Preview
Superios Court
of Califomia
Sara M. Knowles (SBN 216139) County
of Butte
LELAND, MORRISSEY & KNOWLES Lip
1660 Humboldt Road, Suite 6
Chico, CA 95928 12/8/2021
E
Telephone: (530) 342-4500 D
Facsimile: (530) 345-6836
Deputy
Electronical ‘FILED
Attorney for John Denton, as Conservator for Edward F.
Niderost and as Successor Trustee of the Edward F. Niderost
Revocable Living Trust Dated November 8, 1998
SUPERIOR COURT OF CALIFORNIA,
COUNTY OF BUTTE
10
WAYNE A. COOK; TRUSTEE OF THE CASE NO. 20CV00905
11 WAYNE A. COOK 1998 FAMILY TRUST
DATED 12/29/98 EXHIBITS TO OBJECTIONS TO
12 PROPOSED STATEMENT OF
Plaintiff, DECISION AND REQUEST FOR
13 HEARING
Vv.
14
EDWARD F. NIDEROST, INDIVIDUALLY
15 AND AS TRUSTEE OF THE EDWARD F.
NIDEROST REVOCABLE LIVING TRUST
16 DATED NOVEMBER 8, 1998, DOES 1
THROUGH 10,
17
Defendants.
18
AND RELATED CROSS-ACTION
19
20
21 The following exhibits were inadvertently not included in the Objections to Proposed
22 Statement of Decision and Request for Hearing filed today, December 8, 2021.
23
24 LELAND, MORRISSEY & KNOWLES LLP
25
26 Dated: December 8, 2021 by
ara M. Knowles
27 Attorneys for John Denton, Conservator of the
28 Estate of Edward F. Niderost, Individually and as
Successor Trustee of the Edward F. Niderost
Revocable Living Trust Dated November 8, 1998
1
EXHIBIT A
1 THE COURT: Okay. Well, we'll takea moment and 1[ THE WITNESS: I believe the trust of the
2 you can go out and talk to him, and when you've had a 2) Niderosts.
3 chance to meet with him, then I'll hear from counsel again3 Q. And do you know Wayne Cook?
4 MS. KNOWLES: Thank you, Your Honor. | 4a. I do.
s| MR. SANDELMAN: I get to talk to him? | 5/0. And how do you know Mr. Cook?
6 THE COURT: Yes. 6 a. I've known him for roughly seventeen years. I've be
7 (OFF THE RECORD) 7|a real estate broker for all those years and have done a
8 THE COURT: Reconvening on the record after the 8 lot of transactions with him, and over the years we becan
9 Court has given Mr. Sandelman a chance, and Mr. LeClerc,|/i® close friends.
|
10 he wished, to talk to the gentleman, Mr. McCrady. And 10 Q. And do you know who Edward Niderost is? |
ll Mr. Sandelman did you wish to put anything else on the |
dja. only by name. I've never met him,
12 [record at this time? 12) Q. And do you know who John Denton is?
13 MR. SANDELMAN: Well, thank you for giving me the 13) A. I do.
14 opportunity to talk to Mr. McCrady. I think he should 14 Q. And what do you know about John Denton? |
15 testify, except as to any expert opinions. jas a. He's a private money broker in the same line of work |
16 THE COURT: Okay. You may call your next [36 that I am, |
17 witness. 17| Q. Do you understand that the purpose -- or one of the
18 MS. KNOWLES: Thank you, Your Honor. Your Honor, 18 claims in this litigation is regarding the transaction
19 I'm calling Michael McCrady to the stand. 19 between Mr. Niderost and Mr. Cook with respect to -- I'm
20 THE COURT: Okay. Mr. McCrady, can come up to 20| going to referring to the Miller Mansion as the Esplanadt
21 the witness stand up here, and before you take a seat, I 21. property.
|
22 want you to raise your right hand and the Clerk of the 22) A. I understand that this case involves a dispute betwet
23 Court will swear you in. 23| those two parties, yes.
24 --000-- 24/Q. And did you have reason to -~ Strike that. Do you kr
25 MICHAEL MCCRADY, called on behalf of the 25, who Gene Culley is?
9 11
|
Defendant, after being st duly sworn, testified as | la. I do.
follows: 2la. How do you know Mr. Culley?
--000-~ 3 A Many years ago I owned a property on Alamo Avenue in
4 THE CLERK: Thank you. You may be seated. 4 | Chico and he lived in the house next door, and while I
5 THE COURT:Please state your full name and spell 5 was -- I never lived in the house, but I remodeled it, s¢
6 your last name, sir. | 6 when I was over there working, he would come over from tj
7A. Michael Watson McCrady. Last name spelled | 7 to time and talk.
8) M-C-c-R-A-D-Y. al Q. In relation to this transaction on the Esplanade
|
9 THE COURT:
Your witness Ms. Knowles.
|
9| property, did you have any dealings with Mr. Culley?
10) EXAMINATION BY 10 A, Just one phone call that he made to me.
ll MS, KNOWLES: I'll wait a moment while 119. When approximately was that phone call?
12 Mr. McCrady adjusts the seat. Good morning, Mr. McCrady,
12 A. February of 2020.
13 How are you? halo. And what was the purpose of that phone call?
14) THE WITNESS: |
I'm fine, thanks. jaa) a. He said that he was helping his friend, Ed Niderost,
15 Q. Do you know the property that is sometimes referred 45| buy the Miller Mansion, and that Ed might need some privé
16 as the Miller Mansion? 16 money.
17 aA. I do. 17 Q. And through that conversation, did you learn any tery
18 Q. And what do you know about that property? 18 of the pending transaction?
19 A. It was sold back in 2018 and then again -- |
1g) a. Not so much from that phone call. I knew about the |
20) MR. SANDELMAN: Objection, Your Honor. This 20)
| terms from my conversations with Wayne.
21 calls for hearsay. 21/9. And approximately when did you have a conversation 0}
22 THE COURT: Sustained. 22 conversations with Wayne Cook about the terms?
23 THE WITNESS: I know that it's a large property 23 aA. It was in January of 2020.
24 on the Esplanade that at one time was owned by Wayne Cook24 Q. What do you recall was told you to as to what the te!
25 MS. KNOWLES: Do you know who owns it now? | 2s were? |
10] | 12
La. Wayne indicated that a guy had shown up at the | 1 that he would often get nine and a half or ten percent.
property, wanted to buy it and was going to pay full price2|Q. Is there anything about that conversation with |
: |
3 which was one point five million, and that he was 3) Mr. Niderost that you haven't told us about?
4 putting -- the buyer was putting a large amount down. 4a. Yes. So, after we talked about the purchase price at
5 Q And did you have any comments for Mr. Cook regarding 5 the fact that the loan would not be forgiven, I asked hin
this? |
6 how much he had to put down and he indicated that it wou]
A I asked Wayne if he had done a price reduction, and e7 only be about one hundred or one hundred fifty thousand,
said no, and I said, does this person have an agent, and|hé and so I told Ed that I would not be able to make him a
said no. I asked if the man was from out of town, that to loan, it's just not enough of a down payment, and he ask
10 was unusual for someone to offer full price on a propert 10 me what kind of interest rate I would charge, and I told
1 that's been on the market for six months. He said no, thal him eight and a half percent, and he kind of made a litt)
12 guy's just very excited about it and would like to buy it12 exclamation, and suddenly he was off the phone. He didn}.
13 Q And in your conversations with Mr. Culley, did you thad say goodbye, he just was gone, and Gene got back on the
14 |
have reason to speak to Mr. Niderost in that same telephond phone.
15 call? 15 Q And what was your second conversation with Mr. Culley
16 A Right. So Gene called and told me what he was callingé about?
17 for, and then he said, here's Ed and he handed the phone/ td A He asked if I was going to be able to help. I told t
18 who I assume was Ed Niderost, and Ed got on the phone andls I wouldn't be able to, there just wasn't enough down, ané
19 began just talking about his plans to buy the Miller it sounded like I might be in second position, so I
19 |
|
20 Mansion. 20 wouldn't be interested in making the loan, and we got of}
21 Q. And can you tell me about what you recall about the 21 the phone.
|
22 conversation with Mr Niderost about terms or anything e]8@ Q Did you have reason to then have a conversation
23 that was said? 23 Mr. Cook about your conversation with Mr. Niderost?
24 A Ed began talking in earnest about the property and 24 A. Yeah. It was the next day.
25 going on for quite a while about a lot of different topic@s Q What can you tell me about that conversation?
13 15
|
He got confused and lost track of where he was and would A So, I was at Wayne's office down in his lobby, the m
start over, and bounced around a lot in the conversation kind of entry area, and we regularly played cards togethé
but finally he said that he was buying it for a million Gin Rummy, so I was they're on a social visit, and durin(
dollars, and that he was getting paid off or selling som the game I mentioned to Wayne that I had got a call from,
private notes that he held in order to come up with the 5| Niderost and I said that he seemed to be confused about t¢
down payment.
Q Anything else about that conversation?
‘
terms of the deal. He thinks he's only paying a million
7 dollars for it, and he seemed to think that the loan that
A Well, when I -- I asked Ed to repeat the purchase 8 you're going to carry back, the five hundred thousand,
price, and he said a million dollars, and I said that it 9 would be forgiven after you pass away. We kept playing
10 was my understanding that the price was one point five | 10 cards. Wayne didn't say anything. ||
11 million. And he said -- his response to that was, T havell Q What else did you talk about? You kept playing card:
12 confidential information about Wayne. He's dying and his12 Did you say anything to Mr. Cook about how Mr. Niderost
13 daughter said that the five hundred thousand dollar loan 13 seemed to you?
14 that Wayne was carrying back would be forgiven upon wayne as A Well, after a few minutes of playing cards and not m
15 death, So, he said, I'm only pay a million. 15 conversation, I said, you know, Wayne, you should be
16 Q And did you respond at all to that? 16 careful. It seems that Mr. Niderost doesn't really
17 A I did. I told him that that's not how loans work, 17 understand the terms of the deal. He seems very confuse
18 they'll stay on the property even after the holder has 18 and, you know, he seems not to understand what's happeni
19
20
passed, and so it's not going to be forgiven. 19 You know, you should consider canceling the deal. And |
rm
Q
|
Did you talk with Mr. Niderost at all about his hist Wayne didn't respond to that.
21 of lending? Q Did you ever use the word vulnerable to describe
22 A Yes. He said that he had notes that he had placed, | 22 Ms: Niderost to Mr. Cook?
[
23
| think through John, he said, and so he indicated that he 23 A
24 was a private money investor, and at one point in the |
Later -- later in that same interaction with Wayne.
24 So, I told Wayne what I thought. Wayne didn't say
25 conversation when we talked about interest rates, he said25 anything. And then I said, Wayne, you know, he's only
14 16
_ La =
1] putting down a hundred or a hundred fifty thousand. He's 1 recommended, what do we do. And Bill's response to that|
2 having a problem coming up with the down payment. And | 2 was, Wayne, you've engineered this thing from the start,
3 that's when wi layne stopped playing cards and got his phone 3 you tell me what you want on the paperwork, I'll draw it
4 out and made a phone call. 4/ and I'll get it signed.
5 Q. And do you know who he made
|
a phone call to? 5s)a Was there anything else to that conversation?
6) A. Yes. So, Wayne's custom is to put it on speaker pho: pee A. Wayne began to share with Bill what he and Gene had |
7 and set the phone on the table, so when it was on the | 7 talked about, and Bill indicated he would get the paperwi
8 table, I saw the name Gene, and the man who answered, I | 8 taken care of and get back to him.
9 recognized the voice to be that of Gene Culley. 9/0. Did you ever see any of the paperwork for this
10 Q And what was the conversation about? Can you tell me10. transaction?
11) everything that you recall? ll a. No.
12 A. Wayne mentioned to Gene that he understood Ed was ie Q. After the conclusion of that call, did you have any
13 having a hard time coming up with the down payment and waa3 reason to discuss those telephone calls with Mr. Cook? ¢¢
14 wondering how much could Ed come up with, and after a briaft was there further conversation about the transaction?
15 | discussion, Gene indicated maybe one hundred fifty 1s) a. Yes. So, we resumed playing cards, and after a few
16 thousand. So, then, Gene asked Wayne, could you still | 16 moments, I said to Wayne that a hundred fifty thousand |
17) Provide financing, could you make this work, and so they/17 dollars down on a one point five million purchase is pre{
18 had the discussion about what this new loan would look jae thin. You know, you wouldn't normally do that. And Wayr
19 like, how much it would be, and what the terms would be, 19) didn't respond. So, we kept playing. I said, Wayne, the
20 what the payments might be. 20/ terms of this deal, you know, it's pretty messy, and you}
23 Q And at any time did you hear Mr. Culley say words to 21 buyers confused about what's happening, you should be
22 the effect that he had to check with Mr. Niderost? | 22 really careful. This is a case where you could get sued
23 A No. After he and Wayne had a meeting of the mind ab. a8 QO. Did you make any recommendations to Mr. Cook?
24 what this loan might look like, Gene said, oh, that's 2aa. T At that point I said, you should really consider
25 great, thank you, you know, let me know what we need to @@5 canceling this deal, and that's when Wayne stopped and hi
17 19]
1) and they ended their call. 1) looked at me and he said, I'm not canceling this deal.
2 Q So, was there some agreement |
made between Mr. Culley) 2 Q Was there any other discussion about the transaction
3 and Mr. Cook about new terms for the loan? 3) after that between you and Mr. Cook?
aa. I would say generally, yes. I can't say exactly the 4 A. None.
5 specifics of what it was, but I knew the loan amount had 5 Q. And just to recap, when you told Mr. Cook about your
6 been increased to cover the balance of the purchase price, 6 impressions of Mr. Niderost being confused or vulnerable,
7 the one point
five minus the one hundred fifty thousand 7 not understand the terms, did Mr. Cook have a response?
8 down. la. No.
9 Q Was there anything else about that conversation betw ree |
Q. Was he looking at you when you told him these things:
10 Mr Cook and Mr. Culley that you recall in regards to 10, A. We were sitting within two or three feet of each oth:
1. Mr Niderost? 11 at the table playing cards, so yes, we were looking at e/
12) A No. 12 other, but also looking at our cards. |
13, Q What did Mr. Cook do then after the call with | 13] 9. Was there any indication from Mr. Cook that he didn't
14 Mr Culley ended? 14 understand what you were saying?
15 A He placed another call right after that, and again pufi5S | A. No.
16 the phone on speaker phone and set it on the table, and tHé Q. Did you ever tell Mr. Cook about Mr. Niderost's claiy
17 | name on the screen of the phone was Bill Chance. 17 Did you ever use the word confidential information?
18/0. And do you know who Bill Chance is? j18 A. I did.
19 A. Only by name. I understand he's a real estate brokey19| Q. What do you recall that you said to Mr. Cook about
20 here in town. | 20 that, the term confidential information?
21 Q. And what did you hear in that conversation between 21a. I told him that Ed had said that Wayne's daughter hac
22| Mr. Chance and Mr. Cook? 22 told him that the loan would be forgiven, that he had
23) A
|
Wayne told Bill that Ed was having a hard time comin: 23 confidential information about Wayne's health, and that
25 hundred fifty thousand, and he asked Bill what he
|
24 up with the down payment and it was only going to be one 24/ loan would be forgiven when -- after Wayne had passed.
§
2s| I shared that information with Wayne.
18 |
20
_ a
12. Did Mr. Cook respond at all? 1| actually one million one hundred seventy-four thousand
ala Not that I recall, huh-uh. 2 sixty-two dollars and thirty-nine cents, and there's
3) Q. Did you ever explain or tell Mr. Cook that Mr. Nider s8 nothing about a one hundred fifty thousand dollar down
4| was talking f
continuously, went off tangent, lost track o 4 payment. Were you aware of those terms?
|
5 what he was saying? 5 A No.
MR. SANDELMAN Objection, leading. 6 Q When you had the discussion with Mr. Niderost on the
THE COURT: Sustained. She needs to reframe the telephone, is it the case that that whole conversation t ¢ |
question. 7]
8 less than ten minutes?
MS. KNOWLES: How -- did you ever describe 9 A Correct.
10 Mr. Niderost and his behavior during your conversation w an Q And during that ten minute conversation, did
1 him to Mr. Cook? 1. Mr. Niderost tell you that he was attempting to sell noté
12 THE WITNESS: Yes. When I first was talking to 12 where he was the creditor?
13 Wayne after the call, I said that he had seemed confused 13 A. Correct. Yes, he did.
14 and during our conversation he would go off tangent and 14) Q. And did he tell you that he had notes that paid at
15 ramble. So, I tried to make the point to Wayne that theré5 least eight and a half percent interest?
ne was something wrong with Ed, that he was not thinking 16| a. Yes.
17 straight, he was confused. 170. And if I told you that there was evidence in this cas
16) Q Did you have any conversations with anyone else -- 18 of a written agreement between Mr. Niderost and Mr. Chanc
19 Strike that. I don't have any further questions for th. 19 where Mr. Chance was a dual agent also representing
20 |
witness at this time. Thank you. 20/ Mr. Niderost, were you aware of that fact? |
21 THE COURT: Mr. Sandelman? a1| A. No.
22 EXAMINATION BY 22 | Q. When Mr. Niderost was talking to you during that
23 MR. SANDELMAN: Thank you, Your Honor. 23) approximate ten minutes, did he ever say that he did not
24 Mr. McCrady, if you can't answer my questions because you24 want to consummate the transaction?
25 need some water, let us know. I'm assuming you'll be ab i“ A. No.
_
21
——
|
1 to answer the questions, but - 1a. Did Mr. Niderost ever tell you words to the effe. ctt
2 THE WITNESS: I'm good. There was a little bit 2 there was some box on the contract that wasn't checked?
3 of water there, so I'm fine. Thank you. 3A No.
4 Q It's going to come shortly, and I don't have, 4Q.
| Did Mr. Niderost ever tell you any complaints he had
5, hopefully, too many questions. I can show you if you want5 about the terms of the contract, other than what
you've
to see the contract to sell the property known as the 6 told us that he was having some difficulty raising the d
6 |
7 Miller Mansion to Mr. Niderost, but I'll represent to yo 7 payment? |
6 that the purchase price in the Exhibit Two document is o: ee A No. |
9 point five million dollars, and it calls for payment of ené| Q |
I could show you documents indicating that the listir
10 million dollars at the time of close of escrow. It also 10 price was initially one million five hundred fifty thous:
lL has a deposit of fifty thousand dollars, but there's no at dollars and the contract price is one million five hundré
2) term about a one hundred fifty thousand dollar down paymi ae thousand, a difference of fifty thousand
dollars. Were 35
13 at all. That's what the written document says. 13 aware that the listing price was actually higher than thé
14 Now, were you aware of any of those terms when you hal |14 contract price?
15 these discussions in 2020? A
|
I think at one point I had heard that it might have |
16 A. No. a been one point five five. I don't recall when.
17/ Q. And also when the escrow closed, I can show you the 17 Q Okay.
18 closing statement if you need to see. I need to find it 18 A But in my conversations with Wayne, he had asked me j
19 for myself. Okay. I got it. It's Exhibit Forty-four. 19 I would list the property for one point five, so I assum
20 When escrow closed, there was -- I'm sorry about that.
|
| 20, that that was the list price.
21 It's actually Exhibit Forty-five. There was a down paymeat| Q Okay. When you were talking to Mr. Niderost about t
22 of the fifty thousand dollars, and another two hundred 22 sales price of one million dollars or one point five
23 eighty-two thousand one hundred seventy-one, for a total @8 million dollars, is it your take away that
Mr. Niderost
24 three hundred thirt: y-two thousand one seventy-one, and | 24 thought that the effective purchase price
was going to b<
25 || there was financing of one point one million dollars [7° one million dollars because a half a million dollar note
22 24
—— _ |
EXHIBIT B
1 THE COUR’ I'll give you a minute to get set up.| 1/9.For approximately how long have you had business
2 Doctor Fine, just wait one second. Ms. Knowles, you let ne| relations with him of that type?
3) know when you're ready to go. 3A Twenty-five years, thirty years. I'm not sure.
a Ms. KNOWLES: I'm ready, Your Honor. lao And have you owned real estate together?
s| THE COURT: Okay. Doctor Fine, please come | 5A Yes.
6 forward up to the witness chair up here next to me. Beforé | Q Do you currently own any real property together?
|
7 you take a seat, raise your right hand and be sworn by the7| A No.
8| clerk of the court. | 8Q Do you know who Mr. Niderost is, Edward Niderost?
9] MATTHEW FINE, Called as a witness on behalf of | 9a I know the name.
10 the Defendant, after being first duly sworn, testifies asi0|Q And what do you know of Mr. Niderost?
11, follows: ala I know that he bought the Miller Mansion.
22| THE CLERK: Thank you. You may be seated. [22/° Did you ever meet Mr. Niderost in person? |
13 THE COURT: Sir, I'd ask you to state your full /23/a No, I -- no.
14| name and spell your last name. |
14/Q You became a lender to Mr. Niderost with respect to ¢
15 THE WITNESS: Matthew Fine, F-I-N-E. 15] Miller Mansion; is that correct?
16 THE COURT: Okay. Ms. Knowles, your witness. 16 A. That's correct.
17 EXAMINATION BY MS. KNOWLES: |17 9. And how much did you loan him?
18 | Q. Good afternoon, Doctor Fine. How are you? | 28) A. I believe five hundred thousand dollars.
19| A. I'm well today. ‘Thank you. 19/Q. Do you recall the interest rate on that note?
20 THE COURT: Let me just clarify. We're in the 20 aA. I believe it was seven percent.
21 plaintiff's case. Are we taking this witness out of ordé#2 Q. Is this an interest only loan?
22) MS. KNOWLES: Yes, Your Honor. [22 a. Yes, I believe so.
23] THE COURT: Is that correct, Mr. Sandelman and 23/0. Was it secured by a Deed of Trust?
24) Mr. LeClerc? 2ala. Yes.
25 MR. LECLERC: As far as I know. I don't have any | 25 Q. What position?
| —
——— | —
1/idea why Doctor Fine is here. aja I'm sorry.
2 MR. SANDELMAN: Same. Nobody asked me, but he's 2/9. What position?
3 here. We can proceed. 3A First position.
| 4. Did you use a loan broker
‘| THE
5) will take
COURT: Okay. So hearing no objection, we
this witness out of order and, Ms. Knowles, yo:
for the loan?
5) A. No.
6 may proceed. | Q. And how were the terms for that Promissory Note
7 MS. KNOWLES: Q Doctor Fine, do you know Wayne 7 determined? |
8 Cook? | 8 A. Wayne told me about the note and I -- he asked what |
9} a. Yes. | 9 interest rate, and I said I think seven percent for that
10/Q. And can you -- is Mr. Cook sitting in the courtroom 10) loan.
11 today? 11/9. So you learned about the opportunity from Mr. Cook? |
12, A. Yes. 12, a. Yes.
13), Q. And is he sitting in the corner? |
/ 23 Q. Not from anyone else?
ula. Yes. q4aja. No.
15) Q. Okay. And how do you know Mr. Cook? 18) Q. Did you ever talk to a gentleman named Bill or Willi:
16 A. I know him from when he was a stock broker originally16 Chance?
179. And how long did you meet him? jazia. I'm sorry. What was that?
aela. About forty years ago. /18 9. Did you ever talk to a Bill or William Chance about
isla. And are you friends? | 19) | this --
20 A. Yes, we're very good friends. 20a. No.
21 Q. Do you have any business relationships in the past wit Q. |
~- lending opportunity?
22| Mr. Cook? |
|22, A. No.
23) a. I've had business relationships with Mr. Cook. | 3|Q. Did you learn anything about Mr. Niderost's assets ir
24 Q. And what types of business relationships? 24) connection with this?
25 A. We've been partners in real estate property. 25 A. I'm sorry. I didn't catch one of --
|
1 |Q. I'm sorry. Did you learn anything about Mr. Nideros{'a| regarding this transaction?
2 assets in connection with -- | 2a. I had some type of communication. I think I brought
3 A. Assets? ai
the check to the title company.
40 Yes, assets? 49. Did you review any title report in connection with t
sla. Wayne told me something about his assets 5 loan?
6] 0. What do you recall? 6A I reviewed what paperwork was associated With it.
"7 AL That he owned a number of properties. alo Do you remember what any of that paperwork was?
8 Q. Anything else? ala Do I remember -~ excuse me?
9 a. That he had cash for the downpayment. Do you remember what any of that paperwork was?
20] 0. Do you recall what the downpayment was going to be? 10 a
90
|
What it was?
uifa. No, no. |
11}Q Yes.
12,9. Did you ask what Mr. Niderost's monthly income was? 12)A I don't recall.
13 A. No. 13 MS. KNOWLES: Thank you, Doctor Fine. That's all
14)Q. Did you do any independent investigation regarding M14 the questions I have
for you at this time.
15) Niderost's ability to pay the note? [35 THE COURT: Mr. Sandelman, questions?
16 A. No. 16 MR. SANDELMAN: Yes. Thank you, Your Honor.
17/Q. Did you have any agreements with Mr. Cook about what W EXAMINATION BY MR. SANDELMAN:
18 would happen if you were unable to collect the money that18 Q. Doctor Fine, I
can show you the Promissory Note if yc
19] was owed under that Promissory Note?1s need to look at it, but if I asked you if the full name <«
20| A. No. 20 the creditor was Matthew N. Fine, M.D., 401k plan, does
21 9. Subsequently, you transferred your interest in that 21, that track with your recollection?
22. note; is that right? 22) a That's correct.
23 A. Yes. | 23) Q. Next, with respect to that five hundred thousand dol:
24}. And who did you transfer it to? |
24 Promissory Note, as far as you know, did anybody pay any
25) a. Mr. Cook. | 25} brokerage fee?
9 1
— es
——— |
1/Q. Now why did you do that? qa. No.
2 A. He told me that it -- there was some problems with the2 MR SANDELMAN: Nothing else, Your Honor?
3| note and he wanted to buy it.
4) o. And who was that -- who said that?
3
| 4|
THE COURT:
MR. LECLERC:
Mr. LeClerc?
No questions, Your Honor.
5S aA. Mr. Cook. 5| THE couRT: Ms. Knowles, any further questions?
6 Q. Did anybody explain what those problems were? MS KNOWLES: No, Your Honor. Thank you.
Ta. No. THE COURT: May this witness be excused?
8/9. Had Mr. Cook brought you any other business |
9| opportunities like this Promissory Note and Deed of Trust
a Ms. KNOWLES : Yes, Your Honor.
MR. SANDELMAN: Yes, Your Honor.
10 before? 10
°| MR. LECLERC: Yes.
ll aA. He's told me about other notes. jut THE COURT: Okay. I want you to recall, Doctor
12) Q. And were there mortgage brokers involved in those? 12 Fine, we didn't make you wait long.
13) A. Some most all. I'm not sure. 13] THE WITNESS: No. Ie
14 Q. Did you initiate a Notice of Default with respect to 14) THE COURT: We got you in and out here.
15 the Niderost loan when y
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Superios Court of Califomia Sara M. Knowles (SBN 216139) County of Butte LELAND, MORRISSEY & KNOWLES Lip 1660 Humboldt Road, Suite 6 Chico, CA 95928 12/8/2021 E Telephone: (530) 342-4500 D Facsimile: (530) 345-6836 Deputy Electronical ‘FILED Attorney for John Denton, as Conservator for Edward F. Niderost and as Successor Trustee of the Edward F. Niderost Revocable Living Trust Dated November 8, 1998 SUPERIOR COURT OF CALIFORNIA, COUNTY OF BUTTE 10 WAYNE A. COOK; TRUSTEE OF THE CASE NO. 20CV00905 11 WAYNE A. COOK 1998 FAMILY TRUST DATED 12/29/98 EXHIBITS TO OBJECTIONS TO 12 PROPOSED STATEMENT OF Plaintiff, DECISION AND REQUEST FOR 13 HEARING Vv. 14 EDWARD F. NIDEROST, INDIVIDUALLY 15 AND AS TRUSTEE OF THE EDWARD F. NIDEROST REVOCABLE LIVING TRUST 16 DATED NOVEMBER 8, 1998, DOES 1 THROUGH 10, 17 Defendants. 18 AND RELATED CROSS-ACTION 19 20 21 The following exhibits were inadvertently not included in the Objections to Proposed 22 Statement of Decision and Request for Hearing filed today, December 8, 2021. 23 24 LELAND, MORRISSEY & KNOWLES LLP 25 26 Dated: December 8, 2021 by ara M. Knowles 27 Attorneys for John Denton, Conservator of the 28 Estate of Edward F. Niderost, Individually and as Successor Trustee of the Edward F. Niderost Revocable Living Trust Dated November 8, 1998 1 EXHIBIT A 1 THE COURT: Okay. Well, we'll takea moment and 1[ THE WITNESS: I believe the trust of the 2 you can go out and talk to him, and when you've had a 2) Niderosts. 3 chance to meet with him, then I'll hear from counsel again3 Q. And do you know Wayne Cook? 4 MS. KNOWLES: Thank you, Your Honor. | 4a. I do. s| MR. SANDELMAN: I get to talk to him? | 5/0. And how do you know Mr. Cook? 6 THE COURT: Yes. 6 a. I've known him for roughly seventeen years. I've be 7 (OFF THE RECORD) 7|a real estate broker for all those years and have done a 8 THE COURT: Reconvening on the record after the 8 lot of transactions with him, and over the years we becan 9 Court has given Mr. Sandelman a chance, and Mr. LeClerc,|/i® close friends. | 10 he wished, to talk to the gentleman, Mr. McCrady. And 10 Q. And do you know who Edward Niderost is? | ll Mr. Sandelman did you wish to put anything else on the | dja. only by name. I've never met him, 12 [record at this time? 12) Q. And do you know who John Denton is? 13 MR. SANDELMAN: Well, thank you for giving me the 13) A. I do. 14 opportunity to talk to Mr. McCrady. I think he should 14 Q. And what do you know about John Denton? | 15 testify, except as to any expert opinions. jas a. He's a private money broker in the same line of work | 16 THE COURT: Okay. You may call your next [36 that I am, | 17 witness. 17| Q. Do you understand that the purpose -- or one of the 18 MS. KNOWLES: Thank you, Your Honor. Your Honor, 18 claims in this litigation is regarding the transaction 19 I'm calling Michael McCrady to the stand. 19 between Mr. Niderost and Mr. Cook with respect to -- I'm 20 THE COURT: Okay. Mr. McCrady, can come up to 20| going to referring to the Miller Mansion as the Esplanadt 21 the witness stand up here, and before you take a seat, I 21. property. | 22 want you to raise your right hand and the Clerk of the 22) A. I understand that this case involves a dispute betwet 23 Court will swear you in. 23| those two parties, yes. 24 --000-- 24/Q. And did you have reason to -~ Strike that. Do you kr 25 MICHAEL MCCRADY, called on behalf of the 25, who Gene Culley is? 9 11 | Defendant, after being st duly sworn, testified as | la. I do. follows: 2la. How do you know Mr. Culley? --000-~ 3 A Many years ago I owned a property on Alamo Avenue in 4 THE CLERK: Thank you. You may be seated. 4 | Chico and he lived in the house next door, and while I 5 THE COURT:Please state your full name and spell 5 was -- I never lived in the house, but I remodeled it, s¢ 6 your last name, sir. | 6 when I was over there working, he would come over from tj 7A. Michael Watson McCrady. Last name spelled | 7 to time and talk. 8) M-C-c-R-A-D-Y. al Q. In relation to this transaction on the Esplanade | 9 THE COURT: Your witness Ms. Knowles. | 9| property, did you have any dealings with Mr. Culley? 10) EXAMINATION BY 10 A, Just one phone call that he made to me. ll MS, KNOWLES: I'll wait a moment while 119. When approximately was that phone call? 12 Mr. McCrady adjusts the seat. Good morning, Mr. McCrady, 12 A. February of 2020. 13 How are you? halo. And what was the purpose of that phone call? 14) THE WITNESS: | I'm fine, thanks. jaa) a. He said that he was helping his friend, Ed Niderost, 15 Q. Do you know the property that is sometimes referred 45| buy the Miller Mansion, and that Ed might need some privé 16 as the Miller Mansion? 16 money. 17 aA. I do. 17 Q. And through that conversation, did you learn any tery 18 Q. And what do you know about that property? 18 of the pending transaction? 19 A. It was sold back in 2018 and then again -- | 1g) a. Not so much from that phone call. I knew about the | 20) MR. SANDELMAN: Objection, Your Honor. This 20) | terms from my conversations with Wayne. 21 calls for hearsay. 21/9. And approximately when did you have a conversation 0} 22 THE COURT: Sustained. 22 conversations with Wayne Cook about the terms? 23 THE WITNESS: I know that it's a large property 23 aA. It was in January of 2020. 24 on the Esplanade that at one time was owned by Wayne Cook24 Q. What do you recall was told you to as to what the te! 25 MS. KNOWLES: Do you know who owns it now? | 2s were? | 10] | 12 La. Wayne indicated that a guy had shown up at the | 1 that he would often get nine and a half or ten percent. property, wanted to buy it and was going to pay full price2|Q. Is there anything about that conversation with | : | 3 which was one point five million, and that he was 3) Mr. Niderost that you haven't told us about? 4 putting -- the buyer was putting a large amount down. 4a. Yes. So, after we talked about the purchase price at 5 Q And did you have any comments for Mr. Cook regarding 5 the fact that the loan would not be forgiven, I asked hin this? | 6 how much he had to put down and he indicated that it wou] A I asked Wayne if he had done a price reduction, and e7 only be about one hundred or one hundred fifty thousand, said no, and I said, does this person have an agent, and|hé and so I told Ed that I would not be able to make him a said no. I asked if the man was from out of town, that to loan, it's just not enough of a down payment, and he ask 10 was unusual for someone to offer full price on a propert 10 me what kind of interest rate I would charge, and I told 1 that's been on the market for six months. He said no, thal him eight and a half percent, and he kind of made a litt) 12 guy's just very excited about it and would like to buy it12 exclamation, and suddenly he was off the phone. He didn}. 13 Q And in your conversations with Mr. Culley, did you thad say goodbye, he just was gone, and Gene got back on the 14 | have reason to speak to Mr. Niderost in that same telephond phone. 15 call? 15 Q And what was your second conversation with Mr. Culley 16 A Right. So Gene called and told me what he was callingé about? 17 for, and then he said, here's Ed and he handed the phone/ td A He asked if I was going to be able to help. I told t 18 who I assume was Ed Niderost, and Ed got on the phone andls I wouldn't be able to, there just wasn't enough down, ané 19 began just talking about his plans to buy the Miller it sounded like I might be in second position, so I 19 | | 20 Mansion. 20 wouldn't be interested in making the loan, and we got of} 21 Q. And can you tell me about what you recall about the 21 the phone. | 22 conversation with Mr Niderost about terms or anything e]8@ Q Did you have reason to then have a conversation 23 that was said? 23 Mr. Cook about your conversation with Mr. Niderost? 24 A Ed began talking in earnest about the property and 24 A. Yeah. It was the next day. 25 going on for quite a while about a lot of different topic@s Q What can you tell me about that conversation? 13 15 | He got confused and lost track of where he was and would A So, I was at Wayne's office down in his lobby, the m start over, and bounced around a lot in the conversation kind of entry area, and we regularly played cards togethé but finally he said that he was buying it for a million Gin Rummy, so I was they're on a social visit, and durin( dollars, and that he was getting paid off or selling som the game I mentioned to Wayne that I had got a call from, private notes that he held in order to come up with the 5| Niderost and I said that he seemed to be confused about t¢ down payment. Q Anything else about that conversation? ‘ terms of the deal. He thinks he's only paying a million 7 dollars for it, and he seemed to think that the loan that A Well, when I -- I asked Ed to repeat the purchase 8 you're going to carry back, the five hundred thousand, price, and he said a million dollars, and I said that it 9 would be forgiven after you pass away. We kept playing 10 was my understanding that the price was one point five | 10 cards. Wayne didn't say anything. || 11 million. And he said -- his response to that was, T havell Q What else did you talk about? You kept playing card: 12 confidential information about Wayne. He's dying and his12 Did you say anything to Mr. Cook about how Mr. Niderost 13 daughter said that the five hundred thousand dollar loan 13 seemed to you? 14 that Wayne was carrying back would be forgiven upon wayne as A Well, after a few minutes of playing cards and not m 15 death, So, he said, I'm only pay a million. 15 conversation, I said, you know, Wayne, you should be 16 Q And did you respond at all to that? 16 careful. It seems that Mr. Niderost doesn't really 17 A I did. I told him that that's not how loans work, 17 understand the terms of the deal. He seems very confuse 18 they'll stay on the property even after the holder has 18 and, you know, he seems not to understand what's happeni 19 20 passed, and so it's not going to be forgiven. 19 You know, you should consider canceling the deal. And | rm Q | Did you talk with Mr. Niderost at all about his hist Wayne didn't respond to that. 21 of lending? Q Did you ever use the word vulnerable to describe 22 A Yes. He said that he had notes that he had placed, | 22 Ms: Niderost to Mr. Cook? [ 23 | think through John, he said, and so he indicated that he 23 A 24 was a private money investor, and at one point in the | Later -- later in that same interaction with Wayne. 24 So, I told Wayne what I thought. Wayne didn't say 25 conversation when we talked about interest rates, he said25 anything. And then I said, Wayne, you know, he's only 14 16 _ La = 1] putting down a hundred or a hundred fifty thousand. He's 1 recommended, what do we do. And Bill's response to that| 2 having a problem coming up with the down payment. And | 2 was, Wayne, you've engineered this thing from the start, 3 that's when wi layne stopped playing cards and got his phone 3 you tell me what you want on the paperwork, I'll draw it 4 out and made a phone call. 4/ and I'll get it signed. 5 Q. And do you know who he made | a phone call to? 5s)a Was there anything else to that conversation? 6) A. Yes. So, Wayne's custom is to put it on speaker pho: pee A. Wayne began to share with Bill what he and Gene had | 7 and set the phone on the table, so when it was on the | 7 talked about, and Bill indicated he would get the paperwi 8 table, I saw the name Gene, and the man who answered, I | 8 taken care of and get back to him. 9 recognized the voice to be that of Gene Culley. 9/0. Did you ever see any of the paperwork for this 10 Q And what was the conversation about? Can you tell me10. transaction? 11) everything that you recall? ll a. No. 12 A. Wayne mentioned to Gene that he understood Ed was ie Q. After the conclusion of that call, did you have any 13 having a hard time coming up with the down payment and waa3 reason to discuss those telephone calls with Mr. Cook? ¢¢ 14 wondering how much could Ed come up with, and after a briaft was there further conversation about the transaction? 15 | discussion, Gene indicated maybe one hundred fifty 1s) a. Yes. So, we resumed playing cards, and after a few 16 thousand. So, then, Gene asked Wayne, could you still | 16 moments, I said to Wayne that a hundred fifty thousand | 17) Provide financing, could you make this work, and so they/17 dollars down on a one point five million purchase is pre{ 18 had the discussion about what this new loan would look jae thin. You know, you wouldn't normally do that. And Wayr 19 like, how much it would be, and what the terms would be, 19) didn't respond. So, we kept playing. I said, Wayne, the 20 what the payments might be. 20/ terms of this deal, you know, it's pretty messy, and you} 23 Q And at any time did you hear Mr. Culley say words to 21 buyers confused about what's happening, you should be 22 the effect that he had to check with Mr. Niderost? | 22 really careful. This is a case where you could get sued 23 A No. After he and Wayne had a meeting of the mind ab. a8 QO. Did you make any recommendations to Mr. Cook? 24 what this loan might look like, Gene said, oh, that's 2aa. T At that point I said, you should really consider 25 great, thank you, you know, let me know what we need to @@5 canceling this deal, and that's when Wayne stopped and hi 17 19] 1) and they ended their call. 1) looked at me and he said, I'm not canceling this deal. 2 Q So, was there some agreement | made between Mr. Culley) 2 Q Was there any other discussion about the transaction 3 and Mr. Cook about new terms for the loan? 3) after that between you and Mr. Cook? aa. I would say generally, yes. I can't say exactly the 4 A. None. 5 specifics of what it was, but I knew the loan amount had 5 Q. And just to recap, when you told Mr. Cook about your 6 been increased to cover the balance of the purchase price, 6 impressions of Mr. Niderost being confused or vulnerable, 7 the one point five minus the one hundred fifty thousand 7 not understand the terms, did Mr. Cook have a response? 8 down. la. No. 9 Q Was there anything else about that conversation betw ree | Q. Was he looking at you when you told him these things: 10 Mr Cook and Mr. Culley that you recall in regards to 10, A. We were sitting within two or three feet of each oth: 1. Mr Niderost? 11 at the table playing cards, so yes, we were looking at e/ 12) A No. 12 other, but also looking at our cards. | 13, Q What did Mr. Cook do then after the call with | 13] 9. Was there any indication from Mr. Cook that he didn't 14 Mr Culley ended? 14 understand what you were saying? 15 A He placed another call right after that, and again pufi5S | A. No. 16 the phone on speaker phone and set it on the table, and tHé Q. Did you ever tell Mr. Cook about Mr. Niderost's claiy 17 | name on the screen of the phone was Bill Chance. 17 Did you ever use the word confidential information? 18/0. And do you know who Bill Chance is? j18 A. I did. 19 A. Only by name. I understand he's a real estate brokey19| Q. What do you recall that you said to Mr. Cook about 20 here in town. | 20 that, the term confidential information? 21 Q. And what did you hear in that conversation between 21a. I told him that Ed had said that Wayne's daughter hac 22| Mr. Chance and Mr. Cook? 22 told him that the loan would be forgiven, that he had 23) A | Wayne told Bill that Ed was having a hard time comin: 23 confidential information about Wayne's health, and that 25 hundred fifty thousand, and he asked Bill what he | 24 up with the down payment and it was only going to be one 24/ loan would be forgiven when -- after Wayne had passed. § 2s| I shared that information with Wayne. 18 | 20 _ a 12. Did Mr. Cook respond at all? 1| actually one million one hundred seventy-four thousand ala Not that I recall, huh-uh. 2 sixty-two dollars and thirty-nine cents, and there's 3) Q. Did you ever explain or tell Mr. Cook that Mr. Nider s8 nothing about a one hundred fifty thousand dollar down 4| was talking f continuously, went off tangent, lost track o 4 payment. Were you aware of those terms? | 5 what he was saying? 5 A No. MR. SANDELMAN Objection, leading. 6 Q When you had the discussion with Mr. Niderost on the THE COURT: Sustained. She needs to reframe the telephone, is it the case that that whole conversation t ¢ | question. 7] 8 less than ten minutes? MS. KNOWLES: How -- did you ever describe 9 A Correct. 10 Mr. Niderost and his behavior during your conversation w an Q And during that ten minute conversation, did 1 him to Mr. Cook? 1. Mr. Niderost tell you that he was attempting to sell noté 12 THE WITNESS: Yes. When I first was talking to 12 where he was the creditor? 13 Wayne after the call, I said that he had seemed confused 13 A. Correct. Yes, he did. 14 and during our conversation he would go off tangent and 14) Q. And did he tell you that he had notes that paid at 15 ramble. So, I tried to make the point to Wayne that theré5 least eight and a half percent interest? ne was something wrong with Ed, that he was not thinking 16| a. Yes. 17 straight, he was confused. 170. And if I told you that there was evidence in this cas 16) Q Did you have any conversations with anyone else -- 18 of a written agreement between Mr. Niderost and Mr. Chanc 19 Strike that. I don't have any further questions for th. 19 where Mr. Chance was a dual agent also representing 20 | witness at this time. Thank you. 20/ Mr. Niderost, were you aware of that fact? | 21 THE COURT: Mr. Sandelman? a1| A. No. 22 EXAMINATION BY 22 | Q. When Mr. Niderost was talking to you during that 23 MR. SANDELMAN: Thank you, Your Honor. 23) approximate ten minutes, did he ever say that he did not 24 Mr. McCrady, if you can't answer my questions because you24 want to consummate the transaction? 25 need some water, let us know. I'm assuming you'll be ab i“ A. No. _ 21 —— | 1 to answer the questions, but - 1a. Did Mr. Niderost ever tell you words to the effe. ctt 2 THE WITNESS: I'm good. There was a little bit 2 there was some box on the contract that wasn't checked? 3 of water there, so I'm fine. Thank you. 3A No. 4 Q It's going to come shortly, and I don't have, 4Q. | Did Mr. Niderost ever tell you any complaints he had 5, hopefully, too many questions. I can show you if you want5 about the terms of the contract, other than what you've to see the contract to sell the property known as the 6 told us that he was having some difficulty raising the d 6 | 7 Miller Mansion to Mr. Niderost, but I'll represent to yo 7 payment? | 6 that the purchase price in the Exhibit Two document is o: ee A No. | 9 point five million dollars, and it calls for payment of ené| Q | I could show you documents indicating that the listir 10 million dollars at the time of close of escrow. It also 10 price was initially one million five hundred fifty thous: lL has a deposit of fifty thousand dollars, but there's no at dollars and the contract price is one million five hundré 2) term about a one hundred fifty thousand dollar down paymi ae thousand, a difference of fifty thousand dollars. Were 35 13 at all. That's what the written document says. 13 aware that the listing price was actually higher than thé 14 Now, were you aware of any of those terms when you hal |14 contract price? 15 these discussions in 2020? A | I think at one point I had heard that it might have | 16 A. No. a been one point five five. I don't recall when. 17/ Q. And also when the escrow closed, I can show you the 17 Q Okay. 18 closing statement if you need to see. I need to find it 18 A But in my conversations with Wayne, he had asked me j 19 for myself. Okay. I got it. It's Exhibit Forty-four. 19 I would list the property for one point five, so I assum 20 When escrow closed, there was -- I'm sorry about that. | | 20, that that was the list price. 21 It's actually Exhibit Forty-five. There was a down paymeat| Q Okay. When you were talking to Mr. Niderost about t 22 of the fifty thousand dollars, and another two hundred 22 sales price of one million dollars or one point five 23 eighty-two thousand one hundred seventy-one, for a total @8 million dollars, is it your take away that Mr. Niderost 24 three hundred thirt: y-two thousand one seventy-one, and | 24 thought that the effective purchase price was going to b< 25 || there was financing of one point one million dollars [7° one million dollars because a half a million dollar note 22 24 —— _ | EXHIBIT B 1 THE COUR’ I'll give you a minute to get set up.| 1/9.For approximately how long have you had business 2 Doctor Fine, just wait one second. Ms. Knowles, you let ne| relations with him of that type? 3) know when you're ready to go. 3A Twenty-five years, thirty years. I'm not sure. a Ms. KNOWLES: I'm ready, Your Honor. lao And have you owned real estate together? s| THE COURT: Okay. Doctor Fine, please come | 5A Yes. 6 forward up to the witness chair up here next to me. Beforé | Q Do you currently own any real property together? | 7 you take a seat, raise your right hand and be sworn by the7| A No. 8| clerk of the court. | 8Q Do you know who Mr. Niderost is, Edward Niderost? 9] MATTHEW FINE, Called as a witness on behalf of | 9a I know the name. 10 the Defendant, after being first duly sworn, testifies asi0|Q And what do you know of Mr. Niderost? 11, follows: ala I know that he bought the Miller Mansion. 22| THE CLERK: Thank you. You may be seated. [22/° Did you ever meet Mr. Niderost in person? | 13 THE COURT: Sir, I'd ask you to state your full /23/a No, I -- no. 14| name and spell your last name. | 14/Q You became a lender to Mr. Niderost with respect to ¢ 15 THE WITNESS: Matthew Fine, F-I-N-E. 15] Miller Mansion; is that correct? 16 THE COURT: Okay. Ms. Knowles, your witness. 16 A. That's correct. 17 EXAMINATION BY MS. KNOWLES: |17 9. And how much did you loan him? 18 | Q. Good afternoon, Doctor Fine. How are you? | 28) A. I believe five hundred thousand dollars. 19| A. I'm well today. ‘Thank you. 19/Q. Do you recall the interest rate on that note? 20 THE COURT: Let me just clarify. We're in the 20 aA. I believe it was seven percent. 21 plaintiff's case. Are we taking this witness out of ordé#2 Q. Is this an interest only loan? 22) MS. KNOWLES: Yes, Your Honor. [22 a. Yes, I believe so. 23] THE COURT: Is that correct, Mr. Sandelman and 23/0. Was it secured by a Deed of Trust? 24) Mr. LeClerc? 2ala. Yes. 25 MR. LECLERC: As far as I know. I don't have any | 25 Q. What position? | — ——— | — 1/idea why Doctor Fine is here. aja I'm sorry. 2 MR. SANDELMAN: Same. Nobody asked me, but he's 2/9. What position? 3 here. We can proceed. 3A First position. | 4. Did you use a loan broker ‘| THE 5) will take COURT: Okay. So hearing no objection, we this witness out of order and, Ms. Knowles, yo: for the loan? 5) A. No. 6 may proceed. | Q. And how were the terms for that Promissory Note 7 MS. KNOWLES: Q Doctor Fine, do you know Wayne 7 determined? | 8 Cook? | 8 A. Wayne told me about the note and I -- he asked what | 9} a. Yes. | 9 interest rate, and I said I think seven percent for that 10/Q. And can you -- is Mr. Cook sitting in the courtroom 10) loan. 11 today? 11/9. So you learned about the opportunity from Mr. Cook? | 12, A. Yes. 12, a. Yes. 13), Q. And is he sitting in the corner? | / 23 Q. Not from anyone else? ula. Yes. q4aja. No. 15) Q. Okay. And how do you know Mr. Cook? 18) Q. Did you ever talk to a gentleman named Bill or Willi: 16 A. I know him from when he was a stock broker originally16 Chance? 179. And how long did you meet him? jazia. I'm sorry. What was that? aela. About forty years ago. /18 9. Did you ever talk to a Bill or William Chance about isla. And are you friends? | 19) | this -- 20 A. Yes, we're very good friends. 20a. No. 21 Q. Do you have any business relationships in the past wit Q. | ~- lending opportunity? 22| Mr. Cook? | |22, A. No. 23) a. I've had business relationships with Mr. Cook. | 3|Q. Did you learn anything about Mr. Niderost's assets ir 24 Q. And what types of business relationships? 24) connection with this? 25 A. We've been partners in real estate property. 25 A. I'm sorry. I didn't catch one of -- | 1 |Q. I'm sorry. Did you learn anything about Mr. Nideros{'a| regarding this transaction? 2 assets in connection with -- | 2a. I had some type of communication. I think I brought 3 A. Assets? ai the check to the title company. 40 Yes, assets? 49. Did you review any title report in connection with t sla. Wayne told me something about his assets 5 loan? 6] 0. What do you recall? 6A I reviewed what paperwork was associated With it. "7 AL That he owned a number of properties. alo Do you remember what any of that paperwork was? 8 Q. Anything else? ala Do I remember -~ excuse me? 9 a. That he had cash for the downpayment. Do you remember what any of that paperwork was? 20] 0. Do you recall what the downpayment was going to be? 10 a 90 | What it was? uifa. No, no. | 11}Q Yes. 12,9. Did you ask what Mr. Niderost's monthly income was? 12)A I don't recall. 13 A. No. 13 MS. KNOWLES: Thank you, Doctor Fine. That's all 14)Q. Did you do any independent investigation regarding M14 the questions I have for you at this time. 15) Niderost's ability to pay the note? [35 THE COURT: Mr. Sandelman, questions? 16 A. No. 16 MR. SANDELMAN: Yes. Thank you, Your Honor. 17/Q. Did you have any agreements with Mr. Cook about what W EXAMINATION BY MR. SANDELMAN: 18 would happen if you were unable to collect the money that18 Q. Doctor Fine, I can show you the Promissory Note if yc 19] was owed under that Promissory Note?1s need to look at it, but if I asked you if the full name <« 20| A. No. 20 the creditor was Matthew N. Fine, M.D., 401k plan, does 21 9. Subsequently, you transferred your interest in that 21, that track with your recollection? 22. note; is that right? 22) a That's correct. 23 A. Yes. | 23) Q. Next, with respect to that five hundred thousand dol: 24}. And who did you transfer it to? | 24 Promissory Note, as far as you know, did anybody pay any 25) a. Mr. Cook. | 25} brokerage fee? 9 1 — es ——— | 1/Q. Now why did you do that? qa. No. 2 A. He told me that it -- there was some problems with the2 MR SANDELMAN: Nothing else, Your Honor? 3| note and he wanted to buy it. 4) o. And who was that -- who said that? 3 | 4| THE COURT: MR. LECLERC: Mr. LeClerc? No questions, Your Honor. 5S aA. Mr. Cook. 5| THE couRT: Ms. Knowles, any further questions? 6 Q. Did anybody explain what those problems were? MS KNOWLES: No, Your Honor. Thank you. Ta. No. THE COURT: May this witness be excused? 8/9. Had Mr. Cook brought you any other business | 9| opportunities like this Promissory Note and Deed of Trust a Ms. KNOWLES : Yes, Your Honor. MR. SANDELMAN: Yes, Your Honor. 10 before? 10 °| MR. LECLERC: Yes. ll aA. He's told me about other notes. jut THE COURT: Okay. I want you to recall, Doctor 12) Q. And were there mortgage brokers involved in those? 12 Fine, we didn't make you wait long. 13) A. Some most all. I'm not sure. 13] THE WITNESS: No. Ie 14 Q. Did you initiate a Notice of Default with respect to 14) THE COURT: We got you in and out here. 15 the Niderost loan when y