Gibraltar v. Gylmar Development FL Hearing No. 07-42605

8/9/2019 Gibraltar v. Gylmar Development FL Hearing No. 07-42605

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1

1 IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL

CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA

2 GENERAL JURISDICTION DIVISION

3 CASE NO: 07-42605 CA 15

4

5 GIBRALTAR PRIVATE BANK & TRUST

COMPANY, a federal savings bank,

6Plaintiff,

7

vs.

8

LEONARDO GOMEZ, and GYLMAR

9 DEVELOPMENTS, INC., a Florida

corporation, a/k/a GYLMAR

10 DEVELOPMENT, INC., jointly and

severally and Alfredo Carbonell, P.E.,

11 Nachon Enterprises, Inc.., Hertz

Equipment Rental Corporation, Universal12 Concrete and Ready Mix Corp., Board

of County Commissioners, Miami-Dade

13 County, Florida, Xavier Hawley a/k/a

Ignacio Javier Hawley, Mario Rodriguez,

14 Aura Rodriguez, Noe M. Aguilar and

Rafael Echeverry,

15

Defendants.

16 ________________________________________/

17Miami-Dade County Courthouse

18 73 West Flagler Street

15th Floor

19 Miami, Florida 33130

Wednesday, 8:15 a.m.

20 April 16, 2008


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21

22

23 This cause came on for hearing before the

24 Honorable Herbert Stettin, pursuant to notice.

25

2

1 APPEARANCES:

2

3 PAUL D. FRIEDMAN, ESQUIRE

FRIEDMAN & FROST

4 1111 Brickell Avenue

Suite 2050


Attorney for Plaintiff

6

7JEFFREY C. SCHNEIDER, ESQUIRE

8 JENNIFAR HILL, ESQUIRE

JORGE J. PEREZ, ESQUIRE

9 TEW CARDENAS, LLP

15th Floor

10 Four Seasons Tower

1441 Brickell Avenue


Attorneys for Receiver

12

13 GEORGE M. EVANS, ESQUIRE

THE LAW OFFICES OF GEORGE M. EVANS

14 800 Douglas Road

Suite 101

15 Coral Gables, Florida 33134

Attorney for Gomez and Gylmar Development

16


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17 PATRICIA M. ARIAS, ESQUIRE

SHERAR & ARIAS

18 2701 South Bayshore Drive

Suite 303

19 Miami, Florida 33133Attorney for Universal Concrete & Ready Mix Corp.

20

21

22

ALSO PRESENT:

23

Leonardo Gomez

24

25

3

1 THE COURT: Why don't we deal with yours.

2 Yours is to set aside the orders executed on

3 January 17th, 2008, on the grounds that they

4 were entered as if you had no objection when in

5 fact no one even asked you.

6 MS. ARIAS: Correct. Correct.

7 THE COURT: Well?

8 MS. ARIAS: Well, our problem with it was

9 with this, Your Honor. The orders came in.

10 Initially the first set of orders came in. We

11 presumed that they would be set for hearing.


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12 We, you know, figured that there would be some

13 form of hearing with regards to having them

14 heard. I think our surprise came more when

15 there was one that was entered and then at

16 least not even two days later it was -- I

17 mean -- excuse me, the motion was filed and not

18 even two days later the order was entered.

19 THE COURT: Just tell me, do you object

20 to the entry of those orders?

21 MS. ARIAS: I object to the entry of them

22 without a hearing. I don't know what the

23 court's position is going to be considering

24 that all this work has taken place and this

25 hearing is now being heard three months later

4

1 so I object --

2 THE COURT: I'm trying to figure out is

3 there some reason that we need to go back and

4 address those orders at this time?

5 MS. ARIAS: Only that they should have

6 been heard to begin with, Your Honor.

7 THE COURT: So we'll make sure that


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8 doesn't happen in the future.

9 MS. ARIAS: Correct.

10 THE COURT: But, again, I'm going to ask

11 you do you have an objection to the substance

12 of those orders that you wish to revisit?

13 MS. ARIAS: I'm not exactly sure why they

14 have hired an accountant and I think that's

15 more elaborate in their fees.

16 THE COURT: Do you want me to vacate

17 those orders?

18 MS. ARIAS: Yes, but I don't know if that

19 is proper considering all the work that has

20 taken place. That's why I'm concerned as to

21 how are we going to do it? Are we going to

22 start all over with the case if we vacate the

23 order?

24 THE COURT: Anyway, we're going to

25 address one at a time. The first is a motion

5

1 to employ counsel and to employ a forensic

2 accountant.


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3 What's your objection?

4 MS. ARIAS: My objection is I'm not

5 exactly sure why the receiver, who's an

6 attorney, needs an attorney to represent him.

7 THE COURT: Did you hire someone from

8 outside your firm, sir?

9 MR. PEREZ: We hired as far as attorneys

10 Mr. Schneider and Ms. Hill.

11 THE COURT: So you've hired people

12 outside your firm to represent you?

13 MR. PEREZ: They are within Tew,

14 Cardenas. I also hired --

15 MR. SCHNEIDER: Inside the firm.

16 MR. PEREZ: -- forensic accounting firm

17 of --

18 THE COURT: Do you work for Tew,

19 Cardenas?

20 MR. PEREZ: Yes.

21 THE COURT: So it isn't an outside

22 lawyer. And at the time for fees if, I'm the

23 one ruling on this, I'll take into account that

24 it was done in-house.

25 MS. ARIAS: Okay. Great. Thank you,


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6

1 Your Honor.

2 The forensic accountant. Have you hired

3 a forensic accountant yet?

4 MR. PEREZ: We have hired an accounting

5 firm.

6 THE COURT: Who? No, forensic

7 accountant. It's different than an accountant

8 to do your work as a receiver.

9 MR. PEREZ: Yes.

10 MR. SCHNEIDER: Marta Alfonso at Rachlin,

11 Cohen.

12 THE COURT: So it's Rachlin and Cohen.

13 What has she done as a forensic accountant so

14 far?

15 MR. PEREZ: Well, she made an initial

16 review of the bank documents regarding the

17 draws that had been done by -- by the borrower

18 and the funds that have been distributed to the

19 developer Mr. Gomez.

20 THE COURT: Why?

21 MR. PEREZ: Well, because there were


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22 concerns -- there was some concern regarding

23 the possibility of issues.

24 THE COURT: You know, I'm not comfortable

25 doing this without George. This spills over

7

1 into the defense side.

2 All right. So we'll come back to that

3 one.

4 The motion for enlargement of time to

5 file an operating budget.

6 MR. SCHNEIDER: Time has long since

7 passed.

8 THE COURT: Okay. So we're going to wait

9 for George.

10 MR. SCHNEIDER: And the operating budget

11 has since been filed.

12 THE COURT: Okay. So we'll wait for

13 George.

14 (Mr. George Evans enters.)

15 THE COURT: Okay. We had started and

16 then I stopped it because we were getting into


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17 the point where it became substantive and I was

18 asking Universal Concrete what grounds they had

19 for objecting to the orders that were entered,

20 I assume by me, on January 17th when I was

21 sitting in that division.

22 MS. ARIAS: Correct, Your Honor.

23 THE COURT: And we had reached the one

24 where they had employed a lawyer from the same

25 firm as the receiver comes from, the Tew

8

1 Cardenas firm. And that they had employed a

2 forensic accountant Marta Alfonso from Rachlin

3 and Cohen. I had asked what she had done. The

4 response just before we stopped was that she

5 had reviewed the bank's disbursement records --

6 the draw requests and disbursements and I asked

7 why. The receiver was just going to tell us.

8 MR. PEREZ: We were concerned about

9 whether or not there was any impropriety in the

10 disbursement, in the receipt of the funds by

11 the developer and the use of those funds in the

12 construction of the project or if there was any


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13 issues --

14 THE COURT: Was the order appointing a

15 receiver one that required you to investigate

16 the conduct and affairs of the borrower? Or

17 was it that you take over and protect and

18 safeguard the property?

19 MR. PEREZ: Well, it was to review all

20 the records regarding the property which was

21 including the draws. And also the accounting

22 firm has professionals who are involved with

23 the protection -- they assisted me in the

24 protection of the property by -- they have a

25 special group dedicated to receivership and

9

1 trustees. These are the individuals that I

2 turned to in order to secure the property and

3 the premises. It wasn't just that activity.

4 In fact the bulk of their activity has

5 consisted of the -- investigating the property,

6 visiting the property, setting up the fencing,

7 setting up the protection of the property,


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8 securing the property pursuant to the

9 receivership order. They have a special group

10 dedicated just to these types of cases. So the

11 forensic aspect was secondary to the assistance

12 they provided for the receivership protecting

13 and preserving the property.

14 THE COURT: I can tell you I'm looking

15 through the order which Judge Glazer signed. I

16 don't understand your responsibilities to be

17 the investigation of the forensic area of the

18 case. I understand your responsibilities are

19 starting in Paragraph E on Page 5, to manage,

20 preserve, protect and maintain the collateral

21 and you've got to protect the real property

22 itself and you've got to take steps to insure

23 that it is preserved and, if necessary, I guess

24 by extension do some construction on it to make

25 sure that it is preserved and protected.

10

1 MR. SCHNEIDER: Paragraph H on Page 10

2 affords him the right to reject executory

3 contracts. One of the motions that we're here


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4 today on --

5 THE COURT: Yeah, we're going to discuss

6 that. Just a minute.

7 MR. SCHNEIDER: Those contracts had not

8 been produced. They have still not been

9 produced.

10 THE COURT: We'll get there. Hold on.

11 MR. PEREZ: Another issue, Judge, is

12 that --

13 THE COURT: That still doesn't have

14 anything to do with the forensic analysis.

15 MR. SCHNEIDER: Well, we were trying to

16 determine whether --

17 THE COURT: I don't know want a $25,000

18 bill for something that's not going anywhere.

19 Tell me what's going on. Why are we doing

20 this?

21 MS. ARIAS: Well, Your Honor, I mean

22 that's why I'm saying that the lateness of this

23 now blends into their fee request. One of the

24 things that they have requested fees for is for

25 the accountant meeting with somebody at the

11


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1 property. He was there for four hours. Now,

2 what an accountant has to do at a property for

3 four hours beats me because it only took me 30

4 minutes to go out there, look at it and leave.

5 THE COURT: Well, you're quick.

6 MR. SCHNEIDER: Rachlin's fee --

7 THE COURT: Hold on a second.

8 MR. SCHNEIDER: Rachlin's fee for last

9 month was $3,000 just so the court knows.

10 THE COURT: I don't see any basis for the

11 accountants to do forensic work here. They can

12 do the regular accounting for the receiver to

13 the extent it's needed, and I'm not sure that

14 there is unless there's something substantial,

15 construction or expenditures of money, to

16 preserve, protect and manage the property.

17 MR. SCHNEIDER: The vast majority of

18 their work has been at the paraprofessional

19 level to help preserve, manage and protect the

20 property.

21 THE COURT: So what we're doing now is


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22 employing forensic accountants. Are they the

23 accountants as well, the regular accountants?

24 MR. SCHNEIDER: Yes.

25 THE COURT: All right. Maybe it's just

12

1 the word forensic threw me off. I know the

2 Rachlin and Cohen firm and they are forensic

3 accountants. Their specialty is backing up

4 court-related work.

5 MR. SCHNEIDER: Absolutely.

6 THE COURT: Now it's for approval of the

7 procedure for payment of the receiver and the

8 receiver's professional fees and expenses. Has

9 there been an order yet signed which approved

10 any fees to the receiver and his lawyers?

11 MR. SCHNEIDER: The way that order is

12 structured is that we file a fee request notice

13 and if there is no objection, the bank is

14 authorized to pay fees. Just so the court

15 knows that is an order that Judge Glazer has

16 used in another case in which my partner --

17 THE WITNESS: I don't have a problem.


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18 MR. SCHNEIDER: And the purpose of it is

19 so that --

20 THE COURT: As long as people get

21 adequate notice of a request for fees and an

22 opportunity to be heard, I don't mind.

23 MR. SCHNEIDER: Absolutely.

24 THE COURT: That's fine. Have you filed

25 any request for fees yet?

13

1 MR. SCHNEIDER: We have filed two

2 requests for fees. The first one had not been

3 objected to. That's already been paid. The

4 second one they've just filed a short objection

5 and I will hopefully resolve the objection or

6 set it for hearing.

7 THE COURT: Have you received that yet?

8 MR. EVANS: Judge, it's our position that

9 the issue of the receiver is still on appeal.

10 We have a current appeal.

11 THE COURT: Sure. There's no stay so I

12 am asking.


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13 MR. EVANS: Right. We did receive it.

14 We are moving for a stay in the appellate

15 court. You denied our motion for stay so to me

16 that's a standing objection to the payment of

17 the fees.

18 THE COURT: So you're objecting to the

19 fees?

20 MR. EVANS: Of course.

21 THE COURT: Thank you. We'll set a

22 hearing.

23 MR. SCHNEIDER: Just so the record is

24 clear I did not receive an objection to the

25 first fee request. That one has already been

14

1 paid.

2 THE COURT: Okay. How much time do you

3 think it's going to take?

4 MR. SCHNEIDER: Based on the objection

5 I've received so far five minutes.

6 THE COURT: George?

7 MR. EVANS: For a fee hearing. I think

8 we probably need about 20 minutes for a fee


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9 hearing.

10 THE COURT: How big is the fee?

11 MR. SCHNEIDER: $30,000.

12 THE COURT: I'll give you a 20-minute

13 hearing.

14 MR. EVANS: Judge, I do want to make one

15 note for the record and it's because I was late

16 I'm listening more than speaking at this point.

17 We had a hearing in front of Judge Cohen, it

18 was myself and Mr. Friedman, and Judge Cohen

19 indicated that she would handle the discovery

20 matters and all the other matters relating to

21 this particular case and now all of a sudden --

22 and I just want to bring it to the court's

23 attention because I don't know if this is one

24 of the issues that Judge Cohen.

25 THE COURT: This is a recipe for

15

1 disaster.

2 MR. FRIEDMAN: Categorically --

3 MR. SCHNEIDER: Yes, it is.


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4 MR. FRIEDMAN: -- an untrue statement

5 from Mr. Evans, Your Honor, categorically.

6 MR. EVANS: Judge --

7 MR. SCHNEIDER: First of all --

8 MR. EVANS: -- all you have to do is look

9 at the order. Whatever the order says --

10 THE COURT: Give me the order.

11 MR. EVANS: -- you'll see.

12 I didn't bring it with me.

13 THE COURT: I think it is just a terrible

14 mistake to split the case between two trial

15 judges.

16 MR. SCHNEIDER: We have not.

17 MR. FRIEDMAN: Judge, here's what

18 happened. Mr. Evans scheduled a hearing in

19 front of her on discovery issues. It was his

20 motion that brought us to her courtroom at the

21 beginning of this month. And she said,

22 gentlemen, why are you here? You should be in

23 front of Judge Stettin. But I'll go forward

24 with this if you want me to.

25 Mr. Evans said, let's go forward.

16


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1 She dealt with the discovery and she

2 said, I know it's difficult to get in front of

3 a senior judge relative to motion practice --

4 routine motion practice and to do it timely

5 because of their system. She said, I'm here if

6 you need me for discovery issues, and in the

7 meantime here's my ruling. She heard us all

8 out, she entered a written order, I have it

9 with me if you would like it. It addresses

10 those specific discovery issues that were

11 brought to her attention that day and she also

12 told us if there is noncompliance with her

13 ruling, that she would be available during the

14 week of April 21st at any time at the

15 conclusion of her own motion calendar for me to

16 run in there and bring it to her attention.

17 MR. EVANS: Judge, if you'd look at the

18 order. I didn't bring it with me but if

19 counsel says he has it there, it will be a

20 little bit more reflective of what happened at

21 that hearing.

22 THE COURT: Well, again --


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23 MR. SCHNEIDER: And these are not

24 discovery matters.

25 THE COURT: This is the order?

17

1 MR. FRIEDMAN: Yes, Judge.

2 THE COURT: Let me read it.

3 MR. EVANS: It's handwritten by

4 Mr. Friedman.

5 THE COURT: All right. It's a whole

6 series of discovery matters that she dealt

7 with.

8 MR. EVANS: Right.

9 THE COURT: My suggestion to you, use one

10 or the other. It's mistake in my opinion to

11 split the pretrial work in the case between two

12 judges because you're going to get

13 inconsistencies. You are. I have no objection

14 to Judge Cohen taking the file back. It's a

15 regular division case. I understood that it

16 was assigned to me to do and I thought there

17 was an order assigning it.


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18 MR. EVANS: No.

19 MR. FRIEDMAN: I haven't seen it.

20 MR. EVANS: Not that I know of, Judge.

21 THE COURT: How did it get in front of

22 me?

23 MR. EVANS: Because they keep setting

24 hearings in front of you, Judge, with all due

25 respect.

18

1 THE COURT: Well, the only way within the

2 system that I have the right to hear these

3 things is when it is assigned to me and

4 normally that requires an order from the

5 division chief and that would be Judge Simons.

6 And normally when it is assigned, it's normally

7 assigned for all purposes, whether it's

8 pretrial work or the trial itself.

9 MR. EVANS: And that was one of the --

10 THE COURT: I have no problem in doing

11 that but I'm telling you it's a mistake on your

12 side to have it split between two parties.

13 There must have been six or eight different


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14 motions that Judge Cohen dealt with and now

15 we're dealing --

16 MR. EVANS: That's correct, Judge.

17 MR. FRIEDMAN: All discovery related.

18 THE COURT: Is your way of splitting this

19 that I'm going to do receivership related

20 matters and the others are going to be straight

21 discovery on the merits?

22 MR. FRIEDMAN: No, Judge. Again, I want

23 to try and make this very crystal clear.

24 Mr. Evans sought Judge Cohen's intervention.

25 No one else. While at that hearing she said

19

1 what other discovery issues pend as between you

2 and she said, I'll deal with those because of

3 how difficult it is to get to the senior

4 judge's calendar. She said, it's not that I

5 want to. I'll do it if you want me to.

6 THE COURT: As an example only, you've

7 got a summary judgment motion that is specially

8 set in front of me. We moved it at your


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9 request, George, for May 9 I think it is.

10 MR. FRIEDMAN: May 7th.

11 MR. EVANS: They moved it back because he

12 had a problem. We had it for 9th and then

13 we --

14 MR. FRIEDMAN: It's May 7th.

15 THE COURT: Let me move that then.

16 MR. FRIEDMAN: Remember my daughter's

17 graduation.

18 THE COURT: Yes. All right so it's eight

19 o'clock on May 7. As an example only discovery

20 obviously is going to bear on the motion for

21 summary judgment if there are disputes.

22 Whether there are or not. Here I am handling

23 the summary judgment and she's doing the

24 discovery up to that time.

25 MR. FRIEDMAN: You say that, Judge.

20

1 Respectfully she is not handling the discovery.

2 It's only if we want her to. She hasn't ruled

3 that discovery is hers. She said she will do

4 it if we need her to.


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5 THE COURT: Okay. You need an order from

6 Judge Simons and I have no problem in allowing

7 you to say to Judge Simons I'm happy to do it

8 because I am familiar with the file. I handled

9 it while I was covering that division, but I

10 don't feel comfortable. Today we'll do it if

11 you all say, sure, you can handle the rest of

12 the motions today. If you say not, I won't do

13 it.

14 MR. EVANS: My client is asking me to

15 object, Judge.

16 THE COURT: Then I won't. I don't have

17 any authority to do them without a specific

18 reference to me.

19 MR. SCHNEIDER: It is my understanding

20 that --

21 THE COURT: And that will include the

22 summary judgment by the way. I don't have any

23 right to handle these things on a regular

24 division case without the court ordering me to.

25 MR. SCHNEIDER: It's my understanding

21


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1 that the case was assigned to you, Your Honor.

2 THE COURT: I thought it was also.

3 That's why I asked where is the order.

4 MR. PEREZ: It is the receiver's

5 understanding specifically that Judge Cohen

6 assigned the case to you.

7 MR. EVANS: Judge Cohen never said that

8 at a hearing.

9 THE COURT: Just get me an order. Get it

10 in writing. Oral statements are fine but get

11 it in writing.

12 MR. SCHNEIDER: Your Honor, I do hope we

13 can proceed with these motions. This is now

14 the second --

15 THE COURT: He says he objects.

16 MR. SCHNEIDER: It's the second or third

17 time they have been set for hearing. It is

18 their objective to derail and delay this

19 receivership and they've done a masterful job

20 so far. In fact the receiver and I --

21 MR. FRIEDMAN: Judge, you have entered

22 orders in this case.


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23 THE COURT: I think it's a compliment.

24 MR. FRIEDMAN: Judge, you had --

25 MR. EVANS: Didn't sound like it to my

22

1 naked ear, Judge.

2 MR. FRIEDMAN: Judge, you have entered

3 orders in this case on his motions at his

4 request, meaning Mr. Evans'. For him to tell

5 you today he objects to you after --

6 THE COURT: You mean after my time in the

7 division ended?

8 MR. FRIEDMAN: No.


10 MR. FRIEDMAN: Excuse me. As recently as

11 just a few weeks ago.

12 MR. SCHNEIDER: A few weeks ago when the

13 summary judgment motion.

14 MR. FRIEDMAN: He asked for a

15 continuance.

16 MR. SCHNEIDER: Summary judgment motion

17 was postponed.

18 MR. FRIEDMAN: And so today to say that


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19 he objects to proceeding in front of you.

20 MR. SCHNEIDER: And Mr. Evans --

21 MR. FRIEDMAN: Judge, it's obvious what's

22 going on here.

23 MR. EVANS: Just to let the court know I

24 do believe, and the record will bear it out,

25 that it was Mr. Friedman's motion that was

23

1 initially set in front of Judge Cohen and my

2 motions were heard at the same time. I could

3 be corrected but the bottom line is, Judge --

4 MR. FRIEDMAN: You can be corrected.

5 MR. EVANS: You need to have an order.

6 You need to have an order transferring it to

7 you or else you can't hear this.

8 MS. ARIAS: I'm just going to put this

9 for the record just because I'm somewhat -- I'm

10 not Switzerland but I'm going to be neutral

11 here. This is the problem that we have. We

12 need to get this case moving along and I

13 respectfully request that we at least go


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14 forward with this. We are all here, we woke up

15 really early to be here and this is ridiculous

16 and I'm sorry to say that and put it on a

17 record but now we're arguing about something

18 after we've just heard a motion. I believe

19 it's unnecessary and we should at least just go

20 forward and figure it out later but for the

21 moment go forward.

22 MR. FRIEDMAN: Your Honor, on the 26th of

23 March Mr. Evans filed a motion to reset the

24 hearing on my client's motion for summary

25 judgment after it was thrice set. And he

24

1 brought that to your attention and you set a

2 hearing on that motion. In fact I got

3 coldcocked, it was done by phone. I got a

4 phone call without prior notice said, here's

5 the hearing. You entered an order on that.

6 Mr. Evans and his client have already waived

7 any objection consequently to your

8 consideration of the matters in this case. I

9 have no problem seeking, if one has not yet


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10 been entered, an order after the fact approving

11 of what has gone on thus far under your

12 administration of this case, but respectfully

13 we ought to be going forward with today.

14 MR. SCHNEIDER: And because that was a

15 telephonic hearing scheduled with very short

16 notice, I was not able to attend. I was at a

17 deposition but I'm told that at that hearing

18 this hearing was also discussed, that it was

19 agreed that the April 16th hearing would go

20 forward.

21 MR. FRIEDMAN: Absolutely.

22 MS. ARIAS: And I wasn't on the phone

23 either and I participated in every single one

24 of them except for the discovery one which I

25 don't even think I had knowledge of that.

25

1 THE COURT: None of these motions today

2 are case dispositive. I'm going to go forward

3 on them in the interest of trying to

4 accommodate everyone and we will not go forward


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5 on any other hearings without a specific order

6 assigning the matters to me for pretrial

7 hearing.

8 MR. FRIEDMAN: In that regard, Judge, the

9 latter regard, any suggestions on how I can get

10 that from Judge Simons before a hearing that's

11 scheduled for roughly eight or ten days?

12 THE COURT: Go down to Judge Cohen, see

13 if she will sign an order referring it to me.

14 Normally it's done where --

15 MR. FRIEDMAN: Judge Cohen?

16 THE COURT: She can suggest to Judge

17 Simons that I ought to be assigned this matter

18 for hearing because I handled it before and I'm

19 familiar with it and he has the right to object

20 to that. He certainly can or they can refer it

21 to me as a special magistrate. Those are the

22 two ways that I know of that I can handle these

23 matters. You get an R and R, you get review.

24 MR. FRIEDMAN: I had this motion set

25 since February 1.

26


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24 assigned to me.

25 MS. ARIAS: Fair enough.

27

1 MR. SCHNEIDER: I used the notice of

2 hearing as a cheat sheet and just went in the

3 order in which they were filed.

4 THE COURT: The next one is Mr. Evans'

5 motion which is addressed to the same thing,

6 rehearing on the order granting the receiver's

7 motion for enlargement of time to file

8 operating budget and all the other orders that

9 were entered January 17th.

10 MR. EVANS: Yeah, I came into the case

11 after that hearing and found that there were no

12 orders presented to counsel in advance.

13 Apparently they were just signed and so we

14 filed our objection.

15 THE COURT: Now is the time. First, do

16 you object to the order appointing the

17 receiver's lawyers?

18 MR. EVANS: Judge, we have a standing


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19 objection to that because we still have our --

20 THE COURT: You haven't waived any

21 objections to the appointment of the receiver

22 or the continuation of the receiver at all.

23 Whatever rights you have, you have. All we're

24 talking about is the administration of the

25 receivership.

28

1 MR. EVANS: I have no problem with that,

2 Judge, as long as there is no waiver.

3 THE COURT: You haven't waived it. Thank

4 you.

5 The next one I'm -- I'm not going to deal

6 with the '08 case, that's the Galenus Complex

7 case. Defense fight. We'll deal with that

8 separate. Is that in -- it's not even in

9 Division 15?

10 MR. SCHNEIDER: It is. It's been

11 transferred.

12 THE COURT: It's been transferred by

13 Judge Simons.

14 MR. EVANS: It's been transferred to


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15 Judge Cohen, yes.

16 THE COURT: Is the case consolidated or

17 is it still a separate case?

18 MS. HILL: Separate.

19 MR. EVANS: Separate.

20 THE COURT: Separate case.

21 All right. Next one we'll deal with then

22 is -- this hasn't already happened. The

23 receiver's motion for an order approving his

24 budget. I would assume that's a construction

25 budget.

29

1 MR. SCHNEIDER: It is a case budget which

2 includes a construction budget.

3 THE COURT: Okay. First, Concrete, any

4 objections?

5 MS. ARIAS: I am not -- which --

6 THE COURT: This is the receiver's motion

7 for order approving the budget and authorizing

8 the receiver to enter into a general

9 construction contract.


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10 MS. ARIAS: Okay. I do object to the

11 entry of them entering into that specific

12 general construction contract. My objection

13 stems from this. I haven't seen anything to

14 see that they went through a bidding process.

15 I don't know what the other people who they may

16 have interviewed --

17 THE COURT: Mr. Receiver, raise your

18 right hand. Do you swear the testimony you

19 shall give in this matter will be the truth,

20 the whole truth and nothing but the truth?

21 MR. PEREZ: I do.

22 THE COURT: Your name and business

23 address.

24 THE WITNESS: My name is George J. Perez.

25 Business address is 1441 Brickell Avenue, 15th

30

1 Floor, Miami, Florida 33131.

2 THE COURT: And you're the receiver in

3 this case; are you not?

4 MS. ARIAS: That is correct, Judge.

5 THE COURT: Good. You have requested


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6 approval for a construction budget with

7 Universal Design and Construction Corp. for

8 work -- is that to complete the construction or

9 just partially complete it?

10 MR. PEREZ: To complete the construction.

11 THE COURT: To complete it. In its

12 entirety. What did you do to get bids for the

13 work to be done?

14 THE WITNESS: I began interviewing

15 potential general contractors and brokers

16 starting in mid December of 2007 and continued

17 through approximately mid February 2008.

18 THE COURT: How many bids did you get for

19 the work?

20 MR. PEREZ: Five bids.

21 THE COURT: Do you have them?

22 MR. PEREZ: Five submissions and four

23 bids.

24 THE COURT: Do you have them?

25 MR. PEREZ: I do not have -- actually

31


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1 have the bids that were not agreed upon by or

2 approved by the bank and myself.

3 THE COURT: What was the procedure you

4 followed when you got bids or how you got bids?

5 MR. PEREZ: The procedure that we

6 followed first of all is I worked closely with

7 Gibraltar Bank to make sure that they were

8 aware of what was going on and contact

9 prospective brokers and general contractors.

10 The general contractors who were interested in

11 bidding would then go out to the property, they

12 are required to visit the property. You also

13 bring in their subcontractors, provide a

14 detailed analysis and also submit a bid to

15 myself which I would also send to the bank.

16 THE COURT: Do you have each of the bids

17 in your records?

18 MR. PEREZ: They are. I do have each --

19 all the bids are in my records. The records of

20 the receiver. We received bids from Universal

21 Construction which is eventually the one that

22 the bank and I agreed to be the one to use.

23 Also B&A Construction submitted a bid. Kelly


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24 and Menendez Design submitted a bid. Mac

25 Construction, M-A-C Construction submitted a

32

1 bid. The Merritt Company was asked to submit a

2 bid and they went out to the property and they

3 decided they were not interested.

4 In addition I also had discussions with

5 various commercial brokers including Keyes

6 Realty.

7 THE COURT: No, let's deal with real

8 estate brokers later. Just construction work.

9 Okay. Did the bank agree that they would

10 finance the rest of the construction?

11 MR. PEREZ: Yes, the bank not only

12 agreed, the bank insisted that was critical for

13 their ability to -- in their minds to maximize

14 the ability to save their investment, the

15 amount of money they put in. They put in

16 approximately 2.6 million. And what we had

17 talking with the GCs and various individuals is

18 the reality that as it sits today that

19 abandoned construction project, the bank would


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20 be lucky to get 40 cents on the dollar.

21 THE COURT: We are only talking now about

22 the procedures that you followed for completing

23 construction. Were you going to issue receiver

24 certificates for the bank to fund; is that the

25 way you were going to go forward on the

33

1 construction?

2 MR. PEREZ: We were -- we would be

3 using --

4 THE COURT: How were they going to

5 advance money for the rest of construction no

6 matter who does it?

7 MR. PEREZ: Well, the agreement we would

8 enter -- the receiver would enter into an

9 agreement with the approval of the bank with

10 the general contractor, in this case Universal,

11 and then they would fund -- then it would be a

12 standard construction contract.

13 MR. FRIEDMAN: Whether as an advance,

14 Your Honor, under the mortgage --


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15 MR. EVANS: Your Honor, I would object to

16 counsel making a statement while he's

17 testifying.

18 THE COURT: I want to hear how they are

19 proposing to fund. This he speaks for the

20 bank.

21 MR. FRIEDMAN: It doesn't matter.

22 Whether as an advance under the mortgage or

23 receiver certificate. The bank is prepared to

24 fund the selected contractor. That is the one

25 selected by the receiver.

34

1 MR. SCHNEIDER: And the receivership

2 order contemplates receiver certificates

3 without further order of the court once the

4 budget and the contract have been approved.

5 MS. ARIAS: And then the problem would

6 lie somebody like me in a junior lienholder

7 position --

8 THE COURT: Which is the reason I asked

9 if it was going to be done by receiver

10 certificates which normally have a priority and


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11 you've got to make sure that you have that

12 notice so that creditors from before -- has

13 Universal filed a lien?

14 MS. ARIAS: Yes. Universal Concrete?

15 THE COURT: Yes.

16 MS. ARIAS: Yes, Your Honor.

17 MR. FRIEDMAN: They have a $23,000 cement

18 lien.

19 THE COURT: Yeah, I understand, it's not

20 a major item in the greater scheme of things

21 but from their perspective it's everything.

22 MR. EVANS: Also the general contractor

23 also filed a lien as well for I think $500,000.

24 MR. SCHNEIDER: That would be Mr. Gomez's

25 brother.

35

1 THE COURT: One voice at a time.

2 MR. SCHNEIDER: That would be Mr. Gomez's

3 brother.

4 THE COURT: Mr. Friedman's comment was

5 the lien by the GC was filed subsequent to the


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6 filing of the notice of lis pendens.

7 MR. FRIEDMAN: And the person who had

8 filed it is the brother of defendant Leo Gomez.

9 THE COURT: Well, it wasn't. It was a

10 corporation that filed it.

11 MR. EVANS: And the corporation has been

12 working on the project since day one.

13 THE COURT: I understand. Okay. That's

14 Universal Concrete's response. What is yours?

15 MR. EVANS: My response is that, Judge, I

16 haven't seen any of the other --

17 THE COURT: I'm going to give you an

18 opportunity to do that.

19 MR. EVANS: -- as well. I would like

20 counsel to just tell me who at B&A Construction

21 he received a bid from because I represent B&A

22 Construction and I didn't know they were out

23 there giving bids because the company is in

24 default. It has been dissolved so I would like

25 to know who at B&A Construction is --

36

1 THE COURT: Well, we are not going to do


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2 that today. What I'm going to do is give you

3 an opportunity on very short notice to go back

4 and review all of the bids that were received

5 by the receiver and we'll reschedule this

6 hearing once you've had an opportunity to do

7 that. So you need to get some movement going

8 on -- hold on one second.

9 (There was a brief interruption after

10 which the following proceedings were held:)

11 MR. SCHNEIDER: As opposed to another

12 hearing can we do it by letter? He can review

13 the documents as quickly as he can get to my

14 office and --

15 THE COURT: Somehow I'm willing to bet

16 that he's going to object to it. Jeff, it's

17 just going to happen that way.

18 MR. FRIEDMAN: Can we try it just the way

19 our bankruptcy brethren do which is approve the

20 request today subject to the right of

21 rejection?

22 THE COURT: No. The man is entitled to

23 do it. I am not going to eliminate the

24 procedures.


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25 MR. FRIEDMAN: Judge, he's absolutely

37

1 entitled -- he's had this motion pending for

2 two and a half months and he's only asking for

3 this this morning in front of you.

4 MR. SCHNEIDER: And in fact it was

5 previously --

6 MR. FRIEDMAN: Excuse me, please.

7 MR. SCHNEIDER: Sorry.

8 MR. FRIEDMAN: Anything that Mr. Evans

9 can invent to deny, ofusticate (phonetic) and

10 slow down the progress.

11 THE COURT: Auspicate.

12 MR. FRIEDMAN: That too. This case is

13 what he's up to, Judge. We really need to cut

14 through this nonsense.

15 THE COURT: We will when I get

16 jurisdiction. Right now I am handling things

17 that we can handle today. You're going to do

18 that before this week is out.

19 MR. EVANS: Review his --


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20 THE COURT: Sure. They will be made

21 available to you before the end of this weak.

22 MR. EVANS: I want the court to be aware

23 of one thing, Judge, I am in depositions that

24 were scheduled pursuant to that order on the

25 17th. I also have scheduled depositions on the

38

1 18th. Both those days are booked. I do want

2 some time to do it. I am flying out this

3 afternoon to a hearing outside of the

4 tri-county area so I'll do it as quick as I can

5 but maybe next week would probably be a little

6 more quickly. I know that counsel would love

7 to speed this thing along and he was setting

8 summary judgments within eight days after I

9 came into the case.

10 THE COURT: I understand the position of

11 both sides. Mr. Receiver, you've got to make

12 sure that the copies are delivered to his

13 office today. He'll have them so when he is

14 flying he can read it.

15 MR. SCHNEIDER: Could we have a cutoff


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16 period by which he must object in writing?

17 THE COURT: Yeah, your objection has got

18 to be filed by no later than the close of

19 business Monday.

20 MR. EVANS: Thank you.

21 MR. FRIEDMAN: When will the objection be

22 heard, Judge?

23 THE COURT: As soon as you get me

24 jurisdiction.

25 MR. FRIEDMAN: I'll get you that order

39

1 before the weekend. Can we be heard Tuesday?

2 THE COURT: I will tell you what I've got

3 available and then you can figure it out.

4 You can do it on Monday, Tuesday,

5 Wednesday, or Friday of next week at eight

6 o'clock in the morning.

7 MR. EVANS: Judge, I have to check my

8 calendar.

9 MR. SCHNEIDER: I'll take Tuesday.

10 THE COURT: I'm giving you four days.


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11 You can pick one.

12 Okay. Now, the next one then is the same

13 thing for the approval of a contract with a

14 real estate broker which you've attached.

15 MR. SCHNEIDER: Correct.

16 THE COURT: Which is a 6 percent

17 brokerage and it's with, what firm was it

18 again?

19 MR. PEREZ: City Line Services.

20 THE COURT: I'm sorry, say it again.

21 MR. PEREZ: City Line Services.

22 THE COURT: City Line Services, right.

23 Tell me what you did to pick a broker?

24 MR. PEREZ: Well, there was a broker on

25 site originally.

40

1 THE COURT: They were?

2 MR. PEREZ: By Mr. Gomez.

3 THE COURT: Same broker?

4 MR. PEREZ: No, not the same broker, that

5 was Keyes Realty. I met with an individual

6 with Keyes, a Ms. Maria Dezubiria.


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7 THE COURT: Spell it for the reporter,

8 please.

9 MR. PEREZ: D-E-Z-U-B-I-R-I-A. She

10 submitted a letter of interest. I also

11 received a letter of interest from a group

12 called the Realpro Group. R-E-A-L-P-R-O. And

13 also City Line Services. Again, in

14 consultation with the bank we decided that City

15 Line Services offered the most comprehensive

16 services available. They are not just a

17 broker, commercial broker, but they offer a

18 full range of services. They have contacts

19 with all the general contractors and they are a

20 very hands-on entity that actually provide

21 individuals that will track the construction of

22 the project. And we set up a meeting with the

23 bank representative Mr. Raffalski and City

24 Line's representative Mr. Walker and after

25 review of the different proposals it was

41

1 decided that City Line Services would be the


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2 most effective and most capable of --

3 THE COURT: Did you get written

4 submissions by any other brokers?

5 MR. PEREZ: None other than those three,

6 Your Honor.

7 THE COURT: You have submissions from the

8 other two offers?

9 MR. PEREZ: Letters of interest.

10 Actually an e-mail. One is an e-mail.

11 THE COURT: Okay. Did any of them agree

12 to handle it on less than 6 percent brokerage?

13 MR. PEREZ: No, that was standard.

14 THE COURT: Okay. Any objections from

15 Concrete?

16 MS. ARIAS: My only objection is I think

17 it's premature considering the thing is not

18 finished.

19 THE COURT: Okay. You can sell these

20 things before they are done.

21 MS. ARIAS: Absolutely.

22 MR. PEREZ: If I may, Judge.

23 THE COURT: Hold on one second. Time

24 out. Off the record.


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25 (Discussion off the record)

42

1 MR. PEREZ: If I may, Judge, one of the

2 things we discussed among all three brokers

3 that expressed an interest in this property is

4 the ability to market and sell the property

5 before construction.

6 THE COURT: If I had my druthers and

7 they're substantially identical, it's the one

8 who's best qualified to market the property

9 that counts. And I don't intend -- no judge

10 should interfere with the business judgment, as

11 long as it's reasonably exercised, of the

12 receiver.

13 Okay. Any objections?

14 MR. EVANS: Yes, Your Honor, my objection

15 is that there is a pending contract for the

16 sale of these units of which there is

17 litigation.

18 THE COURT: One contract for the sale of

19 all of them?

20 MR. EVANS: For the sale of nine units.


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21 And there are how many total?

22 THE COURT: And there's litigation?

23 MR. EVANS: There's a total of 12. We

24 filed a lawsuit. The receiver is well aware of

25 the lawsuit. In fact the receiver was

43

1 attempting to get involved in that particular

2 case but we have a contract, the man has value.

3 The amount of --

4 THE COURT: When was the contract signed?

5 MR. EVANS: February of '07, and --

6 THE COURT: '07.

7 MR. EVANS: '07. He -- once he didn't

8 follow through with the contract.

9 THE COURT: Are you suing for specific

10 performance?

11 MR. EVANS: For specific performance.

12 THE COURT: I understand.

13 MR. EVANS: I didn't file the lawsuit,

14 another attorney did. I am trying to take it

15 over. Right now the receiver seems to be


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16 handling that portion of it. I don't know why,

17 but, again, I'm hoping to take over that

18 particular case.

19 THE COURT: The plaintiff in that action

20 is?

21 MR. EVANS: Gylmar, the defendant in this

22 action. And the value of the contract is in

23 excess of the bank's equity. Mr. -- you'll

24 see --

25 THE COURT: All right. Is it being

44

1 defended by the prospective purchaser?

2 MR. EVANS: Yes.

3 MR. SCHNEIDER: The second deposit was

4 not paid under the contract which was due long

5 ago.

6 MR. EVANS: But the amount is well in

7 excess of the bank's equity. That's why we

8 object to selling -- incurring the fees of

9 selling the units when in fact they're sold --

10 THE COURT: Is there a lis pendens -- no,

11 there wouldn't be. You're the owner. You're


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12 looking for specific performance against the

13 buyer.

14 How is the broker going to be able to

15 deliver good title, Mr. Receiver or

16 Mr. Receiver's lawyer, when you've got this

17 specific performance suit out there as a matter

18 of public record? How are you going to do that

19 without the resolution of that case?

20 MR. SCHNEIDER: Well, we could dismiss

21 the case. It's a case that Gylmar has brought

22 against the prospective buyer.

23 THE COURT: Meaning you would step in and

24 replace Gylmar on the grounds that you are

25 the -- not the owner but rather the person

45

1 appointed by the court to manage and --

2 MR. SCHNEIDER: Take control of and

3 operate the property.

4 THE COURT: Well, operating and selling

5 are two very different things.

6 MR. SCHNEIDER: It is not a contract for


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7 which we hold out a tremendous amount of hope.

8 THE COURT: No, I understand. Your view

9 is that it's not an enforceable agreement at

10 this point and even if it were enforceable, the

11 buyer couldn't complete the sale anyway.


13 MR. FRIEDMAN: Let alone the case is

14 about to be dismissed for lack of prosecution

15 in the last year.

16 THE COURT: Well, the way the system is

17 set up now you've got to go through a couple of

18 hoops before you can get it dismissed for lack

19 of prosecution.

20 MR. SCHNEIDER: We did not want to

21 dismiss the case; we wanted to keep that option

22 open but we also want to hire an exclusive

23 broker to see if he can find another buyer

24 who's willing to make a second deposit.

25 THE COURT: Have you filed an appearance

46

1 on there and claimed the right to be the

2 plaintiff?


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3 MR. SCHNEIDER: I have filed a notice of

4 pending receivership action. The receiver is

5 not really the appointed receiver for Gylmar.

6 He is appointed receiver for the collateral.

7 THE COURT: Just for the property. It's

8 another reason why I'm having some difficulty

9 understanding how you can come in and take

10 control of that as the owner.

11 MR. SCHNEIDER: Well, we filed --

12 MR. FRIEDMAN: That is the mortgaged

13 property.

14 THE COURT: We are not going to enter

15 into a brokerage agreement until that issue is

16 resolved in my mind. I am not going to have

17 two people stepping on each other. We'll get

18 it resolved.

19 The next one. This is -- and I think it

20 was handled. It was Gylmar's motion to

21 discharge the receiver and I denied it.


23 THE COURT: Okay. We got the summary

24 judgment which has been reset.

25 What else is left?


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47

1 MR. SCHNEIDER: Second motion for

2 enlargement of time to reject contracts and

3 order to show cause.

4 THE COURT: What he's really saying in

5 that motion is you haven't turned over any of

6 the contracts that may exist. Why haven't you

7 done that? First, do you dispute that you

8 failed to turn them over?

9 MR. EVANS: He is unaware of any pending

10 contracts.

11 THE COURT: Then you've got to file

12 something that says there are none. In fact

13 the order is much more broad than that. It

14 says, you've got to make sure that he has

15 access to all of your records so he can verify

16 that independently. That will happen by the

17 close of business today. It's been ordered a

18 couple of times before. You'll make

19 arrangements to go out to his place of business

20 today. He will make all of his business


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21 records available to you for copying. Do you

22 want the originals?

23 MR. SCHNEIDER: I'll take copies. But I

24 don't understand the statement that counsel

25 just made.

48

1 THE COURT: What did he say?

2 MR. SCHNEIDER: He said that there are no

3 pending contracts.

4 THE COURT: That's what he said.

5 MR. SCHNEIDER: His brother's company

6 filed a claim of lien based on the contracts.

7 THE COURT: You will independently verify

8 that.

9 MR. SCHNEIDER: Okay.

10 THE COURT: By the close of business

11 today.

12 MR. FRIEDMAN: Judge, what you've ordered

13 the turn over of just to be clear is all

14 documents that the court's receivership

15 appointment order required to be turned over?

16 THE COURT: That's correct.


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17 MR. FRIEDMAN: Thank you.

18 MR. PEREZ: And to be clear, Judge,

19 you're allowing the receiver to enter into his

20 place of business?

21 THE COURT: Yes, as long as there is no

22 interference with the rest of his business and

23 I'm sure you've got a place where you can make

24 those records available to him where he will

25 not interfere with the rest of your business.

49

1 MR. PEREZ: Just to be clear where is

2 that place of business?

3 THE COURT: Find out right now.

4 MR. EVANS: It's at his home, Your Honor.

5 MR. FRIEDMAN: Where is that? And I

6 don't ask that glibly.

7 MR. EVANS: He was served at his home,

8 Judge. I think counsel knows.

9 MR. SCHNEIDER: Just give us the address.

10 THE COURT: Why don't we give the address

11 where the records are located.


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12 MR. EVANS: 2415 Southwest 102 Place.

13 THE COURT: Mr. Gomez, I don't want

14 anyone interfering unnecessarily in your home.

15 It's a sensitive thing, but I do want and I'm

16 going to order that those business records be

17 made available today. You can either move all

18 those records to another place in your home or

19 outside it. Mr. Evans' office if you like.

20 MR. EVANS: Your Honor, we will move the

21 records to my office.

22 MR. FRIEDMAN: Excuse me, the court is

23 being mislead to a false impression. It's not

24 his residence. It is a house that is used

25 exclusively as an office and a gate that

50

1 completely encircles the property.

2 THE COURT: Okay.

3 MR. FRIEDMAN: Is locked and no human

4 being can pass it.

5 THE COURT: Do you live at that address?

6 MR. GOMEZ: Yes, I do.

7 THE COURT: Do you want to move them out?


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8 MR. GOMEZ: Yes.

9 THE COURT: We will move them all to

10 Mr. Evans' office and we will make sure that

11 they are all moved. You're going to be the

12 custodian, Mr. Evans.

13 MR. EVANS: I will be the custodian, Your

14 Honor.

15 MR. SCHNEIDER: When can we have access?

16 MR. EVANS: Can we do that in the

17 morning, Judge?

18 THE COURT: Today.

19 MR. EVANS: Do you want --

20 THE COURT: Today.

21 MR. EVANS: Okay.

22 THE COURT: Before the close of business

23 today.

24 MR. EVANS: Okay. I want the court to be

25 aware that I am in court all day today but

51

1 he'll do what he can to get them to my office.

2 MR. SCHNEIDER: Do you want to just pick


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3 a time?

4 MR. EVANS: Five o'clock. I want as much

5 time as possible.

6 THE COURT: You got it. Five o'clock.

7 Okay. What else is left today?

8 MR. SCHNEIDER: Motion for the entry of

9 an order to show cause which in all fairness to

10 the defendant this order probably takes care

11 of.

12 THE COURT: It was addressed in the

13 failure to produce records?


15 THE COURT: What else?

16 MR. FRIEDMAN: I have an emergency,

17 Judge.

18 THE COURT: That was the 4:30 that you

19 referred to before.

20 Anything else from the receiver?

21 MR. SCHNEIDER: I just had an order on

22 the extension to reject contracts.

23 THE COURT: Okay. Any objection to it?

24 MS. ARIAS: No.

25 MR. EVANS: No.


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52

1 THE COURT: Thank you.

2 MR. SCHNEIDER: And I will prepare an

3 order regarding production of records.

4 MR. FRIEDMAN: Could you prepare an order

5 on everything that's been addressed today?

6 MR. SCHNEIDER: Sure.

7 THE COURT: There is a copy machine

8 outside.

9 Now, Concrete, any motions?

10 MS. ARIAS: No.

11 THE COURT: Defense?

12 MR. EVANS: You already ruled on the

13 motion for rehearing.

14 MS. HILL: Your Honor, we do have two

15 pending motions in a case that was filed in a

16 separate section.

17 THE COURT: That is the '08 case. It's

18 08-63604, Galenus, G-A--L-E-N-U-S, Complex

19 versus Gibraltar.

20 Off the record.



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22 MR. FRIEDMAN: Yesterday afternoon at

23 about 3:30 I received a fax. I did not just

24 hand that to you, Judge. I received this fax

25 that's in my hands right now of two separate

53

1 corrected notices of taking deposition. It

2 is -- I don't know what it corrects because I

3 never received what it presumably corrects.

4 THE COURT: I've got four notices of --

5 four subpoenas for deposition you handed me.

6 MR. FRIEDMAN: These were faxed to me by

7 Mr. Evans' office presumably yesterday. It's

8 dated the first of April but it shows clearly

9 it was faxed yesterday afternoon and it sets

10 depositions of the chairman of my client.

11 THE COURT: This is set for Thursday.

12 Are you saying to me that you're objecting to

13 the notice?

14 MR. FRIEDMAN: I am objecting to the

15 taking of the depositions no matter when they

16 occur, seek protection from them ever


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17 occurring. It's pure, plain, unadulterated

18 harassment.

19 THE COURT: Before we break for me to do

20 my conference call. I understand Mr. Hayworth

21 is the chairman of the board.

22 MR. FRIEDMAN: Yes.

23 THE COURT: Maria Suarez. What's her

24 role?

25 MR. FRIEDMAN: She's a part-time

54

1 employee. All of these people were mentioned

2 during a deposition as having been members of

3 the loan committee at one point in time during

4 the life and gestation of this loan since 2004.

5 Mr. Mechoso was at the time the senior officer.

6 THE COURT: Why is it you say that he

7 should never be permitted to depose him?

8 MR. FRIEDMAN: They have absolutely

9 nothing whatsoever to do with this asset other

10 than having attended loan committee meetings.

11 THE COURT: At which this loan was

12 approved, modified or discussed?


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13 MR. FRIEDMAN: Yes. And this was raised

14 before Judge Cohen what other depositions does

15 counsel need in the claim that he has to take

16 and he told her an investigator, an appraiser

17 and Kathy Ason (phonetic) and she's one of the

18 names on here. I said I will voluntarily

19 produce Ason right away. She said any

20 depositions you have must occur on the 17th.

21 It's only these three. And these are not --

22 other than Ason, none of these are those

23 people.

24 MR. EVANS: If you'll look at the order

25 at the time of the hearing in front of the

55

1 court she had indicated that the 17th I could

2 take three depositions. Those depositions

3 involve Kathy Ason and the two other people at

4 the bottom.

5 THE COURT: These are set for the 17th.

6 MR. EVANS: Pardon me?

7 THE COURT: These are all set for the


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8 17th.

9 MR. EVANS: No, some are set the 18th.

10 THE COURT: Hayworth is set for the 17,

11 Suarez is set for the 17th, Gordon is set for

12 the 18th and Post is set for the 18th.

13 MR. EVANS: So the only one that's not on

14 that list was someone that after I reviewed the

15 transcript of the deposition Mr. Hayworth was

16 one of the people on the committee.

17 MR. FRIEDMAN: None of these people are

18 on that order except Ms. Ason.

19 THE COURT: We're going to take a break.

20 You're going to go outside and like the

21 professionals that you are you will try to work

22 out the scheduling or whether or not they will

23 occur. If you can't, I will still be here

24 after my phone call. In addition, I will

25 listen to you on the other two motions as well

56

1 since they are now Division 15 cases.

2 MR. EVANS: Judge, if I may at 9:30 I'm

3 scheduled for a foreclosure hearing and at 9:45


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4 in criminal court.

5 THE COURT: You're not going to make the

6 9:45 obviously.

7 MR. EVANS: I have to get there as quick

8 as I can. I don't want to be called the late

9 George Evans again, but I'm doing the best I

10 can. I have someone sitting there in the

11 criminal court that's not an attorney letting

12 them know that I'm running a few minutes late.

13 (Thereupon, a break was taken at 8:58

14 a.m. after which the following proceedings were

15 held at 9:15 a.m.:)

16 MR. FRIEDMAN: I am looking for his

17 client's answers and affirmative defenses. I

18 want to show the court what I recall being the

19 case. I don't have that pleading with me. The

20 discovery sought pertains to no issue raised by

21 the pleadings.

22 THE COURT: We are now back on the

23 objection that you got to these notices of

24 taking depositions for tomorrow and Friday.

25 MR. FRIEDMAN: Yes, Your Honor. I

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1 suppose the first objection I should raise is

2 and I handed you earlier a copy of the

3 subpoenas.

4 THE COURT: Hold one second.


6 MR. FRIEDMAN: The subpoenas were left at

7 the bank yesterday. They were not served on

8 any of the individuals. I asked the bank to

9 send those to me. The --

10 THE COURT: Do you have a process server

11 return?

12 MR. EVANS: Judge, they were served

13 yesterday so I'll have to look at the return.

14 I don't know how he did it. Our process server

15 normally just doesn't leave things at the bank

16 unless there is someone there accepting service

17 on behalf of the bank.

18 MR. FRIEDMAN: I know the individuals

19 were not individually served with service of

20 process. I know that for a fact, A. B, how

21 they got left to the bank otherwise.


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22 THE COURT: No, you know that as hearsay.

23 That's what they told you.

24 MR. FRIEDMAN: Agreed, Your Honor.

25 THE COURT: I know that we've got very

58

1 little time because the depos are set tomorrow

2 and Friday. Is there some compelling reason

3 why they can't be reset so we can do this --

4 MR. EVANS: Not at all.

5 MR. FRIEDMAN: But there is.

6 MR. EVANS: We tried but he doesn't ever

7 want these depos to take place and that's why.

8 MR. FRIEDMAN: There is a reason because

9 the resetting of those will be used as the next

10 excuse why summary judgment shouldn't be heard.

11 THE COURT: We can move them to next week

12 so there is no setting off of the summary

13 judgment.

14 MR. FRIEDMAN: My next week is

15 impossible. I have several out of county and

16 plane trip hearings in federal and state court

17 in Florida. I appreciate the opportunity to


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18 reset them at my convenience, that's

19 appreciated. I haven't spoken to any of these

20 individuals. I do not represent individuals.

21 I represent the bank, A. And, B, by agreeing

22 to their rescheduling, if at all, I am not

23 saying that I agree that these deposition are

24 going forward and I wish to be heard on the

25 point separately.

59

1 THE COURT: No, the reason that all of

2 this has came up is you've said that the

3 service was bad. They were not subpoenaed.

4 They therefore don't have to appear. We don't

5 know that. He doesn't have a service return.

6 You don't have an affidavit or the person

7 themselves saying they were not served.

8 MR. FRIEDMAN: I'm trying to preserve

9 that objection while getting to the one that

10 cuts all of them off which is there is no right

11 to take this discovery at all. It is

12 completely harassment.


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13 THE COURT: Can I see that order again,

14 please.

15 Thanks.

16 MR. EVANS: Judge, you'll find that the

17 order allows me to file my counterclaim by

18 Monday.

19 THE COURT: This is one of those things

20 that we talked about before. Two cooks in this

21 broth.

22 MR. EVANS: Yes, so I don't see how he's

23 going to limit me in taking the depositions of

24 people.

25 THE COURT: Let me read the order again.

60

1 MR. FRIEDMAN: You can have my binder

2 copy.

3 MR. EVANS: Here, Judge.

4 THE COURT: Got it. Let me read it.

5 Numbers one and two and three don't appear to

6 deal with the deposition question, it's the --

7 so it's number four, is it, that deals with it?

8 MS. ARIAS: You just were looking at it.


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9 THE COURT: Gylmar and Gomez shall on

10 April 17, 2008, take the depos at once of

11 plaintiffs.

12 MR. FRIEDMAN: Ason. That's Kathy Ason.

13 That's one I --

14 THE COURT: Oh, okay. Plaintiff will

15 voluntarily produce her. As well as witnesses

16 G and --

17 MR. FRIEDMAN: Two witnesses.

18 THE COURT: Two witnesses, I'm sorry. G

19 and G shall subpoena appraiser and inspector.

20 MR. EVANS: And they have been

21 subpoenaed.

22 MR. FRIEDMAN: If they are, I haven't

23 gotten notice of it.

24 THE COURT: These people --

25 MR. FRIEDMAN: Excuse me, please.

61

1 THE COURT: Come on, guys. Hold on one

2 second. Do the usual when people start acting

3 like this. It's falling apart I've used it so


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4 often. I took my grandchildren to the circus

5 and they had these clown noses so when lawyers

6 start acting like that, I'll join in.

7 All right. Are you telling me, Paul,

8 that the appraiser and inspector are not the

9 people who are the four that are set for

10 Thursday and Friday?

11 MR. FRIEDMAN: There are six -- there are

12 eight names listed. Two of them repeated on

13 each of those notices so it's six different

14 people.

15 THE COURT: Is one of them an appraiser

16 and is one of them an inspector?

17 MR. FRIEDMAN: No.

18 THE COURT: Okay. And your position is

19 these are the limits of the depos, this set how

20 many he can take, no others?

21 MR. FRIEDMAN: The judge's order -- Judge

22 Cohen's order, yes, Your Honor.

23 MR. EVANS: My position is that order

24 does not limit my deposition, it allows me to

25 take three depositions on the 17th.

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1 THE COURT: And, therefore, you can set

2 more on the 18th?

3 MR. EVANS: Whenever I need to because

4 there is no order there that would limit

5 discovery. That would be appealable,

6 reversible error to limit my discovery in the

7 case.

8 MR. FRIEDMAN: I will be pleased to

9 defend the appeal on that issue.

10 THE COURT: I am close to saying this is

11 just silly to have two people deciding what

12 gets done in discovery in a case. It can't

13 work. And of course your concern is you don't

14 want to lose your summary judgment date. I

15 don't see how you can say that he's only

16 entitled to take certain depositions. You can

17 say that the people that he's attempting to

18 take such as Mr. Hayworth, the chairman of the

19 board, you could file a motion or an affidavit

20 from Mr. Hayworth that says, I never had a hand

21 in this thing, I never sat on any committee

22 that dealt with it, I never did anything with


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23 it, therefore, I know nothing about it. The

24 standard stuff that a chairman of the board

25 does on a dispute involving some piece of

63

1 business in the company. And I'll deal with

2 that. How about the other people? They were

3 on a loan committee that dealt with this loan.

4 Why wouldn't he be entitled preliminarily

5 anyway to sit down and ask them what they know

6 about it?

7 MR. FRIEDMAN: Here's two simple reasons.

8 One, he's already deposed through my voluntary

9 production two of those people, the senior

10 credit officer of the bank and a loan --

11 THE COURT: You mean other people on that

12 committee?

13 MR. FRIEDMAN: Yes. Mr. Raffalski and

14 Mr. Mason both of whom I voluntarily produced

15 without his need to subpoena them even though

16 he set them as individuals for depo. What he's

17 trying to do, Judge, respectfully --


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18 THE COURT: He's simply trying to delay.

19 You've said that. I've heard it. I understand

20 that.

21 MR. FRIEDMAN: How many times does one

22 need to take the deposition of people in a loan

23 committee before enough is enough. I submit

24 that two is enough and that there's nothing

25 that anybody else can add to it that is

64

1 anything other than harassment.

2 THE COURT: I understand. Mr. Evans,

3 what is it that you believe you're going to be

4 able to demonstrate by taking additional

5 members of a committee?

6 MR. EVANS: Judge, the two people I

7 deposed were Peter Raffalski and Manuel Mesa.

8 Peter Raffalski's testimony was almost -- I'm

9 not going to say completely but in direct

10 contrary to the testimony of Mr. Mesa. They

11 were both at the same meeting.

12 THE COURT: You're saying that you got

13 inconsistencies on the handling of this loan


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14 that are --

15 MR. EVANS: On this particular loan.

16 THE COURT: That are central to the

17 motion for summary judgment?

18 MR. EVANS: Yes, sir.

19 THE COURT: I will take him at his word,

20 all right. The man thinks -- I think it's

21 reversible error to deny discovery to a person

22 defending a summary judgment. I don't want

23 that for you.

24 MR. FRIEDMAN: I agree.

25 THE COURT: I don't want that for me.

65

1 I'm going to err on the side of giving him some

2 discovery on it. If you'd like, if you think

3 he is abusing the process, I'll put a special

4 master in there. A special magistrate in there

5 who will preside over it to make sure that

6 there's no irrelevancies.

7 MR. FRIEDMAN: Once they're there, the

8 harm has occurred.


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9 THE COURT: What harm?

10 MR. FRIEDMAN: Come on, Judge, bringing a

11 chairman out of a multi-billion dollar --

12 THE COURT: No, I didn't say chairman. I

13 said loan committee.

14 MR. FRIEDMAN: He was on the loan

15 committee.

16 THE COURT: Okay. What is it --

17 MR. FRIEDMAN: Judge, there's no issue in

18 this case that this pertains to.

19 THE COURT: Tell me what the issue is

20 that it pertains to.


22 THE COURT: Tell me what their

23 inconsistencies entail.

24 MR. EVANS: During the testimony the --

25 Mr. Faffalski testified that he made the

66

1 decision to terminate the loan and begin the

2 foreclosure proceedings based on some nebulous

3 principles.

4 THE COURT: Is an issue concerning


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5 whether or not the loan was in default?

6 MR. EVANS: Pardon me?

7 THE COURT: Is that what you're saying?

8 Is there a dispute as to whether the loan was

9 in default?

10 MR. EVANS: There is a dispute as to

11 their conduct that put the loan allegedly in

12 default. In this particular case, Judge,

13 the --

14 THE COURT: What does that mean?

15 MR. EVANS: I'm going to try to make it

16 clear, Judge, because I wasn't prepared to

17 argue this today but I do have to argue it.

18 THE COURT: Well, the depos are set

19 tomorrow so we need to deal with it.

20 MR. EVANS: No, I understand. I agree

21 with you. During the deposition of Mr. Mesa,

22 Mr. Mesa testified that the reason that they

23 put the loan in default after all the

24 extensions and after over 93 percent or

25 94 percent of the building was complete is

67


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1 because they didn't feel that the building had

2 enough value to support the amount that was

3 being placed in. That's what he testified.

4 And they based this on an appraisal which

5 counsel refuses to give me that was obtained

6 before the loan allegedly went into default and

7 at a time where they with telling my client, go

8 forward with the construction, just give us

9 this particular information. It's my position

10 that Mr. Mesa had indicated in his deposition

11 that during the loan committee that the reason

12 that they called this loan due was because of

13 this nebulous appraisal, this appraisal they

14 claim they have that said that the building did

15 not have the value that it did. If you look at

16 the loan documents -- I don't have the

17 paragraph in front of me, but in the loan

18 documents if that situation were to occur, the

19 loan documents indicate that they have to

20 notify my client in reference to that having.

21 Instead of notifying him, they have this

22 appraisal done behind his back, don't give it


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23 to him. I'm still -- I'm going to be moving

24 for that appraisal. And discussed it in

25 committee meetings. And I want to find out

68

1 exactly what went on. There are minutes of

2 those committee meetings. I still don't have

3 those yet.

4 THE COURT: If I hear you properly.

5 MR. EVANS: Yes.

6 THE COURT: What you're saying is there's

7 a dispute on your side as to whether or not the

8 bank properly accelerated the loan and

9 defaulted the mortgagor and sought foreclosure.

10 MR. EVANS: And we also believe that

11 there were some fraudulent practices going on

12 and I'm trying --

13 THE COURT: Have you pled any of that?

14 MR. EVANS: That's -- my counterclaim

15 will be filed by Monday. That will be pled.

16 Right now we pled some basic affirmative

17 defenses. But we're going to amend because we

18 just received the transcripts of those


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19 particular depositions for us to develop my

20 pleadings.

21 MR. FRIEDMAN: We never accelerated the

22 loan, Judge. It matured. We filed a suit a

23 month after it matured.

24 THE COURT: I seem to remember that it

25 had matured of its own terms.

69

1 MR. FRIEDMAN: November 1.

2 THE COURT: It's your argument that they

3 were obligated to further extend it?

4 MR. EVANS: They were. They were

5 extending it and --

6 THE COURT: Yeah, but it had matured. It

7 said it was due.

8 MR. EVANS: They led my client to believe

9 that they were going to extend it. They had

10 already extended it several times and --

11 THE COURT: Okay. All right.

12 MR. FRIEDMAN: That's why the discovery

13 is harassment, Judge.


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14 THE COURT: I understand. Assume that

15 they were properly served. I'll let him take

16 the deposition of the other loan committee

17 members. Now talk to me about --

18 MR. FRIEDMAN: Other?

19 THE COURT: You said that there were two

20 others besides Steve Hayworth.

21 MR. FRIEDMAN: He's already deposed two.

22 THE COURT: I know that.

23 MR. FRIEDMAN: And of the six he has set

24 forth my understanding is that one time or

25 another they were all members of the loan

70

1 committee. Hayworth being one of those.

2 THE COURT: I am going to let him take

3 those depositions.

4 Now, if Hayworth was a member of the

5 committee and made these decisions, Hayworth

6 has to be deposed about it.

7 MR. FRIEDMAN: These decisions being

8 administration of the loan?

9 THE COURT: No, the decision no further


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10 extensions, we're going to treat the loan as

11 mature, pay the money now or we're going to

12 seek enforcement of our debt.

13 MR. FRIEDMAN: Is that true for each of

14 those people? So if I can get an affidavit

15 from each of them that they had no part in that

16 decision --

17 THE COURT: No, he can ask them that. If

18 you'd like, if you think he's going to abuse

19 it, I'll appoint someone to preside over the

20 deposition.

21 MR. FRIEDMAN: It's the taking that's the

22 abuse, Judge, that's my point.

23 THE COURT: I understand. Overruled.

24 Now, I'm going to ask you people to make

25 sure that these depositions are taken quickly.

71

1 They are not used as simply grounds to go into

2 27 other things that have nothing to do with

3 this. If there is a hint that they will be,

4 I'll appoint someone to preside over them.


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6 MR. FRIEDMAN: Can we have ordered that

7 this be done at the bank's office?

8 THE COURT: I'm sorry.

9 MR. FRIEDMAN: At the bank's office.

10 THE COURT: Sure.

11 MR. EVANS: We can't take them at my

12 office, Judge?

13 THE COURT: Go ahead. Let me hear why

14 they should be taken at the bank's office other

15 than it obviously interferes with their workday

16 and you would like them to spend --

17 MR. FRIEDMAN: Some of these people don't

18 even work for the bank by the way. I don't

19 control some of these people. They were loan

20 committee members at the time in '04 or '05 as

21 the case may be.

22 THE COURT: Are these employees or are

23 these directors who sit on the committee?

24 MR. FRIEDMAN: Mr. Hayworth is an

25 employee director.

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1 THE COURT: Of the people that were --

2 MR. FRIEDMAN: Mr. Mechoso doesn't work

3 for the bank. At the time he did but he

4 doesn't any longer.

5 THE COURT: Then he has to subpoena them.

6 MR. FRIEDMAN: Some of these others I

7 honestly don't know. We just got the names

8 yesterday.

9 THE COURT: What's the problem with doing

10 them all at the bank? You can do them quickly.

11 MR. EVANS: He is saying they all don't

12 work there.

13 THE COURT: Of the ones that do work

14 there. In fact if you subpoena them, they'll

15 come to the bank. What's the difference? Go

16 to the bank to do it.

17 MR. EVANS: Where is the bank located?

18 MR. FRIEDMAN: It's about a mile from

19 your office.

20 MR. EVANS: Oh, no problem.

21 THE COURT: Thank you.

22 MR. EVANS: No problem, Judge, I'll go to

23 the bank.


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24 THE COURT: What else?

25 MR. FRIEDMAN: For the sake of clarity I

73

1 heard it argued that appraisals were not

2 produced. If Mr. Evans would open up the box

3 of documents that have been produced to him.

4 THE COURT: Are you saying that you gave

5 him this appraisal?

6 MR. EVANS: You gave me August appraisal?

7 MR. FRIEDMAN: Whatever appraisals the

8 bank has. I don't remember the dates.

9 THE COURT: Every appraisal that the bank

10 ever made on this property on this loan?

11 MR. FRIEDMAN: We have produced every

12 stitch of paper.

13 THE COURT: If you think otherwise,

14 you'll file --

15 MR. EVANS: I just want the court to be

16 aware this is the same objection -- the same

17 appraisal that he objected to on every single

18 deposition that I took, but I'll go forward and


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19 I'll take care of it.

20 THE COURT: Okay. What else?

21 MR. SCHNEIDER: The frivolous lawsuit

22 issue.

23 THE COURT: I'm sorry.

24 MR. SCHNEIDER: The frivolous lawsuit

25 issue, the lawsuit that had been in Division

74

1 13.

2 MR. EVANS: I didn't know that was going

3 forward today.

4 THE COURT: Was it noticed for today?


6 MR. EVANS: This is the one where you

7 haven

Gibraltar v. Gylmar Development FL Hearing No. 07-42605

Documents

Transcript of Gibraltar v. Gylmar Development FL Hearing No. 07-42605