 Devil's Menu |
Day One: Morning |
1 MR. SALINGER: Since it's 1:43 and he's
2 connected, let's resume.
3 Q. Why don't we start this afternoon by
4 identifying what I was given by Mr. Patterson this
5 morning, Mr. Steiner.
6 These are the documents that I've now
7 got in front of me, and Mr. Steiner -- excuse me --
8 Mr. Patterson is holding on to the originals.
9 Maybe if you could get the originals in
10 front of you, because I'll be asking you a few
11 questions about them to just identify them for the
12 record.
13 But just so we're clear, this is what
14 was brought here this morning; is that correct,
15 Mr. Steiner?
16 A. Yes.
17 MR. SALINGER: Okay. First, why don't we
18 mark as next in order the photographs. We'll mark
19 the -- a xerox copy of the photographs and they'll
20 be next in order.
21 (Defendant's Exhibit 13 was marked for
22 identification by the Certified Shorthand Reporter,
23 a copy of which is attached hereto.)
24 BY MR. SALINGER:
25 Q. Okay. Mr. Steiner, the photographs,
100
1 and there look to be 12 of them, they're photographs
2 of your house at 6899 Avenida de Santiago --
3 A. Yes, that's true.
4 Q. -- prior to the landslide?
5 A. Yes.
6 Q. When were these photographs taken?
7 A. I would think they're probably a year
8 prior to the landslide.
9 Q. Now, the photographs are of a framed
10 blowup of a photograph, so we've got a photograph of
11 a photograph?
12 A. Yes. There was an aerial photographer
13 that went around the hills taking pictures and he
14 was going door to door and we bought ours from him.
15 So he has aerial photography of the
16 whole area, and I tried to -- I asked Sandy if she
17 could locate his name because I thought that would
18 be of interest, but she was unable to.
19 Q. Was Sandy the one who paid his bills
20 and dealt with him?
21 A. I dealt with him, but she paid the
22 bills.
23 Q. Do you have any recollection as to
24 where his office was or anything that might identify
25 him?
101
1 A. I wish I did. I wish I did. That
2 was -- to my knowledge, it was his way of paying off
3 his plane.
4 Q. Do you know what sort of plane he had?
5 A. No, I don't.
6 Q. Do you know any of your neighbors
7 who -- on Avenida de Santiago who purchased
8 photographs from him?
9 A. No, I don't.
10 Q. Did he --
11 A. But he did say that he sold them on the
12 street to others.
13 Q. Did he sell you the blowups of the
14 photographs he took?
15 A. Yes. He didn't sell us the negatives.
16 Q. And then you went and had the blowups
17 framed?
18 A. Yes. And, actually, they're sealed
19 inside. They -- the whole thing is secured. You
20 would have to tear it apart and I'm not going to do
21 that.
22 Q. And so you have six separate
23 photographs?
24 A. I thought there were -- I think
25 there's -- I believe there's only three because I
102
1 think I just used different -- there's only three.
2 Q. Okay. So --
3 A. They're just different angles.
4 Q. Oh, I see. They're different angles
5 of --
6 A. The same shot.
7 Q. The photographs -- when did you take
8 these photographs?
9 A. I took them right after I received the
10 request for the pictures.
11 Q. So that would have been sometime in the
12 last couple of months?
13 A. Yes.
14 Q. And are these three photographs that
15 the aerial photographer took, are they hanging in
16 your house in Mission Viejo?
17 A. Yes, they are.
18 Q. Does the name Woody Higdon mean
19 anything to you?
20 A. No, it doesn't.
21 Q. So our xerox copies of these three
22 sheets of photos of the photos have been marked as
23 Exhibit 13.
24 Let's turn to the other documents you
25 produced here today. The first document is a letter
103
1 that you wrote to Congressman Christopher Cox. That
2 was in connection with your treatment by the SBA; is
3 that correct?
4 A. Were you going to be passing those out
5 or --
6 Q. Excuse me. I thought they were out.
7 A. He has the originals.
8 MR. SALINGER: Yes. Let me do it this way.
9 Let's mark this one, then, as next in order, which
10 will be 14.
11 (Defendant's Exhibit 14 was marked for
12 identification by the Certified Shorthand Reporter,
13 a copy of which is attached hereto.)
14 BY MR. SALINGER:
15 Q. As I was saying, what we marked as
16 14 --
17 A. Yes.
18 Q. -- at least the first couple of pages,
19 is the letter that you wrote to Mr. Cox --
20 A. Yes and --
21 Q. -- or Congressman Cox, I should say,
22 regarding your treatment by the SBA?
23 A. Yes.
24 Q. Now, there are all sorts of documents
25 that are stapled to that two-page letter that's
104
1 dated June 7th, 1993. Were they enclosures to the
2 letter that you sent to Mr. Cox -- Congressman Cox?
3 A. Yes.
4 Q. So this entire packet that we've marked
5 as 14 is what you sent to Congressman Cox?
6 A. Yes.
7 Q. Since I haven't had an opportunity to
8 go over some of the new material, I'm not going to
9 really go into it at this time. I just want to
10 identify it so we know what's been brought here
11 today.
12 The next stapled set of documents has
13 on the -- as the first sheet something called
14 "Verification of Real Property Damage," and above it
15 it says "U.S. Small Business Administration," and
16 there appears to be a Polaroid shot of your house,
17 Mr. Steiner, at -- on Avenida de Santiago.
18 A. Now, were you going to pass that out
19 too?
20 Q. Yes. I was just identifying it for the
21 record.
22 MR. SALINGER: Here. We'll mark that packet
23 as Exhibit 15.
24 (Defendant's Exhibit 15 was marked for
25 identification by the Certified Shorthand Reporter,
105
1 a copy of which is attached hereto.)
2 BY MR. SALINGER:
3 Q. Can you identify for us what that
4 packet is?
5 A. This -- let's see. The SBA sent out an
6 adjustor or an appraiser, whatever their term is, to
7 go over the property, and which he did.
8 Q. To what the property?
9 A. To go over the property to verify
10 that -- what the property is like and to check for
11 damage and to ascertain what the cost would be to
12 repair it.
13 Q. And there are a number of different
14 documents in this set. Let me ask you this. Do all
15 the documents in this group of documents that have
16 been marked as Exhibit 15, do they all relate to the
17 SBA appraiser or valuation person going out and
18 looking at your property?
19 A. I've gone through everything so far.
20 Yes, everything -- everything I see relates to that,
21 yes.
22 Q. Are these documents that you obtained
23 from the FBA by your Freedom of Information Act
24 request?
25 A. The SBA? You said FBA.
106
1 Q. Excuse me. I meant SBA if I said FBA.
2 A. Some of the documents were given to me
3 and some were -- I received under the Freedom of
4 Information Act.
5 Off the record.
6 I was worried that you were going to
7 say FBI.
8 Q. I don't think the FBI is involved, to
9 my knowledge at least.
10 Okay. There's another packet of
11 documents stapled together. The first document
12 says -- well, it looks like an SBA form, and at the
13 bottom left-hand side it says "SBA Form 140."
14 There's a revision date of 9/92. There's some
15 correspondence in this set.
16 Can you tell me -- well, first let's
17 have this set marked as next in order, 16.
18 (Defendant's Exhibit 16 was marked for
19 identification by the Certified Shorthand Reporter,
20 a copy of which is attached hereto.)
21 BY MR. SALINGER:
22 Q. I don't know whether these documents
23 are stapled together in some order. Do you,
24 Mr. Steiner?
25 A. They all seem to be actually relating
107
1 to the whole incident. I don't see them as being
2 separate.
3 Q. Did you staple them together?
4 A. No, I didn't.
5 Q. That's just the way you found them in
6 the file when you went --
7 A. That's the way --
8 Q. -- and picked them up before producing
9 them today?
10 A. Yes.
11 Q. I see in this packet there's your
12 Freedom of Information Act request. It's about
13 two-thirds of the way through this particular
14 packet. It's dated Wednesday, April 7th, 1993.
15 And behind that is a letter dated
16 March 26th, 1993, from the Small Business
17 Administration to Congressman Cox explaining how you
18 were treated by the SBA, at least their version of
19 it. Anyway, for the record, that's Exhibit 16.
20 Off the record for a second.
21 (Discussion was held off the record.)
22 THE WITNESS: The SBA packet was quite big.
23 BY MR. SALINGER:
24 Q. The Freedom of Information Act response
25 to you was quite big; is that what you mean?
108
1 A. No. The whole SBA file was quite
2 big -- or is quite big.
3 Q. In response to your Freedom of
4 Information Act request, did you at some point
5 receive a significant bundle of documents from the
6 SBA?
7 A. Yes. Everything I've sent in. In some
8 cases it was a duplicate of what I had already
9 received.
10 One thing that comes to mind was one of
11 the gentlemen somewhere in these documents said that
12 they should watch out for me because I was going to
13 be a problem.
14 Q. I notice that document.
15 A. I haven't seen that yet. I thought
16 that was interesting.
17 Q. It's in what we've marked as
18 Exhibit 15. It's something called "Screening
19 Checklist - Disaster Home Loans" and Mr. Finley
20 wrote something to the effect that "Attention: Loan
21 processing verification, legal. Applicant is
22 extremely vocal and omnipresent in media. He is
23 known by all. He produces weekly newsletter for
24 damage property owners. Be advised to handle with
25 care. This can turn into a major media event."
109
1 A. Boy, I've -- my feelings have never
2 been so hurt.
3 Q. But now I understand why you're
4 concerned about the FBI being involved.
5 Did you ever talk to anyone about this
6 particular memo or notation?
7 A. I believed I had mentioned that to
8 Congressman Cox.
9 Q. Okay. The next packet -- and as I
10 indicated before, I'm labelling them as exhibits by
11 virtue of staples that are in them. That may be
12 more or less arbitrary, but when we put letters on
13 each of the pages, that should cure that issue.
14 In any event, this next packet, the
15 first page is a form from the SBA called "Record of
16 Congressional Inquiry," SBA form 717. This must not
17 be a first event for the SBA.
18 MR. SALINGER: Why don't we mark the packet
19 of documents that are stapled together that have
20 that form on the top as Exhibit 17.
21 (Defendant's Exhibit 17 was marked for
22 identification by the Certified Shorthand Reporter,
23 a copy of which is attached hereto.)
24 BY MR. SALINGER:
25 Q. After that form that I just mentioned,
110
1 there are a number of hand- -- or pages that have
2 handwritten notations on them called a
3 "Chronological Contact Sheet."
4 Is it your understanding that this is
5 the way SBA personnel make notes of communications
6 that they have with people they're dealing with?
7 A. Yes, it is. I was surprised to see how
8 they did this, yes.
9 MR. SALINGER: Okay. The next document is
10 again a form, it says at the top "Secured Home Loan
11 Authorization Draft." It's two pages. On the
12 bottom it says that there's supposed to be three
13 pages. Anyway, we'll mark this document as next in
14 order, which, I think, is 18.
15 (Defendant's Exhibit 18 was marked for
16 identification by the Certified Shorthand Reporter,
17 a copy of which is attached hereto.)
18 BY MR. SALINGER:
19 Q. Do you know what this document is?
20 A. The original explanation that the SBA
21 made to me was a statement that they would -- I
22 would be able to get this 82,500 and apply it on
23 another home, that this was something that they
24 would normally do.
25 They announced that at one of the
111
1 meetings that they had with the homeowners. There
2 were, I believe, three of us that were interested in
3 doing that. One of the homeowners has moved back to
4 the East Coast. I forgot who the other homeowner
5 is, but I believe there was three of us.
6 Q. Do you recall the name of the
7 individual who moved to the East Coast?
8 A. No, I don't.
9 Q. Was he also residing --
10 A. She.
11 Q. She?
12 A. She was the one that came to the
13 meetings, or she was the one that talked at the
14 meetings; her husband didn't. I don't recall her
15 husband. She was the one that was the boisterous
16 one in the family.
17 Q. Did they live on Avenida de Santiago?
18 A. They lived -- I believe they lived on
19 Avenida de Santiago.
20 Q. And it's your understanding that they
21 have moved to the East Coast?
22 A. They have moved to the East Coast, yes.
23 Q. Do they still own their house on
24 Avenida de Santiago?
25 A. Those facts I do not know.
112
1 Q. Do you know --
2 A. I believe either her or her husband
3 were in the airline industry.
4 Q. Do you know if her or her husband are
5 plaintiffs in this lawsuit?
6 A. That, I do not know.
7 Q. Looking at this document that's in
8 front of you now, the -- you mentioned the 82,500.
9 Is that the number that the SBA ultimately decided
10 was the amount to repair the damage that the SBA
11 thought should be repaired to your property?
12 A. Under their guidelines of inclusion and
13 exclusion, yes.
14 Q. In the middle of the page there's
15 something that says "Repayment, interest rate,
16 installment payment, payments beginning."
17 So did anyone explain to you what this
18 meant? Was it the interest rate on this SBA loan
19 would be four percent and you'd be paying it off
20 over 30 years in 402 installments?
21 A. Yes.
22 Q. I notice on the second page it says
23 "Use of Proceeds," and it looks like there's a
24 reference to items that are repair items on your
25 Avenida de Santiago house.
113
1 Was that your understanding as to what
2 the SBA at some point told you that you are to do
3 with the funds?
4 MR. PATTERSON: If you know that that's what
5 that is. He's asking you --
6 THE WITNESS: That was their Catch-22. After
7 everything had occurred, they came back and said,
8 "You can't use it for another house. You can only
9 use it on this house."
10 BY MR. SALINGER:
11 Q. And did that cause you to drop your
12 request for funds from the SBA?
13 A. That is true. There was no -- there
14 was no way I could use the funds.
15 Q. The next document in the stack of
16 documents you produced today is -- looks to be a
17 letter from the SBA dated April 14, 1993, that,
18 again, references this 82,500 number.
19 The body of the letter reflects that
20 this is to be a loan to repair your property --
21 repair or replace your disaster damaged residence,
22 is what it says.
23 I assume you received this letter
24 shortly after the date that's at the top of the
25 letter.
114
1 MR. SALINGER: Let's mark this next in order
2 and give it to Mr. Steiner, Number 19.
3 (Defendant's Exhibit 19 was marked for
4 identification by the Certified Shorthand Reporter,
5 a copy of which is attached hereto.)
6 THE WITNESS: Yes.
7 BY MR. SALINGER:
8 Q. Was it shortly after receipt of this
9 letter that you learned what you just a moment ago
10 described as a Catch-22 condition that was attached
11 to this loan?
12 A. That is true.
13 Q. And you had made a decision at some
14 point prior to learning of this condition that you
15 did not want to repair the Avenida de Santiago home?
16 A. Yes, because the landslide was still
17 occurring, it was an ongoing condition. The city
18 geologist stated that we shouldn't do repairs.
19 Q. Are you talking about --
20 A. Mark McLarty.
21 Q. -- Mark McLarty?
22 A. Yes.
23 Q. And this is at what's been referred to
24 as one of the town hall meetings that took place in
25 the first half of 1993?
115
1 A. Yes, he said it at that time, yes.
2 Q. Have you ever reconsidered whether
3 you're going to take this SBA loan in light of the
4 fact that Mr. McLarty has now indicated that the
5 landslide is no longer moving?
6 A. He hasn't told me that.
7 Q. Did you attend the presentation that
8 the city put on -- I think it was in October of last
9 year when Mr. McLarty spoke?
10 A. Yes.
11 Q. Did he say something to that effect at
12 that presentation?
13 MR. PATTERSON: I'm going to object to that.
14 I thought we had an agreement that anything that
15 occurred in any of those presentations wasn't to be
16 evidence in this case or used as evidence in this
17 case or for the purposes of discovery.
18 MR. SALINGER: The witness said Mr. McLarty
19 didn't tell him something.
20 THE WITNESS: Mr. McLarty told me that the
21 landslide will have phases through which it goes,
22 from movement to nonmovement to movement to
23 nonmovement.
24 BY MR. SALINGER:
25 Q. When did Mr. McLarty tell you that?
116
1 A. At one of the meetings.
2 Q. Was this a remark he made to the group
3 or just to you and whoever was within earshot after
4 or before the formal presentation?
5 A. It was after the formal presentation.
6 Q. So it's your --
7 MR. SALINGER: And, Chuck, to go back to your
8 comment, I certainly concur that what was presented
9 there at the -- at both mediation sessions is not to
10 be used in this case in terms of being presented as
11 evidence, but what I was exploring is this witness's
12 state of mind as to what he understands is going on
13 with his property today. I don't think that that's
14 quite the same thing.
15 MR. PATTERSON: Well, except, Tom, that the
16 state of mind you're talking about is the state of
17 mind with respect to what he was told about the --
18 or what was in his mind at the time that we're
19 talking about this letter, which is April 14th of --
20 of, what, '93?
21 MR. SALINGER: I understand we've moved
22 beyond April 14, 1993.
23 MR. PATTERSON: And now you're bringing it up
24 to the present day and you're asking him whether, I
25 guess, in effect, his state of mind has changed.
117
1 MR. SALINGER: In essence, because that was
2 my question, whether now that he has learned that
3 Mr. McLarty has -- is saying something else, at
4 least that's the way I framed the question, whether
5 he was reconsidering the SBA loan. I think his
6 answer has told me that he's not.
7 Q. But let me just ask you, and I can do
8 it without all of the preamble.
9 I'll just ask you simply this,
10 Mr. Steiner. Have you at any point changed your
11 mind about accepting the SBA loan?
12 A. No, I haven't.
13 Q. And the reason you haven't is you still
14 believe that the existence of the landslide at the
15 site makes it -- or makes the situation for which
16 you don't want to borrow money to repair your house?
17 A. That wasn't the purpose of my
18 application.
19 Q. I understand that, but I was wondering
20 whether you had changed your mind, and you've
21 answered that question.
22 This comment that Mr. McLarty made to
23 you at a town hall meeting in which he said
24 something to the effect that the landslide would go
25 through phases, some when they're moving, some when
118
1 they're not moving --
2 A. Yes, and it could be years before we
3 know anything about this one.
4 Q. Do you understand that -- strike that.
5 What else, if anything, did Mr. McLarty
6 say in that conversation that you just described to
7 us?
8 A. We had a lengthy conversation.
9 Q. What else do you recall about that
10 conversation?
11 A. Why the landslide occurred.
12 Q. What did he say in that regard?
13 A. Two major points he made were cut and
14 fill. He went over cut and fill and the fact that
15 the valleys were removed and filled, and in order to
16 fill the valleys, they had to go through compaction,
17 and once they went through the compaction, they lose
18 the grain of the land, and, in actuality, it plugs
19 up the drains -- the natural drains that the valleys
20 are and causes the water to build up into the hill.
21 The other thing that happened was when
22 Serrano was cut, it removed the lateral support from
23 the hill, and once the lateral support was removed,
24 it -- he came up with figures that -- construction
25 figures that you're supposed to be at a 1.4 or
119
1 better ratio, and once the -- at the time of the
2 landslide the ratio was less than one and,
3 therefore, the hill started to slide.
4 And the best -- the best that can ever
5 be done with that hill is that it be at a 1.2 ratio,
6 which, according to him, construction would never be
7 given by the city -- construction permits would
8 never be given by the city.
9 So as far as I was concerned, I could
10 never sell the property or do any kind of
11 reconstruction on the property, that it could never
12 be on a buildable equilibrium, where it's always on
13 a teeter-totter. I think that's actually what he
14 called it. If it's at a ratio of 1, it's on a
15 teeter-totter where it could go in either way; it
16 would either stay or move.
17 Q. Now, you just said that because of what
18 you heard, you could never -- strike that.
19 A. Because of what he told me.
20 Q. You made that decision right then and
21 there when Mr. McLarty told you what you've just now
22 been describing to us?
23 A. I was impacted by what he said. This
24 is a learned engineer, a man I saw go down into the
25 hole.
120
1 Q. Somebody who you think as competent and
2 honest?
3 A. I felt -- I felt that he was -- what he
4 was telling me was the truth.
5 Q. I'll ask you again, do you feel that he
6 was competent?
7 MR. PATTERSON: I'm going to object to that.
8 THE WITNESS: I felt exactly the same, that
9 he was telling me the truth.
10 MR. PATTERSON: Give me a chance.
11 I'm objecting to it as asking for an
12 opinion or conclusion about the credibility of the
13 witness, which is improper.
14 MR. SALINGER: Well, the witness has
15 testified that he made a decision not to move back
16 in his house or rebuild it based upon what he was
17 hearing from Mr. McLarty, so I'm trying to probe the
18 basis for him relying on Mr. McLarty in that
19 fashion. So I think it's appropriate.
20 Are you instructing him not to answer?
21 MR. PATTERSON: Yes.
22 I am instructing you not to answer.
23 BY MR. SALINGER:
24 Q. What else did Mr. McLarty say in this
25 conversation?
121
1 A. We talked about piezometers. Some of
2 the conversations later on were as far as that they
3 wanted to install some on our property because of
4 the fact that our property was the moving -- the
5 main movement of the landslide was our property.
6 Q. When you said some conversations later
7 on, I gather now you're lumping together --
8 A. I'm mixing some of the conversations
9 because some of the things that were brought up,
10 such as piezometers, were brought up then, some of
11 the wells, things of that nature, in -- things that
12 they were going to continue -- continually put in
13 horizontal and lateral wells and see if that brought
14 the level -- water level down.
15 Q. Did you take any notes at any of these
16 meetings or -- strike that. Let me withdraw that.
17 This conversation or conversations that
18 you had with Mr. McLarty that are not the meetings
19 in general, the formal portion of the meeting, did
20 you ever take any notes on those conversations or as
21 a result of those conversations?
22 A. No, I didn't.
23 Q. So what you're telling me is now
24 basically your recollection of those conversations
25 approximately four years after they took place?
122
1 A. Yes, because -- yes, that's very true.
2 Q. Was anyone else who you can identify
3 present at -- during those conversations, or at
4 least the -- let me focus right in on the
5 conversation that you just have been describing to
6 us in main, the one where Mr. McLarty talked about
7 the cut and fill and Serrano and the ratio.
8 A. He started talking -- he had --
9 actually, it was a diagram of the top- -- a
10 topographical map, which was about the size of that
11 opening right there and it --
12 Q. Excuse me. Let me interrupt because
13 that won't be clear on the record.
14 A. Okay. Yes.
15 Q. You're referring to the opening at the
16 end of the conference room, which I'm estimating to
17 be about eight feet.
18 A. I would say it was about eight feet by
19 four feet. And it was a topographical map and it
20 was -- I believe he called it a cut-and-fill map.
21 And it showed the whole -- how the area had been --
22 the original topography and where he had outlined
23 the cut and fill and how that had affected the --
24 how the compaction had affected and caused the
25 buildup of the water because the natural drainage
123
1 of the valleys were eliminated, so the water --
2 something I always thought was water just drains
3 right out of the side of the hills. But according
4 to him, it has a pathway, like a straw, and as soon
5 as you plug up the end of it, it -- the water just
6 builds up.
7 So, yes, I remember that because it was
8 a -- for me it was a revelation. What I saw and
9 what he said made a great deal of impact on me, and
10 I can still see that map. I can still see that map.
11 Q. Was anyone else present when he was
12 telling you this?
13 A. Yes, yes. As far as the main
14 conversation, the homeowners were present. Many of
15 the homeowners were present.
16 Q. Now, again, are you telling me part of
17 what transpired at the formal presentation or did
18 this, all that you've been telling me, transpire
19 afterwards? It's one of those --
20 A. It's a mixture of both. He explained
21 the cut and fill of the area to everybody else, and
22 then, yes, we talked about it afterwards.
23 Q. Was your wife with you when you talked
24 to him afterwards?
25 A. No.
124
1 Q. Was there anyone else who you
2 recognized who was with the group that was talking
3 to Mr. McLarty afterwards, assuming for the moment
4 that it was a group?
5 A. There were two people that I believe
6 were there; though, they were talking about their
7 own interests. The fellow with the trains down the
8 street from --
9 Q. Mr. Springmeier?
10 A. Springmeier. He was there. He had his
11 own specific questions about the movement in his
12 house. And Mike Clayton I believe was there.
13 Though, in many cases it was, you know, who was at
14 his ear at the time, and, again, I stood back when
15 Springmeier was talking and when Mike was talking.
16 And now I'm getting on to another --
17 one of the other meetings with Mr. McLarty, and he
18 said, "Oh, I see you have an old map there." He
19 says, "Well, I've got the new one. You should stop
20 by and see it."
21 I was one of the -- I was able to get a
22 copy of the landslide map of Orange County; I guess
23 it was an old one, and our area was marked on there.
24 Though, I had -- even if I was purchasing my home
25 and I had known of the existence of this map, I
125
1 would have had a hard time finding it, the fact that
2 it was, because there's no streets or anything. You
3 have to line it up with the freeway. That's how I
4 ended up finding that our house was actually where
5 the ancient landslide was.
6 Q. Did you ever drop by and get a new one
7 from Mark?
8 A. No, I didn't, actually. He said, "You
9 should stop by sometime." I didn't. I guess he had
10 it blown up and everything, from what he had stated.
11 Q. This meeting where the map was present
12 that you've described and where Mr. McLarty talked
13 to you or Mr. Clayton, Mr. Springmeier and made the
14 comments that you've just described as a revelation
15 to you, do you recall where that meeting took place?
16 A. Those are actually two meetings. One
17 was in -- the one with the map was in the -- I think
18 it was the medical center. It was a small -- fairly
19 small room. And the other one was in an auditorium
20 with a stage.
21 Q. Was the meeting that you're describing
22 in the auditorium, was that at the Mormon church?
23 A. Yes, that's what it was. Yes.
24 Q. And the map that you've described was
25 at the meeting at the medical center?
126
1 A. Yes, it was, the one with the cut and
2 fill.
3 Q. And that was the meeting at which,
4 either during the formal presentation or afterwards,
5 Mr. McLarty talked about the fill --
6 A. Yes.
7 Q. -- damming up the valleys that used to
8 allow water to run off?
9 A. Yes.
10 Q. Now, you also mentioned that
11 Mr. McLarty said something about the cutting of
12 Serrano?
13 A. Yes.
14 Q. What was it he --
15 A. That was in our discussion.
16 Q. So excuse me for interrupting, but when
17 you say in your discussion, you're contrasting that
18 with the formal presentation portion of the evening?
19 A. Yes, yes.
20 Q. Go ahead, please.
21 A. That was afterwards.
22 My -- I asked a direct question, did --
23 "When Serrano was built, did that affect the
24 stability of the hill?"
25 And he said, "Yes. It removed lateral
127
1 support."
2 Q. Did he say anything else on that topic?
3 A. His -- no, not at that moment. When he
4 was talking about the ratios, that was separate to
5 that.
6 Q. Was this also at the meeting at the
7 medical center, or after the meeting at the medical
8 center?
9 A. Yes.
10 Q. Did you or anyone else who was around
11 ask what he meant by the "removal of lateral
12 support"?
13 A. Well, I knew what he meant.
14 Q. So no one asked that?
15 A. Well, it was a conversation between him
16 and I.
17 Q. Oh, okay. Did he say --
18 A. It made so much sense. That was -- you
19 know, you just -- you think that it just stands
20 there by itself and that you can do anything, but
21 when -- when a geologist tells you that one --
22 everything is tied together and that if you remove
23 part, it weakens the other part, I didn't realize
24 that. I thought erosion would occur, but I didn't
25 think slippage would occur, that kind of --
128
1 Q. Did he at any point during that evening
2 in response to your question or otherwise indicate
3 that a certain portion of Serrano was built by
4 adding fill to the area and not cutting the area?
5 A. The map showed all the various cut and
6 fill, so, yes, the fill did -- I believe the fill
7 lines did come across Serrano.
8 Q. Did --
9 A. But those would -- again, would cause
10 the seepage to stop and cause more water to build
11 up.
12 Q. Did he say anything about drains put in
13 the fill, subterranean drains?
14 A. No. No, he didn't.
15 Q. Have you subsequently learned that
16 there were subterranean drains put in the fill?
17 A. No, I didn't. This was the first time
18 I'm hearing of this. They obviously -- that was
19 the -- one of the problems that did -- that was
20 addressed when we were talking about the drains is
21 the fact that they have to be maintained and that
22 from time to time have to be cleaned out because the
23 drains by themselves will plug up.
24 He was referring to the lateral -- the
25 horizontal wells that were being installed and that
129
1 those will have -- they can plug them --
2 Q. I -- excuse me.
3 A. So I would think that if drains had
4 previously been put in, that they must have plugged
5 up because the hill -- they didn't drain the hill.
6 Q. The comments that you attribute to
7 Mr. McLarty regarding the stability ratios, were
8 those also made after the presentation at the
9 medical center?
10 A. They were made -- those comments were
11 made during the presentation, and I don't believe
12 that those comments were made at the medical center.
13 I believe they were made at the Mormon. I believe
14 that was when stability was discussed.
15 Q. I asked you a moment ago whether you
16 took any notes of these -- what I'm referring to as
17 private conversations; though, I understand that
18 there may have been other homeowners standing
19 around, but I'm trying to differentiate again
20 between the formal presentation.
21 Talking about the formal presentation
22 portion of the evening in any of these homeowner
23 meetings in which Mr. McLarty spoke, did you take
24 any notes or record what he or others said in any
25 fashion?
130
1 A. Not at the -- there was one meeting
2 that I took a recording, and I don't have them.
3 There was -- nothing ever transpired of it, so I
4 never kept it. It was -- it was a meeting --
5 actually, I believe Mr. Rubin was at that meeting.
6 That was when I was told that lots of people live on
7 landslides and they get used to it.
8 Q. Who said that?
9 A. It was a gray-haired gentleman that
10 was -- I forgot how many homeowners that were there.
11 I think it was -- it was just the evacuated
12 homeowners.
13 Q. So it was at the --
14 A. Mr. Rubin would know who he was.
15 Q. So at the meeting of the evacuated
16 homeowners, you made a recording of what was said
17 and then you never transcribed it and --
18 A. No.
19 Q. -- threw away the tape; is that
20 correct?
21 A. I don't have the tape. I don't know
22 where it is. I gave the whole thing to my son or my
23 daughter and they reused it for their purposes.
24 Q. Well, we got off into an area that I
25 hadn't planned on getting into just by talking about
131
1 the SBA documents. Maybe we ought to go back to
2 that for the moment.
3 Well, I guess I want to tie it up a
4 little bit for now. Have you now told me what you
5 can recall about conversations that you had with
6 Mr. McLarty either before or after formal meetings
7 with homeowners?
8 A. Mark McLarty and I had numerous
9 conversations.
10 Q. And have you told me the sum and
11 substance of your numerous conversations with
12 Mr. McLarty?
13 A. I've told you much of it. As far as
14 other aspects, he was out at the house listening to
15 the ground gurgle. That was one time. We were
16 talking -- it was an amazing thing. The ground
17 actually gurgled.
18 I was talking when he went down the
19 hole. I talked to him at that time. He told me at
20 that time that he was surprised at the depth of the
21 landslide fissure. It was -- I believe he stated
22 that he found it at 60 feet below the ground and he
23 was probably 15 feet -- well, that's exaggerating.
24 Probably about 25 or 30 feet from where the crack
25 was in the ground.
132
1 So that meant from that crack, it went
2 practically straight down for 60 feet. So that's a
3 huge -- a large crevice. I mean, it isn't like it's
4 just a little slice.
5 So that made me think that the severity
6 of it was two things. It was very severe. The
7 other thing is, it was impossible for any kind of
8 caissons to ever secure that because you can't -- if
9 it's 60 feet there, it had to be a hundred feet down
10 at my house.
11 Q. You said you were with him when he went
12 into the hole.
13 A. Yeah.
14 Q. Which hole are you talking about now?
15 A. They dug a hole on our street and he
16 went down it. It amazes me somebody would do that.
17 They dug a hole --
18 Q. Right, a boring.
19 A. -- and he went down into it.
20 Q. Right.
21 A. He does have my respect. Something I
22 wouldn't do.
23 Q. Nor I.
24 Where on Avenida de Santiago was this
25 boring dug?
133
1 A. Right in front of Arlen Steiner's
2 house.
3 Q. So was this --
4 A. Between -- actually, it's very close to
5 Arlen and I, the division between our two houses.
6 Q. Was it in the street or --
7 A. In the street. In the street.
8 Q. And when was this? Obviously this was
9 after you had been evacuated, correct? Strike that.
10 Maybe it isn't so obvious. When was
11 that?
12 A. I'm not sure. I'm not sure of the
13 actual date of that.
14 Q. Was it before you evacuated?
15 A. Again, I'm not sure when that actually
16 transpired.
17 Q. Do you know if it was in 1992? Can
18 you -- do you know enough about it?
19 A. I believe it was in 1993.
20 Q. And what you're saying is he went down
21 in it to at least a depth of, you say, 60 feet?
22 A. He told me -- as I recall, he said the
23 fissure was at 60 feet.
24 Q. Is that the word that he used,
25 "fissure"?
134
1 A. I don't recall if that was actually the
2 word. When the --
3 Q. Slip surface?
4 A. Yeah, the slip surface was at 60 feet
5 below, or something of that nature.
6 Q. I don't mean to suggest words.
7 A. No, no. That's -- my -- in my mind,
8 it's a fissure, but he probably used a different
9 word.
10 Q. Do you know if anyone else went down
11 that hole the day that Mr. McLarty went down that
12 hole?
13 A. To my knowledge, no. There wasn't
14 anybody there that was thin enough. I certainly
15 wasn't.
16 Q. But you could now?
17 A. I could now, I suppose, if I was of
18 that nature, but I'm not. I have trouble burying my
19 feet in the sand, much less to -- much less my head.
20 Q. Now, you said you talked to him that
21 day when he went into that hole --
22 A. Yes.
23 Q. -- and he told you about where the
24 fissure or slip surface, or whatever term he used,
25 he told you it was 60 feet down. Did he tell you
135
1 anything else that day?
2 A. No. That was -- no, we didn't have a
3 long conversation on that day.
4 Q. Now, you said that you spoke with him
5 the day that he was at your house listening to the
6 ground gurgle.
7 A. Yes.
8 Q. When was that?
9 A. That would have been -- that was after
10 we were evacuated and I had come back and I had
11 called about it. Again, I don't recall the date.
12 Q. You called Mr. McLarty and asked him to
13 come out?
14 A. I believe I called the center on it.
15 Q. And do you know who you wound up
16 speaking to?
17 A. No, I don't recall.
18 Q. But you asked that Mr. McLarty come
19 out?
20 A. No. I said, "There's a strange noise
21 in my backyard."
22 Q. And was it in any particular portion or
23 area of your backyard?
24 A. It was about ten feet in from the side
25 gate on the -- as you're looking at the house, on
136
1 the right-hand side, right behind the house.
2 Q. So, in other words, between you and --
3 A. Just about the middle of the garage
4 area behind the house.
5 Q. And on the Arlen Steiner side of your
6 property?
7 A. Yes, yes.
8 Q. And how long did you hear that noise?
9 A. That was probably the only day, but
10 then again, I wasn't spending much time there.
11 Q. So you called when you were out there
12 and somebody came right over?
13 A. That, I'm not sure.
14 Q. What did Mr. McLarty say was causing
15 that noise?
16 A. He just -- he just felt it was just
17 seepage. He didn't think anything of it. He felt
18 it was just from the rainfall.
19 Q. Was it raining that day that --
20 A. No. It was dry.
21 Q. But had it rained the immediately
22 preceding days?
23 A. Not to my knowledge. I don't -- it was
24 a nice, sunny day, but that was in the ground and --
25 well, the ground was damp, so it could have been the
137
1 previous, but I don't recall what the rainfall was
2 within the proximity of that time.
3 Q. Are you able to date approximately when
4 this occurred?
5 A. Not accurately.
6 Q. You say it was after you evacuated, so
7 it was sometime after --
8 A. Yes, it --
9 Q. -- mid January?
10 A. Yes, it would be.
11 Q. Is there any other conversation that
12 you had with Mr. McLarty that you haven't now
13 already spoken to us about?
14 A. We had talked about the piezometers and
15 the fact that -- oh, I thought it was interesting.
16 He said, "Well, landslides really aren't that fast.
17 Maximum speed is 17 miles an hour."
18 I said, "Well, if you're sleeping, 17
19 miles an hour is pretty fast."
20 Q. He wasn't describing this landslide as
21 ever having gone 17 miles an hour, I take it?
22 A. No, no, no. He was saying, as far as,
23 you know, the amount of time you have to get out,
24 normally you do have time to escape.
25 Q. So he was trying to be reassuring?
138
1 A. To some extent. Again, as long as
2 you're not sleeping, it's not bad and as long as
3 you're on a bicycle, I guess, and going in the right
4 direction.
5 Q. This discussion about the piezometers
6 and the speed at which landslides travel, did this
7 take place after a meeting?
8 A. The speed of the landslide actually
9 took place at one of the meetings and one of the
10 homeowners, who is Scotch, had related to -- was
11 relating about a landslide that had occurred in, I
12 believe, Scotland and the speed at which that had
13 occurred, and so that's how that came up. That was
14 his answer -- or that's -- he said he was stating
15 that normally they don't go that fast and normally
16 you do have time.
17 Q. And the --
18 A. Piezometers was under constant -- that
19 was a -- that was brought up many a time, both out
20 at my house and in the course of the meetings, and
21 as far as -- they had said that they were
22 contemplating tying -- actually tying a computer
23 into ours that would wake somebody up if it started.
24 I don't know if that was ever done
25 or -- but they were going to have some sort of --
139
1 they talked about putting a relay in it because they
2 felt that they could get the best idea on movement
3 from the one that was placed on my property.
4 Q. The one that's placed on your
5 property, or was placed on your property, is that
6 the one that's down the slope from the pad and that
7 you access by -- at one point there was a road that
8 went in from what some people call the knuckle of
9 Georgetown?
10 A. Yes. Yes. They came through and they
11 tore up all my sprinklers and what have you down
12 there.
13 Q. That portion of the slope you had
14 sprinklers on?
15 A. For a while we had -- we put some trees
16 down there and we had -- we have watered it for a
17 while. We had some fruit trees down there that we
18 had, oh, some -- there was a little seep thing.
19 Q. Oh, drip ponding? What is it called?
20 A drip system?
21 A. A drip system down there to keep them
22 from -- but they didn't survive in the ground, so we
23 discontinued it, and it didn't really matter when
24 the city came in and tore it up, I guess.
25 Q. Were these the trees that you talked
140
1 about earlier that had been put in your backyard and
2 failed?
3 A. No. I was talking about the ones up
4 high. No. Those we put down there.
5 Q. Were there any other conversations that
6 you had with Mr. McLarty?
7 A. Those are the -- I asked for the
8 readings and I did get a set of the readings. I
9 said, "If you wish to keep on coming on my property,
10 I'd like to have a copy of the readings just to see
11 what's happening," and he did give me those and I
12 passed them on.
13 Those are the -- those are the most
14 important things as far as our conversations that I
15 recall.
16 Q. You passed those readings on to your
17 attorneys?
18 A. Yes.
19 Q. Okay. I got a little sidetracked from
20 going over the SBA documents that you produced here
21 today. Let's -- I'd like to try and finish that.
22 MR. SALINGER: There's a disaster assistant
23 registration application, FEMA. Maybe this is a
24 FEMA form. Yes, Federal Emergency Management
25 Agency, FEMA form 90-69. We'll mark that as
141
1 Exhibit 20.
2 (Defendant's Exhibit 20 was marked for
3 identification by the Certified Shorthand Reporter,
4 a copy of which is attached hereto.)
5 BY MR. SALINGER:
6 Q. Mr. Steiner, is this the application
7 you filled out to get relief from FEMA?
8 A. Yes, it is.
9 Q. And almost at the bottom of the page,
10 is that your signature?
11 A. Yes, it is.
12 Q. And you submitted this to FEMA sometime
13 in February of '93?
14 A. That sounds correct, at their disaster
15 office.
16 Q. And this is what resulted in ultimately
17 payment to you by FEMA?
18 A. That is true.
19 Q. And the payment was $4,000?
20 A. To my best recollection.
21 MR. SALINGER: Okay. The next packet of
22 documents I have is something that at the top says
23 "U.S. Small Business Administration Loan
24 Authorization and Agreement." I'll attach -- and
25 that's an eight-and-a-half-by-eleven series of
142
1 pages, and then there's a note attached to it. It's
2 called "U.S. Business" -- "U.S. Small Business
3 Administration Note, For Disaster Loans Only," and
4 it's multiple pages. I'll have this packet marked
5 as next in order, Exhibit 21.
6 (Defendant's Exhibit 21 was marked for
7 identification by the Certified Shorthand Reporter,
8 a copy of which is attached hereto.)
9 BY MR. SALINGER:
10 Q. I take it this is more information that
11 you received in connection with the loan that you
12 were trying to get from the SBA?
13 A. I did salivate on that four percent
14 rate, too.
15 Q. That's a good rate, no doubt.
16 Then the next document is something
17 that the cover sheet reads "U.S. Small Business
18 Administration Sacramento Disaster Office,
19 Borrower's Disbursement Fact Sheet."
20 A. Yes.
21 MR. SALINGER: This will be Exhibit 22.
22 (Defendant's Exhibit 22 was marked for
23 identification by the Certified Shorthand Reporter,
24 a copy of which is attached hereto.)
25 /////
143
1 BY MR. SALINGER:
2 Q. More paperwork from the SBA in
3 connection with the loan you were seeking from them?
4 A. Yes.
5 Q. As I said, I'm not going to go over
6 these now and maybe never. I just want to identify
7 them.
8 A. It was unending.
9 Q. What did you say? Unending?
10 A. Yes. It was unending.
11 MR. SALINGER: Okay. Next is something
12 called "Federal Emergency Management Agency Region
13 IX" at the top, application number 03301 to the
14 left-hand side and there's a date of 2/23/93. I'll
15 mark this as Exhibit 23.
16 (Defendant's Exhibit 23 was marked for
17 identification by the Certified Shorthand Reporter,
18 a copy of which is attached hereto.)
19 THE WITNESS: So I stand corrected on this.
20 BY MR. SALINGER:
21 Q. Oh, this is the one that shows that you
22 only received $2670?
23 A. Yes.
24 Q. All right. Okay. That's -- that
25 amount is in the second paragraph of this letter,
144
1 correct?
2 A. Correct.
3 MR. SALINGER: Okay. Let's mark as
4 Exhibit 24 a packet of documents from the Small
5 Business Administration. Right below that it says
6 "Disaster Home Loan Application."
7 (Defendant's Exhibit 24 was marked for
8 identification by the Certified Shorthand Reporter,
9 a copy of which is attached hereto.)
10 BY MR. SALINGER:
11 Q. More paperwork in connection with your
12 loan application from the SBA, correct?
13 A. Yes.
14 Q. Let's mark next a letter to you from
15 Mr. Cox -- or to you -- I guess, Chris.
16 MR. SALINGER: We'll mark that as Exhibit 25;
17 a letter from Mr. Cox to Mr. Steiner.
18 (Defendant's Exhibit 25 was marked for
19 identification by the Certified Shorthand Reporter,
20 a copy of which is attached hereto.)
21 BY MR. SALINGER:
22 Q. And this letter was just an update from
23 Mr. Cox regarding your letter to him regarding the
24 treatment that you were receiving from the SBA,
25 correct?
145
1 A. True.
2 Q. Let's mark as Exhibit 26 a letter from
3 the SBA to you.
4 (Defendant's Exhibit 26 was marked for
5 identification by the Certified Shorthand Reporter,
6 a copy of which is attached hereto.)
7 BY MR. SALINGER:
8 Q. And this letter is just acknowledging
9 your request under the Freedom of Information Act
10 for information, correct?
11 A. Yes.
12 Q. And, finally, a letter from the SBA
13 dated 1/14/94 to you, and we'll mark that as
14 Exhibit 27.
15 (Defendant's Exhibit 27 was marked for
16 identification by the Certified Shorthand Reporter,
17 a copy of which is attached hereto.)
18 BY MR. SALINGER:
19 Q. By this letter, Mr. Steiner --
20 actually, it's a form letter to you and then you
21 signed it and put some information on this letter,
22 correct?
23 A. Yes, that's my handwriting.
24 Q. And you were, by checking the
25 appropriate box, asking the SBA to extend the period
146
1 in which they might fund the loan to you?
2 A. Yes.
3 Q. Has that now lapsed?
4 A. Yes.
5 Q. So but as of January 20, 1994, you were
6 still considering whether or not you would want the
7 SBA to fund that loan?
8 A. If it could have been applied to the
9 house, yes.
10 Q. To which house?
11 A. Mission Viejo. That was the whole
12 object.
13 Q. In other words, for quite some time you
14 were hopeful that you could change the SBA's mind on
15 this, in effect, and get them to extend that loan to
16 the -- your new house in Mission Viejo?
17 A. Yes.
18 Q. And you never intended, once they told
19 you that condition -- strike that. Let me rephrase
20 that.
21 At all times after the SBA told you
22 their condition for the loan, namely, that it be
23 used to repair your house in Avenida de Santiago, at
24 all times after that you were of a mind that you
25 didn't want the money for that purpose, correct?
147
1 A. I was striving to have them go through
2 with what they had originally said they would do.
3 Q. And at no time did you waiver and
4 consider using the loan to rebuild or repair Avenida
5 de Santiago; is that correct?
6 A. At no time.
7 MR. SALINGER: Why don't we take a break for
8 a minute or two.
9 MR. PATTERSON: Sure.
10 (Recess taken from 3:06 p.m. to
11 3:14 p.m.)
12 (Ms. Calaway is present.)
13 BY MR. SALINGER:
14 Q. Mr. Steiner, we've now identified on
15 the record all the documents that you've produced
16 today, correct?
17 A. Yes.
18 Q. Now, when we broke this morning for our
19 noon recess we were talking about the refinance of
20 your first by Great American First Savings Bank and
21 the line of credit you obtained in 1990 with Sears
22 Consumer Financial Corporation. I want to now talk
23 about appraisals of your property on Avenida de
24 Santiago.
25 Was there any appraisal of that
148
1 property that you were aware of when you purchased
2 that property in the first part of 1986?
3 A. No. No, there wasn't.
4 Q. Do you know if an appraisal was done by
5 anyone?
6 A. No, I don't know, because it was a bank
7 owned property.
8 Q. You didn't talk to anyone about
9 obtaining an appraisal for you to find out what the
10 property was worth, then, correct?
11 A. No, I didn't.
12 Q. When Great American First Savings Bank
13 paid off the existing loan and gave you a new first
14 in 1987, they obtained an appraisal, did they not?
15 A. They would have.
16 Q. Let me show you a document that I
17 believe was produced by you in the course of this
18 litigation. It's called the Uniform Residential
19 Appraisal Report. It's multiple pages, and we'll
20 mark that as next in order, 28.
21 (Defendant's Exhibit 28 was marked for
22 identification by the Certified Shorthand Reporter,
23 a copy of which is attached hereto.)
24 BY MR. SALINGER:
25 Q. Have you seen this document before?
149
1 A. It does look familiar.
2 Q. Look on page 2 where there's a value of
3 $715,000. Actually, you know, that -- I'm looking
4 where it says "Indicated value by sales comparison
5 approach, $715,000." I think the final number that
6 that appraiser came up with, I think, has been
7 whited out or has been accidentally obscured by a
8 page that was turned over.
9 MR. SALINGER: Can I make a request for you,
10 Chuck, to get a better copy of page PMS 1804,
11 because that's what I have and I think --
12 MR. PATTERSON: Just let me find out what
13 happened.
14 MR. SALINGER: I think the -- this
15 appraiser's ultimate number is obscured by whatever
16 happened to that portion of the document.
17 Q. Do you know, Mr. Steiner, what number
18 this appraiser came up with as a value for your
19 property?
20 A. No, I don't, but it would be at the --
21 somewhere around 708 to 715, because those are the
22 two figures he comes up with.
23 Q. Right.
24 A. So it has to be in that range.
25 Q. Did you talk to this appraiser at all?
150
1 A. I must have. I don't recall.
2 Q. There's some photographs attached to
3 this appraisal, at least to the original of this
4 appraisal and to the copies that we have; there are
5 rather poor xeroxes of photographs.
6 Do you have the actual photographs
7 attached to your copy of this report?
8 A. No, I don't. This -- I believe this
9 was for the bank.
10 Q. Right.
11 A. And they would have had the originals.
12 Q. So when you got it, that's what you
13 got --
14 A. It was just a copy of it.
15 Q. You got poor xeroxes?
16 A. Yeah, mine looked bad. If I was the
17 bank and I received this, I wouldn't loan it.
18 Q. If I could turn your attention to --
19 strike that.
20 You got a copy of this appraisal
21 report, though, at or around the time that you were
22 attempting to refinance with Great American Savings?
23 A. That would be true, yes.
24 Q. Do you recall noting at the time that
25 your property had been appraised within a couple
151
1 years of your purchasing it for under 500,000 for
2 over -- now being appraised for over 700,000?
3 A. Yes.
4 Q. Did you attribute that to the
5 improvements that you had made on the property since
6 you purchased it?
7 A. Yes.
8 Q. I note on page 1 of this report, about
9 two-thirds of the way down where it says "Finished
10 area above grade contains ten rooms, four bedrooms,
11 four and a half baths. I'm not sure; it looks like
12 there's a second half. I'm not -- oh, maybe they're
13 saying there's a half bath and a quarter bath. Do
14 you see where I'm pointing to?
15 A. Yes.
16 MR. PATTERSON: Single line that starts
17 with -- you're talking about a single line that
18 starts "Finished area above grade"?
19 MR. SALINGER: Exactly.
20 MR. PATTERSON: Okay.
21 BY MR. SALINGER:
22 Q. Almost to the right-hand margin is the
23 number 5,108. Is that about the square footage in
24 your house on Avenida de Santiago?
25 A. Yes, that is true. It is one of the
152
1 larger houses in the area.
2 Q. On the fourth page, the page with the
3 number at the bottom PMS 1806, it's labeled
4 "Addendum" on the top.
5 A. Yes.
6 Q. There is a -- the last sentence of that
7 addendum says, and I'll quote it, "The adjustments
8 for quality of construction reflect the fact that
9 the subject's quality is somewhat inferior when
10 compared to typical custom built homes in the
11 tract."
12 Had you noted that when you looked at
13 this appraisal?
14 A. That's a good question, and I asked him
15 on that and I -- obviously I felt insulted. He said
16 it had the -- it had had a Spanish/California look
17 to it. Well, what he felt were the quality homes in
18 the area had the Eastern look, the stone fronts, the
19 shake roofs, things of that nature. So it's a
20 matter of taste and not reality on his part.
21 So, yes, I did take a front.
22 Q. You figured out the question I was
23 going to ask you. Did he say he had downgraded the
24 value because of that?
25 A. Yes.
153
1 Q. Did he tell you how much?
2 A. No. I don't recall. No. I just
3 remember my blood pressure was rising.
4 Q. Now, we've talked about your line of
5 credit that was secured by a second against the
6 property that you obtained in, I think, August of
7 1990. Do you recall the questions I asked you about
8 that earlier?
9 A. Yes.
10 Q. Was there an appraisal done by Sears or
11 somebody working for Sears in connection with that
12 line of credit?
13 A. To my knowledge, they did a
14 walk-through check and I possibly gave them this.
15 Q. By "this," you mean the appraisal that
16 we've just been talking about that was done in 1987?
17 A. Exhibit 28.
18 Q. Thank you.
19 Did you ever see an appraisal that
20 Sears or somebody working on behalf of Sears had put
21 together in connection with that line of credit?
22 A. I don't recall seeing it if it existed.
23 Q. But you think they walked through the
24 property with you?
25 A. Yes, I do. I know the -- John Brunot
154
1 did and he was the gentleman who handled it, and I
2 believe someone else came through also.
3 Q. You spelled Brunot for me previously.
4 A. B-r-u-n-o-t.
5 Q. Thank you.
6 What was his position with Sears?
7 A. He's a manager.
8 Q. Do you know if he's still with them?
9 A. To my knowledge, he is.
10 Q. How did you happen to go through Sears
11 for this line of credit?
12 A. We've done -- we've done a lot of our
13 vehicles through Sears financing and Allstate.
14 Q. Do you know out of what office or
15 location the paperwork on this line of credit is
16 currently going through?
17 A. I -- that, I don't know. That, I don't
18 know.
19 Q. Again, your wife would know that?
20 A. Patricia Coffman would know that.
21 Q. I don't know whether Allstate or Sears
22 Financial have offices in the Sears retail stores or
23 whether they have separate locations. Do you know
24 in this instance whether you dealt with the Sears
25 retail?
155
1 A. I don't know where that office is. I
2 really don't know where that office is. I thought
3 it -- I don't know. I'd be guessing.
4 Q. Okay.
5 A. I think there was a Brea facility, but
6 I believe they closed that.
7 Q. And you think it was out of the Brea
8 facility at one point?
9 A. I believe so.
10 Q. And by "facility," do you mean a Sears
11 retail store or --
12 A. No, no. It was a large building,
13 office-type building, in Brea.
14 Q. And was it an Allstate office, I mean,
15 the "Allstate" appeared on the door?
16 A. I believe so.
17 Q. And, again, it's your best recollection
18 that that line of credit -- or at least you still
19 owe money on that line of credit, so there's a
20 certain amount of paperwork that's going back and
21 forth between you and Sears on that line of credit
22 at the present time?
23 A. I believe so.
24 Q. I want to show you an SBA document that
25 I had -- actually, that had been produced by you
156
1 prior to the SBA documents you produced today.
2 Let's mark this document -- actually, it's a number
3 of pages and the first page says "Verification of
4 Real Property Damage" and it's got a unique
5 Pillsbury number PMS 1861 through 1865.
6 MR. SALINGER: We'll mark that as next in
7 order, 29.
8 (Defendant's Exhibit 29 was marked for
9 identification by the Certified Shorthand Reporter,
10 a copy of which is attached hereto.)
11 BY MR. SALINGER:
12 Q. Mr. Steiner, do you recognize this
13 group of documents?
14 A. Yes, I do.
15 Q. Can you tell me what they are?
16 A. It's a verification of real property
17 damage.
18 Q. Okay. That's the caption that appears
19 on the top of the first page. Was this, to the best
20 of your knowledge, something that was prepared based
21 upon when the SBA came out to look at your property
22 sometime after you had been evacuated?
23 A. There was -- it's -- this one is signed
24 by Carlos Hernandez. There was "Could not go around
25 residence because gates were locked."
157
1 Yeah, this was a strange gentleman.
2 He -- he called and harassed my daughter.
3 Q. Did you ever meet Mr. Hernandez?
4 A. No. I just -- I talked to him on the
5 phone once.
6 Q. Under "Comments" on the bot- --
7 A. I don't recall -- I don't recall the --
8 Q. On the bottom third of the first page
9 it says, as best as I can read, I think that's L
10 slash V --
11 A. Yeah.
12 Q. -- although I'm not positive.
13 A. "Visited site and spoke to A, discussed
14 SBA guidelines." "A" usually is referring to the
15 party.
16 Q. Right.
17 A. And that wasn't me. He talked to my
18 daughter. That's what I -- he became -- she was
19 crying afterwards.
20 Q. I've read something in the file you
21 produced today and perhaps even elsewhere about an
22 incident where somebody called your house.
23 A. This was the Hernandez man that did
24 that.
25 Q. But that comment sounds like somebody
158
1 who visited the site and spoke to somebody.
2 A. I know, it does.
3 Q. And I was going to ask you whether you
4 were "A."
5 A. No. The other thing too is, if I was
6 "A," why didn't he get around the building?
7 Q. Well, I was going to ask you that
8 question.
9 A. Right, because I wasn't "A." That's --
10 Q. During the period -- this apparently
11 was done sometime in February of 1993, and during
12 that time was your house locked up? Was your gate
13 locked with a chain?
14 A. Yes. We evacuated --
15 Q. Right.
16 A. -- so we locked the house up.
17 Q. But when you came back, you could go --
18 you unlocked the gate? I mean, you had the key to
19 this lock?
20 A. Yes, yes.
21 Q. Did somebody from the SBA at some point
22 get into the house to make measurements?
23 A. Yes, yes.
24 Q. Did you let them in?
25 A. Yes. I went through the whole house
159
1 with one gentleman.
2 Q. But that was not Mr. Hernandez?
3 A. No. No, it was not.
4 Q. Was that Mr. Lovell? That's the other
5 name on this report.
6 A. I thought -- I am not sure. I'd have
7 to check the other -- it could have been a Brian
8 Lovell, but I was trying to think of what the other
9 gentleman's name was from the SBA. There were two
10 that I dealt with. The one that -- what was the
11 gentleman who wrote that note about me, watch out
12 for me? If his name isn't Brian Lovell, then, yes,
13 this is the gentleman that walked through.
14 Q. His name is not Brian Lovell. His
15 name -- at least there's somebody at the bottom of
16 that identified as D. Finley.
17 A. Oh, yes, yes, Finley. Yes, I walked
18 through the house with Brian Lovell.
19 Q. And he's the one who took measurements?
20 A. Yes, he measured the whole house. He
21 spent a long time there.
22 Q. Now, there's a number in the middle of
23 the sheet for total predisaster value of real
24 estate, 1,144,000. Do you know where that number
25 came from?
160
1 A. That came -- that number came from
2 Brian Lovell.
3 Q. Do you know what he did to come up with
4 that value?
5 A. He appraised it.
6 Q. Did he go out, to your knowledge, and
7 look at comparables to come up with that number?
8 A. Yes. He had been through the whole
9 area. This is what he stated to me.
10 Q. Did you at any point tell Mr. Lovell
11 what you thought your house was worth?
12 A. I don't recall that.
13 Q. Did you ever tell him what you thought
14 the house was worth but for the landslide problem?
15 A. No, I don't recall my ever stating to
16 him the value of my house.
17 Q. But around this time didn't you think
18 that your property was worth, if it weren't for the
19 landslide, approximately 1, 1.1, 1.2 million
20 dollars?
21 A. I believe I was stating it was more
22 valuable than that.
23 Q. More valuable than 1.2?
24 A. Yes.
25 Q. Did you have any conversation with
161
1 Mr. Lovell about the conclusions in this report as
2 to what it would take to repair the damage to your
3 property?
4 A. Would you please repeat the question?
5 Q. Sure. At around the time -- strike
6 that.
7 You received a copy of this report, did
8 you not, from the SBA before you made your Freedom
9 of Information Act request?
10 A. Yes.
11 Q. Around the time that you walked through
12 the house with Mr. Lovell and you received this
13 report from the SBA, did you have any discussion
14 with Mr. Lovell as to what it would take to repair
15 your house?
16 A. There were conversations as far as some
17 of the problems involved in it and how extensive it
18 could be, depending on what I wanted to do and it
19 could be -- if the foundation was going to be
20 repaired, that would be very expensive. They were
21 going to have to dig underneath.
22 So, no, I didn't -- in that -- those
23 conversations, all it did was make me feel that any
24 monies that would be spent on it would be a waste.
25 Q. I see on the front page of this
162
1 document, Exhibit 29, there's a number for total
2 repair/replacement cost to real estate of 7800.
3 That looks like it may just be talking about the
4 exterior. Did you have any discussions with
5 Mr. Lovell about that number?
6 A. No. No, I don't --
7 Q. And further into this document
8 there's -- on page 3 of this document, that page has
9 a unique number of PMS 1863, there's a total repair
10 cost of 11,936 put at the bottom of the document.
11 Did you have any conversations with Mr. Lovell or
12 anybody at the SBA regarding that number?
13 A. No. There was -- they had come in with
14 figures as low as $2,000 and as high as $110,000. I
15 believe it was 110. It might have been a hundred --
16 I believe it was 110. And the 110, which is the
17 final, I believe, they -- they percentaged out
18 landscaping and pool and things of that nature.
19 Q. So the 110,000 number, which I believe
20 is the final number that the SBA came up with the
21 final cost of repair, that included interior,
22 exterior, everything as far as the SBA was
23 concerned?
24 A. As far as they were concerned, that
25 they were going to give me, loan to me, 82,500.
163
1 That's how that figure came up.
2 Q. They take a percentage?
3 A. They deducted for any kind of
4 hardscape, exterior -- extraneous to the structure
5 itself.
6 Q. You mean they weren't willing to repair
7 exterior cement slabs?
8 A. To my recollection -- well, slab is
9 something different. I don't know that. But they
10 were -- any damage that they considered nonresidence
11 would be excluded, as I recall.
12 Q. Let me show you another appraisal that
13 we have for your property. This one is dated
14 November 2, 1993. That's prepared by Affiliated
15 Financial Services, and Robert A. Denk, D-e-n-k, is
16 the appraiser.
17 MR. SALINGER: We'll mark this next in order,
18 30.
19 (Defendant's Exhibit 30 was marked for
20 identification by the Certified Shorthand Reporter,
21 a copy of which is attached hereto.)
22 BY MR. SALINGER:
23 Q. Do you have that appraisal in front of
24 you now?
25 A. Yes, I do.
164
1 Q. This was an appraisal that was prepared
2 after you knew of the landslide and after you had
3 been evacuated, correct?
4 A. That is correct.
5 Q. For what purpose was this appraisal
6 prepared?
7 A. To evaluate the house.
8 Q. Evaluate the house for any particular
9 purpose, such as the SBA, FEMA?
10 A. I was requested to by my attorneys.
11 Q. This appraiser, was he somebody who was
12 recommended to you by other homeowners in this
13 lawsuit?
14 A. I had asked around for suggestions on
15 appraisers and his name came up.
16 Q. Do you recall who recommended him?
17 A. I believe it was Arlen Steiner, my
18 next-door neighbor.
19 Q. Did you talk to Mr. Denk at all in
20 connection with this appraisal?
21 A. Yes, I did have conversations with him.
22 Q. Conversations, is that multiple
23 conversations?
24 A. There were a -- initially I called him
25 and asked him for references and there were just --
165
1 and then he did the appraisal and brought it out to
2 my home and we discussed it.
3 Q. Did he come and measure your property
4 in the course of undertaking the appraisal?
5 A. I gave -- I believe I gave him the --
6 did I give him the keys? Okay. He told me he was
7 going -- when he was going to be at the house and I
8 met him there and I opened up the house for him. I
9 don't -- I think -- did I -- I believe I left for
10 work, went back to work after that and that he
11 locked up. I don't think I stayed there with him
12 while he measured.
13 Q. When he came and measured, was that
14 still -- strike that.
15 When he came and measured the house
16 when you opened the house up for him, for him to
17 look around and do whatever else he wanted to do in
18 the house, was that within a couple of weeks of
19 November 2, 1993, the date shown on the first page
20 of the appraisal?
21 A. I don't believe so. I was looking for
22 a date on here when it was presented to me, and I
23 can back-figure it if I could find that.
24 Q. Well, on the page that's the fourth
25 page in, it's estimated as of October 30 -- or --
166
1 excuse me -- it says, "I estimate the market value,
2 as defined, of the subject property as of
3 October 30, 1993, to be $50,000." Do you see that?
4 A. Yes. So I would -- it was probably a
5 month prior to that, I would think, that I would
6 have contacted him.
7 Q. Do you recall when Avenida de Santiago
8 was cordoned off by security guards?
9 A. Yes.
10 Q. That was the first couple of months of
11 1993, correct?
12 A. Yes.
13 Q. When, approximately, did that security
14 guard -- when was the security guard taken away from
15 that post, if you know?
16 A. I don't know that.
17 Q. It was within the first six months of
18 1993?
19 A. I didn't live there.
20 Q. Did --
21 A. I -- we moved out and we only went
22 there when we had to, so I wouldn't be the one to
23 ask.
24 Q. So you don't know when that security
25 guard was lifted from that post?
167
1 A. No, I don't.
2 Q. You said you were given references by
3 Mr. Denk. Did you call any of those references?
4 A. I don't really believe I did. He, as I
5 recall, stated he had done appraisals for various
6 neighbors of mine, and my feeling was that he had an
7 understanding of the area and I thought that was
8 important rather than bringing out -- in an outside
9 appraiser that's not familiar.
10 Q. I tell you the reason I asked about the
11 security guard is on page 5 under "Appraisal
12 Addendum," if I could get you to look at the second
13 paragraph --
14 MR. SCHWARTZ: What page is this?
15 MR. SALINGER: It's got the unique number of
16 16975.
17 MR. SCHWARTZ: Thank you.
18 BY MR. SALINGER:
19 Q. The second paragraph under "Appraisal
20 Addendum," second sentence says, "At the time of the
21 inspection, Avenida de Santiago was cordoned off by
22 a private security firm hired by Anaheim to control
23 any possibility of looting, traffic congestion from
24 curious onlookers and coordination of consultants in
25 general."
168
1 Do you know whether that was still the
2 case in October of 1993, that the private security
3 firm was -- had the area cordoned off?
4 A. I really wouldn't know that.
5 Q. At some point -- strike that.
6 Have you had any other appraisal report
7 prepared for your home other than this one?
8 A. I have not -- I cannot recall of
9 another appraisal other than what we've seen.
10 Q. This one, as I said, on the front it
11 says, "As of November 2, 1993." So I take it, then,
12 based upon your last answer, that you know of no
13 other appraisal for your property subsequent to
14 November of 1993?
15 A. No, I know of no other appraisal.
16 Q. Who presently resides in your property?
17 A. I don't know if anybody resides in my
18 property.
19 Q. When was the last time you were at your
20 property?
21 A. When was the last time I was at my
22 property?
23 Q. And by "your property," I'm talking
24 about, obviously, as I have for most of the
25 afternoon, the one on Avenida de Santiago.
169
1 A. Eight months. The last time I was at
2 my property was when I was requested to be there by
3 my attorneys, but that was the only time, and there
4 was -- at that time there was nobody residing in the
5 house, and that's the last time I've seen the house.
6 Q. I was at an inspection at your house by
7 consultants hired by the defendants within the last
8 couple of months and there were people who looked
9 like they were living there. There were personal
10 belongings in the bedroom.
11 A. Were there people there?
12 Q. When I was there, there was not a
13 person in the bedroom, but there were personal
14 belongings. There were things in the bathroom. Do
15 you have any idea whose belongings those may have
16 been?
17 A. Who was there? No, I don't know.
18 Q. I have heard that you had some
19 arrangement with a battered women shelter to use
20 your house.
21 A. I have made a donation of the house to
22 them.
23 Q. You have made a donation of the use of
24 the house or you have actually in some --
25 A. They are renting it for a dollar a year
170
1 for ten years.
2 Q. Do you have a rental agreement with
3 them, something in writing?
4 A. Yes, there is a rental agreement.
5 MR. SALINGER: I'd like to get a copy of
6 that. That's within the purview of what we've asked
7 for and that has not been produced to us.
8 THE WITNESS: You never asked it of me.
9 MR. PATTERSON: Jerry.
10 THE WITNESS: Oh.
11 MR. PATTERSON: Don't get into this. Don't
12 get your dog in this fight.
13 MR. SALINGER: I think we have, but, you
14 know, I could go back to Exhibit 1, but --
15 MR. PATTERSON: I'll look and check.
16 MR. SALINGER: And if we have, which I'm
17 certain we have, I'd like to get it before the next
18 session so that I can ask Mr. Steiner about it.
19 MR. PATTERSON: I said I would check.
20 MR. SALINGER: I understand. I heard you. I
21 was just modifying my request ever so slightly.
22 MR. PATTERSON: Just make sure I respond to
23 your modifications, Tom.
24 MR. SALINGER: Thank you. Don't want any
25 modification to go unresponded.
171
1 MR. PATTERSON: Unresponded.
2 BY MR. SALINGER:
3 Q. What's the name of this organization
4 that you've leased the property to for a dollar a
5 year for ten years?
6 A. Interval House.
7 Q. Did you have any involvement with that
8 organization prior to your leasing your house to
9 them?
10 A. No.
11 Q. Did they approach you or did you
12 approach them?
13 A. I approached them.
14 Q. How did you happen to find them to
15 approach them with this offer?
16 A. I had heard of them.
17 Q. Can you describe to me exactly what
18 that organization does?
19 A. When the husbands beat up their wives,
20 they have a place to go to.
21 Q. So when you were saying that you didn't
22 believe anyone was living there, did you mean that
23 you just didn't know what use they were making of
24 the property today?
25 A. I don't know what use they're making of
172
1 the property today. They've used it for storage.
2 They have a right to use it for whatever -- whatever
3 use they wish to use it for.
4 Q. Have you sought any tax benefit by
5 virtue of this donation or gift you've made to
6 Interval House?
7 A. It's not a gift.
8 Q. This arrangement that you've made with
9 Interval House, have you sought any tax advantage by
10 virtue of that arrangement?
11 A. Donations have tax -- you can make
12 deductions.
13 Q. Have you sought a deduction?
14 A. By "sought," have I applied for it, has
15 my accountant applied for it, has it been part of my
16 taxes?
17 Q. Yes. Is it a part of your taxes?
18 A. Yes, it has been.
19 Q. What is the size of deduction that you
20 have sought by virtue of this donation to Interval
21 House?
22 A. That's a good question. I don't know
23 the answer.
24 Q. Your accountant knows the answer?
25 A. Yes, he does.
173
1 Q. Is this --
2 A. Yeah, he would have the answer.
3 Q. So this is somebody other than
4 Ms. Coffman?
5 A. Yes.
6 Q. Who is this, then?
7 A. Garey Capata.
8 Q. How do you spell his last name?
9 A. C-a-p-a-t-a.
10 Q. And he prepares your tax returns?
11 A. Yes, he does.
12 Q. And where is he located?
13 A. In Laguna Niguel.
14 Q. Do you know on what street?
15 A. Cabot. He is on Cabot.
16 Q. There is a Cabot in Laguna Niguel, yes?
17 A. Cabot.
18 Q. That's pretty close to the 405?
19 A. Yeah. I believe his office is in
20 Los Angeles also, though I've never used them.
21 Q. You've never seen him in L.A.; is that
22 what you mean when you say never used him? You've
23 confused me.
24 A. Yeah, I've never seen him in L.A.
25 Q. How long has he been your accountant?
174
1 A. It must be over ten years, I would
2 think.
3 MR. SALINGER: Do you want to wrap up pretty
4 quick here?
5 MR. PATTERSON: If you're about to start
6 something new.
7 MR. SALINGER: I've got one document that
8 sort of closes off an area that will just take a
9 couple minutes.
10 MR. PATTERSON: That's fine.
11 MR. SALINGER: Let me show you one another
12 document. Mark this one as Exhibit 31.
13 (Defendant's Exhibit 31 was marked for
14 identification by the Certified Shorthand Reporter,
15 a copy of which is attached hereto.)
16 MR. SALINGER: For the record, this is a
17 document that says "Wendover," spelled
18 W-e-n-d-o-v-e-r, "Funding, Inc." On the top it's
19 got an address for that entity in Greensboro, North
20 Carolina.
21 Q. Is this your handwriting that's in the
22 middle of this page?
23 A. I don't believe it is. I don't -- it
24 doesn't look like my handwriting.
25 Q. Can you recognize it? Is it your
175
1 wife's?
2 A. It's probably my wife's handwriting.
3 Q. Do you know who Wendover Funding is?
4 A. They're the mortgage holder for
5 Anaheim.
6 Q. Is that for the Sears --
7 A. No.
8 Q. -- what remains on the line of credit,
9 or was it for what used to be owned by Great -- not
10 Great Western -- Great American Savings Bank?
11 A. Yes.
12 Q. As a matter of fact, I think Great
13 American was taken over, weren't they, by one of the
14 regulatory agencies?
15 A. I think that's very true. There was --
16 that's right, because I called for some reason. We
17 weren't -- oh, we were having a problem as far as
18 being harassed by the assessor's office and we
19 called San Diego to explain the situation and they
20 said they really couldn't listen to me because they
21 were all losing their job in another week.
22 Q. And so to the best of your knowledge,
23 Wendover Funding took over that loan; is that
24 correct?
25 A. Yes, yes.
176
1 Q. Going back to your arrangement with
2 Interval House. Is there any other paperwork
3 documenting your donation to Interval House other
4 than this lease for a dollar a year that you
5 described a moment ago?
6 A. There's an agreement.
7 Q. When was that agreement entered into?
8 A. I don't recall the date.
9 Q. Anything else?
10 A. Between Wind- -- between Interval House
11 and us?
12 Q. Right.
13 A. That would be the total -- that will be
14 the total summation of it, would be the dollar a
15 year and the agreement to contribute the home to
16 them after a maximum of ten years. I got to get the
17 thing paid off before I give it to them.
18 Q. So you have just now told me something
19 that I didn't get from your answer before, that they
20 can lease it for a dollar a year and after ten years
21 you have committed to giving them the property?
22 A. For one dollar.
23 Q. For one dollar.
24 Did you talk to any other charity or
25 organization about making a donation of your Avenida
177
1 de Santiago house other than Interval House?
2 A. I thought about some others, but, no.
3 I just feel -- I feel we should do something to
4 help -- to help women that are being beaten.
5 Q. That is certainly a problem that needs
6 addressing, I agree.
7 MR. SALINGER: Anyway, with that, that's all
8 the questions I have for today since we wanted to
9 break at 4:00 o'clock.
10 MR. PATTERSON: Okay.
11 (WHEREUPON THE DEPOSITION CONCLUDED AT
12 4:06 P.M.)
13 (DECLARATION UNDER PENALTY OF PERJURY
14 ON THE FOLLOWING PAGE HEREOF.)
15
16
17
18
19
20
21
22
23
24
25
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Devil's Menu |
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