselves, that it falls within the privilege? MR. SCAROLA: First, absolute privilege, as distinguished from qualified privilege. Qualified privilege is -- almost always involves questions of fact, but this is an absolute privilege. And secondly, you can determine from the face of the complaint, that this was related to the litigation itself. ORANGE REPORTING 800.275.7991 EFTA01081007 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Okay. MR. SCAROLA: You can see that on the face of the complaint. THE COURT: Okay. MR. SCAROLA: So that's the basis of -- of this dismissal argument, and the -- the allegations of the nature of the damages that were incurred, as well. The nature of the damages are, I had to incur attorney's fees in the context of this litigation. THE COURT: Yes, sir. MR. ACKERMAN: Your Honor, it's our position that the corrected second amended complaint satisfies on its four corners, every element of the tort of abuse of process. We have alleged a misuse of the judicial system through a legal, improper, perverted use of process. We have set those examples out. We have alleged in the complaint, that they were for ulterior purposes, not intended by the law, after the action was, that resulted in damages. We can clearly show that, by looking at paragraph 30 A-C, when the LM case is filed in state court against Mr. Epstein, and it is pending for some time, that this 234-page, 156-count ORANGE REPORTING 800.275.7991 EFTA01081008 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 complaint is filed in Federal Court seeking in excess of $23 million in damages, and it was against Mr. Epstein. We can prove that. And was intended there, we believe, with highly charged allegations, to assist Mr. Rothstein in attracting investors to invest in the Epstein cases. Mr. Epstein's damages include filing motions to dismiss that. That occurred approximately nine months later. So, on that -- on its face, that is a process that is issued after LM, involving the LM case. We then proceeded to list 32 separate instances of abuse of process, and not all of them are in the state cases, a couple are in the federal cases. Paragraph 33 alleges the motives, and we believe that Mr. Edwards was attempting to assist Mr. Rothstein, which is why all the allegations of Mr. Rothstein's conduct with Mr. Edwards' cases, that Mr. Scarola clearly wants to dismiss as unrelated, are appropriate. Because the Court can see on the face of the complaint that there is a link. Mr. Edwards' investigators, Mr. Edwards' cases are ultimately involved with Mr. Rothstein, with the Ponzi scheme. ORANGE REPORTING 800.275.7991 EFTA01081009 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 We've also alleged in paragraph 24, and I believe if the Court looks at the 15 e-mails in camera, the Court will see that link; and what Mr. Scarola wants to clearly dismiss as e-mails on a case, is on the day that there is contact with Mr. Rothstein and the investors, Mr. Rothstein extends an e-mail, which we've alleged, to the investors, who subsequently invest in the Epstein cases, which is the purpose we've alleged, not recovering money on a cause of action, that state, here are the causes of action we have against Mr. Epstein. And based on the privileged log information that we've received, you can see Mr. Rothstein asking Mr. Adler, and Mr. Edwards in August, and then again in October, what are the causes of action against Mr. Epstein? On the day that he communicates -- the day that Mr. Rothstein communicates with the investors, there's a series of e-mails that involve Mr. Adler, that involve Mr. Edwards, that involve investigators and other people, contrary to what Mr. Edwards has testified to, that show a clear link that they are providing the information that Mr. Rothstein asked for -- on the causes of action against Mr. Epstein, that he ORANGE REPORTING 800.275.7991 EFTA01081010 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 subsequently gives to the investors. Now, it is our position that links Mr. Edwards to Mr. Rothstein's scheme. And that therein, provides the necessary element that we can prove that the actions that were taken, that we've alleged to be an abuse of process, aren't protected by any privilege, and were in furtherance of that scheme, as alleged. We've also alleged special damages. The law is very clear, that if a person has to defend themself against the conduct of another party, that they are allowed to come in in separate litigation and claim those damages as special damages. Those have been specifically pled. And right now everything that Mr. Scarola is arguing, are issues of fact that need to be properly pled as affirmative defenses. THE COURT: Let me understand the damages here. The damages are not the defending the lawsuit, because nowhere in here do you contend that the lawsuits are frivolous or not supported by facts. MR. ACKERMAN: No, the damages -- THE COURT: Let me finish. MR. ACKERMAN: I apologize, Your Honor. ORANGE REPORTING 800.275.7991 EFTA01081011 2 11:23 19:13 basic 14:11 basically 4:7 25:8 basis 14:17 17:5 be 7:5 16:6 22:22 be. 16:9 BEACH 1:2, 15, 16 2:4, 8, 8 27:17 28:3 bearing 22:23 been 6:1 15:3 began 10:8 beginning. 23:25 BEHALF 2:6, 10 6:9 belief 7:5, 6 believe 18:4, 17 19:2 21:17 23:20 believed 7:9 believes 7:2, 3 between 27:4 bolster 7:25 book 13:11, 13 Boulevard 2:8 BRADLEY 1:7 2:10, 12 Briefly 23:22 bring 15:17 Burnett 2:3 business 9:10, 16 by 15:10 20:21 <C> CA 1:3 call 25:8 camera 19:3 can 18:21 20:4 CASE 1:3 4:20 7:11, 25 8:4, 4, 6 11:5 12:3 13:9 15:16, 19 17:23 19:5 25:/ /, 11, 17 case. 8:7 18:11 22:16 cases 3:9 5:3 9:13, 18 10:5, 15, 15, 20 13:4 18:14, 24 19:9 22:20, 22 cases, 18:19 cases. 18:6, 15 causal 7:20 cause 19:10 25:5 caused 8:15 causes 19:11, 16, 25 certainly 16:5 Certainly. 3:19 CERTIFIED 28:18 certify 28:6 charged 18:4 children 11:10 Christine 27:16 CHRISTOPHER 2:2 CIRCUIT 1:/, 1 circumstances 16:8 cited 10:16, 21 civil 7:24 claim 4:16 6:6 7:19 10:19 12:7 20:13 23:6 claim. 8:18 11:21 claimed 22:11 claims 6:10 claims. 6:13 10:1 clear 19:23 20:10 clearly 4:19 5:8, 21 6:22 7:13 8:3 12:6 17:22 18:20 19:4 client 6:9 clients 25:13 cloaking 4:4 Club 27:17 come 20:12 communicates 19:18, 19 communications 4:18 5:17 compared 11:17 complaint 3:22, 23 6:11, 15, 21, 23 7:3 12:10 16:24 17:13, 19 18:1, 22 21:20 complaint. 17:3 complete 28:8 completely 27:7 concerns 24:17, 23 25:4 concluded 27:14 conclusion 5:21 conclusion, 5:23 concurrent 11:3 12:4 conduct 8:1 18:19 20:11 conducted 9:10 confusing 25:14, 22 connection 7:20 constitute 4:1 12:5 constituted 8:10 constitutes 9:15 contact 19:5 contempt 14:23 contend 20:20 context 17:10 continue 9:8, 14, 17 continued 4:20 9:5 continues 10:9 contrary 19:22 control 14:22 copies 14:8, 9 copy 13:10 corners 17:14 correct 11:12 23:20 correct. 12:13 21:9 23:21 corrected 17:13 could 8:25 counsel 3:18 14:8 Counterclaim 25:2 26:21 counterclaim. 24:25 COUNTY 1:2, 15 28:3 couple 18:14 course 8:13 14:14, 18 COURT 1:1, 17 3:3, 18, 19 6:8, 14 7:12, 17, 19 8:4, 4, 6, 7, 13, 14, 18 10:14 11:11, 22, 25 12:9, 14, 19 13:6, 11, 14, 17, 21, 24 14:5, 10, 21, 23 15:6, 12, 23, 25 16:10, 14 17:1, 4, 11, 24 18:/, 21 19:2, 3 20:18, 24 21:1, 4, 10, 12, 19 22:3, 9, 13, 15, 17, 19, 20 23:5, 9, 10, 15, 16, 18, 22 24:4, 6, 19 26:4, 20 27:1, 11, 13, /5 28:5, 18 Court. 16:13 Courthouse 1:15 15:18 Courts 27:3 Court's 3:17 14:21 cripple 14:25 CROW 1:12 CSR-MI 1:17 28:5 curious 9:4 cut 12:20 < D > damage 5:12 7:15 9:24 24:20 damages 6:9, 23 7:14, 16, 21 10:2, 20 11:9 13:1, 2 17:7, 9, 22 18:2, 7 20:9, 13, 13, 18, 19, 23 24:2 25:25 26:16 Damages. 3:7 26:3 27:9 DATE 1:13 Dated 28:10 DAVID 1:12 day 19:5, 17, 18 26:15 28:10 DCA 12:6 deal 3:12 14:1 24:20 deals 13:24 14:2 decide 16:6 decisions 14:17 defeat 23:6 defend 7:17 8:16 20:10 21:7, 25 defendants 10:13 11:5 Defendants. 1:9 defended 21:7 defending 20:19 21:12, 14 22:12 defense 16:2 21:22 23:7 defenses. 20:17 defraud 7:13 Delmonico 14:3 demonstrated 12:1 denied 26:21 Denney 2:7 dependent 16:7 deposition 15:3 describe 4:10 described 8:23 10:19 describes 5:7 12:6 designed. 10:25 detail 4:10 10:19 detail, 21:20 detail. 3:24 determine 16:16, 23 23:19 determine. 14:6 dichotomy 27:6 did 7:8 28:6 ORANGE REPORTING 800.275.7991 EFTA01081012 5 16:21 17:2, 5, 17 18:18 19:16 25:16, 21 offices 4:14 Okay 3:3 10:14 12:15 16:10 21:12, 19 22:18 23:22 24:9, 21 25:13, 25 26:17 Okay. 12:14 13:14 14:10 17:1, 4 22:9, 17 24:5 27:11 on 6:7 19:4, 24 on. 5:20 Once 14:13 one, 11:7 ones 27:6 one's 11:7 only 24:2 operate 9:15 operate. 9:8 operating 9:7, 14 opportunity. 12:23 opposing 14:8 or 5:18 11:3 21:6 order 7:24 11:20 originally 26:12 other 19:21 others. 13:10 out. 17:18 outside 21:5, 15 a> 2:3 PALM 1:2, 15, 16 2:4, 8, 8 27:17 28:3 paragraph 4:9, 13, 17, 24, 25 5:7, 14 6:7 7:21, 23 8:6, 19, 23 9:24, 25 12:16 17:23 18:16 19:1 paragraphs 4:6, 7, 9 6:4 parties. 10:21 party 20:11 pay 7:16 Payless 10:11 pending 5:2 15:16 17:24 people 5:18 19:22 permission 3:17 permit 23:3 permitted 21:16 23:2 person 20:10 perspective, 5:8 perverted 7:24 17:17 Phillips 2:3 Phipps 27:16, 16 PLACE 1:15 plaintiff 5:13 10:2, 23 12:11 Plaintiff, 1:5 2:6 plaintiff. 6:25 plaintiffs 9:9 25:11 pleading, 4:3 pleadings 16:17 pleadings. 23:8 please. 3:3 pleased 24:15 pled 20:14, 16 25:5 Point 2:3 3:6 14:11 point. 23:13 policy. 14:16 Ponzi 4:12 5:6, 10, 11, 19 7:4 8:24 18:25 21:18 position 17:12 20:2 power 14:22 powers 14:23 practice 9:12 preceding 5:24 predicate 22:21 prefer 24:1, 4 PRESENT 2:12 press 4:3 preventing 25:12 privilege 14:2, 3, 5, 12, 13, 15 16:1, 18, 19, 20, 21, 22 20:7 22:19 23:12 privilege. 13:25 privileged 19:13 problem 26:4 problems 27:3 proceeded 18:12 proceeding 22:24 proceedings 28:7 process 4:16 6:6, 23 7:24 8:10 10:24 11:1, 13, 15, /7, 20 12:3, 5, 7, 10, 11, 12 15:7, 10 16:3 17:18 18:10, 13 20:6 21:6 25:5, 17, 21, 22 27:5 process. 11:4 15:22 17:15 21:8 produce 7:13 products 25:8 profit 9:17 11:14 profits. 9:18 properly 20:16 proposition 14:4 propositions 10:23 prosecute 9:13 10:1 prosecution 4:19 5:2 7:18 8:13, 17 9:6 11:18 25:13, 16, 20 27:5 prospective 7:4 protected 20:6 prove 10:24 12:12 18:3 20:5 provided 3:9 10:12 14:7 provides 20:4 providing 14:8 19:23 Public 1:17 14:16 Punitive 3:6 10:20 24:2, 19 25:24 26:3, 16 purpose 10:25 11:4, 14, 16, 19 12:2, 2, 4 19:9 25:12 purposes 4:4 9:12 17:20 26:7 pursue 10:9 put 27:1 pyramiding 5:22 <a> Qualified 16:20, 20 question 22:7 23:10 question. 15:23 22:6 questions 16:21 24:16 quotes 10:23 < R > read 3:8, 8, 9 13:7, 17 21:20 24:3 26:9 reading 24:8 25:3 really 24:12, 24 25:14 26:12 reason 21:19 reason. 25:6 reasonable 5:23 received 19:14 reconsidering 26:24 record 27:16 28:8 recorded 4:15 recover 11:8 recovering 19:10 reference 8:6 regard 5:1 14:4 22:18 24:17 regardless 11:2 related 15:14 16:24 relating 4:18 relationship 22:23 release 4:3 relevance 9:2 relying 11:6 remedies 14:20 report 28:7 REPORTED 1:17 27:16 Reporter 1:17 28:6, 18 Reporting, 27:16 require 23:5 required 22:21 23:1 reschedule 26:15 reschedule, 26:10 reset 24:24 respond 15:1 21:6 rest 22:16 result 9:25 11:1 resulted 17:21 revenue 9:14 revenues 9:7 right 11:19 12:22 20:14 Right. 11:22, 25 rights 25:13 rise 25:24 RMR 1:17 28:5 ROTHSTEIN 1:7 3:4 4:11 6:5 18:5, 18 19:6, 6, 14, 18, 24 21:18 Rothstein, 18:24 Rothstein's 18:19 20:3 RPR 1:17 28:5 RRA 5:15 9:8 RRA's 4:14 ruled 25:1 ORANGE REPORTING 800.275.7991 EFTA01081013 6 ruling 26:8, /5 SI 10:10, 22 12:24 suggest 4:23 5:4 they 6:11 12:/5 running 12:20 sides 24:12 13:4 25:6 17:19 Significantly 8:21 sul 26:24 things 10:1 21:4 < S > sir 12:13 13:19 suit 25:16, 17, 20, think 3:12, 21 4:5 S 2:1 3:1 14:1 15:9 21, 22 13:13 21:1 22:1, 5 satisfies 17:14 sir. 13:8 17:11 supported 20:21 24:11 25:2 saying 15:6, 9 21:3, 11 27:10 sure 13:19 25:16 third 10:6 13:13 16:10, 14 26:23 six, 4:7 27:7 this 25:10 says 4:25 5:14 slap-suit 25:9 system 14:25 17:17 this, 25:3 6:14 7:9 12:9 SCAROLA 2:7, 7 so 24:13 So, 15:14 system. 22:14 Those 20:13 22:19, 21 3:/6, 20 10:17 sole 8:22 9:3, 20 <T> though. 13:22 11:20, 23 12:1, 13, 12:2 tab 10:11 13:15, 16 thought 12:25 24:9 15 13:3, 8, 12, 15, some 9:15 23:12 table 3:18 three 15:20 19,23 14:1, 11 somebody 6:15, 17, take 8:8 23:15, 17 through 14:23 15:9, 13, 24 16:9, 19 7:12 15:2 25:10 24:1, 3 26:14 tied 5:11 12, 19 17:2, 5 something 13:1 TAKEN 1:13 7:18 TIME 1:14 12:21, 18:20 19:4 20:15 sorry 16:12 8:12 20:5 22 17:25 23:23 22:5 23:22 24:/, 5, sorry. 16:11 talk 13:1 26:11 24:1, 11 15 26:2, 18 27:10 South 2:4 talking 8:5 times. 13:18 Scarola. 3:15 speaking 16:1 talks 4:17 to 3:12 5:1 7:3, 22, Scarola's 23:6 special 20:9, 13 tell 24:6 26:18 24, 25 8:2, 10, 16 scheme 5:10, 12, 19 specific 16:7, 7 ten 4:8 8:11 9:12, 17 10:6, 17 7:4 8:25 20:3, 8 scheme. 4:12 5:6 21:15 specifically 20:14 terms 6:2 test 15:14 14:5 15:16 16:5, 12 21:24 23:18 18:25 21:18 spend 8:15 24:10 testified 19:22 today. 10:9 24:4 scope 12:7 14:14 spite 11:3 Thank 3:16, 20 tort 17:15 25:25 SCOTT 1:7 4:11 sponte 26:24 27:12, 13 tort, 26:2 Searcy 2:7 staff 5:16 that 4:9 8:8, 9 9:7 transcript 28:8 seat 3:3 second 3:5, 22 stage 23:/2, 14 stands 10:22 14:3 12:1 14:20 20:3, 7, 11 23:5, 6 25:14 trial 27:3 true 7:22 25:15 17:13 started 12:21 28:8 28:8 secondly 16:23 see 10:14 17:2 state 6:8 7:1, 17, 19 8:5, 7, 12, 14, 18 that, 22:1 26:22 that. 13:23 23:16 try 10:6 two 9:4 11:7 18:22 19:3, 14 17:24 18:14 28:3 THE 1:1 3:8 4:1, 8 13:12 15:19 24:3 22:20 state, 19:10 5:14, 17 6:20 8:6 26:15 see, 5:10 Statute 14:24 9:11 10:11, 12 seeking 6:9 18:1 sell 6:2 stenographic 28:9 stenographically 11:11, 16 12:2, 6, 17 14:14 15:13, 17 < U > ulterior 8:20, 22, 24 separate 15:1 28:7 16:3, 16, 17, 23 11:4 17:20 18:12 20:12 stuff. 26:9 17:14, 20 19:7 ultimately 18:24 September 1:13 subjective 7:7 20:19 21:12, 14 23:9 6:8 28:10 serial 11:9 submitted 3:10 subparagraphs 8:11 22:5, 10, 18 23:2, 11, 14 24:17 25:1 uncontested 4:10 underlying 21:13 series 19:19 subpoena 15:15 26:19, 20 27:2, 8, 15 26:2 serious 25:4 subsequent 11:15 them 18:13 understand 11:12 served 6:20, 25 12:3 them, 13:6 20:18 23:16 24:12, 7:19 8:5 12:10 subsequently 19:8 them. 3:11 13:7 13 25:7 26:22 27:2 set 17:18 20:1 21:25 understand. 22:15 seven 4:8 substance 4:24 themself 20:11 understanding 7:7 Shipley 2:7 substantial 4:10 theory 25:7 unfounded 8:2 short 12:21 25:3 substantive 4:22 there 13:3 unity 4:5 show 7:4, 12 12:11 suffered 5:13 10:2 there, 21:22 unnecessary 8:1 17:22 19:23 sufficient 23:4, 6 There's 6:10 10:3 these 8:21 ORANGE REPORTING 800.275.7991 EFTA01081014 unnumbered 4:1 unreasonable 8:1 unrelated 18:21 upon. 11:6 use 7:24 12:3, 12 17:17 22:14 uses 12:17 < V > valid 25:12, 19 variety 5:7, 22 various 4:15 versus 3:4 10:10 vetted 26:12 27:7 victim 9:1 vs. 1:6 < w > want 11:8, 8 13:7 15:16 24:8, 10, 14, 20, 23 27:7 wants 18:20 19:4 was 4:13 6:19 18:2, 3 way 4:9 way. 27:1 we 6:5 18:16 Wednesday 1:13 weeks 15:19 well 3:6 5:21 11:11 12:9 27:1 Well, 7:4 well. 13:13 14:9 17:8 well-founded 6:12 went 3:22 5:1 were 9:19 12:25 21:5 We're 3:4 5:10 6:5 8:2 West 1:16 2:3, 4, 8 27:17 We've 19:1, 7, 9, 14 20:5, 9 what 19:3 21:15 where 12:3 White 2:3 wide 5:16 win 25:17 with 14:1, Z 8 19:5 within 4:20 wonderful 25:15 would 15:21 23:4 wrong 11:13 wrongdoing 9:23 < Y > Yeah 13:24 years 15:20 Yes. 15:24 you 15:2 you. 22:13 you-all 26:15 young 11:10 Your 14:11 22:7 you're 14:19 ORANGE REPORTING 800.275.7991 EFTA01081015