Preview
Transcript of the Proceedings of:
ARBITRATION
ONDERKO
vs.
WILSON, et al.
August 14, 2023
· · ·· · · · · · AMERICAN ARBITRATION ASSOCIATION
· · ·· · · · · · · · · · _________________
·
· · ·TIM ONDERKO,· · · · · · · · · · )
· · ·· · · · · · · · · · · · · · · · )
· · ·· · · · · · · ·Claimant,· · · · )
· · ·vs.· · · · · · · · · · · · · · ·) Case No.
· · ·· · · · · · · · · · · · · · · · ) 01-22-0002-5537
· · ·· · · · · · · · · · · · · · · · )
· · ·DONALD WILSON; and DOES 1-10,· ·)
· · ·inclusive,· · · · · · · · · · · )
· · ·· · · · · · · · · · · · · · · · )
· · ·· · · · · · · ·Respondent.· · · )
· · ·________________________________)
·
·
·
· · ·· · · · · · · · · REPORTER'S TRANSCRIPT
·
· · ·· · · · · · · · · · · ·ARBITRATION
· · ·· · · · · · · · ·Monday, August 14, 2023
· · ·· · · · · ·Via Zoom Remote Video Conferencing
· · ·· · · · · · · · · · · · 8:58 a.m.
·
·
·
· · ·Reported by:· Rachel N. Barkume, CSR, RMR, CRR
· · ·· · · · · · · Certificate No. 13657
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·
·
Arbitration August 14, 2023
·1 · · · · · · · · · A P P E A R A N C E S
·2
·3 THE ARBITRATOR:
·4 · · · · ·FRANK BURKE
· · ·· · · · ·fburke@burkemediation.com
·5
·6 FOR THE CLAIMANT:
·7 · · · · ·MCKENNA BRINK SIGNOROTTI LLP
· · ·· · · · ·By:· DOMINIC V. SIGNOROTTI
·8 · · · · ·Attorney at Law
· · ·· · · · ·1350 Treat Boulevard, Suite 105
·9 · · · · ·Walnut Creek, California 94597
· · ·· · · · ·(925) 433-5448
10 · · · · ·dominic@mckennabrink.com
11
· · ·FOR THE RESPONDENT:
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· · ·· · · · ·EHLERS LAW CORPORATION
13 · · · · ·By:· WESLEY C.J. EHLERS
· · ·· · · · ·Attorney at Law
14 · · · · ·2600 Capitol Avenue, Suite 320
· · ·· · · · ·Sacramento, California 95816
15 · · · · ·(916) 442-0300
· · ·· · · · ·wes@ehlerslawcorp.com
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·1 · · · · · · · · · · · · I N D E X
·2
·3 WITNESSES· · · · · · · · · · · · · · · · · · · · · ·PAGE
·4 TIM ONDERKO
· · ·· ·Direct Examination By Mr. Signorotti· · · · · · ·9
·5 · ·Cross-Examination By Mr. Ehlers· · · · · · · · · 86
· · ·· ·Redirect Examination By Mr. Signorotti· · · · · ·184
·6 · ·Further Redirect Examination By Mr. Signorotti· ·280
·7 DONALD WILSON
· · ·· ·Direct Examination By Mr. Ehlers· · · · · · · · ·189
·8 · ·Cross-Examination By Mr. Signorotti· · · · · · · 204
· · ·· ·Redirect Examination By Mr. Ehlers· · · · · · · ·258
·9 · ·Recross-Examination By Mr. Signorotti· · · · · · 273
· · ·· ·Further Redirect Examination By Mr. Ehlers· · · ·286
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11 · · · · · · · · · · · · ·--o0o--
12 · · · · · · · · · · ·E X H I B I T S
13 CLAIMANT'S EXHIBITS· · · · · · · · · · · · ID· ·EVD
14 Exhibit C1· · 8880 Elder Creek Operating· · · ·11· ·16
· · ·· · · · · · · Agreement
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· · ·Exhibit C12· ·7/1/17 Commercial Lease· · · · · 14· ·16
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· · ·Exhibit C14· ·Option Agreement· · · · · · · · ·15· ·16
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· · ·Exhibit C3· · 3/20/19-3/23/19 Emails· · · · · ·20· ·---
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· · ·Exhibit C5· · 5/15/19 Email with Draft· · · · ·22· ·22
19 · · · · · · · Memorandum of Understanding
20 Exhibit C6· · 5/20/19 Email with Draft· · · · ·25· ·---
· · ·· · · · · · · Memorandum of Understanding
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· · ·Exhibit C7· · 5/21/19 Email with Draft· · · · ·28· ·29
22 · · · · · · · Memorandum of Understanding
23 Exhibit C8· · 5/22/19 Email with Draft· · · · ·31· ·32
· · ·· · · · · · · Memorandum of Understanding
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· · ·Exhibit C9· · 6/11/19 Email with Draft· · · · ·32· ·---
25 · · · · · · · Memorandum of Understanding
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·1 · · · · · · · · · · · · I N D E X
·2 · · · · · · · · · · · ·(Continued)
·3 · · · · · · · · · · ·E X H I B I T S
·4 CLAIMANT'S EXHIBITS· · · · · · · · · · · · ID· ·EVD
·5 Exhibit C13· ·Extension of Master Lease· · · · 40· ·41
·6 Exhibit C19· ·4/7/21 Email· · · · · · · · · · ·41· ·43
·7 Exhibit C20· ·4/28/21 Email· · · · · · · · · · 53· ·55
·8 Exhibit C22· ·5/1/21 Email· · · · · · · · · · ·56· ·57
·9 Exhibit C23· ·5/2/21 Email· · · · · · · · · · ·57· ·60
10 Exhibit C26· ·5/14/21 Email· · · · · · · · · · 59· ·60
11 Exhibit C31· ·5/27/21 Email· · · · · · · · · · 61· ·64
12 Exhibit C33· ·7/23/21 Email· · · · · · · · · · 63· ·70
13 Exhibit C39· ·2/11/22 Email· · · · · · · · · · 68· ·70
14 Exhibit C41· ·Purchase Agreement· · · · · · · ·69· ·70
15 Exhibit C42· ·3/3/22 Correspondence· · · · · · 71· ·71
16 Exhibit C43· ·3/5/22 Email· · · · · · · · · · ·77· ·77
17 Exhibit C65· ·3/15/22 Email· · · · · · · · · · 80· ·81
18 Exhibit C45· ·3/18/22 Email· · · · · · · · · · 82· ·82
19 Exhibit C63· ·Waterfall· · · · · · · · · · · · 83· ·84
20 Exhibit C10· ·7/3/19 Emails· · · · · · · · · · 214· ---
21 Exhibit C21· ·4/30/21 Email· · · · · · · · · · 232· ---
22 Exhibit C24· ·5/3/21 Email· · · · · · · · · · ·235· ---
23 Exhibit C27· ·5/15/21 Email· · · · · · · · · · 239· ---
24 Exhibit C25· ·5/7/21 Email· · · · · · · · · · ·282· 287
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·1 · · · · · · · · · · · · I N D E X
·2 · · · · · · · · · · · ·(Continued)
·3 · · · · · · · · · · ·E X H I B I T S
·4 RESPONDENT'S EXHIBITS· · · · · · · · · · · · · ID· ·EVD
·5 Exhibit R3· · MOU 7/3/2019 - R-00073 through· ·33· ·33
· · ·· · · · · · · R-00076
·6
· · ·Exhibit R5· · 3/3/22 Correspondence· · · · · · 100· ---
·7
· · ·Exhibit R6· · 3/15/22 Email· · · · · · · · · · 109· ---
·8
· · ·Exhibit R14· ·Email 7/3/19· · · · · · · · · · ·145· 145
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·1 · · · · · ·Monday, August 14, 2023 - 8:58 a.m.
·2 · · · · ·(Whereupon, the following proceedings
·3 · · · · ·were held:)
·4 · · · · · · · · · · · · ---o0o---
·5 · · · · ·THE ARBITRATOR:· So the AAA Zoom rules
·6 basically say that when a witness is testifying, first
·7 of all, they have to be on camera; but, secondly, they
·8 should turn off their chat function on their -- any cell
·9 materials and also their e-mail.· You can do that when
10 you're not on the stand or during breaks, but it's
11 oftentimes simpler to turn it off and then just go on
12 mute during breaks and call each other on the phone.
13 · · · · ·So I'm going to -- when it's each person's turn
14 to testify -- we only have two witnesses in this
15 hearing -- I'll ask them if they have turned off their
16 chat function and their e-mail.· Is that okay?
17 · · · · ·MR. ONDERKO:· Yes.
18 · · · · ·THE ARBITRATOR:· Understood?· The other thing I
19 wanted to mention is when we were in our final
20 pre-trial, Mr. -- is it -- is the G hard or soft,
21 Mr. Signorotti?
22 · · · · ·MR. SIGNOROTTI:· It's soft.· Signorotti.
23 · · · · ·THE ARBITRATOR:· Okay.· Right.· Well, I'm half
24 Italian, so I should know how to put out Signorotti.
25 Anyway, there's a couple of exhibits that have
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·1 handwritten charts that Mr. Wilson prepared to
·2 illustrate how this buy/sell would work, and those are
·3 C5 and C19; but he sent two typewritten spreadsheets,
·4 which are C23 and C25.
·5 · · · · ·I actually went in last night and cut and
·6 pasted them together so that I could see how they
·7 compared to Mr. Wilson's handwritten document in terms
·8 of his interpretation of how the buy/sell formula
·9 worked, and Mr. Onderko has his own versions.
10 · · · · ·So, Mr. Signorotti, I'm wondering if you can
11 have your paralegal do the same thing I did, which is go
12 in and cut up the attachments.· They're fairly easily
13 matched together because I believe when they were
14 printed, they put blocks of them on following pages, but
15 they're fairly easy to piece back together again.
16 · · · · ·MR. SIGNOROTTI:· So we actually were able to
17 find the original e-mail, C25.· Mr. Onderko found that.
18 I heard back from Mr. Ehlers this morning.· I have sent
19 him a copy.· I've uploaded it into the DropBox account
20 as well.· And he's preserved his objections to it, but
21 we do have a much cleaner version of that.
22 · · · · ·THE ARBITRATOR:· All right.· C23.· How about
23 C23, though?
24 · · · · ·MR. SIGNOROTTI:· C23, we haven't been able to
25 locate the original version of that, but what we'll be
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·1 able to do is put something together that I think will
·2 be visually more appealing.
·3 · · · · ·THE ARBITRATOR:· Yeah, C3 is -- they're
·4 actually -- the left-hand portion, I think, is identical
·5 in both of them, but then in C25, Mr. Wilson added some
·6 columns on the right.· And I wasn't exactly sure what he
·7 was doing, but Mr. Onderko can tell us what -- his
·8 interpretation of what he was being sent.
·9 · · · · ·So without further ado, Madam Court Reporter,
10 can you swear Mr. Onderko.· And, Mr. Onderko, you're
11 on -- tell me if I'm pronouncing your name right, sir.
12 · · · · ·THE WITNESS:· Yes, you are.· Tim Onderko.
13 · · · · ·THE ARBITRATOR:· Onderko.· Okay.· Madam Court
14 Reporter, will you swear the witness, please.
15 · · · · · · · · · · · TIM ONDERKO,
16 · · · · ·called as a witness by and on behalf
17 · · · · ·of the Claimant, having been duly
18 · · · · ·sworn, testified as follows:
19 · · · · ·MR. SIGNOROTTI:· Mr. Burke, before we get
20 going, can I just confirm that I can share my screen
21 really quick?
22 · · · · ·THE ARBITRATOR:· Sure.
23 · · · · ·MR. SIGNOROTTI:· All right.· I'm going to try
24 it.· All right.· Is everyone able to see a copy of the
25 operating agreement?
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·1 · · · · ·THE ARBITRATOR:· Yes, I can.
·2 · · · · ·MR. SIGNOROTTI:· Perfect.
·3 · · · · ·THE ARBITRATOR:· It's on the screen.
·4 · · · · ·MR. SIGNOROTTI:· Perfect.· All right.· Are we
·5 ready to proceed?
·6 · · · · ·THE ARBITRATOR:· ·We are.· Proceed.
·7 · · · · · · · · · ·DIRECT EXAMINATION
·8 BY MR. SIGNOROTTI:
·9 · · ·Q.· Mr. Onderko, I want to just get some brief
10 background information.· Are you currently employed?
11 · · ·A.· Yes, I am.
12 · · ·Q.· And what do you do for a living?
13 · · ·A.· I'm a real estate broker.
14 · · ·Q.· How long have you been a real estate broker?
15 · · ·A.· Eight years.· I've been a real estate
16 professional for 15-plus years.
17 · · ·Q.· And what do you mean when you say "a real
18 estate professional"?
19 · · ·A.· Licensed real estate agent or broker within --
20 over the last 15 years.
21 · · ·Q.· I want to talk about the 2017 time frame.
22 · · · · ·Were you employed then?
23 · · ·A.· Yes.
24 · · ·Q.· And what did you do then?
25 · · ·A.· Many things.· I -- private money lender. I
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·1 represented buyers and sellers.· I was a principal. I
·2 am a principal in several ventures and developer.
·3 · · ·Q.· Okay.· So as you know, we're here to talk about
·4 an LLC that you're a member of, 8880 Elder Creek
·5 Holdings LLC.
·6 · · · · ·Are you familiar with that?
·7 · · ·A.· Yes.
·8 · · ·Q.· And why don't you describe for me briefly what
·9 that LLC is.
10 · · ·A.· Well, the LLC is a partnership between Don
11 Wilson and myself.· It was created back in 2017 with the
12 intention of developing the subject property 8880 Elder
13 Creek Road in Sacramento, getting that entitled,
14 improved, and eventually sold.
15 · · ·Q.· And just for -- for ease, I am going to refer
16 to 8880 Elder Creek Road as "the property."· Okay?
17 · · ·A.· Okay.
18 · · ·Q.· How did you first become aware of the property?
19 · · ·A.· The property was listed on the market for sale
20 by Colliers International.
21 · · ·Q.· And do you know when that was?
22 · · ·A.· I first saw it in around '16 or '17.
23 · · ·Q.· And what was your relationship with the
24 property at that time, if anything?
25 · · ·A.· None at all.
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·1 · · ·Q.· Did you make any efforts to acquire the
·2 property?
·3 · · ·A.· Yes, I had walked the property several times
·4 with a listing broker.· I prepared an LOI -- or had the
·5 broker prepare an LOI to purchase the property at the
·6 time I wanted to purchase it.· That's what I was doing
·7 at that time in my life in '16 and '17.
·8 · · ·Q.· And do you know who owned the property at that
·9 time?
10 · · ·A.· I came to find out Don owned the property
11 through a couple entities that he had.
12 · · ·Q.· Did you know Mr. Wilson prior to becoming
13 familiar with this property?
14 · · ·A.· No.
15 · · ·Q.· And did you meet Mr. Wilson at all during the
16 course of potentially purchasing the property?
17 · · ·A.· Yes.
18 · · ·Q.· All right.· What I'm going to do is share my
19 screen and show you what's been marked as Exhibit C1.
20 · · · · ·Are you able to see this?
21 · · ·A.· Yes.
22 · · · · ·(Exhibit Number C1 previously marked
23 · · · · ·for identification.)
24 BY MR. SIGNOROTTI:
25 · · ·Q.· This is a document titled Limited Liability
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·1 Company Agreement for 8880 Elder Creek Holdings LLC.
·2 I'm going to refer to that company as "the LLC."· Okay?
·3 · · ·A.· Okay.
·4 · · · · ·THE ARBITRATOR:· For the clarity of the record,
·5 I think that C1 is the same as R4.
·6 · · · · ·MR. EHLERS:· I believe that's correct.
·7 · · · · ·MR. SIGNOROTTI:· That is correct.· That's
·8 correct.
·9 · · · · ·THE ARBITRATOR:· We -- who was speaking --
10 Mr. Ehlers -- when I spoke over you?· I apologize.
11 · · · · ·MR. EHLERS:· Mr. Burke, I was just going to
12 say, I -- depending on the purposes for which this is
13 offered, we would object to the relevance as we
14 indicated in our objections, but --
15 · · · · ·THE ARBITRATOR:· Sure.· As you, I'm sure, know,
16 arbitrators on relevance objections admit them and give
17 them the weight that they're worth, taking into
18 account -- you know, and I'll be taking into account
19 your objections when I get the whole record and am
20 trying to decide what to do.
21 · · · · ·MR. EHLERS:· I appreciate that, Mr. Burke.· And
22 just to ease this as we go, I will likely make the same
23 objections as we go.· I understand that will be your
24 process.· But just so it's clear for the record, I'll
25 make the objections as the documents are introduced,
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·1 understanding that will be your process.
·2 · · · · ·THE ARBITRATOR:· Sure.· Absolutely.
·3 · · · · ·MR. EHLERS:· Thank you.
·4 BY MR. SIGNOROTTI:
·5 · · ·Q.· Why was this LLC formed?
·6 · · ·A.· It was formed to create a partnership agreement
·7 between myself and two others at the time.
·8 · · ·Q.· And who were the two other people?
·9 · · ·A.· Tom Sheridan and Lawrence Allende.
10 · · ·Q.· And it was formed -- you said it created a
11 partnership.· A partnership for what purpose?
12 · · ·A.· Partnership to entitle the property, develop
13 it, and eventually sell it.
14 · · ·Q.· And at this point in time -- we're talking the
15 2017 time frame -- did you discuss this LLC with
16 Mr. Wilson?
17 · · ·A.· He was aware of it, sure.· Yes.
18 · · ·Q.· And what did you and Mr. Wilson discuss about
19 the LLC?
20 · · ·A.· Well, the -- we eventually signed a master
21 lease with a purchase option, and the LLC was the -- the
22 entity that signed as the sub -- the tenant -- the
23 master tenant of the property.
24 · · ·Q.· Did the LLC acquire the property in 2017?
25 · · ·A.· No.· We wanted to, but Mr. Wilson wasn't
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·1 willing to sell at that time, so we created a master
·2 lease with a purchase option at the time.
·3 · · ·Q.· Do you know why he wasn't willing to sell at
·4 this time?
·5 · · ·A.· He was disputing a tax lien that he took
·6 subject to on the property, and he was not wanting to
·7 sell the property and pay off the tax lien at that time.
·8 So that's why we created a master lease with a purchase
·9 option.
10 · · ·Q.· I'm going to show you now what's been marked as
11 Exhibit C12.· Are you able to see this?
12 · · ·A.· Yes.
13 · · · · ·(Exhibit Number C12 previously marked
14 · · · · ·for identification.)
15 BY MR. SIGNOROTTI:
16 · · ·Q.· And what is this document?
17 · · ·A.· That's the master lease between Elder Creek
18 Holdings and Mr. Wilson's entities.
19 · · ·Q.· And what was the purpose of this master
20 lease?
21 · · ·A.· The master lease was meant to take a
22 controlling interest in the property so that we could
23 entitle, develop, get it leased up, get the value
24 increased, and eventually sell it.
25 · · ·Q.· And this -- this project that you're talking
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·1 about, having a property entitled and leased up and
·2 developed, was that something that you had done prior to
·3 this?
·4 · · ·A.· Yes.
·5 · · ·Q.· Do you have experience in that field?
·6 · · ·A.· Yes, I do.
·7 · · ·Q.· Do you know if Mr. Wilson had any experience
·8 doing that type of endeavor prior to 2017?
·9 · · ·A.· He did not, to my knowledge, and that's why he
10 was interested in creating a -- a lease with -- with
11 myself and my partners.
12 · · · · ·MR. EHLERS:· Your Honor -- Mr. Burke, I'll
13 object and move to strike that calls for speculation,
14 but --
15 · · · · ·THE ARBITRATOR:· Overruled.· By the way, C12 is
16 the same as R1.
17 · · · · ·MR. SIGNOROTTI:· That's correct.
18 · · · · ·THE ARBITRATOR:· Continue.
19 BY MR. SIGNOROTTI:
20 · · ·Q.· Next, I'd like to show you what's been marked
21 as C14.· It's a document entitled option agreement.
22 · · · · ·(Exhibit Number C14 previously marked
23 · · · · ·for identification.)
24 BY MR. SIGNOROTTI:
25 · · ·Q.· Just looking at the first page, have you seen
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·1 this before?
·2 · · ·A.· Yes.
·3 · · ·Q.· And what is this document?
·4 · · ·A.· That's the option to purchase the property.
·5 · · ·Q.· And what was the purpose of signing this option
·6 agreement?
·7 · · ·A.· Well, it gave Mr. Wilson time to dispute the
·8 IRS lien that was attached to the property.· And -- and
·9 eventually, at that -- once that was removed or --
10 there's a date on there at some point, that would have
11 given the LLC -- our LLC the right to purchase the
12 property after his dispute was concluded.
13 · · ·Q.· And --
14 · · · · ·THE ARBITRATOR:· And C14 is the same as R2.· So
15 C12 is admitted, C14 is admitted.· C1 is admitted,
16 subject to Mr. Ehlers's objection, which I'll take into
17 account when I'm deliberating.
18 · · · · ·(Exhibit Number C1 entered into
19 · · · · ·evidence.)
20 · · · · ·(Exhibit Number C12 entered into
21 · · · · ·evidence.)
22 · · · · ·(Exhibit Number C14 entered into
23 · · · · ·evidence.)
24 BY MR. SIGNOROTTI:
25 · · ·Q.· Can you describe for Arbitrator Burke, just
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·1 generally, what the condition of the property was at
·2 this time?
·3 · · ·A.· The property was approximately 70 percent
·4 vacant.· It was grossing $8,000 per month at the time.
·5 It was, in my opinion, underperforming.· And, you know,
·6 it's a 40,000-square-foot building.· There were only two
·7 or three tenants at the time.· They were hardly paying.
·8 And so it was an opportunity for me and my group to come
·9 in and add some value, get it entitled, and get some
10 leases going and -- and maximize the value of the
11 property.
12 · · ·Q.· And what type of tenants were at the property
13 in this 2017 time frame?
14 · · ·A.· Traditional tenants.· There was a car scrapper,
15 a car paint company, and a cabinet company, and they
16 were all paying approximately 50 to 60 cents per square
17 foot.
18 · · ·Q.· And what was your plan to increase the
19 profitability of the property?
20 · · ·A.· So the plan was to entitle the property for
21 cannabis purposes and through a CUP.· We were successful
22 doing that, and we identified multiple tenants who would
23 come in and at some point fully stabilize, pay upward
24 from 2.50 -- $2.50 a foot and more.· And at one point,
25 we had most of the building pre-leased.· And -- and
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·1 so -- yeah, that was the -- that was the vision on
·2 adding value to the property.
·3 · · ·Q.· And how was this project financed?
·4 · · ·A.· So there was seed money.· I brought an investor
·5 in, and the first 350,000 was used to entitle the
·6 property, make some improvements, some physical
·7 improvements, soft improvements.
·8 · · ·Q.· And do you recall -- and this is backing up a
·9 minute, but do you recall what you offered in 2017 to
10 purchase the property?
11 · · ·A.· Yeah, we -- we offered 2.8 million to purchase
12 the property -- or 2.2.· Actually, when I first -- my
13 first LOI was 2.5 million dollars.· It was listed for
14 sale for 2.4 or 2.5.· There were multiple listing flyers
15 on it in the mid-2-million range.
16 · · ·Q.· So over -- in 2017, again, we're focusing on,
17 what was Mr. Wilson's involvement with the property and
18 this work that you were doing?
19 · · ·A.· Mr. Wilson was just the landlord, and he was
20 taking a $25,000-per-month rent check while I was
21 developing the property.
22 · · ·Q.· At some point in time, did your financing for
23 this project run out or run short?
24 · · ·A.· You know, I wouldn't -- I wouldn't describe it
25 that way.· We had -- we could have done nothing.· We
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·1 could have put no more money into it if we wanted and
·2 fully leased the space out, but we saw an opportunity in
·3 developing a certain part of the property, in bringing
·4 in certain improvements where we could get tenants to
·5 pay over $5.00 per square foot, and that's what we
·6 actually ended up doing after Mr. Wilson and I got into
·7 a partnership -- but we'll get there in a minute.
·8 · · · · ·But, you know, it -- the -- I've heard
·9 Mr. Wilson in his briefs say that the -- the LLC was
10 going to fail had he not gotten involved, and that's
11 just not true.· The LLC was fine.· Mr. Wilson had been
12 asking us multiple times to get involved on many levels.
13 He had -- he had a taste for getting involved in -- in
14 further putting more money into the project.· And at
15 some point, that made sense for us.· But we didn't need
16 to get into a partnership with Mr. Wilson.· We would
17 have been just fine.· He believes that he saved the day.
18 That's just not true.· And he knows that.
19 · · ·Q.· I'm --
20 · · · · ·THE ARBITRATOR:· Let me ask Mr. Onderko a
21 question.· When you said it was entitled when you formed
22 a CUP, were you working with Sacramento County or the
23 Bureau of Cannabis Control at that point to get that
24 entitlement?
25 · · · · ·THE WITNESS:· Entitlements were through the
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·1 City of Sacramento and the State Cannabis Control Board,
·2 yes.
·3 · · · · ·THE ARBITRATOR:· And so when you shorthanded it
·4 by saying you got a CUP, you got licensed by the City
·5 and the State?
·6 · · · · ·THE WITNESS:· Yes.
·7 · · · · ·THE ARBITRATOR:· For cannabis retail
·8 operations, basically?
·9 · · · · ·THE WITNESS:· For cultivation, non-storefront
10 delivery, distribution, and manufacturing.
11 · · · · ·THE ARBITRATOR:· Thank you.
12 BY MR. SIGNOROTTI:
13 · · ·Q.· All right.· Mr. Onderko, I've brought up what's
14 been marked as Exhibit C3.
15 · · · · ·(Exhibit Number C3 previously marked
16 · · · · ·for identification.)
17 BY MR. SIGNOROTTI:
18 · · ·Q.· This is an e-mail chain from March of 2019.
19 · · · · ·Do you see this?
20 · · ·A.· Yes, I do.
21 · · ·Q.· And these are e-mails between yourself, Tom
22 Sheridan, and Mr. Wilson; is that correct?
23 · · ·A.· Yes, it is.
24 · · ·Q.· All right.· Just focusing on this time frame,
25 March of 2019, were there discussions between yourself,
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·1 Mr. Sheridan, and Mr. Wilson relating to a potential
·2 partnership or joint venture?
·3 · · ·A.· Yes.· You know, that e-mail is -- what that is
·4 is Tom and I wanted to exercise the option earlier than
·5 the option agreement allowed for, so we asked Mr. Wilson
·6 if he would allow us to purchase the property prior to
·7 the purchase option window.
·8 · · ·Q.· What did he say in response?
·9 · · ·A.· He had not finished his IRS dispute.· He was
10 still disputing the IRS lien, so we -- so he did not
11 want to sell the property at that time.· So, you know,
12 at the time, we thought, well, you know, we've got an
13 opportunity to really boost up the leases -- the lease
14 rates on this, and so -- yep, that's what that e-mail, I
15 believe, talks about.
16 · · ·Q.· And as of this time frame, March of 2019, what
17 percentage of the property was leased out,
18 approximately?
19 · · ·A.· Approximately 80 percent, 90 percent.
20 · · ·Q.· And was it grossing more income than it was in
21 2017?
22 · · ·A.· Yes.· And it was definitely cash flowing at
23 that time.· It was covering Don's -- Don's $25,000 a
24 month, and it was paying for its operating expenses.
25 And so this was a -- very early on in the venture, and a
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·1 lot of the tenants were just starting, but yep.
·2 · · ·Q.· All right.· Next, I'd like to show you what is
·3 marked as Exhibit C5.
·4 · · · · ·(Exhibit Number C5 previously marked
·5 · · · · ·for identification.)
·6 BY MR. SIGNOROTTI:
·7 · · ·Q.· Are you able to see this?
·8 · · ·A.· Yes.
·9 · · ·Q.· Okay.· And this is an e-mail chain from May of
10 2019 between yourself and Mr. Wilson.· There's an
11 attachment on this e-mail titled 190515 Investor
12 Proposal.· And I'm going to scroll down to that.
13 · · · · ·MR. EHLERS:· Mr. Burke, I'll renew our
14 objection to these e-mails and these pre-MOU
15 discussions, as we've already discussed.
16 · · · · ·THE ARBITRATOR:· Yes, same ruling.· I'll take
17 it in subject to your objection.· So it's conditionally
18 admitted, but I may change my mind later after the
19 hearing is done.· Go ahead.
20 · · · · ·(Exhibit Number C5 entered into
21 · · · · ·evidence.)
22 BY MR. SIGNOROTTI:
23 · · ·Q.· Mr. Onderko, have you seen this attachment
24 before?
25 · · ·A.· Yes.
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·1 · · ·Q.· And it's titled Proposed Agreement.
·2 · · · · ·Do you see that?
·3 · · ·A.· Yes.
·4 · · ·Q.· And just for the record, I've highlighted some
·5 portions of this.· They were not previously highlighted.
·6 · · · · ·Do you recall what the purpose of this proposed
·7 agreement was?
·8 · · ·A.· So at that time, we were having a -- pretty
·9 serious conversations with Mr. Wilson about coming in as
10 a capital partner.· He was committed -- he had committed
11 up to 1.5 million in capital so that we could do some
12 TIs on the property that would eventually get the lease
13 rates to a much higher level than we -- even than $2.50
14 a foot.
15 · · ·Q.· And what conversations did you and Mr. Wilson
16 have about that?
17 · · ·A.· We had several.· You know, he was -- he was
18 eager to get involved.· He saw an opportunity to get --
19 to boost the property value.
20 · · ·Q.· And was this something that you were interested
21 in doing as well?
22 · · ·A.· Yes.
23 · · ·Q.· So it says on this proposed agreement, "The
24 plan remains to sell by summer of 2021 or such sooner or
25 later date everybody agrees."
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·1 · · · · ·What conversations took place with Mr. Wilson
·2 about a plan to sell the property by the summer of 2021?
·3 · · ·A.· We were all on the same page for -- for as long
·4 as I could remember.· The plan was to get the property
·5 fixed up, get lease rates up, add value, and sell.
·6 · · ·Q.· And during this time, were you meeting with
·7 Mr. Wilson in person to discuss this?
·8 · · · · ·Were the conversations happening over the
·9 phone?
10 · · · · ·Or how were they happening?
11 · · ·A.· E-mail, phone, in person.
12 · · ·Q.· And there's a further highlighted portion here
13 that says, "When the property is sold, the option will
14 be exercised and any additional capital call will be
15 repaid.· The loans and other costs will then be paid."
16 · · · · ·Was the -- what discussions took place with
17 Mr. Wilson about exercising the option that the LLC had?
18 · · ·A.· Well, he understood that that was the -- the
19 reason that we were involved was to eventually sell the
20 property.· So that -- you know, that -- that was the
21 purpose.· The purpose was to get -- add the value, sell
22 the property.
23 · · ·Q.· Scroll down further, and attached to this
24 e-mail are some handwritten notes.
25 · · · · ·Do you recognize these?
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·1 · · ·A.· Yes.
·2 · · ·Q.· Who prepared these notes?
·3 · · ·A.· Don.
·4 · · ·Q.· And do you know what the purpose of these notes
·5 were?
·6 · · ·A.· To describe the distribution of profits when
·7 the property was sold.
·8 · · ·Q.· Have you seen notes prepared like this by
·9 Mr. Wilson before?
10 · · ·A.· Multiple times.
11 · · ·Q.· And your understanding was -- say it again --
12 to show how the proceeds would be distributed --
13 · · ·A.· Yes.
14 · · ·Q.· -- in the event the property was sold?
15 · · ·A.· Yeah.· So in the event -- when the property was
16 sold, this is the formula that would be used to
17 distribute profits to the members.
18 · · ·Q.· Next, I'm going to show you Exhibit C6.
19 · · · · ·(Exhibit Number C6 previously marked
20 · · · · ·for identification.)
21 BY MR. SIGNOROTTI:
22 · · ·Q.· Again, this is another e-mail chain between
23 Mr. Wilson and yourself.
24 · · · · ·Have you seen this e-mail before?
25 · · ·A.· Yes.
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·1 · · ·Q.· And attached to this e-mail is another document
·2 titled Agreement.
·3 · · · · ·Have you seen this before?
·4 · · ·A.· Yes.
·5 · · ·Q.· Who prepared this document?
·6 · · ·A.· Don Wilson.
·7 · · ·Q.· Did you participate in --
·8 · · · · ·MR. EHLERS:· Pardon me just a second,
·9 Mr. Signorotti.· Mr. Burke, I'd like to again -- and I'm
10 happy to have a standing objection to these so I don't
11 have to interrupt every time.· But I'd like to raise the
12 same objection again to this exhibit.
13 · · · · ·And if it's fine with you, Mr. Arbitrator, and
14 with Mr. Signorotti, I'd prefer to just make a standing
15 objection to these pre-MOU e-mails.
16 · · · · ·THE ARBITRATOR:· That's fine.
17 · · · · ·MR. SIGNOROTTI:· That's fine.
18 · · · · ·THE ARBITRATOR:· We have your written
19 objections also.· I'm assuming you're just following
20 along with your previous objections.
21 · · · · ·MR. EHLERS:· That is correct, yes.· Thank
22 you.
23 · · · · ·THE ARBITRATOR:· Okay.
24 BY MR. SIGNOROTTI:
25 · · ·Q.· Mr. Onderko, did you participate at all in the
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·1 preparation of this document?
·2 · · ·A.· No.
·3 · · ·Q.· And just for context, as of this time frame,
·4 2019, did you know one way or the other whether
·5 Mr. Wilson was an attorney?
·6 · · ·A.· I knew from day one in first interacting with
·7 Mr. Wilson that he was an attorney.
·8 · · ·Q.· So in this document, again, it says, "The plan
·9 remains to sell the property by summer of 2021."
10 · · · · ·As far as you understand it, did that
11 understanding, that the goal was to sell the property,
12 ever change?
13 · · ·A.· It was always the plan to sell the property.
14 You know, Don's an attorney.· He prepared these.· So I
15 was reliant on his expertise.· You know, he talked about
16 being an experienced litigator and experienced attorney,
17 and so I relied on his -- his good faith in writing that
18 this -- in preparing this draft and -- and future
19 drafts.
20 · · ·Q.· I'll scroll down to the bottom.· And I'll note
21 that there are signature blocks for Golden Global
22 Enterprises and Global Investment Trust 2017.
23 · · · · ·Do you know what those entities are?
24 · · ·A.· Those are both entities controlled solely by
25 Don Wilson.
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·1 · · ·Q.· And what was their relationship to the
·2 property?
·3 · · ·A.· They owned the property.· Those two entities
·4 owned the property 25/75 percent, I believe.
·5 · · ·Q.· And do you know why they were included as
·6 parties to this proposed agreement?
·7 · · ·A.· Because they were the property owners, and the
·8 agreement was that at some future point, the property
·9 would be sold.· And so, you know, naturally, the owners
10 of the property should be on any agreement when a
11 property is contemplated to be sold.
12 · · ·Q.· Next, I'd like to show you Exhibit C7.
13 · · · · ·(Exhibit Number C7 previously marked
14 · · · · ·for identification.)
15 BY MR. SIGNOROTTI:
16 · · ·Q.· Again, this is another e-mail chain with some
17 attachments that we'll look at.
18 · · · · ·Have you seen this document before?
19 · · ·A.· Yes.
20 · · ·Q.· And the front e-mail here dated May 21st is
21 from Mr. Wilson to yourself.· And reading down --
22 · · · · ·THE ARBITRATOR:· Admitting it subject to
23 Mr. Ehlers's objection.
24 · · · · ·MR. SIGNOROTTI:· Thank you.
25 ///
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·1 · · · · ·(Exhibit Number C7 entered into
·2 · · · · ·evidence.)
·3 BY MR. SIGNOROTTI:
·4 · · ·Q.· I'm going to highlight a portion.· Mr. Wilson
·5 is asking you to please forward a complete set of the
·6 LLC documents including operating agreement and tax
·7 returns.
·8 · · · · ·Do you see that?
·9 · · ·A.· Yes.
10 · · ·Q.· Did you forward him a complete set of the LLC
11 documents, including the operating agreement and tax
12 returns?
13 · · ·A.· Yes, I did.
14 · · ·Q.· Is it your understanding that Mr. Wilson has
15 had a copy of the LLC's operating agreement since at
16 least May of 2019?
17 · · ·A.· Yes.
18 · · ·Q.· Scrolling down now, the attachment is titled
19 Agreement and Memorandum of Understanding.
20 · · · · ·Do you see that?
21 · · ·A.· Yes.
22 · · ·Q.· Who prepared this document?
23 · · ·A.· Don Wilson.
24 · · ·Q.· Did you participate in the preparation of this
25 document at all?
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·1 · · ·A.· No.
·2 · · ·Q.· Highlight another portion.· Was the plan still
·3 to sell the property by the summer of 2021?
·4 · · ·A.· Yes.· In fact, it says "the plan is," and he
·5 capitalized "is" there.
·6 · · ·Q.· Next, I'm going to scroll down to the
·7 Subsection C.· I've highlighted the first sentence.
·8 · · · · ·Do you see that?
·9 · · ·A.· Yes.
10 · · ·Q.· Who prepared this?
11 · · ·A.· Don Wilson.
12 · · ·Q.· Did you have any discussions with Mr. Wilson
13 around this time frame about what ultimately became
14 Subsection C?
15 · · ·A.· I suppose we had conversations, you know --
16 yes, I'm sure we did.· I don't recall the specifics of
17 those conversations.
18 · · ·Q.· And is this Subsection C -- is it the same
19 substantive terms that are included in the final
20 agreement -- memorandum of understanding?
21 · · ·A.· It looks like the same language.
22 · · ·Q.· What was your understanding of the purpose of
23 this Subsection C?
24 · · ·A.· It was an accommodation for -- you know, the
25 plan was always to sell the property once we got the --
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·1 the value up; right?· And so this section was an
·2 accommodation for -- for one of the members in the event
·3 one of the members wanted to stay.· And so it was meant
·4 to be -- you know, if they wanted to stay, great; all
·5 they have to do is match the offer, match the -- the
·6 members who want to -- to leave, match that member's
·7 offer through a written notice, and then we'd move on.
·8 · · · · ·I don't blame Mr. Wilson for wanting to stay.
·9 But certainly, there's nothing that requires me to stay
10 in this venture.· That was never the plan to stay in
11 perpetuity or whenever he felt he wanted me to leave or
12 stay.
13 · · ·Q.· But whose idea was it to include this
14 Subsection C in the agreement?
15 · · ·A.· Don's.
16 · · ·Q.· Just briefly, more for context, I want to show
17 you Exhibit C8.
18 · · · · ·(Exhibit Number C8 previously marked
19 · · · · ·for identification.)
20 BY MR. SIGNOROTTI:
21 · · ·Q.· This is a May 22nd e-mail from Mr. Wilson to
22 Tom Sheridan and yourself.· And there's another --
23 scrolling down -- version of the agreement and
24 memorandum of understanding.
25 · · · · ·Who prepared this document?
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·1 · · ·A.· Don Wilson.
·2 · · ·Q.· Do you know why multiple drafts of this
·3 agreement were being circulated back and forth?
·4 · · ·A.· He kept adding stuff to -- you know, to further
·5 his benefit.
·6 · · ·Q.· Next is Exhibit C9.
·7 · · · · ·(Exhibit Number C9 previously marked
·8 · · · · ·for identification.)
·9 BY MR. SIGNOROTTI:
10 · · ·Q.· And this is a June 11 --
11 · · · · ·THE ARBITRATOR:· C8 is admitted.
12 · · · · ·MR. SIGNOROTTI:· Thank you.
13 · · · · ·(Exhibit Number C8 entered into
14 · · · · ·evidence.)
15 BY MR. SIGNOROTTI:
16 · · ·Q.· C9, from Mr. Wilson to yourself and
17 Mr. Sheridan.· It says, "I think we are there.· Remember
18 I leave for two weeks early Thursday.· Attachment is
19 another copy of the agreement and memorandum of
20 understanding."
21 · · · · ·Who prepared this?
22 · · ·A.· Don Wilson.
23 · · ·Q.· The next -- actually, let me pause for a minute
24 here.
25 · · · · ·MR. SIGNOROTTI:· Mr. Ehlers, which is the color
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·1 version of the MOU?· I might as well just reference that
·2 one.
·3 · · · · ·MR. EHLERS:· The color version -- it wasn't
·4 marked as an exhibit.· I highlighted it for the
·5 arbitrator and attached it to our brief.
·6 · · · · ·MR. SIGNOROTTI:· This is your R3.· Is this the
·7 version that you prefer I use?
·8 · · · · ·MR. EHLERS:· Oh, I see what you mean, the color
·9 signatures.· Scroll down to the bottom, if you would.
10 It's the signatures that are the issue.· Yeah, this is
11 the color one.· R3.· Yep.
12 · · · · ·MR. SIGNOROTTI:· So, Arbitrator Burke, I'm
13 going to just reference R3 instead of C11.· R3 has color
14 signatures; C11 does not.
15 · · · · ·THE ARBITRATOR:· Okay.· That's fine.· And I
16 think both sides have offered this.· So it's admitted.
17 · · · · ·MR. SIGNOROTTI:· Thank you.
18 · · · · ·(Exhibit Number R3 previously marked
19 · · · · ·for identification and entered into
20 · · · · ·evidence.)
21 BY MR. SIGNOROTTI:
22 · · ·Q.· All right.· Mr. Onderko, have you seen this
23 Exhibit R3 before?
24 · · ·A.· Yes.
25 · · ·Q.· Scroll down to the signature page.
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·1 · · · · ·Did you sign this document?
·2 · · ·A.· Yes, I did.
·3 · · ·Q.· As far as you know, did Mr. Sheridan sign this
·4 document?
·5 · · ·A.· Yes.
·6 · · ·Q.· What date did you sign this document?
·7 · · ·A.· June 13.
·8 · · ·Q.· And how do you know that?
·9 · · ·A.· Because that's my writing, and that's the
10 version I have when I sent it out.
11 · · ·Q.· And do you know what date Mr. Wilson signed
12 this document?
13 · · ·A.· Well, apparently he signed it on July 3,
14 because he initialed the change of date there.
15 · · ·Q.· All right.· So on the top right in blue where
16 it says "July 3" and it appears to say "DAW," that's
17 Mr. Wilson?
18 · · ·A.· I -- yes.
19 · · ·Q.· Scrolling down again, Mr. Wilson signed on
20 behalf of Golden Global and the Global Investment Trust;
21 correct?
22 · · ·A.· That's right.
23 · · ·Q.· Again, do you know why those two entities were
24 parties to this agreement?
25 · · ·A.· Because they're the property owner, and the
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·1 plan was to sell the property.
·2 · · ·Q.· There's also a handwritten note at the bottom
·3 which says, "DAW to receive 90 percent of LLC tax
·4 losses," and then it appears "DAW."
·5 · · · · ·Whose handwriting is that?
·6 · · ·A.· That's Don's.
·7 · · ·Q.· And was that handwriting on this agreement when
·8 you signed it?
·9 · · ·A.· No.
10 · · ·Q.· When did you see this handwriting on this
11 agreement?
12 · · ·A.· I realized it when we were filing our tax
13 return that he -- he added that and -- and insisted that
14 he takes 90 percent of the losses.· That was not on
15 there when I signed or Tom Sheridan signed.
16 · · ·Q.· D
Preview
Transcript of the Proceedings of: ARBITRATION ONDERKO vs. WILSON, et al. August 14, 2023 · · ·· · · · · · AMERICAN ARBITRATION ASSOCIATION · · ·· · · · · · · · · · _________________ · · · ·TIM ONDERKO,· · · · · · · · · · ) · · ·· · · · · · · · · · · · · · · · ) · · ·· · · · · · · ·Claimant,· · · · ) · · ·vs.· · · · · · · · · · · · · · ·) Case No. · · ·· · · · · · · · · · · · · · · · ) 01-22-0002-5537 · · ·· · · · · · · · · · · · · · · · ) · · ·DONALD WILSON; and DOES 1-10,· ·) · · ·inclusive,· · · · · · · · · · · ) · · ·· · · · · · · · · · · · · · · · ) · · ·· · · · · · · ·Respondent.· · · ) · · ·________________________________) · · · · · ·· · · · · · · · · REPORTER'S TRANSCRIPT · · · ·· · · · · · · · · · · ·ARBITRATION · · ·· · · · · · · · ·Monday, August 14, 2023 · · ·· · · · · ·Via Zoom Remote Video Conferencing · · ·· · · · · · · · · · · · 8:58 a.m. · · · · · ·Reported by:· Rachel N. Barkume, CSR, RMR, CRR · · ·· · · · · · · Certificate No. 13657 · · · Arbitration August 14, 2023 ·1 · · · · · · · · · A P P E A R A N C E S ·2 ·3 THE ARBITRATOR: ·4 · · · · ·FRANK BURKE · · ·· · · · ·fburke@burkemediation.com ·5 ·6 FOR THE CLAIMANT: ·7 · · · · ·MCKENNA BRINK SIGNOROTTI LLP · · ·· · · · ·By:· DOMINIC V. SIGNOROTTI ·8 · · · · ·Attorney at Law · · ·· · · · ·1350 Treat Boulevard, Suite 105 ·9 · · · · ·Walnut Creek, California 94597 · · ·· · · · ·(925) 433-5448 10 · · · · ·dominic@mckennabrink.com 11 · · ·FOR THE RESPONDENT: 12 · · ·· · · · ·EHLERS LAW CORPORATION 13 · · · · ·By:· WESLEY C.J. EHLERS · · ·· · · · ·Attorney at Law 14 · · · · ·2600 Capitol Avenue, Suite 320 · · ·· · · · ·Sacramento, California 95816 15 · · · · ·(916) 442-0300 · · ·· · · · ·wes@ehlerslawcorp.com 16 17 18 19 20 21 22 23 24 25 www.ImagineReporting.com | 855-777-7865 Page 2 Arbitration August 14, 2023 ·1 · · · · · · · · · · · · I N D E X ·2 ·3 WITNESSES· · · · · · · · · · · · · · · · · · · · · ·PAGE ·4 TIM ONDERKO · · ·· ·Direct Examination By Mr. Signorotti· · · · · · ·9 ·5 · ·Cross-Examination By Mr. Ehlers· · · · · · · · · 86 · · ·· ·Redirect Examination By Mr. Signorotti· · · · · ·184 ·6 · ·Further Redirect Examination By Mr. Signorotti· ·280 ·7 DONALD WILSON · · ·· ·Direct Examination By Mr. Ehlers· · · · · · · · ·189 ·8 · ·Cross-Examination By Mr. Signorotti· · · · · · · 204 · · ·· ·Redirect Examination By Mr. Ehlers· · · · · · · ·258 ·9 · ·Recross-Examination By Mr. Signorotti· · · · · · 273 · · ·· ·Further Redirect Examination By Mr. Ehlers· · · ·286 10 11 · · · · · · · · · · · · ·--o0o-- 12 · · · · · · · · · · ·E X H I B I T S 13 CLAIMANT'S EXHIBITS· · · · · · · · · · · · ID· ·EVD 14 Exhibit C1· · 8880 Elder Creek Operating· · · ·11· ·16 · · ·· · · · · · · Agreement 15 · · ·Exhibit C12· ·7/1/17 Commercial Lease· · · · · 14· ·16 16 · · ·Exhibit C14· ·Option Agreement· · · · · · · · ·15· ·16 17 · · ·Exhibit C3· · 3/20/19-3/23/19 Emails· · · · · ·20· ·--- 18 · · ·Exhibit C5· · 5/15/19 Email with Draft· · · · ·22· ·22 19 · · · · · · · Memorandum of Understanding 20 Exhibit C6· · 5/20/19 Email with Draft· · · · ·25· ·--- · · ·· · · · · · · Memorandum of Understanding 21 · · ·Exhibit C7· · 5/21/19 Email with Draft· · · · ·28· ·29 22 · · · · · · · Memorandum of Understanding 23 Exhibit C8· · 5/22/19 Email with Draft· · · · ·31· ·32 · · ·· · · · · · · Memorandum of Understanding 24 · · ·Exhibit C9· · 6/11/19 Email with Draft· · · · ·32· ·--- 25 · · · · · · · Memorandum of Understanding www.ImagineReporting.com | 855-777-7865 Page 3 Arbitration August 14, 2023 ·1 · · · · · · · · · · · · I N D E X ·2 · · · · · · · · · · · ·(Continued) ·3 · · · · · · · · · · ·E X H I B I T S ·4 CLAIMANT'S EXHIBITS· · · · · · · · · · · · ID· ·EVD ·5 Exhibit C13· ·Extension of Master Lease· · · · 40· ·41 ·6 Exhibit C19· ·4/7/21 Email· · · · · · · · · · ·41· ·43 ·7 Exhibit C20· ·4/28/21 Email· · · · · · · · · · 53· ·55 ·8 Exhibit C22· ·5/1/21 Email· · · · · · · · · · ·56· ·57 ·9 Exhibit C23· ·5/2/21 Email· · · · · · · · · · ·57· ·60 10 Exhibit C26· ·5/14/21 Email· · · · · · · · · · 59· ·60 11 Exhibit C31· ·5/27/21 Email· · · · · · · · · · 61· ·64 12 Exhibit C33· ·7/23/21 Email· · · · · · · · · · 63· ·70 13 Exhibit C39· ·2/11/22 Email· · · · · · · · · · 68· ·70 14 Exhibit C41· ·Purchase Agreement· · · · · · · ·69· ·70 15 Exhibit C42· ·3/3/22 Correspondence· · · · · · 71· ·71 16 Exhibit C43· ·3/5/22 Email· · · · · · · · · · ·77· ·77 17 Exhibit C65· ·3/15/22 Email· · · · · · · · · · 80· ·81 18 Exhibit C45· ·3/18/22 Email· · · · · · · · · · 82· ·82 19 Exhibit C63· ·Waterfall· · · · · · · · · · · · 83· ·84 20 Exhibit C10· ·7/3/19 Emails· · · · · · · · · · 214· --- 21 Exhibit C21· ·4/30/21 Email· · · · · · · · · · 232· --- 22 Exhibit C24· ·5/3/21 Email· · · · · · · · · · ·235· --- 23 Exhibit C27· ·5/15/21 Email· · · · · · · · · · 239· --- 24 Exhibit C25· ·5/7/21 Email· · · · · · · · · · ·282· 287 25 www.ImagineReporting.com | 855-777-7865 Page 4 Arbitration August 14, 2023 ·1 · · · · · · · · · · · · I N D E X ·2 · · · · · · · · · · · ·(Continued) ·3 · · · · · · · · · · ·E X H I B I T S ·4 RESPONDENT'S EXHIBITS· · · · · · · · · · · · · ID· ·EVD ·5 Exhibit R3· · MOU 7/3/2019 - R-00073 through· ·33· ·33 · · ·· · · · · · · R-00076 ·6 · · ·Exhibit R5· · 3/3/22 Correspondence· · · · · · 100· --- ·7 · · ·Exhibit R6· · 3/15/22 Email· · · · · · · · · · 109· --- ·8 · · ·Exhibit R14· ·Email 7/3/19· · · · · · · · · · ·145· 145 ·9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 www.ImagineReporting.com | 855-777-7865 Page 5 YVer1f Arbitration August 14, 2023 ·1 · · · · · ·Monday, August 14, 2023 - 8:58 a.m. ·2 · · · · ·(Whereupon, the following proceedings ·3 · · · · ·were held:) ·4 · · · · · · · · · · · · ---o0o--- ·5 · · · · ·THE ARBITRATOR:· So the AAA Zoom rules ·6 basically say that when a witness is testifying, first ·7 of all, they have to be on camera; but, secondly, they ·8 should turn off their chat function on their -- any cell ·9 materials and also their e-mail.· You can do that when 10 you're not on the stand or during breaks, but it's 11 oftentimes simpler to turn it off and then just go on 12 mute during breaks and call each other on the phone. 13 · · · · ·So I'm going to -- when it's each person's turn 14 to testify -- we only have two witnesses in this 15 hearing -- I'll ask them if they have turned off their 16 chat function and their e-mail.· Is that okay? 17 · · · · ·MR. ONDERKO:· Yes. 18 · · · · ·THE ARBITRATOR:· Understood?· The other thing I 19 wanted to mention is when we were in our final 20 pre-trial, Mr. -- is it -- is the G hard or soft, 21 Mr. Signorotti? 22 · · · · ·MR. SIGNOROTTI:· It's soft.· Signorotti. 23 · · · · ·THE ARBITRATOR:· Okay.· Right.· Well, I'm half 24 Italian, so I should know how to put out Signorotti. 25 Anyway, there's a couple of exhibits that have www.ImagineReporting.com | 855-777-7865 Page 6 YVer1f Arbitration August 14, 2023 ·1 handwritten charts that Mr. Wilson prepared to ·2 illustrate how this buy/sell would work, and those are ·3 C5 and C19; but he sent two typewritten spreadsheets, ·4 which are C23 and C25. ·5 · · · · ·I actually went in last night and cut and ·6 pasted them together so that I could see how they ·7 compared to Mr. Wilson's handwritten document in terms ·8 of his interpretation of how the buy/sell formula ·9 worked, and Mr. Onderko has his own versions. 10 · · · · ·So, Mr. Signorotti, I'm wondering if you can 11 have your paralegal do the same thing I did, which is go 12 in and cut up the attachments.· They're fairly easily 13 matched together because I believe when they were 14 printed, they put blocks of them on following pages, but 15 they're fairly easy to piece back together again. 16 · · · · ·MR. SIGNOROTTI:· So we actually were able to 17 find the original e-mail, C25.· Mr. Onderko found that. 18 I heard back from Mr. Ehlers this morning.· I have sent 19 him a copy.· I've uploaded it into the DropBox account 20 as well.· And he's preserved his objections to it, but 21 we do have a much cleaner version of that. 22 · · · · ·THE ARBITRATOR:· All right.· C23.· How about 23 C23, though? 24 · · · · ·MR. SIGNOROTTI:· C23, we haven't been able to 25 locate the original version of that, but what we'll be www.ImagineReporting.com | 855-777-7865 Page 7 YVer1f Arbitration August 14, 2023 ·1 able to do is put something together that I think will ·2 be visually more appealing. ·3 · · · · ·THE ARBITRATOR:· Yeah, C3 is -- they're ·4 actually -- the left-hand portion, I think, is identical ·5 in both of them, but then in C25, Mr. Wilson added some ·6 columns on the right.· And I wasn't exactly sure what he ·7 was doing, but Mr. Onderko can tell us what -- his ·8 interpretation of what he was being sent. ·9 · · · · ·So without further ado, Madam Court Reporter, 10 can you swear Mr. Onderko.· And, Mr. Onderko, you're 11 on -- tell me if I'm pronouncing your name right, sir. 12 · · · · ·THE WITNESS:· Yes, you are.· Tim Onderko. 13 · · · · ·THE ARBITRATOR:· Onderko.· Okay.· Madam Court 14 Reporter, will you swear the witness, please. 15 · · · · · · · · · · · TIM ONDERKO, 16 · · · · ·called as a witness by and on behalf 17 · · · · ·of the Claimant, having been duly 18 · · · · ·sworn, testified as follows: 19 · · · · ·MR. SIGNOROTTI:· Mr. Burke, before we get 20 going, can I just confirm that I can share my screen 21 really quick? 22 · · · · ·THE ARBITRATOR:· Sure. 23 · · · · ·MR. SIGNOROTTI:· All right.· I'm going to try 24 it.· All right.· Is everyone able to see a copy of the 25 operating agreement? www.ImagineReporting.com | 855-777-7865 Page 8 YVer1f Arbitration August 14, 2023 ·1 · · · · ·THE ARBITRATOR:· Yes, I can. ·2 · · · · ·MR. SIGNOROTTI:· Perfect. ·3 · · · · ·THE ARBITRATOR:· It's on the screen. ·4 · · · · ·MR. SIGNOROTTI:· Perfect.· All right.· Are we ·5 ready to proceed? ·6 · · · · ·THE ARBITRATOR:· ·We are.· Proceed. ·7 · · · · · · · · · ·DIRECT EXAMINATION ·8 BY MR. SIGNOROTTI: ·9 · · ·Q.· Mr. Onderko, I want to just get some brief 10 background information.· Are you currently employed? 11 · · ·A.· Yes, I am. 12 · · ·Q.· And what do you do for a living? 13 · · ·A.· I'm a real estate broker. 14 · · ·Q.· How long have you been a real estate broker? 15 · · ·A.· Eight years.· I've been a real estate 16 professional for 15-plus years. 17 · · ·Q.· And what do you mean when you say "a real 18 estate professional"? 19 · · ·A.· Licensed real estate agent or broker within -- 20 over the last 15 years. 21 · · ·Q.· I want to talk about the 2017 time frame. 22 · · · · ·Were you employed then? 23 · · ·A.· Yes. 24 · · ·Q.· And what did you do then? 25 · · ·A.· Many things.· I -- private money lender. I www.ImagineReporting.com | 855-777-7865 Page 9 YVer1f Arbitration August 14, 2023 ·1 represented buyers and sellers.· I was a principal. I ·2 am a principal in several ventures and developer. ·3 · · ·Q.· Okay.· So as you know, we're here to talk about ·4 an LLC that you're a member of, 8880 Elder Creek ·5 Holdings LLC. ·6 · · · · ·Are you familiar with that? ·7 · · ·A.· Yes. ·8 · · ·Q.· And why don't you describe for me briefly what ·9 that LLC is. 10 · · ·A.· Well, the LLC is a partnership between Don 11 Wilson and myself.· It was created back in 2017 with the 12 intention of developing the subject property 8880 Elder 13 Creek Road in Sacramento, getting that entitled, 14 improved, and eventually sold. 15 · · ·Q.· And just for -- for ease, I am going to refer 16 to 8880 Elder Creek Road as "the property."· Okay? 17 · · ·A.· Okay. 18 · · ·Q.· How did you first become aware of the property? 19 · · ·A.· The property was listed on the market for sale 20 by Colliers International. 21 · · ·Q.· And do you know when that was? 22 · · ·A.· I first saw it in around '16 or '17. 23 · · ·Q.· And what was your relationship with the 24 property at that time, if anything? 25 · · ·A.· None at all. www.ImagineReporting.com | 855-777-7865 Page 10 YVer1f Arbitration August 14, 2023 ·1 · · ·Q.· Did you make any efforts to acquire the ·2 property? ·3 · · ·A.· Yes, I had walked the property several times ·4 with a listing broker.· I prepared an LOI -- or had the ·5 broker prepare an LOI to purchase the property at the ·6 time I wanted to purchase it.· That's what I was doing ·7 at that time in my life in '16 and '17. ·8 · · ·Q.· And do you know who owned the property at that ·9 time? 10 · · ·A.· I came to find out Don owned the property 11 through a couple entities that he had. 12 · · ·Q.· Did you know Mr. Wilson prior to becoming 13 familiar with this property? 14 · · ·A.· No. 15 · · ·Q.· And did you meet Mr. Wilson at all during the 16 course of potentially purchasing the property? 17 · · ·A.· Yes. 18 · · ·Q.· All right.· What I'm going to do is share my 19 screen and show you what's been marked as Exhibit C1. 20 · · · · ·Are you able to see this? 21 · · ·A.· Yes. 22 · · · · ·(Exhibit Number C1 previously marked 23 · · · · ·for identification.) 24 BY MR. SIGNOROTTI: 25 · · ·Q.· This is a document titled Limited Liability www.ImagineReporting.com | 855-777-7865 Page 11 YVer1f Arbitration August 14, 2023 ·1 Company Agreement for 8880 Elder Creek Holdings LLC. ·2 I'm going to refer to that company as "the LLC."· Okay? ·3 · · ·A.· Okay. ·4 · · · · ·THE ARBITRATOR:· For the clarity of the record, ·5 I think that C1 is the same as R4. ·6 · · · · ·MR. EHLERS:· I believe that's correct. ·7 · · · · ·MR. SIGNOROTTI:· That is correct.· That's ·8 correct. ·9 · · · · ·THE ARBITRATOR:· We -- who was speaking -- 10 Mr. Ehlers -- when I spoke over you?· I apologize. 11 · · · · ·MR. EHLERS:· Mr. Burke, I was just going to 12 say, I -- depending on the purposes for which this is 13 offered, we would object to the relevance as we 14 indicated in our objections, but -- 15 · · · · ·THE ARBITRATOR:· Sure.· As you, I'm sure, know, 16 arbitrators on relevance objections admit them and give 17 them the weight that they're worth, taking into 18 account -- you know, and I'll be taking into account 19 your objections when I get the whole record and am 20 trying to decide what to do. 21 · · · · ·MR. EHLERS:· I appreciate that, Mr. Burke.· And 22 just to ease this as we go, I will likely make the same 23 objections as we go.· I understand that will be your 24 process.· But just so it's clear for the record, I'll 25 make the objections as the documents are introduced, www.ImagineReporting.com | 855-777-7865 Page 12 YVer1f Arbitration August 14, 2023 ·1 understanding that will be your process. ·2 · · · · ·THE ARBITRATOR:· Sure.· Absolutely. ·3 · · · · ·MR. EHLERS:· Thank you. ·4 BY MR. SIGNOROTTI: ·5 · · ·Q.· Why was this LLC formed? ·6 · · ·A.· It was formed to create a partnership agreement ·7 between myself and two others at the time. ·8 · · ·Q.· And who were the two other people? ·9 · · ·A.· Tom Sheridan and Lawrence Allende. 10 · · ·Q.· And it was formed -- you said it created a 11 partnership.· A partnership for what purpose? 12 · · ·A.· Partnership to entitle the property, develop 13 it, and eventually sell it. 14 · · ·Q.· And at this point in time -- we're talking the 15 2017 time frame -- did you discuss this LLC with 16 Mr. Wilson? 17 · · ·A.· He was aware of it, sure.· Yes. 18 · · ·Q.· And what did you and Mr. Wilson discuss about 19 the LLC? 20 · · ·A.· Well, the -- we eventually signed a master 21 lease with a purchase option, and the LLC was the -- the 22 entity that signed as the sub -- the tenant -- the 23 master tenant of the property. 24 · · ·Q.· Did the LLC acquire the property in 2017? 25 · · ·A.· No.· We wanted to, but Mr. Wilson wasn't www.ImagineReporting.com | 855-777-7865 Page 13 YVer1f Arbitration August 14, 2023 ·1 willing to sell at that time, so we created a master ·2 lease with a purchase option at the time. ·3 · · ·Q.· Do you know why he wasn't willing to sell at ·4 this time? ·5 · · ·A.· He was disputing a tax lien that he took ·6 subject to on the property, and he was not wanting to ·7 sell the property and pay off the tax lien at that time. ·8 So that's why we created a master lease with a purchase ·9 option. 10 · · ·Q.· I'm going to show you now what's been marked as 11 Exhibit C12.· Are you able to see this? 12 · · ·A.· Yes. 13 · · · · ·(Exhibit Number C12 previously marked 14 · · · · ·for identification.) 15 BY MR. SIGNOROTTI: 16 · · ·Q.· And what is this document? 17 · · ·A.· That's the master lease between Elder Creek 18 Holdings and Mr. Wilson's entities. 19 · · ·Q.· And what was the purpose of this master 20 lease? 21 · · ·A.· The master lease was meant to take a 22 controlling interest in the property so that we could 23 entitle, develop, get it leased up, get the value 24 increased, and eventually sell it. 25 · · ·Q.· And this -- this project that you're talking www.ImagineReporting.com | 855-777-7865 Page 14 YVer1f Arbitration August 14, 2023 ·1 about, having a property entitled and leased up and ·2 developed, was that something that you had done prior to ·3 this? ·4 · · ·A.· Yes. ·5 · · ·Q.· Do you have experience in that field? ·6 · · ·A.· Yes, I do. ·7 · · ·Q.· Do you know if Mr. Wilson had any experience ·8 doing that type of endeavor prior to 2017? ·9 · · ·A.· He did not, to my knowledge, and that's why he 10 was interested in creating a -- a lease with -- with 11 myself and my partners. 12 · · · · ·MR. EHLERS:· Your Honor -- Mr. Burke, I'll 13 object and move to strike that calls for speculation, 14 but -- 15 · · · · ·THE ARBITRATOR:· Overruled.· By the way, C12 is 16 the same as R1. 17 · · · · ·MR. SIGNOROTTI:· That's correct. 18 · · · · ·THE ARBITRATOR:· Continue. 19 BY MR. SIGNOROTTI: 20 · · ·Q.· Next, I'd like to show you what's been marked 21 as C14.· It's a document entitled option agreement. 22 · · · · ·(Exhibit Number C14 previously marked 23 · · · · ·for identification.) 24 BY MR. SIGNOROTTI: 25 · · ·Q.· Just looking at the first page, have you seen www.ImagineReporting.com | 855-777-7865 Page 15 YVer1f Arbitration August 14, 2023 ·1 this before? ·2 · · ·A.· Yes. ·3 · · ·Q.· And what is this document? ·4 · · ·A.· That's the option to purchase the property. ·5 · · ·Q.· And what was the purpose of signing this option ·6 agreement? ·7 · · ·A.· Well, it gave Mr. Wilson time to dispute the ·8 IRS lien that was attached to the property.· And -- and ·9 eventually, at that -- once that was removed or -- 10 there's a date on there at some point, that would have 11 given the LLC -- our LLC the right to purchase the 12 property after his dispute was concluded. 13 · · ·Q.· And -- 14 · · · · ·THE ARBITRATOR:· And C14 is the same as R2.· So 15 C12 is admitted, C14 is admitted.· C1 is admitted, 16 subject to Mr. Ehlers's objection, which I'll take into 17 account when I'm deliberating. 18 · · · · ·(Exhibit Number C1 entered into 19 · · · · ·evidence.) 20 · · · · ·(Exhibit Number C12 entered into 21 · · · · ·evidence.) 22 · · · · ·(Exhibit Number C14 entered into 23 · · · · ·evidence.) 24 BY MR. SIGNOROTTI: 25 · · ·Q.· Can you describe for Arbitrator Burke, just www.ImagineReporting.com | 855-777-7865 Page 16 YVer1f Arbitration August 14, 2023 ·1 generally, what the condition of the property was at ·2 this time? ·3 · · ·A.· The property was approximately 70 percent ·4 vacant.· It was grossing $8,000 per month at the time. ·5 It was, in my opinion, underperforming.· And, you know, ·6 it's a 40,000-square-foot building.· There were only two ·7 or three tenants at the time.· They were hardly paying. ·8 And so it was an opportunity for me and my group to come ·9 in and add some value, get it entitled, and get some 10 leases going and -- and maximize the value of the 11 property. 12 · · ·Q.· And what type of tenants were at the property 13 in this 2017 time frame? 14 · · ·A.· Traditional tenants.· There was a car scrapper, 15 a car paint company, and a cabinet company, and they 16 were all paying approximately 50 to 60 cents per square 17 foot. 18 · · ·Q.· And what was your plan to increase the 19 profitability of the property? 20 · · ·A.· So the plan was to entitle the property for 21 cannabis purposes and through a CUP.· We were successful 22 doing that, and we identified multiple tenants who would 23 come in and at some point fully stabilize, pay upward 24 from 2.50 -- $2.50 a foot and more.· And at one point, 25 we had most of the building pre-leased.· And -- and www.ImagineReporting.com | 855-777-7865 Page 17 YVer1f Arbitration August 14, 2023 ·1 so -- yeah, that was the -- that was the vision on ·2 adding value to the property. ·3 · · ·Q.· And how was this project financed? ·4 · · ·A.· So there was seed money.· I brought an investor ·5 in, and the first 350,000 was used to entitle the ·6 property, make some improvements, some physical ·7 improvements, soft improvements. ·8 · · ·Q.· And do you recall -- and this is backing up a ·9 minute, but do you recall what you offered in 2017 to 10 purchase the property? 11 · · ·A.· Yeah, we -- we offered 2.8 million to purchase 12 the property -- or 2.2.· Actually, when I first -- my 13 first LOI was 2.5 million dollars.· It was listed for 14 sale for 2.4 or 2.5.· There were multiple listing flyers 15 on it in the mid-2-million range. 16 · · ·Q.· So over -- in 2017, again, we're focusing on, 17 what was Mr. Wilson's involvement with the property and 18 this work that you were doing? 19 · · ·A.· Mr. Wilson was just the landlord, and he was 20 taking a $25,000-per-month rent check while I was 21 developing the property. 22 · · ·Q.· At some point in time, did your financing for 23 this project run out or run short? 24 · · ·A.· You know, I wouldn't -- I wouldn't describe it 25 that way.· We had -- we could have done nothing.· We www.ImagineReporting.com | 855-777-7865 Page 18 YVer1f Arbitration August 14, 2023 ·1 could have put no more money into it if we wanted and ·2 fully leased the space out, but we saw an opportunity in ·3 developing a certain part of the property, in bringing ·4 in certain improvements where we could get tenants to ·5 pay over $5.00 per square foot, and that's what we ·6 actually ended up doing after Mr. Wilson and I got into ·7 a partnership -- but we'll get there in a minute. ·8 · · · · ·But, you know, it -- the -- I've heard ·9 Mr. Wilson in his briefs say that the -- the LLC was 10 going to fail had he not gotten involved, and that's 11 just not true.· The LLC was fine.· Mr. Wilson had been 12 asking us multiple times to get involved on many levels. 13 He had -- he had a taste for getting involved in -- in 14 further putting more money into the project.· And at 15 some point, that made sense for us.· But we didn't need 16 to get into a partnership with Mr. Wilson.· We would 17 have been just fine.· He believes that he saved the day. 18 That's just not true.· And he knows that. 19 · · ·Q.· I'm -- 20 · · · · ·THE ARBITRATOR:· Let me ask Mr. Onderko a 21 question.· When you said it was entitled when you formed 22 a CUP, were you working with Sacramento County or the 23 Bureau of Cannabis Control at that point to get that 24 entitlement? 25 · · · · ·THE WITNESS:· Entitlements were through the www.ImagineReporting.com | 855-777-7865 Page 19 YVer1f Arbitration August 14, 2023 ·1 City of Sacramento and the State Cannabis Control Board, ·2 yes. ·3 · · · · ·THE ARBITRATOR:· And so when you shorthanded it ·4 by saying you got a CUP, you got licensed by the City ·5 and the State? ·6 · · · · ·THE WITNESS:· Yes. ·7 · · · · ·THE ARBITRATOR:· For cannabis retail ·8 operations, basically? ·9 · · · · ·THE WITNESS:· For cultivation, non-storefront 10 delivery, distribution, and manufacturing. 11 · · · · ·THE ARBITRATOR:· Thank you. 12 BY MR. SIGNOROTTI: 13 · · ·Q.· All right.· Mr. Onderko, I've brought up what's 14 been marked as Exhibit C3. 15 · · · · ·(Exhibit Number C3 previously marked 16 · · · · ·for identification.) 17 BY MR. SIGNOROTTI: 18 · · ·Q.· This is an e-mail chain from March of 2019. 19 · · · · ·Do you see this? 20 · · ·A.· Yes, I do. 21 · · ·Q.· And these are e-mails between yourself, Tom 22 Sheridan, and Mr. Wilson; is that correct? 23 · · ·A.· Yes, it is. 24 · · ·Q.· All right.· Just focusing on this time frame, 25 March of 2019, were there discussions between yourself, www.ImagineReporting.com | 855-777-7865 Page 20 YVer1f Arbitration August 14, 2023 ·1 Mr. Sheridan, and Mr. Wilson relating to a potential ·2 partnership or joint venture? ·3 · · ·A.· Yes.· You know, that e-mail is -- what that is ·4 is Tom and I wanted to exercise the option earlier than ·5 the option agreement allowed for, so we asked Mr. Wilson ·6 if he would allow us to purchase the property prior to ·7 the purchase option window. ·8 · · ·Q.· What did he say in response? ·9 · · ·A.· He had not finished his IRS dispute.· He was 10 still disputing the IRS lien, so we -- so he did not 11 want to sell the property at that time.· So, you know, 12 at the time, we thought, well, you know, we've got an 13 opportunity to really boost up the leases -- the lease 14 rates on this, and so -- yep, that's what that e-mail, I 15 believe, talks about. 16 · · ·Q.· And as of this time frame, March of 2019, what 17 percentage of the property was leased out, 18 approximately? 19 · · ·A.· Approximately 80 percent, 90 percent. 20 · · ·Q.· And was it grossing more income than it was in 21 2017? 22 · · ·A.· Yes.· And it was definitely cash flowing at 23 that time.· It was covering Don's -- Don's $25,000 a 24 month, and it was paying for its operating expenses. 25 And so this was a -- very early on in the venture, and a www.ImagineReporting.com | 855-777-7865 Page 21 YVer1f Arbitration August 14, 2023 ·1 lot of the tenants were just starting, but yep. ·2 · · ·Q.· All right.· Next, I'd like to show you what is ·3 marked as Exhibit C5. ·4 · · · · ·(Exhibit Number C5 previously marked ·5 · · · · ·for identification.) ·6 BY MR. SIGNOROTTI: ·7 · · ·Q.· Are you able to see this? ·8 · · ·A.· Yes. ·9 · · ·Q.· Okay.· And this is an e-mail chain from May of 10 2019 between yourself and Mr. Wilson.· There's an 11 attachment on this e-mail titled 190515 Investor 12 Proposal.· And I'm going to scroll down to that. 13 · · · · ·MR. EHLERS:· Mr. Burke, I'll renew our 14 objection to these e-mails and these pre-MOU 15 discussions, as we've already discussed. 16 · · · · ·THE ARBITRATOR:· Yes, same ruling.· I'll take 17 it in subject to your objection.· So it's conditionally 18 admitted, but I may change my mind later after the 19 hearing is done.· Go ahead. 20 · · · · ·(Exhibit Number C5 entered into 21 · · · · ·evidence.) 22 BY MR. SIGNOROTTI: 23 · · ·Q.· Mr. Onderko, have you seen this attachment 24 before? 25 · · ·A.· Yes. www.ImagineReporting.com | 855-777-7865 Page 22 YVer1f Arbitration August 14, 2023 ·1 · · ·Q.· And it's titled Proposed Agreement. ·2 · · · · ·Do you see that? ·3 · · ·A.· Yes. ·4 · · ·Q.· And just for the record, I've highlighted some ·5 portions of this.· They were not previously highlighted. ·6 · · · · ·Do you recall what the purpose of this proposed ·7 agreement was? ·8 · · ·A.· So at that time, we were having a -- pretty ·9 serious conversations with Mr. Wilson about coming in as 10 a capital partner.· He was committed -- he had committed 11 up to 1.5 million in capital so that we could do some 12 TIs on the property that would eventually get the lease 13 rates to a much higher level than we -- even than $2.50 14 a foot. 15 · · ·Q.· And what conversations did you and Mr. Wilson 16 have about that? 17 · · ·A.· We had several.· You know, he was -- he was 18 eager to get involved.· He saw an opportunity to get -- 19 to boost the property value. 20 · · ·Q.· And was this something that you were interested 21 in doing as well? 22 · · ·A.· Yes. 23 · · ·Q.· So it says on this proposed agreement, "The 24 plan remains to sell by summer of 2021 or such sooner or 25 later date everybody agrees." www.ImagineReporting.com | 855-777-7865 Page 23 YVer1f Arbitration August 14, 2023 ·1 · · · · ·What conversations took place with Mr. Wilson ·2 about a plan to sell the property by the summer of 2021? ·3 · · ·A.· We were all on the same page for -- for as long ·4 as I could remember.· The plan was to get the property ·5 fixed up, get lease rates up, add value, and sell. ·6 · · ·Q.· And during this time, were you meeting with ·7 Mr. Wilson in person to discuss this? ·8 · · · · ·Were the conversations happening over the ·9 phone? 10 · · · · ·Or how were they happening? 11 · · ·A.· E-mail, phone, in person. 12 · · ·Q.· And there's a further highlighted portion here 13 that says, "When the property is sold, the option will 14 be exercised and any additional capital call will be 15 repaid.· The loans and other costs will then be paid." 16 · · · · ·Was the -- what discussions took place with 17 Mr. Wilson about exercising the option that the LLC had? 18 · · ·A.· Well, he understood that that was the -- the 19 reason that we were involved was to eventually sell the 20 property.· So that -- you know, that -- that was the 21 purpose.· The purpose was to get -- add the value, sell 22 the property. 23 · · ·Q.· Scroll down further, and attached to this 24 e-mail are some handwritten notes. 25 · · · · ·Do you recognize these? www.ImagineReporting.com | 855-777-7865 Page 24 YVer1f Arbitration August 14, 2023 ·1 · · ·A.· Yes. ·2 · · ·Q.· Who prepared these notes? ·3 · · ·A.· Don. ·4 · · ·Q.· And do you know what the purpose of these notes ·5 were? ·6 · · ·A.· To describe the distribution of profits when ·7 the property was sold. ·8 · · ·Q.· Have you seen notes prepared like this by ·9 Mr. Wilson before? 10 · · ·A.· Multiple times. 11 · · ·Q.· And your understanding was -- say it again -- 12 to show how the proceeds would be distributed -- 13 · · ·A.· Yes. 14 · · ·Q.· -- in the event the property was sold? 15 · · ·A.· Yeah.· So in the event -- when the property was 16 sold, this is the formula that would be used to 17 distribute profits to the members. 18 · · ·Q.· Next, I'm going to show you Exhibit C6. 19 · · · · ·(Exhibit Number C6 previously marked 20 · · · · ·for identification.) 21 BY MR. SIGNOROTTI: 22 · · ·Q.· Again, this is another e-mail chain between 23 Mr. Wilson and yourself. 24 · · · · ·Have you seen this e-mail before? 25 · · ·A.· Yes. www.ImagineReporting.com | 855-777-7865 Page 25 YVer1f Arbitration August 14, 2023 ·1 · · ·Q.· And attached to this e-mail is another document ·2 titled Agreement. ·3 · · · · ·Have you seen this before? ·4 · · ·A.· Yes. ·5 · · ·Q.· Who prepared this document? ·6 · · ·A.· Don Wilson. ·7 · · ·Q.· Did you participate in -- ·8 · · · · ·MR. EHLERS:· Pardon me just a second, ·9 Mr. Signorotti.· Mr. Burke, I'd like to again -- and I'm 10 happy to have a standing objection to these so I don't 11 have to interrupt every time.· But I'd like to raise the 12 same objection again to this exhibit. 13 · · · · ·And if it's fine with you, Mr. Arbitrator, and 14 with Mr. Signorotti, I'd prefer to just make a standing 15 objection to these pre-MOU e-mails. 16 · · · · ·THE ARBITRATOR:· That's fine. 17 · · · · ·MR. SIGNOROTTI:· That's fine. 18 · · · · ·THE ARBITRATOR:· We have your written 19 objections also.· I'm assuming you're just following 20 along with your previous objections. 21 · · · · ·MR. EHLERS:· That is correct, yes.· Thank 22 you. 23 · · · · ·THE ARBITRATOR:· Okay. 24 BY MR. SIGNOROTTI: 25 · · ·Q.· Mr. Onderko, did you participate at all in the www.ImagineReporting.com | 855-777-7865 Page 26 YVer1f Arbitration August 14, 2023 ·1 preparation of this document? ·2 · · ·A.· No. ·3 · · ·Q.· And just for context, as of this time frame, ·4 2019, did you know one way or the other whether ·5 Mr. Wilson was an attorney? ·6 · · ·A.· I knew from day one in first interacting with ·7 Mr. Wilson that he was an attorney. ·8 · · ·Q.· So in this document, again, it says, "The plan ·9 remains to sell the property by summer of 2021." 10 · · · · ·As far as you understand it, did that 11 understanding, that the goal was to sell the property, 12 ever change? 13 · · ·A.· It was always the plan to sell the property. 14 You know, Don's an attorney.· He prepared these.· So I 15 was reliant on his expertise.· You know, he talked about 16 being an experienced litigator and experienced attorney, 17 and so I relied on his -- his good faith in writing that 18 this -- in preparing this draft and -- and future 19 drafts. 20 · · ·Q.· I'll scroll down to the bottom.· And I'll note 21 that there are signature blocks for Golden Global 22 Enterprises and Global Investment Trust 2017. 23 · · · · ·Do you know what those entities are? 24 · · ·A.· Those are both entities controlled solely by 25 Don Wilson. www.ImagineReporting.com | 855-777-7865 Page 27 YVer1f Arbitration August 14, 2023 ·1 · · ·Q.· And what was their relationship to the ·2 property? ·3 · · ·A.· They owned the property.· Those two entities ·4 owned the property 25/75 percent, I believe. ·5 · · ·Q.· And do you know why they were included as ·6 parties to this proposed agreement? ·7 · · ·A.· Because they were the property owners, and the ·8 agreement was that at some future point, the property ·9 would be sold.· And so, you know, naturally, the owners 10 of the property should be on any agreement when a 11 property is contemplated to be sold. 12 · · ·Q.· Next, I'd like to show you Exhibit C7. 13 · · · · ·(Exhibit Number C7 previously marked 14 · · · · ·for identification.) 15 BY MR. SIGNOROTTI: 16 · · ·Q.· Again, this is another e-mail chain with some 17 attachments that we'll look at. 18 · · · · ·Have you seen this document before? 19 · · ·A.· Yes. 20 · · ·Q.· And the front e-mail here dated May 21st is 21 from Mr. Wilson to yourself.· And reading down -- 22 · · · · ·THE ARBITRATOR:· Admitting it subject to 23 Mr. Ehlers's objection. 24 · · · · ·MR. SIGNOROTTI:· Thank you. 25 /// www.ImagineReporting.com | 855-777-7865 Page 28 YVer1f Arbitration August 14, 2023 ·1 · · · · ·(Exhibit Number C7 entered into ·2 · · · · ·evidence.) ·3 BY MR. SIGNOROTTI: ·4 · · ·Q.· I'm going to highlight a portion.· Mr. Wilson ·5 is asking you to please forward a complete set of the ·6 LLC documents including operating agreement and tax ·7 returns. ·8 · · · · ·Do you see that? ·9 · · ·A.· Yes. 10 · · ·Q.· Did you forward him a complete set of the LLC 11 documents, including the operating agreement and tax 12 returns? 13 · · ·A.· Yes, I did. 14 · · ·Q.· Is it your understanding that Mr. Wilson has 15 had a copy of the LLC's operating agreement since at 16 least May of 2019? 17 · · ·A.· Yes. 18 · · ·Q.· Scrolling down now, the attachment is titled 19 Agreement and Memorandum of Understanding. 20 · · · · ·Do you see that? 21 · · ·A.· Yes. 22 · · ·Q.· Who prepared this document? 23 · · ·A.· Don Wilson. 24 · · ·Q.· Did you participate in the preparation of this 25 document at all? www.ImagineReporting.com | 855-777-7865 Page 29 YVer1f Arbitration August 14, 2023 ·1 · · ·A.· No. ·2 · · ·Q.· Highlight another portion.· Was the plan still ·3 to sell the property by the summer of 2021? ·4 · · ·A.· Yes.· In fact, it says "the plan is," and he ·5 capitalized "is" there. ·6 · · ·Q.· Next, I'm going to scroll down to the ·7 Subsection C.· I've highlighted the first sentence. ·8 · · · · ·Do you see that? ·9 · · ·A.· Yes. 10 · · ·Q.· Who prepared this? 11 · · ·A.· Don Wilson. 12 · · ·Q.· Did you have any discussions with Mr. Wilson 13 around this time frame about what ultimately became 14 Subsection C? 15 · · ·A.· I suppose we had conversations, you know -- 16 yes, I'm sure we did.· I don't recall the specifics of 17 those conversations. 18 · · ·Q.· And is this Subsection C -- is it the same 19 substantive terms that are included in the final 20 agreement -- memorandum of understanding? 21 · · ·A.· It looks like the same language. 22 · · ·Q.· What was your understanding of the purpose of 23 this Subsection C? 24 · · ·A.· It was an accommodation for -- you know, the 25 plan was always to sell the property once we got the -- www.ImagineReporting.com | 855-777-7865 Page 30 YVer1f Arbitration August 14, 2023 ·1 the value up; right?· And so this section was an ·2 accommodation for -- for one of the members in the event ·3 one of the members wanted to stay.· And so it was meant ·4 to be -- you know, if they wanted to stay, great; all ·5 they have to do is match the offer, match the -- the ·6 members who want to -- to leave, match that member's ·7 offer through a written notice, and then we'd move on. ·8 · · · · ·I don't blame Mr. Wilson for wanting to stay. ·9 But certainly, there's nothing that requires me to stay 10 in this venture.· That was never the plan to stay in 11 perpetuity or whenever he felt he wanted me to leave or 12 stay. 13 · · ·Q.· But whose idea was it to include this 14 Subsection C in the agreement? 15 · · ·A.· Don's. 16 · · ·Q.· Just briefly, more for context, I want to show 17 you Exhibit C8. 18 · · · · ·(Exhibit Number C8 previously marked 19 · · · · ·for identification.) 20 BY MR. SIGNOROTTI: 21 · · ·Q.· This is a May 22nd e-mail from Mr. Wilson to 22 Tom Sheridan and yourself.· And there's another -- 23 scrolling down -- version of the agreement and 24 memorandum of understanding. 25 · · · · ·Who prepared this document? www.ImagineReporting.com | 855-777-7865 Page 31 YVer1f Arbitration August 14, 2023 ·1 · · ·A.· Don Wilson. ·2 · · ·Q.· Do you know why multiple drafts of this ·3 agreement were being circulated back and forth? ·4 · · ·A.· He kept adding stuff to -- you know, to further ·5 his benefit. ·6 · · ·Q.· Next is Exhibit C9. ·7 · · · · ·(Exhibit Number C9 previously marked ·8 · · · · ·for identification.) ·9 BY MR. SIGNOROTTI: 10 · · ·Q.· And this is a June 11 -- 11 · · · · ·THE ARBITRATOR:· C8 is admitted. 12 · · · · ·MR. SIGNOROTTI:· Thank you. 13 · · · · ·(Exhibit Number C8 entered into 14 · · · · ·evidence.) 15 BY MR. SIGNOROTTI: 16 · · ·Q.· C9, from Mr. Wilson to yourself and 17 Mr. Sheridan.· It says, "I think we are there.· Remember 18 I leave for two weeks early Thursday.· Attachment is 19 another copy of the agreement and memorandum of 20 understanding." 21 · · · · ·Who prepared this? 22 · · ·A.· Don Wilson. 23 · · ·Q.· The next -- actually, let me pause for a minute 24 here. 25 · · · · ·MR. SIGNOROTTI:· Mr. Ehlers, which is the color www.ImagineReporting.com | 855-777-7865 Page 32 YVer1f Arbitration August 14, 2023 ·1 version of the MOU?· I might as well just reference that ·2 one. ·3 · · · · ·MR. EHLERS:· The color version -- it wasn't ·4 marked as an exhibit.· I highlighted it for the ·5 arbitrator and attached it to our brief. ·6 · · · · ·MR. SIGNOROTTI:· This is your R3.· Is this the ·7 version that you prefer I use? ·8 · · · · ·MR. EHLERS:· Oh, I see what you mean, the color ·9 signatures.· Scroll down to the bottom, if you would. 10 It's the signatures that are the issue.· Yeah, this is 11 the color one.· R3.· Yep. 12 · · · · ·MR. SIGNOROTTI:· So, Arbitrator Burke, I'm 13 going to just reference R3 instead of C11.· R3 has color 14 signatures; C11 does not. 15 · · · · ·THE ARBITRATOR:· Okay.· That's fine.· And I 16 think both sides have offered this.· So it's admitted. 17 · · · · ·MR. SIGNOROTTI:· Thank you. 18 · · · · ·(Exhibit Number R3 previously marked 19 · · · · ·for identification and entered into 20 · · · · ·evidence.) 21 BY MR. SIGNOROTTI: 22 · · ·Q.· All right.· Mr. Onderko, have you seen this 23 Exhibit R3 before? 24 · · ·A.· Yes. 25 · · ·Q.· Scroll down to the signature page. www.ImagineReporting.com | 855-777-7865 Page 33 YVer1f Arbitration August 14, 2023 ·1 · · · · ·Did you sign this document? ·2 · · ·A.· Yes, I did. ·3 · · ·Q.· As far as you know, did Mr. Sheridan sign this ·4 document? ·5 · · ·A.· Yes. ·6 · · ·Q.· What date did you sign this document? ·7 · · ·A.· June 13. ·8 · · ·Q.· And how do you know that? ·9 · · ·A.· Because that's my writing, and that's the 10 version I have when I sent it out. 11 · · ·Q.· And do you know what date Mr. Wilson signed 12 this document? 13 · · ·A.· Well, apparently he signed it on July 3, 14 because he initialed the change of date there. 15 · · ·Q.· All right.· So on the top right in blue where 16 it says "July 3" and it appears to say "DAW," that's 17 Mr. Wilson? 18 · · ·A.· I -- yes. 19 · · ·Q.· Scrolling down again, Mr. Wilson signed on 20 behalf of Golden Global and the Global Investment Trust; 21 correct? 22 · · ·A.· That's right. 23 · · ·Q.· Again, do you know why those two entities were 24 parties to this agreement? 25 · · ·A.· Because they're the property owner, and the www.ImagineReporting.com | 855-777-7865 Page 34 YVer1f Arbitration August 14, 2023 ·1 plan was to sell the property. ·2 · · ·Q.· There's also a handwritten note at the bottom ·3 which says, "DAW to receive 90 percent of LLC tax ·4 losses," and then it appears "DAW." ·5 · · · · ·Whose handwriting is that? ·6 · · ·A.· That's Don's. ·7 · · ·Q.· And was that handwriting on this agreement when ·8 you signed it? ·9 · · ·A.· No. 10 · · ·Q.· When did you see this handwriting on this 11 agreement? 12 · · ·A.· I realized it when we were filing our tax 13 return that he -- he added that and -- and insisted that 14 he takes 90 percent of the losses.· That was not on 15 there when I signed or Tom Sheridan signed. 16 · · ·Q.· D