in Re: VSDH Vaquero Venture, Ltd. and Douglas M. Hickok, 05-15-01513-CV

in Re: VSDH Vaquero Venture, Ltd. and Douglas M. Hickok

05-15-01513-CV

| Tex. App. | Dec 11, 2015

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Case Information

*0 FILED IN 5th COURT OF APPEALS DALLAS, TEXAS 12/11/2015 4:54:22 PM LISA MATZ Clerk

*1 ACCEPTED 05-15-01513-CV FIFTH COURT OF APPEALS DALLAS, TEXAS 05-15-01513-CV 12/11/2015 4:54:22 PM LISA MATZ CLERK Oral Argument Requested No. 05-15-___________-CV ____________________________________________ COURT OF APPEALS for the FIFTH DISTRICT OF TEXAS ________________________________________ In re VSDH Vaquero Venture, Ltd. and Douglas M. Hickok, Relators . ________________________________________ Original Mandamus Proceeding from County Court at Law Number One of Dallas County, Texas Cause No. CC-09-05232-A Honorable D’Metria Benson Presiding ________________________________________ MANDAMUS RECORD (Tabs 1-29) ________________________________________ J. Carl Cecere Jeffrey S. Levinger State Bar No. 24050397 State Bar No. 12258300 Cecere PC Levinger PC 6035 McCommas Blvd. 1445 Ross Avenue Dallas, Texas 75206 Suite 2500 Telephone: 469-600-9455 Dallas, Texas 75202 ccecere@cecerepc.com Telephone: 214-855-6817

Facsimile: 214-855-6808 jlevinger@levingerpc.com Attorneys for Relators

*2 Evan Lane (Van) Shaw Kenneth B. Chaiken State Bar No. 18140500 State Bar No. 04057800 Law Offices of Van Shaw Chaiken & Chaiken, PC 2723 Fairmont Street 5801 Tennyson Parkway Dallas, Texas 75201 Suite 440 Telephone: 214-754-7110 Plano, Texas 75204 Facsimile: 214-754-7115 Telephone: 214-265-0250 Email: van@shawlaw.net Facsimile: 214-265-1537

Email: kchaiken@chaikenlaw.com Attorney for VSDH Vaquero Attorney for Douglas M. Hickok Venture, Ltd.

*3 I NDEX TO M ANDAMUS R ECORD Volume 1

Certificate of Service Verification of J. Carl Cecere Plaintiff’s Original Petition (July 2, 2009) ............................................... tab 1 Van Shaw’s Petition in Intervention (July 7, 2009) ................................. tab 2 Doug Hickok’s Petition in Intervention (July 7, 2009) ............................ tab 3 Original Answer to Defendants/Counter-Plaintiffs’ Counterclaim (October 5, 2009) ...................................................................................... tab 4 Ken Gross’ and Betsy Gross’ First Amended Counter-Claim Against VSDH Vaquero Venture, Ltd., Evan L. Shaw and Douglass M. Hickok, and Original Third-Party Petition Against VSDH Vaquero Homes, Inc. and VSDH Homes, Inc. (February 16, 2010) ................................................................................................... tab 5 First Amended Answer to Defendants/Counter-Plaintiffs’ Counterclaim (March 29, 2010) ................................................................ tab 6 Plaintiff’s First-Amended Petition (April 30, 2010) ................................. tab 7 Ken Gross’ and Betsy Gross’ Second Amended Counterclaim Against VSDH Vaquero Venture, Ltd., Evan L. Shaw, and Douglas M. Hickok and First Amended Third-Party Petition Against VSDH Vaquero Homes, Inc. and VSDH Homes, Inc. (June 2, 2010) ............................................................................................ tab 8 Counter-Defendants’ Second Supplemental Answer as An Addition to Counter-Defendants’ First Supplemental Answer and Counter-Defendants’ First Amended Answer to Defendants/Counter-Plaintiffs’ Counterclaim .......................................... tab 9 Intervenor/Counter-Defendant Douglas M. Hickok’s Amended and Supplemental Answer to Defendants/Counter-Plaintiffs’ Counterclaim (April 28, 2011) ................................................................ tab 10

i *4 Order Partially Granting Intervenor Evan L. Shaw’s No- Evidence Motion for Summary Judgment (April 22, 2011) ................... tab 11 Plaintiff/Counter-Defendant VSDH Vaquero Venture, Ltd.’s Third Supplemental Answer as an Addition to Counter- Defendants’ First and Second Supplemental Answers and Counter-Defendants’ First Amended Answer to Defendants/Counter-Defendants’ First Amended Answer to Defendants/Counter-Plaintiffs’ Counterclaim (April 29, 2011) ............. tab 12 Ken Gross’ and Betsy Gross’ Third Amended Counter-Claim Against VSDH Vaquero Venture, Ltd., Evan L. Shaw and Douglas M. Hickok and Second Amended Third-Party Petition Against VSDH Vaquero Homes, Inc. and VSDH Homes, Inc. (April 15, 2013) ....................................................................................... tab 13 Defendants/Counter-Plaintiffs Ken Gross and Betsy Gross’ Witness List (November 26, 2013 .......................................................... tab 14 Plaintiff’s Motion for Continuance (December 6, 2013) ....................... tab 15 Plaintiff/Counter-Defendant VSDH Vaquero Venture, Ltd.’s Fourth Supplemental Answer as An Addition to Counter-Defendants’ First, Second and Third Supplemental Answers and Counter-Defendants’ First Amended Answer to Defendants/Counter-Plaintiffs’ Counterclaim (January 24, 2014) ............................................................ tab 16 Ken Gross and Betsy Gross’ Motion to Disqualify Evan L. Shaw (February 27, 2014) ....................................................................... tab 17 Notice of Hearing (June 2, 2014) ............................................................ tab 18 Transcript of the hearing on Ken and Betsy Gross’ Motion to Disqualify Evan L. Shaw (June 18, 2014. .............................................. tab 19 Memorandum Opinion (August 29, 2014) ............................................. tab 20 Order Vacating Oral Ruling on Motion to Disqualify Evan L. Shaw (September 18, 2014) .................................................................... tab 21 Van Shaw’s Motion to Withdraw and Plaintiff/Counter- Defendant VSDH Vaquero Venture, Ltd.’s Motion for Mistrial (June 16, 2015) ........................................................................................ tab 22

ii *5 Ken Gross and Betsy Gross’ Brief on VSDH’s Motion for Mistrial (June 16, 2015) .......................................................................... tab 23 Trial Transcript, vol. 2: Proceedings on June 10, 2015 .......................... tab 24 Trial Transcript, vol. 3: Proceedings on June 15, 2015 .......................... tab 25 Trial Transcript, vol. 4: Proceedings on June 16, 2015 .......................... tab 26 Trial Transcript, vol. 5: Proceedings on June 17, 2015 .......................... tab 27 Trial Transcript, vol. 6: Proceedings on June 18, 2015 .......................... tab 28 Trial Transcript, vol. 7: Proceedings on June 19, 2015 .......................... tab 29 The Grosses’ Trial Exhibits .................................................................... tab 30 VSDH’s Trial Exhibits ............................................................................ tab 31 Charge of the Court (June 19, 2015) ....................................................... tab 32 Motion for Judgment (July 17, 2015) ..................................................... tab 33 Douglas M. Hickok’s Motion for Entry of Judgment (July 22, 2015) ....................................................................................................... tab 34 Gross’ Motion for New Trial (July 29, 2015) ......................................... tab 35 Transcript of the hearing on the motion for new trial and motions for judgment (August 26, 2015). ............................................... tab 36 Order Granting Gross’ Motion for New Trial (August 31, 2015) .......... tab 37 Douglas M. Hickok’s Objections to the Proposed Order Granting the Grosses’ Motion for New Trial (August 31, 2015) ........... tab 38 Motion to Vacate August 31, 2015 Order Granting Gross’ Motion for New Trial and Motion for Hearing on the Record, on Hickok’s Objection to Such Order as A Proposed Order (September 3, 2015) ................................................................................ tab 39 Motion to Vacate August 31, 2015 Order Granting Gross’ Motion for New Trial and Motion for Hearing on the Record, on

iii *6 Evan L. Shaw’s Objection to Such Order as A Proposed Order (September 4) .......................................................................................... tab 40 Order Granting Intervenor Shaw’s Unopposed Motion for Continuance (October 7, 2015) ............................................................... tab 41

iv *7 Respectfully submitted, /s/ Jeffrey S. Levinger

J. Carl Cecere Jeffrey S. Levinger State Bar No. 24050397 State Bar No. 12258300 Cecere PC Levinger PC 6035 McCommas Blvd. 1445 Ross Avenue, Suite 2500 Dallas, Texas 75206 Dallas, Texas 75202 Telephone: 469-600-9455 Telephone: 214-855-6817 Email: ccecere@cecerepc.com Facsimile: 214-855-6808

Email: jlevinger@levingerpc.com Attorneys for Relators Evan Lane (Van) Shaw State Bar No. 18140500 Law Offices of Van Shaw 2723 Fairmont Street Dallas, Texas 75201 Telephone: 214-754-7110 Facsimile: 214-754-7115 Email: van@shawlaw.net Attorney for VSDH Vaquero Venture, Ltd. Kenneth B. Chaiken State Bar No. 04057800 Chaiken & Chaiken, PC 5801 Tennyson Parkway Suite 440 Plano, Texas 75204 Telephone: 214-265-0250 Facsimile: 214-265-1537 Email: kchaiken@chaikenlaw.com Attorney for Douglas M. Hickok

1 *8 C ERTIFICATE OF S ERVICE The undersigned certifies that a copy of this Mandamus Record was served on all counsel of record via the Court’s electronic filing system on this 11th day of December, 2015.

Steven E. Aldous Forshey & Prostok, LLP 500 Crescent Court, Suite 240 Dallas, Texas 75201

/s/ Jeffrey S. Levinger Jeffrey S. Levinger

VERIFICATION

*9 STATE OF TEXAS § § COUNTY OF DALLAS § Before me the undersigned authority, on this day personally appeared J. Carl Cecere, who being by me sworn, deposed and stated as follows: My name is J. Carl Cecere. I am over the age of 18 years and am competent to make this verification. I am one of the attorneys for the Relators in this matter, and I have read the foregoing Petition for Writ of Mandamus. The Mandamus Record includes true and correct copies of every document that is material to the Relators' claim for relief and each document was filed in the underlying proceeding. All of the pleadings included in the Mandamus Record are true and correct copies of the originals on file in the trial court, and all of the hearing transcripts and exhibits included in the Mandamus Record are true and correct copies of the originals prepared by the official court reporter.

J.~ecere Subscribed and sworn to before me on this /tJ-13- day of December, 2015. ~huw~ Notary Public, State0f tiJ ~p.asA Name: ~011 l ~ A-.~P'.s VERONICA ANNE HODGES My Commission Expires Commission Expires: 1}-j2-1Jjy

July 2, 2018

TAB 1

*10 *11 CAUSE NO. tt"~- of"2.ll--~ . S \ S § VSDH VAQUERO VENTURE, LTD. IN THE COUNTY COURT 2nuq JUL -2 PH : § § V. AT LAW NUMBER __J__ : , ' . . ... _,i § . ; ;:. Q\1~ ,._'.\ I::'.'.,.",,< DALLAS COUNTY,Cf_nYia <i: cvo.''u'":•r" y KEN GROSS and BETSY GROSS § OALL.'A'S' · " PLAINTIFF'S ORIGINAL PETITION TO THE HONORABLE JUDGE OF SAID COURT: Comes now Plaintiff, VSDH VAQUERO VENTURE, LTD., complaining of KEN GROSS and BETSY GROSS, hereinafter called Defendants, and for cause of action would respectfully show unto the Court the following:

I. DISCOVERY CONTROL PLAN Discovery is intended to be conducted under Discovery Control Plan Level 2 as set forth in the Texas Rules of Civil Procedure. II. PARTIES Plaintiff is a Texas limited partnership. Defendant, KEN GROSS, is an individual who may be served with process at 2004 White

Wing Cove, Westlake, Texas. Defendant, BETSY GROSS, is an individual who may be served with process at 2004 White Wing Cove, Westlake, Texas. III. VENUE Venue is proper in Dallas County, Texas pursuant to Section 15.002 of the Civil Practice & Remedies Code. PLAINTIFF'S ORIGINAL PETITION - Page I Pltf.Orig.Pet

*12 IV. STATEMENT OF FACTS Upon information and belief, Plaintiff asserts the following Statement of Facts which, in addition to other facts, support Plaintiffs causes of actions set out herein. Defendants made demand on Plaintiff to perform pursuant to what Defendants claim is Plaintiffs obligation to perform. Defendants failed to adhere to their approval obligations and have caused damages to Plaintiff in excess of the minimum jurisdictional limits of this Court.

CAUSES OF ACTION AS TO DEFENDANTS

Count A - Negligence Plaintiff would show that the occurrence made the basis of this lawsuit referred to in this Petition and Plaintiffs resulting damages were proximately caused by the negligent conduct of the Defendants. Said negligence proximately caused the occurrence made the basis of this action and Plaintiffs damages in excess of the minimum jurisdictional limits of the Court.

Count B - Breach of Contract Plaintiff would show that the foregoing allegations constitute breach of contract and said breach has caused Plaintiff damage as a direct, proximate, producing cause and responsibility thereof in an amount in excess of the minimum jurisdictional limits of this Court.

VI. PREJUDGMENT/POST-JUDGMENT INTEREST Plaintiff would further show the Court that many of its damages may be determined by known standards of value and accepted rules of interest as damages from the date of loss and/or the date such damages can be determined prior to judgment, or as the Court otherwise directs, calculated at the legal rate, or as otherwise set by law.

VII. ALTERNATIVE PLEADING Plaintiff incorporates by reference and re-alleges all preceding sections of this Petition and would further show that all pleadings herein, if deemed inconsistent, are made and should be construed in accordance with Rule 48 of the TEXAS RULES OF CIVIL PROCEDURE. PLAINTIFF'S ORIGINAL PETITION - Page 2 Pltf.Orig.Pet

*13 WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully prays that upon final trial hereof, Plaintiff recovers judgment against the Defendants for the following: 1. Judgment against Defendants for actual damages; 2. Pre-judgment interest; 3. Post-judgment interest; 4. Court costs; and 5. Such other and further relief, both at law and in equity, to which Plaintiff may be

justly entitled, both in law and in equity. ~~"""'"'~

EV AN LANE (VAN) SHAW

State Bar No. 18140500

LAW OFFICES OF VAN SHAW

2723 Fairmount Street Dallas, Texas 75201 (214) 754-7110 FAX NO. (214) 754-7115 ATTORNEY FOR PLAINTIFF

PLAINTIFF'S ORIGINAL PETITION Page 3 Pltf.Orig.Pet

LAW OFFICES

*14 !'.= H ,. !) OF VAN SHAW 20D9 JUL -2 PH 5: 16 ATTORNEYS AT LAW VAN SHAW• DANIEL K. HAGOOD , ; pF COUN~EL , . ": i•j JANET R. RANDLE 2723 FAIRMOUNT

DALLAS, TEXAS 75201

cf~~1firM¥~ •BOARD CERTIFIED IN (214) 754-7110 www.shawlawoffice.com PERSONAL INJURY FAX NO. (214) 754-7115 LORI G. MOORE •CERTIFIED PUBLIC APRILS. SUMNER ACCOUNTANT Mr. John F. Warren July 2, 2009 County Clerk VIA HAND DELIVERY 509 Main St. Records Building Dallas, TX 75202 RE: VSDH Vaquero Venture, Ltd. v. Ken Gross and Betsy Gross Dear Mr. Warren: Enclosed via hand delivery please find Plaintiffs Original Petition in the above-styled cause. Please file the same with the Court's records and return a file-marked copy to the undersigned. Further, please prepare and return citations for service to be obtained on the following Defendants:

Defendant, KEN GROSS, at 2004 White Wing Cove, Westlake, Texas; and Defendant, BETSY GROSS, at 2004 White Wing Cove, Westlake, Texas.

Also, enclosed is a check in the amount of$267.00 for filing, jury and bailiffs fees. Thank you for yo ssistance. Van Shaw VS/Im Enclosures - hand delivery YS.ltr2Ct.Pet

*15 TAB 2 *16 CAUSE NO. CC-09-05232-A .,_,,,,., IN THE COUNTY CrOlJRT: ~ 7 § VSDH VAQUERO VENTURE, LTD. r··.

§

I / :, : ,,_,..., ') ') v. § AT LAW NUMBER\'.. § §

KEN GROSS and BETSY GROSS DALLAS COUNTY, TiiXAS : :.j , I)'

VAN SHA W'S PETITION IN INTERVENTION TO THE HONORABLE JUDGE OF SAID COURT: Comes now Intervenor, VAN SHAW, and files this his Petition in Intervention and would respectfully show unto the Court as follows: I. DISCOVERY CONTROL PLAN I PARTIES Discovery is intended to be conducted under Discovery Control Plan Level 2 as set forth in the Texas Rules of Civil Procedure. Intervenor is an individual. Plaintiff is a Texas limited partnership. Defendant, KEN GROSS, is an individual who may be served with process at 2004 White

Wing Cove, Westlake, Texas. Defendant, BETSY GROSS, is an individual who may be served with process at 2004 White Wing Cove, Westlake, Texas. II. VENUE Venue is proper in Dallas County, Texas pursuant to Section 15.002 of the Civil Practice & Remedies Code. \'A!\' SHA\V'S PETITION I~ INTERVENTION- Page I Pct Intervention

*17 III. INTERVENOR'S CAUSE(S) OF ACTION Defendants have made claims of indemnity on Intervenor that are not accurate. IV. NEGLIGENCE The occurrence made the basis of this lawsuit referred to above and Intervenor's resulting damages were proximately caused by the negligent conduct of the Defendants. Said actions constituted negligence which proximately caused the occurrence made the basis of this action and Intervenor's damages in an amount in excess of the minimum jurisdictional limits of the Court.

PREJUDGMENT/POST-JUDGMENT INTEREST

Intervenor would further show the Court that many of his damages may be determined by known standards of value and accepted rules of interest as damages from the date of loss and/or the date such damages can be determined prior to judgment, or as the Court otherwise directs, calculated at the legal rate, or as otherwise set by law.

VI. ALTERNATIVE PLEADING Plaintiff incorporates by reference and re-alleges all preceding sections of this Petition and would further show that all pleadings herein, if deemed inconsistent, are made and should be construed in accordance with Rule 48 of the TEXAS RULES OF CIVIL PROCEDURE.

WHEREFORE, PREMISES CONSIDERED, Intervenor asks upon final hearing, he recover judgment for: I. Actual damages in an amount in excess of the minimum jurisdictional limits of the Court; 2. Pre-judgment interest and post-judgment interest at the maximum legal amount allowed by law; VAN SHA W'S PETITION IN INTERVENTION - Page 2 Pet.Intervention

*18 3. Court costs; and 4. Such other and further relief, both at law and in equity, to which Intervenor may be

justly entitled, both in law and in equity. Respectfully submitted, .. //

EVAN LANE (VAN) SHAW

State Bar No. 18140500

LAW OFFICES OF VAN SHAW

2723 Fairmount Street Dallas, Texas 75201 (214) 754-7110 FAX NO. (214) 754-7115 ATTORNEY FOR PLAINTIFF

V A'I SHA W'S PETITION IN INTERVENTION - Page 3 Pet.Intervention

*19 ,_.,.

LAW OFFICES

., OF VAN SHAW n: ATIORNEYS AT LAW G.~ '. · bA~tEL.K HAoaop

VAN SHAW•

. '· '<OFtC.ciUNSok'

JANET

R. RANDLE 2723 FAIRMOUNT CERTIFl;~"~;i.{~~ALS DALLAS, TEXAS ^[75201] •BOARD CERTIFIED IN (214) 754-7110

RHONDA VINCENT

FAX NO. (214) 754-7115 PERSONAL INJURY

LORI G. MOORE

•CERTIFIED PUBLIC www.shawlawoffice.com APRILS. SUMNER ACCOUNTANT County Court at Law No. 1 July 7, 2009 VIA HAND DELIVERY 509 Main Street ---Phone (214/653-7556)--- Records Building Dallas, TX 75202 RE: Cause No, CC-09-05232-A;

VSDH Vaquero Venture, Ltd. v. Ken Gross and Betsy Gross Madam: Enclosed via hand delivery is the following: 1) Van Shaw's Petition in Intervention. Please file the same with the Court's records and return a file-marked copy to the undersigned. By copy of this letter, a true and correct copy of the above instrument was this date forwarded to all counsel of record. Further, please prepare and return citations for service to be obtained on the following Defendants:

Defendant, KEN GROSS, at 2004 White Wing Cove, Westlake, Texas; and Defendant, BETSY GROSS, at 2004 White Wing Cove, Westlake, Texas.

Also, enclosed is a check in the amount of Forty-Three Dollars ($43.00) for your filing ($35.00) and issuance ($8.00) issuance fees. Thank you for your ·ssistance. Yours very tru , Van Shaw VS/Im Enclosure - hand delivery VS. ltr2Ct. Pet. lnterv. VS

*20 TAB 3 *21 -- CAUSE NO. CC-09-05232-A ·~ ... § VSDH VAQUERO VENTURE, LTD. § v. § AT LAW NUMBER I n. § DALLAS COUNTY, TE~s1- . KEN GROSS and BETSY GROSS § DOUG HICKOK'S PETITION IN INTERVENTION TO THE HONORABLE JUDGE OF SAID COURT: Comes now Intervenor, DOUG HICKOK, and files this his Petition in Intervention and would respectfully show unto the Court as follows: I. DISCOVERY CONTROL PLAN I PARTIES Discovery is intended to be conducted under Discovery Control Plan Level 2 as set forth in the Texas Rules of Civil Procedure. Intervenor is an individual. Plaintiff is a Texas limited partnership. Defendant, KEN GROSS, is an individual who may be served with process at 2004 White

Wing Cove, Westlake, Texas. Defendant, BETSY GROSS, is an individual who may be served with process at 2004 White Wing Cove, Westlake, Texas. II. VENUE Venue is proper in Dallas County, Texas pursuant to Section 15.002 of the Civil Practice & Remedies Code. DOUG HICKOK'S PETITION IN INTERVENTION - Page I Pi.;t_Jntcrvention

*22 III. INTERVENOR'S CAUSE(S) OF ACTION Defendants have made claims of indemnity on Intervenor that are not accurate. IV. NEGLIGENCE The occurrence made the basis of this lawsuit referred to above and Intervenor's resulting damages were proximately caused by the negligent conduct of the Defendants. Said actions constituted negligence which proximately caused the occurrence made the basis of this action and Intervenor's damages in an amount in excess of the minimum jurisdictional limits of the Court.

PREJUDGMENT/POST-JUDGMENT INTEREST

WHEREFORE, PREMISES CONSIDERED, Intervenor asks upon final hearing, he recover judgment for: I. Actual damages in an amount in excess of the minimum jurisdictional limits of the Court; 2. Pre-judgment interest and post-judgment interest at the maximum legal amount allowed by law; DOUG HICKOK'S PETITION IN INTERVENTION - Page 2 Pet.lnteivention

*23 3. Court costs; and 4. Such other and further relief, both at law and in equity, to which Intervenor may be

justly entitled, both in law and in equity. Respectfully submitted

EV

AN LANE (VAN) SHAW State Bar No. 18140500

LAW OFFICES OF VAN SHAW

2723 Fairmount Street Dallas, Texas 75201 (214) 754-7110 FAX NO. (214) 754-7115 ATTORNEY FOR PLAINTIFF

DO!JG HICKOK'S PETITION IN INTERVENTION - Page 3 Pet Intervention

LAW OFFICES

*24 Q~,, ,.,. VAN SHAW ,

ATIORNEYS AT'LAW

- - \l

DANIEL K. HAGOOD

VAN SHAW• ' OF COUNSEL JANET R. RANDLE 2723 FAIRMOUNT· ' DALLAS, TEXAS 75201 CERTIFIED PARALEGALS (214) 754-7110 •BOARD CERTIFIED IN RHONDA VINCENT FAX NO. (214) 754-7115 PERSONAL INJURY

LORI G. MOORE

www.shawlawoffice.com • CERTIFIED PUBLIC APRILS. SUMNER ACCOUNTANT County Court at Law No. I July 7, 2009 509 Main Street VIA HAND DELIVERY Records Building ---Phone (214/653-7556)--- Dallas, TX 75202 RE: Cause No. CC-09-05232-A;

VSDH Vaquero Venture, Ltd. v. Ken Gross and Betsy Gross Madam: Enclosed via hand delivery is the following: Doug Hickok's Petition in Intervention. 1) Please file the same with the Court's records and return a file-marked copy to the undersigned. By copy of this letter, a true and correct copy of the above instrument was this date forwarded to all counsel of record. Further, please prepare and return citations for service to be obtained on the following Defendants:

Defendant, KEN GROSS, at 2004 White Wing Cove, Westlake, Texas; and Defendant, BETSY GROSS, at 2004 White Wing Cove, Westlake, Texas.

Also, enclosed is a check in the amount of Forty-Three Dollars ($43.00) for your filing ($35.00) and issuance ($8.00) issuance fees. y"""''" 1

Thank you for your .,Ssistance.

Van Shaw VS/Im Enclosure - hand delivery \.'S.ltr2Ct. Pet.lntcrv. VS

*25 TAB 4 *26 CAUSE NO. CC-09-05232-A P,'i 3: 39 VSDH VAQUERO VENTURE, LTD. § IN THE COUNTY COURT § Plaintiff § !1i"-... § §

V.

§ KEN GROSS and BETSY GROSS § ATLAWNUMBER I § Defendants § § v. § § EV AN L. SHAW and DOUGLAS M. § § HICKOK

§ § DALLASCOUNTY,TEXAS Intervenors ORIGINAL ANSWER TO DEFENDANTS/COUNTER-PLAINTIFFS' COUNTERCLAIM TO THE HONORABLE JUDGE OF SAID COURT: Come now the Plaintifti'Counter-Defendant, VSDH VAQUERO VENTURE, LTD., Intervenor/Counter-Defendant EV AN L. SHAW and Intervenor/Counter-Defendant DOUGLAS M. HICKOK, jointly and hereinafter referred to as "Counter-Defendants" and file this their Original Answer to Defendants/Counter-Plaintiff's Counterclaim and in support thereof would respectfully show the Court as follows:

I.

The Counter-Defendants enter a general denial and demand a trial by jury of every material issue of fact in this lawsuit.

II.

Counter-Defendants would show the Court that there is a defect in the parties in that DOUGLAS M. HICKOK and EV AN L. SHAW are not proper Counter-Defendants in this cause of action. COUNTER-DEFENDANTS' ORIGINAL ANSWER - Page I Ans.Cclaim

III.

*27 Further answering, Counter-Defendants would show the Court that there is a defect in the parties in that Counter-Defendants DOUGLAS M. HICKOK and EV AN L. SHAW did not individually execute the contract in issue.

IV.

Further answering, Counter-Defendant DOUGLAS M. HICKOK denies executing any written agreement made the basis of this suit in his individual capacity. v. Further answering, Counter-Defendant EV AN L. SHAW denies executing any written agreement made the basis of this suit in his individual capacity.

VI.

Further answering, Counter-Defendants assert Counter-Plaintiffs failed to comply with conditions precedent.

VII.

Further answering, Counter-Defendants assert that Counter-Plaintiffs are estopped from and have waived any right for making a claim and/or for recovery herein.

VIII.

The Counter-Defendants adopt by reference all defenses and affirmative defenses set forth in their Original Petition and any subsequent petition filed herein.

IX.

Further answering, Counter-Defendants would show that Counter-Plaintiffs' claims for declaratory judgment are not proper as a counter petition. COUNTER-DEFENDANTS' ORIGINAL ANSWER - Page 2 Ans.Cclaim

*28 x.

ALTERNATIVE PLEADING

All defenses herein, if inconsistent, are made pursuant to Rule 48 of the Texas Rules of Civil Procedure. WHEREFORE, PREMISES CONSIDERED, Counter-Defendants pray that Counter Plaintiffs take nothing by reason of their suit and Counter-Defendants go hence without day and with their costs in this behalf expended and for such other and further relief to which Counter Defendants may be justly entitled, both in law and in equity.

Respectfully subm//.

EV AN LANE

('I AN) SHAW BarCardNo.18140500

LAW OFFICES OF VAN SHAW

2723 Fairmount Street Dallas, Texas 75201 (214) 754-7110 FAX NO. (214) 754-7115 ATTORNEY FOR PLAINTIFF/ INTERVENORS/COUNTER-DEFENDANTS

CERTIFICATE OF SERVICE The undersigned certifies that a copy of the foregoing instrument was served upon the attorney) record of all parties to the above cause in accordance ~th the Rules of Civil Procedure, on this day of October, 2009. /

VAN SHAW

COUNTER-DEFENDANTS' ORIGINAL ANSWER - Page 3 Ans.Cclaim

*29 . I I VERIFICATION STATE OF TEXAS ) ) COUNTY OF DALLAS ) BEFORE ME, the undersigned Notary Public, on this day personally appeared DOUGLAS M. HICKOK, who being by me duly sworn on his oath deposed and said that he is over 21 years of age, of sound mind and capable of making this Affidavit; that he is a Counter-Defendant in the above-entitled and numbered cause; that he has read the above and foregoing Counter-Defendants' Original Answer, and that every statement contained in Paragraphs II, ID and N is within his personal knowledge and is true and correct.

I 1

SUBSCRIBED AND SWORN TO BEFORE ME on the---· certify which witness my hand and official seal. ( s My commission expires !Vl.111Jif 9 ,~''"Nt-. JENNIFER LEE SATTERAELD . i-} MY COMM1SS10N EXPIRES {*i ~ •••• ~'·' May 7, 2010

.m,.W . (;OIJNTER-DEfENDANTS' ORIGINAi, ANSWER -Page 4 Ans.Cclaim

VERIFICATION

*30 STATE OF TEXAS ) ) COUNTY OF DALLAS ) BEFORE ME, the undersigned Notary Public, on this day personally appeared EV AN L. SHAW, who being by me duly sworn on his oath deposed and said that he is over 21 years of age, of sound mind and capable of making this Affidavit; that he is a Counter-Defendant in the above-entitled and numbered cause; that he has read the above and foregoing Counter-Defendants' Original Answer and Jury Demand; and that every statement contained in Paragraphs II, III and V is within his personal knowledge and is true and correct.

EVANL.SHA~

~~ SUBSCRIBED AND SWORN TO BEFORE ME on the J

day of October, 2009, to

. ~ !"\\\; ~~ \J, 0\ ~, certify which witness my hand and official seal. X ' ~· ,r;"'"'~ LORI G. MOORE f~71~NotaryPubllc,Stateoflexas Notary Pub! · and for the t..I My Commlslton Expires i* State of Texas ~~fa. ~"I May 23, 2012

'''""""' M. commission expiresS \.1.? \ '"J>i\r COUNTER-DEFENDANTS' ORIGINAL ANSWER· Page 5 Ans.Cclaim

*31 : (,'f ',·

LAW OFFICES

2009 ocr -s

OF

Pii 3: 39 VAN SHAW ATTORNEYS AT LAW DANIEL :K''.-;HAGOOD VAN SHAW• - ·--. ·-- OF COUNSEL JANET R. RANDLE 2723 FAIRMOUNT

DALLAS, TEXAS 75201

'1: · ,~·eERTlF_IED PARALEGALS • BOARD CERTIFIED IN (214) 754-7110 RHONDA VINCENT PERSONAL INJURY FAX NO. (214) 754-7115

LORI G. MOORE

www.shawlawoffice.com •CERTIFIED PUBLIC APRILS. SUMNER ACCOUNTANT County Court at Law No. 1 October 5, 2009 509 Main Street VIA HAND DELIVERY Records Building ---Phone (214/653-7556)--- Dallas, TX 75202 RE: Cause No. CC-09-05232-A;

VSDH Vaquero Venture, Ltd. v. Ken Gross and Betsy Gross Madam: Enclosed via hand delivery is the following: I) Original Answer to Defendants/Counter-Plaintiffs' Counterclaim. Please file the same with the Court's records and return a file-marked copy to the undersigned. By copy of this letter, a true and correct copy of the above instrument was this date forwarded to all counsel of record. Thank you for y fir assistance. Van Shaw VS/Im Enclosure - hand delivery cc: See attached Service List. VS.ltr2Ct.Ans2Cclaim

SERVICE LIST

*32 Mr. R. Brent Cooper Via Facsimile (2141712-9540) Ms. Jana Starling Reist ----Phone (214/712-9500)--- 900 Jackson Street, Suite I 00 Dallas, Texas 75202

Attorney for Defendants Kenneth P. Gross and Betsy L. Gross ******************************** Van Shaw represents PlaintiffVSDH VAQUERO VENTURE, LTD, Intervenor, DOUG HICKOK and Intervenor, VAN SHAW

*33 TAB 5 *34 - - CAUSE NO. CC-09-05232-A VSDH VAQUERO VENTURE, LTD., § Plaintiffs/Counter-Defendant, § § v. § . I" § KEN GROSS and BETSY GROSS § ATLA~ Defendants/Counter-Plaintiffs, § ~ .. . § v. § §

EV AN L. SHAW and DOUGLAS M. §

HICKOK

§ lntervenors/Counter-Defendants. DALLAS COUNTY, TEXAS § §

KEN GROSS' AND BETSY GROSS' FIRST AMENDED COUNTER-CLAIM AGAINST VSDH VAQUERO VENTURE, LTD., EV AN L. SHAW AND DOUGLAS M. HICKOK AND ORIGINAL THIRD-PARTY PETITION AGAINST VSDH VAQUERO HOMES,

INC. AND VSDH HOMES, INC.

TO THE HONORABLE JUDGE OF SAID COURT:

COMES NOW, Kenneth P. Gross and Betsy L. Gross, Defendants/Counter- Plaintiffs/Third-Party Plaintiffs (collectively referred to as "the Grosses"), and hereby files their First Amended Petition Against VSDH Vaquero Venture, Ltd., Evan L. Shaw and Douglas M. Hickock (collectively referred to as "Counter-Defendants") and Original Third-Party Petition Against VSDH Vaquero Homes, Inc. and VSDH Homes, Inc. (collectively referred to as "Third- Party Defendants"), and for such would respectfully show the Court as follows:

I. DISCOVERY CONTROL PLAN I. The parties have entered into an Agreed Level 3 Discovery Control Plan pursuant to Tex. R. Civ. P. 190.4.

COUNTER-PLAINTIFFS' FIRST AMENDED COUNTER-CLAIMS AND ORIGINAL THIRD PARTY

PETITION Page 1 D/758360.I

*35 II. PARTIES AND SERVICE 2. Plaintiff/Counter-Defendant VSDH Vaquero Venture, Ltd. is a Texas Limited Partnership who is represented by Evan L. Shaw in this action. 3. Defendant/Counter-Plaintiff/Third-Party Plaintiff Kenneth P. Gross 1s an individual who has appeared in this action and is represented by the undersigned counsel. 4. Defendant/Counter-Plaintiff/Third-Party Plaintiff Betsy L. Gross is an individual who has appeared in this action and is represented by the undersigned counsel. 5. Intervenor/Counter-Defendant Douglas M. Hickok ("Hickok") is a Texas resident and may be served with process by serving his last known address at 5305 Village Creek Drive, Plano, Collin County, Texas 75093.

6. Intervenor/Counter-Defendant Evan L. Shaw ("Shaw") is a Texas resident and may be served with process by serving his last known address at 4646 Cherokee Trail, Dallas, Dallas County, Texas 75209.

7. Third-Party Defendant VSDH Vaquero Homes, Inc. is a Texas General Partnership whose principal place of business is at 5305 Village Creek, Plano, Texas 75093. It may be served with process by serving its President, Douglas M. Hickok at 5305 Village Creek Drive, Plano, Collin County, Texas 75093.

8. Third-Party Defendant VSDH Homes, Inc. is a Texas General Partnership whose principal place of business is at 5305 Village Creek, Plano, Texas 75093. It may be served with process by serving its Registered Agent and President, Douglas M. Hickok at 5305 Village Creek Drive, Plano, Collin County, Texas 75093.

COUNTER-PLAINTIFFS' FIRST AMENDED COUNTER-CLAIMS AND ORIGINAL THIRD PARTY

PETITION Page2

D/758360.J

*36

- III. JURISDICTION AND VENUE 9. The subject matter in controversy is within the jurisdiction limits of this Court. The Court has jurisdiction over VSDH Vaquero Homes, Inc. and VSDH Homes, Inc. because they are Texas general partnerships.

10. Venue is proper with regard to this third-party action under section 15.062 of the TEXAS CIVIL PRACTICE & REMEDIES CODE, as the transaction giving rise to this third-party action arises out of the same transaction, occurrence, or series of actions or occurrences.

IV. FACTS 11. On or about June 4, 2006, the Grosses entered into a New Home Contract ("Contract"), promulgated by the Texas Real Estate Commission, with Counter-Defendants and Third-Party Defendants for the purchase of 2004 White Wing Cove, Westlake, Texas 76262 ("the Property"), in the amount of $2,851,871.00. (A copy of the Contract has been attached hereto as Exhibit "l," and is incorporate herein by reference for all pertinent purposes).

12. The Grosses purchased the Property at the full listed price of $2,851,871.00, even though the Property had been listed for two years, due to the fact that Counter-Defendants agreed to enter into a "Buy Back Option" with the Grosses.

13. According to paragraph 1 ("Buy Back Option") of Addendum A of the Contract, VSDH Vaquero Venture, Ltd. granted to the Grosses, as Buyers of the Property, the "the option . . . to put the Property to Seller [VSDH Vaquero Venture, Ltd.] (i.e. require Seller to repurchase the Property for the original "Sales Price" of $2,851,871.00) on September 1, 2009, or such earlier date as may be mutually agreed between Buyer and Seller . . .. " See Addendum A to Exhibit I.

COUNTER-PLAINTIFFS' FIRST AMENDED COUNTER-CLAIMS AND ORIGINAL THIRD PARTY

PETITION Page 3

D/758360.1

*37

14. Hickok and Shaw are limited partners of VSDH Vaquero Venture, Ltd. and

participated and controlled Counter-Defendants and Third-Party Defendants sell of the Property to the Grosses and benefitted from the sell to the Grosses.

16. Under the signature line of the Contract, VSDH Homes, Inc. is listed as the general partner ofVSDH Vaquero Venture, Ltd. However, according to the Texas Secretary of State's office, VSDH Vaquero Homes, Inc. is listed as VSDH Vaquero Venture, Ltd.'s general partner.

17. In accordance with the terms of the Buy Back Option, the Grosses exercised the Buy Back Option by delivering written notice to Shaw and Hickok before May 1, 2009 of the Grosses' intent to sell the Property back to Counter-Defendants and Third-Party Defendants.

18. However, Shaw and Hickok communicated to the Grosses that Counter- Defendants and Third-Party Defendants do not intend to buy the Property back and perform their contractual obligations as required under Addendum A to the Contract. Counter-Defendants and Third-Party Defendants failed to purchase the property back.

19. The Grosses therefore seek construction of the Contract, including Addendum A, to determine whether or not Counter-Defendants and Third-Party Defendants breached the Contract by refusing and failing to buy the Property back from the Grosses pursuant to the Contract for the original sales price of $2,851.871.00.

20. In an effort to mitigate their damages and avoid foreclosure of the home, the Grosses sold their home for $2,415,600.

COUNTER-PLAINTIFFS' FIRST AMENDED COUNTER-CLAIMS AND ORIGINAL THIRD PARTY

PETITION Page 4

D/758360.I

*38

- - v. DECLARATORY JUDGMENT 21. All factual allegations set forth elsewhere in this petition are incorporated by reference in support of this section. 22. This is an action for declaratory judgment pursuant to the Texas Declaratory Judgment Act, Ch. 37.001 et. seq. of the TEX. CIV. PRAC. & REM. CODE, for the purpose of determining an actionable and justiciable controversy between the parties, as hereinafter more fully appears. The controversy involves Counter-Defendants' and Third-Party Defendants' duty to perform their obligations arising under the "Buy Back Option," Addendum A, to the Contract.

23. Based upon the clear terms of Addendum A to the Contract (Exhibit 1), Counter- Defendants and Third-Party Defendants were obligated to buy the Property back from the Grosses pursuant to the terms of the Contract for the original sales price of $2,851.871.00.

24. Accordingly, the Grosses seek a declaration from this Court, as follows: I. VSDH Vaquero Venture, Ltd. was obligated to buy the Property back from Kenneth P. Gross and Betsy L. Gross on or before September 1, 2009 for the original sales price of $2,851,871.00

2. In the event VSDH Vaquero Venture, Ltd. failed to timely buy the Property back from Kenneth P. Gross and Betsy L. Gross, Douglas M. Hickok and Evan L. Shaw were personally responsible, jointly and severally, to buy the Property back on or before September 1, 2009 for the original sales price of $2,851,871.00.

COUNTER-PLAINTIFFS' FIRST AMENDED COUNTER-CLAIMS AND ORIGINAL THIRD PARTY

PETITION Page 5

D/758360.I

*39

written notice to Hickok and Shaw before May 1, 2009 of the Grosses' intent to sell the Property

back to Counter-Defendants and Third-Party Defendants. Counter-Defendants and Third-Party Defendants have materially breached the Contract in that they have repudiated the contract and failed to proceed with the purchase of the Property. Counter-Defendants' and Third-Party Defendants' breach has proximately caused the Grosses' damages.

27. The Grosses request that a judgment be entered against Counter-Defendants and Third-Party Defendants for actual damages. As a direct and proximate result of Counter- Defendants' and Third-Party Defendants' failure to perform under the Contract, the Grosses have been damaged in an amount in excess of the jurisdictional limits of the Court, for which they seeks appropriate judicial relief.

VII. FRAUD IN A REAL ESTATE TRANSACTION 28. All factual allegations set forth elsewhere in this petition are incorporated by reference in support of this section. 29. The Grosses will show that Counter-Defendants' and Third-Party Defendants' conduct constitutes fraud in a real estate transaction as defined by Section 27.01 of the TEXAS BUSINESS & COMMERCE CODE. Counter-Defendants' and Third-Party Defendants' made a false representation that they would buy the property back pursuant to the Buy Back Option in order to induce the Grosses to enter into the Contract. The Grosses entered into the Contract and purchased the Property at the full listed price of $2,851,871.00, even though the Property had been listed for two years, due to the fact that Counter-Defendants and Third-Party Defendants made the false representation that they would buy the property back pursuant to the "Buy Back Option." The Grosses' reliance directly and proximately caused them substantial injury, as set out above, for which they seek appropriate judicial relief.

COUNTER-PLAINTIFFS' FIRST AMENDED COUNTER-CLAIMS AND ORIGINAL THIRD PARTY

PETITION Page 6 *40 D/758360.l

- - A. Attorneys' Fees 30. The Grosses have retained the law firm of Cooper & Scully, P.C. to represent

them in this action and have agreed to pay the firm reasonable and necessary attorneys' fees. 31. The Grosses are entitled to recover reasonable and necessary attorney fees that are equitable and just under TEXAS CIVIL PRACTICE & REMEDIES CODE § 37.009 because this is a suit for declaratory judgment, under TEXAS CIVIL PRACTICE & REMEDIES CODE§ 38.001 because it is a suit for breach of a written contract, and under TEXAS BUSINESS & COMMERCE CODE §27.0l(e) because this is an suit for statutory fraud. All conditions precedent to the collection of attorneys' fees have been satisfied.

B. Conditions Precedent 32. All conditions precedent to the Grosses claims for relief have been performed or

have occurred. WHEREFORE, PREMISES CONSIDERED, Defendants Kenneth P. Gross and Betsy L. Gross pray that their counterclaims against VSDH Vaquero Venture, Ltd., Shaw and Hickok and third third-party claims against VSDH Vaquero Homes, Inc. and VSDH Homes, Inc. be granted; that upon final hearing of this matter, a declaratory judgment is entered as enumerated above; that the Grosses have and recover damages in an amount within the jurisdictional limits of this Court; pre- and post-judgment interest at the highest lawful rate; attorneys' fees and court costs; exemplary damages; and such other and further relief, whether special or general, to which the Grosses may show themselves justly entitled.

COUNTER-PLAINTIFFS' FIRST AMENDED COUNTER-CLAIMS AND ORIGINAL THIRD PARTY

PETITION Page 7 *41 01758360.l

Respectfully submitted, COOPER & SCULLY, P.C. By~d!Jd

OBRENT COOPER

State Bar No. 04783250

JANA STARLING REIST

State Bar No. 24056890

Founders Square 900 Jackson Street, Suite 100 Dallas, Texas 7 5 2 02 Telephone: (214) 712-9500 Facsimile: (214) 712-9540 ATTORNEYS FOR DEFENDANTS KEN GROSS AND BETSY GROSS

CERTIFICATE OF SERVICE The undersigned certifies that a true and correct copy of the foregoing document was forwarded to all counsel of record herein via facsimile, on this the 12'h day of February 2010 as follows:

Evan Lane (Van) Shaw (via facsimile and CMRRR) Law Offices of Van Shaw 2723 Fairmount Street Dallas, Texas 75201 Attorney for Counter-Defendants

COUNTER-PLAINTIFFS' FIRST AMENDED COUNTER-CLAIMS AND ORIGINAL THIRD PARTY

PETITION Page 8

D/758360.1

*42

C.OOpe Scully A Prn[c.1.1run11i Cm/1mc1!wn ; ~~ ~ l .j •• ' ..... · .. i' 214-i1:2.%11 JANA S. REIST 'kna'.R!i:iist@i:o~P'ersCuilY.¥m February 12, 2010

VIA CERTIFIED MAIL

John Warren County Court Clerk 300 Records Bldg. 509 Main Street Dallas, Texas 75202 VSDH Vaquero Venture, Ltd. v. Kenneth P. Gross and Betsy L. Gross, Cause No.

Re: CC-09-05232-A, on file in the County Court at Law No. 1, Dallas County, Texas OurFileNo.: 1903-17168

Dear Mr. Warren: Enclosed please find an original and one (I) copy of Ken Gross' and Betsy Gross' First Amended Counter-Claim Against VSDH Vaquero Venture, Ltd., Evan L. Shaw and Douglas M Hickok and Original Third-Party Petition Against VSDH Vaquero Homes, Inc. and VSDH Homes, Inc. for filing in the above referenced matter. A check in the amount of $35.00 is enclosed for filing fee. Please return via the enclosed self-stamped envelope a filed stamped copy of the Petition for our file. Plaintiffs counsel will receive a copy of this document via facsimile and certified mail.

If you have any questions, do not hesitate to contact the undersigned. Sincerely yours, g ~ Jr

Founders Square 900 Jackson Street, Suite 100 Dallas, TX 75202

Telephone (214) 712-9500 Fax (214) 712-9540 V-'WW.cooperscully.com *43 Houston Office (713) 236-6800 San Francisco Office (415) 956-9700 Sherman Office (903) 813-3900 01759162.1 February 12, 2010 Page 2 JSR/tsh Enclosures Cc: Evan Lane (Van) Shaw (via facsimile 214.754. 7115 and certified mail)

Law Offices of Van Shaw 2723 Fairmount Street Dallas, Texas 75201 Attorney for Plaintiff

*44 D/759162.l TAB 6 *45 CAUSE NO. CC-09-05232-A 70ln W?. ?q PH ~: 08 IN THE comrrt'b'UR.T § VSDH VAQUERO VENTURE, LTD. § § Plaintiff § §

v. § § KEN GROSS and BETSY GROSS ATLAWNUMBER I § § Defendants § § v. § EV AN L. SHAW and DOUGLAS M. § HICKOK §

§ Intervenors § DALLAS COUNTY, TEXAS FIRST AMENDED ANSWER TO DEFENDANTS/COUNTER-PLAINTIFFS' COUNTERCLAIM TO THE HONORABLE JUDGE OF SAID COURT: {' ·' ~~~~,.,~ ·'' ~ '-'·· 'U ",._j - ' Come now the Plaintiff/Counter-Defendant, VSDH VAQUERO VENtd , LTD., Intervenor/Counter-Defendant EV AN L. SHAW and Intervenor/Counter-Defendant DOUGLAS M. HICKOK, jointly and hereinafter referred to as "Counter-Defendants" and file this their First Amended Original Answer to Defendants/Counter-Plaintiffs Counterclaim and in support thereof would respectfully show the Court as follows:

I.

The Counter-Defendants enter a general denial and demand a trial by jury of every material issue of fact in this lawsuit.

II.

Counter-Defendants would show the Court that there is a defect in the parties in that DOUGLAS M. HICKOK and EV AN L. SHAW are not proper Counter-Defendants in this cause of action and are not liable for the claims made the basis of this suit. COUNTER-DEFENDANTS' FIRST AMENDED ANSWER - Page I Ans.Cclaim.Amdl

III.

*46 Further answering, Counter-Defendants would show the Court that there is a defect in the parties in that Counter-Defendants DOUGLAS M. HICKOK and EV AN L. SHAW did not individually execute the contract in issue and are not liable for the claims made the basis of this suit.

IV.

Further answering, Counter-Defendant DOUGLAS M. HICKOK denies executing any written agreement made the basis of this suit in his individual capacity. v.

Further answering, Counter-Defendant EVAN L. SHAW denies executing any written

agreement made the basis of this suit in his individual capacity.

VI.

Further answering, Counter-Defendants deny Counter-Plaintiffs' allegation that all conditions precedent have been performed or have occurred, in that the following conditions precedent have not been performed or have not occurred: Counter-Defendants EVAN L. SHAW and DOUGLAS M. HICKOK have not

I. been established to have executed the contract in issue; and deny that said contract was executed by these individual defendants;

2. Counter-Plaintiffs KEN GROSS and BETSY GROSS did not obtain written and required approval for improvements to the property in issue; and 3. Counter-Plaintiffs KEN GROSS and BETSY GROSS have not established any exception to the statute of frauds.

VII.

Further answering, Counter-Defendants assert that Counter-Plaintiffs are estopped from and have waived any right for making a claim and/or for recovery herein. COUNTER-DEFENDANfS' FffiST AMENDED ANSWER - Page 2 Ans.Cc\aim.Amdl

VIII.

*47 The Counter-Defendants adopt by reference all defenses and affirmative defenses set forth in their Original Petition and any subsequent petition filed herein.

IX.

Further answering, Counter-Defendants would show that Counter-Plaintiffs' claims for declaratory judgment are not proper as a counter petition. x. Further answering, Counter-Defendants would show that Counter-Defendants are not liable to Counter-Plaintiffs because the agreement does not comply with the requirements of the statute of frauds.

XI.

Further answering, Counter-Defendants would show that Counter-Defendants are not liable to Counter-Plaintiffs because Counter-Plaintiffs failed to mitigate their damages. XII. ALTERNATIVE PLEADING All defenses herein, if inconsistent, are made pursuant to Rule 48 of the Texas Rules of Civil Procedure. WHEREFORE, PREMISES CONSIDERED, Counter-Defendants pray that Counter Plaintiffs take nothing by reason of their suit and Counter-Defendants go hence without day and with their costs in this behalf expended and for such other and further relief to which Counter Defendants may be justly entitled, both in law and in equity. COUNTER-DEFENDANTS' FIRST AMENDED ANSWER - Page 3 Ans.Cclaim.Amdl

*48 Respectfully submitted,

EVAN LANE (VAN) SHAW

Bar Card No. 18140500

LAW OFFICES OF VAN SHAW

2723 Fairmount Street Dallas, Texas 75201 (214) 754-7110 FAX NO. (214) 754-7115 ATTORNEY FOR PLAINTIFF/ INTERVENORS/COUNTER-DEFENDANTS

CERTIFICATE OF SERVICE / The undersigned certifies that a copy of the foregoing ins nt was served upon the attomey"Jf ord of all parties to the above cause in accordance wi the Rules of Civil Procedure, on this day of March, 2010.

VAN SHAW

COUNTER-DEFENDANTS' FIRST AMENDED ANSWER - Page 4 Ans.Cclaim.Amdl

VERIFICATION

*49 STATE OF TEXAS ) ) COUNTY OF~

)

BEFORE ME, the undersigned Notary Public, on this day personally appeared DOUGLAS M. HICKOK, who being by me duly sworn on his oath deposed and said that he is over 21 years of age, of sound mind and capable of making this Affidavit; that he is a Counter-Defendant in the above-entitled and numbered cause; that he has read the above and foregoing Counter-Defendants' First Amended Answer, and that every statement contained in Paragraphs II, III and IV is within his personal knowledge and is true and correct.

L ____ .

DOUGLAS M. HICKOK

~ SUBSCRIBED AND SWORN TO BEFORE ME on the dle day of March, 2010, to certify which witness my hand and official seal. < My commission expires~D El ·"~, JENNIFE!l LEE SATfERRELD ~, MY COMMISSION EXPIRES iii • May7,2010 COUNJER-DEFENDANJS' FIRST AMENDED ANSWER - Page 5 Ans.Cclaim.Amdl

VERIFICATION

*50 STATE OF TEXAS ) ) COUNTY OF DALLAS ) BEFORE ME, the Wldersigned Notary Public, on this day personally appeared EV AN L. SHAW, who being by me duly sworn on his oath deposed and said that he is over 21 years of age, of soillld mind and capable of making this Affidavit; that he is a C Oilllter-Defendant int he above-entitled and numbered cause; that he has read the above and foregoing Coilllter-Defendants' First Amended Answer and Jury Demand; and that every statement contained in Paragraphs IT, III and V is within his personal knowledge and is true and correct.

w SUBSCRIBED AND SWORN TO BEFORE ME on the '.J._ <'.\~y of March, 2010, to certify which witness my hand and official seal. /;>~~""""''~~. LORI G. MOORE '* *'NolQIVPIJblk:. State al Texas Notary Public i ~ ;j My Ccmmlalon Expires '<.,;. °' ~ May 23, 2012 State of Texas

.............. My commission expires~\ d-..~\ ~ \ d--

COUNTER-DEFENDANTS' FIRST AMENDED ANSWER - Page 6

Ans.Cclaim.Amdl

*51 LAW OFFICES OF 2010 HAR 29 PH ~: 08

VAN SHAW

.... 1. i\T LAW .. , '''· ·

ATTORNEYS AT LAW

DANIEL K. HA'b'°ooD VAN SHAW' SY _____ _ OF COUNSEL JANET R RANDLE 2723 FAIRMOUNT

DALLAS, TEXAS 75201

CERTIFIED P~fi!G!\l.S • BOARD CERTIFIED IN (214) 754-7110 RHONDA VINCENT PERSONAL INJURY FAX NO. (214) 754-7115

LORI G. MOORE

www.shawlawoffice.com • CERTIFIED PUBLIC APRILS. SUMNER ACCOUNTANT County Court at Law No. 1 March 29, 2010 509 Main Street VIA HAND DELIVERY Records Building ---Phone (214/653-7556)--- Dallas, TX 75202 RE: Cause No. CC-09-05232-A;

VSDH Vaquero Venture, Ltd. v. Ken Gross and Betsy Gross Madam: Enclosed via hand delivery is the following: 1) First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim. Please file the same with the Court's records and return a file-marked copy to the undersigned. By copy of this letter, a true and correct copy of the above instrument was this date forwarded to all counsel of record. Thank you for your sistance. Yours very trul , Van Shaw VS/Im Enclosure - hand delivery cc: See attached Service List. VS.ltr2Ct.Ans2Cclaim

*52 ' ..

SERVICE LIST

Mr. R. Brent Cooper FAX (214/712-9540) Ms. Jana Starling Reist =PH (214/712-9500) = COOPER & SCULLY brent.cooper@cooperscully.com 900 Jackson Street, Suite I 00 jana.reist@cooperscully.com Dallas, Texas 7 5202

Attorney for Defendants Kenneth P. Gross and Betsy L. Gross ******************************** Van Shaw represents PlaintiffVSDH VAQUERO VENTURE, LTD, Intervenor, DOUG HICKOK, Intervenor, VAN SHAW and Third-Party Defendants VSDH VAQUERO HOMES, INC. and VSDH HOMES, INC.

*53 TAB 7 *54 . "\ \c q\i?\ ~0

CAUSE NO. cc-09-05232-A

~ · ''· .·~x:,s VSDH VAQUERO VENTURE, LTD. § IN THE COUNTY co~~ 11PR 30 PN 2: 59 § v. '-' i " - ' . ' " .. '' ,·. § AT LAW NUMBER I ''' /, /"'",• :~ ' ' •1 § KEN GROSS and BETSY GROSS § DALLAS COUNTY,~ (J'.""L':":',in-:;------ PLAINTIFF'S FIRST-AMENDED PETITION TO THE HONORABLE JUDGE OF SAID COURT: Comes now Plaintiff, VSDH VAQUERO VENTURE, LTD., complaining of KEN GROSS and BETSY GROSS, hereinafter called Defendants, and for cause of action would respectfully show unto the Court the following:

appeared by filing an answer in this lawsuit. Defendant, BETSY GROSS, is an individual who has been previously served and has appeared by filing an answer in this lawsuit. III. VENUE Venue is proper in Dallas County, Texas pursuant to Section 15.002 of the Civil Practice & Remedies Code. PLAINTIFF'S FIRST AMENDED PETITION - Page I Pet_lst-Amd.Doc

*55 IV. STATEMENT OF FACTS Upon information and belief, Plaintiff asserts the following Statement of Facts which, in addition to other facts, support Plaintiff's causes of actions set out herein. In June of 2007, Plaintiff, VSDH VAQUERO VENTURE, LTD and Defendants entered into a contract for the purchase of the property located at 2004 White Wing Cove, Westlake, Texas. (the "Property"). See Exhibit 1. ^[1] A First Amendment to the contract on June 12, 2007 is attached at Exhibit 2.

Subsequent to the purchase of the Property, Defendants breached the contract by commencing construction and proceeding to make major improvements to the property without first obtaining the consent of Plaintiff as required and thereafter made wrongful demands for monies owed. Defendants also failed to timely comply with the contract's buy-back notice provisions and thereafter sold the Property and incurred commissions and other costs that would not have been incurred had the notice provisions and been complied with accompanied by a timely triggered buy-back.

As a result of Defendants' breach, Plaintiff has incurred attorneys' fees related to this legal proceeding related to the contract. v.

CAUSES OF ACTION AS TO DEFENDANTS

Breach of Contract Plaintiff would show that the foregoing allegations constitute breach of contract and said breach has caused Plaintiff damage as a direct, proximate, producing cause and responsibility thereof in an amount in excess of the minimum jurisdictional limits of this Court, including but not limited to attorneys fees under the contract.

*56 VII. ALTERNATIVE PLEADING Plaintiff incorporates by reference and re-alleges all preceding sections of this Petition and would further show that all pleadings herein, if deemed inconsistent, are made and should be construed in accordance with Rule 48 of the TEXAS RULES OF CIVIL PROCEDURE.

WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully prays that upon final trial hereof, Plaintiff recovers judgment against the Defendants for the following: 1. Judgment against Defendants for actual damages including attorneys' fees; 2. Pre-judgment interest; 3. Post-judgment interest; 4. Court costs; and 5. Such other and further relief, both at law and in equity, to which Plaintiff may be

justly entitled, both in law and in equity.

EVAN

E(VAN)SHAW Stat ar No. 18140500

ETR.RANDLE

State Bar No. 00792216

LAW OFFICES OF VAN SHAW

2723 Fairmount Street Dallas, Texas 75201 (214) 754-7110 FAX NO. (214) 754-7115 ATTORNEY FOR PLAINTIFF

PLAINTIFF'S FIRST AMENDED PETITION - Page 3 Pet_lstwAmd.Doc

*57 PROMULGATED BY THE TEXAS REAL ESTATE COMMISSION (TREC) 02-13-0B

NEW HOME CONTRACT

(Completed Construotlon) NOTICE: Not For Use For Condominium Transactions. or Clos!ngs Ptlor to Completion of construction 1. PARTIES: VSDH vaquero venture Ltd (Seller) agrees to sell and convey to Kenneth P. Gross and Betsy L. Gross ______ (Buyer) and Buyer agrees to buy from Sellar the Property described below.

2. PROPERTY: Lot 11 , Block vaouero Residential Addition, City of Westlake , County of Tarrant , Texas, known as 2004 White Wing Cove ^[76262] (address/zip code), or as described on attached exhibit, together with: (I) Improvements, fixtures and all other property located thereon; and (ii) all rights, prtvileges and appurtenances thereto, Including but not limited to: permits, easements, and cooperative and assoctatlon memberships. All property sold by this contract Is called the "Property".

3. SALES PRICE:

A. Cash portion of Sales Price payable by Buyer at closing ................................................ $ 2. 851, 871. QO B. Sum of all financing described below (excluding any loan funding fee

ormortgaga insurance premium) ..................................................................................... $ __ ____ _ _ C. Sates Price (Sum of A and B) ........................................................................................... $ 2. 851, 871 00 4. FINANCING: The portion of Sales Price not payable In cash will be paid as follows: (Check applicable boxes below) 0 A. THIRD PARTY FINANCING: One or more third party mortgage loans in the total amount of $ (excluding any loan funding fee or mortgage Insurance premium). (1) Property Approval: If the Property doss not satisfy the lenders' underwriting requirements for the loan(s),

this contract will terminate and the earnest money will be refunded to Buyer. [2) Financing Approval: (Check one box only) 0 (a) This contract Is subject to Buyer being approved for the financing described In the attached Third Party Financing Condition Addendum. O (b) This contract Is not subject to Buyer bein9 approved for financing and does not Involve FHA or VA financing. 0 B. ASSUMPTION: The assumption of the unpaid principal balance of one or more promissory notes described In lhe attached TREC Loan Assumption Addendum. 0 C. SELLER FINANCING: A promissory note from Buyer to Seller of$ , secured by vendo(s and deed of trust !lens, and containing the terms and conditions described In the attached TREC Seller Financing Addendum. If an owner policy of title Insurance Is furnished, Buyer shall furnish Seller with a mortgagee policy of title insurance. ,.,

6, EARNEST MONEY: Upon execution of this contract by both parties, Buyer shall deposit$]_()_,_., o.,o,,_,o,_,,'"'o"'o'--------'- as earnest money with Chicago Title company , as escrow agent, at 6688 N. Central #560, Dallas. TX 75206 (address). Buyer shall deposit additional earnest money of$ with escrow agent within ____ days after the effective date of this contract. If Buyer falls to deposit the earnest money as required by this contract, Buyer will be In default.

6. TITLE POLICY ANO SURVEY:

A. TITLE POLICY: Seller shall furnish to Buyer at 00 Seller's D Buyer's expense an owner policy of tttle Insurance (Title Polley) Issued by ~c.,h.,.i,,o,,a.,g"o'-"T-"'i-"t""l"e-"c,,om""'......_,_ ___________ .,.-----, -----,--,------,---~--,.-----,-----,-- (Title Company) In the amount of the Sales Price, dated at or after closing, Insuring Buyer against loss under the provisions of the Title Polley, subject to the promulgated exclusions (Including existing building and 2oning ordinances) and the following exceptions: (1) Restrictive covenants common to the platted subdivision In which the Property is localed. (2) The standard printed exception for standby fees, taxes and assessments. (3) Liens created as part of the financing described In Paragraph 4. (4) Utility easements created by the dedication deed or plat of the subdivision In which the Property Is located. (5) Reservations or exceptions otherwise permllted by !hiS contract or as may be approved by Buyer In writing. (6) The standard printed exception as to marllal rights. (7) The standard printed exception as to waters, tidelands, beaches, streams, and related matters. (8) The standard printed exception es to discrepancies, conflicts, shortages in area or boundary !Ines,

encroachments or protrusions, or overlapping Improvements. Buyer, at Buyers expense, may have the exception amended to read, ^[0] shorteges in area".

B. COMMITMENT: Within 20 da s after the Title Company receives a copy of this contract, Seller shall furnish to B er a commitment for tit! uranc Commitment an u e(s ex ense, le Ible co lss of restrictive

EXHIBIT

*58 " " 2004 White W1ng Cove Contract Concerning Westlake, TX 7 62 62 Page 2 of 9 02-13·08 (Address of Properly) covenants and documents evidencing exceptions In the Commitment (Exception Documents) other than the standard printed exceptions. Seller authorizes the Title Company to deliver the Commitment and Exception Documents to Buyer at Buyer's address shown tn Paragraph 21. If the Commitment and Exception Documents are not delivered to Buyer within the specified time, the time tor detlvery wlll be automatically extended up to 16 days or the Closing Date, whichever Is earlier.

C. SURVEY: The survey must be made by a registered professional land surveyor acceptable to the Title Company and any lender. (Check one box only) ll!I (1) Within days after the effective date of this contract, Seller shall furnish to Buyer ^[7]

and Title Company Seller's existing survey of the Property and a Residential Real Property Affidavit promulgated by the Texas Department of Insurance (Affidavit). If the existing survey or Affidavit Is not acceptable to Title Company or Buyer's lender. Buyer shall obtain a new survey at D Sellers ll!I Buyer's expense no later than ^[3] days prior to Closing Date. If Saller falls to furnish the existing survey or Affidavit within the time prescribed, Buyer shall obtain a new survey at Sellers expense no later than ^[3] days prior to Closing Date.

D (2) Within days after the effeot/ve dote of this contract, Buyer shall obtain a new survey at Buyers expense. Buyer Is deemed to receive the survey on the date of actual receipt or the date specified in this paragraph, whichever Is earlier.

D (3) Within days after the effective date of this contract, Seller. at Seller's expense, shall furnish a new survey to Buyer. D. OBJECTIONS: Buyer may object in wrttlng to defeots, exceptions, or encumbrances to title: disclosed on the euivey other than Items 6A(1) through (7) above; disclosed In the Commitment other than Items 6A(1) through (8) above; or which prohibit the foltowlng use or activity:-----~------------ Buyer must object not later then (t) the Closing Date or (II) days after Buyer receives the Commitment. ExcepUon Documents, and the survey, whichever is eamer. Buyers falture to object within the time allowed will constitute a waiver of Buyers right to oblect; except that the requirements In Schedule C of the Commitment are not waived. Provided Seller Is not ob11gated to Incur any expense, Seller shalt cure the ttmely objections of Buyer or any third party lender w1lhin 16 days after Seller receives the objections and the Closing Date will be extended as necessary. If objections are not cured within such 15 day period, this contract wll/ tenn!nate and the earnest money will be refunded to Buyer unless Buyer waives the objections.

E. TITLE NOTICES:

(1) ABSTRACT OR TITLE POLICY: Broker advises Buyer to have an abstract of title covering the Property examined by an attorney of Buyers selection, or Buyer should be furnished with or obtain a Title Polley. II a Tltle Polley Is furnished, the Commitment should be promptly reviewed by an attorney of Buyers choice due to the time limitations on Buyers rtght to object.

(2) MANDATORY OWNERS' ASSOCIATION MEMBERSHIP: The Property 1lil ls D Is not subject to mandatory membership In an owners' association. If the Property rs subject to mandatory membership In an owners' association, Seller notifies Buyer under §5.012, Texes Property Code, that, as a purchaser of property In the residential community Jn which the Property Js located, you are Obligated to be a member of the owners' association. Restrictive covenants governing the use and occupancy of the Property and a dedicatory instrument governing the establishment, maintenance, and operaUon of this resldent1al community have been or wi/I be recorded in the Real Property Records of the county In which the Property Is located. Coples of the restrictive covenants and dedicatory Instrument may be obtained from the county clerk. You are obligated to pay assessments to the owners' association. The amount of the assessments Is subject to change. Your failure to pay the assessments could result In a lien on and the foreclosure of the Property. If Buyer Is concerned about these matters, the TREC promulgated Addendum for Property Subject to Mandatory Membership In an owna(s Association should be used.

(3) STATUTORY TAX DISTRICTS: If the Property Is situated In a utility or other statutorlly created district providing water, eewer, drainage, or flood control facilities and selVlces, Chapter 49, Texas Water Code, requires Seller to deliver and Buyer lo sign the statutory notice relating to the tax rate, bonded Indebtedness, or standby fee of the district prior to final execution of this contract.

(4)TIDE WATERS: It the Property abuts tha tidally Influenced waters of the state, §33.135, Texas Natural Resources Code, requires a notice regarding coaster area property to be Included in the contract. An addendum containing the notice promulgated by TREC or required by fhe parties must be used.

(o)ANNEXATJON: If the Property Is located outside the limits of a municipality, Seller notifies Buyer under §5.011, Texas Property Code, that the Property may now or later be Included Jn the extraterritorial jurisdiction of a munlc/pallty and may now or later be subject to annexation by the municipality. Each municipality maintains a map that depicts Its boundaries and extraterritorial Jurisdiction. To determine If the Property Is located within a municipality's extraterritorial jurisdiction or is flke/y to ba located within a municipality's exlraterrltor/al jurisdiction, contact all municipalltles located In the general proximity of the Property for further Information.

and Seller_--"''--- __ _ TREC NO. 24·6 Page2of9 VSDH V11que10 V PrQdUoe,i;.iwJlh Zlpform"' by RE FormsNe~ LLC 18025 F!neen Mlle Road, Cll~ton Towmhlp, M!chlgan 480311 mmz!o!orm com *59 2004 White Wing Cove Contract Concerning _________ _,w..,e,,s,_,t.,l.,,a.,k.,,e,_,,'-"T"'X,__,_7_.6.,2..,6.,2 _________ page 3 of9 02-13-06 (Address of Property)

(6) PROPERTY LOCATED IN A CERTIFICATED SERVICE AREA OF A UTILITY SERVICE PROVIDER:

Notice required by §13.257, Water Code: The real property, desor!bad In Paragraph 2, that you are about to purchase may be located In a certlficeted water or sewer service area, which Is authorized by law to provide water or sewer service to the properties In the certificated area. If your property Is located In a certlflceted area there may be special costs or charges that you w/11 be required to pay before you can receive water or sewer service. There may be a period required to conslruct lines or other tacllllies necessary to provide water or sewer service to your property. You are advised to determine If the property Is In a certificated area and contact the uHl/ty service provider to determine the cost that you wltl be required to pay and the period, If any, that Is required to provide water or sewer service to your property. The undersigned Buyer hereby acknowledges receipt of the foregoing notice at or before the execution of a binding contract for the purchase of the real property described in Paragraph 2 or at closing of purchase of the real property.

(7) PUBLIC IMPROVEMENT DISTRICTS: If the Property Is In a pub/le Improvement dlstrlc~ §5.014, Property Code, requires Seller to notify Buyer as follows: As a purchaser of this parcel of real property you are obligated lo pay an assessment to a munlclpal.ty or county for an Improvement project undertaken by a public Improvement district under Chapter 372, Local Government Code. The assessment may be due annually or Jn periodic Installments. More Information concerning the amount of the assessment and the due dates of that assessment may be obtained from the munlolpal/ly or county levying the assessment. The amount of the assessments Is subject to change. Your failure to pay the assessments could result In a lien on and the foreclosure of your property.

7, PROPERTY CONDITION:

A. ACCESS, INSPECTIONS AND UTILITIES: Seller shall permit Buyer and Buyer's agents access to the Property at reasonable times. Buyer may have the Property Inspected by inspectors selected by Buyer and licensed by TREC or otherwise permitted by law to make Inspections. Seller shall pay for turning on existing utllltlas for Inspections.

B. ACCEPTANCE OF PROPERTY CONDITION: Buyer accepts the Property In its present condition; provided Sellar, at Seller's expense, shall complete the following specific repairs and treatments; and make the following Improvements: All items written on inspection report as non-functi.onal: seller will renai.r

C. WARRANTIES: Except as expressly set forth In this contract, e separate writing, or provided by law, Seller makes no other express warranties. Seller shall ass!gn to Buyer at closlng all assignable manufacturer warrantfes.

D. INSULATION: As required by Federal Trade Commission RegulaHons, the Information relating to the Insulation Installed or to be installed In the Improvements at the Property Is: (check only one box below) D (1J as shown in the attached speclflcat/ons. D (2 as follows:

a) Exterior walls of Improved living areas: Insulated with ~--~~~-~--------- Insulation to a thickness of Inches which yields an R-Value of - - - - - - - - - b) Wallo In other areas of the home: Insulated with Insulation to a thickness of Inches w--.-hl'""ch~y'""ie'id'""s-a"'n"'R"'-"'V"'a'lu-e-o"f----------. c) Ceilings In Improved J/V/ng areas: Insulated with ----~~~-~-------- Insulation to a thickness of Inches which yields an R-Value of . d) Floors of Improved living areas not applied to a slab foundation: Insulated with Insulation to a thickness of Inches which yields an R-Value of . e) Other Insulated areas: Insulated with lnsulal/on to a thickness of Inches which yields an R-Value of -~--~~---- All stated R-Values are based on Information provided by the manufacturer of the Insulation. E. LENDER REQUIRED REPAIRS AND TREATMENTS: Unless otherwise agreed In writing, neither party Is ob/lgated to pay for lender required repairs, which Includes treatment for wood destroying Insects. If the parties do not agree to pay for the lender required repairs or treatments, this contract will terminate and the earnest money will be retunded to Buyer. If the cost of lender required repairs and treatments exceeds 5% of the Sales Price, Buyer may terminate this contract and the earnest money wl/I be refunded to Buyer.

F. COMPLETION OF REPAIRS, TREATMENTS, AND IMPROVEMENTS: Unless otherwise agreed in writing, Seller shall complete all agreed repairs, treatments, and Improvements (Work) prior to the Closing Date. All required permits must be obtained, and Work must be performed by persons who are licensed or otherwise authorized by law to provide such Work. At Buyer's election, any transferable warranties received by Seller with respect to the Work wlll be transferred to Buyer at Buyer's expense. If Seller falls to complete any agreed Work prior to the Closing Date, Buyer may do so and receive reimbursement from Seller at closing. The Closing Date wlll be extended up to 15 days, If necessary, to complete Work.

Initialed for identification by Buyer: f/v ' k ~ and Seller - TREC NO. 24-6 (TAR-1604) 2-13-06 Page 3 of 9 r

ProducedwllhZlpForm™ by RE FormsNel, Ll.C 1ao2t1 Fine.en Mlle Road, Cllnlon Township, Michigan 48036 WNJ ilptorm.com VSDH Vaquero Y ^[2004] *60 White Wing Cove ContractConcemlng Wegtlake. TX 76262 Page4of9 02-13-06 (Address of Property) G. ENVIRONMENTAL MATTERS: Buyer Is advised that the presence of wetlands, toxic substances, Including asbestos and wastes or other environmental hazards or lhe presence of a threatened or endangered species or its habitat may affect Buyer's intended use of the Property. If Buyer is concerned about these matters, en addendum promulgated by TREC or required by lhe parties should be used.

H. SELLER'S DISCLOSURE: Except as otherwise disclosed In this contract, Seller has no knowledge of the following: (1) any flooding of the Property which has had a material adverse effect on the use of the Property; (2) any pending or threatened litigation, condemnation, or special assessment affecting the Property; (3) any environmental hazards or conditions materially affecting the Property; (4) any dumpslte, landfill, or underground tanks or containers now or previously located on the Property; (5) any wetlands, as defined by federal or state law or regulation, affecting the Property; or (6) any threatened or endangered species or their habitat affecting the Property.

I. RESIDENTIAL SERVICE CONTRACTS: Buyer may purchase a residential service contract from a residential service company llce11sed by TREC. If Buyer purchases a residential service contract, Seller shall reimburse Buyer at closing for the cost of the residential service contract In an amount not exceeding $ . Buyer should review any residential service contract for the scope of coverage, exclusions and limllatlons. The purchase of a resldentlal service contract Is optional. Similar coverage may ba purchased from various compantes authorl•ed to do business In Texas.

8. BROKERS' FEES: All obligations of the parties for payment of brokers' fees are contained In separate written agreements. 9. CLOSING: A The closing of the sale will be on or before Jµne 12 , 2007 , or within 7 days after objections made under Paragraph 60 have been cured or waived, whichever date is later (Closing Date). If either party falls to close the sale by the Closing Date, the non-defaulting party may exercise the remedies contained in Paragraph 15.

B. At closing: (1) Seller shall execute and deliver a general warranty deed conveying lltle to the Property to Buyer and showing no additional exceptions to those permitted in Paragraph 6 and furnish lax statements or certificates showing no delinquent taxes on the Property.

(2) Buyer shall pay the Sales Price in good Funds acceptable to the escrow agent. (3) Safier and Buyer shall execute and deliver any notices, statements, certificates, affldavlis, releases, loan

documents and other documents required of them by this contract, the Commitment or law necessary for the closing of the sale and the issuance of the Tiiie Polley.

C. Unless expressly prohibited by written agreement, Seller may continue to show the Property end receive, negotiate and accept back up offers. D. All covenants, representations and \varranUes In this contract survive closing. 10. POSSESSION: Seller shall deliver to Buyer possession of the Property in Its present or required condition, ordinary wear and tear excepted: !XI upon closing and funding D according to a temporary resldenllal lease form promulgated by TREC or other written lease required by the parties. Any possession by Buyer prior to closing or by Seller after closing which Is not authorized by a wrltten !ease will establish a tenancy at sufferance relationship between the parties. Consult your Insurance agent prior to change of ownership and possession because Insurance coverage may be limited or terminated. The absence of a written lease or appropriate insurance coverage may exposo the parties to economic loss.

11. SPECIAL PROVISIONS: (Insert only factual statements and business details applicable to the sale. TREC rules prohibit llcenseeo from adding factual statements or business details for which a contract addendum, lease or other form has been promulgated by TREC for mandatory use.)

t) See Addendum ^[11] A ^[11] and Addendum ^[11] B" ~) Y•r v•~J,, ... ,J..,y "~"'lh.:..-y ~,..:.~l ~eai--. 1 -1k.. B'--"I'~ ~ [MAu\- IHme_cy

t<. ,._.,. +L~l.\t. .._\- 'S:loOP"" r-">i'1 •"- ~I z,"c. 'f,2-0•1. <" TREC NO. 24·6 ~ · ?- and Seller Initialed for !dentlficaUon by Buyer~'l-''°~"'-- Page4 of9 (TAR-1604) 2-13-06 ' Produoed "'1'th ZlpForm ™by RE FormeNat, LLC 10025 Fifteen MMe Roa cl, Cllr'll.on Township, Michigan 46035 WMV-zlprorm com VSDH V11q11ero V ^[2004] *61 White Wing Cove Contract Conoernlng _________ ~w~e~•~t.,,.l~a'!'k~e,_.,'--c'T"'X'- ^[2] ?,,6,.2""6"'2--------- Page 5 of 9 02~13·08 (Address ol Property)

12. SETILEMENT AND OTHER EXPENSES:

A. The following expenses must be paid at or prior to oloslng: (1) Expenses payable by Seller (Seller's Expenses): (a) Releases of existing liens, Including prepayment penalties and recording tees; release of Seller's loan llablllty; tax statements or certificates; preparation of deed; one-half of escrow fee; and other expenses payable by Seller under this contract. - o-

(b) Seller shall also pay an amount not to exceed $ to be applied In the following order: Buyer's Expenses which Buyer Is prohibited from paying by FHA, VA, Texas Veterane Housing Assistance Program or other governmental loan programs, and then to other Buyer's Expenses as allowed by the lender.

(2) Expenses payable by Buyer (Buyer's Expenses): (a) Loan origination, discount, buy-down, and commltmsnl fees (Loan Fees). (b) Appraisal fees; loan application fees; credit reports; preparation of loan documents; Interest on the notes

from date of dlsbursemenl to one month prior to dates of flrst monthly payments; recording fees; ooples of easements and resMctlons; mortgagee title policy with endorsements required by lender; loan-related Inspection fees; photos; amortization schedules; one-half of escrow fee; all prepaid Items, Including required premiums for flood and hazard Insurance, reserve deposits for Insurance, ad valorem taxes and spacial governmental assessments; final compliance Inspection; courier fee; repair Inspection; underwriting fee; wire transfer fee; expenses Incident to any loan; and other expenses payable by Buyer under this contract.

B. Buyer shall pay Private Mortgage Insurance Premium (PM/), VA Loan Funding Fee, or FHA Mortgage Insurance Premium (MIP) as required by the lender. C. If any expense exceeds an amount expressly stated In this contract far such expense to be paid by a party, that party may terminate this contract unless the other party agrees to pay such excess. Buyer may not pay charges and fees expressly prohibited by FHA, VA, Texas Veterans Housing Assistance Program or other governmental loan program regulations.

13. PRORATIONS AND ROLLBACK TAXES:

A. PRORATION$: Taxes for the current year, maintenance fees, assessments, dues and rents will be prorated through the Closing Date. The tax proration may be calculated taking Into consideration any change In exemptions that wlll affect the current year's taxes. If taxes for Iha current year vary from the amount prorated at closing, the parties shall adjust the proretlons when tax statements far the current year are available. If taxes are not paid at or prior lo closing, Buyer will be obligated to pay taxes for the current year.

B. ROLLBACK TAXES: If Seller's change In use of the Property prior to closing or denial of a special use valuation on the Property results In additional taxes, penalties or Interest (Assessments) for periods prior to closing, the Assessments wltl be the obligation of Seller. Obligations Imposed by this paragraph wlll survive closing.

14. CASUAL TY LOSS: If any part of the Property Is damaged or destroyed by flre or other casualty after the effective date of this contract, Seller shall restore the Property to Its previous condlllo.n as soon as reasonably possible, but-IA any event by the Closing Date:-lrSeller falls to do so due to factors beyond Seller's-·control, Buyer may -let terminate this contrnot and the earnest moneywlll be refunded to Buyer (b)-extend the time .for performanca"'p..lo 15 days and the Closing Date wlll be·extended as necessary·"'·(G} accept the Property in its damaged condition with · an assignment of insurance proceeds and receive credit from Seller at closing In the amount of the deductible under the Insurance policy. Seller's obligations under this paragraph are Independent of any other obligations of Seller under this contract.

.. .,

15. DEFAULT: If Buyer falls to comply with this contract, Buyer will be In default, and Seller may (a) enforce specific

performance, seek such other relief as may be provided by Jaw, or both, or (b) terminate this contract and receive the earnest money as liquidated damages, thereby releasing both parties from this contract. , Sole "'"d. beyond Sellers control, Seller fails within the time allowed to ver the ~~\:VIC. Commitment, or survey, If re · , ay a extend the time for performance up to 16 days and the ~"""''~e-1,

'LI \-""1,. Closing D · extended as necessary or (b) terminate this contract as the sole remedy and receive the . If Seller falls to comply with this contract for any other reason, Seller will be in default and Buyer ma (a) enforce speclflc performance, aeelE e1::1e[::i slh ^[2] r ^[11] e' es ms; t ;' ; ddad b; la::, et both, or (b) terminate tract and receive the earnest mane , thereb releasln both ertles. rom this contr ct. 16. MEDIATION: It Is the po cy o e e e o Texas to encourage resolution of disputes through alternative dispute resolution procedures such as mediation. Subject to applicable law, any dispute between Seifer and Buyer related to this contract which Is not resolved through informal discussion will 0 will not be submitted to a mutually acceptable mediation service or provider. The parties to the med' Ion shall bear the mediation costs equally. This ara ra h doss not reclude fro seekin e uitabfe rell om a court of com etent urlsdlctlon. ? and Seller

lnlllaled for Identification by Buyer TREC NO. 24-8 (TAR-1604) 2-13-08 Page5ofg *62 2004 White Wing cove Westl.ake. IJIX 7 62 62

Contract Concerning Page 6 of ^[9] 02-13·06 (Addrass of Property) 17. ATIORNEY'S FEES: The prevalllng party In any legal proceeding related to this conlracl Is entllled to recover reasonable allornsy's fees and all costs of such proceeding Incurred by the prevatllng party. 18. ESCROW: A. ESCROW: The escrow agent Is not (I) a party to this conlraot and does not have llablllly for the performance or nonperformance of any party to this contracl, (ii) llabla for Interest on the earnest money and (Ill) liable for the loss of any earnest money caused by the failure of any financial tnstltutlon In which lhe earnest money has been deposited unless the financial Institution is acting as escrow agent.

B, EXPENSES: At closing, the earnest money must be applied first to any cash down payment, then to Buye~e Expenses and any excess refunded to Buyer. If no closing ocours, escrow agent may require payment of unpaid expenses Incurred on behalf or the parties and a written release of liability of escrow agent from all parties.

c. DEMAND: Upon termination of lhis conlracl, either party or the escrow agent may send a release of earnest money to each party and the parties shall execute counterparts of the release and deliver same to the escrow agent. If either party falls to execute the release, eltber party may make a written demand to the escrow agent for the earnest money. If only one party makes written demand for the earnest money, escrow agantshall promptly provide a copy of the demand to the other party. If escrow agent does not receive written objection to the demand from the other party within ^[15] days, escrow agent may disburse the earnest money to the party making demand reduced by the amount of unpaid expenses I.curred on behalf of the party receiving the earnest money and escrow agent may pay the same lo the creditors. If escrow agent complies with the provisions of this paragraph, each party hereby releases escrow agent from all adverse claims related to the disbursal of the earnest money.

P. DAMAGES: Any party who wrongfully falls or refuses to sign a release acceptable to the escrow agent within ^[7] days of receipt of lhe request will be liable to the other party for liquidated damages of three times the amount of the earnest money.

E. NOTICES; Escrow agent's notices will be effective when sent In compliance with Paragraph 21. Notice of objeclion lo the demand will be deemed effective upon receipt by escrow agent. 19. REPRESENTATIONS: Seller represents lhat as of the Closing Date there will be no liens, assessments, or security Interests against the Property which will not be satisfied out of the sales proceeds. If any representation or Seller In this contract Is untrue on the Closing Pate, Seller will be In default

20. FEDERAL TAX REQUIREMENTS: If Seller is a "foreign person," as defined by applicable law, or If Seller falls to deliver an aftldavll to Buyer that Saller Is not a "foreign parson,• then Buyer shall withhold from the sales proceeds an amount sufficient to comply with applicable tax law and deliver the same to the Internal Revenue Service together with appropriate tax forms. Internal Revenue Seivlce regulations require filing written reports If currency In excess of specified amounts Is received In the transaction.

21. NOTICES: All notices from one party to the other must be In writing and are effective when malled to, hand-delivered al, or transmltled by facsimile or electronic transmission as,follows: To Buyer

To Seller at: at: 1430 Eagle Bend Drive 5305 Village Creek Southlake. TX 76092 Plano. TX 75093 Telephone; _(fil,]J4.,2~1.:-::.o4.,8"'3"4'------ Telephone: (972) 732-1155 Facsimile: ______________ _ 'IJl--1:>-i.-k&<llJ Facsimile:

E-mail: H 1':,ko \:-:> ""~'\ "'' ~ ;{o"'-1"· "-'J-

E-mail: - - - - - - - - - - - - - - - -

! / , ' j ~ Initialed for Identification by Buye'r-"" Pf-". __ /'\ L and Seller ____ __c"J."'-"--- TREC NO. 24-6 1::-T (TAR-1604) 2-13-06 Page 6 of 9 Prod~ced With ZlpForm™ by RE FcrmsNet. LLC 1 B02P Fine en MUe Read, Clinton Town:Jh!p, Michigan 48036 w.wJ zlgftlrrn com VSDH Vaquero V *63 2004 White Wing Cove Westlake . '!'~ 7 6262 Contract Conoornlng !='age 7 of9 02-13-08 (Addre.ss of Property) 22. AGREEMENT OF PARTIES: This contract contains the entire agreement of lhe parties and cannot be changed except by their written agreement. Addenda which are a part of this contract are (check all applicable boxes): 0 Third Party Financing Condition Addendum

0 Addendum for "Back-Up" Contract 0 Seller Financing Addendum 0 Environmental Assessment, Threatened or Endangered Species and Wetlands Addendum

l&I Addendum for Property Subject to 0 Addendum fo.r Coastal Area Property Mandatory Membership In an Owners' Association

0 Buyers Temporary Residential Lease 0 Addendum for Property Located Seaward of the Gulf lntracoastal Waterway ll!I Other (list): Addendum "A" & 0 Addendum for Sale of Other Property by Buyer Add@ndum nan ~ '

23. TERMINATION OPTION: For nominal con~deratlon, the receipt of which Is hereby acknowledged by Seller, and N · l'l-- Buyer's agreement to pay Seller$ (Option Fee) within ^[2] days after the effective date of this contract, Sejler grants Buyer the unrestricted right to termlnata this contract by giving notice of termination to Seller within /I A\:-

days after the effective date of this contract. If no dollar amount is stated as the Option Fee or If Buyer fails to pay the Option Fee within the time prescribed, this paragraph will not be a part of this contract and Buyer shall not have the unrestricted right to terminate this contract. If Buyer gives notice of termination within the time prescribed, the Option Fee will not be retunded; however, any earnest money will be refunded to Buyer. The Option Fee 0 will 0 will no! be credited to the Sales Price at closing. Time Is of tho essence for this paragraph and strict compliance with the time for performance Is required.

24. CONSULT AN ATTORNEY: Real estate licensees cannot give legal advice. READ THIS CONTRACT CAREFULLY. If you do not understand the effect of this contract, consult an attorney BEFORE signing. Buyers f1/JC/; 2. 11'{&€/U-utAI Attorney Is: 7-l'l -1 ~<i -0(, 0 (,. Telephone: --{.8h,1-/ __,_2_-_,fL.L'f~)~,____---"'/ .)o.....t.7'-1-/ __ _

Telephone: Facslmlla: __ ~_l 'f_-_ ^[1] _~_.:9_-_o__,ie'--o'--7=--------

Facsimile: E-mail:. _____________ _

/ ' - !< f- and Seller-~ _____ _ Initialed for ldentlftcatlon by Buyer ' TREC NO. 24-6 (TAR-1604) 2-13-06 -, -. Page 7 of9

PrO<fucedwl!ll ZlpForm'" by RE FormsNet, LLC 16026 F/flecn Miia Road, CJlnlon Township, Mlchl11an 48035 ymw z!oform CQID . VSDH Vaquero V ^[2004] *64 White Wing Cove Contract Concernlng _________ w,..e.,..s:!<tl,._a,.k&e,._,_. _T,,x,.__7L6o,20'6o,2._ ___ ____ _ Page a of 9 02-13-08 (Address of Proparty) day of ___________ , _____ (EFFECTIVE DATE). I EXECUTED the {BROKER: FILL IN THE DATE OF FINAL ACCEPTANCE.)

suyer~~ This contract Is subject to Chapter ^[27] of the Texas Property Code. The provisions of that chapter may affect your right to recover damages arising from the performance of this contract. If you have a complaint concerning a construcUon defect arising from the performance of this contract and that defect has not been

, _______ _

corrected through normal warranty service, you

must provide the notice required by Chapter ^[27] of th& Texas Property Code to the contractor by certified mall, return receipt requested, not later than the 60th day before the date you flle suit to recover damages In a court of law or Initiate

Seller VSDH Vaquero Venture Ltd. arbitration. The notice must refer to Chapter ^[27] f51:1tt ~;I..'-- <:,P

of the Texas Property Code and must describe

the construclion defect. If requested by the contractor ^[1] you must provide the contractor an opportunity to Inspect and cure the defect as provided by Section 27.004 of the Texas Seller Property Code. The form of this contract has been approved by the Texas Real Estate Commission. TREC forms are Intended for use only by trained real estate licensees. No representation Is made ae 10 the legal validity or adequacy of any provision fn any specific transacifons. It la not Intended for complex transactions. Texas Real Estate Commission, P.O. Box 12168, Auslln, TX 78711-2186, 1-800-250·8732 or (612) 459·6544 (http://www.lrec.stale.tx.us) TREC NO. 24-6. Thi• form replacee TREC NO. 24·5.

TREC NO. 24·6

{TAR-1604) 2-13-06 Page 8 of 9 Prodt1ced Wllh Z!pForm111 by RE FormaNel LLC 18025 Fifteen Mlle Roarl, c11ri1on Towmhlp, Mlehlgan 48036 WfWt :i!pforcn com VSDHVaquero V *65 2004 White Wing Cove Contract Concerning ________ ~w~e~s~t~l~ak~e..,_. ~'r~X~~7~6~2~6~2~------- Page ti org 02·13·06 (Address of Property)

BROKER INFORMATION AND RATIFICATION OF FEE

" ^[1] Listing Broker has agreed to pay other Broker of the total sales price • when Listing Broke~s fee Is received. Escrow Agent Is authorized and directed to pay Other Broker from Listing Broker's fee at closing.

Va~ero Residential Realty, LLC 0298573 Other Broker License No. License No. Listing Broker

represents D Buyer only es Buyer's agent repreaents [2) Seller and Buyer as an intermediary D Seller only as Seller's agent · 0 Seller as LlsUng Broker's subagent (917) 430-6600 Telephone Associate Telephone Listing Associate 1405 Fountain Grass (817)430-6601 Court Broke~s Address Listing Assoclate's Office Address Facsimile TX 76262 Westlake City State Zip City State Zip

=Fa_c_s ^[7] fm"ll~e------------·--· ·---· Eiiia7.il~A--d,~d-re_s_s _________ - - - - - - - - Email Address Selling Associate Telephone Selling Assoclate's Office Address Facsimile Zip Staie Email Address

OPTION FEE RECEIPT

Receipt of$ - - - - - - - - (Option Fee) in the form of ___________ Is acknowledged. Seller or Listing Broker Date CONTRACT AND EARNEST MONEY RECEIPT ,: Rscelptof Ill Contract and ll2i $ ~D,LX.:0 -- Earnest Money In the form of c:.z/_e_LK _,; oate: 6/4;&~. . /, .. .. ~.~~~~~A:i~~~•dc:,;,c,,tfc_.;po'i':fL,0 .. By: /_,.{d." ·· / ~-5 ;,,c,.<..--Jr/ ~m-tu:./&Ctc!.~f.f;.{e£A· ... ~fi../M_('{Jf{

hb ,§15 1 /II C.tr.!7[..f.U._., rf:fu>D ..... - ~:i:~h~~~es•;;i1<;1 --'!01 - 0(7/ 7'/.. L/ Auu~ P Ji<5 7::;W> Facsimile: ,;2;q -.!'(al ·41b'J , Cltv State Zip

TREC NO. 24-6

(TAR·1604) 2-13-06 Page 9 of 9 *66 PROMULGATED BY THE TEXAS REAL ESTATE COMMISSION (TREC) 02-13-08 SUBDIVISION INFORMATION, INCLUDING RESALE CERTIFICATE FOR PROPERTY SUBJECT TO MANDATORY MEMBERSHIP IN AN OWNERS' ASSOCIATION (Section 207.003, Texas Property Code) {NOT FOR use WITH CONDOMINIUMS) Resale Certificate concerning the Property (Including any common areas assigned to the Property) 2004 White Wina Coye (Street Address), City located at of Westlake , County Of Tarrant; ^[1] Texas, prepared by the property owners' association (the Owners' Association). A. The Property 0 is 0 is not subject to a right of Hrst refusal or other restraint contained

in the restrictions or restrictive covenants that res~lcts the owner's right to transfer the owner's property. 8. The current regular assessment for the Property is$· 1 • sa 1 . o o per __ _,,s.,e"'m.,i..::-,.a"'n"n"'u"a""l""l~y--- C. A special assessment for the Property due after the date the resale certificate was prepare<f is$ · - - - - - - - - payable as follows - - - - - - - - - - - - - - - - - - - D. The total of all amounts due and unpaid to the Owners' Association that are attrtbutabla to tho Property is$ - - - - - - - - E. The capftal expenditures approved by the Owners' Association its current for fiscal year are $ _____ _ F. The amount of reserves for capita/ expenditures rs$ - - - - - - - - G. Unsatisfied judgments against the Owners' Association total $ - - - - - - - - H. There Dare 0 are not any suits pending against the Owners' Association. The style and cause

number of each pending suit Is: ___________________________ _ · t. Tho Owners' Association's board D has actual knowledge 0 has no actual knowledge of conditions on the Property In violation of the restrictions applying to the subdivision or the bylaws or rules of the Owners' Association. Known violations a re : - - - - - - - - - - - - - - - - - - - - - - - -

J. The Owners' Association D has 0 has not received notice from any governmental authority regarding health or building code violations with respect to the Property or any common areas or common facllltles owned or leased by the Owners' Association. A summary or copy of each notice is attached.

K. The Owners' Assoc/allon fees resulting from the transfer of the Property are$ - - - - - - - - - - - - payable to __________________________________ _ Initialed for Identification by Buyer~ /_,, f--anct Seller x __

TREC NO. 37-2

(TAR-1923) 2-13-06 ~ Page 1 of 2 Vaquero Residential Realty I ^[405] F'oun!ain Grass Ct., \Vestlake TX 76262 Phone; 8174306600 Fax: 817-430-6601 Vaqllero Reslde11fl11! Realty, LL VSDH Vaquero V

ProdlJc&d vJlh ZlpFOfTll ™by RE FO!lllSNet, LLC 18025 Fifteen Mile Road, Clinton Towns.hip, MIChlgan -48035 WWW ;!pfonn com *67 2004 White Win9 Cove Subdivision Information Concerning H@s!J.Akg, ?X 222§2 Page 2 of 2 02-13·06 (Address of Property) L. The Owners' Association's managing agent is Q:inne Mf!l!:e.t!i! , BTI C2mmunit~ Man§g~~nt Assoc, (Name of Agent)

1500 N. NorwooQ Di; ' BlQg: ~, ^[1] S;uite ;>QO, Hyrst, ^[1] ~K 2§05§ (Malling Address) rnui 215-21~~

rn17121s-n:rn (Telephone Number) {Fex Number) li5) do Odo not allow foreclosure of the Owners' Association's lien on the Property for M. The restrlclions failure to pay assessments.

REQUIRED ATTACHMENTS:

1. Restrictions 5. Current Operating Budget 2. Rules 6. Certificate of Insurance concerning Property

and Liability Insurance for Common Areas 3. Bylaws and Facl!l!les 4. Current Balance Sheet 7. Any Governmental Notices of Health or

Housing Code Violations NOTICE: This Subdivision Information may change at any time. VamJ§~Q HQ~owner•~ A~§Qgist~on Name of Owners' Association By: Title: Malling Address: E·mall: Date: This fonn has boon approved by the Texas Roal Eslale commission far use only wllh slmllarty approved or promulgated contract forms. No represenlaVon Is made as to the legal valldlly or adequacy of any provision In any specific transaction. Texas Roal Eslale Commission, P.O. Box 12188, Austin, TX 78711·2188, 1-800-260-8732 or (512) 459-6544 (hllp:llwww.trec.slale.tx.us) TREC No. 37·2. This fonn replaces TREC No. 37·1. TREC NO. 37-2

(TAR-1923) 2-13-06 Page ^[2] of 2 Produced wilh ZlpForm™ by RE FormaNel, LLC 18026 Fifteen Mlle Road, Cllntc11 T0M15hlp, Miehlgan 48035 ~fQJm&Qm_ YSDI I Vaquero V *68 02-13.06 PROMULGATED BY THE TEXAS REAL ESTATE COMMISSION (TREC) ADDENDUM FOR PROPERTY SUBJECT TO MANDATORY MEMBERSHIP IN AN OWNERS' ASSOCIATION (NOT FOR USE WITH CONDOMINIUMS) ADDENDUM TO CONTRACT CONCERNING THE PROPERTY AT 2004 White Wing Cove Westlake (Street Address and City) Vaquero Homeown•r's AS$OQiation

A»DMDPMA

*69 t. JIUY BACK OPTION: VSDH Vaquero Vonture Ltd. (VSDH), 1111 Beller, hmby srants lo KC111!0lh P. and Bolay L. Groll (Clroa•), oa Buyer, of 2004 White WlnJ Cove iii Vaquero subdivision, Woallab, T6X81 (tho Pro~rty) tho option (tho "Buy Baok Oplion") to put tho Properly to Soller (i.e., requiro Soller to rcpurohue tho Property for tho origjnol "Solos Pri""" of $2,8Sl,871.00) on Soplember l, 2009, or auoh oarlior dato ^[118] may be mutually agreed between Buyer and Seller, ill wrllillg (tho "Buy !lack Dalo''), subject to tho followin.g tontt8 and conditions:· (a)' DllCLARATION DATB: On or bolbrv May i, 2009, (tho "Declerallon

Dato"), lluyer must oxonilso·lho Buy Bad< Option by delivering writ!cn notice thereof to Seller (tho "Buy Baolc Option Notlco''· ~ fur BUY reMon, Seller has not received tho Buy Beok Option Noli..,, on or bof019 5:00, loco! time in DallM/Pmt Worth, Toxoa, onlhe Deolaratlon Delo, then Buyer shall have waived tho Buy BllCk Option and same shall bo null avoid. ·

(b) BUYl!R BXBRCISBS TllB BUY BACK OPTION: If Buyer timely and properly exeroiaos tho Buy Baok Oplion, then tho following shall apply: (f) Buyer may. not sell or oonvoy any rlghl, title or interoat in and to the Property to any third party unlCBB Soller broachea Its obllgstion to rq>uroltaao lho Property pul'IUlll!t to tho Buy Baok Option due to no lilult of Buyer; (II) Soller may conunenoo miu1<eflng tho Property' for sole on May 2, 2009, and lluyer •8"008 to fully cooperate with sll madcolillg otlbrts of Soller; and (Iii) on or before September I, 2009, unloaa Buyer and Soller 81!1'00 upon anothor stated date in wrltlng, Buyer shall vacalO the Property and dolivor full posscss!Oll thore<>f to Seller, and tho Property shall bo fn tho samo condltton as existed on the original Closing Dato, plus an,y Soller approved lmprovomenta, loss reasonable wear aud tear, with all meobanloal, elcotrioal, plumbing and other syalems and componOllle fn good woridng order and in a ''broom-<>loan". ootldltlon. Prior to tho Declaration Dal!>, tho B11yor oan anter lnto a contrsot to tho sell tho Ptoperty and will be entllled to all prooeods ftom auch sale. Should lh• Bu;)ll>r onlor Into a con1Jaot to sell the property, the Buy Baok Option wlll · lnmu:dlaloly letminate and will no IOJl8or bo awllable to Buyer. If, howovor, Buyer timely and properly oleots to invoke Ibo Buy Baok Option and Ibo oloslng of tho repurohaso l4kos plsco, lhon Buyer walvea and · relinquishes an,y and all olalms they may have to any proceeds ftom tho subsequent aolo of tho Prop6rty by Soller, and Buyer shall not bo lillblo lbr any loss Incurred by Soller &om tho subsequent salo of tho Property.

(c) CASUALTY: If tho Propotty is ~a111a9ed by fire or other ooaualty the cost of whlob to repair Is equal to or greatot than $100,00.00, lhon, llollo1 llWI), at Ms eptlon1 eMt to cdlher (i) ~•ftlM"• the Buy.. Bao~ Opt±onfull ~d void,

Pege l of~] k6- JlJI-. ~

·

~#lld Se11bija\doua\Loca) SttlfnSl\nruponry lntmrc,J:Fllt«JLK.6A\Ad~ A ~ ~"' Coo!Jletv3 .,,,.,{8.9Pl!)Ao< -

*70 If the cost to repair is less than $100,000, then Buyer shall, at Buyer's sole cost and expense, repair and restore the home to its prior condition in order for Buyer to have the right to exercise 1he repurchase option. If Buyer fuils to timely and properly repair and restore the Property prior to Buy Back option date, then Seller may tenninate the Buy Back Option.

2. BUYER"S IMPROVEMENTS: Before commencing construction, Buyer will review with Seller the plans and specification and receive general consent (consent not to be unreasonably withheld) to proceed with the improvements. Buyer will periodically (on a reasonable basis) update Seller regarding progress and timelines on completing the improvements. Sellei· understands that Buyer has the right to make minor changes and decisions during the process of completing the improvements provided they are in 1he best interest of completing the improvements in the most logical and reasonable manner. Buyer will also complete the improvements (i} in a good workmanlike manner, free from material defects, (ii) in accordance with all laws, ordinances, statutes, rules, regulations and any and all restrictions and other matters of record applicable thereto; and (iii) free of any liens or claims of any kind or character, and Buyer shall absolutely and unconditionally save, defend, or indemnify and hold harmless Seller from and against any and all reasonable attorney's fees and disbursements and all damages which may arise by reason of Buyer's perfonnance of any work thereto or Buyer's failure to do as required hereby or the Escrow Agreement (hereinafter defined). ESCROW AGREEMENT: The attached Addendum B is a spreadsheet of

3. improvements and costs proposed by the Buyer to be made to the Property. A total of$156,871.00 oftbese improvements has been incorporated into the $2,851,871.00 Sales Price. Buyer agrees to escrow funds totaling $156,871.00 with the Title Company and enter into an Escrow Agreement (herein so called), acceptable to Seller and Buyer, that outlines the proposed improvements to the property and the disbursement of such funds. Buyer accepts risk of any improvement cost overruns in excess of$156,871.00, however, ifimprovements costs do not exceed the $156,871.00 allocated budget, Buyer may use the remaining funds and apply to other improvements not specified in Addendum B.

4. Doub Hickok and Van Shaw as partners in VSDH Vaquero Venture Lts. Each hereby personally guaranty Sel1er's obligations under the Buy Back Option granted from VSDH to Buyer hereunder. In the event VSDH fails to perform fully under the tenns of the Buy Back Option, each of its partners set forth hetin above shall be personally responsible, jointly and severally, to perform the obligations ofVSDH under the Buy Back Option.

*71 5. Buyer reserves the right to cancel Buy Back Option after the declaration date provided that Seller has not entered into a purchase contract with a third party on 2004 White Wing.

In addition, in paragraph 15 in the body of the contract under DEFAULT, Seller reinstates language stricken "seek spch other relief as may be nrovided by law, or both:n

*72 ------'--------·~ -----~--·--- -

ADDENDUMB

... 2004 White Wing - 1092 Sq Ft Addition • Casita w/ FR, Bedroom, Shared Pool Bath ^[1500] ^[2000] ^[1750] ^[800]

En ineeer ^[500] Permit ^[1500] Trash Haul ^[1000] ^[546] ^[8] 4,368 Piers 8' x 24" ^[19] ^[200] 3,800 Step ^[1] ^[200] ^[200] Pump Truck - Estimate ^[1] ^[1500] 1,500 Front Patio ^[156] ^[3] ^[468] Back Patio to Pool ^[522] ^[3]

•• • • - • I I 1,000 *73 . .. NV I Alarm I Door Bell / Intercom 2,000

• Stone Material tons) 25 145 3,625 Stone Labor - Casita 831 4,986 6 Stone Labor - Wall-Off A/C 72 6 Stone Border Around Front Patio 45 10 Stone for Front Patio Gale - Material & Labor 1 300

4 546 5 1 1200

...

1500

14 •• • : 1092 6 6,552 Paint & Stain - Addition & New Cabinets 500 500 Paint - Master ^[1] 1 600 Paint - Fo er ^[600] 700 Paint - FR 700 600 600 Paint - Halls 1 300 Paint - Stairs 300 .. --· 1 400 400 Paint - BR# 4 & Bath 1 3000 3,000 Faux for Above Rooms ••

:

Wood - Casita Down Slate - Pool Bath Car et - Casita Bedroom and Media Pool Bath Shower

• 1,000

3000 1,500 A liances . . ..L. - Base Price 2,695,000

Addition 126,851 Remodel 30,020

*74 Purchase Price 2,851,871 Purchase Price or Contract Price to be: 2,851,871 Seller to pay for improvements totaling: 156.871

Any improvments over 156,871 are at Buyer's expense If improvmenets cost less than 156,871, Buyer wil be refunded the difference ~~ TEXAS ASSOCIATION OF REALTORS® INTERMEDIARY RELATIONSHIP NOTICE USE OF THIS FORM 8Y PERSONS 'M-iO ARE NOT MEMBERS OF THE TEXAS ASSOCIATION OF REAL TORS® 15 NOT AUTHORIZED ©Texas Association of REAL TORS®, loc. 2004 To: ----------~V~S~D=H~V=a.,au.,._,e=r~o~V=e~n~t~u~rce~L=t=d~·-~-------- !Seller or Landlord) Kenneth P. Gross ~ \:>et-.s.'{ L • EJ..-o SS (Prospect) and From: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - !B roke r 's Firm) 2004 White Wing Cove Re: =W=e=s=t=l=a=k=e~=T=X~~7=6~2=6~2 ________________________ (Property) Date: A Under this notice, "owner' means the seller or landlord of the Property and "prospect" means the above-named

prospective buyer or tenant for the Property. B. Broker's firm represents the owner under a listing agreement and also represents the prospect under a buyer/tenant representation agreement. C. In the written listing agreement and the written buyer/tenant representation agreement, both the owner and the " r prospect previously authorized Broker to act as an intermediary if a prospect who Broker represents desires to buy or lease a property that is listed by the Broker. When the prospect makes an offer to purchase or lease the Property, Broker will act in accordance with the authorizations granted in the listing agreement and 1n the buyer/tenant representation agreement.

D. Broker 0 will [fil will not appoint licensed associates to communicate with, carry out instructions of, and provide opinions and advice during negotiations to each party. If Broker makes such appointments, Broker appoints· _____________________________ to the owner: and - - - - - - - - - - - - - - - - - - - - - - - - - - - - - to the prospect.

*75 E. By acknowledging receipt of this notice, the undersigned parties reaffirm their consent for broker to act as an intermediary F Additional information: (Disclose material information related to Broker's relationship lo the parties, such as personal relationships or prior or contemplated business relationships.) The undersigned acknowledge receipt of this notice lb

>

Seifer or Landlord Date Date VSDH Vaquero Venture Ltd. Seller or Landlord Date Date

Betsy L. Gross (TAR-1409) 1-7-04 Page 1 of 1 Vaquero Residential Realty 1405 Fountain Grass Ct., Westloke TX 76262 Phone:8174306600 Fax. 817-430-6601 Vaquero Residential Realty, LL

VSDH Vaquero V Produced with ZrpForm™ by RE ForrnsNet, LLC 18025 Fifteen Mile Road. Clinton Township, M1ch1gan ^[48035] www zipform.com

ADPENPUMA

BUY BACK OPTION: VSDH Vaquero Venture Ltd. (VSDH), as Soller, hereby 1. grants to Kenneth P. and l3etsy L. Groos (Gross), as Buyer, of2004 White Wins Cove in Vaquoro subdivision, Westleke, Texas (tho Proporty) tho option (tho ''Buy Back Qption'' to put tho Property to Seller (i.o., requlro Seller to repurohaso the Property for Ute original "Soles Price" of $2,851,871.00) on Saptomber 1, 2009, or suoh oar lier dato "" may ho mutually agreed between Buyer and Seller, in writing (tho ''Buy Back Date"), subject to tho followlnl! tenns and conditions:· (a)- DECLARATION DATE: On or bolbro May i, 2009, (tho '~laration

Date"), Buyer must oxeroJso th• lluy Back Option by dellvor!ng written notice thereof to Seller (the "Buy Baok Option Notioo'?. 1f, for any reason, Soller has not reoeived tho Buy Baok Option l\fotioo, on or before S:OO, loco! tlmo ln Dallas/Port Worth, Toxas, on !ho Declaration Dare, !hon Buyer &hall have waived the Buy l3ack Qption and same shall bo null

J

avoid. · (b) BUYER BXBRCISBS T.HE BUY BACK OPTION: IfBuyer timely and properly exerolsos tho Buy Back Option, then the following shall opply: (I) Buyer may. not sell or convey any right, title or interest in and to the Property to any third par!Y unl688 Seller breaches its obligation to repurohase tho Property pursuant to tho Biiy Baok Option due to no foul! of Buyer; (ii) Soller may eoJnmonco marketing the Property· for aalo on May 2, 2009, and Buyer agrees to fully eooperato with all marketing of!brta of Seller; and (Iii) on or before September 1, 2009, unlosa Buyer and Sellar •fl!'.•• upon another stated date in writing, Buyer shall vacate the Property and deliver t\J.tl poaaeaslon thare<>f to Seller, and tho Property *76 shall be in the sumo condiilon as existed on tho original Closing Dato, plus aey Seller approved improvements, leas reasonal>le wear and tear, with all mechenloal, oleotrioal, plumbing and other systems and components Jn good working order and in a ''broom-oloan". concllt!on. Prior to tho Deolatatlon Date, tho Buyer can enter lnto a eontraot to tho sell tho Proporty and will ho ont!Ued to all proeeeda from auoh sale. Should tho Buyer enter into a contraot to sell the property, tho Buy Baok Option wlll immedlatoly 1onninato and will no longer be available to Buyer. If, however, Buyer timely and properly elects to invoko tho Jluy Back Option and tho closing of tho repurohaao takes place, then Buyer waives and · relinquishes any and all claims they may have to any proceeds from tho subsequent sale of tho Prop&rty by Soller, and Buyer shall not be llablo fur any loSi ln0U1Ted by Soller from tho subsequent aalo of tho Proporty.

(c) CASUALTY: If the Property is qumaged by fire or other casualty the cast of which to repair is equal to or greater fh\ln $100,00.00, thon,.lle!lw ma,, /<fy !!!: ,/\/""- •I ii• opllo•1 oleet to oilhor (i) doe!.,.• tho Buy-Baek Qpllonfull ll!'d void, . . Pagolof(1 . ~ .. C1\Dotumenl51Uld Sel8JJgidou_g'l!.QC;t] S~u-bip\T'tmp(ln:ry fotunctF!lr.1\0U<6A\AdMn \1111 A loOmta Contralltv3 '

- .

032N.'{SSPN).~

If the cost to repair is less than $100,000, then Buyer shall, at Buyer's sole cost and expense, repair and restore the home to its prior condition in order for Buyer to have the right to exercise the repurchase option. If Buyer fails to timely and properly tepair and restore the Property prior to Buy Back option date, then Seller rnay tenninate the Buy Back Option.

2. BUYER"S IMPROVEMENTS: Before commencing construction, Buyer will review with Seller the plans and specification and receive general consent (consent not to be unreasonably withheld) to proceed with the improvements. Buyer will periodically (on a reasonable basis) update Seller regarding progress and timelines on completing the improvements. Seller understands that Buyer has the right to make minor changes and decisions during the process of completing the improvements provided they are in the best interest of completing the improvements in the most logical and reasonable manner. Buyer will also complete the improvements (i) in a good workmanlike manner, free from mateiial defects, (ii) in accordance with all laws, ordinances, statutes, rules, regulations and any and all restrictions and other matters of record applicable thereto; and (iii) free of any liens or claims of any kind or character, and Buyer shall absolutely and unconditionally save, defend, or indemnify and hold harmless Seller from and against any and all reasonable attorney's fees and disbm·sements and all damages which may arise by reason of Buyer's performance of any work thereto or Buyees failure to do as required hereby or the Escrow Agreement (hereinafter defined).

3. ESCROW AGREEMENT: The attached Addendum B is a spreadsheet of improvements and costs proposed by the Buyer to be made to the *77 Property. A total of$156,871.00 of these improvements has been incorporated into the $2,851,871.00 Sales Price. Buyer agrees to escrow funds totaling $156,871.00 with the Title Company and enter into an Escrow Agreement (herein so called), acceptable to Seller and Buyer, that outlines the proposed improvements to the property and the disbursement of such funds. Buyer accepts risk of any improvement cost overruns in excess of$156,871.00, however, ifimprovements costs do not exceed the $156,871.00 allocated budget, Buyer may use the remaining funds and apply to other imp1·ovements not specified in Addendum B.

4. Douh Hickok and Van Shaw as partners in VSDH Vaquero Venture Lts. Each hereby personally guaranty Seller's obligations under the Buy Back Option granted from VSDH to Buyer hereunder. Jn the event VSDH fails to perform fully under the tenns of the Buy Back Option, each of its partners set forth herin above shall be personally responsible, jointly and severally, to perfonn the obligations ofVSDH under the Buy Back Option.

5. Buyer reserves the right to cancel Buy Back Option after the declaration date provided that Seller bas not entered into a purchase contract with a third party on 2004 White Wing.

In addition, in paragraph 15 in the body of the contract under DEFAULT, Seller reinstates language stricken "seek such other relief as may be provided !zy law, or both:"

FIRST AMENDMENT TO NEW HOME CONTRACT

*78 THIS FIRST AMENDMENT TO NEW HOME CONTRACT (the "Amendment'') is entered into by and between VSDH VAQUERO VENTIJltE, LTD., a Texas limited partnership (the "Seller''), and KENNETH P. GROSS and BETSY L. GROSS (collectively, the "Purchaser'').

WITNESSETH:

WHEREAS, Seller and Purchaser entered into that certain New Home Contract dated effective as of June 4, 2007 (the "Contract"), providing for the sale by Seller to Purchaser of a tract of land located at 2004 White Wing Cove, Westlake, Tarrant County, Texas (the "Property'') and being more particularly described in the Contract; and

WHEREAS, Seller and Purchaser desire to amend the Contract as hereinafter set forth. NOW, THEREFORE, based on these facts and in consideration of the mutual benefits to be

obtained by this Amendment, Seller and Purchaser agree as follows: 1. Amending Provisions. The Contract is herepy amended as follows: (a) Paragraph 9.A. of the Contract is hereby amended to provide that the date and time for

the closing to be fully consummated and funded shall b.e extended to occur on or before noon on Friday, June 29, 2007 (the new "Closing Date"); provided, however, that as a Condition Precedent (herein so called) to such extension, Purchaser and Seller hereby agree that Purchaser shall deliver to the Title Company the following: (i) a fully executed copy of this Amendment; (ii) a or a wire transfer or cashier's check made payable to the Title Company, in the am01mt of Fifty Thousand and No/100 Dollars ($50,000.00), which shall be added to and comprise a portion of the earnest money being held under the Contract; (iii) a cashier's check made payable to Seller, or a wire transfer to the Title Company in care of *79 Seller, in the amount of Eight Thousand, Five Hundred and Noll 00 Dollars ($8,500.00) as a non refundable extension fee which shall lll)t be credited toward the Sales Price (the "Extension Fee''). In addition, the Extension Fee shall be increased 1'y Five Hundred and No/100 Dollars ($500.00) for each day after June 29th that passes until the closing is fully consuinmated and funded, and Purchaser shall pay same to Seller no later than at closing.

(b) Inasmuch as Purchaser was not ready, willing or able to consumniate the closing as. and ·when required by the Contract and Seller has already tendered full performance of its closing obligations, this Amendment constitutes an offer by Seller .to extend the Closing Date, and if this Amendment is not . fully executed and deliverea by Purchaser to. Seller and the Condition Precedent is not fully satisfied on or before 4:00 p.m. local time in Dallas, Texas on. June 20, 20Q7, then the following shall automatically apply: (i) Seller's offer to extend the Closing Date shall be fully rescinded, (ii) Purchaser shall be in . default under the Contract, (iii) Seller shall be deemed to have terminated the Contract and entitled to retain all of the earnest money on deposit with the Title Company, and (iv) Purchaser shall vacate the Property.

( c) There are no other amendments. 2. Consequence of Amendment. Nothing in this Amendment affects or modifies any of the

provisions of the. Contract, except as expressly provided herein. The Contract, as amended by this Ameodment, will continue in full force and effect and is ratified and affirmed by Seller and Purchaser as if originally written as herein amended.

Page 1 of3

EXHIBIT

C:\Documents and Settings\doug\Local Setrings\Temporary Internet Fites\OLK6A\Ist Amendment to Contract v2 061907(SSFN).doc: - - - - ------------·-- - 3. Miscellaneous. (a) The section headings contained in this Amendment are for convenience ofreference only

and are not intended to delineate or limit the meaning of any provision of this Amendment or to be considered in construing or interpreting the provisions of this Amendment. Capitalized terms used in this Amendment which are not otherwise defined hereiri shall have the same meiµring as given to, them iri the Contract

(b) This Amendment may be executed in any number of counterparts, separately or together, by Seller and Purchaser. If counterparts hereof are executed separately by :Purchaser and Seller, when taken together, same will constitute one (1) original. If the same counterparts are eilecuted by Purchaser and Seller, then each such counterpart shall constitute an original. Seller and/or Purchaser may execute and deliver this Amendment by telephone facsimile transmission, and the receiving party may rely fully thereon as an original.

(c) This Amendment embodies the entire agreement and understanding l)etween 'PurchaSer and Setler with respect to its subject matter and supersedes all prior agreements and understandings, written or oral, between Purchaser and Seller related to that subject matter. This Amendment may be amended, waived or discharged only by an instrument in writing executed by the party agairist which enforcement of the amendment, waiver or discharge is sought.

( d) The determination that any provision of this Amendment is invalid or unenforceable will not affect the validity or enforceability of the remaining provisions or of that provision under other circumstances. In the event of any determination of invalidity or unenforceability, this Amendment will _be construed as if the invalid or unenforceable provision were not included in this Amendment.

EXECUTED as of (although not necessarily on) the 12th day of June, 2007. *80 SELLER: VSDH VAQUERO VENTURE, LTD,, a Texas limited partnership By: VSDH Homes, Inc.,

a Tei<as corporation, its General Partner lr------ By: ______________ ~ Douglas M. Hickok, ViCe President Page 2 of3 C;\Documents and.Settings\doug\Local Settings\Tempora.J)' Int~et Fi1es\OI.K6A\lstAmendment to Contract v2 061907(SSFN).doc --------------- . ili EXECUTED as of (although not necessan1y on) the 12 day of June, 2007.

PURCHASER:

KENNETH P. GROSS

*81 Page 3 of3 C:\Documents and Settings\doug\Local Settings\Temporary Internet Filcs~O_LK.6A\lst Amendment.to Contract v2 061907{SSFN).doc . . .... - .... - -- @l>ENDDMA t. BUY BACK OPTJ'.ON: VSDH Vaquein Ven!w'O Ltd. (VSDH), as SoJ!et, heRby grants to Kllll!10fh P. and Betsy L. Groa$ (Gwas), ~ Bllyor, of 2004 Wlille ~ Cow in V,.quoi:o sub~ W~laki!. ~ (tlte~):!M QPtlon (tho "Buy B'IClt Oi>1ioli? topJ!t1hol'mperl;Y to Sl!)lor (f~,:tequl~ $ellerto 1'Cjll1l'cillag tho P:toperty for tho o1!8jual "Sales l'rlee'' of $2;851,871.oo) on September l, 2009, or euoli elll"lietda(<Ja,may bo mutually agreed between~ and Seller, in wziling OM "Bill' llaokD~'). subject to tho f0110Wingtenns aru!Col!d!tlons:· (a)· Dl!CLAMTlON DATE: On or be1l!1'o May i, 2009, @a "l>Colatafion

Dl\IO''), Buyor muet ex«olse·the Buy Back ClPtion fly • • writw.n. notice thereof to Seller (tho "Buy Baok Option No~?. ~ :8>r sny muon, Sollet hall nol teeelved tllll Buy Baok Op~ NOl!OO, on or belb.16 5:00, 1ooal lime hi DallM!llort Worth, Texas, on tho Declaration Date, th$1 Buyer Shall have waived 1ho Buy Bao!t O,plion and smne aJWl be null avoid. ·

(b) BUYl!R BXRR.CJSBS Tf1B BUY BACK OPTION: If Buyer timely and · properly exeroises the Buy BllCk Oj)llon, tl\on tho following sball apply: (i) Buyer may. nol se11 or OOJtVoy any right, title or interest in and lo tho . Property to any lhinl party unless Sollor broaches ifs oblfgajlon to repurchaao lho Properly pumlllltto lllo Buy Baok Op!lon due to no iim1t of Buyer; 61) Sell61' may C<lll.1l!W!lOO marketing tM Pxoperty' fot sale an May 2, 200!>, and Buyor agrees to fully oooper11to with alt mad<eling effilrts of seller; and (ill) 011 or before Sepfelllber 1, 2009, unless Buyer and Soller apupo11 ml01het s!aled date in wrlling, Buyei' aball wa~ tho Property attil. ~iver full possmloll thereof to S~1!ilr. end Iha Properly *82 shall be in th4samo condition u oxlsted Oil tho ollglnal Closing Dall>, plus any Soll£ approved lmprovemenls, lesa roaso.nabh> wear and tear, withal! mechanlll41, ele<ltrlcal, plumbing and other sy_atems and compOMlll8 In good Wondng order an,d in a ''btoom-olean". eoltdltton. P.tiot' lo 1ho Dectarallon Dalo, tho Buyer can enter into a conmiot lo 1he sell the l"..l'.IJ!)erty and will be enl!tlod lo all pmcteds from euoli Sl!to. Should lite Buyer enfer into a oonttaot lo soil !he p.mpt.rt~ tho :auyB$Ck Option will · lmmecllalely terminate and will no lOll8"f be availmlo 1o Buyol'. n; hOWOV<lr, Buyer timely and properly oleofS to lnvokethe~uy Baok O,p!io11 and tho oloshig of ti» rep~ li!hs place, then Buyer waives. and · rellnquishea ~ and all olah!is the)' may blwe lo any ~s Jh>lll tho aubseqlU:llt aato 0£111& Pmpertyb.y sener. and Duy« shall not be l!db1o !bi aey loss lncutted by Seller flom tho subsequent aale ofthol'!pperly.

1_ l//- ltJi< (e) CASUAL'l'Yi If thol'toperty is ~amaged by fire or othor ossualtytho cost . ~\· :::!;~"l:!=::~~~::tho~:~~Fi== l'Pgelo(f~ "'~ ~~ . . •· ~Sot~~~-l'UK'.OU<O~A~a.:;.;:-v3 .

-

....,.,,~ ·• ···- -··-- .. _ _j. Jftho cost to repair la loss than $100,000, thenBuye.r shall, at Buyer's &0lo cost and~ repair andJC.1tOre the home to il3 prior condllon in orderfbr Buyer to have therlght to eir.erclsetbe MJljJTCM!"' option. Jf Buyer fidJs to 1im.ely andpl'Q,Jl!'tly repair and restdrothe llrop~ prior to Buy Back option~ tlienSell!it.l!lilYtenninate the Buy BsCk Option. BUY.ER"S ~V£M!Wl'$: Belhre commencing conslrucdon, Buyer

2. Will reY:iew •Sellar tho plans and spcclficatlon ll!ld ieaclvo general COJl!!Cllt (CO)IScdt not to be u~ly withbeld;) to proceed with the in!plovemell!& BIJFwill perlodlca\ly(Qn a.retllfollable bssls) update .Seller ~!!~gress and llmelfn-...(!11 completing the impravemems. ·· · tliat Buyer bas therlglit to mab:mlnor cl:ulnges and Seller un . decisions ~tho procci!ls ofeomp.teling1he improvements provlded 1hey .are In the best interest of completlugtlu! improvements in the most loglcal and reasonable lllllllJlCl'. Buyer will also complete the improvements (I) in a good WQr!nnanllke manne,r, free Jiom materlal defects, (ii) in acco!dlll!Ce with all Jaws, ordinances, stalnles, tllles, regulations and any and all restriot!OJJS and oilier matters of record appll~ thereto; lll!d (iii) fteo oflUIY liel)s or claims of any kind or cbaractc;t, l!J1dB~ shall absolutely and 1111COlldilionslly save, defend, or lndemniff ruufrolilibmmlcss Seller 1i'om and against any and all reasonable attomey!11 :fees anddisbursementa attd all damages whlclt may atlse by reason of Buyer's perfurmanee of any work thereto or Buyer's ·:liiilure to do BB required he!eby or the Escrow Agreement (hereinafter defined).

3. *83 4. Doub IDclcok and Vl!A;~ as partners in VSDH Vaquero Vemure Liii.

Bachhereby~piran1y ~s obligations under the Buy Back Option~~ VSDH to Buyer hereunder. In thcevet!t VSDHf1Ws to potfurm~ under tbe leanso:f;the Buy Back OptWn, each of its partners $et :ll:!rllt he.tin abo~ shall be perst1tt•lly responsible, jointly and tieverally, to plll'1Wm the obligations ofVSDH under the Buy Back Option.

Stone Labor - W.all-Off A/C Stone Border Around Front Patio . Stone for Front Patio Gate - Material & Labor 14 Linear Feet in Great Room 1 O Linear Feet in Game Room 2,500 1 () Linear Feet In Caslta 2,500 $ Paint & Stain Unit Addition Other Buyer Option Paint & Stain - Addition & New Cabinets 1092 6,552 Paint - Master 1 Paint- Fo er 1 Paint-FR 1 Paint- Halls Paint - Stairs 1 *84 3000 1,50()

LAW OFFICES OF VAN SHAW ATTORNEYS AT LAW VAN SHAW• JANET R. RANDLE 2723 FAIRMOUNT

DALLAS, TEXAS 75201

'iliiitma•n PARALEGALS • BOARD CERTIFIED IN (214)754-7110

RHOND

CENT

PERSONAL INJURY

FAX NO. (214) 754-7115

LORI G. MOORE

•CERTIFIED PUBLIC www.shawlawoffice.com APRILS. SUMNER ACCOUNTANT County Court at Law No. 1 April 30, 2010 509 Main Street VIA HAND DELIVERY Records Building ---Phone (214/653-7556)--- Dallas, TX 75202 RE: Cause No. CC-09-05232-A;

VSDH Vaquero Venture, Ltd. v. Ken Gross and Betsy Gross Madam: Enclosed via hand delivery is the following: Plaintiff's First-Amended Petition. 1) Please file the same with the Court's records and return a file-marked copy to the undersigned. By copy of this letter, a true and correct copy of the above instrument was this date forwarded to all counsel of record. Thank you for your assistance. Enclos cc: See attached Service List. *85 VS.ltr2Ct.Ans2Cclaim

SERVICE LIST

Mr. R. Brent Cooper FAX (2141712-9540) Ms. Jana Starling Reist =PH (2141712-9500) = COOPER & SCULLY brent.cooper@cooperscully.com 900 Jackson Street, Suite 100 j ana.reist@cooperscull y. com Dallas, Texas 75202

*86 TAB 8 *87 CAUSE NO. CC-09-05232-A VSDH VAQUERO VENTURE, LTD., § Plaintiffs/Counter-Defendant, § § v. § §

KEN GROSS and BETSY GROSS § Defendants/Counter-Plaintiffs, § AT LAW NUMBER I § v. § §

EV AN L. SHAW and DOUGLAS M. §

HICKOK

§ Intervenors/Counter-Defendants. § DALLAS COUNTY, TEXAS §

KEN GROSS' AND BETSY GROSS' SECOND AMENDED COUNTER-CLAIM AGAINST VSDH VAQUERO VENTURE, LTD., EV AN L. SHAW AND DOUGLAS M. HICKOK AND FIRST AMENDED THIRD-PARTY PETITION AGAINST VSDH VAQUERO HOMES, INC. AND VSDH HOMES, INC.

TO THE HONORABLE JUDGE OF SAID COURT:

COMES NOW, Kenneth P. Gross and Betsy L. Gross, Defendants/Counter- Plaintiffs/Third-Party Plaintiffs (collectively referred to as "the Grosses"), and hereby files their Second Amended Petition Against VSDH Vaquero Venture, Ltd., Evan L. Shaw and Douglas M. Hickock (collectively referred to as "Counter-Defendants") and First Amended Third-Party Petition Against VSDH Vaquero Homes, Inc. and VSDH Homes, Inc. (collectively referred to as "Third-Party Defendants"), and for such would respectfully show the Court as follows:

I. DISCOVERY CONTROL PLAN *88 I. The parties have entered into an Agreed Level 3 Discovery Control Plan pursuant to Tex. R. Civ. P. 190.4.

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PARTY PETITION Page 1 D/767482.1

II. PARTIES AND SERVICE 2. Plaintif£'Counter-Defendant VSDH Vaquero Venture, Ltd. is a Texas Limited Partnership who is represented by Evan L. Shaw in this action. 3. Defendant/Counter-Plaintiff/Third-Party Plaintiff Kenneth P. Gross 1s an individual who has appeared in this action and is represented by the undersigned counsel. 4. Defendant/Counter-Plaintiff/Third-Party Plaintiff Betsy L. Gross is an individual who has appeared in this action and is represented by the undersigned counsel. 5. Intervenor/Counter-Defendant Douglas M. Hickok ("Hickok") is a Texas resident who has appeared in this action and is represented by Evan L. Shaw in this action. 6. Intervenor/Counter-Defendant Evan L. Shaw ("Shaw") is a Texas resident who has appeared in this action and who is representing himself in this action. 7. Third-Party Defendant VSDH Vaquero Homes, Inc. 1s a Texas General Partnership whose principal place of business is at 5305 Village Creek, Plano, Texas 75093. It may be served with process by serving its President, Douglas M. Hickok at 5305 Village Creek Drive, Plano, Collin County, Texas 75093.

III. *89 JURISDICTION AND VENUE 9. The subject matter in controversy is within the jurisdiction limits of this Court. The Court has jurisdiction over VSDH Vaquero Homes, Inc. and VSDH Homes, Inc. because they are Texas general partnerships.

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IV. FACTS 11. On or about June 4, 2006, the Grosses entered into a New Home Contract ("Contract"), promulgated by the Texas Real Estate Commission, with Counter-Defendants and Third-Party Defendants for the purchase of 2004 White Wing Cove, Westlake, Texas 76262 ("the Property"), in the amount of $2,851,871.00. (A copy of the Contract has been attached hereto as Exhibit"!," and is incorporate herein by reference for all pertinent purposes).

12. The Grosses purchased the Property at the full listed price of$2,851,871.00, even though the Property had been listed for two years, due to the fact that Counter-Defendants agreed to enter into a "Buy Back Option" with the Grosses.

13. According to paragraph I ("Buy Back Option") of Addendum A of the Contract, VSDH Vaquero Venture, Ltd. granted to the Grosses, as Buyers of the Property, the "the option . . . to put the Property to Seller [VSDH Vaquero Venture, Ltd.] (i.e. require Seller to repurchase the Property for the original "Sales Price" of $2,851,871.00) on September I, 2009, or such earlier date as may be mutually agreed between Buyer and Seller .... " See Addendum A to Exhibit I.

14. Hickok and Shaw are limited partners of VSDH Vaquero Venture, Ltd. and *90 participated and controlled Counter-Defendants and Third-Party Defendants sell of the Property to the Grosses and benefitted from the sell to the Grosses.

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20. In an effort to mitigate their damages and avoid foreclosure of the home, the Grosses sold their home for $2,415,600. *91 v.

DECLARATORY JUDGMENT

21. All factual allegations set forth elsewhere in this petition are incorporated by reference in support of this section.

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22. This is an action for declaratory judgment pursuant to the Texas Declaratory Judgment Act, Ch. 37.001 et. seq. of the TEX. C1v. PRAC. & REM. CODE, for the purpose of determining an actionable and justiciable controversy between the parties, as hereinafter more fully appears. The controversy involves Counter-Defendants' and Third-Party Defendants' duty to perform their obligations arising under the "Buy Back Option," Addendum A, to the Contract.

2. In the event VSDH Vaquero Venture, Ltd. failed to timely buy the Property back from Kenneth P. Gross and Betsy L. Gross, Douglas M. Hickok and Evan L. Shaw were personally responsible, jointly and severally, to buy the Property back on or before September I, 2009 for the original sales price of $2,851,871.00.

VI. BREACH OF CONTRACT 25. All factual allegations set forth elsewhere in this petition are incorporated by reference in support of this section. 26. As stated above, the Grosses entered into a valid and enforceable contract with Counter-Defendants and Third-Party Defendants. See Exhibit I. The Grosses have fulfilled all *92 requirements, statutorily and in accordance with the terms of the Buy Back Option, by delivering written notice to Hickok and Shaw before May 1, 2009 of the Grosses' intent to sell the Property back to Counter-Defendants and Third-Party Defendants. Counter-Defendants and Third-Party Defendants have materially breached the Contract in that they have repudiated the contract and

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PARTY PETITION Page 5

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failed to proceed with the purchase of the Property. Counter-Defendants' and Third-Party Defendants' breach has proximately caused the Grosses' damages.

vu.

FRAUD IN A REAL ESTATE TRANSACTION

28. All factual allegations set forth elsewhere in this petition are incorporated by reference in support of this section. 29. The Grosses will show that Counter-Defendants' and Third-Party Defendants' conduct constitutes fraud in a real estate transaction as defined by Section 27.01 of the TEXAS BUSINESS & COMMERCE CODE. Counter-Defendants' and Third-Party Defendants' made a false representation that they would buy the property back pursuant to the Buy Back Option in order to induce the Grosses to enter into the Contract. The Grosses entered into the Contract and purchased the Property at the full listed price of $2,851,871.00, even though the Property had been listed for two years, due to the fact that Counter-Defendants and Third-Party Defendants made the false representation that they would buy the property back pursuant to the "Buy Back Option." The Grosses' reliance directly and proximately caused them substantial injury, as set *93 out above, for which they seek appropriate judicial relief.

A. Attorneys' Fees 30. The Grosses have retained the law firm of Cooper & Scully, P.C. to represent

them in this action and have agreed to pay the firm reasonable and necessary attorneys' fees.

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PARTY PETITION Page 6

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31. The Grosses are entitled to recover reasonable and necessary attorney fees that are equitable and just under TEXAS CIVIL PRACTICE & REMEDIES CODE§ 38.001 because it is a suit for breach of a written contract, and under TEXAS BUSINESS & COMMERCE CODE §27.0l(e) because this is an suit for statutory fraud. All conditions precedent to the collection of attorneys' fees have been satisfied.

B. Conditions Precedent 32. All conditions precedent to the Grosses claims for relief have been performed or

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Respectfully submitted, COOPER & SCULLY, P.C.

R.

St e Bar No. 04783250

JANA STARLING REIST

State Bar No. 24056890

Founders Square 900 Jackson Street, Suite 100 Dallas, Texas 75202 Telephone: (214) 712-9500 Facsimile: (214) 712-9540 ATTORNEYS FOR DEFENDANTS KEN GROSS AND BETSY GROSS

CERTIFICATE OF SERVICE

The undersigned certifies that a true and correct copy of the foregoing document was forwarded to all counsel of record herein, on this the 2ND day of June 2010 as follows: Evan Lane (Van) Shaw (via facsimile and CMRRR) Law Offices of Van Shaw 2723 Fairmount Street Dallas, Texas 75201 Attorney for Counter-Defendants

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*95 PARTY PETITION Page 8

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... } PROMULGATED BY THE TEXAS REAL ES\ATE COMMISSION (TREC) 02-13.06

. NEW HOME CONTRACT

(Completed Constmctf~n) · NOTICE: Not For Uoe for CondomlofumTransactrons or CIO!ilr\gll Ptlcr to Cornpf2Uon ofConstrucUon 1~ PARTIES: VSDH Yf!lqtliti> venture I.td (Seller) agreeslosellandconveytoRennat:h P. Gross and Betsy L. Gross - - - - - - (Buyer) and Buyer agrees to bey from Seller tho Property described below.

2. PROPERTY: Lot ^[11] , Block , Vaquero )lesidentia.1 Aqd!Uon, Clly of , Texas, known as !Iest1ake , Counly of !farrent ^[2004] !!bite Wing Cova 7§2€2 (addressfZip code), aras described on attached exhibit, together with: (Q Improvements, fixtures and all other property focafe\i thereon; and Qi) all rights, privileges and appurtenances !hereto, fncfadlng but not llmlfed to: permits, easemenls, and ccoperafive and association memberships. NI property sold by !his cont-aot Is called the "Property''. 17 '· q ,.. ~ 0 ^[0] 0

3. SALES PRIG!:: "l.j~ •1° ' z ,851 871. OO· A. Cash portion of Sales Prloepayable by Buyer at closing ................................................. $ 8. Sam of all financing descdbed below (excluding any loan funding ree> .

V'

~ or morrgage lnsuranoe premium) ............................... , ................. ,................................... W ^[1] 7 (,, <\.> .,..., .., ~ . . . $ • • . O. Sales Price (Sum of A and B) ........................................................................................... $ g , a!U ,en . Mr 4. FINANCING: The portlon of Sales Prtoe not payable in cash will be paid as folfows; (Check appficable boxes ~loW) O A. THIRD PARTY FINANCING: One or more third· party mortgage loans in the toial amount ·of $ (excluding any loan funding fee or mortgage Insurance premium). (1) Property 'Approval: If the Property does not satisfy the lenders' underwriting requirements for lite loan(s),

this contract wm termlnate and the eamest money will be refunded to Buyer. (2) Flnanolng Approval: (Check one box only) . · . · D (a) This contract Is subject to Buyer being approved for the financing dascrlbed In the attached Third Party Financing Condltlon Addendum. O {b)Thfs contract Is not subject to Buyer being approved For financing and does. not Involve FHA or VA financing. D 8. ASSUMPTION: The ilSSUmptlon of the unpaid principal balance of one or more proin!ssory no\es described In the attached TREC Loan Assumption Addendum. · O c. SEl.LER FINANCING: A promissory note flom Bayer to Seller of$ . , secured by vendots and deed of trust liens, and containing the terms and ocndltlons descdbed In the a!lached IBEC Seller Financing Addendum. ff an owner policy of Ufta Insurance rs furnished, Buyer shaU fUrnlsh Seller wlih a mortgagee policy of ttfie Insurance. "' ...

e. !:At!NEST MONE:Y: Upon execuUon of this contract by bolh parties, Buyer shall deposit .$-SO« ooo: ·o.o · ' as earnest money with Chioacro IJ!i f.le Comoanv , as escrow agen~ at 6688 'N, Cantra,l #560. Dallas. TX 75206 (address). Buyer shaU.deposit additional earnest money of$ with ascrow agent within .,,.--- days after the.effective date of this contract. If Buyer falls to daposlt the earnest money as required by this contract, Buyerwlll be In deiault

$, TITLE POLICY AND SURVEY: A..TITLE:POUCY: Seller shalt tumlsh to Buyer a! fiil Seller's I:I Buyer's .expense· an owner··pallcy·of.iltle .. Insurance (Tiiie Palley) issued by ~Ch~i~o~a.,a;,,a,_...~~it~l~e~C.,om.,,p,.a~n"'y'-----=---~~--- - - - - - - - - - - - - - - - - - - - - - - - - (Tiiie Company) In the amoantof Iha· Sales Prtoe, dated at or after closliig, Insulins Buyer against loss under the provisions of the 11!\e Policy, subject to !he promulgated exclusions Qnc!udlng exisUng building and zoning ordinances) and the following exceplfons: · . (1) Res!rlcUve covenants common to the plaited subdivision In Which the Property !s locatad. (2) The etanderd prtnted excepllon for standby fees, taxes and asoessments.

.•' (3) · Liens created as pa it of the financing deserlbed lh Paragraph 4. (4) Ullllty easements oreatad by lha dedication aeed or plat of Iha subdivision ln which the Property ls located. *96 (6) Reser\laJlons or excepllons otherwfse·penn!Hed by this contract or as may be approved by Buyer In wrltlng. ($) The standard printed exception as to marifal rights. (7) The standard printed exception as to waters, tidelands, beaches, streams, and related matters. (8) The standard pnnted ·exception as to' discrepancies, oonfjiots, shortages In area or boundary Unee, .

encroachments or protrusions.- or averlappln,g Improvements. Buyer, at Buyer's expense, may have !he exception amended to read, 'shortages In area".

. B. COMMITMENT: Wilhln 20 d a ~r the Title Company receives a copy of !his contrao~ Seller shall furnish to B er a commitment tor tit uran Comml!menf an er's ex ense, I Ible co es of restrlotive

EXHIBIT

I ... J-

I

2004 White Wing Cove Contract Concernfng ________ ~w~e~•~t,_l~a~k~e~T'C'X"-~7~6~2~6~2~-------- Page 2 of 9 02-13·06 {Address of Property) covenants and documents evidencing exceptions fn the Commitment (Exception Documents) other than the standard prtnted exceptions. Seller authorizes the Titfe Company to deliver the Commitment and Exception Documents to Buyer at Buyer's address shown fn Paragraph 21. If the Commitment and Exception Documents are not delivered to Buyer within the speclfled time, the time for delivery will be automaticalfy extended up to 15 days or the Closing Date, whichever Is earlier. ·

C. SURVEY: The suNey must be made by a registered professional land surveyor acceptable to the TI!le Company and any fender. (Check one box only) fill (1) Wrthln ^[7] days after the effective date of !his contrac~ Seller shall furnish to Buyer

and Title Company Seller's existing survey of the Property and a Residential Real Property Affidavit promulgated by the Texas Department of Insurance (Affidavii). ff the existing suNey or Affidavit Is not acceptable to Title Company or Buyer's lender, Buyer snail obtain a new survey at D Seller's !XI Buyer's expense no later then 3 days prior to Closing Date, If Seller falls to furnish the existing survey or A.."fldavit within the time prescribed, Buyer shall obtain a new suNey at Seller's expense no later than 3 days prior· to Closing Date.

D (2) Within days after the effective date of this contract, Buyer shall obtain a new survey at Buyer's e~ense. Buyer is deemed to receive the survey on the date of actual receipt or the date specified in this paragraph, whichever Is earlier.

0 (3) Within days after the effective date of this contract, Seller, at Seller's expense, shall furnish a new survey to Buyer. D. OBJECTIONS: Buyer may object in wliting to defects, exceptions, or encumbrances to title: disclosed on the survey other than items 6A(1) through (7) above; disclosed In the Commitment other than items 6A(1) through (8) above; or which prohibit the following use or ac t i v i ty : - - - - - - - - - - - - - - - - - - Buyer must object not later than (i) the Closing Pate or (ii) ^[7] days after Buyer receives the Commitment, Exception Documents, and the survey, whfchever is earlier. Buyer's failure to object within the time allowed will constitute a waiver of Buyer's right to object; except that the requirements In Schedule C of the Commitment are not waived. Provided Seller fs not obligated to incur any expense, Seifer shall cure ihe timely objections of Buyer or any third party lender within 15 days attar Seller receives the objections and the Closing Date will be extended as necessary. If objections are not cured within such 15 day period, this contract will termtnate and the earnest money will be refUnded to Buyer unless !luyerwalves the objections.

E. TITLE NOTICES:

(1)ABSTRACT OR TITLE POLICY: Broker advises Buyer to have an abstract of title covering the Property examined by an attorney of Buyer's selection, or Buyer should be furnished with or obtain a Title Polley. If a Tltle Policy Is furnished, the Commitment should be promptly reviewed by an attorney of Buyer's choice due to the time limitations on Buyer's right to object.

(2) MANDATORY OWNERS' ASSOCIATION MEMBERSHIP: The Property fill ls 0 Is not subject to mandatory membership fn an owners' association. If the Property ls subject to mandatory membership fn an owners' association, Seller notifies Buyer under §5.012, Texas Property Code, that, as a punchaser of property In the residential community In which the Property is located, you are obligated to be a member of the owners' association. Restrictive covenants governing the use and occupancy of the PropeJ1¥ and a dedicatory instrument governing the establishment, maintenance, and operation of this rasfden!Jal community have been or will be reconded in the Real Property Reocrds of the county in which the Property is located. Coples of the restrictive covenants and dedicatory instrument may be obtained from the ocunty clerk. You are obffgated lo pay assessments to the owners' association. The amount of the assessments Is subject to change. Your failure to pay the assessments could result In a lien on and !ha foreclosure of the Property. If Buyer Is concerned about these matiers, the TREC promulgated Addendum for Property Subject to Mandatory Membership In an Owner's Association should be used.

(3) STATUTORY TAX DISTRICTS: If the Property Is situated In a utility or other statutorily created dlslrtct providing water, sewer, drainage, or flood control facilities and services, Chapter 49, Texas Water Code, requires Seller to deliver and Buyer to sign the statutory notice relating to the tax rate, bonded indebtedness, or standby fee of the dist net prior to final execution of this contract.

· (4) TIDE WATERS: ff the Property abuts the tidally lnfiuenced waters of the state, §33.135, Texas Natural Resources Code, requires a notice regarding coastai area property to be Included in the contract. An *97 addendum containing the notice promulgated by TREC or required by the parties must be used.

(5)ANNEXATION: If the Property Is located outside the limits of a munlclpalfly, Seller notifies Buyer under §6,011, Texas Property Code, that the Property may now or later be included In the extraterritorial jurlsdicllon of a municipality and may now or later be subject to annexation by the municipality. Each municipality malntalns a map that depicts Its boundaries and extraterritorial Jurisdiction. To determine if the Property is located within a municipality's extraterrltorlal jurisdlclion or Is flkely to be located within a municipality's extralerr!torial jurtsdfctlon, contact all municlpalltles located in the general proximity of the Property ior further Information.

. ru Initialed for identification by Buye~ k'?. and Seller TREC NO. 24·6 . (TAR·1604) 2·13·06 l I Page2 of9 VSDH Vaqueio y Produc:ettwlllt Zlpfoimm by RC: FormsNe~ LLC 1B02.5 Fln.een Mlle Road, OHnton Township, Michigan 48036 wuwz!pform.com ·. ; ____ . __ _ 2004 White Wing Cove Westlake, TX 76262 Conlracf Concernfng Pag&3of9 02-13·06 (Address oiProperty) (6) PROPERTY LOCATED IN A CERTfFICATED SEf<VICE AREA OF A UTILITY SERVICE PROVIDER: Notice required by §13.257, Water Code: The resl property, described Jn Paragraph 2, !hat you are about to purchase may be located in a certificated water or sewer service area, which Is autholized by law tortl';rovlda water or sewer service to the fsroperties in the certificated area. If dour progerty Is located in a ce ·floated area there may be special cos s or charges that you will be re~ulre lo pay efore you can receive water or sewer service. There may be a period required to construct Ines or other faclllties necessary to provide water or sewer service io your property. You are advised to determine If the prope:;\I'. Is In a certificated area and contact !he utllf~ service provider to determine the cost that you Wiil be require to pay and the perlodb If to Jiiovide water or sewer service to your property. The undersigned Buyer here y· ank, that Is require ac nowledges receipt of e foregoing notice at or before !he execution of a binding contract ior !he punchase

· of the real property described in Paragrafih 2 or at closing of purchase of the real pro&erty. · (7) PUBLIC IMPROVEMENT DISTRICTS: f the Property Is In a pUbllc improvement isirict, §5.014, Property

Code, requires Seller to noiify Buyer as follows: As a purchaser of this parcel of real prog,erty you are obli?rated lo pay an assessment to a munlclpallly or couniy for an improvement project un ertaken by a pub le Improvement district under Chapter 372, Local Government Code. The assessment may b.e due .annually or In periodic Installments. More Information concemlng the amount of the assessment and the due dates of that assessment may t)e obtained from the municipalily or counly levying the assessment The amount of the assessments is subject to change. Your failure to pay the assessments could result in a lien on and the foreclosure of your property.

7. PROPERTY CONDITION:

A ACCESS, INSPECTIONS AND UTILITIES: Seller shall permit Buyer and Buyer's agents access to the Property at reafonable times. Buyer m"& have the Property insr.ected by lns~ec!ors selected by Buyer and licensed by TREC or otherwlse permitted y law to make lnspeci ens. Seller s all pay for turning on exisUng utlli!les for inspections. · B. ACCEPTANCE OF PROPERTY CONDITfON: Buyer accepts the Property In its present condition; provided Seller, at Seller's expense, shall complete the following specific repairs and treatments; and make the following improvements:All items written on in@eoti.on re};'!ort as ;non-functional: s~ller wil.l .reoair.. C, WARRANTIES: Except as expressly set forth In this contract, a separate writing, or provided by law, Seller makes no other express warranties. Seller shall assign to Buyer at closing all assignable manufacturer warranties.

D. INSULATION: As re~ulred by Federal Trade Commission Regulatfons, ihe Information relating to tha Insulation Installed or to be insta led in the Improvements at the Property Is: (oheck only one box below) 0 11) as shown in the attached specifications. 0 2) as follows: ·

a) Exterior walls of Improved living areas: Insulated with · . Insulation to a thickness of

inches which yields an R-Value of b) Walls In other areas of the home: Insulated with Insulation to a thickness of Jnches whfch yields an R-Value of c} Ceilings in Improved living areas: Insulated with

lnsulatlon to a ihlckness of · Inches which yields an R-Value of . d) Floors of Improved !lving areas not applied to a slab foundation: insulated with insulation to a thickness of Inches which yields an R-Value of e) Other Insulated areas: insulated with insulation to a thickness of Inches which yields an R-Value of All stated R-Values are based on Information provided by the manufacturer of the Insulation. E. LENDER REQUIRED REPAIRS AND TREATMENTS: Unless othelWlse agreed In writing, neither party is obllgated to pay for lender required repairs, which includes treatment for wood destroying insects. If the parties do not agree to pay for the lender required rer,alrs or treatments, !his contract will tennlnate ·and the earnest money will be refunded to suy,er. If !he cost of ender required repairs and treatments exceeds 5% of the Sales Price, Buyer may terminate th s contract and the earnest money wlll be refunded to Buyer.

*98 F. COMPLETION OF REPAIRS, TREATMENTS, AND IMPROVEMENTS: Unless otherwise agreed in writing, Seller shalf complete all agreed repairs, treatments, and improvements (Work) prior to the Closing Date. All required pennlts must be obtained, and Work must be performed by p~rsons who ars licensed or otherwise authorized by law to provide such Work. At Buyer's election, any transferable warranties received by Seller with respect to the Work wlll be transierred lo Buyer at Buyer's expense. If Seller fails to completa any agreed Work prior to the Closing Date, Buyer may do sa and recelve reimbursement from Seller at closing. The Closing Date will be extended up to 15 days, If necessary, lo oomplete Work.

,,/

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Initialed for ldentlflcaUon by BuyeY vv -· (_,/ I ' - and Seller .......

TR[::C NO. 24-6

(TAR-1604) 2·13-06 • Page 3 of9 ProdUC:$i;I wllll ZlpFormN by RE rormsNet, LLO 18025 Fifteen Mije Road, C!Jnlon Township, Mtchfgan4BD36 wy.w~loform.e-om VSDH Vequcro V (_.; __ :,.. ______ ,___ __ . 2004 Whita Wing Cove ContractConcarning Westlake, TX 76262 Pag-a4of9 02-13-06 (Address of Property) G .. ENVIRONMENTAL MAITERS: Buyer is advised that the presence of wetlands, toxic substances, fncludlng asbestos and wastes or other environmental hazards or the presence of a threatened or endangered species or its habitat may affect Buyer's intended use of the Properly. If Buyer is concerned about tbese matters, an addendum promulgated by TREC or required by. lhe parties should be used.

H. SELLER'S DISCLOSURE: Except as otherwise disclosed In this contract, Setler has no knowledge of the following: (1) any flooding of the Proper!Y which has had a material adverse effect on the use of the Properly; (2) any pending or threatened litigation, condemnation, or special assessment affecting the Properly; (3) any environmental hazards or conditions matertally affecting the Property; [4) any dumpsite, landfill, or underground tanks or containers now or· previously located on the Property; (5) any wetlands, as defined by federal or slate law or regulation, affecting the Property; or (6) any threatened or endangered species or their habitat affecting the Property.

I. RESIDENTIAL SERVICE CONTRACTS: Buyer may purchase a residential service contract from a residential service company licensed by TREC. if Buyer purchases a residentlal service contract, Seller shall reimburse Buyer at· closing fOr ·the cost of the residential service contract in an amount not exceeding $ . Buyer should review any resldenttal service contract for the scope of coverage, exclusions and limitalions. The purchase of a restclentlal service contract ls opt!onal. Similar coverage may be purchased from various companies authorized to do business In Texas.

8. BROKERS' FEES: All obligations of the parties for payment of brokera' fees are contalnad In separate written agreements. 9, CLOSING: A. The closing of the sale will be on or before , or within ^[7] days after June ^[12] , 2007 objections made under Paragraph 6D have been cured or waived, whichever date is later (Closing Date). If etther party fails to close the sala by the Closing Date, the non-defaulting party may exercise the remedies contained in Paragrapl> 15.

B. At closing: (1) Seller shall execute and deliver a general warranty deed conveying title to the Property to Buyer and showing no additional exceptions to those permitled in .Paragraph 6 and furnish tax statements or certificates showing no delinquent taxes on the Property.

(2) Buyer shall pay the Sales Price In good funds accep)able to the escrow agent. (3) Seller and Buyer shall execute and deliver any nolices, statements, certiftca!as, affidavits, releases, loan

documents and ofi\er documents required of them by this contract, the Commitment or law necessary for the closing of the sale and the issuance of the TI!le Policy.

C. Unless expressly prohibited by written agreement, Seller may continue to show !he Property and receive, negotiate and accept back up offers. · D. All GOVenants, representations and warranties in this contract survive closing. 10. POSSESSION: Seller shall deliver to Buyer possession of the Properly in its present or required condition, ordfnary wear and tear excepted; llil upon closing and funding D according to a temporary residential lease form promulgated by T~EC or other written lease required by the parties. Any possession by Buyer prior lo closing or by Seller after closing which ls not authorized by a written lease will establish a tenancy at sufferance relationship between the parties. Consult your insurance agent prror to change of ownership and possession because insurance coverage may be limited or terminated. The absence of a written lease or appropriate insurance coverage may expose the parties to economic loss.

11. SPECIAL PROVISIONS: (Insert only factual statements and business details applicable lo the sale. TREC rules prohibit licensees from adding factual statements or business details for which a contract addendum, lease or other form has been promulgated by TREC for mandatory use.)

*99 -k) See Addendum ^[11] A ^[11] and Addendum ^[11] B ^[11] t!.) Vof--v•Ji:<Lcl,~ A~,,J1'.;:,. ~.::d.. ~~; ..... , fl'e. B'-'\'"-~ ~i.s\--/l-t.me_cy

,u.._ +cl_,.h\,._ ,,_\- -S:toi>P""- f--""''1'1 ;...._ ~J \f°k,<- lf, 2-<)•1 . . {<. . / "*'''-· __ _

Initialed for ldenUfication by Buyer,'l""H'..l;/""'--- /<r:;... and Seller TREC NO. 24·6 (TAR-1604) 2-13-06 Page4 of 9

I

Prod"Ucedwtn:i ZlpFonnnrby RE Fonn~el, [.LC 16025 Fifteen MUa RQad, CTinlal TOYmshlp, MlchJgan 46035 \WJW..Zk1form com . VSDHVeqnero V ! . ; 2004 White Wing Cove

c~ntrac( Concernfng __ __ __ __ ~W~e~•~t"Ol-ca;ck~e~,,,T~X'-:7"""62~6~2~-------- Pages Of 9 02·13-06 •.·, .... · (Address of Property) 12, SETTLEMENT AND OTHER EXPENSES: A. The following expenses must be paid at or prtor\o closing: . (1) Expenses payable by Seller (Seller's Expenses): (a) Releases of ex!stlng liens, Including prepayment penalties and recording fees; ·release of Seller's J.oan liabifily; tax statements or certificates; preparation of deed; one-half of escrow fee; and other expenses payable by Seifer under this contract,

(b) Seller shall also pay an amount not to exceed$ - o- lo ba applied In the following order: Buyer's Expenses which Buyer Js prohibited from paying by FHA, VA, Texas Veterans Housing Assistance Program or other governmental loan programs, and then to other Buyer's Expenses as allowed by the lender.

(2) Expenses payable by Buyer (Buyer's Expenses): (a) Loan origination, disc0unl, buy-down, and commitment fees (Loan Fees). (b) Appralsal fees; loan application fees; credit reports; preparation. of loan documents; Interest on the notes

from date of disbursement to one month prior to dates of first monthly payments; recording fees; ocpfes of easements and restrlctlons; mortgagee title policy with endorsements required by fender; loan-related Inspection fees; photos; amortization schedules; one-half of escrow fee; all prepaid Items, Including required premiums for flood and hazard Insurance, reserve deposits for Insurance, ad valorem taxes and special governmental assessments; final compliance Inspection; courier fee; repair Inspection; underwrltlng fee; wire transfer fee; expenses Incident to any loan; and other expenses payable by Buyer under this eontracl ·

B. Buyer shall pay Private Mortgage Insurance Premium (PM!}, VA loan Funding Fee, or FHA Mortgage Insurance Premium (MIP) as required by the lender. · C. If any expense exceeds an amount expressly stated In thiS contract for such expense to be paid by a party, that party may terminate this contract unless the other party agrees to pay such excess. Buyer may not pay charges and fees expressly prohibited by FHA, VA, Texas Veterans Housing Assistance Program or other governmental Joan program regulations.

13. pRORATIONS AND ROLLBACK TAXES: A. PRORATION$: Taxes for the current year, maintenance fees, assessments, dues and rents will be prorated through the Closing Date. The tax proration may be calculated taking Into consideratlon any change In exemptions that will affect the current year's taxes. If taxes for the current year vary from the amount prorated at closing, the parties shall adjust the prorations when tax statements for the current year are available. If taxes are not paid at or prior to closing, Buyer wlJI be obligated to pay taxes for the current year.

B. ROLLBACK TAXES: If Sellers change In use of the Property prior to closfng or·denlal of a special use valuation .on the Property results Jn additional taxes, penalties or Interest (Assessments} for periods prior to closing, the Assessments wRI be the obfigatlon of Seller. Obligations imposed by this paragraph will survive closing.

14. CASUALTY LOSS: If any part of the Property ls damaged or destroyed by fire or other casualty after the effective date of this contract, Seller shall restore !be Property. to its previous condition.as. soon as reasonably posslble.--l>l!f~R · any .even! by the-Closing Date;-Jf-SeJJer falls· to do so due to factors beyond Sel!el's-control, Buyer may.-Ea)- ,. ;. ,. i . terminate this contract and the·earnest· money-wm be refunded to Suyer-(llj-el<tend· the time .. for·performanc~p.to · 1.5. days .and the Clo~Jng Date wJJJ be·~tended as necessary-or~ accept the Property Jn its damaged condition with · an assignment of Insurance proceeds and receive credit from Sellar at closing In the amount of the deductible under th.e Insurance policy. Sellers obligations under this paragraph are independent of any other obligations of Seller under this contract.

15. DEFAULT: If Buyer falls to comply with this contract Buyer wm be in default, and Seller may {a) etiforce specific . performance, seek such other relief as may be provided by law, or both, or (b) terminate this contract and receive 1-s ^[1] *100 ,;ofe. <><'lk the earnest money as liquidated damages, !hereby releasing both parties from this contract , beyond Sellers control, Seller fails within the time allowed to m

e ver 'the ~~(~· e may a extend the time for performance up to 16 days and the · · j1t0ii(~~ Commitment, or survey, If re , Closing D extended as necessary or (b) terminate this contract as the .safe remedy and receive the ·

• If Seller fails to comply with this contract for any ot.~~r.reason, ~eller wlll .. be In default and Buyer (a) .enforce speclflc perfo.JT!lance, aeelt e!ieR aUier wlief aq ffl~®).d:f0~.¥~;~-El e; leu, .er both, or (b) terrnfnata ntract and receive the earnest money, thereb releasln both· a1,ue&.uum this contract.

16. Ml;ODIATION: It Is the po cyri e e of Texas to enoourage'reiiolutlori of disputes through alternative dispute resolution procedures such as mediation. Stib)eot to appllcable Jaw, an dispute between Seifer and Buyer related to this contract which Is not resolved through lnfOrmal discussion 'will D will not be submitted to a mutually acceptable mediation service or provider. The parties to the med' Ion shall bear the mediation casts equally. This ara ra h does not reclude fro seekin e uitable rell om a court of com etent urtsdlctlon. .?. and Seller

· · fnitliired for ldentlfioatlori by Buyer ·. TREC NO. 24-ti (TAR-1604) 2-13-06 Page 5 of$ -·-····•··--'- 2004 White Wing Cove Westlake, TX: 76262 P"lJo6of9 02-13-06 Contract Concerning (Address of Property) 17 •. ATTORNEY'S FEES: The prevalllng party In any legal proceeding related to this contract is enttued to recover reasonable attorney's fees and all costs of such proceeding Incurred by the prevailing party, 18. ESCROW: A. ESCROW: The escrow agent Is not (i) a party lo this contract and does not have liability for the peJformance or nonperformance of any party to this contract, (ii) liable ior lniarest on the earnest money and 011) liable for the loss of any earnest money caused by the failure of any ftnancial institution Jn which the earnest money has been deposited unless the financial Institution is acting as escrow agenl _

B. EXPENSES: At closing, the earnest money must be applied first to any cash down payment, then to Buyefs Expenses and any excess refunded to Buyer. If no closing occurs, escrow agent rnay require payment of unpaid expenses Incurred on behalf of the parties and a written release of liability of escrow agent from all parties.

C, DEMAND: Upon termination of this contract, either party or the escrow agent may send a release oi earnest m 0 ney to each party and the parties shall execute counterparts of the release and deliver same to the escrow agenl If either party falls to execute the release, eJtf)er party may make a written demand to !he escrow agent for the earnest money. If only one party makes wrttten demand for the earnest money, escrow agent'shall promptly provide a copy of the demand to the other party. If escrow agent does no! receive written objection to the demand from the other party Within 15 days, escrow agent may disburse the earnest money to the party making demand reduced by the amount of unpaid expenses Incurred on behalf of the party receiving the earnest money and escrow agent may pay the same to the creditors. If escrow agent complies with the provisions of this paragraph, each party hereby releases escrow agent from all adverse claims related to the disbursal of the earnest money.

D. DAMAGES: Any party who wrongfully fails or refuses to sign a release acceptable to the escrow agent within ^[7] days of receipt of the request will be liable to the other party for liquidated damages of three times the amount of the earnest money.

E, NOTICES: Escrow agent's notices will be eifectlve when sent ln compliance with Paragraph 21. Notice of objection to thil demand wlll be deemed eifeotlve upon receipt by escrow agent. 19; REPRESENTATIONS: Seller represents that as of the Closing Date there Will be no liens, assessments, or security Interests against the Property which will not be satisfied out of the sales proceeds. If any representation of Seller in this contract Is untJUe on the Closing Date, Seller Wiii be In default.

;· 20. FEDERAL TAX REQUIREMENTS: If Seller is a '~oreign person,' as defined by applicable law, or if Seller fails to deliver an af(ldavlt to Buyer that Seller Is not a "foreign person,' then Buyer shall withhold from· the sales proceeds an amount sufficient to comply with applicable tax raw and deliver !he same to the Internal Revenue Service together with appropriate tax fonns. Internal Revenue Service regulations require filing written reports If currency In excess of speciffed amounts is received in the transaction.

21, NOTICES: All notices from one party to the other must be in writing and are effective when malled to, hand-delivered a~ or transmitted. by facsimile or electronic transmission as.follows: To Buyer To Seller a.. .

at: " 5305 Vil1aae Creek 1-430 Eagle Bend Drive Southlake. TX 76092 Plano. TX 75093 *101 Telephone: (817) 421-4B34 Telephone: 1972) 732-1155 Facsimile: ____________ _ Facslmlle: "IJi..-'12><--ltlt<l\J.

E-mail: ll1c.-\'-o\::> i'l"ti-t:'\"'i~s rol.lf'" iJJ- - E-malc --------~----- / /, 1./) Initialed for identification by Buys,.. "' ~ J\ ' - and Seller TREC NO. 24-6 ^[11] '- . (TAR-1604) 2-13-06 V- I ' Page6 oi9 Produced\'/!~ ZlpForm?' by ~E Fo~Ne~ LtC 18025 Fifteen Mlle Road, Clinton Township, Mlch!Qan 46035 WWW zrori;irm.com YSPHV11qtr:ro V ------------------- - - - - - - - - - - - - - - - 2004 White Wing Covs 1!'Qll:!J.l&t' ~ '1§'.2~" P•ga ^[7] ot~ 02-1$.0ll Coi:Jb"liicn Coneeittrlng (Ad6- of Pl'Opotly) :22.. AGREEMENT OF PARTIES: This contract conl9fns the entire sgteament of !ha ~ and caru10t be cllanged EOO;ept by thefrwrilten agreement Addenda which are a part of tllle contrai;:t ere (check all appllcabfe boms): Cl Third Pa11y Flnanclng Cort<:!Hlon AddBlldum 0 Addendum for "Bac1'-lJp• Conb:ao! 0 Environmental Assas$)'11ent, Throatenec! or 0 Setter Aoanclng Addendum

Eodangerecr Speclllll and Wethmds AMendum

0 Addendum ror Coastal Area Property 0 Aaden(!um toe Properly SubJact lo Mal'ldatory Membarshlp In an Owners' Assoc!llllon Cl Addendum ~Property Located Seawrd of

0 Buyer's Tempor;iry Residenllal Lease 1he Gutf lnltacoas!al WS.tet'i'/ay 11!1 Other Qlst): ad:d§tlldwtt. ~r~q ~ 0 Addendum for Sale ot Other Properly by Mdendrnn n1,1u ~ar 23. TCRMlf'IATION OPTION: For nominal con,:;erallon. the receipt of which Is h&reby aekr'lowledgad b'j SeKer, and this conlrac~ f7F grants Buyer the unreslrlc:ted right !o termlna1e this contract by glvlng noUce of leimlnatlon !O N l'l-' Buyets agreeme11t !O pay Seiter$ {Opllon Fee) within 2 days after the etreot!<e date or Seller within dey:s at!ar th& effective d;i.te of this contra cl. II no dolls»" an\Ount ls '11atecl as the Opllon Fee II-- or If Buyer fulls lo pay the Option Fee within tho tkna prescr!bed, this paragraph wtlI not be a part Of 1hls conlteCt end Buyer shaD not hav& tho unres.trlcted right to terminate 1hls contract If Buyer gives nob of iermlnal!Qn within the time pra5eribed, Iha Opl!on Fee wUI not be refunded; however, any. earnest money will be ref\lnded lo Buyer. The Option Fee 0 'W1IJ 0 wm nat bi'I cn>di!ed to lhe Sales Prlos al closing. l'trrut Is of Ille -nee for this paragrapl!i all([ strict compliance wttb tbs time for porf'Qrmance Is required. .

24. CONSUL! AN ATTORNEY: Real e&a.re licensees cannot give legal advl6e.. REAO THIS OONTRACT CAREFUi.LY. If you d~ not under"S-tand ttis effect Of il11s" contraot.. consult an attotney BEFORE; signing. Buyer's =~yls: lut\0;e,l Jt(i+,..-e) £.-b,J~)

f1#CI(

'2 l~N1£. ft:.-M nA/ Attorney ts: ' G.t.TI JJ. Ce.."\-«..\ '4i'w'\·J <>....... 5,- OA-llltr 1 1'>'- 1.n.of.. Telephone: 7-l 'f '·"1 ?.. <i - 0 t. 4 (,. Telephone: 8/7- :f<it -t.J'I/ .t1't-l~<j-l)ft o'i' Facslmif<i: *102 FaCShnlle: E-man: Asf-vt..J J «.,:R..._....i • c.a .,.,.__

E-mail:

/ .. !'JA - ~--Ki•_,,,,,.. J< f- and SeUE>r i\'> lnl!laled 1tir fd&rrtltlcaUon by Buyer . TREC NO. 24-6 ' I {TAR-1604) 2-13-0S Paoe7of9 , ~~ %Igf'.Q~~b)' ltl! 1Cltllif'.l~t, t.LC1a.'»:5 A.llMn Mt~ R,otd, cnnf.oft 'lbwmnfp. M!Ohfpin ~& 'tNN(tleforn'f Com . • · .• VS!>B Ytqut® V

SSQJE)

f' --~~~~·-- 2004 White W~n~ c"""' C..,,..,.Con_ H'•&:tla ks:I , ~3 2 62: ii2 P"40 8of9 ~2-1J.4lll (Mdto .. of Ptoporl)') day of (eFFECTIVJ: DATE). EXECUIEO Ute ' {BROKER: FILL lN THE DATI! OF FINAL ACOEPTANcg.) -·· . Tllfa co11tt.act ls subject to Chapb!r 27 Of the BuyM~~ Te><a• Property Code. The provisions of that chapter may affact )'l)Ur rtsht to recover damages arislns from the perfOrmance Of this conlracl ti yoo have a complal~t eoncern!ng a

-~ constroctlon de mt arislllg from tfte pet'fo.rmanoe of th!$ CQntraot and that defect has not Ileen cor<ected through normal wammty 6$1\'IQ&, you must provide the notice requited 'IT/ Chapter Zf of the Texas ?roper!)' Code to the contractor by ces1lfled maD, return n!CSlpt T!!quested, not later

--'If

than the 60llt ~ before t~e dale you file suJt ta recover damages In a coUrt of laW or lnldate arbttrallon. The nQtlca mwt refer to Chaplet 27 Sellar VEDH v.._quero ~tu,,., Ltd.

'(-s.~lt ~~&P. of tile 'l"exas Property Code and must deSOl!b<> tile construotlon ~ .rt requested b>' 6"' contC<ICICT, Y01.I must pn>vide the cot1'!tllctor, an opportunf!y to Inspect and cure the defeot !IS prOYlded U'f Seclfon 27.004 of the Texas Seifer Property Code.

- *103 Tha l\mn of thlo c:on!raot has b~ spprmred by Iha Texllll fCesl Estate Co!n""4slon. mec {orll'IS "°' ltl!ended for""" only by trafl1(ld rear OSlafa Pcenaees. No n!p1'!sanlall<>n ls mod& aa to Ille log$f \l.$lldlty 111' adequacy of 8f'/ provJsron rn any apeelfto ' tmnsso!IOl'Je._lt f$ not !nmded foreompl"" tmnsactlonL T~ Reale.tote Comm~lon. P.O. Box 121sa, Auslln, 1X 78711-2188. Hl()().,250.8732 or (612) ~ (h1lp!l/www.1tao.ota!e.IX.U•) TRIOC NO. 24-S. This form replacM TReC NO. 24-5 • ..

TREC NO. 24-6

. Page8ot~ (l'AR-1804} 2-13-0S . . l'<>xl•codw!Ulpfonn'"byRIU'""""'~UC< .... ,,_M!iol\ood,Cll\IOJIT __ • ..,.. ,_,.,,,,,, .... VSOS:Voq"""V . - ...... ··--···.. . . . .f ..... -··-· - .

.

BROKER INFORMAllOlllAflD AA'llFICATIDl>I O;P FEE of Ille IOtl!ll t=* pdt<l U•Vn~ a~ him actetd b l>"f Other 8roll.t.r when U511ng 9rol<ol"a fo., 1:1 """''""d. e=ow Asiei>I b awll<>llz<ld ~ dlt'e<ta<;I to P$1 Oth•r Brokot from U.ll!lg Broltsf• !06 atdoolng. -

Va""""" Reddoot>ill!l. Jta>i;J./lf, !.LC p2j19573 ute""'" No. U11ii1ig ~ 6tner etel<& Lloolloa No. ,.~ a a.,,.,,..rvuet•J<lr'ua•r>t

lllt llahnndBUf"'U"'1IJ\!Hlllfdilll)' ropt8'!"'4$' a &olMoo!ya•SollofgCIQant ·O soror .. u.uno Brok?<'• ..,bogont .' fM71~9~ Llst1ng AoiiOlilata •llpl\one ~4~5 rount.un GrltlS~ ~ • CJ!l?l 4ll~i_ ~AsliOcll!W's OlliC8 OAddreas !ii F Zli> Zip Clly

Feett1m11e 'l'elophone zrp City OPTION l'l!E RECEIPT Receipt of$ _______ (Opllon ""9) in ll>ttfolill Of _________ :._faaeknoW!odge<I. seJier or Uillilg Bi<lfu

*104 'tREO NO. 24-6 (iJ.\R-1804) 2·1:!-0!!! PB,g<>~ 0(9

FIRST

AMEND111ENT TO NEW HOME CONTRACT THIS FIRST Afv!ENDMENT TO NEW HOME CONTRACT (the "Amendmenf') is entered into by and betwei;n VSDH VAQUERO VENTURE, LTD., a Texas limited partnership (the "Seller"), and KENNETH P. GROSS and BETSY L. GROSS (collectively, the "Purchaser'').

WITNESSETH:

WHEREAS, Seller and Purchaser entered into that certain New Home Contract dated effective as of June 4, 2007 (the "Contract"), providing for the sale by Seller to Purchaser of a tract of land located at 2004 White Wing Cove, WestJfilcf,, Tarrant County, Texas (the "Property") and being more particularly described in the Contract; and

. WHEREAS, Seller and Purchaser desire to amend the Contract as hereinafter set forth. NOW, THEREFORE, based on these facts and in consideration of the mutual benefits to be

obtained by this Amendment, Seller and Purchaser agree as follows: · L Amending Provisions. The Contract is hereby amended as follows: (a) Paragraph 9.A. of the Contract is hereby amended to provide that the date and time for

the closing to be fully consummated and funded shall be extended to occur on or before noon on Friday, June-29, 2007 (the new "Closing Date"); prpvided, however, that as a Condition Precedent (herein so called) to such extensioµ, Purchaser and Seller hereby agree that Purchaser shall ·deliver to the Title Company the following: (i) a fully executed copy of this Am~ndment; (ii) a or a wire transfer or cashier's check made payable to the Title Company, in the amount of Fifty Thousand and No/100 Dollars ($50,000.00), which shall be added to and comprise a portion of the earnest money being held under the Contract; (iii) a cashier's check made payable to Seller, or a wire transfer to the Title Company in care of Seller, in the amount of Eight Thousand, Five Hundred and N6/100 Dollars ($8,500.00) as a non refundable extension fee which shall not be credited toward the Sales Price (the "Extension Fee"). In addition, the Extension Fee shall be increased by Five Hundred and No/JOO.Dollars ($500.00) for each day after June 29" that passes until the closing is fully consuinmated and funded, and Purchaser shall pay same to Seller no later than at closing.

(b) Inasmuch as Purchaser was not ready, willing or able to consmnniate the closing as. and ·when required by the Contract and Seller has already tendered fuil performance of its closing obligations, · this.Amendment constitutes an offer by Seller to extend the Closing Date, and if this Amendment is not . fully executed and delivered by Purchaser to' Seller and the Condition Precedent is not fully satisfied on or *105 before 4:00 p.m. local time in Dallas, Texas on June 20, 20Q7, then the following shall automatically apply: (i) Seller's offer to extend the Closing Date shall be fully rescinded, (ii) Purchaser shall be in . default under the Contract, (iii) Seller shall be deemed to have terminated the Contract and entitled to retain all of the earnest money on deposit with the Title Company, and (iv) Purchaser shall vacate the Property.

( c) There are rio other amendments. 2. ConBequence of Amendment. Nothing in this Amendment affects or modifies any of the

provisions of the_ Contract, except as expressly provided herein. The Contract,. 'as amended by this Amendment, will continue in full force and effect and is ratified and affirmed by Seller and Purchaser as if originally written as herein amended.

Page I of3 C:\Docum:nts az:d Setti..<gs\doug\Local Setlings\Temporzry Internet Files\OLK6A\Ist Amendment to Contractv2 061907(SSFN).dpc ·--------------- ---- 3. Miscellaneous. (a) The section headings contailled in this Amendment are for conv01rience of reference only

(b) This Amendment may be executed in any number of counterparts, separately or together, by Seller and Purchaser. If counterparts hereof are executed separately by Purchaser and Seller, when taken together, same will constitute one(!) original. If the same counterparts are executed by Purchaser and Seller, then each such counterpart shall constitute an original. Seller and/or Purchaser may execute and deliver this Amendment by telephone facsimile transnrission, and the receiving party may rely fully thereon as an original.

(c) This Amendment embodies the entire agreement and understanding between Purchaser and Seller with respect to its subject matter and supersedes all prior agreements and understandings, wiitten or oral, between Purchaser and Seller related to that subject matter. This Amendment may be amended, wfilved or discharged only by an insfnnnent in writing executed by the party against which enforcement of the amendment, waiver or discharge is sought. The d,tennination that any provision of this Amendment is invalid or unenforceable will

(d) not affect the validity or enforceability of the remaining provisions or of that provision under other circumstances. In the event of any deternrination of invalidity or unell"forceability, this Amendment will be construed as ifthe invalid or unell"forceable provision were not included in this Amendment.

. EXECUTED as of (although not necessarily on) the 12"' day of June, 2007.

SELLER:

VSDH VAQUERO VENTQRE, LID., a Texas limited partnership By: VSDH Homes, Inc.,

a Tekas corporation, its General Partner *106 By:--,,--~,--.,...::::::=====~~~~----_-_-_--

Douglas M. Hickok, Vice President

Page2 of3 C:\Documents and .Settings\doug\Local Settings\Temporary Interp.et Files\OLK.6A\1stAmendment to Contractv2 061907(SSFN).doc . ili EXEC!JTED as of (although not necessarily on) the 12 day ofJune, 2007. PURCHASER: KENNETII P. GROSS

*107 Page 3 of3 C:\Documents 11.nd Settings\doug\I.ocal Scttings\Temporary Internet Fiies~0:1X6:A \lst Am!mdincnt.to Contract v2 051907(SSFN).rloc . ···~.!--·--··'"' ·.-...... Af)DEMJUM_A, l. :BUY BACK OPTION: VSDH Vaquero Venture Ltd, (VSDHf, as Seller, hereby grants to Kenneth P. and Betsy L. Gross (Cltoa•), as Buyer, of 2004 Wltlto W"Jll& Cow in Vaquero subdiviolan. W11$tlake, Texas (tit$ Prop<lrty) the option (the "Buy Baek Option") fO put1he Propo.'fy(o S'eller (i.e.,_xequlre Seller lo repurohase the Propel'ly fur the original ''Sales Price" af $2,851,871.00) on September 1, 2009, or suoh ....:iier dal<> as may ho mutually asreed betweonBuye.r eud Seller, in writing (the ''Bo;v Back Date''). subject to the following terms andeonditions:·

DECLABATJON DATE: On or beli:>re May i, 2009, (the ''.O~laration (a)· Dale''), Buyer tnust ~xeroJs•,.th• !luy Back Option by deli'l'ering written notice thereof ro Seller (the ''Buy Ba1>k Option Noli~<>''). n; fur any :reason, S~er .It~ not received the Buy Baek Option N'otloo, on or before S:OO, looa!timeln Dallas/Fort Worth, Texas, onilteDeolaratlonDate, !hon Buyer shall have waived the Jluy Back Option iu1d ·~ shall be null avoid, · BUYER EXERCISES '.l1lB BUY BACK OPTION: .If Buyer timely and ·

(b) properly exeroioes tho Buy Back Option, t!\en tho following ahall apply: (i) B11yer may.1to! se11 or oonvoy any i:lgbt, title or inter~t in and to the . Property to IU1Y thW party unless Sellar broaches its obilgaflon to repurollase the Property purau!tnt to tho Bu.y Baok Option due to no iilult of Buyer: [Ii) Seiler may aoounenoo marketing the .P.ropor!}; for sale an May 2, 2009, and Buyer agrees to fully cooperafe with all matke!ing efforts of Seller; l!lld (iii) on or before Soptomber r, 2009, unless Buyer and Soller all"'• upon anotheE staled dat<i in writing; Bu.yei: shall vacate the Property aruf deliver full po,,.ession thereof to Soller, and the Property shall be in tho aam.c condition a• existed on !ho orlgfnal Closing Dato, plus lntY Soller eppr<>Wd improvomenls, loss reasonablo wear and war, with all mechanioal, e!octrlcal, plumbing and other •Y.Btems and componenla in good vioiking order llll_d in a "broom-clean''. coltditloo. Prlor to tho Declaration Dale>, tho Buyer oan enter into a eontraot to the soil the P.rapcrty and wlll be enl!Ui:d to all proceeds from such B!ile. Should the Buyer enter:lnto a contract to soil the property, !ha Buy Baok Option. will · Immediately terminate and will no longer be available kl Buyor. If, howevor, Buyer thnely l!lltl properly elects to invoke th" Buy Be.ok Option and !ho olosltig of !M repurobase tm.. placa, then Buyer walVOB and · relinquishes auy and all ~!alms !hey may h11v• to ally proooeds fu>m the> *108 s11llsequenteale of thi! Property by SelleJ; arul Buyar shall not b" lil!blo fu~ llll}' loss !ncutted by Seller from the aubsequettt sale oftlte:Proporty,

.· · - - - ------------ Tfthecostto .repairis losstlmn $1-00,000, then Buyer shall, atBuyer'ssole cost and expense, repair lll!d restore the home to :its prior condition in order for Buyer to hav'" the right to eJ>.'etcise the repurchase optiop. If Buyer ihlls to timely and properly repair and restore the Properly prlorto Buy Back option date, then. Seller may terminate the Buy Back Option. BUYER"S IMPROVEMENTS: Befure commencing construction, Buyer

2. m11 review with Seller the plans and specification and receive general consent (consent not to he unreasonably withheld) to proceed with the improvel!lents. Buyer w!ll periodicslly (on a reasonable basis) update .Se.ller regsrding progress and timelines on completing the improvements. Seller understands that Bnyer has therlghtfo make minor changes end decisions during the process of completing 1he improvements provided

.. 1hey are In the best interest of completing the improvements in tho most logical and reasonable m~·. Buyer will als1> complete thi> improvements (i) in a good worlanaolike manner, free from material defue!s, (ii) in aocordance with all laws, ordinances, statutes, rules, reg.ulations and any and llllrestriotions and othennattem of record appli¢ahle thereto; and (ill) free of any liei:is or claims of any kind or cluiracter, end Buyer shall absolutely aod unccnditlonally save, defend, or imlemnify and hold harmless Sellerfrrun and against any and all reasonable attorney's rees filld disbmwments and all damages whicltlllJly arise byretlSOll. ¢'Buyer's peribDlll!IWe of any work fueteto or Boyer's .:fuifure to doss required hereby or the Escrow Agreement (hereinafter defined). ESCROW A.GREEMBNT: The ar.aoh..-d Addendum B is a spreadsheet of

3. . 1r-\-eJt>'?"'/ =:;;~ts ancl costs proposed by !he Buyer to be maae to tbe &yet agrees to =row/ ~ funds tolal.ing $156 • mpany WJd en~ into an · Escrow Agreement (herein so called), acceptable to Seller and.Buyer, that outlllres the proposed improvements to the property anil the disbursement of such fund/I. Bnyel.' acceptarisk of any improvement cost C>YemJJlS in excess of$1S6,871.00, however, ifimprovements cosh! do not exceed the

· --·------------ ·- -·- ·-··---· ··--· --·- - ----· -- · ·-f156,87l.OO allocated bridget, Buyer may use the remaining funds mid apply to otherhnprovenwnls not.speoified in Addendum B. *109 4.. Doub Hiclrol::and VanShawaspa.-tners:iJ). VSDHVaqnero VentureLm. Each hereby personally guaranty Selle1's obligatians under the Buy Back ;.· Option gtaIJted from VSDH to Buyer hereunder. In the event VSDH fails to perl'onn fully under the lx:!:ms of the Buy Back Option, each of its partners set furfh heJ.in above·?Jiall be persanally responsible, jointly and severally, lo poribrm the obligations ofVSDH under the Buy Back

·Option. ! . -

....

S. · Bul'l'f = th e right to canrel Bu:~·::siu;:k bption after the declllX>llim't d.alf> provldcd that Sdller has not e:nt=d into apurollttsc coottac::t wiih a thiJ:d pmty o.u 2004 White W'tng.. .

Inllrldition. in.pamgraph 15 in tbc body of the ~under lJEFAULT, Seller reimlates Iangaage slrlcl::ett "seek. sgcb ntb« rclief!IS mu bQ provided by law. Qt . l!!!!b::

I ' *110 . --·· ....... ·~ ...... -~~·---.. -·- ·--···- - · - · - ... · • - - - , . , .• . . . _ ._ , , . , , _ , ._ P- • • • - - - - - • • -·· ·~--- ......... ---······-··~- .. "···-·---··-··· ' ... ,. ' I

I

:mmrlll•n 432 Stone Labor - Wall-Off NC 6 10 450 Stone Border Around Front Patio 45 1092 500 Paint - Master 1 600 Paint - Faver 1 700 Paint- FR 1 Paint- Halls 600 1 1 300 Paint - Stairs Paint-BR#4 & Bath 1 ^[400] --:r

~------

1000 1,500 3000 Apollances }f(. *111 kv-·f\ C.OOperOScully A /'m/o.1wn<1/ Curporarwn JANAS. REIST June 2, 2010

VIA HAND DELIVERY

John Warren County Court Clerk 300 Records Bldg. 509 Main Street Dallas, Texas 75202

Re: VSDH Vaquero Venture, Ltd. v. Kenneth P. Gross and Betsy L. Gross, Cause No. CC-09-05232-A, on file in the County Court at Law No. 1, Dallas County, Texas Our File No.: 1903-17168

Dear Mr. Warren: Attached please find an original and one (1) copy of Ken Gross' and Betsy Gross' Second Amended Counter-Claim Against VSDH Vaquero Venture, Ltd., Evan L. Shaw, and Douglas M Hickok and First Amended Third-Party Petition Against VSDH Vaquero Homes, Inc. and VSDH Homes, Inc. for filing in the above referenced matter. Please return via the waiting courier a copy of the filed stamped copy for our file. Plaintiffs counsel will receive a copy of this filing via facsimile and certified mail.

If you have any questions, do not hesitate to contact the undersigned. Sincerely yours, ~~\~~

Jana S. Reist

*112 Founders Square 900 Jackson Street, Suite 100 Dallas, TX 75202 Telephone (214) 712-9500 Fax (214) 712-9540 www.cooperscully.com Houston Office (713) 236-6800 San Francisco ()ffice (415) 956-9700 Sherman Office (903) 813-3900

D/767483.J

June 2, 2010 Page 2 JSR/tsh Attachment Cc: Evan Lane (Van) Shaw (via certified mail &facsimile 214. 754. 7115)

Law Offices of Van Shaw 2723 Fairmount Street Dallas, Texas 75201 Attorney for Plaintiff

D/767483.1

*113 TAB 9 *114 I iJ,:i , '' '(. : ·· • CAUSE NO. CC-09-052~foc~~ ·/.,12;" IN THE COUNTY CmRq;4 VSDH v AQUERO VENTURE, LTD. § §

Plaintiff § § v. § § ATLAWNUMBER I KEN GROSS and BETSY GROSS § § Defendants § § v. § § EV AN L. SHAW and DOUGLAS M. § HICKOK §

§ Intervenors § DALLAS COUNTY, TEXAS COUNTER-DEFENDANTS' SECOND SUPPLEMENTAL ANSWER AS AN ADDITION TO COUNTER-DEFENDANTS' FIRST SUPPLEMENT AL ANSWER AND COUNTER-DEFENDANTS' FIRST AMENDED ANSWER TO DEFENDANTS/COUNTER-PLAINTIFFS' COUNTERCLAIM

TO THE HONORABLE JUDGE OF SAID COURT: Come now Plaintiff VSDH VAQUERO VENTURE, LTD., Intervenor/Counter-Defendant EV AN L. SHAW and Intervenor/Counter-Defendant DOUGLAS M. HICKOK, jointly and hereinafter referred to as "Counter-Defendants", and file this their Second Supplemental Answer as an Addition to Counter-Defendants' First Supplemental Answer and Counter-Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim, and would respectfully show unto the Court the following:

I.

The pleadings and assertions set forth herein supplement and are in addition to Counter Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim and Counter Defendants' First Supplemental Answer in Addition to Counter-Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim. None of the contentions, assertions nor defenses set forth in Counter-Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim and/or Counter-Defendants' First Supplemental Answer in Addition to Counter Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim are withdrawn. This is to be read in addition to and in conjunction with Counter-Defendants' First *115 COUNTER-DEFENDANTS' SECOND SUPPLEMENTAL ANSWER IN ADDITION TO FIRST AMENDED ANSWER - Page I Ans.Cclaim.Amd 1.Supp2 Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim and Counter-Defendants' First Supplemental Answer in Addition to Counter-Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim.

II.

Further answering, Counter-Defendants would show that Defendants/Counter-Plaintiffs KEN GROSS and BETSY GROSS first breached the contract made the basis of this suit and, as such, released Counter-Defendants from all responsibility thereunder.

III. ALTERNATIVE PLEADING All defenses herein, if inconsistent, are made pursuant to Rule 48 of the Texas Rules of Civil Procedure. WHEREFORE, PREMISES CONSIDERED, Counter-Defendants pray that Counter Plaintiffs take nothing by reason of their suit and Counter-Defendants go hence without day and with their costs in this behalf expended and for such other and further relief to which Counter Defendants may be justly entitled, both in law and in equity.

EV AN LANE (VAN) SHAW

BarCardNo.18140500

LAW OFFICES OF VAN SHAW

2723 Fairmount Street Dallas, Texas 75201 (214) 754-7110 FAX NO. (214) 754-7115 ATTORNEY FOR PLAINTIFF/ INTERVENORS/COUNTER-DEFENDANTS

*116 COUNTER-DEFENDANTS' SECOND SUPPLEMENTAL ANSWER IN ADDITION TO FIRST AMENDED ANSWER- Page 2 Ans.Cclaim.Amd l .Supp2

CERTIFICATE OF SERVICE

The undersigned certifies that a copy of the foregoing instrument was served upon the attomey~rd of all parties to the above cause in accordance w. ith the Rules of Civil Procedure, on this day of October, 2010.

. ,,- ! / *117 COUNTER-DEFENDANTS' SECOND SUPPLEMENTAL ANSWER IN ADDITION TO FIRST AMENDED ANSWER- Page 3 Ans.Cclaim.Amdl .Supp2

J: ,

LAW OFFICES

?011.r OF GZ'; VAN SHAW '<1

IJ;:

., . . lt:o. ·-'~ ATTORNEYS AT LAW ~ . '.DANIEL K HAGOOO 2723 FAIRMOUNT ........ ^[11] .• ··,!;I 'AF COUNSEL

VAN SHAW

DALLAS, TEXAS 75201 . -~----- JANET R. RANDLE (214) 754-7110 CERTIFIEb F'ARALEGALS

ERIC GREEN

FAX NO. (214) 754-7115 RHONDA VIN-~T www.shawlawoffice.com LORI G. MOORE •CERTIFIED PUBLIC APRILS. SUMNER ACCOUNTANT County Court at Law No. 1 October 21, 2010 509 Main Street VIA HAND DELIVERY Records Building =PH (214/653-7556) = Dallas, TX 75202 RE: Cause No. CC-09-05232-A;

VSDH Vaquero Venture, Ltd v. Ken Gross and Betsy Gross Madam: Enclosed via hand delivery are the following: 1) Counter-Defendants' Second Supplemental Answer as an Addition to Counter-Defendants'

First Supplemental Answer and Counter-Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim; and

2) Counter-Defendants' Objection to the Affidavit of Kenneth P. Gross attached to Counter Plaintiffs' Partial Motion for Summary Judgment Against VSDH Vaquero Venture, Ltd. and Douglas M. Hickok on Counter-Plaintiffs' Breach of Contract Claim and Declaratory Judgment Action

Please file the same with the Court's records and return a file-marked copy to the undersigned. By copy of this letter, a true and correct copy of the above instrument was this date forwarded to all counsel of record. Thank you for your assistance. Yours very truly,

I

vans~/

VS/Im

Enclosures - hand delivery *118 cc: See attached Service List.

Mr. Doug Hickok, Via E-Mail (dhickok@marquisgroup.net) Ms. Darcy Topolski, Via E-Mail (dtopolski@marquisgroup.net)

SERVICE LIST

R. Brent Cooper FAX (214/712-9540) Jana Starling Reist =PH (214/712-9500) = COOPER & SCULLY brent.cooper@cooperscully.com 900 Jackson Street, Suite 100 jana.reist@cooperscully.com Dallas, Texas 75202

Attorney for Defendants Kenneth P. Gross and Betsy L. Gross Kenneth B. Chaiken FAX (214/265-1537) Chaiken & Chaiken, P.C. =PH (214/265-0250)= kchaiken@chaikenlaw.com One Galleria Tower 13355 Noel Road, Suite 600 Dallas, Texas 75240

Attorney for Intervenor DOUG HICKOK ******************************** Van Shaw represents Plaintiff VSDH VAQUERO VENTURE, LTD, Intervenor, VAN SHAW and Third-Party Defendants VSDH VAQUERO HOMES, INC. and VSDH

HOMES, INC.

*119 TAB 10 *120 Filed 11 April 28 P1:48 John Warren County Clerk Dallas County

CAUSE NO. CC-09-05232-A

VSDH VAQUERO VENTURE, LTD. § IN THE COUNTY COURT § Plaintiff/Counter-Defendant, § § v.

§

KEN GROSS and BETSY GROSS § AT LAW NUMBER I § Defendants/Counter-Plaintiffs, § § v.

§

EVAN L. SHAW and DOUGLAS M. § § HICKOK

§ Intervenors/Counter-Defendants, § DALLAS COUNTY, TEXAS INTERVENOR/COUNTER-DEFENDANT DOUGLAS M. HICKOK'S AMENDED AND SUPPLEMENTAL ANSWER TO DEFENDANTS/COUNTER-PLAINTIFFS' COUNTERCLAIM TO THE HONORABLE JUDGE: Intervenor/Counter-Defendant Douglas M. Hickok ("Hickok") files this Amended and Supplemental Answer to Defendants/Counter-Plaintiffs' Ken Gross' and Betsy Gross' Counterclaim, and respectfully shows as follows:

1. Hickok previously has asserted (and he continues to assert) the following affirmative defenses and/or specific denials to the Grosses' counterclaims: a. The Grosses breached the subject contract and released Hickok from responsibility thereunder; b. The Grosses' counterclaims and third-party claims are barred by the economic loss doctrine; c. There is a defect in the parties, Hickok is not a proper party and is not liable in the capacity in which he has been sued; *121 INTERVENOR/COUNTER-DEFENDANT DOUGLAS M. HICKOK'S AMENDED AND SUPPLEMENTAL ANSWER TO DEFENDANTS/COUNTER-PLAINTIFFS' COUNTERCLAIM Page 1

d. There is a defect in the parties in that Hickok did not individually execute the contract made the basis of this suit and is not liable for the claims made the basis of this suit;

e. Hickok denied execution of any written agreement made the basis of this lawsuit in his individual capacity; f. Hickok denies the Grosses' alleged compliance with conditions precedent, and he pleads failure of conditions precedent, including: denial of execution of the subject contract; 1. failure of the Grosses to obtain written and required approval for the 11. improvements of the property; and, failure to establish exceptions to the statute of frauds;

111. g. Estoppel and waiver; h. Negligence;

Failure to state a viable claim for declaratory relief; 1. J. Claims bar under the statute of frauds; and, Failure to mitigate. k.

2. Based upon issues and facts raised by the Grosses in briefs filed within the past two weeks, and upon certain summary judgment rulings made by the Court in that time period and as recently as April 22nd, pleading further or alternatively as may be necessary, Hickok pleads as follows:

a. The Grosses' counterclaims to enforce the alleged guaranty made the basis of this lawsuit against Hickok are barred by the doctrine of impossibility of performance;

b. The Grosses' counterclaims to enforce the alleged buy-back provision made the basis of this lawsuit are barred by the doctrine of illusory contracts or promises;

*122 INTERVENOR/COUNTER-DEFENDANT DOUGLAS M. HICKOK'S AMENDED AND SUPPLEMENTAL ANSWER TO DEFENDANTS/COUNTER-PLAINTIFFS' COUNTERCLAIM Page2

c. The Grosses' collllterclaims to enforce the alleged guaranty made the basis of this lawsuit against Hickok are barred by a failure of or incomplete execution of the alleged guaranty agreement by one of the alleged guarantors;

d. The Grosses' collllterclaims to enforce the alleged guaranty and the buy back obligation made the basis of this lawsuit are both barred by lack of consideration and/or a failure of consideration;

e. To the extent the alleged guaranty obligation is found to be enforceable against Hickok (which he continues to deny), any recovery from Hickok is limited to his limited partner's contribution at the time the alleged guaranty was made; and,

f. The Grosses counterclaims for fraud or breaches of alleged off-contract understandings are barred, in whole or in part, by the doctrine of merger. WHEREFORE, Counter-Defendant Douglas M. Hickok prays that Collllter-Plaintiffs take nothing by their suit against him, and that he be discharged with costs of court, attorney ' s fees, and such other and further relief to which he may be entitled.

Respectfull~ Kenneth B. Chaiken State Bar No. 04057800 CHAIKEN & CHAIKEN, P.C. One Galleria Tower 13355 Noel Road, Suite 600 Dallas, Texas 75240 (214) 265-0250 telephone (214) 265-1537 facsimile ATTORNEY FOR INTERVENOR/ COUNTER-DEFENDANT DOUGLAS M. IDCKOK

*123 INTERVENOR/COUNTER-DEFENDANT DOUGLAS M. HICKOK'S AMENDED AND SUPPLEMENT AL ANSWER TO DEFENDANTS/COUNTER-DEFENDANTS' COUNTERCLAIM Page 3

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of Intervenor/Counter-Defendant Douglas M. Hickok's Second Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim has been served upon all counsel of record by facsimile and certified mail on this J "8'rf/..v.Iay of April, 2011.

Kenneth B. Chaiken

VERIFICATION

§ STATE OF TEXAS § COUNTY OF DALLAS § BEFORE ME, the undersigned authority, on this day personally appeared, Douglas M. Hickok, being by me duly sworn on his oath, deposed and said that he has read paragraphs 1 ( c ), l(d), l(e), l(f) and 2(d) in the above and foregoing amended and supplemental answer, and every statement contained therein is within his knowledge and is true and correct.

Douglas M. Hickok Subscribed and sworn to before me this the 2~ day of _ ..._A--"-Fp-"-'---i_,l,___ ___ _ 2011, to certify which witness my hand and seal of office. Nok~ofTexas *124 INTERVENOR/COUNTER-DEFENDANT DOUGLAS M. IDCKOK'S AMENDED AND SUPPLEMENTAL ANSWER TO DEFENDANTS/COUNTER-DEFENDANTS' COUNTERCLAIM Page4

TAB 11 *125 CAUSE NO. CC-09-05232-A

VSDH VAQUERO VENTURE, LTD. § IN THE COUNTY COURT § Plaintiff § § § v. § KEN GROSS and BETSY GROSS § ATLAWNUMBER 1 § § Defendants § v. § § EV AN L. SHAW and DOUGLAS M. § § HICKOK

§ Intervenors § DALLAS COUNTY, TEXAS 11:\-t<TI AU.'{

ORDEJ}GRANTING INTERVENOR EVAN L. SHA W'S NO-EVIDENCE MOTION FOR SUMMARY JUDGMENT IJtl.... Came on to be heard on the _a day of April, 2011, Intervenor Evan L. Shaw's No Evidence Motion for Summary Judgment, and the Court, after review of pleadings on file and hearing the arglllllent of counsel, is of the opinion same should be GRANTED-'14 -lo ,/ i(E"f.J ~i:?DSS and- Be'fs'< ~'205'5' 6eeACH of-c::oµn~:r-c~s e)f=h..T/tJiJ 1 tlfl"'-

IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED that Intervenor (( Evan L. Shaw's No Evidence Motion for Summary Judgment is GRANTED in itf~~heey. ~f~fV(.; IT>, IT IS SO ORDERED. (Wtti~ (Jf\ ~

Signed thi~ay of April, 2011. ~(Af>- 11"1~ ~alt,

Upon Entry, Please Return to:

~f:taot-1

Law Offices of Van Shaw

2723 Fairmount

?ub?e;,,Vl'(/f Dallas, Texas 75201 .Jofu rfhe1

214/754-7110

*126

b0eh"nq dut- , 0 jLt.~ylD e~!tAaAt1 I ljJQr(l~I~

Order - Page I of I -0 p11'1 ~ 1J7 TAB 12 *127 CAUSE NO. CC-09-05232-A VSDH VAQUERO VENTURE, LTD. § § Plaintiff § § v. § §

KEN GROSS and BETSY GROSS § AT LAW NUMBER 1 § Defendants § § v. § §

EV AN L. SHAW and DOUGLAS M. § HICKOK §

§ Intervenors § DALLAS COUNTY, TEXAS PLAINTIFF/COUNTER-DEFENDANT VSDH VAOUERO VENTURE, LTD.'S THIRD SUPPLEMENTAL ANSWER AS AN ADDITION TO COUNTER-DEFENDANTS' FIRST AND SECOND SUPPLEMENTAL ANSWERS AND COUNTER-DEFENDANTS' FIRST AMENDED ANSWER TO DEFENDANTS/COUNTER-PLAINTIFFS' COUNTERCLAIM TO THE HONORABLE JUDGE OF SAID COURT:

Come now Plaintiff/Counter-Defendant VSDH VAQUERO VENTURE, LTD. hereinafter referred to as "Counter-Defendant" or "VSDH" and files this its Third Supplemental Answer as an Addition to Counter-Defendants' First and Second Supplemental Answers and Counter Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim, and would respectfully show unto the Court the following:

I. Defendants/Counter-Plaintiffs' Counterclaim are withdrawn. This is to be read in addition to and in

conjunction with Counter-Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim and Counter-Defendants' First and Second Supplemental Answers in Addition to Counter-Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim.

II.

Based upon issues and facts raised by the Grosses in briefs filed within the past two weeks, and upon certain summary judgment rulings made by the Court in that time period and as recently as April 22°d, pleading further or alternatively as may be necessary, VSDH pleads as follows:

a. The Grosses' counterclaims to enforce the alleged guaranty made the basis of this lawsuit against Shaw/Hickok are barred by the doctrine of impossibility of performance;

b. The Grosses' counterclaims to enforce the alleged buy-back provision made the basis of this lawsuit are barred by the doctrine of illusory contracts or promises;

c. The Grosses' counterclaims to enforce the alleged guaranty made the basis of this lawsuit against Shaw/Hickok are barred by a failure of or incomplete execution of the alleged guaranty agreement by one of the alleged guarantors;

d. The Grosses' counterclaims to enforce the alleged guaranty and the buy back obligation made the basis of this lawsuit are both barred by lack of consideration and/or a failure of consideration;

e. To the extent the alleged guaranty obligation is found to be enforceable against Shaw/Hickok, any recovery from Shaw/Hickok is limited to their limited partner's contribution at the time the alleged guaranty was made; and

f. The Grosses' counterclaims for fraud or breaches of alleged off-contract understandings are barred, in whole or in part, by the doctrine of merger. III. ALTERNATIVE PLEADING All defenses herein, if inconsistent, are made pursuant to Rule 48 of the Texas Rules of Civil Procedure. *129 THIRD SUPPLEMENT AL ANSWER TO COUNTERCLAIM - Page 2

WHEREFORE, PREMISES CONSIDERED, Counter-Defendant VSDH prays that Counter-Plaintiffs take nothing by their suit against it, and that it be discharged with costs of court, attorney's fees, and such other and further relief to which it may be entitled.

Respectfully submitted,

EV AN LANE (VAN) SHAW

Bar Card No. 18140500

LAW OFFICES OF VAN SHAW

2 723 Fairmount Street Dallas, Texas 75201 (214) 754-7110 FAX NO. (214) 754-7115 ATTORNEY FOR PLAINTIFF/ INTERVENOR/COUNTER-DEFENDANT

CERTIFICATE OF SERVICE The undersigned certifies that a copy of the foregoing instrument was served upon the attorneys of record of all parties to the above cause in accordance with Rules of Civil Procedure, on this ,jifl\lay of April, 2011.

VAN SHA

*130 THIRD SUPPLEMENTAL ANSWER TO COUNTERCLAIM - Page 3 ..

VERIFICATION

STATE OF TEXAS ) ) COUNTY OF DALLAS ) BEFORE ME, the undersigned Notary Public, on this day personally appeared EV AN L. SHAW, who being by me duly sworn on his oath deposed and said that he is over 21 years of age, of sound mind and capable of making this Affidavit; that he is an authorized agent of Counter Defendant VSDH VAQUERO VENTURE, LTD. in the above-entitled and numbered cause; that he has read the above and foregoing Third Supplemental Answer as an Addition to Counter Defendants' First and Second Supplemental Answers and Counter-Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim; and that every statem~nt contained in Paragraphs II ( d) is within his personal knowledge and is true and correct. ,-/

EVANL.

SUBSCRIBED AND SWORN TO BEFORE ME on the ~'day of April, 2011, to certify which witness my hand and official seal. ;~-- LORI G. MOORE ~ ..::."'\Notary Public. Slate oflexoa ~· lr May23.2012 \,;.\ *l My CommtssiOn Expires

............. *131 THIRD SUPPLEMENTAL ANSWER TO COUNTERCLAIM - Page 4 LAW OFFICES OF VAN SHAW ATTORNEYS AT LAW VAN SHAW• JANET R. RANDLE 2723 FAIRMOUNT

ERIC GREEN

DALLAS, TEXAS 75201 (214) 754-7110

"MEMBER OF COLLEGE

FAX NO. (214) 754-7115 OF THE STATE BAR OF TEXAS www.shawlawoffice.com

"CERTIFIED PUBLIC ACCOUNTANT

County Court at Law No. 1 April 29, 2011 .., ·< =PH (214/653-7556) = il 509 Main Street VIA HAND DELIVERY ^[1] ~:l~~;!5cui~~i;~ 2

r RE: Cause No. CC-09-05232-A; VSDH Vaquero Venture, Ltd v. Ken Gross and Betsy Gross j I Madam: Enclosed via hand delivery are the following: 1) Intervenor/Counter-Defendant SHA W's Third Supplemental Answer as an Addition to

Counter-Defendants' First and Second Supplemental Answers and Counter-Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim; and

2) Plaintif£'Counter-Defendant VSDH's Third Supplemental Answer as an Addition to Counter-Defendants' First and Second Supplemental Answers and Counter-Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim

Please file the same with the Court's records and return a file-marked copy to the undersigned. By copy of this letter, true and correct copies of the above instruments were this date forwarded to all counsel of rec d. Van Shaw *132 VS/Im Enclosures - hand delivery cc: See attached Service List.

Mr. Doug Hickok, Via E-Mail ( dhickok@marquisgroup.net) Ms. Darcy Topolski, Via E-Mail (dtopolski@marquisgroup.net)

SERVICE LIST

R. Brent Cooper FAX (214/712-9540) Jana Starling Reist =PH (214/712-9500) = COOPER & SCULLY brent.cooper@cooperscully.com 900 Jackson Street, Suite 100 jana.reist@cooperscully.com Dallas, Texas 75202

Attorney for Defendants Kenneth P. Gross and Betsy L. Gross Kenneth B. Chaiken FAX (214/265-1537) Chaiken & Chaiken, P.C. =PH (214/265-0250)= One Galleria Tower kchaiken@chaikenlaw.com 13355 Noel Road, Suite 600 Dallas, Texas 75240

*133 TAB 13 *134 rllED JOHii F. WARREN COUNTY CLERK

DALLAS COUNTY, TEXAS CAUSE NO. CC-09-05232-A 2013 APR IS PH I,: 22 VSDH VAQUERO VENTURE, LTD., IN THE COUNTY COURT § Plaintiffs/Counter-Defendant, § § v. § § KEN GROSS and BETSY GROSS § Defendants/Counter-Plaintiffs, § AT LAW NUMBER 1 § v. § §

EV AN L. SHAW and DOUGLAS M. §

HICKOK

§ Intervenors/Counter-Defendants. DALLAS COUNTY, TEXAS § §

KEN GROSS' AND BETSY GROSS' THIRD AMENDED COUNTER-CLAIM AGAINST VSDH VAQUERO VENTURE, LTD., EV AN L. SHAW AND DOUGLAS M. HICKOK AND SECOND AMENDED THIRD-PARTY PETITION AGAINST VSDH VAQUERO

HOMES, INC. AND VSDH HOMES, INC.

TO THE HONORABLE JUDGE OF SAID COURT:

I. DISCOVERY CONTROL PLAN 1. The parties have entered into an Agreed Level 3 Discovery Control Plan pursuant *135 to Tex. R. Civ. P. 190.4.

COUNTER-PLAINTIFFS' THIRD AMENDED COUNTER-CLAIMS AND SECOND AMENDED THIRD

PARTY PETITION Page 1 D/877087.1

II. PARTIES AND SERVICE 2. Plaintiff/Counter-Defendant VSDH Vaquero Venture, Ltd. is a Texas Limited Partnership who is represented by Evan L. Shaw in this action. 3. Defendant/Counter-Plaintiff/Third-Party Plaintiff Kenneth P. Gross 1s an individual who has appeared in this action and is represented by the undersigned counsel. 4. Defendant/Counter-Plaintiff/Third-Party Plaintiff Betsy L. Gross is an individual who has appeared in this action and is represented by the undersigned counsel. 5. Intervenor/Counter-Defendant Douglas M. Hickok ("Hickok") is a Texas resident who has appeared in this action and is represented by Evan L. Shaw in this action. 6. Intervenor/Counter-Defendant Evan L. Shaw ("Shaw") is a Texas resident who has appeared in and who is representing himself in this action. The Grosses recognize that Shaw has been given a summary judgment in this case and are continuing to name him in this pleading so as to avoid any confusion should there be an appeal that they wish to continue to pursue their claims against him.

8. Third-Party Defendant VSDH Homes, Inc. is a Texas General Partnership whose principal place of business is at 5305 Village Creek, Plano, Texas 75093. It may be served with *136 process by serving its Registered Agent and President, Douglas M. Hickok at 5305 Village Creek Drive, Plano, Collin County, Texas 75093.

COUNTER-PLAINTIFFS' THIRD AMENDED COUNTER-CLAIMS AND SECOND AMENDED THIRD

PARTY PETITION Page 2 D/877087.I

III. JURISDICTION AND VENUE 9. The subject matter in controversy is within the jurisdiction limits of this Court. The Court has jurisdiction over VSDH Vaquero Homes, Inc. and VSDH Homes, Inc. because they are Texas general partnerships.

IV. FACTS 11. On or about June 4, 2006, the Grosses entered into a New Home Contract ("Contract"), promulgated by the Texas Real Estate Commission, with Counter-Defendants and Third-Party Defendants for the purchase of 2004 White Wing Cove, Westlake, Texas 76262 ("the Property"), in the amount of $2,851,871.00. (A copy of the Contract has been attached hereto as Exhibit"!," and is incorporate herein by reference for all pertinent purposes).

12. The Grosses purchased the Property at the full listed price of$2,851,871.00, even though the Property had been listed for two years, due to the fact that Counter-Defendants agreed to enter into a "Buy Back Option" with the Grosses.

13. According to paragraph 1 ("Buy Back Option") of Addendum A of the Contract, VSDH Vaquero Venture, Ltd. granted to the Grosses, as Buyers of the Property, the "the option . . . to put the Property to Seller [VSDH Vaquero Venture, Ltd.] (i.e. require Seller to repurchase the Property for the original "Sales Price" of $2,851,871.00) on September I, 2009, or such *137 earlier date as may be mutually agreed between Buyer and Seller . . .. " See Addendum A to Exhibit I.

COUNTER-PLAINTIFFS' THIRD AMENDED COUNTER-CLAIMS AND SECOND AMENDED THIRD

PARTY PETITION Page 3 D/877087.l

14. Hickok and Shaw are limited partners of VSDH Vaquero Venture, Ltd. and participated and controlled Counter-Defendants and Third-Party Defendants sell of the Property to the Grosses and benefitted from the sell to the Grosses.

15. Further, according to paragraph 4 of Addendum A, Hickok and Shaw both agreed to be personally responsible, jointly and severally, in the event VSDH Vaquero Venture, Ltd. does not fully perform under the terms of the Buy Back Option. Neither Hickok nor Shaw conditioned his personal guaranty on the other being liable as well. Neither Hickok, Shaw nor anyone else ever informed the Grosses that their personal liability was conditioned on the other guarantor's liability.

The "Buy Back Option" provides the following: VSDH Vaquero Venture Ltd (VSDH), as Seller, hereby grants to Kenneth P. and Betsy L. Gross (Gross), as Buyer, of 2004 White Wing Cove in Vaquero subdivision, Westlake, Texas (the Property) the option (the "Buy Back Option") to put the Property to Seller (i.e. require Seller to repurchase the Property for the original "Sales Price" of$2,851,871.00) on September I, 2009, or such earlier date as may be mutually agreed between Buyer and Seller, in writing (the "Buy Back Date"), subject to the following terms and conditions.

The Buy Back Option further provides requirements and deadlines on how the Grosses would exercise the Option. The Grosses followed those requirements.

Further, according to paragraph 4 of Addendum A, Hickok personally guaranteed the Buy Back Option. Paragraph 4 provides the following: Doug Hickok and Van Shaw as partners in VSDH Vaquero Venture, Ltd. each hereby personally guarantee [sic] Seller's obligations under the Buy Back Option granted from VSDH to Buyer hereunder. In the event VSDH fails to perform fully under the terms of the Buy Back Option, each of its *138 partners set forth herein [sic] above shall be personally responsible, jointly and severally, to perform the obligations of VSDH under the Buy Back Option.

COUNTER-PLAINTIFFS' THIRD AMENDED COUNTER-CLAIMS AND SECOND AMENDED THIRD

PARTY PETITION Page 4

D/877087.1

The Contract further required the Grosses to construct improvements on the Property. The Grosses constructed over $150,000 worth of improvements to the home. The Grosses timely exercised the Buy Back Option, putting Hickok on notice of the Grosses' intent to the sell the Property back to VSDH. Hickok has testified that VSDH has "absolutely not" been insolvent since this transaction. In any event, VSDH, Shaw and Hickok failed to buy the Property back and perform their contractual obligations as required under the Contract.

Only after VSDH, Hickok and Shaw had affirmatively represented that they had no intention of honoring the Buy Back Option, did the Grosses sell the Property in August 2009 for $2,415,600 in an effort to mitigate their damages and avoid foreclosure of the home. VSDH and Hickok's breach and fraud has cost the Grosses actual damages of over $550,000 for the difference between the bargained-for "guaranteed" buy-back value and the amount of the actual sale, real tor fees, closing costs, and fees associated with the sale of the Property.

18. However, Shaw and Hickok communicated to the Grosses that Counter- *139 Defendants and Third-Party Defendants do not intend to buy the Property back and perform their

COUNTER-PLAINTIFFS' THIRD AMENDED COUNTER-CLAIMS AND SECOND AMENDED THIRD

PARTY PETITION Page 5

D/877087.I

contractual obligations as required under Addendum A to the Contract. Counter-Defendants and Third-Party Defendants failed to purchase the property back.

20. In an effort to mitigate their damages and avoid foreclosure of the home, the Grosses sold their home for $2,415,600. v.

DECLARATORY JUDGMENT

21. All factual allegations set forth elsewhere in this petition are incorporated by reference in support of this section. 22. This is an action for declaratory judgment pursuant to the Texas Declaratory Judgment Act, Ch. 37.001 et. seq. of the TEX. C1v. PRAC. & REM. CODE, for the purpose of determining an actionable and justiciable controversy between the parties, as hereinafter more fully appears. The controversy involves Counter-Defendants' and Third-Party Defendants' duty to perform their obligations arising under the "Buy Back Option," Addendum A, to the Contract.

The provision of the personal guaranty in the Contract addendum states the following: *140 Doug Hickok and Van Shaw as partners in VSDH Vaquero Venture, Ltd. each hereby personally guaranty Seller's obligations under the Buy Back Option granted from VSDH to Buyer hereunder. In the event VSDH fails to fully perform under the terms of the Buy Back Option, each of its partners set forth herein above shall be personally

COUNTER-PLAINTIFFS' THIRD AMENDED COUNTER-CLAIMS AND SECOND AMENDED THIRD

PARTY PETITION Page 6

D/877087 I

responsible, jointly and severally, to perform the obligations of VSDH under the Buy Back Option

"Jointly and severally" means that liability may be apportionable either among two or more parties or to only one; together and in separation. BLACK'S LAW DICTIONARY (Second Pocket Edition, 2001) (emphasis added). The fact that the guaranty provides the terms ')ointly and severally" only further obligates Hickok's own personal liability, whether or not Shaw is liable. The Texas Supreme Court has stated that "when the obligation of the sureties is joint and several, the discharge of one of them does not release the others from payment of their proper proportion of the claim." Glasscock v. Hamilton, 62 Tex. 143, 150 (1884). The Texas Supreme Court has further offered the following analysis:

When a plaintiff alleges that two parties to a contract made him a promise, although under the rule at common law as to joint and several contracts, that is a joint promise, yet the allegation necessarily means that each of them promised. Hence we see no good reason why, although he has alleged the promise of the two, he should not recover against one upon proof that he promised, although he may fail to prove the promise of the other.

McDonald v. Cabiness, 100 Tex. 615, 616, I 02 S.W. 721, 722 (1907). Thus, looking to the plain language of the personal guaranty, Hickok is obligated to it whether or not Shaw is obligated.

Texas law requires that (I) the surety (Hickok) signed the guaranty on a condition that another (Shaw) was to sign, and (2) the obligee (the Grosses) to the personal guaranty had knowledge of such a condition. Hickok did not sign on the condition that Shaw would also sign the guaranty. Hickok did not inform the Grosses of such a condition to his signing. Hickok has denied even signing in his personal capacity, and cannot now argue that he signed personally in a conditional capacity.

*141 Hickok cannot claim that he signed it on a condition that Shaw was to sign it. Hickok first raised this legal argument a few days before the first trial setting, but even then never affirmatively claimed that he signed the personal guaranty on the condition that Shaw was to also

COUNTER-PLAINTIFFS' THIRD AMENDED COUNTER-CLAIMS AND SECOND AMENDED THIRD

PARTY PETITION Page 7

D/877087.1

sign it. At Hickok's deposition, he testified that he is not liable because he never "signed on behalf of [our] personal beings." He never made any such contention that Shaw's signature was a required factor. Also, there is no language in the personal guaranty or the entire Contract that states such a condition exists.

Further, the Grosses were never made aware that such a condition existed. The first time the Grosses were even aware that Hickok was making such a contention was a few days before the first trial setting in May of 2011. Hickok has no evidence that the Grosses were aware that such a condition existed.

There is no language in this provision, or appearing anywhere else in the Contract, requiring both Hickok and Shaw's signatures on the Contract or personal guaranty before either can become personally liable. The plain language of the agreement states that the personal guaranty may be enforced as to both or only one partner.

The language of the provision itself can only be reasonably interpreted to mean what it says - that Hickok agreed personally to perform the Buy Back Option in the event VSDH failed to perform. The description of "partner," does not limit Hickok's liability. To do so ignores the clear language of the "personal" guaranty. Texas case law has firmly held that a designation in a personal guaranty is only to point out the person intended and not to limit such individual's liability.

The language of the guaranty provision in this case only states that Hickok is a "partner" in VSDH, but does NOT state that his "personal" guarantee is limited to his capacity as a partner *142 (limited partner language is nowhere in guaranty). The words "guaranty" and "guarantor" have distinct legal meanings, i.e., a guaranty is an undertaking by one person to answer for the payment of a debt or performance of a contract or duty of another.

COUNTER-PLAINTIFFS' THIRD AMENDED COUNTER-CLAIMS AND SECOND AMENDED THIRD

PARTY PETITION Page 8 D/877087.l

Hickok's status as a limited partner, which is not even stated in the personal guaranty provision, does not mean he cannot personally obligate himself for the obligations of the limited partnership. Texas law has found that a limited partner can personally obligate himself for liabilities of his limited partnership. Further, even if the language on the guaranty did not provide that Hickok made a personal guaranty (which it clearly did), Hickok's designation as "partner" in the guaranty and his control over the transaction personally obligates him under TEXAS BUSINESS ORGANIZATIONS CODE§ 153.102. Under Texas Business Organizations Code § 153.102(a), a limited partner can be liable for the obligations of a limited partnership if the limited partner participates in the control of the business. "If the limited partner participates in the control of the business, the limited partner is liable only to a person who transacts business with the limited partnership reasonably believing, based on the limited partner's conduct, that the limited partner is a general partner." Id. 153.102(b). Hickok was the individual who negotiated the Contract and participated in the control of this agreement. Further, the term "partner" in the personal guaranty and Hickok's conduct would lead the Grosses to reasonably believe he was in fact a partners, i.e. general partners, of VSDH.

2. In the event VSDH Vaquero Venture, Ltd. failed to timely buy the Property back from Kenneth P. Gross and Betsy L. Gross, Douglas M. Hickok and Evan L. Shaw were personally responsible, jointly and severally, to buy the Property back on or before September I, 2009 for the *143 original sales price of$2,851,871.00.

COUNTER-PLAINTIFFS' THIRD AMENDED COUNTER-CLAIMS AND SECOND AMENDED THIRD

PARTY PETITION Page 9 D/877087.1

VI. BREACH OF CONTRACT 25. All factual allegations set forth elsewhere in this petition are incorporated by reference in support of this section. The Grosses adopt herein the arguments made above. 26. The Grosses adopt herein the arguments made above. As stated above, the Grosses entered into a valid and enforceable contract with Counter-Defendants and Third-Party Defendants. See Exhibit I. The Grosses have fulfilled all requirements, statutorily and in accordance with the terms of the Buy Back Option, by delivering written notice to Hickok and Shaw before May I, 2009 of the Grosses' intent to sell the Property back to Counter-Defendants and Third-Party Defendants. Counter-Defendants and Third-Party Defendants have materially breached the Contract in that they have repudiated the contract and failed to proceed with the purchase of the Property. Counter-Defendants' and Third-Party Defendants' breach has proximately caused the Grosses' damages.

VII. FRAUD IN A REAL ESTATE TRANSACTION 28. All factual allegations set forth elsewhere in this petition are incorporated by *144 reference in support of this section. The Grosses adopt herein the arguments made above. 29. The Grosses will show that Counter-Defendants' and Third-Party Defendants' conduct constitutes fraud in a real estate transaction as defined by Section 27.01 of the TEXAS BUSINESS & COMMERCE CODE. Counter-Defendants' and Third-Party Defendants' made a false

COUNTER-PLAINTIFFS' THIRD AMENDED COUNTER-CLAIMS AND SECOND AMENDED THIRD

PARTY PETITION Page 10 D/877087.l representation that they would buy the property back pursuant to the Buy Back Option in order to induce the Grosses to enter into the Contract. The Grosses entered into the Contract and purchased the Property at the full listed price of $2,851,871.00, even though the Property had been listed for two years, due to the fact that Counter-Defendants and Third-Party Defendants made the false representation that they would buy the property back pursuant to the "Buy Back Option." The Grosses' reliance directly and proximately caused them substantial injury, as set out above, for which they seek appropriate judicial relief.

A. Attorneys' Fees 30. The Grosses have retained the law firm of Cooper & Scully, P .C. to represent

them in this action and have agreed to pay the firm reasonable and necessary attorneys' fees. 31. The Grosses are entitled to recover reasonable and necessary attorney fees that are equitable and just under TEXAS CIVIL PRACTICE & REMEDIES CODE § 38.001 because it is a suit for breach of a written contract, and under TEXAS BUSINESS & COMMERCE CODE §27.0l(e) because this is an suit for statutory fraud. All conditions precedent to the collection of attorneys' fees have been satisfied.

B. Conditions Precedent 32. All conditions precedent to the Grosses claims for relief have been performed or

have occurred. WHEREFORE, PREMISES CONSIDERED, Defendants Kenneth P. Gross and Betsy L. Gross pray that their counterclaims against VSDH Vaquero Venture, Ltd., Shaw and Hickok, *145 joint and several, and third third-party claims against VSDH Vaquero Homes, Inc. and VSDH Homes, Inc. be granted; that upon final hearing of this matter, a declaratory judgment is entered as enumerated above; that the Grosses have and recover damages in an amount within the jurisdictional limits of this Court; pre- and post-judgment interest at the highest lawful rate;

COUNTER-PLAINTIFFS' THIRD AMENDED COUNTER-CLAIMS AND SECOND AMENDED THIRD

PARTY PETITION Page 11

D/877087.1

attorneys' fees and court costs; exemplary damages; and such other and further relief, whether special or general, to which the Grosses may show themselves justly entitled.

Respectfully submitted, COOPER & SCULLY, P.C. By:--=~~B"'-RE"-"N""'/'--"'cr;j"""o'---~p_,_¥l_,,_.RL4..£. 1 , __ _

-==o.04783250

GORDON K. WRIGHT

State Bar No. 22029600

JANA STARLING REIST

State Bar No. 24056890

Founders Square 900 Jackson Street, Suite I 00 Dallas, Texas 75202 Telephone: (214) 712-9500 Facsimile: (214) 712-9540 ATTORNEYS FOR DEFENDANTS KEN GROSS AND BETSY GROSS

CERTIFICATE OF SERVICE The undersigned certifies that a true and correct copy of the foregoing document was forwarded to all counsel of record herein as specified below, on this the 15th day of April 2013, as follows:

Evan Lane (Van) Shaw (via CMRRR andfacsimile) Law Offices of Van Shaw 2723 Fairmount Street Dallas, Texas 75201 Attorney for VSDH and Evan L. Shaw Kenneth B. Chaiken (via CMRRR and facsimile) Chaiken & Chaiken, P.C. *146 One Galleria Tower 13355 Noel Road, Suite 600 Dallas, Texas 75240 Attorney for Douglas M Hickok

COUNTER-PLAINTIFFS' THIRD AMENDED COUNTER-CLAIMS AND SECOND AMENDED THIRD

PARTY PETITION Page 12 D/877087.l

FILED

JOHN F. WARREN O:>oper Scully COUIHY CLERK

DALLAS COUNTY. TEXAS

A 1'1nfc.,.•10!l<1! (:01'J1om£•<m 2013 APR 15 PH ft: 22 JANAS. REIST 214-712-9571 Jana.Reist@cooperscully.com April 15, 2013

VIA HAND DELIVERY

John Warren County Court Clerk George L. Allen Courts Building 600 Commerce Street, 5th Floor Dallas, Texas 75202

Re: VSDH Vaquero Venture, Ltd v. Kenneth P. Gross and Betsy L. Gross, Cause No. CC-09-05232-A, on file in the County Court at Law No. 1, Dallas County, Texas Our File No.: 1903-17168

Dear County Clerk: Enclosed please find an original and one (1) copy of Ken Gross' and Betsy Gross' Third Amended Counter-Claim Against VSDH Vaquero Venture, Ltd, Evan L. Shaw and Douglas M Hickok and Second Amended Third-Party Petition Against VSDH Vaquero Homes, Inc. and VSDH Homes, Inc. for filing in the above referenced matter. All counsel of record will receive a copy of this document via certified mail and facsimile.

If you have any questions, please do not hesitate to contact me. /7 . /I Yours truly, a/)lf;fl) .II 1~ JJa~~ ;e~~

JSR/tsh *147 Attachments

Founders Square ^[900] Jackson Street, Suite 100 Dallas, TX 75202 Telephone (214) 712-9500 Fax (214) 712-9540 www.cooperscully.com Houston Office (713) 236-6800 San Francisco Office (415) 956-9700 Sherman Office (903) 813-3900

D/877312.1

April 15, 2013 Page2 cc: Evan Lane (Van) Shaw

Law Offices of Van Shaw 2723 Fairmount Street Dallas, Texas 75201 Attorney for Van Shaw and VSDH Vaquero Venture, Ltd. via certified mail and facsimile Kenneth B. Chaiken Chaiken & Chaiken, P.C. One Galleria Tower 13355 Noel Road, Suite 600 Dallas, Texas 75240 Attorney for Douglas M Hickok via certified mail and facsimile

*148 D/877312.1 TAB 14 *149 Scanned & Saved by: d-. ~c•n Checked by:J__.

CAUSE NO. CC·09-0S232-A

§ VSDH VAQUERO VENTURE, LTD., IN THE COUNTY COURT Plaintiffs/Counter-Defendant, § § § v. § KEN GROSS and BETSY GROSS § Defendants/Counter-Plaintiffs, § AT LAW NUMBER! § v. § §

EVAN L. SHAW ~nd DOOGLAS M. § lDCKOK § Intervenors/Counter-Defendants. § DALLAS COUNTY, TEXAS §

DEFENDANTS/COUN'fER-PLAINTIFFS

KEN GROSS AND BETSY GROSS' WITNESS LIST

TO THE HONORABLE JUDGE OF SAID COURl': COMES NOW, Kenneth P. Gross and Betsy L. Gross (hereinafter referred to as "the Grosses"), Defendants/Counter-Plaintifts in the above-entitled and numbered cause, and files this their Witness List and designate the following witnesses who may be called to testify at the time of trial. The below list represents the Grosses good faith effort to set out a witness list in advance of trial. Pre-trial preparations and/or trial may necessitat7 the calling of additional witnesses not set out on the below list. To that end, the Grosses res.erve the right to call and/or examine any individual identified as a witness on any party's witness list or a person with knowledge of relevant facts in any answer to Request for Disclosure or Interrogatories in this case. The Grosses resewe the right to designate further witnesses based upon the designations of *150 the Plaintiffs/Counter"Defendants and lntervenors/Counter-Defendants. The Grosses also reserve the right to supplement this list in order to rebut testimony elicited by Plaintiffs/Counter- Defendants and Intervenors/Comiter-Defendants during trial.

DEFENDANTS/COUNTER-PLAINTIFFS' KEN GROSS AND BETSY GROSS' WI

l IW0PLP11: S0/G0 39\ld Plaintiffs also reserve the right to call as a witness at trial the expert witnesses whom Defendants and/or Third-Party Defendants have designated as experts in this case. I. PLAINTIFFS' WITNESS LIST Kenneth P. Gross c/o his attorneys of record: Steven E. Aldous Braden, Varner & Aldous, P.C. 703 McKinney Avenue, Suite 400 Dallas, Texas 75202 (214) 740-0212 (214) 740-0217 fax Defeodant/Counter-Plaiotift" Betsy L. Gross c/o her attorneys of record: Steven E. Aldous Braden, Varner & Aldous, P.C. 703 McKinney Avenue, Suite 400 Dallas, Texas 75202 (214) 740-0212 (214) 740-0217 fax Defendant/Counter-Plaintiff Roxann Taylor Realty Executives - The Roxann Taylor Team 640 North Carroll Avenue Southlake, Texas 7 6092 The Grosses' real estate agent for subsequent sale of property Brent Cooper Jana S. Reist Gordon Wright Cooper & Scully, P.C. 900 Jackson Street, Suite 100 Dallas, Texas 75202 (214) 712-9500 *151 The Grosses' counsel

DEFENDANTS/COUNTER-PLAINTIFFS' KEN GROSS AND BETSY GROSS' WITNESS LIST Page 2 S0/E0 38\ld z9:91 E106/96/11 Steven E. Aldous Braden, Varner & Aldous, P.C. 703 McKinney Avenue, Suite 400 Dallas, Texas 75202 (214) 740-0212 (214) 740-0217 fax The Grosse~' counsel

II.

PEllSONS WHO MAY BE CALLED AS AN ADVERSE WITNESS Van Shaw, individually and as a representative of VSDH Vaquero Venture, Ltd. 2723 Fairmount Street Dallas, Texas 75201 Doug Hickok, individually and as a representative of VSDH Vaquero Venture, Ltd. c/o his attorney ofrecord: Kenneth B. Chaiken Chaiken & Chaiken, P.C. 13355 Noel Road, Ste. 600 Dallas, Texas 7 5240

III. OTHER WITNESSES In addition, the Grosses reserve the right to supplement this list pursuant to the Texas Rules of Civil Procedure and incorporates by reference any and all individuals and/or entities listed by the other parties in their respective Responses to Requests for Disclosures. Further, the Grosses hereby incorporate by reference any additional persons who are identified in documents produced in the current lawsuit. *152 DEFENDANTS/COUNTER-PLAlNTlFFS' KEN GROSS AND BETSY GROSS' WITNESS LIST Pago 3

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L

1G001'L1'1G Respectfully submitted,

TEVEN E. ALDOUS

State Bar No. 00982100 saldous@bvalaw.com BRADEN, VARNER & ALDOUS, P.C. 703 McKinney Avenue, Suite 400 Dallas, Texas 75202 (214) 740-0212 (214) 740-0217 fax Attorney for Defendants/Counter Plaintiffs

CERTIFICATE OF Sl\.RVICE The undersigned certifies that a true and correct copy of the foregoing instrument was served upon the following attorneys of record in accordance with Rule 2la of the Texas Rules of Civil Procedure on the 26 1h day ofNovember, 2013.

Kenneth B. Chaiken Evan Lane (Van) Shaw Chaiken & CHaiken, P.C. Law Offices of Van Shaw Legacy Town Center III 2723 Fairmont Street 5801 Tennyson Pkwy., Suite 440 Dallas, Texas 75201 Plano, Texas 75024

*153 DEFENDANTS/COUNTERCPL/l.INTIFFS' KEN GROSS AND BETSY GROSS' WITNESS LIST Page 4 90/90 39\ld snoa111 d3Nd\IA N::JG\lda 69'91 £106/96/11 TAB 15 *154 FILED 12/6/2013 11:41:32 AM JOHN F. WARREN COUNTY CLERK

DALLAS COUNTY CAUSE NO. CC-09-05232-A VSDH VAQUERO VENTURE, LTD. § IN THE COUNTY COURT § Plaintiff § § v. § § KEN GROSS and BETSY GROSS § ATLAWNUMBER 1 § Defendants § § v. § § § EV AN L. SHAW and DOUGLAS M. HICKOK §

§ Intervenors § DALLAS COUNTY, TEXAS PLAINTIFF'S MOTION FOR CONTINUANCE CERTIFICATE OF CONFERENCE Counsel for movant and counsel for respondent have personally conducted a conference at which there was a substantive discussion of the items presented to the Court in this Motion and counsel for respondent advises he does not oppose this Motion. ~/,.

CERTIFIED to the L_ day of December, 2013 by ___ +->/'~----

~

~ShaW

TO THE HONORABLE ruDGE OF SAID COURT:

Comes now Plaintiff, VSDH VAQUERO VENTURE, LTD, and files this its Motion for Continuance and in support thereof would respectfully show the Court as follows:

I.

*155 This matter is currently set for trial on December 9, 2013. On or about November 26, 2013, Plaintiff received Defendants/Counter-Plaintiffe Ken

Gross and Betsy Gross' Witness List, a true and correct copy of which is attached hereto as Exhibit A. The same identifies VAN SHAW as a "person who may be called as an adverse witness."

On December 2, 2013, Mr. Shaw wrote attorney Steve Aldous requesting that Mr. Aldous inform Mr. Shaw whether or not Mr. Aldous would be calling Mr. Shaw, and informing Mr. Plaintiffs Motion for Continuance - Page 1 of 5 MORP Pltf Mot4 Cont Aldous that if Mr. Shaw is called to testify, then Mr. Shaw will have to find different counsel. A true and correct copy of said letter is attached hereto as Exhibit B.

Having not heard from Mr. Aldous as to whether or not Mr. Aldous would be calling Mr. Shaw to testify at trial, on December 5, 2013, Mr. Shaw wrote Mr. Aldous again asking if Mr. Aldous would be calling Mr. Shaw as a witness, and advising Mr. Aldous that if Mr. Shaw is called as a witness, then Mr. Shaw would need to find different counsel. A true and correct copy of said letter is attached hereto as Exhibit C.

Further, on December 5, 2013, Mr. Shaw had a conversation with Defendants' counsel, Mr. Aldous, during which Mr. Aldous represented to Mr. Shaw that Mr. Aldous could not confirm whether or not Defendants would be calling Mr. Shaw as a fact witness.

II.

Mr. Shaw will be prohibited from serving as trial counsel for Plaintiff if Defendants call Mr. Shaw as a fact witness at trial pursuant to Rule 3 .08 of the Texas Disciplinary Rules of Professional Conduct, which states as follows:

(a) A lawyer shall not accept or continue employment as an advocate before a tribunal in a contemplated or pending adjudicatory proceeding if the lawyer knows or believes that the lawyer is or may be a witness necessary to establish an essential fact on behalf of the lawyer's client, unless:

(1) the testimony relates to an uncontested issue; (2) the testimony will relate solely to a matter of fommlity and

there is no reason to believe that substantial evidence will be offered in opposition to the testimony;

(3) the testimony relates to the nature and value of legal services rendered in the case; ( 4) the lawyer is a party to the action and is appearing pro se; or (5) the lawyer has promptly notified opposing cotmsel that the

*156 lawyer expects to testify in the matter and disqualification of the lawyer would work substantial hardship on the client. (b) A lawyer shall not continue as an advocate in a pending adjudicatory proceeding if the lawyer believes that the lawyer will be compelled to furnish testimony that will be substantially adverse to the lawyer's client, unless the client consents after full disclosure.

Plaintiff's Motion for Continuance - Page 2 of 5 MORP Pltf Mot4 Cont

(c) Without the client's informed consent, a lawyer may not act as advocate in an adjudicatory proceeding in which another lawyer in the lawyer's firm is prohibited by paragraphs (a) or (b) from serving as advocate. If the lawyer to be called as a witness could not also serve as an advocate under this Rule, that lawyer shall not take an active role before the tribunal in the presentation of the matter.

IV.

Because Defendants are unable to definitively advise as to whether Defendants intend to call Mr. Shaw as a fact witness at trial, and because Plaintiff will be forced to seek other counsel pursuant to Rule 3.08 if Mr. Shaw is called as a fact witness, Plaintiff requests a continuance of trial in this matter until such time as it can be determined whether or not Defendants will be calling Mr. Shaw as a fact witness.

Additionally, in the event that Defendants decide they will be calling Mr. Shaw as a fact witness, Plaintiff will require a reasonable amount of time to locate and engage new counsel, and said counsel will require a reasonable amount of time to familiarize himself with the case and prepare for trial.

Requiring Plaintiff to go to trial on December 9, 2013, would be extremely prejudicial to Plaintiff as it would effectively allow Defendant to call Mr. Shaw as a witness and have Mr. Shaw disqualified as Plaintiff's counsel in the middle of trial. This would not only operate as a deprivation to the Plaintiff of Plaintiff's right to its attorney of choice, it would also leave Plaintiff unrepresented in the middle of trial.

This continuance is not sought for delay only, but so that justice may be done.

WHEREFORE PREMISES CONSIDERED, Plaintiff respectfully requests that trial in this

matter be continued until such time as Defendants advise as to whether or not Defendants are going to call Van Shaw as a fact witness, and, if Defendants do intend to call Mr. Shaw as a fact witness, until such time as Plaintiff is able to locate and engage new counsel, and said counsel is able to familiarize himself with the case and prepare for trial, and for such other and further relief, at law or in equity, to which Plaintiff may be justly entitled. *157 Plaintiff's Motion for Continuance - Page 3 of 5 MORP PltfMot4 Cont

Respectfully f b · ed,

EVANL E AN)SHAW

BarCardNo.18140500

COLLEN R. MEYER

Bar Card No. 24074709

LAW OFFICES OF VAN SHAW

2723 Fairmount Dallas, Texas 75201 Telephone: (214) 754-7110 Facsimile: (214) 754-7115 ATTORNEYS FOR PLAINTIFF

CERTIFICATE OF SERVICE The undersigned certifies that a copy of the foregoing instrument was served upon the

I

• : """.rn-"". 2013. attorneys °/:cord of all parties to the above cause in accordance with··· the Rules of Civil Procedure, ,. lhi,

VANSHAJ;

*158 Plaintiffs Motion for Continuance- Page 4 ofS MORP PltfMot4 Cont

VERIFICATION

STATEOF1EXAS § § / / COUNTY OF DALLAS § / / EV AN LANE SHAW, being duly sworn, states that he is the atto~~f record for Plaintiff in the above entitled case and that he has read the foregoing Motion fo ~~ti~uance and that each statement of fact contained therein is true and correct to the best 1 hi

owledge.

EV AN LANE (VAN) SHAW

SUBSCRIBED AND SWORN TO BEFORE ME, on this the l..Jfh. day of December, 2013. . .•. , .. LETICIA BEAIBIZ BOTELLO J ·~·""1i;r:., l~ '-?$~ %;~ ..... ~~ MY COMMISSION EXPIRES

Notary Public in and for th September 20, 2014 .

'•r,,,?,~,i.':''

State of Texas My Commission Expires: S<p flo, !3fi'1

Plaintiff's Motion for Continuance - Page 5 of 5

*159 MORP PltfMot4 Cont

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CAUSE NO. CC·09-0S232-A

§ IN THE COUNTY COURT VSDH VAQUERO VENTURE, LTD., Plaintiffs/Counter-Defendant, § § v. § § § KEN GROSS and BETSY GROSS Defendants/Counter-Plaintiffs, § AT LAW NUMBER! § v. § §

EVAN L. SHAW ~nd DOOGLAS M. § lDCKOK § Intervenors/Counter-Defendants. DALLAS COUNTY, TEXAS § §

DEFENDANTS/COUN'fER-PLAINTIFFS

KEN GROSS AND BETSY GROSS' WITNESS LIST

TO THE HONORABLE JUDGE OF SAID COURl': COMES NOW, Kenneth P. Gross and Betsy L. Gross (hereinafter referred to as "the Grosses"), Defendants/Counter-Plaintifts in the above-entitled and numbered cause, and files this their Witness List and designate the following witnesses who may be called to testify at the time of trial. The below list represents the Grosses good faith effort to set out a witness list in advance of trial. Pre-trial preparations and/or trial may necessitat7 the calling of additional witnesses not set out on the below list. To that end, the Grosses res.erve the right to call and/or examine any individual identified as a witness on any party's witness list or a person with knowledge of relevant facts in any answer to Request for Disclosure or Interrogatories in this *160 case. The Grosses resewe the right to designate further witnesses based upon the designations of the Plaintiffs/Counter"Defendants and lntervenors/Counter-Defendants. The Grosses also reserve the right to supplement this list in order to rebut testimony elicited by Plaintiffs/Counter- Defendants and Intervenors/Comiter-Defendants during trial.

DEFENDANTS/COUNTER-PLAINTIFFS' KEN GROSS AND BETSY GROSS' WI

l IW0PLP11: S0/G0 39\ld Plaintiffs also reserve the right to call as a witness at trial the expert witnesses whom Defendants and/or Third-Party Defendants have designated as experts in this case. I. PLAINTIFFS' WITNESS LIST Kenneth P. Gross c/o his attorneys of record: Steven E. Aldous Braden, Varner & Aldous, P.C. 703 McKinney Avenue, Suite 400 Dallas, Texas 75202 (214) 740-0212 (214) 740-0217 fax Defeodant/Counter-Plaiotift" Betsy L. Gross c/o her attorneys of record: Steven E. Aldous Braden, Varner & Aldous, P.C. 703 McKinney Avenue, Suite 400 Dallas, Texas 75202 (214) 740-0212 (214) 740-0217 fax Defendant/Counter-Plaintiff Roxann Taylor Realty Executives - The Roxann Taylor Team 640 North Carroll Avenue Southlake, Texas 7 6092 The Grosses' real estate agent for subsequent sale of property Brent Cooper Jana S. Reist *161 Gordon Wright Cooper & Scully, P.C. 900 Jackson Street, Suite 100 Dallas, Texas 75202 (214) 712-9500 The Grosses' counsel

II.

III. OTHER WITNESSES In addition, the Grosses reserve the right to supplement this list pursuant to the Texas Rules of Civil Procedure and incorporates by reference any and all individuals and/or entities listed by the other parties in their respective Responses to Requests for Disclosures. Further, the Grosses hereby incorporate by reference any additional persons who are identified in documents *162 produced in the current lawsuit. DEFENDANTS/COUNTER-PLAlNTlFFS' KEN GROSS AND BETSY GROSS' WITNESS LIST Pago 3

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1G001'L1'1G Respectfully submitted,

TEVEN E. ALDOUS

State Bar No. 00982100 saldous@bvalaw.com BRADEN, VARNER & ALDOUS, P.C. 703 McKinney Avenue, Suite 400 Dallas, Texas 75202 (214) 740-0212 (214) 740-0217 fax Attorney for Defendants/Counter Plaintiffs

*163 DEFENDANTS/COUNTERCPL/l.INTIFFS' KEN GROSS AND BETSY GROSS' WITNESS LIST Page 4 90/90 39\ld snoa111 d3Nd\IA N::JG\lda 69'91 £106/96/11 LAW OFFICES OF VAN SHAW ATTORNEYS AT LAW 2723 FAIRMOUNT DALLAS, TEXAS 75201 DANIEL K. HAGOOD

VAN SHAW*

OF COUNSEL JANET R. RANDLE (214) 754-7110 FAX NO. (214) 754-7115 CERTIFIED PARALEGALS *BOARD CERTIFIED IN www.shawlawoffice.com RHONDA VINCENT PERSONAL INJURY LORI G. MOORE •CERTIFIED PUBLIC APR!L S. SUMNER ACCOUNTANT Mr. Steve Aldous December 2, 2013

ATTORNEY AT LAW

FAX (214*740-0217) 703 McKinney Avenue, Suite 400 =PH 214*740-0212 = Dallas, Texas 75202 Re: VSDH V. Gross Dear Mr. Aldous: I received your List of Witnesses and Notice that I am listed as a possible witness by you. If I am to be called I cannot then be counsel for VSDH and will need time to find other counsel Please let me)mow if you will I will not be calling me so that I can make plans accordingly: Thi( / Van Shaw VS/rv *164 Cc: Ken Chaiken email E)(H\B\T

\8

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LAW OFFICES OF VAN SHAW ATTORNEYS AT LAW ^[2723] FAIRMOUNT VAN SHAW'" DALLAS, TEXAS 75201 JANF.T R. RANDL.F.: OANJEL. K. HAGOOD (214) 754-7110

OF COUNSEL

FAX NO. (214) 754-7115 ~ F.IOARD OERTIFIED !N www.shawlawoffice.com PERSONAL INJURY C~~TIFIEO PA~ALEGALS ~ CERTIFIEO PUBLIC Fl.HONDA VINCENT ACCOUNTANT LORI G. MOORE AP~IL $, SUMNER

Mr. Steve Aldous December 2, 2013

ATTORNEY AT LAW

*165 FAX (214*740-0217) 703 McKinney Avenue, Suite 400 = f:'H 214"'740-0212 = Dallas, Texas 75202 Re: VSDH V. Gross Dear Mr. Aldous: I received your List of Witnesses and Notice that I am listed as a possible witness by you. IfI am to be cal.led I cannot tben be counsel for VSDH and will need time to find other counsel

,/ Please let me ](~ow if you will I will not be c;alling me so that I can make plans according! Van Shaw

Scanned & Saved by: ~ Scan Checked by:~

LAW OFFICES OF VAN SHAW ATTORNEYS AT LAW 2723 FAIRMOUNT DALLAS, TEXAS 75201 DANIEL K. HAGOOD

VAN SHAW"

OF COUNSEL (214) 754-7110 JANET R. RANDLE FAX NO. (214) 754-7115 CERTIFIED PARALEGALS *BOARD CERTIFIED IN www.shawlawoffice.com RHONDA VINCENT PERSONAL INJURY LORI G. MOORE *CERTIFIED PUBLIC APRILS. SUMNER ACCOUNTANT Mr. Steve Aldous December 5, 2013

FAX (214*740-0217)

ATTORNEY AT LAW =PH 214*740-0212 = 703 McKinney Avenue, Suite 400 saldous@bvalaw.com Dallas, Texas 75202 Re: VSDH v. Gross Dear Mr. Aldous: I called you to discuss a moment ago and left a message as you were unavailable. I have not heard from you in reply to my fax as to whether of not you will/ will not be calling me as a witness at trial. I need to know asap as if you will call me, I cannot be counsel if I am to be a witness. Please advise asap.

/ Thanks, j rl vansk:i~ *166 VS/rv Cc: Ken Chaiken email

EXHIBIT

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LAW OFFICE OF V SHAW FAX 2147547115 2147547110 TEL

BROA0J127259 SER.#

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LAW OFFICES OF VAN SHAW ATTORNEYS AT LAW ^[2723] FAIRMOUNT DANIEL K. HAGOOD DALLAS, TEXAS 752Q1 VAN SHAW~ Of COUNSEL (214) 754"7110 JANET R. RANDLE: FAX NO. (214) 754·7115 Ce.f!l.TIP"IEO PARALEGALS ~BOARD CERTIFI~ ^[1111] www.shawlawoffice.com ~HONDA. VINCENT Pe.~SONAI. 1NJt,JRY LORI G. MOO~e • CERTtFIED PUBLIC APRIL S. SUMNE;R, ACCOUNTANT December 5, 2013 Mr. Steve Aldous *167 FAX (214*740-0217)

ATTORNEY AT LAW

=PH 214*740-0212 ~ 703 McKinney Avenue, Suite 400 saldous@bvalaw.com Dallas, Texas 75202 Re: VSDH v. Gross Dear Mr. Aldous: I called you to discuss a moment ago and left a message as you were unavailable. I have not heard from you in reply to my fax as to whether of not you will I will not be calling me as a witness at_ trial. I need to know asap as if you will call me, I cannot be counsel if I am to be a wi!J;less.

,. ;

Please advisei~ap. ~.;

_r TAB 16 *168 FILED 1/24/2014 12:49:00 PM JOHN F. WARREN COUNTY CLERK

DALLAS COUNTY CAUSE NO. CC-09-0S232-A VSDH VAQUERO VENTURE, LTD. § IN THE COUNTY COURT §

Plaintiff § §

v. § §

KEN GROSS and BETSY GROSS § AT LAW NUMBER 1 §

Defendants § § v. § §

EV AN L. SHAW and DOUGLAS M. § HICKOK §

§ Intervenors § DALLAS COUNTY, TEXAS PLAINTIFF/COUNTER-DEFENDANT VSDH VAOUERO VENTURE, LTD.'S FOURTH SUPPLEMENTAL ANSWER AS AN ADDITION TO COUNTER-DEFENDANTS' FIRST, SECOND AND THIRD SUPPLEMENTAL ANSWERS AND COUNTER-DEFENDANTS'

FIRST AMENDED ANSWER TO DEFENDANTS/COUNTER-PLAINTIFFS' COUNTERCLAIM TO THE HONORABLE JUDGE OF SAID COURT: Come now Plaintiff/Counter-Defendant VSDH V AQUERO VENTURE, LTD. hereinafter referred to as "Counter-Defendant" or "VSDH" and files this its Fourth Supplemental Answer as an Addition to Counter-Defendants' First, Second and Third Supplemental Answers and Counter Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim, and would respectfully show unto the Court the following:

I.

*169 The pleadings and assertions set forth herein supplement and are in addition to Counter Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim and Counter Defendants' First, Second and Third Supplemental Answers in Addition to Counter-Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim. None of the contentions, assertions nor defenses set forth in Counter-Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim and/or Counter-Defendants' First, Second and Third in Addition to Counter-Defendants' First Amended Answer to Supplemental Answers Defendants/Counter-Plaintiffs' Counterclaim are withdrawn. This is to be read in addition to and in conjunction with Counter-Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' FOURm SUPPLEMENTAL ANSWER TO COUNTERCLAIM - Page ^[1] PLED Pltf Ans Def CClairn Supp4

1 Counterclaim and Counter-Defendants' First, Second and Third Supplemental Answers in Addition to Counter-Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Counterclaim.

II.

Plaintiff/Counter-Defendant VSDH VAQUERO VENTURE, LTD. asserts (and it continues to assert by amendment or supplement if necessary) the following affirmative defenses and/or specific denials to the Grosses' counterclaims:

a. The Grosses breached the subject contract and released Plaintiff/Counter- Defendant from responsibility (if any under the contract, which is denied) thereunder pursuant to the doctrine of first material breach;

b. The Grosses' counterclaims and third-party claims are barred by the economic loss doctrine; c. Plaintiff/Counter-Defendant VSDH VAQUERO VENTURE, LTD. denies the Grosses' alleged compliance with conditions precedent and pleads failure of conditions precedent, including:

failure of the Grosses to obtain written and required approval for the 1. improvements of the property; and, ii. failure to establish exceptions to the statute of frauds. d. The Grosses' claims are barred by estoppel and waiver; e. The Grosses' claims are barred by failure to state a viable claim for declaratory

relief or other relief; f. The Grosses' claims are barred by the claims bar under the statute of frauds; *170 g. The Grosses' claims are barred by their failure to mitigate; h. The Grosses' claims are barred by lack of privity; i. The Grosses' claims are barred by lack of presentment or demand; j. The Grosses' counterclaims for damages for breach of the alleged guaranty made

the basis of this lawsuit against Plaintiff/Counter-Defendant are barred by the doctrine of impossibility of performance; FOURm SUPPLEMENTAL ANSWER TO COUNTERCLAIM - Page ^[2] PLED Pltf Ans DerCClaim Supp4

2 k. The Grosses' counterclaims for damages due to an alleged breach of the buy-back provision made the basis of this lawsuit are barred by the doctrine of illusory contracts or promises;

1. The Grosses' counterclaims for damages. for alleged breach of the alleged guaranty made the basis of this lawsuit against Plaintiff/Counter-Defendant are barred by a failure of or incomplete execution of the alleged guaranty agreement by at least one of the alleged guarantors;

m. The Grosses' counterclaims for damages for alleged breach of the alleged guaranty or the buy-back obligation made the basis of this lawsuit are both barred by lack of consideration and/or a failure of consideration; and

n. To the extent the alleged guaranty obligation is found to be enforceable against Plaintiff/Counter-Defendant (which Plaintiff/Counter-Defendant VSDH VAQUERO VENTURE, LTD. continues to deny), any recovery from Plaintiff/Counter-Defendant is limited to Plaintiff/Counter-Defendant's limited partner's contribution at the time the alleged guaranty was made.

ITI.

Pleading further to the extent necessary, Plaintiff/Counter-Defendant VSDH VAQUERO VENTURE, LTD. asserts the following additional defenses by supplementation: a. The Grosses' claims against Plaintiff/Counter-Defendant for damages are barred by their agreement to seek exclusive remedies, not including damages, from Plaintiff/Counter Defendant in the event of a breach of the alleged buy-back provision in the subject contract;

b. The Grosses' claims against Plaintiff/Counter-Defendant are barred under the doctrine of election of remedies; and, c. If any person/entity guaranteed anything in the subject contract, at most said person/entity guaranteed a buy-back obligation, and not any obligation by the Seller to pay *171 damages.

IV. ALTERNATIVE PLEADING All defenses herein, if inconsistent, are made pursuant to Rule 48 of the Texas Rules of Civil Procedure. FOURm SUPPLEMENTAL ANSWER TO COUNTERCLAIM - Page ^[3] PLED Pltf Ans DefCClaim Supp4

3 .. , v.

NOTICE OF INTENT

Plaintiff/Counter-Defendant hereby gives notice of intent to utilize items produced in discovery in the trial of this matter and the authenticity of such items is self-proven per the Texas Rules of Civil Procedure, 193.7.

WHEREFORE, PREMISES CONSIDERED, Plaintiff/Counter-Defendant VSDH V AQUERO VENTURE, LID. prays that Counter-Plaintiffs take nothing by their claims against Plaintiff/Counter-Defendant VSDH VAQUERO VENTURE, LID., and that Plaintiff/Counter Defendant VSDH VAQUERO VENTURE, LID. be discharged with co of court, attorney's fees, and such other and further relief to which Plaintiff/Counter-De ndant VSDH VAQUERO VENTURE, LID. may be entitled, both in law and in equity.

EV AN LANE rv AN) SHAW Bar Card No. 18140500

LAW OFFICES OF VAN SHAW

2723 Fairmount Street Dallas, Texas 75201 (214) 754-7110 FAX NO. (214) 754-7115 Email-van@shawlaw.net A TIORNEY FOR PLAINTIFF/COUNTER DEFENDANT

*172 FOURm SupPLEMENTAL ANSWER TO COUNTERCLAIM - Page ^[4] PLED Pltf Ans DefCClaim Supp4

4 , .

CERTIFICATE OF SERVICE

T ersigned certifies that a copy of the foregoing instrument was served upon the of all parties to the above cause in accordance with the Ru es ofCivil Procedure, y of January, 2014.

VERIFICATION

STATE OF TEXAS ) ) COUNTY OF DALLAS ) BEFORE ME, the undersigned Notary Public, on this day personally appeared EVAN L. SHAW, who being by me duly swom on his oath deposed and said that he is over 21 years of age, of sound mind and capable of making this Affidavit; that he is an authorized agent of Plaintiff/Counter-Defendant VSDH VAQUERO VENTURE, LTD. in the above-entitled and numbered cause; that he has read the above and foregoing Fourth Supplemental Answer as an Addition to Counter-Defendants' First, Second and Third Supplemental Ans rs and Counter Defendants' First Amended Answer to Defendants/Counter-Plaintiffs' Count claim; and that every statement contained in Paragraph II(m) is within his personal knowledge a is true and correct.

EVANL. S W

*173 SUBSCRIBED AND SWORN TO BEFORE ME on the ~~~y of January, 2014, to certify which witness my hand and official seal. \

Q~

LORI G. MOORE

MY COMMISS10N EXPiRES May 23,2016 My commission expires ~ I l ~\. ~ \..f} , FOURTH SUPPLEMENTAL ANSWER TO COUNTERCLAIM - Page 5 PLED Pltf Ans Def CClaim Supp4

5 TAB 17 *174 FILED 2/27/2014 9:49:01 AM JOHN F. WARREN COUNTY CLERK

DALLAS COUNTY CAUSE NO. CC-09-05232-A VSDH VAQUERO VENTURE, LTD., § IN THE COUNTY COURT Plaintiffs/Counter-Defendant, § § v. § § KEN GROSS and BETSY GROSS § Defendants/Counter-Plaintiffs, § AT LAW NUMBER 1 § v. § §

EV AN L. SHAW and DOUGLAS M. §

HICKOK

§ Intervenors/Counter-Defendants. § DALLAS COUNTY, TEXAS §

KEN GROSS AND BETSY GROSS' MOTION TO DISQUALIFY EV AN L. SHAW TO THE HONORABLE JUDGE BENSON: COMES NOW, Kenneth P. Gross and Betsy L. Gross (hereinafter referred to as "the Grosses"), and file this motion to disqualify Evan L. Shaw ("Shaw") as counsel for VSDH Vaquero Venture, Ltd. ("VSDH") and would respectfully show the following:

ARGUMENT AND AUTHORITIES

This case was previously set for trial on December 9, 2013. On December 6, 2013, Shaw *175 filed a motion for continuance on behalf ofVSDH on the grounds that Shaw could be called as a witness in the trial and, as such, Shaw would be prohibited by the Disciplinary Rules of Professional Conduct from acting as trial counsel for VSDH. (A copy of the motion for continuance is attached as Exhibit 1 ). During the various hearings held by the Court prior to passing the setting, counsel for Douglas M. Hickok indicated that Shaw would likely be called as a witness in the case. Ken Gross and Betsy Gross' Motion to Disqualify Evan L. Shaw: Page 1 of3

As of today's date, Shaw has not withdrawn from representing VSDH. This matter is currently specially set for trial on July 7, 2014. Nothing has changed in terms of the likelihood that Shaw will be called as a witness in the trial of this case. The trial court has the power and the duty to disqualify counsel when representation of the client is prohibited by the Texas Disciplinary Rules of Professional Conduct. See Ayres v. Canales, 790 S.W.2d 554, 557 n.2 (Tex. 1990). Tex. Disciplinary R. Prof. Conduct 3.08 was amended in 1994 to prohibit "employment as an advocate before a tribunal in a contemplated or pending adjudicatory proceeding." Tex. Disciplinary R. Prof. Conduct 3.08(a). As a result, Shaw is not permitted to act as an advocate before this Court during the pendency of this case.

WHEREFORE, PREMISES CONSIDERED, the Grosses respectfully request that their motion to disqualify Evan L. Shaw be GRANTED, and that they have and recover all other relief to which they are entitled in law or equity.

Respectfully submitted, Isl Steven E. Aldous *176 Steven E. Aldous State Bar No. 00982100 saldous@forsheyprostok.com FORSHEY & PROSTOK LLP 500 Crescent Court Suite 240 Dallas, Texas 75201 Telephone: (214) 716-2101 Facsimile: (214) 740-2115 Attorney for Defendants/Counter Plaintiffs

Ken Gross and Betsy Gross' Motion to Disqualify Evan L. Shaw: Page 2 of3

CERTIFICATE OF SERVICE

The undersigned certifies that a true and correct copy of the foregoing instrument was served upon the following attorneys of record in accordance with Rule 21a of the Texas Rules of Civil Procedure or through the electronic filing system on the 2ih day of February, 2014.

Kenneth B. Chaiken Evan Lane (Van) Shaw Law Offices of Van Shaw Chaiken & Chaiken, P.C. 2723 Fairmont Street Legacy Town Center III Dallas, Texas 75201 5801 Tennyson Pkwy., Suite 440 Plano, Texas 75024

Isl Steven E. Aldous

STEVEN E. ALDOUS

*177 Ken Gross and Betsy Gross' Motion to Disqualify Evan L. Shaw: Page 3 of3

12/05/2013 12:05 2147547115 LAt.<J OFFICE OF V .SHAW PAGE 03/15

CAUSE NO. CC-09-05232-A

IN THE COUNTY COURT VSDH VAQUERO VENTURE, LTD. § § Plaintiff § § v. § § AT LAW NUMBER 1 KEN GROSS and BETSY GROSS § § Defendants § § v. § § EV AN L. SHAW and DOUGLAS M. § HICKOK §

§ Intervcnors § DALLAS COUNTY, TEXAS PLAINTIFF'S MOTION FOR CONTINUANCE CERTI.FICATE OF CONFERENCE Counsel for movant and counsel for respondent have personally conducted a confere at which there was a substantive discussion of the items presented to the Court ipthis Motion and counsel for respondent advises he doe"" oppooe this Motion. ~

CERTIFIED to the L day of December, 2013 by ___ J_L_.__ ___ _

Y

V/.;l_ Shaw TO THE HONORABLE JUDGE OF SAID COURT: *178 Comes now Plaintiff, VSDH VAQUERO VENTURE, LTD, and files this its Motion for Continuance and in support thereof would :respectfully show the Court as follows: This matter is currently set for trial on December 9, 2013. On or about November 26, 2013, Plaintiff received Defendants/Counter-Plaintiffs Ken

Gross and Betsy Gross' Witness List, a true and correct copy of which is attached her.eto as Exhibit A. The same identifies VAN SHAW as a "person who may be called as an adverse witness.'~

On December 2, 2013, Mr. Shaw VvTOte attorney Steve Aldous requesting that Mr. Aldous infonn Mr. Shaw whether or not Mr. Aldous would be calling Mr. Shaw, and informing Mr. Plaintiffs Motion for Continuance· Pa~e 1 llf5

EXHIBIT

MORP Pltf Mot4 Conl

I

LAW OFFICE OF V .SHAW

PAGE 04/16 2147547115

12/06/2013 12:05 Aldous that if Mr. Shaw is called to testify, then Mr. Shaw will have to find different counsel. A true and correct copy of said letter is attached hereto as Exhibit B.

Having not heard from Mr. Aldous as to whether or not Mr. Aldous would be calling Mr. Shaw to testify at trial, on December 5, 2013, Mr. Shaw wrote Mr. Aldous again asking if Mr. Aldous would be calling Mr. Shaw as a witness, and advising Mr. Aldous that if Mt. Shaw is called as a witness, then Mr. Shaw would need to find different counsel. A true and correct copy of said letter is attached hereto as Exhibit C.

Further, on December 5, 2013, Mr:. Shaw had a conversation with Defendants' counsel, Mr. Aldous, during which Mt. Aldous represented to Mr. Shaw that Mr. Aldous could not confinn whether or not Defendants would be calling Mr. Shaw as a fact witness.

H.

Mr. Shaw \Vilt be prohibited from serving as trial counsel for Plaintiff if Defendants call Mr. Shaw as a fact witness at trial pursuant to Rule 3.08 of the Texas Disciplinary Rules of Professional Conduct, which states as follows:

(a) A lawyer shall not accept or continue employment as an advocate before a tiibunal in a contemplated or pending adjudicatory proceeding if the lav.'Ycr knows or believes that the lawyer is or may be a witness necessary to establish an essential fact ^[011] behalf of the lav,.ryer's client unless:

(1) the testimony relates to an uncontested issue; (2) the testimony will relate solely to a matter <)f formality and

there is no reason to believe that substantial evidence will be offored in opposition to the testimony;

*179 (3) the testimony relates to the nature and value of legal services rendered in the case; (4) the lawyer is a party to the action and is appearing prose; or (S) the lawyer has promptly notified opposing counsel that the

law-yer expects to testify in the matter and disqualification of the lawyer would work substantial hardship on the client. (h) A lawyer shall not continue as an advocate in a pending adjudicatory proceeding if the lav,;yer believes that the lawyer will be compelled to furnish testimony that will be substantially adverse to the lawyer's client, unless the client consents after full disclosure.

£.!ajntiff's Motion fot Continuance· Pag~ 2 Qf5 MORP PltfMot4 Cont

LAW OFFICE OF V SHAW

PAGE 05/15 2147547115 12/05/2013 12:05 (c) Withoi.1t the client's informed consent, a lawyer may not act as advocate in an adjudicatory proceeding in which another lawyer in the lawyer's finn is prohibited by paragraphs (a) or (b) from serving as advocate. If the krwyer to be called as a witness could not also serve as an advocate under this Rule, that lawyer shall not take an active role before the tribunal in the presentation of the matter.

IV.

Because Defendants are unable to definitively advise as to whether Defendants intend to call Mr. Shaw as a fact \Vitness at trial~ and because Plaintiff will be forced to seek other counsel pursuant to Rule 3.08 if Mr. Shaw is called as a fact \Vltness, Plaintiff requests a continuance of trial in this matter until such time as it can be determined whether or not Defendants will be calling Mr. Shaw as a fact ·witness.

Requiring Plaintiff to go to t-rial on December 9, 2013, would be extremely prejudicial to Plaintiff as it would effectively allow Defendant to call Mr. Shaw as a Vvitn.ess and have Mr. Shaw disqualified as Plaintiff's counsel in the middle of trial. This would not only operate as a deprivation to the Plaintiff of Plaintiffs right to its attorney of choice, it would also leave Plaintiff unrepresented in the middle of trial.

v. TI1is continuance is not sought for delay only, but so that justice may be done. WHEREFORE PREMISES CONSIDERED, Plaintiff respectfully requests that trial in this

matter be continued until such time as Defendants advise as to whether or not Defendants are going to call Van Shaw as a fact witness, and? if Defendants do intend to call Mr. Shaw as a fact witness, *180 until such time as Plaintiff is able to locate and engage new counsel, and said counsel is able to familiarize himself with the case and prepare for trial: and for such other and further relief, at law or in equity, to which Plaintiff may be justly enJitled. ~lllintiff's Motion for Conti!1ull!l.ce - Page 3 of 5 MORP PltfMot4 Cont

LAW OFFICE OF V.SHAW PAGE 05/15 2147547115 12/05/2013 12:05 Respectfully sf,b · ed, tA. AN) SHAW

EVAN L

Bar Card No. 18140500

COLLEN R. MEYER

Bar Card No. 24074709 LAW OFFICES OF VAN SHAW 2723 Fairmount Dallas~ Texas 75201 Telephone: (214) 754-7110 Facsimile: (214) 754-7115 ATTORNEYS FOR PLAINTIFF

CERTIFICATE OF SERVICE

The undersigned certifies that a copy of the foregoing instrument was served upon the attorneys Gord of all parties to the above cause in accordance witl1 the Rules of Civil Procedure, , : day of December, 2013. / / on this

VAN SHA vb *181 Plnintifrs Mgtion for Continua.nee - Pnge 4 of 5 MORP Pltf Mot4 Cont

LAW OFFICE OF V.~HAW PAGE 07/15 2147547.115 12/05/2013 12:05

VERIFICATION

§ STATE OF TEXAS § COUNTY OF DALLAS § EV AN LANE SHAW, being duly sworn, states that he is the atto y of record for Plaintiff in the above entitled case and that he has read the forei;wing Motion fo · ontinuance and that each statement of fact contained therein is true and correct to ~the bestiif hi owledge.

EV AN

LANE (VAN) SHAW SUBSCRIBED AND SWORN TO BEFORE ME, on this the {J0 day of December, 2013. LETICIA BEAn:tlZ BOTELLO J ~~~!!!!!!!!!!!'!!!!'!!!!!!!!!!!!!~··

MY COMMISSION EXPIR!;S

Notary Public in and for th ~r:!0,2014 State of Texas My Commission Expires: Sip.BuJJ.A'1 *182 Plaintlfr~ Mtition for Continunnce • Pa!le 5 of S MORP PltfMot4 Cont -

PAGE 08/15

LAW OFFICE OF V SHAW 2147547115 12/05/2013 12:05 CAUSE NO. CC~Q9w05232-A IN THE COUNTY COURT §

VSDH VAQUERO VENTURE, LTD.,

§ Plaintiffs/Counter-Defendant, § § v. § KEN GROSS ·and BETSY GROSS § AT LAW NUl\tlBER 1 § Defendants/Counter-Plaintiffs, § v. § §

EVAN L. SHAW ~nd DOUGLAS M. §

HICKOK

§ Inite:rvenors/Counter-Defendants. DALLAS COUNTY, TEXAS § § DEFENDANTSICOUN~t'.ER-PLAiNTIFFS

KEN GROSS AND

BETSY GROSS' WITNESS LIST

TO THE

HONORABLE JUDGE OF SAID COURT: COMES NOW, Kenneth P. Gross and Betsy L. Gross (hereinafter referred to a.s ''the Grosses"), Defendants/Counter-Plairitiffs in the above-entitled and numbered cause, and files this their Witness List and designate the following witnesses who may be called to testify at the time of trial. The below list represents the Grosses good faith effort to set out a witness list in advance of trial. Pre4rial preparations and/or trial may necessita:te the calling of additional *183 witnesses not set out on the below list. ·ro that end, the Grosses res.e.rve the right to call and/or examine any individual identified as a i,.vitness on any party's wimess list or a person with knowledge of relevant facts in any answer to Reque$t for Disclosure or Interrogatories in this case. The Grosses reserve the right to designate further witnesses based upon the designations of the Plaintiffs/Counter-Defendants and Intervenors/Counter·Defendants. The Grosses also reserve the right to supplement this list in order to rebut testimony elicited by Plaintiffs/Counter- Defendants and lntervenors/Cow1ter-Defendants during triaL

snoal'i1 ~3N~~A NJcr~~g LAW OFFICE OF V SHAW 12/05/2013 12:05 2147547115 PAGE 09/15 Plaintiffs also reserve the right to call as a witness at trial the expert witnesses whom Defendants and/or Third-Party Defendants have Q.esignated as experts in this. ease. r. ~LAINTIFFS' Wl"(MESS 4IST Ke11Ileth P. Gross c/o his attorneys of record: Steven E. Aldous Braden, Vamer & Aldous, P.C. 703 McKinney A venue, Suite 400 Dallas, Texas 75202 (214) 740-0212 (214) 740-0217 fax Defendant/Counter-Plaintiff Betsy L. Gross c/o her attorneys of record: Steven E. Aldous Braden, Varner & Aldous) P.C. 703 McKinney A venue, Suite 400 Dallas, Texas 75202 (214) 740~0212 (214) 740-0217 fax Defeudant/CounterftPJaintiff Roxann Taylor Realty Executives - The Roxann Taylor TefUn 640 North Carroll Avenue *184 Southlake, Texas 76092 The Grosses' real estate agent for subsequent sale of property Brent Cooper Jana S. Reist Gordon Wright Cooper & Scully, P.C. 900 Jackson Street, Suite 100 Dallas> Texas 75202 (214) 712-9500 The Grosses' counsel

DEFENDANTS/COUNTER-PLAlNTIFFS' KEN GROSS AND BETSY GROSS' WITNESS LIST Page Z zs:s1 E10~/9~/tt · LAW OFFICE OF V SHAW 12/05/2013 12:05 2147547115 PAGE 10/15 Steven E. Aldous Braden, Varn.er & Aldous, P.C. 703 McKinney A venue, Suite 400 Dallas) Texas 75202 (214) 740~0212 (214) 740~0217 fa."<. The Grosses~ counsel

II.

PER$0NS WHO MAY BE GALLED AS AN ADVERSE WITNESS Van Shaw, individually and as a representative of VSDH Vaquero Venture; Ltd. 2723 Fairmount Street Dall.as~ Texas 75201 Doug Hickok, individually and as a representative of VSDH Vaquero Venture~ Ltd. c/o his attorney of record~ Kenneth B. Chaiken Chaiken & Chaiken) P.C. 13355 Noel Road, Ste. 600 Dallas, Texas 75240

III. OTHER WITNESSES In addition, the Grosses reserve the right to supplement this list pursuant to the Texas Rules of CiVil Procedure and incorporates by reference any and all individuals and/or entities *185 listed by the other parties in their respective Responses to Requests for Disclosures. Further? the Grosses hereby incorporate by reference any additional persons who are identified in documents produced in the current lawsuit.. DEFENDANTS/COUNTER-PLAlN1'lFFS' KEN GROSS AND EETSY GROSS; WITNESS LIST Pag~ 3

90/170 39V'd 12/05/2013 12:05 2147547115 LAW OFFICE OF V SHAW

PAGE 11/15

Respectfully submitted.

TEVEN E. ALDOUS

State Bar No. 00982100 saldous@bvals.w.co:m BRADEN, V ARl'lER & ALDOUS, .P.C. 703 McKinney Avenue, Suite 400 Dallas, Texas 75202 (214) 740~0212 (214) 740-0217 fax Attorney for.Defendants/Counter Plaintiffs

CERTitJJ.:ATE OF SERVICE The undersigned certifies that a true and correct copy of the foregoing instrument was served upon the following attomeys of record in accordance with Rule 21a of the Texas Rules of Civil Procedure on the 26th day of November, 2013.

Kenneth "B. Chaiken Evan Lane (Van) Shaw Chai.ken & CHaiken, P. C. Law Offices of Van Shaw *186 Legacy Town Center III 2723 Fainnont Street 5801 Tennyson Pkwy.~ Suite 440 Dallas, Texas 75201 Plano, Texas 75024 .Page ^[4]

DEFENDANTS/COUNT£R-PLAINTIFFS' KEN GROSS AND BETS\' GROSS' WITNESS LIST 90/90 39'i1d LAW OFFICE OF V. c;HAW PAGE 12/15 12/05/2013 12:05 2147547J 15 LAW OFFICES OF VAN SHAW ATTORNEYS AT LAW 2723 FAIRMOUNT OANIEl K. HAGOOD DALLAS, TEXAS 75201 VAN SHAW" OF COUNSeL JANET R. Rl\NDl.F. (214) 754·7110

FAX NO. (214) 754-7115

Ct::RTIFlED Pl\RAl.F.GALS • SOAF~O CERTIFIED IN www.shawlawoffice.com RHONDA VINCENT PE:RSONAL INJUF!Y LORI G. MOORE • CSRTIFIED PUBLIC APRILS. SUMNER

ACCOUNTANT

Mr. Steve Aldous December2, 2013

ATTORNEY AT LAW

FAX (214*740-0217)

=PH 214*740-0212 = 703 McKinney A venue, Suite 400 Dallas; Texas 75202 Re: VSDH V. Gross Dear Mr. Aldous: I received your List of Witnesses and Notice that I am 11sted as a possible witness by you. IfI am to be called I cannot then be counsel for VSDH and will need time to find other counsel Please let mefi~w if you will /will not be cal li:og me so that I can make plans acctrd1ng1 ( Than ,

I *187 I

Van Shaw VS/rv Cc: Ken Chaiken email PAGE 13/15

LAW OFFICE OF V SHAW 12/05/2013 12:05 2147547115 TRANSMISSION 'vERIFICATIOi'l REPORi 12/02/2013 07:27 TIME NAME LAW OFFICE OF V SHAW FAX 2147547115 2147547110 TEL : SER. ff ; BROA0J127259

12/02 07:27

DATE, TIME

FAX i'IO. /NAME 2147400/.17 DURATION 00:06:16

PAGE(S)

^[01] rn<

RESULT MODE STANDARD

ECM

LAW OFFICES OF VAN SHAW ATTORNEYS AT JJ\W 2723 FAIRMOUNT VAN SHAW" DALLAS, TE;XAS 75201 JANF.T Fl. RANDLE {214) 754·7110 CAN/EL K H.J\0000 (\fOCOONS!;l FAX NO. (214) 754-711;; • J;10ARD 09!<'1"(~/EI:.\ IN WMl/.Shawlawoffice .. com P.ERSONAL INJLtRY

C/;l~Ttl'"fEO PARALEGALS: 'Cl;RTIFISO PU!'!uc

~ONOA

*188 VTNCENT ACCO UM" llNi ~osr G. MOORE' A"l'\IL S, S~IMN!;R

Mr. Steve Aldous December 2, 2013 ATTORNEY AT LAW FAX (214*740~0217) 703 McKinney Avenue, Suite 400 =PH 214*740~0212,,,. Dallas) Texas 75202 R.e: VSDH V. Gross Dem· Mr. Aldous: r received your List of Witnesses and Notice that l am listed as a possible witness by you. IfI am to be called r cannot tben be counsel for VSDH and will need time to find other. counsel Please let me kfow if You '11,rill I will not be calling me so that I can make pJans accordingj>7 Th~/ ;· Van Shaw LAW OFFICE OF V SHAW PAGE 14/16

12/06/2013 12:05 2147547115 LAW OFFICES OF VAN SHAW AITORNEYS AT LAW 2723 FAIRMOUNT DALLAS, TEXAS 75201 DANIEL K HAGOOD Vl'INSHAW' OF COUNSEL (214) 754"7110 JANET R RANDLE FAX NO. (214) 754-7115 CERTIFIEO PARALEGALS • BOii.RO C5RTIFIF.D IN www.shawlawoffice.com RHONDA VINCF.NT

PERSONAL INJURY

LORI G. MOORE • Cl:f<ilF'IED PUBLIC APRILS. SUMNER ACCOUNTANT Mr. Steve Aldous December 5, 2013

ATTORNEY AT LAW

FAX (214*740-0217) 703 McKinney A venue, Suite 400 =PH 214*740-0212 ... Dallas, Texas 75202 saldous@bvalaw.com Re: VSDH v. Gross Dear Mr. Aldous: I called you to discuss a moment ago and Jeft a message as you were unavailable. I have not heard from you in reply to my fax as to whether of not you will I will not be calling me as a witness at)rial. I need to know asap as if you will call me, I cannot be counsel if I am to be a wit1;i.ess.

" Please advisr;/asap. Thanks, I *189 VanSlL VS/rv Cc: Ken Chaiken email

EXHIBIT

PAGE 15/15 2147547115 LAW OFFICE OF V.SHAW 12/05/2013 12:05 . ·•r.alrn~d & s~v~d by:~ sc:;in Chedrnll by:-~~ TRANSMlSSION VERIFICATION REPCJRT TIME 12/05/2013 11: ll NAME LAW OFFICE OF V SHAW FAX 2147547115 2147547110 TEL SER.# BROA0J127:259

I

DATE,. TIME 12/05 11:11 FAX NO./NAME 2147400217 00:00:15 DURATION PAGE(S) RESULT 01

OK MODE STANDARD ECM

LAW OFFICES OF VAN SHAW ATTORNt:YSAT LAW

2723 FAIRMOUNT

OflNl!l K HAMOD DALI.AS, TE!XAS 75201 VANSl'IAW" OF COUNSEL (Z14) 754·1110 JAN!iT F!, PU\NCILl:l FAX NO. (214) 754·7115 CSRTIFll3J;I P1\AALtGALS 'BOl\RD CERT!FleC> IN *190 www,shawls~ffiee.com Rl-IONCl~ VIHCENt PERSONA!. !N./Ul'c'f ~Ol'\I G, MOORE • CSRTIFIED PUl!!LJO APRll S. SUMN"R

ACCOUNT MIT

December 5~ 2013 Mr. Steve Aldous

FAX (214"'740-0217)

ATTO&"'iEY AT LAW =PH 214!+.740-0212 ;:= 703 McKinney A venue, Suite 400 saldous@bvalaw.com Dallas, Texas 75202 Re; VSDH v. Gross Dear Mr. Aldous: I called you to discuss a moment ago and left a message as you were unavailable, I .have not heard from you in reply to my fax as to whether of not you will I will not be calling me as a witness at.:trlal. I need to know asap as if you Vvill call me, I cannot be counsel if I am to be a \Vitt;ess.

,. I I

Please advisef asap. / Thanks./ _[ PAGE 15/15 LAW OFFICE OF \/ c;HAW 2147547.115 12/05/2013 12:05 12/6111 ProOoc® eFlllng 2· Filing Acl<nCMiedgement .,b!Q Out, logged in as janot@lshawlaw.net Click Here to go to Pro Doc eFiljng ! I Horne I Submi~ ~:mng j My Filings/ Firm Management I Resources! 1-1elp J ---~rQOf of Filil)_g_ 1. Case Information Your submission W<l$ s:uccessful! Your tr01ce number rs 54667. The details of your filing are sho\M'l 2. Uplo'1d Documents below. 3, Fillng SerVi<:es You can monitor the status of this filing by going to the "~y Fiiio.gs" 3t"e~L 4. cScrvice S. Review Filing 6. Process Filing The date and time below wlll be the official tlmcstiimp when this flllMg i!!< a<::c:epted by the clerk. 7. Acknowledgement r-···· . ·-

·--·-·······-------·-.·

Start a Ne~ ! Time f 1ime Zone: Date! ----·-··-~=~ --,-~- ·'> ' - \ ------- 11:41:30 AM Friday, December 06, 2.013 -----·------ Bookmark 111,.[s Page Privacy: !;!olfcy www.ProOoc.com This s!te and all contents C:opyri9ht ©2003-2013 Thomson Reuters. All rights reserved. *191 1/1 ht1ps:JAw.w.prcdocefile.com'20/SubAc~CllMedgementaspx TAB 18 *192 FILED 6/2/2014 1:41:35 PM JOHN F. WARREN COUNTY CLERK

DALLAS COUNTY CAUSE NO. CC-09-05232-A VSDH VAQUERO VENTURE, LTD., § IN THE COUNTY COURT § Plaintiff/Counter-Defendant § § §

v. § § KEN GROSS AND BETSY GROSS, § AT LAW NUMBER 1 § Defendants/Counter-Plaintiffs § § v. § § DOUGLAS M. HICKOK, § § Intervenor/Counter-Defendant. § DALLAS COUNTY, TEXAS

NOTICE OF HEARING

TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

A hearing on Ken Gross and Betsy Gross’ Motion to Disqualify Evan L. Shaw will be held on Wednesday, June 18, 2014, at 8:30 a.m., in the County Court at Law No. 1, Dallas County, Texas.

*193 Respectfully submitted, /s/ Steven E. Aldous Steven E. Aldous State Bar No. 00982100

FORSHEY PROSTOK, LLP

500 Crescent Court, Suite 240 Dallas, TX 75201 (214) 716.2100 (214) 716.2115 saldous@forsheyprostok.com Attorney for Defendants/Counter-Plaintiffs Ken Gross and Betsy Gross

Page 1 of 2 Notice of Hearing:

CERTIFICATE OF SERVICE

I hereby certify that on June 2, 2014, a true and correct copy of the foregoing document was served, via email, through the Electronic Filing Manager in accordance with the Texas Rules of Civil Procedure, to all counsel of record.

/ s/ Steven E. Aldous *194 Page 2 of 2 Notice of Hearing: TAB 19 *195 1 REPORTER'S RECORD VOLUME 1 OF 1 VOLUME CAUSE NO. CC-09-05232-A

VSDH VAQUERO VENTURE, LTD.,) IN THE COUNTY COURT

Plaintiff/ ) Counter-Defendant, )

) ) )

V.

KEN GROSS and BETSY GROSS, )

Defendants/ ) AT LAW NO. 1 Counter-Plaintiffs )

) ) ) EVAN L. SHAW and DOUGLAS M.)

V.

HICKOK, ) )

Intervenors/ Counter-Defendants. ) DALLAS COUNTY, TEXAS

------------------------------------------------------- KEN GROSS AND BETSY GROSS' MOTION TO DISQUALIFY EVAN L. SHAW ------------------------------------------------------- *196 On the 18th day of June, 2014, the following 17 proceedings came on to be heard outside the presence of 18 a jury in the above-entitled and -numbered cause before 19 the Honorable D'METRIA BENSON, judge presiding, held in 20

Dallas, Dallas County, Texas. 21 Proceedings reported by computerized stenotype 22 machine. Reporter's Record produced by computer-aided 23 transcription. 24 25

APX 18

2 APPEARANCES: MS. JANET R. RANDLE SBN 00792216 Law Offices of Van Shaw 2723 Fairmount Dallas, Texas 75201 (214)754-7110 ATTORNEY FOR PLAINTIFF/COUNTER-DEFENDANT VSDH VAQUERO VENTURE,LTD.

- AND - MR. KENNETH B. CHAIKEN SBN 04057800 Chaiken & Chaiken, P.C. Legacy Town Center III 5801 Tennyson Parkway Suite 440 Plano, Texas 75024 (214)265-0250 ATTORNEY FOR COUNTER-DEFENDANT DOUGLAS M. HICKOK

- AND - MR. STEVEN E. ALDOUS SBN 00982100 Forshey & Prostok, LLP 500 Crescent Court *197 Suite 240

16 Dallas, Texas 75201

(214)716-2101 ATTORNEY FOR DEFENDANTS/COUNTER-PLAINTIFFS KEN GROSS AND BETSY GROSS

17 18 19 20 21 22 23 24 25

APX 19

3 INDEX JUNE 18, 2014 PAGE VOL.

PROCEEDINGS.............................. 4 1

COURT'S RULING .......................... 15 1 ORAL MOTION FOR CONTINUANCE ............. 16 1 COURT'S RULING........................... 17 1 END OF PROCEEDINGS....................... 21 1 REPORTER'S CERTIFICATE................... 22 1

EXHIBIT INDEX (NONE) *198 17 18 19 20 21 22 23 24 25

APX 20

PROCEEDINGS

June 18, 2014 THE COURT: This is Cause No. 09-05232-A, VSDH Vaquero Venture, LTD versus Ken Gross and Betsy Gross. Please make your announcements for the record.

MR. ALDOUS: Steve Aldous for the Grosses. MS. RANDLE: Janet Randle appearing for

Van Shaw, the attorney being -- attempting to be disqualified, and also counsel for VSDH.

MR. CHAIKEN: Kenneth Chaiken for Douglas Hickok. THE COURT: Okay. You may proceed, Mr. Aldous. MR. ALDOUS: Your Honor, if you recall, we were set for trial in December on this very case, and *199 Mr. Shaw showed up, asked for a continuance at that time 16 saying that he may and likely would be a witness in the 17

case and that he was seeking a continuance on that 18 basis. And if you recall, he had Mr. Hagood come to 19 pick the jury in the event we were to proceed to the 20

jury. We didn't proceed to the jury. I then sent an 21 email to Mr. Shaw asking him if he will agree to 22 withdraw based upon his statements to the Court. He 23 said, "no." So I filed this motion. 24

The motion basically says if you -- if the 25

APX 21

5 lawyer is going to be a witness, the new rule says you can't act as an advocate before the Court. That means anything. And as a result, Your Honor, we're moving to dismiss him as a result of him being a witness.

THE COURT: Ms. Randle? MS. RANDLE: Well, yes, Your Honor. First

of all, let's talk about the delay. Our argument is in terms of the setting of this motion, this motion is six months after counsel has known about the issue. The issue was first raised in December. And at that time, it wasn't Mr. Shaw saying he was going to testify; it was Mr. Shaw contacting counsel because Mr. Shaw appeared on counsel's witness list -- or defendants' witness list.

Mr. Shaw -- and it's in the record. *200 Counsel has attached it to different correspond -- 16 letters from Mr. Shaw saying, "Tell me what it is. Are 17

you going to call me or aren't you going to call me?" 18 And Mr. Shaw -- the evidence before the Court in those 19 letters is that counsel refused to give Mr. Shaw an 20

answer. So Mr. Shaw did not withdraw. It wasn't 21 Mr. Shaw's testimony that he was going to testify on 22 behalf of himself. And I can't recall if at that time, 23 Your Honor, Mr. Shaw was still a defendant. And I 24

really don't recall when the summary judgment was 25

APX 22

6 granted. MR. ALDOUS: He was not a defendant at the time. MS. RANDLE: Okay. Well, I appreciate counsel, and I'll assume counsel's correct. MR. CHAIKEN: That is correct. MS. RANDLE: So anyway, Your Honor, we

have counsel coming before the Court today, less than three weeks before trial -- again, the trial is set in July -- when counsel filed this motion back in February and here we are in June hearing a motion that should have been heard sooner if there was an issue. It should have been filed in December when counsel just told you that he was advised Mr. Shaw was not going to withdraw voluntarily on his own. *201 THE COURT: Well, it was filed in

16 February, correct? 17

MS. RANDLE: Correct, Your Honor. It's 18 now June. 19 THE COURT: It's not like it was filed 20

yesterday. 21 MS. RANDLE: Well, I understand that. 22 But, you know, February to June, it's almost been four 23 months. 24

MR. ALDOUS: I think the delay here is not 25

APX 23

7 my delay but Mr. Shaw's delay. And I know that counsel wasn't here when Mr. Shaw told the Court and what he told the Court and Mr. Chaiken's statement that he would be calling Mr. Shaw as a witness as well. And even to this day, I cannot confirm that I will call Mr. Shaw, but I can say that it's more than a 50 percent chance. So, you know, I just don't want him -- I don't care what he does.

Counsel, you can say whatever. I mean, I don't care if he's a lawyer or not for the case. The question is the rule. The rule says that he's not supposed to do it. If he wants to do it, fine. I just don't want him using it as an excuse for a continuance like he did back in December.

MR. CHAIKEN: Can I make one comment? *202 THE COURT: You may, Mr. Chaiken. 16 MR. CHAIKEN: Thank you. Because I was 17

here. First of all, I'm a little surprised that we are 18 here at this juncture because I -- and maybe it's just 19 my own mind at work. I thought, given that the motion 20

was filed in February and then there was no attempt to 21 set it until recently, that the issue was basically a 22 dead issue. But I guess I was mistaken on that. So I'm 23 a little troubled by the timing of it all. But, 24

nevertheless, I just want to be clear on the record. I 25

APX 24

8 have never said that I am going to call Mr. Shaw as a witness. I said that I may need to call Mr. Shaw as a witness. And if I do call Mr. Shaw as a witness, it will be simply to rebut testimony that has been offered by Mr. Gross or his -- testimony given by Mr. Gross regarding certain interactions that he has had with Mr. Shaw.

THE COURT: So those would be factual issues. MR. CHAIKEN: They would be factual issues because he was a fact witness to alleged conversations that occurred outside the scope of litigation and prior to litigation. But, again, I don't know how the trial's going to shape up in terms of what the Court's going to let into evidence and not let into evidence. *203 And the other thing that I wanted to

16 mention is -- because that issue, that last issue, to me 17

is probably the most critical one. There have been 18 recently filed cross-motions for summary judgment, 19 which, from my point of view and I think from 20

Mr. Aldous' point of view from our conversations, would, 21 depending on the Court's rulings on those, significantly 22 not only narrow the scope of the trial depending on the 23 rulings, but at least shape those issues for trial 24

purposes, which will have a bearing on whether or not, 25

APX 25

9 if there is a trial left, Mr. Shaw would be a witness or not be a witness.

And so we, unfortunately, filed these motions about the same time and haven't been able to obtain a setting on those motions. And so my only issue would be that -- that if there's a way that we can get the summary judgments heard and ruled on before the current trial date, which I know is a difficult proposition because I understand that Your Honor is going to be gone the week before the July 4th -- or unavailable, I don't know about gone, the week before the July 4th weekend or week.

THE COURT: No. I'm planning to be here that week. MR. CHAIKEN: I had been informed when I *204 attempted to get a setting that you had no availability. 16 Maybe -- is there a judicial conference or something 17

going on or -- 18 THE COURT: No. Maybe we just have a full 19 docket. 20

MR. CHAIKEN: Maybe it's a full docket, 21 but I had understood that you were unavailable for a 22 reason other than a busy schedule, but I could be 23 mistaken. 24

MS. RANDLE: Your Honor -- 25

APX 26

10 THE COURT: The week of the 4th -- MS. RANDLE: -- I would also like to

continue. THE COURT: Just a second. The week of the 4th of July? MR. CHAIKEN: The week of the 4th, yeah. THE COURT: No. That's a different issue. MR. CHAIKEN: Okay. THE COURT: There's a conference during

that week. MR. CHAIKEN: Okay. That might have been where I got confused in terms of what the lack of availability was about, but I don't know. If there's a way to possibly postpone the start date of the trial and hear the summary judgment and then defer the ruling *205 based upon the outcome, I think it may help shape the

16 question. I don't know. Steve and I talked about -- 17

excuse me. Mr. Aldous and I talked about bringing that 18 to your attention and seeing if there's a way that we 19 might be able to address that question. 20

THE COURT: Have you been to mediation 21 since Mr. Aldous has been on the case? 22 MR. ALDOUS: We have, Your Honor. 23 MR. CHAIKEN: Since you got involved? 24

MR. ALDOUS: Yes. 25

APX 27

11 MR. CHAIKEN: Who did -- MR. ALDOUS: Judge Stanton. MR. CHAIKEN: Oh, that's right. Yeah, we

sure did. THE COURT: And he was unable to resolve this with you? MR. ALDOUS: He was. THE COURT: Ms. Randle? MS. RANDLE: Yes, Your Honor. I'd like to

finish my arguments. I started with this idea that there is essentially a waiver. And the case I'd like to cite to the Court on that is a case -- it's BP AM Production Company versus Zaffirini 419 S.W.3d 485. And that is a San Antonio 2013 case. And in that case, the time period's a little longer. It was an affidavit of *206 the attorney that was filed, and the opposing counsel

16 waited seven months before the opposing counsel set it 17

for hearing. And it happened to be three days before a 18 summary judgment, and the Court said you essentially -- 19 it's too late. You've waived it. 20

Now that's not my only argument. Counsel 21 indicated that the rule is any time an attorney is going 22 to testify, and I disagree. That isn't the rule. The 23 rule that's been moved on is the Rule of Professional 24

Conduct 3.08. And that rule requires defendant to come 25

APX 28

12 into this court with evidence that Mr. Shaw in his testimony that is alleged to have been -- whatever it is he's going to testify to has to be an essential fact to the case, and it has to be something that the -- that cannot be obtained by anyone else.

There is no evidence before this Court to that affect. Counsel has not met the burden of coming forward and establishing that information. The rule is not that an attorney cannot testify. There is also an exception that an attorney can testify if they're a defendant. Now Mr. Shaw was a defendant, and now -- but Mr. Shaw is also an owner of VSDH.

THE COURT: Which is a corporate entity, correct? MS. RANDLE: It's a corporate entity, but *207 I'm just saying -- 16 MR. CHAIKEN: I believe it's a limited 17

partnership just for clarity. 18 MS. RANDLE: But there is -- I don't have 19 a case that says that. But my argument is that there is 20

a situation with respect to a self-interest. If you're 21 going to say that you can't testify or you can testify 22 if you are strictly a defendant, the question becomes: 23 What is the purpose of that rule? 24

So my position today is, Your Honor, that 25

APX 29

13 the motion before the Court does not present this Court with any evidence of what Mr. Shaw's testimony is that counsel suggests triggers under Rule 3.08 a responsibility for this Court to disqualify him.

THE COURT: Where in the rule do you find a requirement that they have to present evidence of that testimony?

MS. RANDLE: Well, Your Honor, they're the moving party. There are exceptions. THE COURT: I'm looking at the rule. I don't see anything that says that they have to present testimony about what the --

MS. RANDLE: Well, Your Honor, all -- THE COURT: -- what the lawyer would -- we

can't talk at the same time. *208 MS. RANDLE: I'm sorry. 16 THE COURT: -- what the lawyer would 17

testify to. I did ask whether or not he would be 18 testifying as to fact issues, which I think is 19 important. 20

MS. RANDLE: Fact issues, but, Your Honor, 21 it's not just fact issues. The rule requires them to be 22 essential fact issues that only Shaw can testify to. If 23 there's a source that you can get that fact issue from 24

someone else -- you know, there's no evidence that Shaw 25

APX 30

14 is going to testify to that. That's the problem here. Counsel has not indicated he's going to call Shaw. No one has come before this Court to say, "Mr. Shaw is going to testify to fact A. Mr. Shaw is the only person who can testify to that fact. It's essential to the case; therefore, Mr. Shaw needs to be disqualified."

There are -- the majority of cases that are cited that are -- that are the note cases are cases overruling the trial Court's denial or granting of the motion based upon those very issues of evidence not provided by the moving party seeking disqualification. And that is something that counsel has not provided to this Court at all, and counsel first knew about this issue in December. It's now six months later, and you still -- this Court has no idea what is the testimony *209 that is going to be at issue. No one has presented that

16 to the Court. 17

THE COURT: Mr. Chaiken just said that he 18 would be asking Mr. Shaw questions with regard to the 19 testimony of Mr. Gross. And if he does that, then I 20

assume that Mr. Aldous will have questions as well. 21 MS. RANDLE: Well, Your Honor, I guess -- 22 THE COURT: Now, I think the way to 23 resolve this is that Mr. Shaw may not represent VSDH 24

pursuant to the section in the rule, the note -- it's 25

APX 31

15 Note 8 -- that says, "The rule does not prohibit the attorney who may or will be a witness from participating in the preparation of a matter for presentation to a tribunal. However, to minimize the possibility of unfair prejudice to an opposing party, the rule prohibits any testifying lawyer who could not serve as an advocate from taking an active role before the tribunal in the presentation of the matter."

So he may stay on the case, but he may not make any presentations before the Court. MS. RANDLE: Well, Your Honor, on what -- on what testimony, though? That's -- I guess that's the question. What is the testimony that is being used to prohibit Mr. Shaw from --

THE COURT: The problem is we don't know, *210 but we do know that he is likely to be a witness in this 16 case. And that's what the rule addresses. It says, "A 17

lawyer shall not accept or continue employment as an 18 advocate before a tribunal in a contemplated or pending 19 adjudicatory proceeding if the lawyer knows or believes 20

that the lawyer is or may be a witness necessary to 21 establish an essential fact." 22 MS. RANDLE: "An essential fact," that's 23 my point, Your Honor. And that's what -- 24

THE COURT: Well, "knows or believes that 25

APX 32

16 he may be," and therein lies the rub. So my ruling is my ruling. He may continue to represent; he just may not represent before this tribunal.

MS. RANDLE: Okay. Your Honor, I then ask for a continuance at this time because Mr. Shaw has been sitting here waiting. Just as Mr. Chaiken said, everyone thought this issue was gone. Now we have a motion set seven -- three weeks before trial. So I'm asking for a continuance of the trial to allow --

THE COURT: This is a 2009 case. MS. RANDLE: Your Honor, I understand

that. THE COURT: It's been pending on the docket of the Court for an excessive amount of time. The last time Mr. Shaw did appear before the Court, he *211 did appear with Mr. Hagood -- the Court has a specific

16 recollection of that -- with the specific intent that 17

Mr. Hagood would conduct the trial portion of the 18 proceedings and that he would be here in an advisory 19 capacity. And so the Court's ruling is that's what's 20

going to happen. 21 MS. RANDLE: Okay. Your Honor, just to 22 note, since that time, as Mr. Chaiken said, everything 23 has gone away. And now we have a motion filed, but I 24

haven't heard the Court render any discussion regarding 25

APX 33

17 the delay in now filing a motion and now three weeks before trial. I don't even know if Mr. Hagood is even available now.

THE COURT: Mr. Hagood was informed of the time of the trial as was Mr. Shaw, correct? MR. ALDOUS: Yes, Your Honor. MS. RANDLE: Yes. But the question is:

Was he informed of the trial with respect to being trial counsel, actual counsel?

THE COURT: He was here in that capacity. MS. RANDLE: So, Your Honor, I'd just move

for a continuance to allow at least, you know -- THE COURT: The Court is disinclined to allow another continuance in a 2009 case. MR. ALDOUS: I object to not getting *212 three-days' notice of the motion, Your Honor. 16 MS. RANDLE: Your Honor, I understand. 17

I'm just moving for the continuance to allow Mr. Hagood 18 to prepare for trial now that counsel has filed a motion 19 three weeks before trial raising the issue before this 20

Court. 21 THE COURT: The testimony before the Court 22 was that Mr. Aldous asked Mr. Shaw some months ago 23 whether or not he would be proceeding and that no 24

response was provided. 25

APX 34

18 MS. RANDLE: Your Honor, I -- THE COURT: The Court has made its ruling. MR. ALDOUS: Thank you, Your Honor. MR. CHAIKEN: Your Honor, can I just ask

one question? I had raised the possibility of getting some of your time to consider those cross-motions.

THE COURT: I'll have to look at the docket, Mr. Chaiken. I can't just tell you off the bat. MR. CHAIKEN: Well, my only question is: Would the Court be inclined to allow the shortening of the 21-day notice period, assuming we agree to that?

MR. ALDOUS: We do agree to that. THE COURT: I still have to look at the

docket. MR. ALDOUS: Right. *213 MR. CHAIKEN: Okay. And if we could do 16 that, I'd appreciate it, just kind of figuring that out 17

one way or the other so that I can close the loop on 18 that. 19 MS. RANDLE: Your Honor, I'm not making 20

any representation before the Court as to any agreement 21 as to any extension at this time. I just want it to be 22 clear. 23 THE COURT: Would these be summary 24

judgment motions involving VSDH, or would it just be 25

APX 35

19 involving the Grosses and Mr. Hickok? MR. CHAIKEN: Mr. Hickok was the first movant for summary judgment, and then it's not really a cross -- well, it is. It's related to some of the issues. So in effect, it's a cross-motion filed by the Grosses, but it's as between the claims involving the Grosses and Mr. Hickok as a guarantor, not VSDH per se.

MR. ALDOUS: It's just related to construction of the contract -- MR. CHAIKEN: Well, it -- no. MR. ALDOUS: -- essentially. MR. CHAIKEN: Mine also involves one

additional issue, which is whether or not there -- as a matter of law, the buy-back obligation, whether owed by VSDH or a guarantor, could have been performed. That's *214 the second issue that's raised in my summary judgment

16 motion. 17

MR. ALDOUS: But I thought that was based 18 upon the wording of the contract. 19 MR. CHAIKEN: That is the remedies 20

portion. But, yeah. But anyway, it would certainly 21 help things if we can get it done. And if the Court 22 can't do it, I certainly understand that timing is what 23 it is. 24

THE COURT: Well, I can't tell you right 25

APX 36

20 now is what I'm telling you. MR. CHAIKEN: No, no, I understand. THE COURT: I'll just have to get back

with you on that. MR. ALDOUS: Are we released, Your Honor? THE COURT: Who's going to -- you're going

to present an order, Mr. Aldous? MR. ALDOUS: I will. THE COURT: Circulate it. MR. ALDOUS: Based upon your ruling, I'll

have to change it. MS. RANDLE: Your Honor, I'd like to see the order before it's presented to the Court. THE COURT: I just told him to circulate it, Ms. Randle. *215 MS. RANDLE: I understand, but I said 16 before it's presented to the Court. 17

THE COURT: That's what "circulate" means. 18 MS. RANDLE: I just want to be clear. 19 It's not always clear to some counsel, Your Honor. 20

THE COURT: All right. 21 MR. CHAIKEN: Do you want us to go check 22 the docket to see what's available or -- 23 THE COURT: No. We'll get back with you. 24

MR. CHAIKEN: Okay. Fair enough. Sure. 25

APX 37

21 Thanks. MS. RANDLE: Are we excused, Your Honor? THE COURT: You're excused. MR. CHAIKEN: Thanks, Judge. (Proceedings concluded)

*216 17 18 19 20 21 22 23 24 25

APX 38

22 STATE OF TEXAS )

COUNTY OF DALLAS )

I, Cathye Moreno, Official Court Reporter in and for the County Court of Dallas County, Texas, County Court At Law Number One, State of Texas, do hereby certify that to the best of my ability the above and foregoing contains a true and correct transcription of all portions of evidence and proceedings requested in writing to be included in the Reporter's Record, in the above-styled and -numbered cause, all of which occurred in open court or in chambers and were reported by me.

I further certify that this Reporter's Record of the proceedings truly and correctly reflects the exhibits, if any, admitted by the respective parties.

I further certify that the total cost for the *217 preparation of this Reporter's Recordis $220.00 and 16 will be paid by the Law Offices of Van Shaw. 17

Witness MY OFFICIAL HAND this the 20th day of 18 June, 2014. 19 20

/S/CATHYE G. MORENO, CSR

Cathye G. Moreno, Texas CSR #6076

21 Expiration Date: 12/31/14 Official Court Reporter County Court at Law No. 1 600 Commerce Street, Suite 550 Dallas, Texas 75202 22 23

cathyemoreno@sbcglobal.net 24 (214)653-7496 25 APX 39 TAB 20 *218 r1u:u . 0 JOHN F. WARREN COUNTY CLERK

IALLASCOUNT~TEXAS 201~ AUG 29 AH 11: 59 Conditionally Grant and Opinion Filed August 28, 2014 In The <!tnurt nf Appeals 1J1ift1': ilintri.d nf Wcxan at ilallan No. 05-14-00958-CV IN RE VSDH VAQUERO VENTURE, LTD., Relator Original Proceeding from the County Court at Law No. 1 Dallas County, Texas Trial Court Cause No. CC-09-05232-A

MEMORANDUM OPINION

Before Justices FitzGerald, Francis, and Myers Opinion by Justice Francis Relator VSDH Vaquero Venture, Ltd. filed this mandamus proceeding after the trial court made an oral ruling disqualifying Evan L. Shaw as its counsel on the ground he may be a witness *219 in the case. To obtain mandamus relief, relator must show both that the trial court abused its discretion and that it has no adequate appellate remedy. In re Prudential Ins. Co., 148 S.W.3d 124, 135-36 (Tex. 2004) (orig. proceeding); Walker v. Packer, 827 S.W.2d 833, 839--40 (Tex. 1992) (orig. proceeding). VSDH has met its burden. We therefore conditionally grant the writ of mandamus.

Real parties in interest Kenneth and Betsy Gross are counter-plaintiffs below. The following facts are taken from their counterclaim and VSDH's motion for continuance. The Grosses purchased residential property from VSDH; Shaw and Douglas M. Hickok are limited partners in VSDH. The contract contained a "buy back" option requiring VSDH to repurchase the property subject to particular terms and conditions. According to the Grosses, they exercised the option. The Grosses allege that after VSDH, Shaw, and Hickok "affirmatively represented" they would not "honor" the provision, the Grosses sold the property to a third party. VSDH filed a declaratory judgment action contending it did not breach the contract, and the Grosses counterclaimed against Shaw, Hickok, and VSDH for damages for breach of contract and fraud. ^[1]

Two weeks before the case was set to go to trial, VSDH received the Grosses' witness list identifying VSDH's counsel, Shaw, as a "person who may be called as an adverse witness." By this time, Shaw was no longer a defendant in the suit. Shaw wrote to the Grosses' counsel twice to determine if he planned to call Shaw as a witness at trial. When the Grosses' counsel refused to say one way or the other, Shaw filed a motion to continue the case until the Grosses decided whether they were calling him as a witness and, if they decided they would be calling him, additional time to locate and engage new counsel to represent VSDH. The trial was reset for July 2014.

Two and a half months later, the Grosses filed a motion to disqualify Shaw asserting that Shaw had not withdrawn from representing VSDH and that "[ n ]othing had changed in terms of *220 the likelihood that Shaw will be called as a witness in the trial of this case." Relying on rule 3.08 of the Texas Disciplinary Rules of Professional Conduct, they asserted Shaw should not be permitted to act as an advocate in the case. As the trial date neared, the Grosses set the motion for a hearing on June 18, 2014. At the hearing, the Grosses presented no evidence to support their motion, only argument. Counsel for the Grosses would not confirm whether he would call *221 reporter's record. Id. We conclude the oral ruling in this case meets the criteria.

Because disqualification is a severe remedy, courts must adhere to exacting standards when considering motions to disqualify so they are not used as a trial tactic. Spears v. Fourth Court of Appeals, 797 S.W.2d 654, 656 (Tex. 1990) (orig. proceeding). Here, the Grosses relied on rule 3.08(a) of the disciplinary rules of professional conduct to disqualify Shaw. While the disciplinary rules are not controlling as standards governing motions to disqualify, they serve as guidelines that "articulate considerations relevant to the merits of such motions." Id. The burden is on the movant to establish with specificity a violation of the disciplinary rules. Id.

Rule 308(a) of the disciplinary rules provides in relevant part: "A lawyer shall not accept or continue employment as an advocate before a tribunal in a contemplated or pending -3- adjudicatory proceeding if the lawyer knows or believes that the lawyer is or may be a witness necessary to establish an essential fact on behalf of the lawyer's client" except under certain circumstances. See TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 3.08(a), reprinted in TEX. Gov'T CODE ANN., tit. 2, subtit. G, app. A (WEST 2013) (TEX. STATE BAR R. art. x, § 9). A party seeking disqualification of a lawyer under rule 3.08(a) must present evidence that the testimony of the lawyer is necessary, that it goes to an "essential fact," and that the party will be prejudiced if the opposing lawyer is permitted to serve in dual roles. See In re Lavizadeh, 353 S.W.3d 903, 904 (Tex. App.-Dallas 2011, orig. proceeding); see also In re Bahn, 13 S.W.3d 865, 872 (Tex. App.-Fort Worth 2000, orig. proceeding). An attorney's testimony is not considered necessary if there is no unqualified, positive intent to call the attorney as a witness. See In Interest of A.M, 974 S.W.2d 857, 864 (Tex. App.-San Antonio 1998, no pet.) (citing Spears, 797 S.W.2d at 658). If relying on rule 3.08(a), the moving party must further show that the fact to be established by the attorney's testimony is essential to the testifying attorney's own client's case as opposed to another's party's case. In re Lavizadeh, 353 S.W.3d at 904. Finally, *222 the moving party must show the trial court lacks any means other than disqualification to remedy the harm to the opposing party. In re Bivins, 162 S.W.3d 415, 421 (Tex. App.-Waco 2005, orig. proceeding). Where a party fails to present evidence to support all of these matters, the party seeking disqualification fails to carry its burden and the trial court cannot reasonably conclude the attorney's testimony is necessary to establish an essential fact to the party's case. In re Lavizadeh, 353 S.W.3d at 904; Gilbert McClure Enters. v. Burnett, 735 S.W.2d 309, 311 (Tex. App.-Dallas 1987, orig. proceeding).

Here, the Grosses did not present any evidence to support their motion to disqualify. Consequently, based on the record before us, the trial court could not have reasonably concluded that Shaw's testimony was necessary to establish an essential fact of VSDH's case. See In re

-4- Lavizadeh, 353 S.W.3d at 904; Gilbert McClure Enters., 735 S.W.2d at 311. In reaching this conclusion, we reject the Grosses' argument that the trial court could take judicial notice of the contents of its file in making its decision. We note, first, that no party requested the court to take judicial notice of any document. Second, nothing in the record reflects that the trial court took judicial notice of any document. To the contrary, the record suggests the trial court did not know what essential fact Shaw's testimony would establish or how the Grosses would be prejudiced if permitted to testify to those facts. When VSDH's counsel asked what testimony was "being used to prohibit" Shaw from representing VSDH, the trial court responded, "The problem is we don't know, but we do know that he is likely to be a witness in this case. And that's what the rule addresses .... "

Appeal is an inadequate remedy for the improper disqualification of Shaw. See Spears, 797 S.W.2d at 657-58. Accordingly, we conditionally grant the relator's petition for writ of mandamus and direct the trial court to vacate its oral order granting the Grosses' motion to disqualify and to enter a written order denying the motion. A writ will issue only in the event the *223 trial court fails to comply.

140958F.P05

/Molly Francis/ MOLLY FRANCIS JUSTICE

-5- flLt.u FlLE COPY JOHN F. WARREN 0 COUNTY CLERK

CHIEF JUSTICE BALLAS COUNTY. TEXAS LISA MATZ CAROLYN WRJGHT CLERK OF THE COURT (214) 712-3450

JUSTICES

81~ AUG 29 AH 11: 59 theclerk@5th.txcourts.gov DAVID L. BRIDGES MICHAEL J. O'NEILL

GAYLEHUMPA KERRY P. FITZGERALD BUSINESS ADMINISTRATOR MOLLY FRANCIS (214) 712-3434

DOUGLAS S. LANG

gayle.humpa@5th.txcourts.gov <!Court of ltlppea1s

ELIZABETH LANG-MIERS

ROBERT M. FILLMORE jf tftb ~istritt of 'Qtexas at ~allas FACSIMILE

LANA MYERS

(214) 745-1083 DAVID EVANS 600 COMMERCE STREET, SUITE 200 DAVID LEWIS INTERNET ADA BROWN DALLAS, TEXAS 75202

HTTP://5TH.TXCOURTS.GOV

(214) 712-3400 August 28, 2014

Evan Lane (Van) Shaw Steven E. Aldous Law Offices of Van Shaw Forshey Prostok 2723 Fairmount St 500 Crescent Ct Dallas, TX 75201-1912 STe. 240 * DELIVERED VIA E-MAIL *

Dallas, TX 75201 * DELIVERED VIA E-MAIL *

Kenneth B. Chaiken Chaiken & Chaiken, PC Legacy Town Center III 5801 Tennyson Parkway, Suite 440 Plano, TX 75024

* DELIVERED VIA E-MAIL *

RE: Court of Appeals Number: 05-14-00958-CV

Trial Court Case Number: CC-09-05232-A *224 Style: In Re: VSDH Vaquero Venture, Ltd. Please find attached the opinion that issued in the above cause today. Respectfully, /s/ Lisa Matz, Clerk of the Court

cc: Dallas County Court Clerk, County Court At Law No. 1 (DELIVERED VIA E-MAIL) Justice Mary L. Murphy (DELIVERED VIA E-MAIL) D'Metria Benson (DELIVERED VIA E-MAIL)

TAB 21

*225 CAUSE No. cc-09-05232-A VSDH VAQUERO VENTURE LTD, IN THE COUNTY COURT Plaintiff(s), V. ATLAWNO.l KEN GROSS, BETSY GROSS,

DALLASCOUNTY,TEXAS Defendant(s),

ORDER VACATING ORAL RULING ON MOTION

TO DISQUALIFY Ev AN L. SHAW On June 18, 2014, an oral ruling was made to disqualify attorney Evan L. Shaw from the above-styled case, specifically that Shaw "may stay on the case, but he may not make any presentations before the Court". The Court now VACA TES that oral ruling and enters this Order DENYING the Grosses' Motion to Disqualify *226 Evan L. Shaw.

IT IS ORDERED, ADJUDGED AND DECREED that the oral r~ling made on June 18, 2014 on the Motion to Disqualify Evan L. Shaw is VACA TED. IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Motion to Disqualify Evan L. Shaw is DENIED. Signed this ~y of~~ 2014 CC - 09 - 05232 - A MCMO UROER - MISCELLANEOUS 6&1162 ' 1111111111111111111111111111111111111111

TAB 22 *227 FILED 6/16/2015 9:21:42 AM JOHN F. WARREN COUNTY CLERK DALLAS COUNTY

CAUSE NO. CC-09-0S232-A VSDH VAQUERO VENTURE, LTD. § IN THE COUNTY COURT § Plaintiff/Counter-Defendant, § §

V.

§ §

KEN GROSS and BETSY GROSS § AT LAW NUMBER 1 § Defendants/Counter-Plaintiffs, § §

V.

§ §

EVAN L. SHAW and DOUGLAS M. § HICKOK §

§ Intervenors/Counter-Defendants. § DALLAS COUNTY, TEXAS VAN SHAW'S MOTION TO WITHDRAW AND PLAINTIFF/COUNTER-DEFENDANT VSDH VAOUERO VENTURE, LTD.'S MOTION FOR MISTRIAL TO THE HONORABLE JUDGE: Now come Plaintiff/Counter-Defendant VSDH Vaquero Venture, Ltd. ("VSDH") and its *228 counsel, Van Shaw, and file this Motion to Withdraw and Motion for Mistrial, and respectfully shows as follows:

I. MOTION TO WITHDRAW Texas Rule of Professional Conduct 3.08(b) states as follows: "A lawyer shall not continue as an advocate in a pending adjudicatory proceeding if the lawyer believes that the lawyer will be compelled to furnish testimony that will be substantially adverse to the lawyer's client, unless the client consents after full disclosure. "( emphasis added)

VAN SHAW'S MOTION TO WITHDRAW AND PLAINTIFF/COUNTER-DEFENDANT

Page 1 VSDH VAQUERO VENTURE, LTD.'S MOTION FOR MISTRIAL MORP Pltf Mot2 Withdraw and Mot4 Mistrial

1 On June 15,2015, during the first day of trial in the above-styled matter, Van Shaw came to believe that Van Shaw would be compelled to furnish testimony that will be substantially adverse to his client. Counsel for Mr. and Mrs. Gross expressed his intention to call Mr. Shaw as a witness at approximately 2:50 p.m. in chambers with the Court. Immediately thereafter, counsel for Defendant Mr. Hickock advised of his intent to call Mr. Shaw as a witness as well. Immediately prior to counsel advising the intent to call Shaw as a witness, Doug Hickock (first witness) was questioned by counsel for Grosses as to the "solvency of VSDH" and the matters relating to the 'first breach' defense of VSDH. Defendant set up conflicting testimony by Van Shaw that will advsersly impact VSDH - to that end:

(a) Hickock testified that Shaw was wrong to advise Grosses that VSDH was "insolvent". Shaw will now be required to testify as to why VSDH was insolvent, why the representation by the VSDH G.P. (Hickock) was wrong and that will substantially and adversely affect VSDH in that the same will be undermined as to credibility and its *229 financial position will jeopardize its first breach defense. The evidence will prejudice its first breach defense. (b) Hickock testified that Hickock "referred" all dealings with the Grosses to Shaw in dealing with the Gross' buy-back issue. Shaw will now be required to testify as to the same. Those facts are material and will substantially and adversely affect VSDH and the testimony by Van Shaw as to the first breach issues will prejudice VSDH. Pursuant to Texas Rule of Professional Conduct 3.08(b), Mr. Shaw is now required to

discontinue his representation of Plaintiff/Counter-Defendant VSDH.

VAN SUA W'S MOTION TO WITHDRAW AND PLAINTIFF/COUNTER-DEFENDANT

Page 2 VSDH VAQUERO VENTURE, LTD. 'S MOTION FOR MISTRIAL MORP Pltf Mot2 Withdraw and Mot4 Mistrial

2 Therefore, Mr. Shaw respectfully requests that the Court GRANT Mr. Shaw's Motion to Withdraw. II. MOTION FOR MISTRIAL As a result of Mr. Shaw's sudden requirement to discontinue his representation ofVSDH after the start of trial in this matter, VSDH respectfully requests that the Court declare a mistrial and re-set this matter for trial after a reasonable period of time to allow VSDH to retain new counsel and prepare for trial.

A mere continuance of the trial will not be sufficient, as a new jury should be selected. The current jury has already seen Mr. Shaw in action as counsel for VSDH. If this trial is

only continued, then this same jury will undoubtedly be very confused as to why the man the jury thought was counsel for VSDH - Mr. Shaw - is no longer sitting at counsel's table in the courtroom, but is now taking the stand and offering material factual testimony.

Such confusion will greatly prejudice VSDH and cause irreparable harm to VSDH. *230 Therefore, VSDH respectfully requests the court declare a mistrial, and re-set this matter

for trial. WHEREFORE, PREMISES CONSIDERED, Plaintiff/Counter-Defendant VSDH Vaquero Venture, Ltd. and its counsel, Van Shaw, respectfully request that the Court DECLARE a mistrial in this matter, GRANT Van Shaw's Motion to Withdraw, and re-set this matter for hearing after a reasonable period of time to allow Plaintiff/Counter-Defendant VSDH Vaquero Venture, Ltd. to obtain new counsel and prepare for trial, and grant Plaintiff/Counter-Defendant

VAN SUA W'S MOTION TO WITUDRA W AND PLAINTIFF/COUNTER-DEFENDANT

Page 3 VSDH VAQUERO VENTURE, LTD.'S MOTION FOR MISTRIAL MORP PltfMot2 Withdraw and Mot4 Mistrial

3 VSDH Vaquero Venture, Ltd. any and all further relief to which they may be entitled, both at law and in equity.

Respectfully submitted, lsi Van Shaw Evan Lane (Van) Shaw State Bar No. 18140500 van@shawlaw.net Janet R. Randle State Bar No. 00792216 janet@shawlaw.net Collen Meyer State Bar No. 24074709 collen@shawlaw.net

LAW OFFICES OF VAN SHAW

2723 Fairmount Street Dallas, Texas 75201 (214) 754-7110 telephone (214) 754-7115 facsimile *231 ATTORNEYS FOR PLAINTIFF/COUNTER DEFENDANT VSDH VAQUERO VENTURE, LTD.

CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of foregoing Motion has been served upon all counsel of record pursuant to the Texas Rules of Civil Procedure on this 16 th day of June, 2015. lsi Van Shaw Evan Lane (Van) Shaw

VAN SHAW'S MOTION TO WITHDRAW AND PLAINTIFF/COUNTER-DEFENDANT

Page 4 VSDH VAQUERO VENTURE, LTD. 'S MOTION FOR MISTRIAL MORP Pltf Mot2 Withdraw and Mot4 Mistrial

4 TAB 23 *232 FILED 6/16/2015 8:46:59 AM JOHN F. WARREN COUNTY CLERK DALLAS COUNTY

CAUSE NO. CC-09-05232-A VSDH VAQUERO VENTURE, LTD., § IN THE COUNTY COURT Plaintiffs/Counter-Defendant, § § v. § § KEN GROSS and BETSY GROSS § Defendants/Counter-Plaintiffs, § AT LAW NUMBER 1 § v. § §

EVAN L. SHAW and DOUGLAS M. §

HICKOK

§ Intervenors/Counter-Defendants. § DALLAS COUNTY, TEXAS §

KEN GROSS AND BETSY GROSS’ BRIEF ON VSDH’S

MOTION FOR MISTRIAL

TO THE HONORABLE JUDGE BENSON:

COMES NOW, Kenneth P. Gross and Betsy L. Gross (hereinafter referred to as “the Grosses”), and file this brief related to VSDH’s motion for mistrial and would respectfully show the following:

ARGUMENT AND AUTHORITIES

*233 VSDH is attempting to use Texas Rule of Professional Conduct 3.08 as a tactical weapon to avoid trial and subvert the purpose of rule 3.08. On December 6, 2013, three days before trial of this matter, VSDH filed a motion for continuance asserting that continuance was necessary because Shaw might be a fact witness in this case and rule 3.08 prohibited his participation as counsel and a witness. The Court granted that motion. After months passed and Shaw did not substitute new counsel for VSDH, the Grosses filed a motion to disqualify Shaw based upon his representations contained in his motion for continuance. Shaw opposed the motion. The Court granted the motion and Shaw sought relief from the order with the court of appeals. When Shaw KEN AND BETSY GROSS’ BRIEF Page 1 filed his mandamus, it made the parties miss another trial setting. The court of appeals conditionally granted the writ of mandamus because the record lacked evidence that Shaw’s testimony would relate to an essential fact that would prejudice a party if Shaw served as both witness and lawyer. (Memorandum Op. p. 4). Now, more than one and half years after initially raising the issue, using the issue to get a continuance on two occasions, VSDH claims this trial should be halted and Shaw permitted to withdraw. The motion should be denied and trial should continue.

Rule 3.08 provides: (a) A lawyer shall not accept or continue employment as an advocate before a tribunal in a contemplated or pending adjudicatory proceeding if the lawyer knows or believes that the lawyer is or may be a witness necessary to establish an essential fact on behalf of the lawyer’s client, unless:

(1) the testimony relates to an uncontested issue; (2) the testimony will relate solely to a matter of formality and there is no reason

to believe that substantial evidence will be offered in opposition to the testimony; *234 (3) the testimony relates to the nature and value of legal services rendered in the case; (4) the lawyer is a party to the action and is appearing pro se; or (5) the lawyer has promptly notified opposing counsel that the lawyer expects to

testify in the matter and disqualification of the lawyer would work substantial hardship on the client. (b) A lawyer shall not continue as an advocate in a pending adjudicatory proceeding if the lawyer believes that the lawyer will be compelled to furnish testimony that will be substantially adverse to the lawyer’s client, unless the client consents after full disclosure. First, the defense is an affirmative defense which must be pleaded. (c) Without the client’s informed consent, a lawyer may not act as advocate in an adjudicatory proceeding in which another lawyer in the lawyer’s firm is prohibited by paragraphs (a) or (b) from serving as advocate. If the lawyer to be called as a witness could not also serve as an advocate under this Rule, that lawyer shall not take an active role before the tribunal in the presentation of the matter.

KEN AND BETSY GROSS’ BRIEF Page 2 Comment 2 to the rule provides that “[o]ne important variable in this context is the anticipated tenor of the lawyer’s testimony. If that testimony will be substantially adverse to the client, paragraphs (b) and (c) provide the governing standard. In other situations, paragraphs (a) and (c) control.” Comment 10 to the rule states that the rule should not be used as a tactical weapon to deprive the opposing party of the right to be represented by the lawyer of his or her choice because reducing the rule to such a use would subvert its purpose.

In the present case, neither Hickok nor the Grosses have moved to disqualify Shaw under rule 3.08. At most, Hickok has announced his intention to call Shaw as a witness. However, “[a] mere announcement by an adversary of his intention to call opposing counsel as a witness is insufficient to orchestrate counsel's disqualification.” Gilbert McClure Enterprises v. Burnett, 735 S.W.2d 309, 311 (Tex. App.—Dallas 1987, orig. proceeding). “There must be [evidence of] a genuine need for the attorney's testimony, which should be material to the movant's case as well as prejudicial to the interests of the attorney's client before disqualification is required.” Id. *235 Shaw has not identified any evidence that he may provide which is material (in the sense of rule3.08) to this case. Likewise, Hickok has not identified any evidence that will be sought from Shaw that will be material. Furthermore, Shaw has not offered anything to show that any testimony he will provide will be prejudicial to the interest of VSDH.

The evidence admitted at trial shows that Hickok was the point person for VSDH in the negotiation and consummation of the contract at issue in this case. Shaw did not become involved until the Grosses exercised their buy-back option. For all of Shaw’s dealings with the Grosses, there are emails which reflect those conversations. In fact, there is evidence of only one substantive meeting with Shaw after the Grosses exercised their buy-back option. KEN AND BETSY GROSS’ BRIEF Page 3

At this point, there is no evidence before the Court that any evidence which might be sought from Shaw is material in the sense that it will have any bearing on the ultimate decisions to be made by the jury. If Hickok wishes to call Shaw as a witness to set up a defense that is not material, such a tactic is not prohibited by the rule. In addition, Shaw himself has not offered any evidence to the Court about whether or why any testimony he might give would be prejudicial to his client. As a result, the Court should deny the motion.

WHEREFORE, PREMISES CONSIDERED, the Grosses respectfully request that VSDH’s motion for mistrial be Denied and that they have and recover all other relief to which they are entitled in law or equity.

Respectfully submitted, /s/ Steven E. Aldous Steven E. Aldous State Bar No. 00982100 saldous@forsheyprostok.com F ORSHEY & P ROSTOK , LLP *236 500 Crescent Court, Suite 240 Dallas, TX 75201 Ph. 214.716.2100 Fx. 817.877-4151 Attorney for Defendants/Counter Plaintiffs

CERTIFICATE OF SERVICE

The undersigned certifies that a true and correct copy of the foregoing instrument was served upon all attorneys of record in accordance with Rule 21a of the Texas Rules of Civil Procedure on the 16 th day of June, 2015.

/s/Steven E. Aldous ___

STEVEN E. ALDOUS

KEN AND BETSY GROSS’ BRIEF Page 4 TAB 24 *237 1 REPORTER'S RECORD VOLUME 2 OF 10 VOLUMES CAUSE NO. CC-09-05232-A

VSDH VAQUERO VENTURE, LTD.

)IN THE COUNTY COURT ) Plaintiff/Counter-Defendant, ) ) ) ) )AT LAW NO. 1 )

V.

KEN GROSS and BETSY GROSS Defendants/Counter-Plaintiffs, )

) ) ) )

V.

EVAN L. SHAW and DOUGLAS M. HICKOK ) ) Intervenors/Counter-Defendants, )DALLAS COUNTY, TEXAS -------------------------------------------------------

TRIAL ON THE MERITS

------------------------------------------------------- *238 16 On the 10th day of June 2015, the following 17 proceedings came on to be heard within the presence of 18 19 a jury in the above-entitled and -numbered cause before 20 the Honorable EMILY TOBOLOWSKY, sitting for the 21 Honorable D'METRIA BENSON, held in Dallas, Dallas 22 County, Texas. 23 Proceedings reported by computerized stenotype 24 machine. Reporter's Record produced by computer-aided 25 transcription.

APPEARANCES:

MR. STEVEN E. ALDOUS SBN 00982100 Forshey Prostok, LLP 500 Crescent Court Suite 240 Dallas, Texas 75201 (214)716-2100 ATTORNEY FOR DEFENDANTS/COUNTER-PLAINTIFFS KEN GROSS and BETSY GROSS

- AND -

MR. KENNETH B. CHAIKEN SBN 04057800 Chaiken & Chaiken, PC Legacy Town Center III 5801 Tennyson Parkway Suite 440 Plano, TX 75024 (214)265-0250 ATTORNEY FOR INTERVENOR/COUNTER-DEFENDANT DOUGLAS M. HICKOK

- AND -

MR. EVAN LANE (VAN) SHAW SBN 18140500 MR. DANIEL K. HAGOOD SBN 08698300 Law Offices of Van Shaw 2723 Fairmount Street Dallas, Texas 75201 (214) 754-7110 ATTORNEY FOR PLAINTIFF/COUNTER-DEFENDANT *239 16 17 18 VSDH VAQUERO VENTURE, LTD; 19

INTERVENOR, VAN SHAW; and THIRD-PARTY DEFENDANTS VSDH VAQUERO HOMES, INC. AND VSDH HOMES, INC. 20 21 22

ALSO PRESENT: Ms. Jane Fraser, Jury Consultant 23 24 25

3 INDEX JUNE 10, 2015 PAGE VOL. PROCEEDINGS.............................. 4 2 VOIR DIRE BY MR. ALDOUS.................. 13 2 VOIR DIRE BY MR. HAGOOD.................. 75 2 VOIR DIRE BY MR. CHAIKEN................. 85 2 STRIKES FOR HARDSHIPS.................... 114 2 STRIKES FOR CAUSE........................ 138 2 SEAT THE JURY AND SWEAR IN THE JURY...... 148 2 END OF PROCEEDINGS....................... 151 2 REPORTER'S CERTIFICATE................... 152 2

EXHIBIT INDEX (NONE)

*240 16 17 18 19 20 21 22 23 24 25

4

PROCEEDINGS

June 10, 2015 (Jury panel enters the courtroom) THE COURT: Please be seated. Good morning, ladies and gentlemen. First

of all, I should tell you that I am not Judge D'Metria Benson. My name is Judge Emily Tobolowsky. And I'm the judge of the 298th District Court. Unfortunately, Judge Benson doesn't have a voice today. She has a little bit of laryngitis, and so I am pinch hitting as it were during this jury selection time.

I wanted to make sure that all of you have had an opportunity to take the oath as potential jurors downstairs. Did anybody miss taking the oath? *241 Okay. Those of you who missed taking the

16 oath, would you please raise your right hands? Would 17 you raise your right hand? 18 (Potential jurors sworn) 19 THE COURT: Thank you. 20 Mr. -- 29? 21 VENIREPERSON VILLANUEVA: I'm no -- 22 THE COURT: You don't speak English well? 23 VENIREPERSON VILLANUEVA: I don't 24 understand. 25 THE COURT: Okay. Can you read English?

5 VENIREPERSON VILLANUEVA: No. THE COURT: Can you write English? VENIREPERSON VILLANUEVA: No. I only

understand a little bit. THE COURT: Okay. If you'll sit back down, we'll -- we will deal with it. We will talk to you a little later. Okay?

VENIREPERSON VILLANUEVA: Okay. VENIREPERSON CANTU: I'm in the same

situation. I mean, I understand a little bit of English, but I don't know I can write or --

THE COURT: Okay. We'll talk to you also. That's Number 1 and Number 29; is that correct? VENIREPERSON VILLANUEVA: Yeah. *242 THE COURT: All right. Counsel, if you 16 all will also make note of that. 17 Anybody else concerned about any ability 18 to read or write or understand English? 19 Yes, ma'am. 20 VENIREPERSON DIMEFF: I have a minor -- 21 like a hearing problem that I can't understand some 22 people's voices. And I'm saying like the bottom third 23 of my hearing. 24 THE COURT: All right. Well, we'll -- 25 you'll hear the lawyers speak during this first portion

6 of the trial, and you'll need to let us know whether you're having any difficulty as we proceed through the morning.

As I indicated to you, I am Judge Tobolowsky. And, first of all, I know I speak on behalf of Judge Benson when I thank you for answering your summons for jury services and also for cooling your heels this morning while we were getting you up here and getting ready for you. I've heard it said, though I'm sure it's not true of any of you, that some people do not do a happy dance when they get a summons for jury service.

And in all seriousness, I want to tell you that I think you're going to have a very interesting *243 experience. I want to remind you that we tend to take 16 trial by jury for granted in this country. We grew up 17 with this, those of us who did grow up here; and we tend 18 to think of this as just -- you know, this is how it is. 19 This is how it is all over the world. Well, it's not. 20 In fact, this is one of the relatively few countries 21 worldwide that has trial by jury and even fewer that 22 have trial by jury in civil cases. 23 Because you are in this courthouse, you 24 will not be hearing a criminal case. This will be a 25 civil case. Nobody will be going to jail if you're

7 chosen to be a juror. But I want to remind you that this right to trial by jury is so important to our democracy that it's in our constitution. I mean, we don't have a whole lot of things in our constitution, but the right to trial by jury is in our constitution.

So I trust and hope that you will give this serious consideration; that you will listen carefully; that you will answer the questions that the lawyers ask you carefully and be reminded that this is a great privilege, but also responsibility that you undertake.

We are here to choose a jury of six of you. And even if you're not chosen, we thank you for being here. Has everybody turned off all of their *244 telephones or other electronic devices?

16 Thank you. 17 While you're in the courtroom, you may not 18 communicate, even the lawyers may not communicate using 19 any electronic device or by telephone, text, email, 20 chatroom, blog, or social networking websites, such as 21 Facebook, Twitter, Instagram, Myspace, if it still 22 exists. And do not record or photograph these 23 proceedings, as that also is prohibited by law. 24 If you are chosen to serve on the jury, 25 your very important role will be to decide the factual

8 matters in this case. The judge isn't empowered to weigh the facts and to decide who they believe. That's your job, and the judge's job is just to make sure that the case is tried in accordance with the law.

This is a lawsuit that was brought by Ken and Betsy Gross, and they are represented today by Steve Aldous.

Mr. Aldous, you may introduce yourself and whomever else you'd like to introduce. MR. ALDOUS: Thank you, Your Honor. Here with me today is Jane Fraser and also

Sarah Irish over here. THE COURT: Thank you, Mr. Aldous. MR. ALDOUS: Thank you, Judge. *245 THE COURT: And the Grosses have brought

16 suit against VSDH Vaquero Venture, Ltd., and that entity 17 is represented by Van Shaw. 18 Mr. Shaw, you may stand and introduce 19 yourself and whomever else you'd like. 20 MR. SHAW: Thank you, Your Honor. 21 Good morning. I'm Van, last name Shaw. 22 And I'm here today with Dan Hagood today. And I'm going 23 to be pinch lawyer. 24 MR. HAGOOD: Good morning. 25 THE COURT: Thank you, Mr. Shaw.

9 And the Grosses have also brought suit against an individual named Douglas Hickok, and he is represented today by Ken Chaiken.

Mr. Chaiken, you may stand and introduce yourself and anybody else you'd like. MR. CHAIKEN: Good morning. My name is Kenneth Chaiken. And it is my honor and privilege to introduce to you my client, Mr. Douglas Hickok, who's here today as well.

THE COURT: Thank you, Mr. Chaiken. MR. CHAIKEN: Thank you, Judge. THE COURT: There are some instructions

I'm about to give, and you need to abide by them during jury selection. And, please, listen very carefully. If *246 you're chosen to serve on a jury, you're going to hear

16 some of them again. But every juror must obey the 17 instructions. If you don't obey the instructions, you 18 could be called to testify about potential juror 19 misconduct, which then would mean we'd have to start 20 this process all over again. And that wouldn't be fun 21 for the next group of people and it wouldn't be fun for 22 this group and their clients and it would be expensive 23 for the county. So please obey my instructions. 24 To avoid looking like you are friendly 25 with one side of the case, do not mingle or talk with

10 the lawyers, the witnesses, the parties, or anyone else involved in the case. Pardon me. You may exchange casual greetings like "hello" or "good morning." Other than that, do not talk about -- do not talk to them at all. They have to follow these same instructions, so you'll understand it when they do.

I apologize. Anybody else suffering from allergies this time of year? Do not accept any favors from the lawyers, the witnesses, the parties, or anyone else involved in the case and do not do any favors for them. This could be something as simple as giving somebody a ride or giving them food. Do not discuss the case with anyone, not even your spouse, a friend, or anyone else, *247 including by either in person or by phone, by text, by

16 email, chatroom, blog, or social networking websites, 17 such as Facebook, Twitter, or Myspace. 18 And do not allow anyone to discuss the 19 case with you or in your hearing. If anyone tries to 20 discuss the case with you or in your hearing, please 21 tell me or a bailiff at once. The reason for this is we 22 do not want you influenced by anything you hear that is 23 not evidence in this case. So anything that should come 24 to you from outside of this courtroom is something we 25 don't want you influenced by.

11 Right after I'm finished with these instructions, the parties, through their attorneys, have the right to ask you questions about your background, experiences, and attitudes. They are not trying to meddle in your affairs, but they are trying to thoroughly determine who could be a fair juror in a case like this. And you will hear the words perhaps "bias" and "prejudiced" used. And we don't mean prejudiced in some other manner in which you might think it applies. But the lawyers in this first portion of the trial are just trying to determine who can be fair.

Now in the state of Texas, we call this first portion of the trial voir dire. If anyone speaks French, you know that's terrible. That's a Texanism of *248 a French phrase. I'm fond of saying we're closer to

16 Paris, France -- closer to Paris, Texas, than we are to 17 Paris, France. Hence, the Texas version of voir dire. 18 Please remember that you took an oath to 19 tell the truth, and so that oath means that if you're 20 answering questions that are asked to you by these 21 lawyers, you need to give a complete answer. In that 22 connection, you all have numbers, and it is easier for 23 me and for the lawyers to see your numbers than it is to 24 figure out what number you are. 25 So if you have an answer to a question, if

12 you would, pull up and keep holding up your number until you've been acknowledged in some way. And at the same time, the lawyers probably will all ask questions of you as a group and ask, you know, you to identify yourselves if you want to speak in connection with a group question. So keep those numbers raised until you've been acknowledged.

But if there's a question that's asked that you really don't want to talk about in front of your new 29 best friends, if you would let us know, we can arrange for you to speak privately in front of me and in front of the lawyers in connection with your answer.

One other thing that I have failed to tell *249 you is that the trial for which we are picking a jury 16 today will not actually start until next Monday. So 17 because next Monday at the courthouse is a non-jury 18 week, the lawyers are making this and the judge arranged 19 for you to be called down today to make other selections 20 of the jury today. But the trial will not start until 21 next Monday at 9:30. 22 I'm sure some of you are going to want to 23 talk to us about your availability, and you'll have an 24 opportunity to do that. But I did want you to know that 25 when we are finished with this process, you will not be

13 needed the rest of the week. But you will be needed beginning on Monday.

Does anybody -- does everybody understand these instructions? All right. We're going to begin with voir dire. And, Mr. Aldous, you may proceed. MR. ALDOUS: Thank you, Your Honor. Good morning everybody. So the reality

is, I talk pretty loud, so you won't have any problems hearing me. But, occasionally, if you start to talk, I may remind you -- bless you -- that the court reporter up here is taking down what you have to say. So I may say, gee, what did you say and have you repeat.

I always think it's kind of unfair when we *250 start up here asking you questions because, you know, 16 I've got your jury information cards, and y'all don't 17 know a hill of beans about me. So I'm going to tell you 18 what my card would say, but I'm not going to give you my 19 middle name. 20 Steve Aldous, 2525 Carlisle, Dallas, 21 75021. I've lived in Dallas County for over 20 years, 22 but I couldn't add it up. And since I'm not really 23 getting paid, I don't donate. My date of birth is 24 8/27/62. I see somebody 8/25/72. I've got six kids. 25 I'm married. It's a blended Brady Bunch thing. And

14 I've never served on a jury. I'm a lawyer obviously. Forshey & Prostok is the name of my law firm. My spouse is employed by a place called Soft Surroundings out in Southlake. I've never been on a jury. Nobody will ever pick me, and I have been a party to a lawsuit. So now you know as much about me as I know about you.

So part of this process is for us to get to know you. In order for us to get to know you, you've kind of got to speak up. So if I ask you a question, it's not that I'm picking on you; I'm trying to find out some things to see whether or not you'd be a good juror for here, or maybe there's another case somewhere else in the courthouse that you'd be a better juror in.

So, first of all, let me just start off by *251 saying this is a breach of contract case concerning a 16 house. All right. So with that said, I'm going to give 17 you a list of names, and these people are either going 18 to be witnesses or they're going to be referred to in 19 the case. And if you hear me call out the name, then 20 put your number up, if you don't mind. 21 First, of course, you've got Dan Hagood 22 and Van Shaw who represent VSDH Joint Venture. Does 23 anybody know Dan or Van? 24 All right. Mr. Chaiken and his client, 25 Mr. Hickok, does anybody know those folks?

15 And, as the Court told you, as the judge told you, I represent Ken and Betsy Gross. I specifically asked them not to be here this morning because I don't want you holding back on what you have to say just because my clients are here, and they may not want to hear it. So I asked them not to be here. So does anybody know Ken and Betsy Gross? They live out in Coppell or Southlake.

All right. Does anybody know a lawyer who may testify named Brent Cooper of Cooper & Scully? All right. What about Paul Kramer, who's a builder? Does anybody know Roxann Taylor, who's a real estate agent in the Southlake area?

No? You see I was looking at the real *252 estate agent. See, like I said, there, Mrs. Dimeff -- 16 no, Ms. Jackson. Ms. Jackson, when I looked at you, it 17 was because you're the only person in real estate here. 18 So I knew partly you wouldn't want to put it on the 19 card, so I was wondering if you knew Ms. Taylor. No? 20 Okay. 21 So a lawyer named Hap Stern? A fellow 22 that worked out at Vaquero, who's named John 23 Buttemiller, but I don't think he lives there anymore. 24 And then, finally, another lawyer named Mack Zimmerman, 25 anybody know him?

16 Now I'm not saying all these people are going to be witnesses. All I'm saying is that they may be referred to in the case.

All right. So the other thing, too, is, does anybody know anybody from -- connected with my law firm that has an office in Fort Worth and Dallas, Forshey & Prostok, a good Louisiana lawyer?

All right. Great. So does anybody here watch, like, law shows on TV? Oh, we've got a nodder right here. So, let's see. Now, you're Ms. Pearson. What show -- what's your favorite law show?

VENIREPERSON PEARSON: Law and Order. MR. ALDOUS: Law and Order, okay. That's

the one where they say in the criminal justice system, *253 blah-blah-blah. 16 And did anybody else -- oh, Ms. Watts, 17 what's your favorite. 18 VENIREPERSON WATTS: Criminal Minds. 19 MR. ALDOUS: That's also a criminal show. 20 So all you folks that watch criminal shows, you know, 21 what is the burden of proof they always talk about? 22 Beyond a reasonable doubt, right? 23 All right. We all know that. We've heard 24 that on TV at times. There was only one person that I 25 saw on their information sheet who said that they were

17 on a criminal jury, and I can't remember who it was. If you've ever served on a jury that was a criminal trial, please raise your hand. All right. So Mr. Cirone, did I say that correctly?

VENIREPERSON CIRONE: You said it right. MR. ALDOUS: All right. Before we get any

further, I have a question for you. Were you really born on 11/11/1911?

VENIREPERSON CIRONE: No. MR. ALDOUS: That would make you over 100

years old. So I'm assuming that your information card is not accurate; is that right?

VENIREPERSON CIRONE: Yeah, you're right about that. *254 MR. ALDOUS: Okay. Good, because I was 16 going, wow, this would be the first. I've never had 17 somebody on the jury over 100 years old. No, but -- 18 (Venire panel laughing) 19 MR. ALDOUS: I don't think I heard you. 20 That's selected deafness, you know, married a little 21 bit. So you were on a criminal jury? 22 VENIREPERSON CIRONE: Yes. 23 MR. ALDOUS: Do you recall how long ago it 24 was approximately? 25 VENIREPERSON CIRONE: About 15 years ago.

18 MR. ALDOUS: All right. Did y'all actually go to a verdict, render a verdict? VENIREPERSON CIRONE: Yes. MR. ALDOUS: Do you remember the judge

telling you at that time you have to find that the burden that the prosecutor has to find is beyond a reasonable doubt. Do you remember that?

VENIREPERSON CIRONE: Yes, I do. MR. ALDOUS: Has anybody else served on a

criminal jury? Well, the good thing about it is, forget all that. This is a civil case. And because we aren't talking about putting somebody in jail or we're not talking about the power of the state to bring a case, this has a different, what we call, burden of proof. *255 And there's a -- the lawyers call it the burden of

16 persuasion is -- is what we talk about in a civil case. 17 And it's a preponderance of the evidence. 18 Who knows what that means? What it really 19 means is more likely true than not. That's it. It's 20 just more likely true than not. It's whether or not you 21 tip the scale one way or the other. It's okay in civil 22 cases to have all kinds of doubts as long as when you 23 weigh them out, you say it's more likely true than not. 24 Now, some people say, "But I don't like 25 that. That's too low." So what I want to know is if

19 there's anybody here who has a feeling about that burden of proof and say, you know what, I think that's just too low? How about you, Ms. Jackson? You think it's okay.

I noticed a couple of y'all have been involved in civil suits, and I'm assuming that whoever it was involved in a civil suit had a similar situation where they recognized the burden of proof was lower than a criminal case. Did anybody have a bad experience in regard to a case that they previously had?

Okay. Mr. Machen? VENIREPERSON MACHEN: Machen. MR. ALDOUS: Go ahead and tell me what

you're thinking. VENIREPERSON MACHEN: I was just wanting *256 clarification on that because I was involved in a civil 16 suit against our home builder. 17 MR. ALDOUS: Okay. So when you were 18 involved in a civil suit against your home builder, did 19 it go all the way to a jury trial? 20 VENIREPERSON MACHEN: No. It went just in 21 front of the judge. 22 MR. ALDOUS: All right. And was there a 23 trial in front of the judge? 24 VENIREPERSON MACHEN: Yes. 25 MR. ALDOUS: So what happens is, like in

20 your civil suit, people have to make judgment calls as to who's telling the truth, who's not telling the truth, and the burden is by a preponderance of the evidence. Did you have the same way in your trial?

VENIREPERSON MACHEN: Yes. MR. ALDOUS: You know, some people say,

oh, yeah, I hear preponderance of the evidence, and it's okay, and they've just really got to convince me. And that's really not what the law requires. And so if anybody has any kind of -- what about you, Mr. Rodgers? When you were playing for the Packers and y'all were winning Super Bowls --

VENIREPERSON RODGERS: That was the wrong one. *257 MR. ALDOUS: Sorry about that. But do you 16 have any problem applying that same kind of a standard, 17 you know, just making calls about who's more likely 18 right from wrong? 19 VENIREPERSON RODGERS: No. 20 MR. ALDOUS: All right. What about you, 21 sir, Mr. Kozak. 22 VENIREPERSON KOZAK: Yes, sir. 23 MR. ALDOUS: Any problem with that? 24 VENIREPERSON KOZAK: No, sir, not at all. 25 MR. ALDOUS: Okay. And then, Mrs. Evans,

21 you were a party to a civil case it says, according to your jury card, right?

VENIREPERSON EVANS: Yes. MR. ALDOUS: And is that the same kind of

way it was going with your case in terms of what -- did you have to go to a trial?

VENIREPERSON EVANS: No. MR. ALDOUS: Okay. So if you settled, you

didn't really get that far, right? VENIREPERSON EVANS: No. MR. ALDOUS: All right. So -- and by the

way, Mrs. Dimeff, did I say that right? VENIREPERSON DIMEFF: Dimeff. MR. ALDOUS: Am I talking loud enough for *258 you?

16 VENIREPERSON DIMEFF: It's not the 17 loudness; it's the pitch. 18 MR. ALDOUS: All right. How's my pitch? 19 VENIREPERSON DIMEFF: You're good. 20 MR. ALDOUS: Mr. Berg, do you have any 21 problem with the way the civil system is set up? 22 VENIREPERSON BERG: No, sir. 23 MR. ALDOUS: So, let me just ask if there 24 -- this way. How many of you don't think it's fair if 25 for any reason that -- that it's so unfair that you

22 couldn't follow the Court's instruction on what a preponderance of the evidence is and just say it's more likely true than not? Anybody?

Boy, are y'all still -- does anybody like some coffee or something, a Jolt Cola? All right. So let's move on then. So I'm assuming that nobody here has any opinions about lawsuits in general. How about you, Number 12 juror, Ms. Gonzales?

VENIREPERSON GONZALES: Honestly, I think it just depends on what it is. I mean, I think some are good. Some are not.

MR. ALDOUS: All right. Who feels like Ms. Gonzales, you know, there's some that are probably *259 good, some that are probably bad? Okay. We've got lots 16 of numbers holding up here. Has anybody had a 17 particular bad experience in the civil justice system 18 that would make it to where it's difficult for you to 19 sit on this jury? That's just a broad question. 20 Nobody? 21 Okay. We're moving along. We're just 22 doing really good. These are my notes. Sorry. So, if 23 you've been a plaintiff, that is a person bringing a 24 claim in a lawsuit, if you would, just raise your number 25 up.

23 Okay. We've got Mrs. Evans. Mrs. Evans is Number 3. Anybody -- yes, Mr. Machen. All right. Anybody else? Ms. Watts? MR. CHAIKEN: What numbers, please? MR. ALDOUS: Number 17. Number 10 and

Number 17. Do you have a question, Ms. Watts? VENIREPERSON WATTS: Well, we were in a

classified lawsuit thing. I don't know if I should warn you about that.

MR. ALDOUS: All right. So if it is something that you would like to talk about privately, we can do that. *260 VENIREPERSON WATTS: Okay.

16 MR. ALDOUS: All right. So why don't we 17 just make a note of it. 18 THE COURT: And I'm sorry. Is that 17? 19 MR. ALDOUS: Number 17, Your Honor. 20 THE COURT: Thank you. 21 MR. ALDOUS: Anyone else? All right. So 22 let me just ask you, Mrs. Evans, just generally, what 23 type of case it was. Number 3. 24 VENIREPERSON EVANS: Oh, what kind of case 25 it was?

24 MR. ALDOUS: Yes. Was it a personal injury or -- VENIREPERSON EVANS: It was a personal injury. MR. ALDOUS: Okay. And, Mr. Machen, what type of case? Was it against your builder? VENIREPERSON MACHEN: Yes. MR. ALDOUS: And was that because you felt

like the builder didn't do what he said he was going to do?

VENIREPERSON MACHEN: It was worse than that. But, yes, sir. MR. ALDOUS: That's a mild understatement of what went on? *261 VENIREPERSON MACHEN: Right. 16 MR. ALDOUS: All right. So, Mr. Machen, 17 if it doesn't -- I don't want to, you know, get into 18 your business too much. But if you would, just tell us 19 what happened in your situation. 20 VENIREPERSON MACHEN: Well, we would pay 21 our -- write checks out to him, and he was not paying 22 his -- his people. So at the time of closing, those 23 contractors put a lien on our house, and we had to fork 24 over a ton of money to get the lien off our house so we 25 could close.

25 MR. ALDOUS: I see. How long ago was this? VENIREPERSON MACHEN: That was 2008, '09. MR. ALDOUS: Okay. And how was it in

terms of the resolution? Were you satisfied with it, unsatisfied?

VENIREPERSON MACHEN: Well, we won. But he didn't show up for court, and we never were able to collect.

MR. ALDOUS: Anyone else on the second row been a party to lawsuit that is either way of them -- Ms. Watts, we're going to talk to you later.

Anyone? And then anyone on the last row? Now I'm going to change the question just *262 a little bit. I'm going to ask: Has anybody who has a

16 family member or a very close friend who's been a party 17 to a lawsuit? If you would, raise your hand. 18 Let's see, Mrs. Ortiz; is that correct, 19 Number 18. And then we've got Mrs. Evans, Number 3. 20 We've got Mr. Cirone, Number 28. Anyone else? Oh, 21 Number 20, Mr. Pearle; is that right? 22 All right. Let me start with you, 23 Mrs. Evans. Could you tell me what -- if a family 24 member or close friend has been a party to a lawsuit? 25 VENIREPERSON EVANS: Yes.

26 MR. ALDOUS: Is it a different lawsuit than the one you were talking about? VENIREPERSON EVANS: Yes. MR. ALDOUS: Okay. Can you just tell me a

little bit about it? VENIREPERSON EVANS: Well, I'd rather not. I'll talk to you in private. MR. ALDOUS: All right. You can talk to us in private. Number 3, Your Honor. And then, Mrs. Ortiz, could you tell me a

little bit about it? VENIREPERSON ORTIZ: Yes. I mean, my dad owned a company and he was the franchiser. And one of *263 the franchisees left the company and started his own. 16 And he took all of his customers with him. And so he 17 had to go sue him and, you know, so it was a big deal at 18 work. 19 MR. ALDOUS: Where was that 20 geographically? 21 VENIREPERSON ORTIZ: It was -- I believe 22 it was in Pennsylvania, but he had lawyers here and up 23 there. 24 MR. ALDOUS: And what type of business was 25 your dad in?

27 VENIREPERSON ORTIZ: Marble restoration. MR. ALDOUS: I'm sorry? VENIREPERSON ORTIZ: Marble restoration. MR. ALDOUS: Oh, okay. Anything about

your service in that -- in that situation that might cause you to go one way or the other before you ever start in this case?

VENIREPERSON ORTIZ: No. MR. ALDOUS: Okay. Mr. Pearle, if you

don't mind, could you tell us a little bit about your situation you were referring to when you raised your card?

VENIREPERSON PEARLE: Yeah. It was -- it was my ex-wife. She's an interior designer, and it was *264 something that was less than $10,000. And it was -- it 16 pretty much just went away. We kind of got hosed. 17 MR. ALDOUS: All right. So there was like 18 two things wrong with your answer. One, you started off 19 by saying, "my ex-wife." And then at the end, you were 20 saying, "We got hosed." 21 VENIREPERSON PEARLE: On both ends. 22 MR. ALDOUS: Anything about -- and you're 23 juror Number 20, right? I'm just making sure. So 24 anything about your experience in there that would keep 25 you from being a juror in this case?

28 VENIREPERSON PEARLE: No. MR. ALDOUS: And then on the back row I

had Mr. Cirone. VENIREPERSON CIRONE: My dad owned a grocery store on the corner of Luke and McKinney Avenue here in Dallas. We've lived here all our lives. And during a storm, heavy rain and wind, the roof fell out. So we went to court to try to get the insurance company to pay for it and they didn't do it.

MR. ALDOUS: Is there anything about his experience in that regard that would cause you to -- VENIREPERSON CIRONE: I'm a little bitter because -- and they didn't pay a cent, and so we had to close his business up because of it. *265 MR. ALDOUS: How long ago was that?

16 VENIREPERSON CIRONE: I guess I was in my 17 20s, so a long time ago, 40 years ago. 18 MR. ALDOUS: If you were somehow reached 19 and asked to sit on this jury and the judge told you to 20 put all of that stuff aside, could you do that? 21 VENIREPERSON CIRONE: Considering he lost 22 his business over that, I kind of -- it still bothers me 23 a little bit. 24 MR. ALDOUS: All right. Thank you, sir. 25 Now, Ms. Haggerty?

29 VENIREPERSON HAGGERTY: Yes. MR. ALDOUS: Have you been a -- you or a

family member or close friend been a party to a lawsuit in your -- Number 27?

VENIREPERSON HAGGERTY: Yes. MR. ALDOUS: You have? VENIREPERSON HAGGERTY: I have. MR. ALDOUS: Do you -- would you mind

telling me what type of case it was. VENIREPERSON HAGGERTY: My husband was in an accident. MR. ALDOUS: Okay. VENIREPERSON HAGGERTY: Just made a

settlement. *266 MR. ALDOUS: I'm sorry? 16 VENIREPERSON HAGGERTY: We made a 17 settlement. 18 MR. ALDOUS: Okay. 19 VENIREPERSON HAGGERTY: So we didn't get 20 to a jury or anything. 21 MR. ALDOUS: Anything about your 22 experience that might keep you from being what I call 23 fair or impartial to both sides in this case? 24 VENIREPERSON HAGGERTY: Well, depending on 25 maybe the person's age, you know. Like then, I was very

30 young and I didn't get too much input on, you know, what I should do or what shouldn't I do. So now, you know, I think back then, you know, since I got older, I think I was maybe shortchanged, you know.

MR. ALDOUS: All right. Thank you, Ms. Haggerty. This case is going to have some issues in it relating to contracts. Does anybody here feel like that they have any special expertise or knowledge about just contracts in general? If you do, just raise your hand.

Okay. Ms. Gonzales, Number 12? Anyone else? Oh, we've got Ms. Doty. Did

I say that right? *267 VENIREPERSON DOTY: You got it right. 16 MR. ALDOUS: Number 21. 17 Mrs. Jackson, Number 5, real estate. 18 Anyone else? 19 Now, I will say this. Everybody, all of 20 us make contracts, you know. We might go to work and we 21 don't get paid until the end of the pay period. We 22 expect to get paid. That's really a contract. But in 23 this situation, it's a -- there's some written 24 contracts. 25 So let me ask you, Mrs. Gonzales. Could

31 you tell us about your experience with contracts? VENIREPERSON GONZALES: Well, I was working at AT&T. I worked in the legal department. And the gentleman that I supported was -- that's what we did. We did contracts with various vendors, whether it was Microsoft or Verizon or cable companies as to what they could and could not do.

MR. ALDOUS: Did you -- were you part of the team that assisted in reviewing those types of contracts?

VENIREPERSON GONZALES: Absolutely. MR. ALDOUS: All right. VENIREPERSON GONZALES: I was the

assistant though. *268 MR. ALDOUS: Did you -- were y'all 16 generally -- like, somebody would send you a contract 17 and then y'all would change it up a little bit, and add 18 some language to it? 19 VENIREPERSON GONZALES: We did both. We 20 originated contracts and we did review contracts that 21 they originated. 22 MR. ALDOUS: And when you say that they 23 were with all types of people, were they all types of 24 contracts, you know, like vendor contracts, software 25 contracts, all of that?

32 VENIREPERSON GONZALES: Yes. MR. ALDOUS: Okay. So in this case, the

judge is going to instruct you, I believe, at the end of the case to make a determination whether or not a party's breached a contract or not. Is there anything about your experience that would keep you from following the Court's instructions in this case? Nothing? Sometimes you've got to speak out.

VENIREPERSON GONZALES: Oh, no. MR. ALDOUS: The court reporter is sitting

there going, nodding, and shaking her head. VENIREPERSON GONZALES: Sorry. MR. ALDOUS: I'm sorry. Who else?

Ms. Doty, what was your -- what is your experience with *269 regard to contracts? 16 VENIREPERSON DOTY: Just with my job. I 17 work in advertising and I write the master service 18 agreements and -- with my -- or with our clients. 19 MR. ALDOUS: All right. So, would you -- 20 would you just say that almost all of what you're 21 working on with regard to contracts is related to 22 advertising services? 23 VENIREPERSON DOTY: Yes. 24 MR. ALDOUS: Is there anything about that 25 experience that you believe might impact you in

33 reviewing contracts between these parties? VENIREPERSON DOTY: No. MR. ALDOUS: No? VENIREPERSON DOTY: No, not that I can

think of. MR. ALDOUS: Mrs. Jackson, Number 5. And were you referring to the fact that you're a real estate agent?

VENIREPERSON JACKSON: Yeah. I deal with the -- you know, buying, selling of residences and things that go along with the contract.

MR. ALDOUS: And do you use the standard form? VENIREPERSON JACKSON: Yes. *270 MR. ALDOUS: So this case is going to -- 16 at least a portion of the contract is a standard real 17 estate form contract put out by the Texas -- 18 VENIREPERSON JACKSON: Real Estate 19 Commission. 20 MR. ALDOUS: -- Real Estate Commission. 21 There you go. During this process, there was some 22 changes to it. But during this process, there is going 23 to be people who testify. And I believe at the end of 24 the case, the judge is going to say you should really 25 make your decision based on what the evidence is in this

34 case rather than your own personal experiences. Do you think you're going to be able to do that? Is that a, "yes"?

VENIREPERSON JACKSON: That is a, "yes." MR. ALDOUS: So, you know, I always do

that because of the court reporter. VENIREPERSON JACKSON: I understand. MR. ALDOUS: Okay. Sorry. Thank you for

your answer. Anybody else with the contracts? Okay. juror Number 17, Ms. Watts? VENIREPERSON WATTS: I worked at -- I did contracts for an apartment complex. MR. ALDOUS: All right. Was it for, like, *271 leases? 16 VENIREPERSON WATTS: Yes. 17 MR. ALDOUS: Okay. Anything about that 18 experience that you can think of that would effect you 19 or keep you from being a fair juror in this case? 20 VENIREPERSON WATTS: Based on that 21 company, yes. I'm just going to be honest. 22 MR. ALDOUS: Okay. Let me restate it. 23 Assuming that the company that you worked for isn't 24 involved in this case and has nothing to do with it, 25 will it effect you in this case?

35 VENIREPERSON WATTS: No. MR. ALDOUS: Okay. Thank you. Anyone else? What about other than

Mrs. Jackson, anybody else have any particular expertise or any experience in real estate?

Nobody's raising their hand. Nobody's raising their hand. Mr. Villanueva? VENIREPERSON VILLANUEVA: Right. MR. ALDOUS: And there's two Villanuevas,

but I'm referring to juror Number 8, right? VENIREPERSON VILLANUEVA: Right. MR. ALDOUS: You work for DART; is that

right? *272 VENIREPERSON VILLANUEVA: Right. 16 MR. ALDOUS: And as a field supervisor, do 17 you have to deal with acquiring right-of-ways or 18 anything like that? 19 VENIREPERSON VILLANUEVA: No. My job is 20 basically contract compliance for the provider of fair 21 transit services. So I pretty much go out into the 22 field and make sure the drivers pick up our customers or 23 compliance with what they've agreed on, but it's -- 24 MR. ALDOUS: Well, when you're doing that, 25 do you create your own checklist of the things they have

36 to comply with based upon the contract, or do you get that from someone else?

VENIREPERSON VILLANUEVA: I get that from my employees I supervise. MR. ALDOUS: All right. Thank you, Mr. Villanueva. MR. ALDOUS: Yes, Number 20, Mr. Pearle? VENIREPERSON PEARLE: You mentioned

right-of-ways. I have a contract with some farmland right now dealing with some pipeline right-of-ways. I didn't know if that's relevant or not, but --

MR. ALDOUS: Well, it could be. But who do you work for, Mr. Pearle? VENIREPERSON PEARLE: I don't work for *273 anybody right now. 16 MR. ALDOUS: Well, when you say you were 17 working on the -- 18 VENIREPERSON PEARLE: I have a farm and we 19 have -- an association would come in and wants to put a 20 pipe across our farm. So it's an easement deal. 21 MR. ALDOUS: I was asking Mr. Villanueva 22 about that. But I don't think that an easement is 23 necessarily going to be involved. 24 But has anybody had any experience with a 25 buyback provision in a real estate contract, meaning

37 I'll buy this, but then after a certain period of time, you may buy it back? Anybody ever had that? No one?

Okay. Let me ask you this then. Does anybody have any experience as a title agent or with a title company? Okay, nobody.

What about being in residential construction? Okay. Let's see, Number 4, Mrs. Dimeff? VENIREPERSON DIMEFF: I'm an interior designer. And when I lived in Ohio for 20 years, I worked with contractors building houses, choosing finishes and designing.

MR. ALDOUS: What about working with the actual contracts themselves? You know, like a general contractor might sign off and then give a list of *274 specifications that they say they won't comply with. Do

16 you have any experience in that regard? 17 VENIREPERSON DIMEFF: A change order? 18 MR. ALDOUS: It could be a change order or 19 it could be the original contract. 20 VENIREPERSON DIMEFF: A little bit. You 21 know, if there's a change order, it's not charged. 22 MR. ALDOUS: Could you tell me a little 23 bit more about your interior design work? 24 VENIREPERSON DIMEFF: Basically back then, 25 it was strictly residential. I would be with the buyer

38 for like a year working -- helping build the home in terms of choosing everything the buyer had to choose for the house, whether it's the tile, the door knobs, molding. So I usually would work with one client each year, you know.

MR. ALDOUS: Would you have a written contract to do that work? VENIREPERSON DIMEFF: I had my own contract with my client. MR. ALDOUS: Okay. And then now do you still do that work? VENIREPERSON DIMEFF: I do more decorating than designing, so not as much building. MR. ALDOUS: Okay. I think I understand. *275 Let me -- is your spouse a physician? 16 VENIREPERSON DIMEFF: Yes. 17 MR. ALDOUS: What type of physician is 18 your spouse? 19 VENIREPERSON DIMEFF: Sports medicine. 20 MR. ALDOUS: And where does he work? 21 VENIREPERSON DIMEFF: UT Southwestern. 22 MR. ALDOUS: Thank you. Let's see. Where 23 was I? Oh, title companies. And nobody else raised 24 their hands, right? 25 Okay. Let me ask you this. Does anybody

39 work or has worked as a financial planner or advisor, CPA? Nobody's raising their hand. Okay, great.

Now, who owns a business with three or more employees, anybody? Mr. Pearle, Number 20. Anyone else? All right. So let me ask you a --

Mr. Pearle, tell me about your type of business. VENIREPERSON PEARLE: I had a commercial photography studio. We had about five people working for us. And then we had an art company that was kind of part of it.

MR. ALDOUS: So you said photography and then art? VENIREPERSON PEARLE: Yes. *276 MR. ALDOUS: Okay. I was just -- were you 16 able to catch that? 17 And let's see. How long did you have that 18 business? 19 VENIREPERSON PEARLE: About 20 years. 20 MR. ALDOUS: When did you quit doing that 21 business? 22 VENIREPERSON PEARLE: I mean, I still do 23 it to some extent, but I kind of shut the studio down 24 around, oh, 2001 or '02. 25 MR. ALDOUS: All right. Thank you,

40 Mr. Pearle. Go ahead. Oh, I thought you were going to say something. I thought you were going to add something to it.

So, how many folks here said that they were on the jury before? Could you just raise your hand again? So Mr. -- Number -- let me put it by number. Number 28, Number 12, any kind of jury, Mr. Palmer 23, and is it Adeboye? Did I say that correctly?

VENIREPERSON ADEBOYE: Yes. MR. ALDOUS: Number 30. Anyone else? For those of you that did serve on a jury,

were any of you the presiding juror? That means the one who's like -- has to answer the questions for the judge and all that. Anybody? *277 VENIREPERSON GONZALES: Is that like the

16 foreman? 17 MR. ALDOUS: Yes. 18 VENIREPERSON GONZALES: Yes. 19 MR. ALDOUS: You know, because we're all 20 correct now, it's not a foreman. I'll have you know 21 that it's presiding juror. 22 VENIREPERSON GONZALES: Now you know how 23 long it's been. 24 MR. ALDOUS: So, Ms. Gonzales, you were. 25 VENIREPERSON GONZALES: Yes.

41 MR. ALDOUS: And what type of case was it? VENIREPERSON GONZALES: It was a breaking

and entering case. MR. ALDOUS: And were you able to reach a verdict? VENIREPERSON GONZALES: Yes. MR. ALDOUS: All right. Anyone else,

presiding juror? Nobody's raising their hand. All right. So I've got some questions for about a couple of you. Mr. Machen? VENIREPERSON MACHEN: Yes. MR. ALDOUS: Now you said on your juror

information card that while you and your spouse both work at Southwest Airlines, she is a solutions *278 architect. Now I was thinking, well, that means she's

16 an architect. But then I thought, well, maybe at 17 Southwest that means something else. 18 VENIREPERSON MACHEN: Well, we are both in 19 technology. So she's an architect of the systems. 20 MR. ALDOUS: Oh, okay. Database? 21 VENIREPERSON MACHEN: Right, server, 22 databases, just networking. 23 MR. ALDOUS: Is that what you do too? 24 VENIREPERSON MACHEN: No. I'm a business 25 analyst.

42 MR. ALDOUS: Okay. VENIREPERSON MACHEN: But I'm in

technology, so she would be part of my team if I was like --

MR. ALDOUS: Would you mind describing for me what you do, what you work with? VENIREPERSON MACHEN: So I'm in technology and I work with our internal customers. And I have technology teams to develop requirements for internal applications and requirements based off of our internal customer's wants. And those requirements are passed on to the development team, and they take that and start their software development processes.

MR. ALDOUS: Thank you. *279 Mr. Richie, you're from sales with Andrews 16 Distributing. 17 VENIREPERSON RICHIE: Right. 18 MR. ALDOUS: Can you tell me what you do 19 or what type of sales? 20 VENIREPERSON RICHIE: (Inaudible). 21 THE REPORTER: I can't hear you. 22 MR. ALDOUS: Here. You know what? I've 23 got this thing. So you get to be the first one. 24 VENIREPERSON RICHIE: All right. 25 MR. ALDOUS: So if you would, we're doing

43 karaoke numbers. Pick your own song. What were you saying now? VENIREPERSON RICHIE: I distribute alcohol

for 7-11, RaceTrac, QuikTrip, your local convenience stores around the Dallas/Fort Worth metroplex.

MR. ALDOUS: Thank you. THE COURT: Courthouses? MR. ALDOUS: I don't know that song. Mr. Rodgers -- and forgive me. What do

you do for a living? VENIREPERSON RODGERS: I'm the training manager at Equinox Health Club. MR. ALDOUS: Okay. Do you float between clubs or whatever? *280 VENIREPERSON RODGERS: I don't float, but 16 I've worked in Chicago, Miami, and now here. 17 MR. ALDOUS: Okay. Thank you, sir. 18 And Mrs. Evans, what were you doing -- 19 what is your -- kind of your background in terms of 20 work? 21 VENIREPERSON EVANS: Okay. I was working 22 for Citigroup, and I got hurt. I told you I got 23 injured. It was my spine and I had my knee replacement 24 and put on disability. 25 MR. ALDOUS: Okay. And how long ago was

44 that? VENIREPERSON EVANS: In 2005. MR. ALDOUS: All right. Thank you. Mrs. Dimeff, how -- are you still doing

design? VENIREPERSON DIMEFF: Yes. MR. ALDOUS: And forgive me. You know, I

wanted to ask you this, but I didn't want to really sound stupid. You said that you don't really do the interior design much. You do --

VENIREPERSON DIMEFF: Decorating. MR. ALDOUS: Decorating? VENIREPERSON DIMEFF: In Texas, you need a

special license to call yourself an interior designer, *281 and I don't have that. So when I moved here, my company 16 is my name Interiors, not interior designer. So 17 officially I cannot be designing. 18 MR. ALDOUS: How long have you been in 19 Texas? 20 VENIREPERSON DIMEFF: Five years. 21 MR. ALDOUS: And prior to that, you were 22 in Ohio? 23 VENIREPERSON DIMEFF: Yes. 24 MR. ALDOUS: What part of Ohio? 25 VENIREPERSON DIMEFF: Cleveland, Maple

45 Heights. MR. ALDOUS: Okay. And then, Mrs. Jackson, your husband is a lawyer; is that right? VENIREPERSON JACKSON: That's correct. MR. ALDOUS: I wanted to see if you would

admit it out loud. And does your husband do this sort of law where we're picking a jury and so forth?

VENIREPERSON JACKSON: He does family law and so I assume he does. I would imagine. MR. ALDOUS: Okay. Now, so you go home today and your husband says, hey, what did you do? And you go I had jury service. And he goes, hey, tell me about that.

VENIREPERSON JACKSON: I'll say, "no." *282 MR. ALDOUS: It was a trick question. 16 You'll be able to, I assume, not have any problem 17 controlling your husband, right? 18 VENIREPERSON JACKSON: I won't. I will 19 not speak to him about it. 20 MR. ALDOUS: All right. Now, Mr. Lejia, 21 what do you do currently? 22 VENIREPERSON LEJIA: I work at a hotel as 23 a receptionist. 24 MR. ALDOUS: That's right, at Hampton -- 25 VENIREPERSON LEJIA: Hampton Inn.

46 MR. ALDOUS: Okay. And, you know, I was trying to -- I was trying to go through these information cards real fast, and I don't do math well. And so I was trying to add up everybody's age. And the only ones I got right were the ones that were close to mine. So how old are you?

VENIREPERSON LEJIA: Nineteen. MR. ALDOUS: Nineteen. It's very -- it's

very problematic for those of us over 50 who couldn't grow a beard like that even then. I'm very upset. Thank you, sir.

And then, Ms. McCoy, are you -- I think you said you were retired? VENIREPERSON MCCOY: Not retired, but my *283 husband is deceased I said. 16 MR. ALDOUS: What did your husband do 17 before he passed away? 18 VENIREPERSON MCCOY: He worked at saw 19 mills. 20 MR. ALDOUS: Saw mills? 21 VENIREPERSON MCCOY: Yeah. 22 MR. ALDOUS: How long have you lived in 23 the Dallas area? 24 VENIREPERSON MCCOY: This year, maybe 15 25 years.

47 MR. ALDOUS: Fifteen years. Where -- are you from Louisiana originally? VENIREPERSON MCCOY: Louisiana. MR. ALDOUS: What part of Louisiana? VENIREPERSON MCCOY: Winnfield. I don't

know if you-all know where it is. It's about a four-hour drive from here.

MR. ALDOUS: Thank you, ma'am. And then, Mr. Villanueva, how long have

you been a field supervisor at DART? VENIREPERSON VILLANUEVA: About three years. MR. ALDOUS: Three years. And you seem like a very young guy. I didn't add it up. How old are *284 you? 16 VENIREPERSON VILLANUEVA: Thirty-nine. 17 MR. ALDOUS: That's just unfair. You look 18 younger than that, but that's a compliment. So, thank 19 you, sir. 20 Ms. Pearson, what is it -- what is your 21 field of work? 22 VENIREPERSON PEARSON: I'm a sales 23 associate at Carter's Children's clothing store. 24 MR. ALDOUS: Where is that store? 25 VENIREPERSON PEARSON: I work at the one

48 over at Firewheel in Garland. MR. ALDOUS: Firewheel. How long have you been there? VENIREPERSON PEARSON: I just started in February. MR. ALDOUS: Okay. And, Ms. Gonzales, are you still with AT&T? VENIREPERSON GONZALES: No, I retired December 21st. MR. ALDOUS: Congratulations. And I know better than to ask their age. VENIREPERSON GONZALES: Because I'm older than you. MR. ALDOUS: Mr. Kozak, it says here that *285 you work for Walmart. 16 VENIREPERSON KOZAK: Yes, sir. 17 MR. ALDOUS: How long have you worked 18 there? 19 VENIREPERSON KOZAK: A year and a half. 20 MR. ALDOUS: All right. And are you -- 21 did you go to high school here in Dallas? 22 VENIREPERSON KOZAK: Mesquite. 23 MR. ALDOUS: Mesquite, I say here in the 24 Dallas area. And I know that you're not very old. 25 Nineteen?

49 VENIREPERSON KOZAK: No. MR. ALDOUS: Twenty-one? VENIREPERSON KOZAK: Twenty. MR. ALDOUS: Twenty, split the difference.

Thank you, sir. VENIREPERSON KOZAK: You're welcome. MR. ALDOUS: Mrs. George, it says here on

your information card that you were on a civil jury. Did you serve on a civil jury before?

VENIREPERSON GEORGE: No. MR. ALDOUS: Okay. Just sometimes they

don't transcribe it right. And then it says also that your husband is a -- is an evangelist?

VENIREPERSON GEORGE: Yes. *286 MR. ALDOUS: Now, what type of -- what 16 religion? 17 VENIREPERSON GEORGE: Christian. 18 MR. ALDOUS: I mean, any particular group 19 or denomination? 20 VENIREPERSON GEORGE: Pentecostal. 21 MR. ALDOUS: Okay. Thank you. 22 Mr. Berg, what do you do for fun, actually 23 for a living? 24 VENIREPERSON BERG: For a living, I'm a 25 public works superintendent for the city.

50 MR. ALDOUS: Is it Red Oak? VENIREPERSON BERG: Yes, sir. MR. ALDOUS: Okay. I did remember that.

How long have you been doing that? VENIREPERSON BERG: That particular job, about six years. MR. ALDOUS: All right. Thank you, sir. Now, Mr. Maguire? VENIREPERSON MAGUIRE: Yes. MR. ALDOUS: So what does it mean to be a

research analyst? VENIREPERSON MAGUIRE: It's a C-Suite recruiting for a big -- big companies. So we -- they ask us, hey, we need a new chief marketing officer and *287 we go find those people. And I do like all the internal

16 stuff. 17 MR. ALDOUS: So you're a recruiter? 18 VENIREPERSON MAGUIRE: Yes. 19 MR. ALDOUS: Did you say C-Sweep? 20 VENIREPERSON MAGUIRE: Yeah, C-Suite. 21 MR. ALDOUS: Oh, C-Suite. A lot of rock 22 and roll when I was a young guy, and I can't hear very 23 well. So when you say "C-Suite," what does that mean to 24 you? 25 VENIREPERSON MAGUIRE: That's just the top

51 decision makers of the company. MR. ALDOUS: How long have you been doing that? VENIREPERSON MAGUIRE: Eight months. MR. ALDOUS: Eight months. And where did

you go to school?

VENIREPERSON MAGUIRE: SMU.

MR. ALDOUS: Are you originally from

Dallas? VENIREPERSON MAGUIRE: Chicago. MR. ALDOUS: Okay. Is it warmer here than

Chicago? VENIREPERSON MAGUIRE: Sure. MR. ALDOUS: And, Ms. Watts, I think we *288 already talked to you. Well, what did you do for your

16 work? 17 VENIREPERSON WATTS: I was an assistant 18 property manager. 19 MR. ALDOUS: That's right, with the 20 apartment complex that will remain unnamed? 21 VENIREPERSON WATTS: Yes. 22 MR. ALDOUS: Okay. Thank you, ma'am. 23 Mrs. Ortiz, you work for Pfizer in sales? 24 Are you assigned a particular medication? 25 VENIREPERSON ORTIZ: Uh-huh.

52 MR. ALDOUS: Is that a, "yes"? VENIREPERSON ORTIZ: Yes. MR. ALDOUS: Okay. And how long have you

worked for Pfizer? VENIREPERSON ORTIZ: For 14 years. MR. ALDOUS: What medications are you

assigned? VENIREPERSON ORTIZ: Lyrica and Embeda and Flector Patch. MR. ALDOUS: And what? VENIREPERSON ORTIZ: Flector Patch. MR. ALDOUS: Okay. Thank you. And your

husband's a recruiter? VENIREPERSON ORTIZ: Yes, he is. *289 MR. ALDOUS: What type of recruiter? 16 VENIREPERSON ORTIZ: IT. 17 MR. ALDOUS: Does he work for a company 18 here in town or is he independent? 19 VENIREPERSON ORTIZ: In town. 20 MR. ALDOUS: Who does he work for? 21 VENIREPERSON ORTIZ: Prestige Staffing. 22 MR. ALDOUS: Okay. Thank you. 23 Mr. Ramirez, I wrote down here that you 24 work at Bluebonnet Healthcare? 25 VENIREPERSON RAMIREZ: I work in the

53 office. MR. ALDOUS: Sir, could you just tell us a little bit about your job so that -- because I'm not sure what that means?

VENIREPERSON RAMIREZ: We get referrals from doctors and hospitals and verify insurance. If everything verifies, we take the patient. The nurse goes in and sees the patient, does an evaluation, and then some come in end of life and we take them hospice.

MR. ALDOUS: And how long have you been with them? VENIREPERSON RAMIREZ: Four years. MR. ALDOUS: Are you originally from

Dallas? *290 VENIREPERSON RAMIREZ: No. 16 MR. ALDOUS: Where are you originally 17 from? 18 VENIREPERSON RAMIREZ: Odessa. 19 MR. ALDOUS: Odessa? Do you hate Midland 20 High? 21 VENIREPERSON RAMIREZ: Lee. 22 MR. ALDOUS: Lee, I'm sorry. See, you 23 knew which one to hate. 24 Mr. Pearle, are you farming right now? 25 VENIREPERSON PEARLE: I have it leased

54 out. MR. ALDOUS: You have it leased out. So somebody else is cultivating whatever you've got? VENIREPERSON PEARLE: Yes. MR. ALDOUS: All right. Thank you, sir. Ms. Doty, we talked earlier about you

doing advertising and contracts. But I didn't really ask you what you do in advertising.

VENIREPERSON DOTY: I'm an account manager, so I work on four different accounts. And I do the planning and strategy and manage the daily execution.

MR. ALDOUS: Okay. So you have particular people that you help them do their advertising stuff? *291 VENIREPERSON DOTY: Yes. 16 MR. ALDOUS: Thank you. 17 And then, Mr. Pina? 18 VENIREPERSON PINA: Yes, sir. 19 MR. ALDOUS: It says here that you're a 20 truck driver. Are you independent or are you -- 21 VENIREPERSON PINA: I currently work for a 22 company. 23 MR. ALDOUS: So if you were asked to serve 24 on a jury, it would be -- let me say it differently. I 25 know independent truck drivers, they don't make money if

55 they're not driving. Is that the same way with you? VENIREPERSON PINA: Yes, sir. MR. ALDOUS: It is the same way? VENIREPERSON PINA: Yes, sir. MR. ALDOUS: All right. I'll ask about

this in a minute. Okay. Mr. Palmer, you're a professor of some sort of medicine at UT Southwestern? VENIREPERSON PALMER: I'm an nephrologist. MR. ALDOUS: How long have you been with

UT?

VENIREPERSON PALMER: About 30 years. MR. ALDOUS: Thirty years. I notice that

you recently got married? *292 VENIREPERSON PALMER: Remarried, yes. 16 MR. ALDOUS: Remarried. And she lives 17 somewhere at Cedars Siani? 18 VENIREPERSON PALMER: Yes. She was at UT 19 Southwestern but was recruited and is now at Cedars 20 Siani. 21 MR. ALDOUS: So how does that work out 22 long distance? 23 VENIREPERSON PALMER: We're trying to make 24 it work. 25 MR. ALDOUS: I imagine that's tough. And

56 that's in Los Angeles, right? VENIREPERSON PALMER: Beverly Hills. MR. ALDOUS: Thank you, Mr. Palmer. Ms. Ellender? VENIREPERSON ELLENDER: Uh-huh. MR. ALDOUS: It says here that you're a

programmer. VENIREPERSON ELLENDER: Uh-huh. MR. ALDOUS: Is that a, "yes"? VENIREPERSON ELLENDER: Yes. MR. ALDOUS: How long have you been a

programmer? VENIREPERSON ELLENDER: Twenty-five years. MR. ALDOUS: Twenty-five years. I've *293 always admired programmers because to me it's kind of

16 like voodoo. You put the lines together and it comes 17 into the computer and it works. Who do you currently 18 work for? 19 VENIREPERSON ELLENDER: DISD. 20 MR. ALDOUS: Thank you, ma'am. 21 Mrs. Duffey, Number 25, I have to get back 22 there to you. You're kind of hiding behind somebody 23 over there. What do you do for a living? 24 VENIREPERSON DUFFEY: I'm retired. I was 25 a Texas Instruments employee in process control.

57 MR. ALDOUS: Oh, great. And congratulations on being retired. Thank you. And then, Mr. Perez, it says here that you do dispatch at AT&T, is it? VENIREPERSON PEREZ: Time Warner right now. MR. ALDOUS: Time Warner? VENIREPERSON PEREZ: Yes, sir. MR. ALDOUS: So I'm going to try to get

you to speak up a little bit. Tell me what you do as a dispatcher.

VENIREPERSON PEREZ: Currently I'm -- like you said, I'm a dispatcher. I drive the tanks and help them with their issues and that's pretty much it right *294 now.

16 MR. ALDOUS: All right. Thank you. 17 Mrs. Haggerty, I don't remember. Did I 18 ask you what you do? 19 VENIREPERSON HAGGERTY: No, you did not. 20 MR. ALDOUS: What do you do? 21 VENIREPERSON HAGGERTY: Customer service. 22 MR. ALDOUS: Did you work at Neiman 23 Marcus? 24 VENIREPERSON HAGGERTY: I do work at 25 Neiman Marcus.

58 MR. ALDOUS: You do work at Neiman Marcus. I knew my memory was in there somewhere. And when you say customer service, is that any particular department?

VENIREPERSON HAGGERTY: Well, it's -- right now it's all in one. Inbound calls come in and we take the calls from the stores or whatever.

MR. ALDOUS: Okay. Thank you, ma'am. Mr. Cirone? VENIREPERSON CIRONE: Yes. MR. ALDOUS: In addition to being over 100

years old -- VENIREPERSON CIRONE: Tough life. MR. ALDOUS: -- you do medical sonograms? VENIREPERSON CIRONE: Yes. *295 MR. ALDOUS: At Doctors Hospital; is that

16 right? 17 VENIREPERSON CIRONE: Yes. 18 MR. ALDOUS: Now, how long have you been 19 doing that? 20 VENIREPERSON CIRONE: Forty-two years. 21 MR. ALDOUS: Do you have to have a license 22 for this? 23 VENIREPERSON CIRONE: Yes. You have to be 24 registered with the state and keep it current. 25 MR. ALDOUS: So you have continuing

59 education and all that? VENIREPERSON CIRONE: Yes. MR. ALDOUS: Thank you, sir. Mr. Villanueva, Number 29, you indicated

to the judge that you have difficulty with English? VENIREPERSON VILLANUEVA: I understand a little bit. I'm working forklift driver for a company four or five years.

MR. ALDOUS: We'll talk to you with the judge because I'm sure that we're going to call you up later.

And, Mr. Adeboye, you work in sales at Home Depot? VENIREPERSON ADEBOYE: Yes, sir. *296 MR. ALDOUS: How long have you been doing 16 that? 17 VENIREPERSON ADEBOYE: Fourteen years. 18 MR. ALDOUS: And were you a party to a 19 civil lawsuit? 20 VENIREPERSON ADEBOYE: Yes. 21 MR. ALDOUS: Do you recall what -- 22 VENIREPERSON ADEBOYE: I served on a jury. 23 I served on a jury. 24 MR. ALDOUS: Oh, you served on a jury. 25 You were part of the jury?

60 VENIREPERSON ADEBOYE: Yes. MR. ALDOUS: How long ago was that? VENIREPERSON ADEBOYE: Three years. MR. ALDOUS: Three years ago. VENIREPERSON ADEBOYE: Yes. MR. ALDOUS: All right. Thank you, sir. So, Mrs. Jackson, have you -- in

conjunction with your real estate business, have you ever had people who have not followed through with their contracts that they agreed on?

VENIREPERSON JACKSON: I mean, there is a clause where you can terminate during an option period, which is -- you know, there's an option to terminate in ten days. *297 MR. ALDOUS: Right.

16 VENIREPERSON JACKSON: They terminated 17 them, but I've never had anybody blatantly breach their 18 sales contract. 19 MR. ALDOUS: Okay. I'm assuming that 20 you've had plenty of experience with closing? 21 VENIREPERSON JACKSON: Uh-huh. 22 MR. ALDOUS: Is that a, "yes"? 23 VENIREPERSON JACKSON: Yes. 24 MR. ALDOUS: So what is your experience -- 25 I mean, whether or not closing happens all at the same

61 time; in other words, all the people come in at the same time?

VENIREPERSON JACKSON: No, no. MR. ALDOUS: How does it happen now in

your experience? VENIREPERSON JACKSON: Well, I mean, I've had where the sellers have signed the papers and basically closed first, and where the buyers closed first. I've had it where it's happened in a couple of days before the other party has closed, or they could be out of town, you know, and we have to have out-of-town closing, something like that.

MR. ALDOUS: Have you ever had a situation where -- well, in your experience, who made sure that *298 everybody signs the right thing and does the right thing 16 in order for the deal to be done? 17 VENIREPERSON JACKSON: Are you talking 18 about at the closing table? 19 MR. ALDOUS: Yes. 20 VENIREPERSON JACKSON: There's an escrow 21 officer there at the table that will go through the 22 paperwork and answer questions, if either party has 23 questions about any of the paperwork. 24 MR. ALDOUS: Is that usually somebody who 25 works for the title company?

62 VENIREPERSON JACKSON: The title company. You know, if my client has a question that I can answer real estate wise, then I will do it.

MR. ALDOUS: Then you would be involved in that? VENIREPERSON JACKSON: Uh-huh. MR. ALDOUS: Do you usually attend the

closing? VENIREPERSON JACKSON: Yes, unless they're out of state. MR. ALDOUS: Do you do closing now by electronic signature, you know, where you -- VENIREPERSON JACKSON: No. MR. ALDOUS: I wondered if they'd gotten *299 there.

16 VENIREPERSON JACKSON: I have not -- not 17 electronically, no. There's always been somebody there 18 to sign. 19 MR. ALDOUS: Do you ever have a situation 20 where you may represent an individual, but there's a 21 company on the other side, like the seller or builder or 22 something? 23 VENIREPERSON JACKSON: I have done it 24 where it's an investor that has purchased a home and so 25 it's basically his own company to flip the home. He

63 owns it, the company. But, you know, if that's what you mean. Yeah, for an investor.

MR. ALDOUS: So some of your clients are investors? VENIREPERSON JACKSON: Uh-huh. MR. ALDOUS: I watch HGTV a lot about

that. In any event, flip or flop, you know. VENIREPERSON JACKSON: Right, right. MR. ALDOUS: Is that what you're kind of

talking about? VENIREPERSON JACKSON: Uh-huh. MR. ALDOUS: Okay. I'm going to ask you

kind of a question. And instead of saying -- you know, giving an explanation for your answer, I'm going to see *300 if I can get you to say just "yes" or "no." And that's

16 just because this is the way -- then we can talk about 17 it later. But see if you can say "yes" or "no." 18 If someone was seriously harmed in a 19 business deal that they think went bad, would you bring 20 a case? Juror Number 1? 21 VENIREPERSON CANTU: No. 22 MR. ALDOUS: Why is that? 23 VENIREPERSON CANTU: I mean, really I say 24 "no" because it's like -- I don't know what the question 25 -- I mean, some words I don't understand. And one word

64 for me can change everything. And I told you earlier I don't know enough English to speak English. With one word can change everything, and I don't want to give you the wrong answer.

MR. ALDOUS: You're absolutely right, Mr. Cantu. We'll talk about that later. All right? What about you, Mr. Rodgers? Did you hear me? VENIREPERSON RODGERS: Yes. MR. ALDOUS: If you or a loved one were

seriously harmed in a business dispute, would you file a lawsuit?

VENIREPERSON RODGERS: In a business dispute? *301 MR. ALDOUS: Yes, sir. 16 VENIREPERSON RODGERS: I suppose I would. 17 yes. 18 MR. ALDOUS: What about you, Mrs. Evans, 19 juror Number 3? 20 VENIREPERSON EVANS: Uh-huh. 21 MR. ALDOUS: And what about you, 22 Mrs. Dimeff? 23 VENIREPERSON DIMEFF: Yes. 24 MR. ALDOUS: What about you, Mrs. Jackson? 25 VENIREPERSON JACKSON: Yes.

65 MR. ALDOUS: What about you, Mr. Leija? Did I say that right? VENIREPERSON LEIJA: Yes. MR. ALDOUS: Sorry. Mrs. McCoy? VENIREPERSON MCCOY: Would you repeat

that? MR. ALDOUS: Sure. If you or a loved one was seriously injured or harmed in a business dispute, would you file a lawsuit?

VENIREPERSON MCCOY: (Inaudible). MR. ALDOUS: She said, "yes." And I was

saying that so that she could hear you, the court reporter. *302 Isn't that right, Mrs. McCoy? Is that a

16 "yes"? 17 VENIREPERSON MCCOY: Yes. 18 MR. ALDOUS: Thank you. 19 Mr. Villanueva? 20 VENIREPERSON VILLANUEVA: Yeah. 21 MR. ALDOUS: What about you, Mrs. Pearson? 22 VENIREPERSON PEARSON: Yes. 23 MR. ALDOUS: What about you, Mr. Machen? 24 VENIREPERSON MACHEN: I've done that. 25 Yes.

66 MR. ALDOUS: Thank you, sir. Mr. Richie? VENIREPERSON RICHIE: Yes. MR. ALDOUS: What about you,

Mrs. Gonzales? VENIREPERSON GONZALES: Yes. MR. ALDOUS: What about you, Mr. Kozak? VENIREPERSON KOZAK: Yes. MR. ALDOUS: What about you, juror Number

14, Mrs. George? VENIREPERSON GEORGE: Yes. MR. ALDOUS: What about you, Mr. Berg? VENIREPERSON GEORGE: Yes. MR. ALDOUS: What about you, Mr. Maguire? *303 VENIREPERSON MAGUIRE: I just want to

16 clarify. Is this harm like physically or financially? 17 MR. ALDOUS: Financially. 18 VENIREPERSON MAGUIRE: Probably. 19 MR. ALDOUS: I mean -- all right. 20 Mrs. Watts? 21 VENIREPERSON WATTS: Yes. 22 MR. ALDOUS: What about you, Mrs. Ortiz? 23 VENIREPERSON ORTIZ: Yes. 24 MR. ALDOUS: What about you, Mr. Ramirez? 25 VENIREPERSON RAMIREZ: Yes.

67 MR. ALDOUS: Mr. Pearle? VENIREPERSON PEARLE: Yes. MR. ALDOUS: Mrs. Doty? VENIREPERSON DOTY: Yes. MR. ALDOUS: You're smiling. I'm not

sure. I'll ask you later. VENIREPERSON DOTY: I had the same question as he did. MR. ALDOUS: Okay. Mr. Pina? VENIREPERSON PINA: Yes. MR. ALDOUS: What about you, Mr. Palmer? VENIREPERSON PALMER: Yes. MR. ALDOUS: What about you,

Mrs. Ellender? *304 VENIREPERSON ELLENDER: Yes. 16 MR. ALDOUS: And then we have Mrs. Duffey. 17 VENIREPERSON DUFFEY: Yes. 18 MR. ALDOUS: And Mr. Perez? 19 VENIREPERSON PEREZ: Yes. 20 MR. ALDOUS: Ms. Haggerty? 21 VENIREPERSON HAGGERTY: Yes. 22 MR. ALDOUS: Mr. Cirone? 23 VENIREPERSON CIRONE: Yes. 24 MR. ALDOUS: Mr. Villanueva? 25 VENIREPERSON VILLANUEVA: Yes.

68 MR. ALDOUS: And then, Mr. Adeboye? VENIREPERSON ADEBOYE: Yes. MR. ALDOUS: All right. Let me ask you to

go back just a -- there was a couple of -- I think Mr. Maguire and also Mrs. Ellender, you both said as long as it's not personal injury or -- you made a comment, were you talking about personal injury or business. If it was personal injury, would you feel differently than if it was a business dispute, a financial thing?

VENIREPERSON MAGUIRE: I think I'd be more likely to sue in a case that was physical rather than if it was financial.

MR. ALDOUS: Thank you. What did you *305 mean, Ms. Ellender, when you had that question? I 16 didn't mean that you -- 17 VENIREPERSON ELLENDER: Oh, I didn't -- I 18 didn't have one. 19 MR. ALDOUS: Oh, Ms. Doty, Number 21. You 20 know what? I'm sorry. 21 VENIREPERSON ELLENDER: That's okay. 22 MR. ALDOUS: Ms. Doty, Number 21, what 23 about the difference between personal injury versus 24 business injury would matter or financial injury? 25 VENIREPERSON DOTY: I mean, it would

69 probably be -- it would be "yes" either way, but more for physical.

MR. ALDOUS: Okay. Yes, Mr. Pearle? VENIREPERSON PEARLE: I think it would

probably be based on the amount. MR. ALDOUS: So you talked earlier about the lawsuit your ex-wife brought for 10,000 or less. Are you saying that there's a certain amount at which you believe the dispute needs to be before you'll follow through with it?

VENIREPERSON PEARLE: It needs to be more than that. MR. ALDOUS: So, I mean, I think we can probably all agree that if it doesn't meet your standard *306 of serious financial harm, you probably wouldn't do it? 16 And what might be serious financial harm for each one of 17 us might be less for some and more for others. Does 18 everybody agree with that? 19 So in terms of this case, though -- I 20 mean, in terms of my question, nobody here had a problem 21 with the fact that bringing a lawsuit, if they had to, 22 to recover financial harms as a result of a business 23 deal that they felt like they got wronged in, right? 24 VENIRE PANEL: Right. 25 MR. ALDOUS: Thank you.

70 How much time do I have left, Judge? THE COURT: You have four minutes. MR. ALDOUS: Thank you. Your Honor, did

you want me to do the hardships or do you do the hardships?

THE COURT: I'll handle it. MR. ALDOUS: All right. Thank you. Now I do have questions. One of the

issues that might be involved in this case is that sometimes under the law, people are allowed to recover their attorney's costs, the cost of hiring their attorneys, their attorney's fees. Does anyone have a feeling about that one way or the other? If you do, raise your number. *307 Oh, Mrs. Ortiz, it started to come up.

16 She said -- Number 18, maybe. 17 VENIREPERSON ORTIZ: When my dad had his 18 lawsuit, he actually kind of turned on to two teams of 19 lawyers; one here in Dallas, then one in Pennsylvania or 20 wherever it was. And, basically, each were charging. 21 It went up so high, the bill was astronomical that he 22 basically got out of it. He told each other -- I don't 23 know how he did it, but I thought it was pretty 24 interesting how much the lawyers were charging to 25 basically do the little work they were doing. And each

71 of them were charging. They were each working on it, but one at a time. But the other was still charging. It was just ridiculous. So the bill got ridiculous. I just was turned off by that whole process.

MR. ALDOUS: Well, you know, most lawyers couldn't afford themselves, and that's the way, kind of, the market goes. But is there anything else about your work experience through your dad's stuff that would cause you to say, "I can't follow the judge's instructions and award attorney's fees to a prevailing party just because of what happened to my dad?"

VENIREPERSON ORTIZ: No. I mean, I think if someone's found guilty, they should pay for the other's attorney's fees. *308 MR. ALDOUS: I think -- are you saying

16 that you might look hard at the bills or something? 17 VENIREPERSON ORTIZ: Definitely. 18 MR. ALDOUS: Mr. Pearle, you -- 19 Thank you, ma'am. 20 You started to raise your number. 21 VENIREPERSON PEARLE: (Inaudible). 22 MR. ALDOUS: Okay. Anyone else want to 23 throw down and say something about that? All right. 24 So, the one last thing that I have to talk 25 about is the stuff that we hear about in TV all the

72 time. You know, they talk about circumstantial evidence versus, you know, eyewitness testimony. You know, it's a big deal on TV. And, you know, the -- I believe it's in this case. The judge is going to instruct you that circumstantial evidence is just as good as direct evidence. And so I always kind of wondered, so what does that really mean? So here's the difference, the way I always explain it.

So if you see it snowing, then that's direct evidence that it's snowing. If you go to sleep and there's no snow on the ground and you wake up in the morning and there's snow on the ground, that's circumstantial evidence because you didn't see it snowing, but you know it must have snowed because the *309 snow's on the ground.

16 Now, I don't -- the question I really have 17 is: Does anybody have a problem with that concept and 18 saying that, "No, I can't -- I can't do a verdict on 19 circumstantial evidence. I need direct evidence"? Does 20 anybody feel that way? Okay. Great. 21 So, now the judge is going to ask each one 22 of you whether or not you have some issues personally 23 about acting as a juror in this case. And the good 24 thing -- there's really some good news. The good news 25 is that you will not be sequestered at a hotel or

73 something, and it will not last for two months. It's probably going to be a three-day trial, and it's starting on Monday. So if anybody does have an issue -- Mr. Pina, I believe that you said, you know, you may have an issue about finances or spending time out and that sort of thing.

Please raise it with the judge because, you know, for -- as you can imagine, for Ken and Betsy Gross, this is an important case for them. And we don't want anybody to feel financial pressure with having to sit on the jury to have that effect the way that they are feeling in this case because it's an important case for them. So if you will raise that with the judge, I would appreciate it. *310 And the other thing that I'd like to say

16 is thank you for your time and thank you for your 17 attention. And I hope I didn't pry too much into your 18 business. Thank you. 19 THE COURT: Thank you, Mr. Aldous. 20 Ladies and gentleman, I have some 21 questions for you. It's now 12:25. I know you-all have 22 been down here since about 8:30 this morning. The 23 defendants in this case will also have an opportunity to 24 ask you some questions about your qualifications. 25 Usually the questions that they ask are not as long

74 simply because some of the issues have been covered already. But they are entitled. Bless you. They are entitled to a combined hour. And then we would have some discussion before we know exactly who's going to be asked to stay.

So would you-all like to keep moving, or would you like to take a brief lunch break and come back?

VENIRE PANEL: Keep moving. THE COURT: Okay. Is everybody okay?

Nobody have a health issue that they need to eat? Some people do.

VENIREPERSON EVANS: My leg is cramping up real bad. *311 THE COURT: Okay. Why don't we take about 16 a five-minute stretch break, restroom break. And we'll 17 just keep moving. 18 (Venire panel exits the courtroom) 19 (Brief recess taken) 20 (Venire panel enters the courtroom) 21 THE COURT: Other than the fact that 22 Mrs. Evans or panel member Number 3 is standing up, is 23 anybody missing anybody who was sitting next to them? 24 Okay. Terrific. You may be seated. 25 Mrs. Evans, if it makes you more

75 comfortable, you can stand up over there. VENIREPERSON EVANS: Thank you. THE COURT: We'll let the interns sit, and

then we'll ask Mr. Hagood to come forward. All right. Mr. Hagood, you may proceed. MR. HAGOOD: Thank you, Judge. Good afternoon folks. It's already

afternoon. So good afternoon to you-all. As the judge said, I'm Dan Hagood. I won't read you my jury card. When I sit on the plaintiff's side, I always read my jury card. By the time it comes to me, it seems so contrived that I won't do it.

I'll be very quick, frankly. The defense (sic) covered a lot of ground I would have covered. I *312 want to ask you this question. I want to kind of pick 16 up where Mr. Aldous left off. If you had a close friend 17 or yourself, a family member, who had signed a written 18 contract, negotiated and signed, and then did not follow 19 that contract precisely to the letter, would you sue 20 someone for not following the contract if you were the 21 first one who did not honor the contract? 22 Do you understand what I'm saying? I've 23 got a contract. It requires A, B, C, D, and E, parts A, 24 B, C, D, and E for both parties. The party one, me, I 25 don't honor that contract. I don't follow exactly what

76 my contract required me to do. But I sue the other party for not -- I first don't follow. They know it, and then the second party doesn't follow. Without -- would you, as the first party, sue the second party if you're the first one to not honor the contract?

It's a little different question than the question you were asked earlier. The question you were asked earlier: Would you sue if you, you know, were seriously harmed in a business transaction?

I'm asking a much different question. If you were the first one that caused harm, would you sue someone that you say harmed you?

So, Number 1, I want a "yes" or "no," just the same as Mr. Aldous, if it's possible. *313 VENIREPERSON CANTU: I don't understand. 16 MR. HAGOOD: Okay. I'm sorry, sir. I 17 apologize. 18 Number 2? 19 VENIREPERSON RODGERS: I don't think I can 20 give you a "yes" or "no." I think it depends upon the 21 case and the varying degrees of how bad it is. 22 MR. HAGOOD: I understand. 23 Number 3? 24 VENIREPERSON EVANS: I'm like Number 2. 25 MR. HAGOOD: Four?

77 VENIREPERSON DIMEFF: Basically, no. MR. HAGOOD: Five? VENIREPERSON JACKSON: Did I knowingly do

it? MR. HAGOOD: Oh, yeah. VENIREPERSON JACKSON: Oh, I did it on

purpose? MR. HAGOOD: You're going to have to decide that. There's no question it's going to be -- under the question I'm posing to you, you are the one who did not honor the contract first. Would you sue someone for not honoring the contract themselves?

VENIREPERSON JACKSON: I don't know. I don't know that. I can't say "yes" or "no." *314 MR. HAGOOD: Okay. That's fine. 16 Six? 17 VENIREPERSON LEIJA: No. 18 MR. HAGOOD: Seven? 19 VENIREPERSON MCCOY: No. 20 MR. HAGOOD: Eight? 21 VENIREPERSON VILLANUEVA: No. 22 MR. HAGOOD: Nine? 23 VENIREPERSON PEARSON: No. 24 MR. HAGOOD: Ten? 25 VENIREPERSON MACHEN: No.

78 MR. HAGOOD: Eleven? VENIREPERSON RICHIE: No. MR. HAGOOD: Twelve? VENIREPERSON GONZALES: No. MR. HAGOOD: Thirteen? VENIREPERSON KOZAK: It just depends on

the situation. MR. HAGOOD: Okay. Fair enough, sir. Fourteen? VENIREPERSON GEORGE: I don't know. MR. HAGOOD: Fifteen? VENIREPERSON BERG: No. MR. HAGOOD: Sixteen? VENIREPERSON MAGUIRE: Situational. *315 MR. HAGOOD: Seventeen?

16 VENIREPERSON WATTS: Situational. 17 MR. HAGOOD: Eighteen? 18 VENIREPERSON ORTIZ: Situational. 19 MR. HAGOOD: Nineteen? 20 VENIREPERSON RAMIREZ: No. 21 MR. HAGOOD: Twenty. 22 VENIREPERSON PEARLE: No. 23 MR. HAGOOD: Twenty-one? 24 VENIREPERSON DOTY: Situational. 25 MR. HAGOOD: Okay. Very well. Thank you.

79 ma'am. Twenty-two? VENIREPERSON PINA: No. MR. HAGOOD: Twenty-three? VENIREPERSON PALMER: No. MR. HAGOOD: Twenty-four? VENIREPERSON ELLENDER: No. MR. HAGOOD: Twenty-five? VENIREPERSON DUFFEY: Depends on the

circumstances. MR. HAGOOD: Yes, ma'am. Thank you. Twenty-six? VENIREPERSON PEREZ: No. MR. HAGOOD: Twenty-seven? *316 VENIREPERSON HAGGERTY: Circumstantial.

16 MR. HAGOOD: Yes, ma'am. 17 Twenty-eight? 18 VENIREPERSON CIRONE: No. 19 MR. HAGOOD: Twenty-nine? 20 VENIREPERSON VILLANUEVA: No. 21 MR. HAGOOD: Thirty? 22 VENIREPERSON ADEBOYE: No. 23 MR. HAGOOD: Okay. Fair enough. Thank 24 you. I've only got a couple of more questions. The way 25 the process works is the plaintiff goes first. And what

80 always scares me when I'm on the defense side of the room is that people make up their minds quick. It's psychological phenomenon called recency. Once I hear something, I kind of jump on it. And, really, the way facts come out in a courtroom is like an assembly line. Plaintiff goes first, so here's the first pack. It comes out. Here's the second pack. It comes out. Here's the third pack. It comes out.

The defense packs are way back here because we go second. And it's so scary to me that people might make up their mind as the facts come tumbling into a courtroom before they've heard all the facts. And I really want to caution people not to do that. I want to ask if there -- if some people are just *317 predisposed and say, "Hey, Dan, I'm a person that makes

16 up my mind quick. I'm very decisive, and once I make up 17 my mind, I don't change my mind." 18 I just need to discover if someone here is 19 like that. Only you know inside your heart of hearts. 20 So I need to ask you for -- have a fair representation 21 of my client because it would be unfair, I think you'd 22 all agree, if you made a decision before you heard all 23 the evidence. That's all the Court's requiring. 24 So, Number 2, would you have a problem 25 with that?

81 VENIREPERSON RODGERS: I don't have a problem with that. MR. HAGOOD: Number three? VENIREPERSON EVANS: No. MR. HAGOOD: Number 4, are you a decisive,

"I make my mind up quick" person? VENIREPERSON DIMEFF: I am, but then it could be changed with the next level. MR. HAGOOD: Okay. So I call them -- I don't mean it in a bad way -- flip flop. Is that fair? VENIREPERSON DIMEFF: Yes. MR. HAGOOD: Fair enough. Thank you. Five? VENIREPERSON JACKSON: No. *318 MR. HAGOOD: Six?

16 VENIREPERSON LEIJA: No. 17 MR. HAGOOD: Seven? 18 VENIREPERSON MCCOY: No. 19 MR. HAGOOD: Eight? 20 VENIREPERSON VILLANUEVA: No. 21 MR. HAGOOD: Nine? 22 VENIREPERSON PEARSON: No, sir. 23 MR. HAGOOD: Ten? 24 VENIREPERSON MACHEN: No. 25 MR. HAGOOD: Eleven?

82 VENIREPERSON RICHIE: No. MR. HAGOOD: Twelve? VENIREPERSON GONZALES: No. MR. HAGOOD: Thirteen? VENIREPERSON KOZAK: No. MR. HAGOOD: Fourteen? VENIREPERSON GEORGE: No. MR. HAGOOD: Fifteen? VENIREPERSON BERG: No. MR. HAGOOD: Sixteen? VENIREPERSON MAGUIRE: No. MR. HAGOOD: Seventeen? VENIREPERSON WATTS: Yes. MR. HAGOOD: Yes, ma'am. I thank you. *319 Eighteen?

16 VENIREPERSON ORTIZ: No. 17 MR. HAGOOD: Okay. Nineteen? 18 VENIREPERSON RAMIREZ: No. 19 MR. HAGOOD: Twenty? 20 VENIREPERSON PEARLE: No. 21 MR. HAGOOD: Twenty-one? 22 VENIREPERSON DOTY: No. 23 MR. HAGOOD: Twenty-two? 24 VENIREPERSON PINA: No. 25 MR. HAGOOD: Twenty-three?

83 VENIREPERSON PALMER: No. MR. HAGOOD: Twenty-four? VENIREPERSON ELLENDER: No. MR. HAGOOD: Twenty-five? VENIREPERSON DUFFEY: No. MR. HAGOOD: Twenty-six? VENIREPERSON PEREZ: No. MR. HAGOOD: Twenty-seven? VENIREPERSON HAGGERTY: No. MR. HAGOOD: Twenty-eight? VENIREPERSON CIRONE: No. MR. HAGOOD: Thank you, sir. Twenty-nine? VENIREPERSON VILLANUEVA: No. *320 MR. HAGOOD: Thirty?

16 VENIREPERSON ADEBOYE: No. 17 MR. HAGOOD: Other than -- I don't mean it 18 disrespectful. Other than the flip-floppers and Number 19 17, I can count on you-all, y'all are going to promise 20 me you'll hold your fire until you've had all the 21 evidence and until you all get back in the jury room and 22 deliberate together before you make up your mind? Can 23 y'all promise me that? 24 Okay. Last area of inquiry. I represent 25 and Mr. Shaw represents an entity, a business entity.

84 It's a -- frankly, it's a partnership. It's called VSDH Ventures -- a couple of other words behind it -- Partnership. And that's a business entity under the law. And Mr. Hickok here was a partner, and he is an individual. So he's here individually. I'm here representing the partnership.

Now, has anyone ever had experience with forming or working in partnerships or LLCs, limited liability companies, limited liability partnerships, anything like that? In the first row, anyone with experience in that area?

Number 3, what is your experience, ma'am? VENIREPERSON EVANS: With our family, we

have land and we're going through that. *321 MR. HAGOOD: Yes, ma'am. So you have some 16 experience working in -- working inside a partnership? 17 VENIREPERSON EVANS: Well, the whole 18 family's included, the whole heir family. 19 MR. HAGOOD: Yes, ma'am. 20 VENIREPERSON EVANS: We're all kind of 21 included. 22 MR. HAGOOD: All right. Thank you. 23 VENIREPERSON EVANS: We were born into it. 24 MR. HAGOOD: Thank you, ma'am. 25 Anyone else on the first row?

85 On the second row? Number 20, yes, sir? VENIREPERSON PEARLE: We have development

companies with some partners and our company has partners.

MR. HAGOOD: Okay. You understand there were second -- the partnership is a second -- a separate business entity, a separate human being for the purposes of this courtroom. It's not the same as Mr. Hickok. Partnership's different. Mr. Hickok is different. They're separate entities. Everybody understand that?

Okay. Last row, anybody have any experience in the partnership area? All right. I want to thank you. You're all a great bunch of people. I look forward to working in front of *322 you. And thank you very much. 16 THE COURT: Thank you, Mr. Hagood. 17 Mr. Chaiken? You need to take some water 18 up there with you? 19 MR. CHAIKEN: I think I'm okay. There's 20 some in here now. I appreciate it, Judge. I'm 21 suffering an allergy problem too. 22 My name is Ken Chaiken. And as I 23 mentioned earlier today, it is my privilege today to 24 represent Mr. Douglas Hickok, who's sitting in the room. 25 You heard Mr. Aldous tell you that this is a very

86 important case to Mr. and Mrs. Gross, who are not here presently. But it is also a very important case for Mr. Hickok. Mr. Hickok finds it to be a very important case because he is the involuntary participant in this room today. He was sued. Does everybody understand that he was sued and that's why he is here today? Does anybody not understand that?

Okay. Now, this may sound like a silly question, but I'm going to ask it anyway. Is there anybody among the group of you that believes that a party who has been sued doesn't have a right to defend themselves? Anybody at all?

So can I assume that you all agree that when somebody has been sued, they have a right to defend *323 themselves? Yes? 16 And they have a right to rely upon who to 17 decide whether or not the suit against them is 18 meritorious or not meritorious? Could you tell me who? 19 Who do they have a right to rely upon to decide those 20 issues? 21 UNIDENTIFIED VENIREPERSON: A jury. 22 MR. CHAIKEN: A jury, you folks. Yes. 23 And what is the one fundamental thing that 24 somebody who has been sued, who believes that they have 25 the right to defend themselves, believes that they have

87 a good defense, is entitled to expect from the members of the jury who are ultimately selected to sit in the box over there? Can you tell me? You've been on a jury.

VENIREPERSON GONZALES: To be open-minded, to hear everything and not pick and choose what you want to hear.

MR. CHAIKEN: Have you heard the words preconceived notions? VENIREPERSON GONZALES: Yes. MR. CHAIKEN: Would you agree with me that

what somebody like Mr. Hickok has a right to expect is not only that jurors who are called upon to decide the case against them are open-minded, but they don't come *324 with a preconceived notion about what the case involves

16 or whether somebody's a good person or a bad person or 17 those kind of things? Would you agree me? 18 VENIREPERSON GONZALES: I would. 19 MR. CHAIKEN: Is there anybody that 20 disagrees with that? Anybody at all? 21 Do you agree with that, that somebody 22 who's been sued has a right to come into court and ask 23 for open-minded citizens, without preconceived notions, 24 to come in and listen to the case from beginning to end 25 and decide the case based upon the evidence? Is that a

88 fair assumption? Right to defend themselves, no problem? Is that right?

UNIDENTIFIED VENIREPERSON: Yes. MR. CHAIKEN: Okay. Thank you. Now, I represent plaintiffs, who are

people who sue people, sometimes. And I represent defendants, people who are sued, sometimes. Kind of an equal-opportunity lawyer. I represent people who have a need for my legal services. Now, it's Mrs. Jackson who's the real estate agent, right?

VENIREPERSON JACKSON: Yes. MR. CHAIKEN: Are you an equal-opportunity

realtor? You represent buyers and sellers? VENIREPERSON JACKSON: That's right. *325 MR. CHAIKEN: No distinction between the 16 two; no preference for one over the other? 17 VENIREPERSON JACKSON: No. 18 MR. CHAIKEN: Is there anybody who thinks 19 -- and I'm going to pick on Mr. Machen over here because 20 he has graciously informed us that he's been involved in 21 a lawsuit that he served as plaintiff in. Mr. Machen, 22 do you believe that just because somebody files a 23 lawsuit, there must be something to it? 24 VENIREPERSON MACHEN: No, not necessarily. 25 MR. CHAIKEN: Okay. And just because the

89 lawsuit reaches the stage where we have to call upon fine citizens like you to come down and make decisions, if it made it this far, there must be something to it? Anything like that?

VENIREPERSON MACHEN: Well, if you made it this far, it must be needing a solution from the jury. MR. CHAIKEN: Okay. And I'll agree with you. It does need a solution from the jury. But is there anything about the fact that it has made it this far that causes you to think, "Well, you know, he filed a lawsuit. There must be something to it because, otherwise, we wouldn't be here"?

VENIREPERSON MACHEN: Well, not necessarily. No. *326 MR. CHAIKEN: So you understand that there 16 are some lawsuits that have merit. 17 VENIREPERSON MACHEN: Right. 18 MR. CHAIKEN: Like you believe yours had 19 merit, correct? 20 VENIREPERSON MACHEN: Yes. 21 MR. CHAIKEN: And I assume that the party 22 who you sued at some point in time believed that they 23 had a defense, correct? 24 VENIREPERSON MACHEN: They didn't show up 25 in Court, but --

90 MR. CHAIKEN: They never even -- they never even announced? I know you said that it was a default, but did they ever offer a defense at all for part of the case?

VENIREPERSON MACHEN: No. MR. CHAIKEN: No, okay. Has anybody been involved in a suit where

they saw a defense offered? Anybody at all? I'm going to come back to you again, okay, Mrs. Jackson, because you have seen real estate contracts, contracts for the purchase and sale of residential real estate.

VENIREPERSON JACKSON: Right. MR. CHAIKEN: Have you ever seen contracts *327 that impose mutual obligations on the parties?

16 VENIREPERSON JACKSON: What do you mean? 17 MR. CHAIKEN: Do you understand what 18 mutual obligations mean? 19 VENIREPERSON JACKSON: No. 20 MR. CHAIKEN: Let's look at it this way. 21 When you are representing a seller and the buyer and 22 seller enter into a contract. 23 VENIREPERSON JACKSON: Right. 24 MR. CHAIKEN: There are obligations on the 25 party to sell it, correct, that are spelled out in the

91 contract; is that right? VENIREPERSON JACKSON: Right. MR. CHAIKEN: One of those obligations

might be, if I receive X number of dollars, I will sell the property, correct?

VENIREPERSON JACKSON: Correct. MR. CHAIKEN: All right. And then there

are also obligations on the part of the buyer, right? I will obtain a survey. I will pay X number of dollars in order to obtain title to the property, right?

VENIREPERSON JACKSON: Right. MR. CHAIKEN: Okay. And that's

commonplace in real estate contracts, isn't it? VENIREPERSON JACKSON: Right. *328 MR. CHAIKEN: That's what I mean by mutual 16 obligation. 17 VENIREPERSON JACKSON: Yes. 18 MR. CHAIKEN: And you're aware that when 19 parties enter into contracts, they are called upon to 20 perform their obligations; is that right? 21 VENIREPERSON JACKSON: Correct. 22 MR. CHAIKEN: So if you have a contract 23 that has mutual obligations, then both parties are 24 expected to perform. 25 VENIREPERSON JACKSON: Right.

92 MR. CHAIKEN: You understand that, right? All right. And there was some discussion

earlier with you-all about, you know, if -- if somebody brings a suit under a contract where they were required to perform and they breached first, okay, or they didn't perform first, we have a problem with them bringing the suit. You-all recall that conversation a little while ago, right?

My question is a little bit different. Okay. My question -- and I'm going to start by asking -- I'm bad at remembering names, so forgive me.

Mr. Rodgers, I won't do any discount type of check, comments, or -- well, factors comments. But I'm going to start with you. Do you think it's *329 important when you're analyzing whether somebody's

16 performed under a contract or not or whether they're 17 required to perform under a contract or not and look at 18 everybody's obligations to be performed? 19 VENIREPERSON RODGERS: Yeah. 20 MR. CHAIKEN: And if you were instructed 21 in this case that one party's failure to perform excused 22 another party's failure to perform, could you follow 23 that instruction if the Court said you are instructed 24 that if one party failed to perform first, the other 25 party's obligations are excused? Could you follow that

93 instruction? VENIREPERSON RODGERS: I guess if that was mandated, yeah. MR. CHAIKEN: Well, you seem to have concern about that. What would be your concern? VENIREPERSON RODGERS: Not a concern. I guess I'm just trying to follow. But if one person -- I guess I'm thinking two wrongs don't make a right. So if one person does something wrong and it's excused, the other person does something wrong and it's mutually agreed that both are excused, that's one thing.

But if one person does something wrong and it's not excused and another person does something wrong that's also not excused, they're both wrong. *330 MR. CHAIKEN: My question's a little bit

16 different. 17 VENIREPERSON RODGERS: Okay. 18 MR. CHAIKEN: My question to you is: If 19 the judge -- that will be Judge Benson because Judge 20 Tobolowsky won't be here with us once we get started in 21 the trial. If the judge were to instruct you that if 22 you found that the party suing failed to perform a 23 contract first -- 24 VENIREPERSON RODGERS: Uh-huh. 25 MR. CHAIKEN: -- okay, and that excused

94 the other party, who was alleged to have not performed under the contract, would you be able to comply with that instruction?

VENIREPERSON RODGERS: Yeah. MR. CHAIKEN: Okay. And would you be able

to comply with that instruction even if you felt like, you know, the party that didn't perform first still got hurt and they got damage and I kind of feel sorry, would you still follow the instruction?

MR. ALDOUS: Your Honor, let me object to this line of questioning because it doesn't give the full aspect of what the Court might charge and it's delving into the facts of the case.

THE COURT: Sustained. *331 MR. CHAIKEN: I'll move along. 16 Has anybody ever been involved in a 17 transaction where somebody signed a guaranty? Anybody 18 at all? Does anybody know what a guaranty is? 19 Are you raising your hand? You are 20 Mr. Maguire, right? 21 VENIREPERSON MAGUIRE: Yes. I feel like 22 everyone here has, but they may or may not know that, 23 but -- 24 MR. CHAIKEN: Okay. What is a guaranty 25 based on your understanding?

95 VENIREPERSON MAGUIRE: I mean, if you buy a vacuum cleaner or something has a money-back guarantee, and it doesn't work or, you know, if you purchase some other sort of product, there's a warranty.

MR. CHAIKEN: Okay. That's one form of guaranty. I'm going to pick on you again, and I'm sorry. But you -- Mrs. Jackson, have you ever seen -- do you deal with banks and lenders when you're involved in real estate transactions?

VENIREPERSON JACKSON: Yes, I agree we deal with them. MR. CHAIKEN: Have you ever encountered a buyer who didn't really have sufficient credit to make *332 the transaction, but a family member may have agreed to 16 cosign a loan? 17 VENIREPERSON JACKSON: Yes. 18 MR. CHAIKEN: Or put a little bit 19 differently, sign a document called a guaranty that 20 guaranteed repayment for performance of the obligations? 21 VENIREPERSON JACKSON: I would say I've 22 had a client do that. But she did that mainly with her 23 lender, and the lender had to get those forms signed 24 separate, you know, money that was coming to her. 25 MR. CHAIKEN: So, but you were familiar

96 with the concept of somebody who -- VENIREPERSON JACKSON: Yes. MR. CHAIKEN: -- guaranteed the

performance of another client, right? VENIREPERSON JACKSON: Correct. MR. CHAIKEN: Okay. And has anybody else

encountered a situation where somebody else was asked to guaranty performance of a contract obligation of a third party?

You're nodding your head back there. And I want to call you Mr. Adeboye, but I know that's not right.

VENIREPERSON ADEBOYE: For example, I work at Home Depot. Okay. You come out and buy some lock *333 for your house. You see, that is guaranty. 16 MR. CHAIKEN: And you stand behind it? 17 VENIREPERSON ADEBOYE: I stand behind that 18 lock. 19 MR. CHAIKEN: But has anybody ever been 20 involved -- Mr. Pearle? 21 VENIREPERSON PEARLE: Yes, sir. In my 22 prior business, I would hire different -- like a food 23 stylist or a clothing stylist or a makeup person. So 24 the whole job hinges on that. And I'm kind of 25 guaranteeing their showing up for work and doing the

97 job. I mean, I don't know if that's really what you're wanting.

MR. CHAIKEN: My question is a little bit different. Has anybody encountered a situation where one party said, "I will guaranty the performance of the contract obligation that somebody else is required to perform if they don't perform it?

VENIREPERSON ORTIZ: Like a cosigner? MR. CHAIKEN: A cosigner, yes. That's

what I'm talking about, cosigner, yes. Have you been involved in one of those, Mrs. Ortiz?

VENIREPERSON ORTIZ: My husband has. MR. CHAIKEN: Your husband has? VENIREPERSON ORTIZ: Uh-huh. *334 MR. CHAIKEN: Do you mind if I ask what

16 the nature of that is based? 17 VENIREPERSON ORTIZ: It's just when he was 18 younger, growing up, and wanting to get a truck, and his 19 dad cosigned for the truck. 20 MR. CHAIKEN: Cosigned a note. 21 VENIREPERSON ORTIZ: Yes. 22 MR. CHAIKEN: So, in other words, he 23 guaranteed that he would pay for the note payments if 24 your husband didn't make payments; is that right? 25 VENIREPERSON ORTIZ: Correct.

98 MR. CHAIKEN: And did you understand that in order for the lender in that situation to recover from the guarantor, who would have been your husband's father, your husband would have had to not pay first, right?

VENIREPERSON ORTIZ: Right. MR. CHAIKEN: Does anybody have any

difficulty with that concept, you know, that there are occasions where an individual may guaranty the performance of another party's contract obligations? Anybody have any issues about that? Anybody find that complex or bothersome or anything like that? Yes, ma'am? You're Mrs. Evans, right?

VENIREPERSON EVANS: Uh-huh. I kind of *335 went through that with my granddaughter. When she 16 finished high school, she wanted to buy a car. I said I 17 can't afford to buy you a car. But she asked me would I 18 cosign. Now, at first I was hesitant, because, you 19 know, I wasn't working. And I said, well, you know, 20 it's going to fall back on me. 21 But one time she got late on her payment. 22 Instead of calling her, they called me. So it makes you 23 feel like, well, somehow if she's not able to pay for 24 this car, it sets in that you're going to have another 25 car payment if they don't pay for it, just like you are

99 still being held responsible. MR. CHAIKEN: But you wouldn't -- you wouldn't have a problem, would you, if the bank called you and said, hey, we're calling on you to make the payments but -- was it your daughter or your granddaughter?

VENIREPERSON EVANS: Granddaughter. THE COURT: But your granddaughter, you

found out she made the payment. Would you have a problem with that?

VENIREPERSON EVANS: She made the payment? MR. CHAIKEN: Okay. But if you had found

out that your granddaughter made the payment, okay, but the bank was saying, "Well, you're the guarantor. We *336 want you to pay."

16 VENIREPERSON EVANS: But that's what they 17 were going to tell me. 18 MR. CHAIKEN: Oh, they were. And you had 19 a problem with that, right? 20 VENIREPERSON EVANS: Well, I didn't have a 21 problem with it. I just realized sometimes you don't 22 really realize what you're doing, you know, because 23 you're so happy they graduated and she was responsible. 24 She was working. And, you know, but you don't never 25 know if their job -- you know, not have a job next week.

100 If they don't pay, you got to pay. MR. CHAIKEN: Right. Well, my question to you is a little different. When the bank called you and said, "Well, we want you to pay for her," even though she had already paid, do you think that was wrong?

VENIREPERSON EVANS: Of course, if she already paid. MR. CHAIKEN: Okay. So, it would have been wrong for them to look to you as the guarantor and say, "Well, you're the guarantor. We're just going to ask you to pay anyway." That's not right. Do you agree with that?

VENIREPERSON EVANS: That's not right. MR. CHAIKEN: Okay. Anybody else ever *337 find themselves in a situation where -- where either

16 they asked somebody to guaranty or cosign one of their 17 obligations or they were asked to do so? 18 Yes, ma'am. You are Ms. Doty? Yes? 19 VENIREPERSON DOTY: Yes. 20 MR. CHAIKEN: Okay, 21. 21 VENIREPERSON DOTY: Apartment after 22 college, it was right out of college. 23 MR. CHAIKEN: Right. 24 VENIREPERSON DOTY: My dad cosigned for my 25 apartment.

101 MR. CHAIKEN: And so your dad agreed to do that for you? VENIREPERSON DOTY: Yes. MR. CHAIKEN: Okay. And you wouldn't have

expected your dad to have to honor the guarantee of your payment obligations unless you breached your obligation to pay; is that right?

VENIREPERSON DOTY: Correct. MR. CHAIKEN: So, in other words, the

guarantee is only enforceable when the circumstances giving rise to it have occurred; is that a fair statement?

MR. ALDOUS: Your Honor, let me object to that particular question as going beyond the scope of *338 voir dire. 16 THE COURT: Sustained. 17 MR. CHAIKEN: I'm just trying to find the 18 biases on guarantors, if there are any. I'll move on. 19 THE COURT: Mr. Chaiken, please move 20 along. 21 MR. CHAIKEN: Does anybody think that just 22 because somebody allegedly signs a guarantee, they're 23 automatically responsible for the obligations of 24 somebody else? 25 MR. ALDOUS: Your Honor, let me object to

102 that question also and for the same reason. THE COURT: Sustained. MR. CHAIKEN: I'll move along, Judge. If you're a party to a contract, as your

clients are, your clients expect the other party to comply with the requirements of the contract that they signed and agreed to; is that true?

VENIREPERSON DOTY: Uh-huh. MR. CHAIKEN: And would anybody find it

difficult to say, well, a party comes in and is suing to enforce a contract, but they don't want to comply with all the requirements of the contract if they don't find them favorable to themselves, but they want the other person to be held responsible for the contract. *339 MR. ALDOUS: Your Honor, I object to that

16 question as going into the facts of the case. 17 MR. CHAIKEN: I'm not going into the facts 18 of the case. 19 MR. ALDOUS: It's improper for voir dire, 20 Your Honor. 21 THE COURT: I'm going to ask you to move 22 on, Mr. Chaiken. 23 MR. CHAIKEN: You were asked questions 24 earlier about the difference between people and 25 entities. You-all recall that conversation?

103 Corporations are -- are they alive? Are they alive, sir? I mean, are they -- can you see them and touch them and hear them?

THE REPORTER: I didn't hear him. MR. CHAIKEN: My question to you, sir, is:

You understand what a business entity is? You talked about that earlier in response to some questions by Mr. Hagood. Do you remember that?

UNIDENTIFIED VENIREPERSON: Okay. MR. CHAIKEN: And you know what a

corporation is; it's a business. Okay. Do you understand that corporations act through individuals, individuals that work for the company or who represent the company. You understand that concept? *340 UNIDENTIFIED VENIREPERSON: Yes.

16 MR. CHAIKEN: But you understand that when 17 those people are acting, they may be acting for the 18 entity. Do you understand that? 19 UNIDENTIFIED VENIREPERSON: Yes. 20 MR. CHAIKEN: Okay. Mrs. Ortiz, you were 21 shaking your head, yes. Do you understand that if a 22 contract -- if a corporation or a business entity or a 23 partnership is involved in signing a contract, somebody, 24 a human being, has to sign the contract on behalf of the 25 company?

104 VENIREPERSON ORTIZ: Correct. MR. ALDOUS: Your Honor, let me object to

that question as also being outside the scope of voir dire.

THE COURT: Overruled. MR. CHAIKEN: Thank you. And do you have any difficulty

distinguishing the idea that where the human being who signs the document on behalf of the business entity does so, they may only be acting on behalf of that entity?

VENIREPERSON ORTIZ: Correct. MR. CHAIKEN: Okay. Do you have any belief

or any preconceived notion that if they sign their name to it on behalf of a company or a corporation, they *341 intended by placing their personal name on the document

16 to be personally responsible for the obligations that 17 are owed by the company? 18 MR. ALDOUS: Your Honor, I object. That's 19 going into the -- 20 THE COURT: Sustained. 21 MR. CHAIKEN: Mr. Rodgers, can you be a 22 fair and impartial juror in this case? 23 VENIREPERSON RODGERS: Uh-huh. 24 MR. CHAIKEN: Is there anything about what 25 you've heard today that causes you to have any concern

105 about your ability to be open-minded and fair and impartial --

VENIREPERSON RODGERS: No. MR. CHAIKEN: -- and to wait until the end

of the evidence to make a decision as to who's wrong and who's right?

VENIREPERSON RODGERS: No. MR. CHAIKEN: What about you, Mrs. Evans? VENIREPERSON EVANS: I mean, ask the

question again. MR. CHAIKEN: Is there anything that you've heard so far today that causes you to have concern about whether you can be a fair and impartial juror in this case? *342 VENIREPERSON EVANS: I can't.

16 MR. CHAIKEN: You can't? Okay. 17 What about you, Mrs. Dimeff, can you be a 18 fair and impartial juror? 19 VENIREPERSON DIMEFF: I can. 20 MR. CHAIKEN: You can listen to the 21 evidence from beginning to end? 22 VENIREPERSON DIMEFF: Yes. 23 MR. CHAIKEN: No preconceived notions 24 about who's wrong or who's right by virtue of who sued 25 whom?

106 VENIREPERSON DIMEFF: Well, I sort of do, but -- I sort of have a preconceived notion. MR. CHAIKEN: Okay. What's your preconceived notion? VENIREPERSON DIMEFF: Well, I don't want to say it in front of everybody. MR. CHAIKEN: Okay. Can we talk to you about that privately afterwards? VENIREPERSON DIMEFF: Yes. MR. CHAIKEN: Okay. Mrs. Jackson, what

about you? Can you be a fair and impartial juror? VENIREPERSON JACKSON: Yes. MR. CHAIKEN: Can you listen to all of the

evidence from beginning to end before deciding who's *343 wrong and who's right? And you aren't influenced by who 16 sued whom in terms of arriving at that decision? 17 VENIREPERSON JACKSON: No. 18 MR. CHAIKEN: Thank you. 19 Mr. Leija, what about you? Can you be a 20 fair and impartial juror if you're selected on this -- 21 to serve as a juror on this case? 22 VENIREPERSON LEIJA: Yes. 23 THE REPORTER: I heard, "yes." But I 24 didn't hear anything after that. 25 MR. CHAIKEN: He said, "Yes, if he

107 understands the concept." Mr. Leija, can you come to your jury service with an open mind without preconceived notions as to who's wrong and who's right?

VENIREPERSON LEIJA: Yes. MR. CHAIKEN: Okay. What about you,

Ms. McCoy? VENIREPERSON MCCOY: Yes. MR. CHAIKEN: You can be fair and

impartial? VENIREPERSON MCCOY: Yes. MR. CHAIKEN: And you can listen to the

evidence from beginning to end, and you can give Mr. Hickok the opportunity to provide his defense *344 without forming any decisions before he's done so.

16 VENIREPERSON MCCOY: Yes. 17 MR. CHAIKEN: Okay. Thank you. 18 Mr. Villanueva, how about you? 19 VENIREPERSON VILLANUEVA: Yes. 20 MR. CHAIKEN: Same thing? 21 VENIREPERSON VILLANUEVA: Uh-huh. 22 MR. CHAIKEN: Okay. Ms. Pearson, what 23 about you? 24 VENIREPERSON PEARSON: Yes. 25 MR. CHAIKEN: Mr. Machen?

108 VENIREPERSON MACHEN: Yes. MR. CHAIKEN: Okay. Mr. Richie, I haven't

picked on you at all. How about you? Can you be fair and impartial, open-minded, and serve as a juror without preconceived notions as to who's wrong and who's right?

VENIREPERSON RICHIE: Sure. MR. CHAIKEN: Ms. Gonzales, what about

you? VENIREPERSON GONZALES: Absolutely. MR. CHAIKEN: Okay. Mr. Kozak, what about

you, sir? VENIREPERSON KOZAK: Yes. MR. CHAIKEN: All right. Mrs. George? VENIREPERSON GEORGE: Yes. *345 MR. CHAIKEN: All right. Mr. Berg?

16 VENIREPERSON BERG: Yes. 17 MR. CHAIKEN: Mr. Maguire? 18 VENIREPERSON MAGUIRE: Yes. 19 MR. CHAIKEN: Ms. Watts? 20 VENIREPERSON WATTS: I tend to jump to 21 conclusions. I can sit and listen, but I could jump to 22 conclusions in the beginning. 23 MR. CHAIKEN: Okay. Do you think that 24 effects your ability to be fair and impartial and to sit 25 and listen to all the evidence from beginning to end

109 before deciding who's wrong and who's right? VENIREPERSON WATTS: Yes. MR. CHAIKEN: It does? VENIREPERSON WATTS: Yes, it does. MR. CHAIKEN: Okay. Thank you for your

honesty. I appreciate it. Mrs. Ortiz, what about you? VENIREPERSON ORTIZ: I'm kind of in the

same boat as her, but I'm willing to -- I think that earlier I flip flopped back.

MR. CHAIKEN: Well, when you say you're kind of in the same boat, the boat that I understood Ms. Watts to be in is that she doesn't believe that she can be fair and impartial because of her preconceived *346 beliefs about the situation. What about you? Can you

16 be fair and impartial, notwithstanding the fact that you 17 tend to jump to conclusions and then maybe flip flop, or 18 what? 19 VENIREPERSON ORTIZ: I think I can be fair 20 and impartial. 21 MR. CHAIKEN: So you can wait to listen to 22 everything, follow the instructions of the Court, and 23 then decide who's right or who's wrong? 24 VENIREPERSON ORTIZ: Yes. 25 MR. CHAIKEN: Okay. What about you? Is

110 it -- you're Mr. Ramirez. Sorry. Can you be fair and impartial from beginning to end?

VENIREPERSON RAMIREZ: Yes. MR. CHAIKEN: Without preconceived notions

as to who's wrong and who's right? VENIREPERSON RAMIREZ: My mind may wander a little. MR. CHAIKEN: Okay. Is there anything that effects your ability to be fair and impartial -- VENIREPERSON RAMIREZ: No. MR. CHAIKEN: -- and be attentive and to

follow the instructions of the Court. VENIREPERSON RAMIREZ: No. MR. CHAIKEN: Okay. I appreciate that. *347 Mr. Pearle, what about you, sir?

16 VENIREPERSON PEARLE: I can be fair and 17 impartial. 18 MR. CHAIKEN: From beginning to end, 19 without forming an opinion in advance as to who's wrong 20 and who's right? 21 VENIREPERSON PEARLE: Correct. 22 MR. CHAIKEN: Okay. Thank you, sir. 23 Ms. Doty, how about you? 24 VENIREPERSON DOTY: I can be. 25 MR. CHAIKEN: Okay. From beginning to end?

111 VENIREPERSON DOTY: Yes. MR. CHAIKEN: All right. Tell me your name. I'm sorry. VENIREPERSON PINA: Pina. MR. CHAIKEN: Mr. Pina, I'm sorry. My

writing is bad and I don't have my reading glasses on. Like Mr. Aldous, I'm kind of getting up there in age.

All right. Can you be fair and impartial from beginning to end? VENIREPERSON PINA: Yes. MR. CHAIKEN: You can approach the case

with an open mind, without preconceived notions or judgments about who's wrong and who's right?

VENIREPERSON PINA: Yes. *348 MR. CHAIKEN: Okay. Thank you, sir. 16 Mr. Palmer or is it Dr. Palmer? 17 VENIREPERSON PALMER: Doctor. 18 MR. CHAIKEN: Dr. Palmer, how about you, 19 sir? 20 VENIREPERSON PALMER: Yes. I can be fair 21 and impartial from beginning to end. 22 MR. CHAIKEN: Okay. And there's nothing 23 about what you've heard that causes you any concern 24 about your ability to be fair and impartial and follow 25 the instructions of the Court?

112 VENIREPERSON PALMER: No. MR. CHAIKEN: Thank you. Ms. Ellender, how about you? VENIREPERSON ELLENDER: Yes. MR. CHAIKEN: You can be? VENIREPERSON ELLENDER: Yes. MR. CHAIKEN: Okay. From beginning to end? VENIREPERSON ELLENDER: Yes. MR. CHAIKEN: No preconceived notions as

to who's wrong and who's right? VENIREPERSON ELLENDER: No. MR. CHAIKEN: Thank you. Is there anybody else who feels like

Ms. Watts, that, you know, they just are kind of quick *349 out of the gates to make a decision and, you know, they 16 find that it will effect their ability to be -- and I 17 appreciate her honesty, by the way; but we need you all 18 to be honest on this. 19 Is there anybody else who feels the same 20 way, that they just don't think they can be fair and 21 impartial from the beginning to end? 22 Anybody else, the back row in particular 23 because I haven't singled you all out? Anybody, anybody 24 else? If I ask the question a little bit differently, 25 it causes you to think a little bit different about it.

113 Anybody? Yes, ma'am, you raised your hand in the back. UNIDENTIFIED VENIREPERSON: Not from the beginning to the end because circumstances change within a process. And even before we hear from the beginning, I might think something. And as the process goes along, it may not be what I thought it was, not from the beginning to the end.

MR. CHAIKEN: So you cannot be fair and impartial from beginning to end? UNIDENTIFIED VENIREPERSON: Not from the beginning to the end. MR. CHAIKEN: So at some point in the process -- UNIDENTIFIED VENIREPERSON: I can be *350 impartial, but not from the beginning to the end. 16 MR. CHAIKEN: Okay. So at some point in 17 time, you will form your opinion without waiting for all 18 of the evidence and you'll sit with it -- 19 UNIDENTIFIED VENIREPERSON: I'll wait, but 20 it still can change within that time. I can wait to 21 hear everything in that time. 22 MR. CHAIKEN: Ladies and gentlemen, I 23 appreciate the time that you have taken out of your busy 24 days to be here and fulfill this important service as 25 jurors. Without you, the process doesn't work. Without

114 you, people like my client don't have the ability to have their day in court and have a fair and full opportunity to have issues of concern to them resolved. So thank you for your time and attention.

THE COURT: Thank you, Mr. Chaiken. Ladies and gentlemen, we're going to

excuse you in a moment out into the hallway while the attorneys and I have some further discussions that will lead to the selection of the jury.

You have heard me say that you will not be coming back this week, that you will be coming back on Monday. And you have heard an estimate that the trial would be approximately three days. Since this is not my case, I know no more about it than you do. So assuming *351 we're talking about a three-day case, I'm going to ask

16 you a question, but I want you to listen to the 17 qualifiers that I'm going to put on this question before 18 everybody throws their card in the air. 19 I recognize everybody works. Everybody 20 has family responsibilities. It's hard to be away from 21 your day-to-day obligations. I understand that totally. 22 I'm not asking about that. But I am asking, with regard 23 to next week, does anybody have surgery scheduled, a 24 doctor's appointment, non-refundable tickets to 25 somewhere? And, if you do, would you raise your hand?

115 Okay. I need -- I'm sorry -- Number 1 -- hold on. One, 2, 19, 23 -- I'm sorry. Are you 25? VENIREPERSON DUFFEY: Twenty-five. THE COURT: Twenty-five, I've got 23

already. Anybody else who cannot -- who wants to talk to me about whether or not they can be here?

Okay. Number 3, I was already going to talk to you. And, Number 20, you understand the parameters I've put on this? UNIDENTIFIED VENIREPERSON: And then we're going to be here? THE COURT: I'm going to get to you in just a minute. *352 Number 20, your answer is within the scope 16 that I talked about? 17 VENIREPERSON PEARLE: I will put my card 18 down. 19 THE COURT: Okay. And, Number 27, is your 20 problem within the scope I talked about? 21 VENIREPERSON HAGGERTY: Yes. 22 THE COURT: All right. 23 VENIREPERSON RODGERS: Can I talk about my 24 scope real quick? I'm leaving town Thursday. So, if 25 it's a three-day trial, it wouldn't be an issue. But if

116 it's going to -- THE COURT: You know, I don't know. I'm going to have to verify with the lawyers. When would you be leaving town Thursday, in the morning or in the evening?

VENIREPERSON RODGERS: First flight out on Thursday morning. THE COURT: Okay. Thank you. All right. What I would like to do then is

ask -- okay. We know what the issue is with Panel Member Number 2. So I'm not going to ask you to stay behind, but I would ask Panel Member Number 1, Number 3, Number 4, Number 17, Number 19, Number 23, Number 25, Number 27, and Number 29 to remain here in the courtroom in *353 your seats.

16 Otherwise, if you would, please leave your 17 numbers in your chairs and go out in -- when I tell you 18 to, go out into the hallway. Please remember my 19 instructions. Do not discuss the case. Do not do any 20 independent investigation. No Googling, texting, 21 tweeting, blogging, Facebooking. If you need to let 22 your employer know that you are still here, you 23 certainly may do that. But don't discuss anything more 24 than that. 25 So, other than the ones whose numbers I've

117 called and asked to stay here, if the rest of you will go out into the hallway. Please don't get too far away -- you can go to the restroom or whatever -- in case we need to speak with you. But we are going to be working on who is going to be a juror in this case. Thank you. Those whose number I did not call may go out in the hallway.

(Venire panel exits the courtroom) THE COURT: Counsel, do you-all want to

come up to the bench? Jose Cantu, would you come up here, please? Mr. Cantu, you have indicated that you have some difficulty with English.

VENIREPERSON CANTU: Uh-huh. *354 THE COURT: And I didn't -- don't recall. 16 I may have asked you these questions. And if I have, 17 please forgive me. Can you read English? 18 VENIREPERSON CANTU: Well, I don't -- I 19 read, but I don't know enough. 20 THE COURT: You don't know enough? 21 VENIREPERSON CANTU: No. 22 THE COURT: Have you understood what we've 23 been talking about here? 24 VENIREPERSON CANTU: But, like I said, 25 some words I don't understand. So it's too hard for me

118 to get a decision because I don't want to get a wrong decision. One word can change everything for me.

THE COURT: Okay. And remind me what you do. VENIREPERSON CANTU: I work for a company. I'm a machine operator. THE COURT: Okay. And how long have you lived -- where were you born? VENIREPERSON CANTU: I was born in Mexico. THE COURT: And how long have you lived

here in this country? VENIREPERSON CANTU: Twenty-six years. THE COURT: And do you speak English on

your job or Spanish on your job? *355 VENIREPERSON CANTU: So, so. I mean, 16 maybe half. 17 THE COURT: Okay. Counsel I tend to err 18 on the side of caution and would be inclined to excuse 19 Panel Member Number 1. 20 MR. CHAIKEN: No objection. 21 MR. HAGOOD: No objection. 22 MR. ALDOUS: No objection. 23 THE COURT: Thank you, sir. If you will 24 leave your juror badge -- I don't know where our bailiff 25 is. But if you will just leave it there on the ledge,

119 you may go back to work or go home. And thank you very much for your service.

VENIREPERSON CANTU: Thank you. THE COURT: Cathye, can you hear me? THE REPORTER: Yes, ma'am. THE COURT: All right. I'm going to try

to get the language people out of the way first. MR. ALDOUS: Juror Number 29. THE COURT: Yes. MR. CHAIKEN: We'd agree, Your Honor. THE COURT: Okay. All right. Senor Villanueva? VENIREPERSON VILLANUEVA: I'm sorry for -- THE COURT: I understand and we understand *356 that. Thank you. You may go back to work or you may go

16 back home. If you will leave us your badge -- 17 VENIREPERSON VILLANUEVA: I'm sorry. 18 THE COURT: -- and your number. That's 19 quite all right. 20 MR. CHAIKEN: Thank you, sir. 21 THE COURT: Thank you. 22 Sheriff, we've excused Number one and 23 Number 29 for language reasons. 24 Okay. I think they were the only language 25 people.

120 Then Number 2, we know has a flight out Thursday morning. I'm not familiar with your case, so we -- y'all can just -- I'm just holding that out there. And, you know, obviously, you don't want to seat somebody that may have to disappear even if you're going to have an alternate. So that's just FYI. If you want to excuse him now out of an abundance of caution and you want to agree to that, that's fine.

MR. ALDOUS: Would it be possible to have him come and explain whether or not it's a definite deal or whether or not it's something he could reschedule with work?

THE COURT: Sure. I will do that, but I'm not going to do that at this moment. *357 MR. ALDOUS: Okay. That's fine. 16 THE COURT: Okay. 17 MR. CHAIKEN: And, Judge, just in case it 18 comes up again, we don't necessarily share Mr. Aldous' 19 view that it's a three-day trial. And so we think it 20 will probably take the better part of, if not all of, 21 next week. Just so you're aware. 22 THE COURT: All right. Mrs. Evans? 23 This is Panel Member Number 3. 24 Come on up. Mrs. Evans, you were asked 25 some questions earlier, and you said you kind of wanted

121 not to talk in front of everybody. Do you remember what that was about?

VENIREPERSON EVANS: Yeah. He asked me did I know of somebody that had a lawsuit against a family or friend. And I just had a friend that did have a lawsuit. And, well, I didn't think it was a fair lawsuit. But, you know, they said it was because she did get injured pretty bad.

THE COURT: But you had some question in your own mind about whether it was a fair lawsuit? VENIREPERSON EVANS: Yeah. But wasn't nothing I could do about it. You know, they went in -- it ain't like she had a jury, you know, trial or anything. *358 THE COURT: Was there anything -- is there

16 anything about that or anything you've done previously 17 in the legal system that would make you think you could 18 not be fair as a juror in this case? 19 VENIREPERSON EVANS: No way. I think I 20 could be a good juror. 21 THE COURT: Okay. Now you said you were 22 having a problem with your leg falling asleep or 23 something. Do you have some physical problems, or was 24 it just for the moment? 25 VENIREPERSON EVANS: I have physical

122 problems. I have disability in my spine and my knee. I had knee replacement. I've got to have another knee replacement. And it seems like my other leg is going out, and I can't sit very long.

THE COURT: Now if you are seated as a juror, you're going to be in these more comfortable chairs over here where the interns are. And I know there will be breaks during the day. I'm sure there will be at least one break during the morning. There will be a lunch break. There will be at least one break in the afternoon. I don't know how many breaks Judge Benson normally has, but I can promise you that it will be at least that. Do you think that will be enough, or are you concerned about your ability to sit? *359 VENIREPERSON EVANS: I may have to stand

16 up. That's the only problem because my -- I was 17 cramping up. 18 THE COURT: Right. 19 VENIREPERSON EVANS: But I would love to 20 be a juror. I've never been a juror, and I would love 21 to if I -- if it just weren't for my little injuries 22 that I have. 23 THE COURT: All right. Counsel, anybody 24 else have any questions for Number 3? 25 MR. ALDOUS: Ma'am, if you were allowed to

123 just stand up if your leg started feeling a little gimpy on you and you were able to stand up in the jury box, could you serve?

VENIREPERSON EVANS: I sure could. MR. ALDOUS: Thank you, ma'am. THE COURT: Anything else from you guys? MR. CHAIKEN: I don't have anything,

Judge. THE COURT: Okay. Thank you so much. Will you go back out in the hallway for us? VENIREPERSON EVANS: All right. MR. CHAIKEN: Thank you, Mrs. Evans. THE COURT: All right. Mrs. Dimeff? Okay. When Mr. Chaiken was asking his *360 questions --

16 VENIREPERSON DIMEFF: Uh-huh. 17 THE COURT: -- you said, well, you might 18 have a preconceived notion about how you feel about the 19 case. 20 VENIREPERSON DIMEFF: I do. I can't help 21 it. And I'm under oath, so I had to say. 22 THE COURT: Okay. So talk to me about 23 that. 24 VENIREPERSON DIMEFF: What is my notion, 25 my preconceived notion?

124 THE COURT: Yes. VENIREPERSON DIMEFF: Well, as a designer,

I've worked with a lot of contractors and subcontractors. And a lot of them do sort of unethical things. And so I'm just sort of picturing this whole case, and I'm picturing that this couple hired this company. This company did not follow through. And so now the company is saying, well, we didn't follow through because you didn't do this.

And then, secondly, I feel like then they're trying to kind of weasel out of it by saying -- by saying you can't sue him. You have to sue this company, which is an LLC. That is just what I'm thinking in my mind and I can't help it. *361 THE COURT: All right. I have no earthly

16 idea what the facts are in this case. I have no idea 17 what the facts are in this case and neither do you. You 18 haven't been presented with any facts. And I recognize 19 that you have a scenario in your mind about what the 20 facts are. So, do you think you could listen to the 21 facts and be fair and impartial, or are you already down 22 the road about what you think happened? 23 VENIREPERSON DIMEFF: I'm a normal person. 24 I could listen, but I just want to be fair to the 25 defendant too. That's all. And I'm just being honest,

125 and I hate even standing here. THE COURT: Well, I understand. VENIREPERSON DIMEFF: I would be happy to

serve as a juror. I have no problem with that, but I'm just trying to be honest.

THE COURT: Okay. And is your -- I mean, if these were to be the facts -- fortunately for me, I have no clue -- is your belief about who should win and who should lose already set before you've heard any evidence?

VENIREPERSON DIMEFF: No, no. THE COURT: Okay. VENIREPERSON DIMEFF: It's not like, oh,

the people building the house should always win. No. *362 THE COURT: Okay. You understand that 16 your job as a juror would be to listen to the case and 17 find the facts. You would evaluate the credibility of 18 the witnesses, and you would decide what you think the 19 facts are. And you would answer questions that were 20 given to you by the judge. And the judge would decide 21 what the law is that applies. So do you have any 22 unshakeable beliefs about any of the small number of 23 issues you've heard about from the lawyers today that 24 will just make you -- 25 VENIREPERSON DIMEFF: Nothing unshakeable.

126 THE COURT: Okay. Anything, Mr. Aldous? MR. ALDOUS: No, Your Honor. THE COURT: Anything, Mr. Chaiken? MR. CHAIKEN: I do have a couple of

questions. Mrs. Dimeff, I heard you say that you had concerns about your ability to be fair to the defendant. VENIREPERSON DIMEFF: Well, based on the preconceived notion that I have right now, this is -- I'm just being honest with you with what I'm thinking.

MR. CHAIKEN: Sure. Well, I appreciate your honesty, and I don't mean to put you on the spot. I just want to understand where you're coming from so that we can make an informed decision about your ability *363 to be on the jury.

16 Would it be fair to say that based on what 17 you've heard today and because of your preconceived 18 notions, the defendant -- I don't know which defendant 19 you're talking about, but whichever one you're talking 20 about is starting sort of behind the starting block a 21 little bit in your eyes in this case, not on equal 22 footing? 23 VENIREPERSON DIMEFF: They are. Just by 24 what I've heard today, yes. 25 MR. CHAIKEN: Okay. And your concerns of

127 those preconceived notions are such that you won't be able to divorce yourself from those notions and serve from beginning to end as a fair and impartial juror?

VENIREPERSON DIMEFF: I could -- I mean, like I said, I probably -- I know I know nothing about it. But I could flip flop if there were just all these facts that say otherwise. I mean, I am fair.

MR. CHAIKEN: But you -- but you have a preconceived bias against certain parties who are members of the industry that you have just indicated earlier just based upon your personal experience?

VENIREPERSON DIMEFF: I do a little bit. MR. CHAIKEN: Would you say that those

biases do effect your ability to come into the courtroom *364 with an open mind, to listen to everybody from beginning 16 to end, and to separate those biases out and just decide 17 the case based on the evidence? 18 VENIREPERSON DIMEFF: I think I could. I 19 mean, if I heard a strong reason to -- that would 20 convince me otherwise, of course, I would listen to 21 that. 22 MR. CHAIKEN: I have nothing else. 23 THE COURT: Mr. Hagood, anything from you? 24 MR. HAGOOD: No. 25 THE COURT: Thank you, madam. You may go

128 back out in the hallway. Okay. I think the next person who indicated the she needed to speak with us is Number 17, Ms. Watts.

Ms. Watts, would you come on up? I'm just trying to get through the people

who said they have hardships, but Ms. Watts had also said she wanted to speak privately with us.

Good afternoon, Ms. Watts. Much earlier on, you said you wanted to speak privately with us about an issue.

VENIREPERSON WATTS: It's about a lawsuit that I'm currently involved in. THE COURT: Okay. And what kind of case *365 is that? 16 VENIREPERSON WATTS: It's a Fun 5 lotto 17 ticket. 18 THE COURT: I'm sorry. It's a what? 19 VENIREPERSON WATTS: It's a Fun 5 lotto 20 ticket. 21 THE COURT: Oh, a lotto ticket. Okay. 22 And did you bring the lawsuit against the lotto people? 23 VENIREPERSON WATTS: Well, I mean, a 24 group. 25 THE COURT: There's a group of you who are

129 suing the lotto people? VENIREPERSON WATTS: Yes. THE COURT: They didn't pay you something

you thought you should have gotten? VENIREPERSON WATTS: Right. THE COURT: Okay. Is there anything about

that lawsuit and your being a party to that lawsuit that you think would make you unable to listen to the facts of this lawsuit?

VENIREPERSON WATTS: Well, I'm one of the people that jumps to conclusions. THE COURT: Right, right. VENIREPERSON WATTS: And it's kind of hard

for me to change my mind. *366 THE COURT: Okay. So you just don't think 16 you could be fair? 17 VENIREPERSON WATTS: I don't think so. 18 THE COURT: Okay. Well, I appreciate it. 19 All right. Anybody have any questions for 20 her? 21 MR. ALDOUS: No, Your Honor. 22 MR. HAGOOD: No, Your Honor. 23 THE COURT: Okay. You may go back out in 24 the hallway. Thank you, ma'am. 25 Okay. The next person who asked to speak

130 with us is 19. Michael Ramirez, come on down. Good afternoon. VENIREPERSON RAMIREZ: Hi, how are you? THE COURT: What's your time problem? VENIREPERSON RAMIREZ: I have a doctor's

appointment on Wednesday of next week. I just recently switched over to a medication, and I have labs due Wednesday. The following week, my doctor calls me in for a conference. And the following week, I go to Hawaii and get married, so I would have to wait a number of months.

THE COURT: Oh, goodness. VENIREPERSON RAMIREZ: I have labs done to *367 see if the medication is two a day or one a day.

16 THE COURT: Okay. And anybody have any 17 questions for Mr. Ramirez? 18 MR. ALDOUS: What time of day is your 19 appointment? 20 VENIREPERSON RAMIREZ: At 9:00. 21 MR. ALDOUS: And do you know how long it 22 typically lasts? 23 VENIREPERSON RAMIREZ: Usually about an 24 hour. He wants to talk to me and make sure everything 25 is going good, everything -- you know. I usually have

131 to wait for labs. I have to get in line and wait for labs and they draw blood.

MR. ALDOUS: But -- and part of the reason I'm asking is I've been informed that Judge Benson will hear her docket in the mornings. So she starts hearings at 9:00. And if she doesn't start court until 10:00, does that -- is that okay with your schedule?

VENIREPERSON RAMIREZ: I could probably be here at 10:30 or 11:00. MR. ALDOUS: Okay. THE COURT: That's Wednesday of next week. VENIREPERSON RAMIREZ: That's Wednesday of

next week. That would be the issue. MR. ALDOUS: So if that time issue, that *368 one block of time, got resolved, would you have any 16 problems serving as a juror otherwise? 17 VENIREPERSON RAMIREZ: No, none. 18 MR. ALDOUS: All right. Thank you. 19 VENIREPERSON RAMIREZ: That's why my mind 20 is wandering about the wedding and 50 people. That's on 21 my mind. 22 THE COURT: That's a lot to have on your 23 mind. 24 VENIREPERSON RAMIREZ: It is a lot. 25 MR. CHAIKEN: Could I ask a question?

132 THE COURT: Sure. MR. CHAIKEN: And I don't mean to pry.

I've gone to new doctors before. I've never had an experience going to their offices and a lot of times I have an appointment set at 9:00 o'clock and I don't get seen until 2:00. Do you know anything about this doctor; for instance, whether or not you'll actually be seen at the time of your appointment?

VENIREPERSON RAMIREZ: I usually get seen in 20 minutes. MR. CHAIKEN: Okay. And is it fair to say because this is your first appointment, you're not really sure how long it's going to last?

VENIREPERSON RAMIREZ: It's the same *369 doctor. It's just a different medication. 16 MR. CHAIKEN: Oh, I thought you said you 17 were going to a new doctor. 18 VENIREPERSON RAMIREZ: No, for new meds. 19 I recently switched meds. 20 MR. CHAIKEN: Okay. Thank you. Fair 21 enough. 22 THE COURT: Thank you, sir. You may step 23 out in the hallway. 24 Okay. Dr. Palmer, come on down. Good 25 afternoon.

133 VENIREPERSON PALMER: Hi. Yes. I rescheduled for these three days because my schedule is totally clear. But on Monday, I have a full clinic that I'm personally responsible for.

THE COURT: You said you're a nephrologist? VENIREPERSON PALMER: I'm a nephrologist. And I start the in-patient dialysis service at Parkland over the weekend through Monday. And then, more importantly, on Tuesday I'm a visiting professor down at the University of Houston. That's been arranged. And on Thursday, I'm a visiting professor out in California.

THE COURT: Goodness. VENIREPERSON PALMER: Those are things *370 already that have been on the books for several weeks.

16 THE COURT: Anybody have any questions for 17 him? 18 MR. ALDOUS: No, Your Honor. 19 THE COURT: Mr. Chaiken? 20 MR. CHAIKEN: I don't have any questions. 21 MR. HAGOOD: No, Your Honor. 22 THE COURT: Can we have an agreement on 23 him? 24 MR. ALDOUS: I agree. 25 MR. CHAIKEN: I have no opposition.

134 MR. HAGOOD: You don't oppose the agreement? MR. CHAIKEN: I don't oppose it. MR. HAGOOD: Whatever Mr. Chaiken wants, I

want. THE COURT: All right. Dr. Palmer, we're going to go ahead and excuse you. If you'll just leave your juror badge. And if you brought your number up, you can just leave it there. And thank you.

VENIREPERSON PALMER: Thank you. THE COURT: Okay. I think our next person

was Number 25; is that correct? MR. HAGOOD: No, Your Honor. I don't think we're going to get that far. *371 THE COURT: Well, let's just go ahead and 16 do it anyway. 17 MR. HAGOOD: Okay. 18 THE COURT: Come on up, Ms. Duffey. What 19 was your concern about your schedule, please, ma'am? 20 VENIREPERSON DUFFEY: My concern is I'm a 21 diabetic and I have an insulin three times a day. I'm 22 also raising two grandkids, and one has to go to school 23 also this year. And he has no way of getting there. 24 And today I had to make him miss because I had to be 25 here.

135 THE COURT: Oh, well, I think that you probably have an excuse. VENIREPERSON DUFFEY: And the next week following, I have -- THE COURT: You don't need to tell me anymore. I think you actually have an excuse under the law. And we're going to say thank you for being here today. And if you'll just leave us your juror badge, you may be excused.

VENIREPERSON DUFFEY: Thank you. THE COURT: Thank you very much. MR. CHAIKEN: Thank you. Good luck to

you. THE COURT: Okay. Ms. Haggerty, come on *372 down. Good afternoon. SO tell me what your concern is 16 about your time. 17 VENIREPERSON HAGGERTY: Oh, the only thing 18 is I'm getting ready to retire. And I don't know if 19 they're going to pay like they used to, so I need to 20 make a call. At this time I work. If we -- the 21 schedule for like next week that I'll need to be there. 22 I know if you're sick or something, but right now I just 23 need to see -- the company came in, so I don't know that 24 this new company will they do like -- 25 THE COURT: Yes, I understand.

136 Ms. Haggerty, in all likelihood, since there's a small number of people who are going to be seated, we probably won't need to know the answers to all these things. If we do, we'll give you the high sign, and let's see if you can find out. But right now if you'll go back out in the hallway.

VENIREPERSON HAGGERTY: Okay. THE COURT: Thank you. Okay. According to my notes, those we

have excused for one reason or another are 1, 23, 25, and 29. Is that everybody else's -- consistent with everybody else's notes.

MR. ALDOUS: Yes, Your Honor. MR. HAGOOD: Seventeen is also gone. *373 THE COURT: Oh, is 17 gone?

16 MR. CHAIKEN: No. You haven't made a 17 decision on that. 18 THE COURT: Well, we haven't talked about 19 -- I mean, we haven't talked about for the purposes of 20 cause yet. I do have a couple of people I'm sure we'll 21 end up talking about. But right now I was just talking 22 about people who either had language issues or time 23 issues. And so I think we've got those four. And then 24 there was -- 25 MR. ALDOUS: Number 2.

137 THE COURT: -- Number 2 y'all wanted to talk to and find out how urgent this was. So, Sheriff, could you ask Aaron Rodgers, Number 2, to come in and talk to us a minute? Come on up, Mr. Rodgers. I just had a couple of quick questions about your travel schedule next week. You indicated that you would be headed out of town first thing on Thursday, I believe you said.

VENIREPERSON RODGERS: Correct. THE COURT: And I just wanted to have an

understanding of was this business or pleasure, and how etched in stone is it?

VENIREPERSON RODGERS: It's pleasure, but it's for Father's Day. I have a trip planned to go home *374 to Illinois. 16 THE COURT: Okay. And -- 17 VENIREPERSON RODGERS: It's the whole 18 family all getting together. 19 THE COURT: All right. Anybody have any 20 questions for him? 21 MR. ALDOUS: No. No questions. 22 THE COURT: Any questions, folks? 23 MR. CHAIKEN: No. 24 THE COURT: Okay. You can go back out in 25 the hallway.

138 What do y'all want to do with Number 2? Do you want to agree on him or do you -- what do you want to do?

MR. HAGOOD: We'd agree. MR. ALDOUS: I'm a father. I'll let him

go. THE COURT: Okay. MR. CHAIKEN: We'll agree. THE COURT: All right. So Number 2 is

also on the excused list. So now we're going to start with the plaintiff and ask you for any requested strikes for cause purposes. And I would appreciate it if we would start numerically, you know, one through whatever. And *375 this actually would not be one, but -- and then we'll

16 work through them one at a time. 17 MR. ALDOUS: None, Your Honor. 18 THE COURT: None, okay. That made that 19 easy. 20 MR. ALDOUS: Would you like me to do some? 21 THE COURT: No, no. That made that easy. 22 Mr. Hagood? 23 MR. HAGOOD: Number 4, Your Honor and 24 Number 17. 25 THE COURT: All right. Let's talk about

139 Number 4 first. What do you think she said that allows you to strike her for cause?

MR. HAGOOD: I think she stated she was biased, Judge. She said that she wouldn't start -- she would not start the plaintiff and the defendant at the same starting line. One would be ahead of the other. She said she had preconceived notions. I just think in the totality of the interrogation of Number 4, she's not a fair and impartial juror. I know she wants to be. I know she'll try, but going into this trial, she doesn't wear the same hat as the other jurors. I just feel that she's not a qualified juror.

THE COURT: Mr. Chaiken? MR. CHAIKEN: May I comment on that? *376 THE COURT: Sure.

16 MR. CHAIKEN: I wrote down she said -- 17 something that struck me. She said you could convince 18 me otherwise with a strong reason. Well, I think that's 19 evidence of her bias right there. 20 THE COURT: I heard that. 21 MR. CHAIKEN: I'll go one step further. 22 On behalf of Mr. Hickok, she specifically said in the 23 beginning of the questioning of her that she could not 24 be fair to the defendant. She didn't say which 25 defendant, but she said to the defendant, indicating

140 that -- again I don't even know which defense is starting far behind. But due to her bias about people in the industry, based on her experience, she already has an idea of why she would not be able to be fair and impartial.

THE COURT: Comment, Mr. Aldous? MR. ALDOUS: This is why I didn't go into

the facts of the case because she was all mixed up on the facts of this case. She said that she --

THE COURT: She made up the facts of the case. MR. ALDOUS: Well, I mean, she said she didn't have a bias against the contractor. We're the contractor. So I think that you cannot acquire a bias *377 based upon the facts that you're fed during voir dire

16 unless it's an express bias against that particular type 17 of case, breach of contract, and/or a specific party. 18 But they didn't get the party. They got -- they got the 19 contractor, who is us. So I don't believe that they've 20 met the test. 21 MR. CHAIKEN: I'd like to comment in 22 response if I may. I think that she specifically said 23 is that she had a particular bias against the party who 24 was sued under a contract under a breach of contract in 25 that industry. And her words were specifically -- I

141 have written them down -- that because a party was sued for breach of contract that she had a concern with people in the industry. She would tend to favor the party who was sued, and that's why she said specifically that she was biased against the defendant from the get go.

THE COURT: Though I do not think that the notion of starting behind is any kind of a test based on the case law, I do believe in the totality of what she said that I'm going to grant the defendant's strike for cause of Number 4.

Mr. -- I'm sorry. Mr. Hagood, who was the other? MR. HAGOOD: Seventeen, Your Honor. *378 THE COURT: Any disagreements about 17? 16 MR. ALDOUS: We don't agree. I mean, the 17 fact that she said that she could -- was impressionable, 18 I mean that -- I don't think that that meets any sort of 19 test for being struck for cause. 20 THE COURT: My concern is that she said it 21 effects her ability to be fair. And those were the 22 words I wrote down. 23 MR. CHAIKEN: I actually wrote down. 24 MR. ALDOUS: Would you please not write 25 that kind of stuff down?

142 MR. CHAIKEN: What I wrote down is at the end of her examination, she said, "I can't be fair," specifically.

MR. ALDOUS: I have this thing in my ear that I cannot hear stuff like that. THE COURT: I understand. But, unfortunately, I do think she disqualified herself and Number 17, defendant's cause.

Do you have any? MR. CHAIKEN: What do -- MR. ALDOUS: If he has to start it like

that, then -- THE COURT: No. I've already granted the cause for Number 17. *379 MR. CHAIKEN: I don't have grounds for 16 cause, but I am concerned with -- I think we all should 17 be concerned about Mr. Ramirez, Number 19, and his -- 18 MR. ALDOUS: No, no, no. Look and let me 19 tell you what -- because I know that Judge Benson holds 20 her docket in the morning. And I just don't think it's 21 as big a time crunch as we think. 22 MR. CHAIKEN: My suspicion is that we'll 23 remind ourselves come Wednesday with a bunch of lawyers 24 and witnesses and jurors waiting around. 25 THE COURT: You could. You could.

143 MR. CHAIKEN: Waiting around for a guy who's not going to be real thrilled that he was selected to be on a jury.

THE COURT: Sheriff, about when does Judge Benson start her trial on days where she's got hearings first?

THE BAILIFF: It just depends on how long the hearings go, Judge. I can't pinpoint. THE COURT: Okay. In your experience, has she waited for people who maybe had a doctor's appointment or something and could be here, but --

THE BAILIFF: If they're on the jury, she doesn't have much of a choice unless the attorneys agree to go with a five-panel jury or whatever. *380 THE COURT: Right. I mean, I certainly

16 don't think that's cause. And if you want to exercise a 17 peremptory, that's certainly your right to do so. 18 Anything else on request for cause 19 strikes? 20 MR. CHAIKEN: Defendant Hickok has no 21 other -- well, let me look at one other thing here. No 22 other motions for cause by defendant. 23 THE COURT: All right. Then let me go 24 back over my notes to tell you who I have as having been 25 excused for one reason or another. Number 1, Number 4,

144 Number 7 -- Number 2, pardon me -- Number 17, Number 23, Number 25, and Number 29. Is that consistent with everybody else's notes?

MR. CHAIKEN: I may have missed it. I had 1, 2, 4, 17 and then it goes to 23. THE COURT: That's what I had too. MR. HAGOOD: And 25 too. THE COURT: Yes. And 29. MR. ALDOUS: She just got 2 and 4 -- THE COURT: I did? I got them out of

order because I hadn't written them down in order. Sheriff, how do you do you strikes? Do you have a special strike sheet, or do you have them -- THE BAILIFF: No, we just have them -- *381 THE COURT: Would you-all have -- take the 16 sheriff's lead here since everybody does it differently? 17 THE BAILIFF: All we need to do is put 18 defense or plaintiff up at the top. And it doesn't 19 matter; you can use just any three things here. Just 20 put the last name and the corresponding number of the 21 jurors that you strike. 22 THE COURT: All right. And do you all 23 have places to go? 24 MR. CHAIKEN: How are we doing the 25 alternate?

145 THE COURT: Once we do -- you guys are splitting your strikes and you have your strikes is my understanding. And once we have I understand you have one alternate. So once we have -- I understand you're having one alternate. So once we figure out who are the six, then the alternate comes from the next three. Would that be right?

MR. ALDOUS: That's right. THE COURT: Because each of you would get

a strike and then we would have one survivor. MR. ALDOUS: So we wait until after. THE COURT: Yes. You wait until after.

So you're only exercising the normal number of strikes right now. And then once we figure out where you *382 stopped, then it will be the next three in line from

16 whom you will -- 17 MR. HAGOOD: We all agree the panel 18 includes up to 15 -- to and including 15. 19 MR. ALDOUS: I have up to 15. 20 MR. CHAIKEN: Your Honor, I need to make a 21 motion for additional strikes on the grounds that there 22 is an antagonist of interest in the case between 23 defendant Hickok and defendant VSDH. More specifically, 24 this is a case that involves a suit alleging breach of a 25 buyback obligation in a contract and an allegation that

146 Mr. Hickok is liable for damages caused by that breach as a guarantor of the obligation.

There is a provision in the contract that has a sole and exclusive remedy provision that allows only for the recovery of specific performance by striking the typical remedies in the TREC contract. There was language in an addendum that said that one of the parties had agreed to reinstate the stricken remedies. The party that agreed in the addendum to reinstate the stricken remedies, who was the seller, who was defined as VSDH, which is the entity defendant in this case.

There's no agreement by Mr. Hickok. He expressly stated in the reinstatement of the exclusivity *383 remedy provision, and that had been previously stricken 16 that is. And he is nevertheless being sued for damages. 17 His position in the case is even if there is a breach 18 and even if there is liability for damages, he cannot be 19 held liable under the exclusive remedies provision, 20 which will cause his defense to be antagonistic to some 21 degree to that of VSDH. So for the reason that there is 22 antagonism on those grounds, he should be permitted to 23 have additional strikes because the parties are not 24 aligned. 25 THE COURT: My understanding is that Judge

147 Benson has heard this motion and has denied this motion. Is that accurate, Counsel?

MR. ALDOUS: That is accurate, Your Honor. MR. CHAIKEN: Well, the judge heard the

motion, but not in the context of having heard voir dire. And my understanding of the law is that if the antagonism has been demonstrated throughout the voir dire process -- which I spent time talking about and trying to talk about guaranty issues specifically that nobody else talked about -- then the Court can consider the motion based upon the antagonism demonstrated during the voir dire process.

THE COURT: Denied. MR. ALDOUS: Thank you. *384 THE COURT: Okay.

16 MR. ALDOUS: How much time you want to 17 give us? 18 THE COURT: Just make it as quick as you 19 can. 20 (Recess taken to make strikes) 21 (Venire panel enters the courtroom) 22 THE COURT: Ladies and gentlemen, you may 23 be seated. 24 Ladies and gentlemen of the jury panel, we 25 very much appreciate your patience and cooperation

148 today. I'm now going to read the names of those of you who have been selected to serve on the jury. As I call your name, please come forward and take your seat in the jury box. Number 1 Juror is, as I understand it from the bailiff, will be sitting here closest to the -- to the court reporter. And that lucky individual is Jose Lejia; Number 2, Shirley McCoy; Number 3, Raul Villanueva; Number 4, Jessica Pearson; Number 5, Christopher Richie; Number 6, Grace Gonzales; and lucky Number 7 is Henry Berg.

All right. When Mr. Berg gets up there, if you-all will raise your right hands as soon as he gets up there, we'll swear you in.

(Swear in the jury) *385 THE COURT: You may be seated. 16 Those of you who have not been asked to 17 stay are excused. Please leave your badges and your 18 numbers in your chairs. Oh, I'm sorry. The bailiff 19 needs your badges. Thank you one again for your service 20 here. 21 Ma'am, I'm sorry. We may have made you a 22 little bit late and I apologize. 23 Ladies and gentlemen, because the trial is 24 actually going to start on Monday, we're not going to do 25 anything more. But there are a couple of housekeeping

149 things I wanted to cover with you. There should be a card for the Court there right in front of you. Please take that with you. If for any reason you have a problem being here Monday at 9:30, you need to let the Court know as soon as possible.

Everybody has been given an opportunity to tell me they have a problem, they can't come; so I'm hoping I'm not going to hear any of that or Judge Benson isn't going to hear any of that. If somebody gets sick or something, keep those with you.

And as soon as the -- as soon as he is finished excusing the rest of the panel, he's going to show you where the jury room is, which is back there. But he's going to show you that and tell you a little *386 bit more about the rules of the road for this Court. So

16 if you-all will just wait just a second for him, I know 17 everybody is starving. 18 Yes, ma'am? 19 THE COURT. 20 UNIDENTIFIED JUROR: When it comes to 21 work, what do we tell them? 22 THE COURT: You can tell them you've been 23 seated on a jury and you have that number. So if your 24 work needs to verify that you, you know, need to be 25 here, they can certainly call and verify that. You may

150 not -- I do not know whether your individual employers, you know, pay for your jury service; but you, under the law, cannot be terminated for serving on a jury.

Anybody else have any questions? Yes, ma'am. JUROR NO. 6: Do we still get discounts on our parking? I know we have to turn that in today. THE COURT: Right. My recollection is it was one day. Is it just one day that they get discounted parking, or do they get discounted parking everyday?

THE BAILIFF: If you parked under Old Red, these things on your jury summons are only good for one day. When you come down Monday, you pull that little *387 tab out of the machine. Just take it down to the

16 central jury room. They will validate it and it will 17 only cost you $3 because you are technically still on 18 jury duty. 19 THE COURT: Okay. Sheriff, I have told 20 them that you are going to show them around a little bit 21 and give them some more specific instructions. And so 22 I've sworn at them, and they are yours. Thank you. 23 Thank you, ladies and gentlemen. 24 (Jury exits the courtroom) 25 THE COURT: Anything else for the record,

151 folks -- MR. ALDOUS: No, Your Honor. THE COURT: -- before you come back on

Monday? MR. HAGOOD: No, Your Honor. THE COURT: Thank you. You may be

excused. (Proceedings concluded for the day) *388 16 17 18 19 20 21 22 23 24 25

152 STATE OF TEXAS )

COUNTY OF DALLAS )

I further certify that this Reporter's Record of the proceedings truly and correctly reflects the exhibits, if any, admitted by the respective parties. *389 WITNESS MY OFFICIAL HAND this the 27th of October, 2015.

16 17 /s/ Cathye G. Moreno Cathye G. Moreno, Texas CSR #6076 Expiration Date: 12/31/16 18 Official Court Reporter 19

County Court at Law No. 1 600 Commerce Street, Suite 550 Dallas, Texas 75202 20 cathyemoreno@sbcglobal.net 21

(214)653-7496 22 23 24 25

TAB 25 *390 1 REPORTER'S RECORD VOLUME 3 OF 10 VOLUMES CAUSE NO. CC-09-05232-A

VSDH VAQUERO VENTURE, LTD.

)IN THE COUNTY COURT ) ) ) ) ) )AT LAW NO. 1 ) Plaintiff/Counter-Defendant,

V.

KEN GROSS and BETSY GROSS Defendants/Counter-Plaintiffs, )

) ) ) )

V.

EVAN L. SHAW and DOUGLAS M. HICKOK ) ) Intervenors/Counter-Defendants, )DALLAS COUNTY, TEXAS -------------------------------------------------------

TRIAL ON THE MERITS

------------------------------------------------------- *391 16 On the 15th day of June 2015, the following 17 proceedings came on to be heard within the presence of 18 19 a jury in the above-entitled and -numbered cause before 20 the Honorable D'METRIA BENSON, judge presiding, held in 21 Dallas, Dallas County, Texas. 22 Proceedings reported by computerized stenotype 23 machine. Reporter's Record produced by computer-aided 24 transcription. 25

APPEARANCES:

MR. STEVEN E. ALDOUS SBN 00982100 Forshey Prostok, LLP 500 Crescent Court Suite 240 Dallas, Texas 75201 (214)716-2100 ATTORNEY FOR DEFENDANTS/COUNTER-PLAINTIFFS KEN GROSS and BETSY GROSS

- AND -

MR. EVAN LANE (VAN) SHAW SBN 18140500 Law Offices of Van Shaw 2723 Fairmount Street Dallas, Texas 75201 (214) 754-7110 ATTORNEY FOR PLAINTIFF/COUNTER-DEFENDANT VSDH VAQUERO VENTURE, LTD; INTERVENOR, VAN SHAW; and *392 16 17 18 THIRD-PARTY DEFENDANTS 19

VSDH VAQUERO HOMES, INC. AND VSDH HOMES, INC.

20 21 22 23 24 25

3 INDEX JUNE 15, 2015 PAGE VOL. PROCEEDINGS.............................. 9 3 EXHIBIT DISCUSSIONS...................... 9 3 OPENING STATEMENTS BY MR. ALDOUS......... 14 3 OPENING STATEMENTS BY MR. SHAW........... 24 3 OPENING STATEMENTS BY MR. CHAIKEN........ 31 3 GROSSES' WITNESSES Direct Cross Voir Dire Vol. Douglas Hickok 39 -- -- 3 MOTION FOR MISTRIAL...................... 127 3 END OF PROCEEDINGS....................... 132 3 REPORTER'S CERTIFICATE................... 133 3

EXHIBIT INDEX *393 GROSSES' NO. DESCRIPTION OFFERED ADMITTED VOL. 1 May 5, 2007 Fax from 16 10 10 3 17

Mr. Gross to Buttemiller 18 3 New Home Contract, First 10 10 3 Amendment, Addendum A & B 19 4 Appraisal Invoice and 10 10 3 20 Summary Appraisal Report 21 5 Settlement Statement 10 10 3 June 28, 2007 22 15 Construction Loan 10 10 3 23

Documents 24 22 First Horizon Builder's 10 10 3 Soft Cost Draw Request 25 4 EXHIBIT INDEX CONTINUED GROSSES' NO. DESCRIPTION OFFERED ADMITTED VOL. 24 October 16, 2008 Fax 10 10 3

from Mr. Gross to Hickok Regarding Improvements 25 October 16, 2008 Fax 10 10 3 Confirmation Sheet 26 June 26, 2008 Fax from 10 10 3 Mr. Gross to Kramer Regarding Inspection and Warranty 27 October 31, 2008 Email 10 10 3 from Mr. Gross to Hickok 30 February 23, 2009 Email 10 10 3 from Mr. Gross to Hickok Regarding Addition 31 April 27, 2009 Fax from 10 10 3 the Grosses to VSDH 32 April 27, 2009 Fax 10 10 3 Confirmation *394 33 May 1, 2009 Email from 10 10 3 16 the Grosses to Hickok and Confirmation from Hickok 17 34 April 27, 2009 Email from 10 10 3 18

Mr. Gross to Hickok Regarding Buyback Option 19 35 May 1, 2009 Email Chain 10 10 3 20 between Mrs. Gross and Hickok 21 38 June 28, 2009 Email from 10 10 3 Mr. Gross to Shaw and Hickok 22 42 Settlement Statement 10 10 3 23

August 27, 2009 24 43 Escrow Agreement 10 10 3 August 28, 2009 25 5

EXHIBIT INDEX CONTINUED

GROSSES' NO. DESCRIPTION OFFERED ADMITTED VOL. 44 General Warranty Deed 10 10 3 August 27, 2009 45 Affidavit as to Debts 10 10 3 and Liens, Parties in Possession and Third Party Claims and Easements with Indemnity Agreement 46 Payoff Acceptance 10 10 3 Affidavit, Non-foreign Person Affidavit, Seller's Affidavit Agreement for Legal Services, Agreement Concerning Association Assessments and Resale Certificate

47 Real Estate Contract 10 10 3 Between the Grosses and Ms. Browning, Addendums and Intermediary Notice 51 Amendment to Real Estate 10 10 3 Contract August 27, 2009 52 Residential Real Estate 10 10 3 *395 Listing Agreement

16 54 Email Chain Ending on 116 116 3 June 7, 2009 Between Shaw, Hickok and Mrs. Gross 17 18

59 Email from Mr. Gross to 10 10 3 Hickok, Shaw and Mrs. Gross 19 August 18, 2009 Regarding Sale of Home 20 60 Letter to Jana Reist to 10 10 3 21

Shaw August 19, 2009 22 65 May 18, 2009 Email 10 10 3 Between Shaw and Mrs. Gross 23 66 April 29, 2009 Email 10 10 3 24

Chain between Hickok, Shaw, and Mr. Gross 25 6

EXHIBIT INDEX CONTINUED

GROSSES' NO. DESCRIPTION OFFERED ADMITTED VOL. 68 June 21, 2007 Sommerfelt 10 10 3 Email Chain to Hickok, Shaw, Stern and Buttemiller 83 May 18, 209 Email Chain 10 10 3 Between Shaw and Mrs. Gross 84 Email Ending May 17, 2009 10 10 3 Between Shaw and Mrs. Gross 88 June 7, 2009 Letter from 10 10 3 Shaw to Mrs. Gross 89 Email Chain Ending 10 10 3 June 6, 2009 Between Shaw, Hickok, and Mrs. Gross 91 June 28, 2009 Email 10 10 3 from Mr. Gross to Shaw, Hickok and Mrs. Gross 92 Email Chain Ending 10 10 3 April 29, 2009 Between Hickok, Shaw, and Sumner Attaching Contract of Sale *396 93 Email Chain Ending 10 10 3 16 April 29, 2009 Between Shaw, Hickok and Sumner Attaching First Amendment 17 18

94 Email Chain Ending 10 10 3 April 29, 2009 Between 19 Shaw, Hickok, and Sumner Attaching Changes to Contract 20 96 Amendment to Listing 10 10 3 21 98 Settlement Statement 10 10 3 22

Between the Grosses and VSDH June 19, 2007 23 105 Email from Hickok to 10 10 3 24

Buttemiller June 20, 2007 25 7

EXHIBIT INDEX CONTINUED

GROSSES' NO. DESCRIPTION OFFERED ADMITTED VOL. 106 General Warranty Deed 10 10 3 108 June 17, 2007 Letter from10 10 3

the Grosses to Hickok 111 June 19, 2007 Email from 10 10 3 Hickok to Mr. Gross 114 Burgess Property Inspection Report June 6, 2007 10 10 3 VSDH'S NO. DESCRIPTION OFFERED ADMITTED VOL. 1 May 25, 2007 Fax from 9 9 3

Ken Gross to Buttemiller Attaching Addendum A 2 June 1, 2007 Summary 9 9 3 Appraisal Report 6 New Home Contract 9 9 3 8 June 12, 2007 First 9 9 3 *397 Amendment to New Home Contract 16 9 June 17, 2007 Fax from 9 9 3 the Grosses to Hickok 17 10 June 19, 2007 Email from 9 9 3 18

Hickok to Ken Gross Regarding First Amendment 19 12 Residential Construction 9 9 3 20 Loan June 27, 2007 21 14 Assignments of Rights 9 9 3 Under Construction Contract 22 18 Construction Loan 9 9 3 23

Agreement June 27, 2007 24 19 Construction Loan Rider 9 9 3 June 27, 2007 25 8

EXHIBIT INDEX CONTINUED

VSDH'S NO. DESCRIPTION OFFERED ADMITTED VOL. 22 Mechanic's Lien Contract 9 9 3 June 27, 2007 26 Affidavit of Completion 9 9 3 June 27, 2007 27 Builder Soft Cost Draw 9 9 3 Request June 28, 2007 28 Settlement Statement 9 9 3 June 28, 2007 29 July 3, 2007 Letter from 9 9 3 Mr. Stern to the Grosses Regarding new Home Contract 30 June 26, 2008 Letter from 9 9 3 the Grosses to Mr. Kramer Regarding Inspection and Warranty 31 October 16, 2008 Letter 9 9 3 from Ken Gross to Hickok 32 October 31, 2008 Email 9 9 3 Chain between Ken Gross and Hickok *398 16 33 February 23, 2009 Email 9 9 3 from the Grosses to Hickok 17 45 Residential Contract 9 9 3 18

(Resale) August 21, 2009 19 46 Settlement Statement 9 9 3 August 27, 2009 20 57 June 18, 2009 Email 9 9 3 21

from the Grosses to Hickok 22 23 24 25

9

PROCEEDINGS

June 15, 2015 (Off-the-record discussion held) THE COURT: All right. We'll go on the

record. Plaintiff's Exhibits 1, 2, 6, 8, 9, 10, 12, 14, 18, 19, 22, 26, 27, 28, 29, 30, 31, 32, 33, 44 -- no, excuse me -- 45, 46, and 57 are admitted.

Plaintiff's Exhibits 3, 4, 5, 11, 13, 15, 16, 17, 21, 23, 24, and 58 are denied. Does that comport with everyone's understanding?

MR. ALDOUS: Yes, Your Honor. MR. CHAIKEN: No, Your Honor. I have one

other concern, which is 56, which was the first -- THE COURT: Fifty-six doesn't show up on *399 the list. 16 MR. CHAIKEN: I know. It was one of the 17 three that we talked about earlier today, which was the 18 draw request. 19 MR. ALDOUS: It's going to be in as 20 Exhibit 22. If you want to admit it with a defense 21 number, you can; but... 22 MR. CHAIKEN: Well, I'm just trying to 23 keep track of it. Yeah. I'd like to admit it with a 24 defense number on it. It was 56. We talked about it by 25 agreement. If it's coming in as 22 on the Gross' list,

10 I mean, it's not a big deal either way. THE COURT: Well, as long as the document's coming in and it's agreed, then we don't need to add a new one because there was no 56 previously, is what it boils down to.

MR. CHAIKEN: No, I understand. And the only thing I was doing was because we did add those, and we just talked about them. And I had identified it as 56, and I just wanted to make sure that it was admitted as 56. But I didn't know that he was going to put it back on as Gross' 22. So if that's the case, then it's fine either way.

THE COURT: All right. We will leave it as the Gross exhibit, which at this point in time is *400 defendant's exhibits. 16 All right. Defendant's Exhibits 1, 3, 4, 17 5, 15, 22, 24, 25, 26, 27, 30, 31, 32, 33, 34, 35, 38, 18 42, 43, 44, 45, 46, 47, 51, 52, 59, 60, 65, 66, 68, 83, 19 84, 88, 89, 91, 92, 93, 94, 96, 98, 105, 106, 108, 111, 20 114 are admitted. Defendant's Exhibits -- let's go off 21 the record for a minute. 22 (Off-the-record discussion held) 23 THE COURT: All right. We'll go back on 24 the record. Defendant's Exhibits 2, 6, 8, 9, 10, 11, 12, 25 13, 14, 16, 17, 18, 19, 20, 21, 37, 39, 40, 48, 49, 50,

11 53, 54, 55, 56, 57, 58, 61, 62, 63, 64, 67, 69, 70, 71, 72, 73, 77, 81, 82, 85, 86, 87, 90, 95, 99, 100, 101, 102, 103, 104, 107, 109, 110, 112, 113, 118, 119, 120, 121, 122, 123, and 124 were removed by the defendant.

Does that comport with your recollection, Mr. Aldous? MR. ALDOUS: Yes, Your Honor. THE COURT: Okay. There's several items

that are either deferred or pending prove up, and we'll deal with those as they arise.

MR. ALDOUS: Your Honor, I just wanted to make sure that this is acceptable to you. With respect to the witness, I have a book that has all the exhibits in it which are admitted, as well as the ones that are *401 deferred. I will not have them refer to the ones that

16 are deferred until it's admitted. It's just for 17 purposes of being complete, I have it all in here. 18 THE COURT: Both sides or just -- 19 MR. ALDOUS: Just my side. 20 THE COURT: Okay. Any objection to that, 21 Mr. Shaw and Mr. Chaiken? 22 MR. SHAW: No objection. 23 MR. CHAIKEN: No, but I don't know that 24 we've done it that way, which is there were -- as I see 25 it, we have 7, 20, 25, 47 through 55. So we will

12 probably need to break out -- Sarah, will you come up here, please? We'll need to break out our exhibits the same way so that those which are deferred are in a separate collection to stay consistent.

MR. ALDOUS: If they're deferred -- THE COURT: No, his are in the book. MR. ALDOUS: They're all in here. THE COURT: He's just not going to

reference them with the witness until -- MR. CHAIKEN: Oh, okay. I thought you said you had a separate book for the deferred. MR. ALDOUS: No, no, no. I'm sorry. MR. CHAIKEN: Understood. I *402 misunderstood, but now I misunderstand.

16 MR. ALDOUS: As long as it's not referred 17 to or not sent to the jury until it's admitted, you 18 know, that's -- I figure that's fine. 19 MR. CHAIKEN: I'm okay with that. 20 MR. ALDOUS: And I'm okay with y'all doing 21 the same thing. 22 MR. SHAW: I got no problem with that. 23 THE COURT: Okay. All right. 24 MR. CHAIKEN: I understand now what you 25 meant.

13 THE COURT: A little slow on the pick up today, Mr. Chaiken? MR. CHAIKEN: No. Just this whole plaintiff versus defendant switch thing has got me a little confused, but now I'm good.

THE COURT: Is there anything else we need to do before we bring in the jury? MR. CHAIKEN: No, Your Honor. THE COURT: I do have the orders on

limine. Have you-all had a chance to review them so that you stay within the parameters that have been set?

MR. ALDOUS: Yes, Your Honor. MR. CHAIKEN: I have no problem with that.

Could we have five minutes just to kind of group and run *403 to the restroom and then start? 16 THE COURT: You may. 17 MR. CHAIKEN: Thank you. 18 THE COURT: All right. We stand in recess 19 for five minutes. All rise. 20 (Recess taken) 21 THE COURT: All rise. You may bring in 22 the jury. 23 (Jury enters the courtroom) 24 (Jury instructions read off the record) 25 THE COURT: We'll go on the record.

14 Mr. Aldous, you may make your opening statement. MR. ALDOUS: Thank you, Your Honor. I believe you gave me 20 minutes. And if you would, just give me a five-minute warning. Thank you.

Good morning. We're essentially here because, in an effort to avoid the responsibilities that the defendants had under a contract, they've begged, they've deceived, they've delayed, they've denied. And that's the way this is going to go in trial, I anticipate.

This all started back in 2007 when Ken and Betsy Gross went -- they wanted to move to Vaquero. Ken builds houses and one of the things that he wanted to do *404 is he wanted to get a home, to build a model home

16 somewhere in Vaquero, which is out in Westlake, north 17 Fort Worth. And he wanted it to be built out there so 18 people would try to use his services. Well, it wasn't 19 working out in terms of finding the lot and getting it 20 started. But Ken knows the home at 2004 White Wing Cove 21 that had sat unpurchased for about two years, even 22 though it had been on sale. 23 Ken looked at the home and he believed 24 that he knew why it wasn't selling. He thought that it 25 needed a bedroom downstairs and it needed a media room

15 and some of other things that people, when they buy these high-dollar homes, expect. Ken did some investigation. He found out that the builder or the owner of the home was VSDH Vaquero Joint Venture. I'm never going to call them that again. It's just VSDH. And it stands for Van Shaw and Doug Hickok. Those are the two principals of VSDH.

So Ken learned who was the owner of the home, and he had a proposal for them. The proposal was, "I'll pay you for the -- for asking price on the house. My family and I will move in for a couple of years. I will build an addition on to the home. This is about how much it's going to cost. Here are the specifications for it. Here's what it's going to look *405 like. And then if you will, at the end of that period

16 buy the house back from me, you don't have to pay for 17 the addition. I'll pay for it." That was the deal. 18 In other words, we're going to buy it. 19 We're going to build this addition, but you're going to 20 buy it back from me. Now, Mr. Gross smartly said, "And 21 I want the VS and the DH of VSDH, that is Van Shaw and 22 Doug Hickok, to personally guarantee that this happens." 23 So we went to the closing. Everybody 24 agreed to this process. We went to the closing in June 25 of 2007. And at that closing, everybody signed off on

16 it except for Mr. Shaw. So you won't hear me refer to him as responsible under this at all because he did not sign the document. However, Mr. Hickok signed it. And Mr. Hickok agreed, as you will see, what the contract says; that they personally -- personally guaranteed the performance of VSDH on this buyback option. So you may recall that in 2007 things weren't -- they were okay.

And in 2008, the bad stuff started happening with the economy. If you remember, that's when AIG went under, that's when Lehman Brothers went under. It's when nobody could get a loan from anybody. Things turned south. So in October of 2008, Ken starts calling Mr. Hickok to say, "I'm going to start building on the addition. Come on by. Take a look." *406 There was no response, so he sent a fax.

16 And we have the fax, and we'll show it to you. The fax 17 said, "Hey, listen. Send me your address. I'll send 18 you the plans or come on by and we'll go through 19 everything and I'll show you, you know, we're getting 20 started." Mr. Hickok made an appointment for two weeks 21 later on October 31st, 2008. And then on the morning of 22 the meeting, he sent an email and said, "I won't be 23 showing up today. I'm out of town." 24 And Ken just is getting along, said, "Hey, 25 no problem. Just let me know when you get back." It

17 turns out that it was sometime later that Mr. Hickok actually came out and the addition had already started. Now you'll hear from Ken and Betsy Gross, and they'll tell you that Mr. Hickok did not complain one bit about the addition. In fact, he said it looks great. Everything's going according to the plan. But, more importantly, he didn't say that I have a problem with this. I want something moved. I don't like this. I don't like the way you're doing it. It was just like, okay, we'll talk to you later.

Ken went on to finish the addition, added even extra. He went above and beyond. He matched the tiles on the roof so that they'd match the original house. He got all this. He made it look like the *407 original house. And then in February of 2009, Ken

16 finishes the addition. Ken sends a letter back over to 17 Mr. Hickok and says, "Hey, come on out. Take a look. I 18 want to show you what we did." No response. 19 Then in April of 2009 -- you'll see this 20 contract. The contract says, if you want -- Mr. Gross 21 and Mrs. Gross, if you want the VSDH to buy this back 22 from you, you have to let them know by May 1st, 2009. 23 So on April 27, 2009, Ken and Betty let them know we're 24 exercising the buyback. Let's go ahead and get this 25 done, and you can buy it back, as the contract states.

18 Now, there was no response originally from them saying, oh, no. We're not going to buy it back because of one, two, three. What it was, was Mr. Hickok then said, "I'm turning this matter over to my friend and partner, Van Shaw, who's also a lawyer."

So now Mr. Shaw is the one that we're going to deal with, and Mr. Shaw's first statements to the Grosses out of the box was, "Hey, we can't perform because VSDH is insolvent." Now Mr. Hickok says that VSDH has never been insolvent, but that's what they said. VSDH is insolvent. Will you take something else? They're like, no, no.

Then we had meetings with them to try to resolve the issue. It didn't work out. So we had a *408 meeting with Van Shaw somewhere around June 28, 2009. 16 It was clear that they were not going to honor the 17 buyback. Mr. Shaw denied that anybody personally 18 guaranteed the responsibilities of VSDH. And so we 19 said, okay. We've got to do something. We listed the 20 home. We then had the home listed and it eventually 21 sold the next month in August of 2009 for a loss. 22 Now, these are -- this is an expensive 23 home. The original listing price was $2.8 million. We 24 sold it for $2.4 something million. The difference in 25 what we're asking you for in terms of the damages are

19 about $582,000, plus the attorney's fees we've had to expend in getting there.

Now, you're going to be faced with some excuses that I believe that they'll raise and then evidence as reasons why they didn't do this. One, they'll tell you that the breach -- that we breached an escrow agreement in the original contract. Now you'll see in the original 2007 contract, we said that we would escrow the amount that it would take. That means give to another party, an independent party. Usually it's a bank or an escrow agent. We're going to give them this money.

It's the value of the improvements. And then we'll just take from that money to build the *409 improvements. Well, there was an escrow. Our bank was 16 loaning us money. They had the money in escrow. They 17 doled it out to us as we built the addition. So I don't 18 know where that excuse comes from. 19 There will be another excuse. We're not 20 personally liable on this. We didn't personally 21 guarantee it. And you'll see the contract. The 22 contract says that "I, Douglas Hickok, personally 23 guarantee the performance of VSDH." I don't understand 24 why, but one of the excuses will be, "Well, I only 25 signed this in my capacity as a member of VSDH, but not

20 as an individual." The contract doesn't say that, so I don't know where they're coming with that excuse.

MR. CHAIKEN: Your Honor, I object to the argument about he doesn't understand why they're saying things.

THE COURT: No speaking objections. MR. CHAIKEN: Beyond the scope of opening. THE COURT: Sustained MR. ALDOUS: The evidence is going to be

that there -- that the contract in it had some deletions from it. In other words, there were some portions in the contract where they crossed through it and then they handwrote some things in. One of the things that I believe will end up coming before you is whether or not *410 we -- that is the Grosses -- said that our only remedy

16 was whether or not we could make them buy the house. 17 And I think you'll find that the evidence, when it's all 18 admitted, will show that we changed that at the time 19 that we wrote this out. So I don't know where that's 20 coming from. 21 MR. CHAIKEN: Your Honor, same objection. 22 THE COURT: Counsel approach. 23 (Sidebar conference held) 24 THE COURT: You may proceed. 25 MR. ALDOUS: One of the issues that has

21 also been raised is that the contract where it said, you know, we had to let them know that we wanted them to buy it back by May 1st, 2009, it says that they have until September 1st, 2009 to actually buy the home back. However, during that period of time, if you recall I was saying that we were visiting with Mr. Shaw, who had taken over the issue from Mr. Hickok. And he clearly let us know that they were not going o perform the buyback.

So in order to protect ourselves, we had to go ahead and sell it to someone else. However, you'll see the evidence that during that entire step, all those steps in the process, we kept them informed and asked them to let us know if they had any objection. *411 At no point in time did they ever say don't do that,

16 don't sell that house, or we're going to disagree with 17 your sale to this woman. So it actually was sold and 18 the closing was in August of 2009. And, as a result, we 19 were able to limit the damages that we're asking for 20 here. 21 One of the issues, I believe, that will 22 also come forward from the evidence is whether or not we 23 allowed them an opportunity to approve the plans for the 24 addition prior to starting construction. I believe the 25 evidence is going to show you that when we originally

22 entered into the contract, we had three pages of specifications. Now I'm told that "specifications" mean like I'm going to spend X dollars on the tile. I'm going to spend X dollars on the bathroom. I'm going to spend X dollars -- it's a detailed list of all the costs that are going to go into the addition.

Also, Mr. Gross will testify that when he was selling the idea of doing the buyback, you know, the purchase and the buyback, he walked the property with Mr. Hickok and explained why he thought it hadn't sold and what he proposed doing and all of that together. In addition to that, we tried to give them the plans before we started, and they weren't interested.

Now at the end of the day, because of the *412 way it was sold and the timing it was sold, it ended up 16 costing Ken and Betsy about $582,000 and some change to 17 -- for the difference between what they would have had 18 if the defendants would have honored this agreement 19 versus the one that we ended up having to do. 20 In addition to that, you're going to have 21 some evidence of what these attorney's fees cost to get 22 this kind of a case and it's not cheap. I expect that 23 we're going to have testimony from at least two lawyers. 24 I'm not the only lawyer that represented the Grosses. 25 They had another lawyer before me, and I anticipate that

23 he will testify. I think what the evidence is really going to show is that after when -- the house that VSDH built, it was called a spec house. What that means is they didn't have a buyer. They built the home in hopes that somebody else would come along and buy it, and it didn't sell for, you know, a long period of time. During that period of time, VSDH is having to pay for the carrying cost of all the costs that went into building the home. I think it's about $1.9 million. And so that they're paying on the upkeep to keep the house going, paying on the note, and all that.

And I think the evidence is going to show that when this deal came along, although it wasn't what *413 they wanted to do, they were going to agree -- that is 16 VSDH and Mr. Hickok were going to agree, and then hope 17 that they never heard from Ken and Betsy Gross again. 18 But when we did what the contract required -- that is 19 Ken and Betsy Gross notified them appropriately and did 20 all the things in compliance with the contract, then 21 they started their strategy to try to avoid 22 responsibility. 23 MR. SHAW: Your Honor, this is outside the 24 scope of the limine. 25 THE COURT: Careful, Mr. Aldous.

24 MR. ALDOUS: Yes, Your Honor. I believe that the evidence will show you

that the excuse -- THE COURT: Five minutes. MR. ALDOUS: Thank you, Your Honor. -- the excuses that they have for avoiding

the contract are not supported by the evidence. In other words, they're not going to be able to come forward and show you where they are right and we are wrong. Their strategy will continue to play out in this courtroom.

Now we are happy to be finally in front of you. It's been a while since we've been able to get here, and we'll be more than happy to have you decide *414 the facts of this case. I appreciate your attention.

16 THE COURT: Mr. Shaw? 17 MR. SHAW: Thank you, Your Honor. 18 Ladies and gentlemen, I saw you on 19 Wednesday. I did not speak to you. Dan Hagood was here 20 speaking to you in my stead. My name is Van Shaw, and 21 I'm a lawyer for VSDH Venture, Ltd. And I have today 22 Darcy Topolski in the courtroom. 23 Darcy, could you stand up, please? 24 She'll be with me in trial as a 25 representative of the company.

25 Now we hear the rest of the story. As you agreed on Wednesday, you said you'd wait to hear all of the evidence before deciding. And we talked about, hey, the plaintiff gets to go first. They get to open first and we have to tag along. They get to put their evidence on first, and we have to tag along. They even get to close first, and we have to tag along. And so it's important that you wait until all the evidence is in -- and you agreed to do so and I appreciate that -- before you decide. There was a discussion about an assembly line, and that's what the trial is like. It's an assembly line, and we're at the back of the line. So you don't get to hear what we're adding to the pot until the product is way down the line, and that's why *415 it's very important for to you wait.

16 You also said, and you agree, that 17 contracts are important and that if you breached a 18 contract, you would not then sue for enforcement of the 19 contract. 20 MR. ALDOUS: Your Honor, I would object 21 because that's beyond the scope of -- I object. 22 THE COURT: Sustained. 23 MR. SHAW: The fact of the matter is, and 24 the evidence will show, that if you want to precisely 25 enforce a contract, you must precisely abide by that

26 contract. That's what the evidence will be in this case. Mr. Gross is a sophisticated builder. Mr. Gross has built many multimillion dollar homes. Mr. Gross -- this is not Mr. Gross' first rodeo. Mr. Gross knows what he's doing and is very sophisticated. His lawyer knows what he's doing, but he said things like, VSDH is Van Shaw and Doug Hickok. Well, that's not true.

VSDH Venture, Ltd., is an entity, just like General Motors is an entity or Dell computers is an entity. When Michael Dell signs a contract, Michael Dell is signing a contract for Dell Corporation. And that's what the laws are in this country. It's a great country. We have laws and those laws need to be enforced, and that's why we have things like contracts *416 and legal entities.

16 But what I want to tell you is about the 17 rest of the story. 18 Your Honor, may I have the Elmo, please? 19 THE COURT: I'd say keep talking. It's 20 going to be a while before it comes up. 21 MR. SHAW: I'm sorry? 22 THE COURT: Keep talking. It will be a 23 while before it comes up. 24 MR. SHAW: All right. I want to give you 25 a little background. I told you that Mr. Gross is not

27 unsophisticated. And I'll give you a little more background. VSDH is Van Shaw. That's what this fellow said. And DH is Doug Hickok. Well, Doug and I -- Doug's in the courtroom. That's him. Doug and I go back many, many years. We were grade school friends, been friends ever since, so we have a long relationship with each other. Doug is an admiral guy and you'll see that. When Doug testifies, you'll get to determine that for yourself.

But what I've got is -- and you're going to get to see in this case -- is some contracts. And, Your Honor, this is Exhibit 6. There's -- the case is going to be mainly

about a contract. Okay. There's a contract that the *417 parties entered into, and that's what we're going to be 16 talking about a lot. Okay. This is -- this is the 17 contract, Vaquero Venture, Ltd. -- it's hard to read -- 18 Mr. Gross and Mrs. Gross. Okay. This is what we're 19 talking about. Now, what you did not hear in the 20 opening from the plaintiff and that -- what I wanted to 21 talk to you about a little bit is this. The contracts 22 are entered into and they're there for a reason. 23 And 22 says -- and it's hard to read -- 24 the content contains the entire agreement of the parties 25 and cannot be changed except by written agreement,

28 cannot be changed except by written agreement. Everybody agreed to that. Those were the terms. You won't hear one person in this lawsuit tell you otherwise. Then you're going to find some evidence that there's an addendum to the contract, and this is the buyback that they're talking about. Okay. VSDH grants blah-blah-blah the Grosses an option to put the property to the seller. Okay. You've heard some talk about that.

Now, let's look what it says they have to do. It says buyback exercises. They have to do a few things. But in this section, it says the buyer may not sell or convey the title blah-blah-blah. And then it says should the buyer enter into a contract to sell the *418 property, the buyback option will immediately terminate

16 and will no longer be available to the buyer. And 17 that's what happened in this case, no doubt about it. 18 You will see the evidence and hear the evidence that 19 that occurred. 20 You're going to also see evidence that the 21 same contract said, before commencing the construction 22 improvements that counsel told you about, buyer will 23 review with the seller the plans and specs and receive 24 general consent. Never, ever happened, never. So 25 you're going to see a lot of things that were important

29 in this case that never happened. You're going to see this section, escrow agreement. Buyer agrees to escrow funds totaling $156,000 with the title company and enter into escrow agreement, blah-blah-blah. Never happened. Buyer never, ever, ever, never did that. And as a result, buyer was sent a letter. Buyer was sent a letter that said you're in violation of the agreement. You've got obligations under the agreement. You're in violation. Not only were those violations not cured, buyer never responded ever, never responded.

So then we come down with the real important facts. If you want to precisely enforce a contract, you must precisely abide by it.

MR. ALDOUS: Your Honor, I object to that *419 being on the Elmo if it's not in evidence. 16 THE COURT: Sustained. 17 MR. ALDOUS: I continue to object. 18 MR. SHAW: Can I use an outline at all, 19 Your Honor, that shows the jury what the evidence will 20 show? 21 THE COURT: In closing. 22 MR. SHAW: Okay. 23 MR. ALDOUS: Thank you. 24 MR. SHAW: The evidence is going to show 25 you that there was a purchase contract, and it was dated

30 -- the property was to close on June the 12th, 2007. It didn't happen. Property wasn't bought until about two weeks later, July 27th. But what happened on July 19th -- and the evidence is going to show you that the Grosses moved in to a two-and-a-half-million dollar house without authority, without the knowledge or without the consent of the sellers, never, ever knew it. The property was located -- Mr. Hickok lived in Plano. I lived in Dallas. The property was in Westlake. We learned -- Mr. Hickok was shocked to learn that the Grosses moved into the property, pre-contract, pre-purchase.

Mr. Hickok writes a letter, Exhibit 10. Mr. Hickok says, "I was shocked to hear that you had *420 taken up occupancy of the house prior to closing." 16 You'll see this document in full during the trial. It 17 was very surprising, very unacceptable and shocked. 18 There was the addendum to the contract that Mr. Gross 19 agreed to. We told you about it. Before any 20 construction, the buyer will review with the seller. It 21 never happened. The buyer will escrow $156,000. It 22 never happened. The buyer will wait until September 1, 23 2009 -- that's the date, the buyback date, September 1, 24 2009. Prior to that date, Mr. Gross sold the home prior 25 to that date. So, the buyer breached the contract.

31 It's going to be unequivocal. The buyer breached the contract and there are significant breaches we talked about. You'll hear evidence about that probably ad nauseam. I know your time is important. We don't want to burn your time, but this is a very important case and we want to make sure everybody's clear on it. The bottom line facts from my side is that the Grosses violated the contract. The Grosses say, well, Van Shaw never signed it, so we don't have anything to do with that. Well, they sued Van Shaw on top of everything else.

MR. ALDOUS: Objection, Your Honor. That's -- objection. THE COURT: Parties approach. *421 (Sidebar conference held) 16 THE COURT: You may proceed. 17 MR. SHAW: This -- so the Grosses have a 18 number of issues that we will talk about. But in the 19 end, the important things are, if you want to precisely 20 abide by the contract, you need to precisely. If you 21 want to enforce it precisely, you need to abide by it 22 precisely. You will hear significant evidence that that 23 never occurred. We thank you for your time. 24 THE COURT: Mr. Chaiken? 25 MR. CHAIKEN: Thank you, Your Honor.

32 Ladies and gentlemen, we spoke briefly on Wednesday of last week when you were participating in the jury-selection process. You may recall that Mr. Hickok was present in the courtroom. I'd like to reintroduce Douglas Hickok.

Doug, will you please stand up? And it is my privilege to represent Doug.

Doug is a long-time client of mine and he is a good friend of mine. And I am tasked with the burden and obligation of establishing for you that Doug has a defense to this case and the case that has been brought against him. What's very important here is that you understand what Mr. Hickok has been sued for. You've already heard the difference between entities and *422 individuals; that human beings sign for entities where

16 -- because a live person has to act for an entity. 17 And you will see evidence in the form of a 18 contract, the contract that Mr. Shaw put up on the Elmo 19 a few minutes ago that shows that Mr. Hickok signed the 20 contract. Yeah, he's the human being. The signature is 21 there, but his signature was very clearly -- the 22 evidence will show in his capacity as a vice president 23 of the general partner of the VSDH Vaquero entity. The 24 evidence will show that both Mr. and Mrs. Gross, as the 25 buyer identified in the contract, and Mr. Hickok, acting

33 for the seller -- the seller is specifically identified. There's nobody other than VSDH -- initialed the contract. They did it for what's called identification purposes.

And you'll hear evidence from the witness stand from Mr. Hickok and from his lawyer in the transaction as to what that means and why it was done that way, what initialing for purposes of identification means. And you'll hear evidence from Mr. Hickok that, yes, he had a conversation through a broker about the possibility of there being a personal guarantee by him and Mr. Shaw in this transaction of this buyback obligation that you're hearing about.

But you'll also hear, and the evidence *423 will show, that Mr. Hickok made very clear that when he 16 was considering the possibility of a personal guarantee, 17 he told the broker, "I will only consider a personal 18 guarantee if two things happen. One, Mr. Van Shaw also 19 personally guarantees any such obligations; and, number 20 two, there is a document signed, okay, with my signature 21 on it and Mr. Shaw's signature on it that says we both 22 guarantee any of the obligations of VSDH." And the 23 evidence in this case will be that although Mr. and 24 Mrs. Gross were represented by a lawyer in the 25 transaction, they never took any action to cause that

34 situation to be properly documented and executed by either Mr. Hickok or Mr. Shaw.

Now, what is a buyback option? Well, a buyback option, the evidence will show, is an understanding in a contract whereby a party who has bought this property, a house, has the opportunity under certain circumstances specified in the contract to sell it back to the party who sold it to them. And the evidence will show that the party who sold the property is not Mr. Hickok and it's not Mr. Shaw, but it was VSDH, the partnership. And that is the party charged with a buyback obligation under the contract.

Now, the evidence in this case is going to show the following: That Mr. and Mrs. Gross only care *424 about contract provisions that benefit them without 16 regard to contract provisions that they don't like. For 17 example, the evidence is going to show that when they 18 purchased the house from VSDH, the Grosses signed a loan 19 agreement with a lender. And the lender's loan 20 agreement that they signed knowingly stated that they 21 were required to commence construction work, this 22 addition that they did, within a very short period of 23 time. I believe it was 30 days after they closed on the 24 purchase of the house. 25 Now, not only did they move into the house

35 before they bought it, unbeknownst to the partnership or its partners, the evidence will show that Mr. and Mrs. Gross did not commence construction, okay, until sometime possibly a year-and-a-half later. The first indication that anybody got, and the evidence will show this, that they were commencing construction was an email in October of 2008. They closed their purchase in June of 2007. What you're going to find out through the evidence is that the loan agreement that I just mentioned required them to finish the construction work by December of 2007.

They didn't even attempt to comply with their loan obligation to start construction of the house on a timely basis. But construction was a material part *425 of the agreement and the inducement for the buyback

16 obligation, and that's what the evidence is going to 17 show you. And not only did Mr. and Mrs. Gross fail to 18 meet their obligations under their loan agreement to 19 start and finish construction before the end of 2007, 20 but they got into a fight with their lender. They got 21 into a fight with their lender. 22 MR. ALDOUS: Your Honor, I object. 23 MR. CHAIKEN: And they told their lender. 24 THE COURT: Approach. 25 (Sidebar conference held)

36 THE COURT: You may proceed. MR. ALDOUS: Thank you, Your Honor. MR. CHAIKEN: But at the end of the day,

the Grosses are suing Doug Hickok for breach of the contract they say he personally guaranteed the buyback obligation, and he is required now to pay damages for a failure of the partnership, VSDH, to buy the property back. When you look at the contract -- you can just take my word for it. You'll hold me to this -- you will see that if there was a guarantee in this deal by Mr. Hickok, all he guaranteed was to perform the buyback obligation if, and only if, VSDH did not do so in accordance with the contract.

And the evidence will show you the *426 following: Number one, the buyback option had what is 16 called a buyback date, September 1st, 2009. That was 17 the date upon which VSDH, if it had an obligation to buy 18 the property back, was required to buy it back. You 19 will see that the only time, and the evidence will show, 20 that if Mr. Hickok guaranteed this thing that he could 21 be called upon to perform the guarantee was after 22 September 1st came and went and VSDH had not bought the 23 property back on that date. 24 But Mr. Hickok couldn't have performed the 25 guarantee obligation if he wanted to once September 1st

37 of 2009 rolled around because Mr. and Mrs. Gross took it upon themselves to sell the property to a third party. They sold the property to somebody else.

And you want to know what? The very same buyback option that they are trying to enforce against Mr. Hickok says: Once you give notice that you intend to exercise the buyback option, you, the buyers -- meaning Mr. and Mrs. Gross -- shall not sell the property or convey any interest in the title to anybody else. But they did it anyway.

Well, the evidence is going to show you -- and out of Mr. Gross' own words, Mr. Hickok never told him that he wasn't going to perform any buyback obligation. And Mr. Shaw indicated it might be a *427 problem, but he never said that they were not going to

16 perform. And at the end of the day, the contract says 17 that there's only a guarantee obligation, if there is 18 one at all, upon the occurrence of the default, not the 19 possibility of one. 20 You will see that as of the buyback date, 21 even if there was an enforceable guarantee, Mr. Hickok 22 could not have performed under the guarantee because it 23 would have required the Grosses, in exchange for the 24 buyback price, to deliver title to the property to 25 Mr. Hickok, the supposed guarantor, but; they didn't

38 have title to the property to deliver to him because they sold the property to somebody else in breach of their contractual obligations not to do so.

THE COURT: Five minutes. MR. CHAIKEN: You will also see that in

the contract when the contract was initially signed, there was a strike through a provision of the contract that talks about what the parties' rights and remedies were if one or the other defaulted. And when I say, "one or the other," I mean the seller or I mean the buyer. Okay. But the Grosses come in here and say Mr. Hickok became a party to the contract. And when this addendum you heard mentioned was put together, there was some language in there that said that the *428 seller, who was VSDH, agreed to reinstate some language

16 that was stricken. 17 But the evidence will show you in the form 18 of that language itself that if Mr. Hickok was a party 19 to the contract, which we say he was not, he never 20 agreed to reinstate those remedies. And one of the 21 remedies that Mr. and Mrs. Gross struck and they agreed 22 to strike was their ability to sue for damages, but here 23 they are again not honoring their contract and suing for 24 damages. 25 MR. ALDOUS: Your Honor, objection.

39 MR. CHAIKEN: And that is what we -- THE COURT: Sustained. MR. CHAIKEN: We believe the evidence will

show you that the suit for damages against Mr. Hickok was waived.

Ladies and gentlemen, as I told you during jury selection, this is a very important case for all of the parties. But it is an important case for my client, Mr. Hickok, who as I told you was brought here against his will, and he'll only ask for the opportunity to defend himself. I thank you for your time.

THE COURT: You may call your first witness, Mr. Aldous. MR. ALDOUS: Yes, I would call Doug *429 Hickok. 16 THE COURT: Raise your right hand, please. 17 (Witness sworn) 18 THE COURT: You may be seated. 19 MR. ALDOUS: May I approach, Your Honor? 20 THE COURT: You may. DOUGLAS HICKOK, 21 22 having been first duly sworn, testified as follows: 23 DIRECT EXAMINATION 24 BY MR. ALDOUS: 25 Q Mr. Hickok, just for easy reference, I've got

40 some stuff around here, and they've got these numbers on them. And if I'm referring to a number, I'll let you know, and then you can flip to it. Is that all right?

A Perfect. Q Great. I'll just set that in front of you.

First of all, let's see what we can agree on, right? A Sure. Q Your name's Doug Hickok? A Douglas M. Hickok. Q Can we agree on that? A Yes, sir. Q VSDH, that is the defendant in this case, is

VSDH Joint Venture Ltd., right? *430 A Yes, sir. 16 Q The parties to that agreement, that is who 17 makes up VSDH, that's you, Van Shaw, and VSDH Homes, 18 Inc., correct? 19 A Yes, sir. 20 Q So are there any other individuals who have an 21 ownership interest in VSDH other than you and Mr. Shaw? 22 A No, sir. 23 Q So when I say -- 24 A But let me correct something. 25 Q Sure.

41 A VSDH Homes, Inc. is not an individual. They're a corporation. Q That's right. A Okay. Q So the only two individuals that have an

ownership interest in VSDH are you and Van Shaw? A Yes, sir. Q Okay. Now, with respect to VSDH, does the VS

stand for Van Shaw and DH Doug Hickok? A It probably did. I can't remember back then, but it probably did. Sure. Q Well, you know, I guess -- is there any other thing that you think that those initials could apply to other than Van Shaw and Doug Hickok? *431 A I'm sure I can come up with something, but I --

16 let's go with Van Shaw and Doug Hickok. 17 Q All right. You said that -- I think you told 18 me a long time ago that you've known Mr. Shaw since 6th 19 grade? 20 A Yes, sir. 21 Q Have you been in ventures with him before, 22 other than VSDH? 23 A A venture before we formed VSDH? 24 Q Yes, sir. 25 A I believe so. Sure.

42 Q Now the contract that we're here about -- MR. ALDOUS: Your Honor, if you could just a minute -- I've got to grab something out of that room. Do you mind?

THE COURT: That's fine. MR. ALDOUS: You know, I asked Seth if we

could get the easel. I think we forgot. THE COURT: Counsel, approach. And, Mr. Aldous, approach with your exhibits. MR. ALDOUS: Okay. THE COURT: You may proceed.

Q (By Mr. Aldous) Mr. Hickok, if you would, please take a look at Number 3, Exhibit 3 in the book there. *432 THE COURT: You may be seated, Mr. Aldous.

16 MR. ALDOUS: Thanks, Judge. I'm going to 17 have to flip from page to page. 18 THE COURT: That's fine. You can do that 19 seated. The jury can't see through you. 20 MR. ALDOUS: Okay. 21 Q (By Mr. Aldous) Exhibit 3 now, is this the 22 contract -- I'm sorry. I may have ended up with the 23 wrong one. Do you see the numbers on this Exhibit 3, 24 $2,695,000? 25 A Yes, sir.

43 Q That's not the agreement that ended up being -- that actually closed, is it? A I believe that's the one that did actually close. Q Isn't it true that the actual sales price that closed was $2.8 something million? A It could have. It either went one way or the other, yes, sir. Q All right. Just so that we're clear, at some point in time, the amount that was to go with the improvements actually was part of the contract price, right?

A Say that one more time. Excuse me. I was looking at something else. *433 Q At one point in time, whatever the improvements 16 were going to be made on the house were part of the 17 contract price, right? 18 A Yes, sir. 19 Q And then another version, it wasn't part of the 20 contract price? 21 A Yes, sir. 22 Q Okay. So I want to make sure that we get the 23 actual contract that belongs with your -- with the 24 actual agreement, the one that actually got performed. 25 Let me show you -- this is not up there, so I'm going to

44 have to bring it to you. This is actually Exhibit No. 2 that's been admitted into --

THE COURT: Mr. Aldous? MR. ALDOUS: May I approach, Your Honor? THE COURT: You may. MR. ALDOUS: Thank you. THE COURT: Court first. The Court first. MR. ALDOUS: Oh, sorry. This is already

admitted as Hickok Exhibit 2. THE COURT: You may approach. MR. ALDOUS: Thank you, Your Honor.

Q (By Mr. Aldous) This is what I wanted to show you. So do you recognize this? A Yes, sir. *434 Q This exhibit shows that the contract price for 16 the house is 2,851,871, right? 17 A Yes, sir. 18 Q Now do you recall actually entering into this 19 contract? 20 A I don't know if it fully got -- I can't 21 remember if it fully got executed, and I don't think it 22 did and went to the title company where everybody signed 23 off. I don't think so, but I'm not sure. 24 Q Well, just so that we're clear, first of all, 25 when people are going to agree to buy a house or sell a

45 house, what they do is they enter into a contract, right?

A Yes, sir. Q And that contract says that by a certain amount

of time, we're going to do X or Y; and at that time, which is called the closing, that's when the money changes hands, right?

A Yes, sir. Q Now, this house that's reflected on this

Exhibit 2 shows -- it says in the city of Westlake 2004 White Wing Cove, right?

A It does. Q That's the house that VSDH had built for it,

right? *435 A Had built for it. What's "it"? 16 Q For VSDH? 17 A Oh, that we had built for our company, sure. 18 Q Right. VSDH built it as a spec home, correct? 19 A Yes, sir. 20 Q In other words, when you built it, when you set 21 out to build it, you didn't have a buyer particularly in 22 mind? 23 A Right. 24 Q And you built it in the hopes that you would 25 build the house for X amount of cost, and you'd be able

46 to sell it for a profit later on? A Sure. Q That's what the business of VSDH is, that sort

of thing, right? A Yes, sir. Q Now there was one other home in this area that

VSDH actually built, correct? A Correct. Q And that was right next door to this house? A Yes, sir. Q And didn't -- in fact, didn't a guy that you

guys knew actually live in that house, Wally? A Wally Maya purchased the home. Q What was Wally's full name? *436 A Maya. It's Waldemar D. Maya, M-a-y-a.

16 Q He purchased the home? 17 A Yes, sir. Well, an -- let us make sure. An 18 entity that he owns purchased the home. 19 Q I see. And he's also been an investor with you 20 on some other projects, right? 21 A Yes, sir. 22 Q Would you consider Mr. Maya to be a friend of 23 yours? 24 A Sure. 25 Q Okay, great. Now, the agreement that is

47 Exhibit 2 reflects -- if you would, turn to the page that's marked Gross 0009. See at the bottom of the page, it says right down there that number?

A Yes, sir. Q Now it says special provisions. Do you see

that? A Yes, sir. Q And it says, see Addendum A. See Addendum A

and Addendum B. Do you see that? A Yes, sir. Q Was the sale of this home to Ken and Betsy

Gross what you would refer to as standard? MR. CHAIKEN: Objection, form, calls for speculation as to what is meant by standard. *437 THE COURT: No speaking objections. And 16 you stand when you address the Court. 17 MR. CHAIKEN: My apologies, Your Honor. I 18 thought you said we could be seated. 19 THE COURT: Overruled. 20 A I mean, I believe your question was: Is this 21 standard? And I don't think -- there's no two pieces of 22 real estate that are exactly alike ever, and so there's 23 really no standards in real estate is my simple answer. 24 Q (By Mr. Aldous) Well, you have a lot of 25 experience buying and selling real estate, don't you?

48 A I'm fairly experienced. Yes, sir. Q You've been doing it for quite some period of

time? A Yes, sir. Q Have you ever done real estate projects like

this one? A I've probably done these two homes. Q That's it? A Yes, sir. I'm not in the home building

business. Q Well, you also owned other residential facilities like condos or something? A Condos, apartments, yes, different single-family types. *438 Q Have you ever entered into a contract to buy 16 back a house like you did it in this situation? 17 MR. CHAIKEN: Your Honor, objection. 18 THE COURT: Overruled. 19 MR. CHAIKEN: May I state the basis of the 20 objection? 21 THE COURT: As long as it's not a speaking 22 objection. 23 MR. CHAIKEN: The question is vague in 24 terms of who Mr. Aldous is speaking of as "you." 25 THE COURT: Overruled.

49 A Could you rephrase -- restate your question, please? Q (By Mr. Aldous) Yes, sir. Have you, either as VSDH or any other entity in which you're involved, ever done a sell with a buyback provision in it other than this situation?

A You know, I can't think of anything off the top of my head, only because I haven't done a whole lot of this type of residential contracts. So, no.

Q Now, the addendum -- so this whole contract that is Exhibit 2 that I'm holding up right here, a lot of this is a form, isn't it?

A It's a -- I believe it's a promulgated form, which means it's a form that's issued by the Texas Real *439 Estate Commission. I believe this is the -- yes, it's 16 produced by -- I'm pretty sure it was promulgated. At 17 the top of the page it says promulgated by the Texas 18 Real Estate Commission. So it's a standard form by the 19 Texas Real Estate Commission. 20 Q And if you want to make changes to the standard 21 form, you may cross some places out? 22 A Yes, you can. 23 Q Or you may add addendums, like was done in this 24 situation, right? 25 A Sure.

50 Q Let's turn to the addendum, which is at page -- A I don't see an addendum. Q Yeah, I don't either. It doesn't look like it

made it into this copy. MR. ALDOUS: May I approach, Your Honor? THE COURT: You may. MR. ALDOUS: It's previously admitted as

Exhibit 6. THE COURT: Is this an extra because I don't have one in the notebook that you're giving me? MR. ALDOUS: This is Hickok and VSDH's exhibit. THE COURT: Okay. MR. ALDOUS: Thank you. *440 THE COURT: You may approach.

16 MR. ALDOUS: Thank you. 17 Q (By Mr. Aldous) Just so you have it now. 18 A Okay. 19 Q Let me show you what's been admitted as Exhibit 20 No. 6. This has the complete agreement in it, doesn't 21 it? 22 A Well, this is not the complete, final 23 agreement. 24 Q What is missing from Exhibit 6? 25 A Well, this is not -- this was not the contract

51 that went to the title company. Q What makes you think that, sir? A Well, I don't believe -- let me just look at

something here. If I remember correctly, there were some other strikeouts in the Addendum A attached. This is the agreement. This isn't the final agreement.

Q When you say "this," can you tell me -- MR. ALDOUS: Do you mind if I approach, Your Honor? THE WITNESS: What you're showing as Exhibit A is not the contractual -- the final contractual agreement that we had -- that VSDH had with the Grosses.

MR. ALDOUS: Do you mind if I approach, *441 Your Honor? 16 THE COURT: You may. 17 Q (By Mr. Aldous) Where are you looking? 18 A Well, this is. This is not. 19 Q All right. Let's go ahead and move on then to 20 Exhibit 3 that's been admitted already. When you say 21 that the -- does this Exhibit 3 that is in the notebook, 22 does it have the addendum as it was reflected and went 23 to closing? 24 A It does. It looks like it's fully executed by 25 all the parties and it has the Addendum A, I believe you

52 were referring to, attached. Q All right. So what we have with respect to Exhibit 3 are several pages, and then we have the addendums that are attached, correct?

A Yes, sir. Q And in terms of this agreement, you went

through and you signed the contract. Let's turn to that page. It is the page that is marked as 0028. Do you see that?

A Yes, sir. Q Now, I know this is kind of hard for you to --

first of all, you see where it says VSDH Homes, Inc, LP? A It actually says VSDH Homes, Inc. with my -- with a GP next to it. That's the general partner of the *442 seller, which is VSDH, Vaquero Venture, Ltd. 16 Q Now that line, that horizontal line, and then 17 the -- I mean the vertical line, then follow the 18 horizontal line, is that your signature, sir? 19 A That's my signature with a VP for vice 20 president of VSDH Homes, Inc., the GP. 21 Q Have you been a doctor before? 22 A No. Unfortunately I sign a lot of checks. 23 Q You make it as quickly as possible; is that 24 right? 25 A Quickly as possible, painless as possible.

53 Q Each page of Exhibit 3 is initialed. And in terms of the initialing, is this that I'm pointing to here, is that your initial?

A That's my initial as the seller, which is VSDH, Vaquero Homes, Ltd. That's me signing on behalf of the seller.

Q I know you want to -- A Like Dell Computer or whatever. Q -- make that distinction. A I'm making a distinction. Sure. Q Right. But my question is very simple. Is

that your initial? A Yes. Q Is that you? *443 A It is mine --

16 Q For whatever capacity? 17 A -- mine on behalf of the seller, yes, sir. 18 Q And you went through on pretty much every page 19 and did the same thing; isn't that right? You initialed 20 it? 21 A Just like Ken and Betsy Gross did, sure. 22 Q Right. Now when we get to the addendum, which 23 is going to be at the page marked Gross 33, this is 24 where it starts, correct? 25 A Yes, sir.

54 Q And that's what it looks like? A Yes, sir. Q Now I have some particular parts of it that are

on this agreement, so I want to take it one by one. THE COURT: Mr. Aldous? MR. ALDOUS: Yes, sir. THE COURT: You need to move your exhibits

away from -- MR. ALDOUS: All right. Would it be all right if I put them up here? THE COURT: That's fine. MR. ALDOUS: Great. MR. CHAIKEN: Your Honor, may I make a

request? I'm sorry to interrupt. Before the additional *444 boards are published to the jury, could I ask that they 16 not be shown to the jury. 17 THE COURT: You just want them turned 18 around? 19 MR. CHAIKEN: Thank you, Your Honor. 20 Q (By Mr. Aldous) The very first paragraph of the 21 addendum, you see that there? It says, lawyer language, 22 VSDH Vaquero Venture, Ltd., as seller, grants to Ken and 23 Betsy Gross, as buyer, the option to put the property to 24 seller. I require the seller to purchase the property 25 for the original sales price of $2,851,871 on September

55 1st, 2009, or such earlier date as may be mutually agreed between buyer and seller. You see that?

A Yes. And it goes on to say, "subject to the following terms and conditions." Sure. Q Right. So would you agree with me that subject to the other terms and conditions, VSDH agreed to repurchase the home from the Grosses if they exercised it appropriately according to the addendum?

A Yes, sir. THE COURT: Would you like to approach? MR. ALDOUS: I was changing this. Is this

approaching? THE COURT: That's approaching. MR. ALDOUS: May I approach? *445 THE COURT: You may.

16 MR. ALDOUS: Thank you. 17 Q (By Mr. Aldous) The next paragraph is the 18 declaration date. You see that? 19 A Yes, sir. 20 Q On or before May 1st, 2009, the declaration 21 date, the buyer must exercise the buyback option by 22 delivering the written notice to the seller. If for any 23 reason they have not exercised the buyback option notice 24 on or before 5:00 p.m., then the buyer waives the 25 buyback option, right?

56 A Yes, sir. Q So as I understand what this is saying is the

Grosses were required to give VSDH notice like this before May 1st, 2009, if they wanted to exercise the buyback?

A Yes, sir. Q You agree with me that Mr. and Mrs. Gross

correctly gave notice that they wanted to invoke the buyback?

A They did, but didn't meet the terms and conditions of the buyback, but they gave notice. Q All right. I understand that you've got a problem with that, but I'm just trying to eliminate some things we can agree on. You agree they sent you notice? *446 A Yes, sir.

16 Q And what you disagree with is that they 17 complied with the rest of it? 18 A Yes, sir. 19 Q So we don't have to ask the jury to get them to 20 find out whether we gave notice. You agree with that? 21 A Yes, sir. 22 Q Okay. 23 MR. ALDOUS: May I approach? 24 THE COURT: You may. 25 MR. ALDOUS: I'll get this down pretty

57 soon. Q (By Mr. Aldous) Now, the next paragraph, which is B, it says -- push it up. It says if -- basically, if the buyer agrees to exercise or exercises the buyback option, then the following things are going to apply. And then it says the buyer will not sell or convey any right, title, or interest in and to the property to any third party unless the seller breaches its obligation to repurchase the property pursuant to the buyback option due to no fault of the buyer.

Now as I understand this is -- would you -- would you agree with me that as long as the seller, being VSDH, has not breached any obligation, then the Grosses have to wait until September 1st, 2009? *447 A Yes, sir.

16 Q If, as you understand it, VSDH breached the 17 agreement before that date, the Grosses were free to 18 sell it. Do you agree with that? 19 A I'm not a lawyer, so I really can't answer 20 that. 21 Q Well, just from your own understanding of the 22 agreement -- first of all, you read this addendum before 23 you signed it, right? 24 A Yes, sir. 25 Q And you had a lawyer on the deal with you. In

58 addition to Mr. Shaw, you had Hap Stern, correct? A Yes, sir. Q And he's a lawyer that's worked with you on

real estate deals before? A Yes, sir. Q As you understood this, would you agree that

your understanding was that if VSDH breached the agreement before September 1st, 2009, then the Grosses were free to sell the property?

A Again, that's a legal -- you're asking me for a legal answer. I'm not an attorney. Q Well, I'm just asking you for your understanding. I mean, just your understanding, unformed by any legal analysis. *448 A You would think so, but I don't know enough

16 about the law. 17 Q Okay. Would it be okay if I said you agree 18 subject to your lawyer overruling? 19 A Sure. 20 Q Okay. Then it says the seller may commence 21 marketing the property, the seller being VSDH, right? 22 A Yes, sir. 23 Q Could commence marketing the property for sale 24 by May 2nd, 2009, and the buyer agrees to cooperate. 25 Now, would you agree with me that VSDH never marketed

59 this property after the -- the option date where -- I mean, where they selected the buyback, where the Grosses selected the buyback?

A Correct. Q You guys never made any effort during this

period of time to market the property on behalf of VSDH? A Correct. Q Okay. The buyer agrees to fully cooperate with

all marketing efforts of seller. I think we already talked about that. And then on or before 2009, unless buyer and seller agree upon another stated date in writing, buyer shall vacate the property and deliver possession thereof to the seller, being VSDH, right?

A Yes, sir. *449 Q And the property shall be in the same 16 condition, blah-blah-blah. 17 Now, here's my question for you. As of May 18 1st, 2009, VSDH had no intent to buy this property back; 19 isn't that right? 20 A I totally have to disagree with that. 21 Q Are you saying, sir, that you, as VSDH, on May 22 1st were willing and wanted to buy this property back if 23 you were required to by the contract? 24 A If I was required to under the contract, sure 25 we could have bought the property back.

60 Q Well, I'm asking a little bit different question. I'm not asking you whether you could have bought the property back. I'm asking whether you had any intent as of May 1st, 2009, to buy this property?

MR. CHAIKEN: Objection, Your Honor, objection to the use of the word "you." It's vague. THE COURT: Overruled. A VSDH -- my position as the GP of VSDH were the Grosses did not abide by the terms of the contract; therefore, we were not going to buy the contract -- the property back because they didn't abide by the terms of it.

Q Okay. So that's what I wanted to hear. A Okay. *450 Q So, as of May 1st, 2009, it was your position,

16 as VSDH, that the Grosses had not complied with the 17 contract; and, therefore, you had no intent as VSDH to 18 buy back the property? 19 A Yes, sir. 20 Q So would it be true that as of May 1st, 2009, 21 the Grosses could go out and sell the property because 22 there was no intent on your behalf to buy this back? 23 A I don't -- that's not what the contract says. 24 No one asked me my intent. 25 Q Let me ask you this. Is it your position that

61 you could tell the Grosses that your -- VSDH is not going to comply with this contract and they just have to wait after that, until September 1st, 2009, to sell?

A I never told the Grosses that we were not going to buy the contract back. Q Well, isn't it true, sir, that after the Grosses exercised the buyback option, which you said -- you admitted they did, you said that Van Shaw's handling this matter for me now?

A Yes, sir. Q And that's the way it was going to go. You

were kind of in the mix during the sell, but when it came to dealing with the contract and things, you bowed out and let Mr. Shaw take over? *451 A Yes, sir.

16 Q And when Mr. Shaw spoke, he spoke for you and 17 VSDH? 18 A I would say, yes. 19 Q Now, was there any reason that you as VSDH or 20 you as yourself did not tell the Grosses in May of 2009, 21 look, we're not going to do this buyback because we 22 believe you already breached the agreement? 23 A Is there any reason why I did not tell them 24 that? 25 Q Yes, sir.

62 A I had no communication with them. Q Well, you had communication with him, you would

just say, "I'm referring you to Van Shaw"? A I had one phone call with Mr. Gross when I left his house. No, excuse me. I had one phone call with Mr. Shaw after I left Mr. Gross' house that I told Mr. Shaw I'm referring it to -- referring all the rest of this matter to you because of the violations in the contract.

Q So, let me get this straight. When is it that you believe you referred the matter to Mr. Shaw? A On or about -- you know, again, it's -- the date's unclear to me, but it's going to be sometime in 2008 after I visited with Mr. and Mrs. Gross at their *452 home, immediately after on the car on the ride home.

16 Q Did you ever express to Mr. and Mrs. Gross 17 that, listen, I believe you violated the contract at 18 this time? 19 A Absolutely, when I was in their house. 20 Q It's your testimony that you told them that 21 they were in breach of the agreement? 22 A I asked them -- I told them I didn't get a 23 chance to review the plans and specs, and I was looking 24 at a half-built house. 25 Q I guess we'll get back to that here in a

63 minute. What I'm really kind of interested in right now is I guess what we could agree with. But you would agree with me -- I'll move on. You will agree with me that Mr. Shaw was handling the buyback if it -- whatever is happening in that regard after May 1st, 2009?

A Yes, sir. Q And you agree with me that as VSDH, you had no

intent on following through with the buyback because of your belief that the Grosses had breached the agreement?

A At that time, I -- in May of 2009, I was -- I had -- I was not in any discussion in May of 2009, me personally, as part of VSDH. Mr. Shaw and the Grosses were in discussions, but not me.

Q Right. But you told us earlier that it was *453 your belief as of May 1st, 2009, that because the 16 Grosses had breached the contract in your mind, you did 17 not -- were not going to buy this back? 18 A Again, I'm speaking on behalf of me and VSDH. 19 But, yes, that's -- I think you could probably say that 20 for Mr. Shaw and myself both. Yes. 21 Q Would it be helpful to you if we were to get 22 you two hats, one where you could put -- 23 A It really would. 24 MR. CHAIKEN: Objection, Your Honor, 25 argumentative.

64 THE COURT: Sustained. MR. ALDOUS: I'll withdraw that question. May I approach, Your Honor? THE COURT: You may.

Q (By Mr. Aldous) The next provision of the buyback is a casualty provision, which that really relates to having insurance on the house and that sort of stuff?

A Yes, sir. Q That has nothing to do with what we're fighting

about, right? A Correct. Q Okay. This Paragraph 2 relates to buyer's

improvements. Do you see that? *454 A Yes, sir. 16 Q Now it says before commencing construction, 17 buyer will review with seller the plans and 18 specifications and receive general consent, consent not 19 to be unreasonably withheld, to proceed with the 20 improvements. Do you see that? 21 A Yes, sir. 22 Q Now as I understand it, you disagree whether or 23 not you were provided an opportunity to review the plans 24 and specifications? 25 A I don't disagree. I know I did not get to look

65 at the plans and specs. Q Well, let's be clear about what you got. The contract itself had the specifications attached to it, didn't it? Do you see that?

A Yes, sir. Q This is the Addendum B to the contract that we

referred to earlier, right? A Yes, sir. Q And you see there it says 2004 White Wing, 1092

square-foot addition casita with FR. What is that? Family room maybe?

A It could be. Q Bedroom? You know what a bedroom is, right? A Yes, sir. *455 Q And then a shared pool bath; do you see that?

16 A Yes, sir. 17 Q And then for all of the specific work that was 18 going to be completed, it had units and then the cost 19 per unit for -- and the total cost for the addition, 20 right? 21 A Yes, sir. 22 Q Now, before -- and by the way, that's your -- 23 A Initial? 24 Q -- initial down there, right? 25 A Yes, sir.

66 Q So, I mean, there's no question that you saw these specifications, right? A Yes, sir. Q And this is typically what would be attached to

a builder's contract whenever -- if you were having a home built, they would say things like this and have the specifications like this, wouldn't it?

A I think that's a real general -- I mean, it's detailed, but it's pretty general. Yes, sir. Q Detailed but pretty general? A Well, what I mean by it is you -- it's got

paint, stain, like I'm looking under paint, stain. Is it going to be bright purple or is it going to be white? I don't want bright purple on a wall. I mean, I'm *456 saying it's very -- it's got some detail, but it's

16 general in nature. 17 Q Well, let me ask you this. What is it that you 18 think that you could get from architectural plans that 19 you couldn't get from these specifications? 20 A You're going to get architectural plans with 21 more specifications, detailed specifications attached to 22 it from the architect. 23 Q Could you describe for me what you mean? 24 A When an architect designs -- I'm more coming 25 from the commercial industry. But when the architect

67 designs a building or a home or something, they design the floor plan. And then they tell the contractor via specifications what exactly they want them to build. All right. This looks more like a cost breakdown from a contractor of what's going to be built in the house, not, quote, specifications.

Q So is it your contention that the Addendum B attached to the contract is not the specification called for in Paragraph 2?

A Correct. Q So I didn't see anywhere else in the contract

where a specification was actually defined, did you? A Off the top of my head, no. I just don't remember the contract that well. *457 Q Well, I did not see anywhere in the contract 16 where it says specification means X, Y, and Z. You 17 don't have any testimony about it right now, do you? I 18 mean, you don't know that there's any kind of definition 19 in there, right? 20 A No. But I know what specifications are as I 21 explained just a minute ago. 22 Q You know what specifications are for you as a 23 commercial real estate type person? 24 A I would say most anybody in the real estate 25 business would know what that is, yes.

68 Q And then plans -- in terms of what plans are required, that's not also defined in here, is it? A As a -- you know, I think it just uses the term "plans." So, no. Q So would you agree with me that plans can sometimes -- more over time because they start off with a draft and then they go to the next draft and sometimes there's little changes, and so they have revisions. Do you agree with that?

A Probably always being revised. Sure. Q Yes. And so it doesn't say whether you, you

know, give approval based upon the first draft or the last draft or any potential revision therein, right?

A Right. *458 Q And then let's go through the next part. You 16 see the next paragraph says the attached Addendum B is a 17 spreadsheet of improvements and costs proposed by the 18 buyer who made it to the property, right? 19 A Yes, that's what we just talked about. Those 20 were more not specs, but improvements and costs. 21 Q Okay. Buyer agrees to escrow funds totaling 22 $156,871 with the title company and enter into an escrow 23 agreement acceptable to seller and buyer that outlines 24 the proposed improvements to the property and the 25 disbursements of such funds, et cetera.

69 Now you heard your lawyer stand up and tell the jury or Mr. Hickok -- I'm sorry. Mr. Shaw that this was -- never happened. What is it that never happened with regard to an escrow?

A Well, I think what -- the contract is very clear to me that the buyer, the Grosses, needed to take $156,000, okay, and put it with the title company. And the title company is outlined in this contract also. And the seller, VSDH, and the Grosses needed to enter into what's called an escrow agreement, which basically determines how the funds could move in and out of the title company for their use. And that never happened.

Q Now, this agreement that -- so when you say that the escrow agreement never occurred, are you *459 referring to the escrow agreement with the title 16 company? 17 A It's a separate agreement with the title 18 company between the Grosses, ourselves, and the title 19 company is the agent holding the money. And the title 20 company has to be party to this agreement too as to how 21 the money gets disbursed. 22 Q Well, would you agree with me that the escrow 23 agreement was basically to make sure that the money that 24 was earmarked for the building of the addition didn't go 25 to some other purpose but actually went to build the

70 addition? A I'd would say that -- MR. CHAIKEN: Your Honor, relevance. The document speaks for itself. THE COURT: Overruled. A I would say that's the general nature of the agreement, to make sure it's held by a third party as a fiduciary or somebody that's not involved in the transaction.

Q (By Mr. Aldous) All right. And you're aware that the bank that was loaning the Grosses the money to build the addition acted as the escrow agent for this particular addition?

A I had no idea that that occurred until well *460 down the road. We thought the money never got put up. 16 Q When you say "well down the road," what do you 17 mean? 18 A I would say this was supposed to happen right 19 after the agreement was signed, so I'm going to say 20 several months down the road. 21 Q Well, this agreement was signed in June of 22 2007, right? 23 A Yes, sir. 24 Q The money changed hands in late June 2007, 25 right?

71 A Yes, sir. Q When the money was changing hands, you knew at

that time that the bank that was loaning the Grosses the money to build the addition was acting as its own escrow agent?

A I had no idea. Q If you would, take a look at Exhibit No. 5 in

your book there. First of all, do you recall if you, on behalf of VSDH, went to the closing before or after the Grosses?

A I don't recall if I even went to the closing. Q All right. So in terms of a closing that

occurs, in other words, where the contracts going to be consummated and all the money that's going to change *461 hands, it can happen where one party to the transaction

16 comes in and signs whatever has to happen, then another 17 party comes in and signs. It doesn't have to happen at 18 the same time, right? 19 A No, sir, it doesn't. 20 Q And sometimes -- I think you were just alluding 21 to it. Sometimes you don't even go in. They bring them 22 to you and you sign them or you do it electronically, 23 right? 24 A Or you do it at your lawyer's office or -- yes, 25 sir.

72 Q But in this case -- you know that in this type of closing that you get a settlement statement, right? A Yes, sir. Q And Exhibit 5 is a settlement statement.

MR. ALDOUS: May I stand to do this thing? THE COURT: Just remember the jury can't

see through you, which is why I have you stay seated. MR. ALDOUS: I'm very thin. Q (By Mr. Aldous) If you look at Exhibit 5, this is a settlement statement for the closing of the sale from VSDH to the Grosses, right?

A Yes, sir. Q Now this indicates it was signed by the Grosses

down here and the closing agent for the title company on *462 6-27-07. Do you see that? 16 A Yes, sir. 17 Q Now if you will -- I mean, I don't know. 18 Apparently somebody in the government created this form, 19 but it's not the easiest thing to read. But if you 20 will, take a look at the part on the second page, Line 21 number 1303. 22 A Yes, sir. 23 Q You see that? 24 A Yes, sir. 25 Q Escrow for construction holdback, 156,871. And

73 then they have a holdback of 154,071. Do you see that? A Yes, sir. Q Is that the type of escrow you were expecting? A That is what I was expecting, yes, sir. Q Yeah. Is it -- and the reason that it was only

154,071 is because Ken and Betsy had already spent $2,800 for architectural engineering and permit. Did you get this also as part of your closing documents? I'm showing you what's been marked as Exhibit No. 22 in the notebook. If you see there, it says builder's soft cost draw request. And this was all done at the same time as the closing, 6-28-07. Do you see that?

A I see it. Am I signing that document? I can't see the bottom. *463 Q No. I didn't see that you signed it, but it 16 was all part of the closing documents, which you would 17 get a package at the end, right? 18 A I don't remember seeing this document. My 19 attorney may have seen it, but I don't remember seeing 20 it. 21 Q Well, if you would, turn to Exhibit 98. 22 A Excuse me. Which one? 23 Q 98. This is a settlement statement but it has 24 a different date on it. Do you see that? It has a 25 settlement date of June 29, 2007. Do you see this?

74 A I'm looking at it. Yes, sir. I'm looking for the settlement date. There it is, June 29. Yes, sir. Q And it has -- this has the summary of the seller's transaction, and then it's got your squiggly line down there at the bottom, right?

A Yes, sir. Q And that's your -- meant to be your signature

even though you can't read it? I mean that says -- to you, that says Doug Hickok, GP, or tell me what that says?

A It says Douglas M. Hickok as GP for the partnership. Q Okay. Well, so this is the seller's side of the closing statement that was reflected of the buyer's *464 side on Exhibit 5, right? 16 A Yes, sir. 17 Q So you have two different documents. You have 18 Exhibit 5, which is the closing from the side of the 19 Grosses, correct? 20 A Yes, sir. 21 Q And then you have Exhibit 98, which is the 22 closing side for VSDH, right? 23 A Yes, sir. 24 Q And those two together constitute the closing 25 statement, correct?

75 A Yes, sir. Q Now, you don't deny that you would have been

given a copy of the closing statement signed by the Grosses if they signed it two days before you closed, which provided that they were putting this money into escrow?

A Not in all cases. I don't know if I got it or not because you're not -- you normally do not get all the information from the other side's business. They try to keep it separate. That's why you have two separate sides, two separate papers.

Q Let me just rephrase it then. A Okay. Q After looking at this, you agree that the money *465 was escrowed. It was just escrowed with the bank rather

16 than the title company? 17 A I -- looking at this, I have no idea where this 18 money got escrowed. 19 Q All right. 20 A It says -- excuse me. It says escrow for 21 construction holdback. And I do remember a letter going 22 from my attorney to the Grosses asking them where -- why 23 didn't you put up the money at the title company? 24 Q Well, I just want to make sure what we're 25 arguing about. All right. So if there really was an

76 escrow for the holdback and it was done by the lender, you'd have no objection with that, right?

A Sure I would. Q Why is that? A Because I have no idea what the agreement is

with the lender. Q Oh. A Is it to do construction two years from now,

five years from now? I don't know what their agreement is. How did they get the money? I mean, did they -- you know, the key is this, is that you wanted to make sure that the house got built, the improvements got put in place.

Q Well, what would happen if the improvements *466 didn't get put in place in this case? 16 A Liens go on the house because the contractors 17 don't get paid. 18 Q Well, what would you care? You already sold 19 the house, right? VSDH is out of it except -- unless 20 they build the addition and exercise the buyback, right? 21 A Sure. 22 Q So if they don't build the addition -- let's 23 say that they borrowed the money and they used it, I 24 don't know, to go to Shreveport and gamble, do you care? 25 A Well, that wasn't the original intent of the

77 agreement. Q Right. But, I mean, all you do is you say, hey, you didn't use it on the addition. You can't buy it back.

A Right. Q So really VSDH only had an interest in this if

there was actually going to be an addition built and it was going to be something that they wanted to do the buyback, right?

A I think that's fair. Q All right.

THE COURT: Is that a good stopping point, Mr. Aldous? MR. ALDOUS: Yes, Your Honor. *467 THE COURT: All right. It's now 12:15. 16 We'll take a one-hour lunch break. During this lunch 17 break, the jury is under the same instructions you've 18 been briefly given. You're not to discuss this case 19 among yourselves or with anyone else until such time as 20 the case has been submitted to you for your 21 deliberations. All rise. The jury is excused. 22 (Jury exits the courtroom) 23 THE COURT: All right. We stand in 24 recess. (Lunch recess taken) 25 THE COURT: You may bring in the jury.

78 (Jury enters the courtroom) THE COURT: You may be seated. Mr. Aldous, you may continue. MR. ALDOUS: Thank you, Your Honor.

Q (By Mr. Aldous) Mr. Hickok, when we left off, we were discussing the settlement statements. So I'm at Exhibit 98, which is your half of the -- that is VSDH's half of the closing statement. All right? You see that all these -- or the slots are numbered? Do you see that?

A Yes, sir. Q So No. 504 says, pay off of first mortgage

loan, Chase Bank $1,952,730.89. Do you see that? A Yes, sir. *468 Q Does that mean that when you guys sold this 16 house to the Grosses that you had to pay off a note; 17 that is, VSDH had to pay off a note in the amount of 18 $1,952.730? 19 A Yes, that's true. 20 Q Is that a -- the note that was part of the 21 construction cost for building the home originally? 22 A That was a portion of it, yes. 23 Q And is it true that the home, prior to the 24 Grosses coming and entering into this contract in 2007, 25 had been completed and sat empty for a while?

79 A Yes, that's true. Q And I believe that --

MR. ALDOUS: May I approach, Your Honor? THE COURT: You may. MR. ALDOUS: I hate to do this to you, but

I think your microphone is turned off. A You want me to speak? Q (By Mr. Aldous) I was having a little trouble

hearing you. A Okay. Q There you go.

So, while VSDH was waiting for this home to sell, it was paying the carrying cost on the note that is reflected in Exhibit 98, No. 504? *469 A Yes. We had to pay the interest carried to the

16 bank on the loan each month. Yes, sir. 17 Q I think in terms of building a spec home, you 18 wanted to sell relatively soon after you complete a 19 home, right? 20 A The sooner the better, sure. 21 Q And from your perspective as one of the 22 principals of VSDH, you know, you would theoretically 23 love it to sell while it's in construction, right? 24 A Sure, you would, but that doesn't happen very 25 often.

80 Q And then even if it doesn't sell during construction, you'd like to sell within 90 days of when the construction ended, right?

A The sooner the better. Q And in this situation, the house did sit empty

for a while? A Yes, sir. Q During the opening statements of Mr. Chaiken,

he referred to the Grosses violating the contract and moving into the house. Do you recall that?

A Yes, sir. Q When that happened -- first of all, assume that

the Grosses received the keys or something from the agent; is that right? *470 A I have no idea how they got in the house to

16 this day. 17 Q Well, suffice it to say, you didn't know that 18 they were moving in, right? 19 A VSDH had no idea they were moving into the 20 house. 21 Q I'm going to show you what's previously been 22 admitted as Exhibit 10 from your side of the equation. 23 You see here it's an email from you to Ken Gross dated 24 June 19, 2007. Do you see that? 25 A Yes, sir.

81 Q And you say, "Ken, I have no interest in rehashing the past, but I must say that I was shocked to hear that you had taken up occupancy in the house prior to closing without notifying the seller for permission. At this time, I'm only interested in the assurance that you will close the sale this week. Attached, please find an amendment to the contract that requires you to escrow an additional $25,000 of earnest money applicable to the contract price and pay an extension of $500 per day. As outlined in the amendment, the document must be executed and delivered to my attention by 4:00 central standard time today. If I am not in receipt of this fully executed amendment, I can only assume that you have no interest in purchasing the property and you will *471 immediately vacate the residence. Thanks in advance."

16 Did I read that right? 17 A Sure. 18 Q So as I understand it, you, on behalf of VSDH, 19 said, look, we didn't give permission for you to move 20 in. But since you did, I want to make sure you're going 21 to close, and so I have this amendment to the contract 22 and you either sign it or otherwise we're going to 23 assume you're not going to close? 24 A Yes. 25 Q All right. That Exhibit 3 that's in that book

82 has an amendment to the contract, right? It's on page, Gross 00030.

A I've got it. Q Okay. The amendment says the first amendment

to the new home contract is entered into between VSDH and the Grosses and then it has some recitals like saying whereas the seller and blah-blah-blah. You see all that?

A Yes, sir. Q And then it says amending provision, the

contract is hereby amended to provide that the date and time of the closing to be fully consummated and shall be extended to occur on or before noon Friday, June 29th, right? *472 A Yes, sir.

16 Q Provided, however, that as a condition to the 17 following, they shall deliver to the title company a 18 fully executed copy of this amendment, a wire transfer 19 or cashier's check made payable to the title company in 20 the amount of 50,000, which shall be added to a portion 21 of the earnest money being held -- and earnest money 22 means that's money that the buyer will give to the title 23 company whereas if they don't follow through with it, 24 then the seller gets that money? 25 A Yes, sir.

83 Q And then a cashier's check made payable to seller or wire transfer to the title company in the amount of $8,500 as a non-refundable extension fee, which shall not be credited towards the sales price. So that just means $8,500 on top, right?

A Yes. Q And that $8,500 was to correspond for the

amount of time that they were going to be in the house prior to closing, right?

A I don't know if that's the exact way it worked. It might have been from the original closing date and now this contract's being extended. So I'm not sure if it's for being in the house or not. I don't know if there's a correlation there. *473 Q Well, let me ask it just a little differently.

16 This is the amendment that you referred to in your email 17 that is Exhibit 10, right? 18 A That's probably the email that resulted in this 19 amendment. 20 Q And this amendment was signed by you on behalf 21 of VSDH, right? 22 A It was signed by VSDH. Yes. 23 Q Well, I mean, you signed it on behalf of VSDH, 24 right? 25 A Okay. Yes.

84 Q And it was signed by the Grosses, right? A Yes, sir. Q So if you, that is VSDH, agreed to amend the

contract to allow them to extend the closing and knowing that they were in the house, then you're not saying that that's a breach of the contract because the contract was amended, correct?

A I am saying that -- on behalf of VSDH, I'm saying we came to agreement after they basically jumped in and moved into the house ahead of time, which is very, very unusual.

Q Well, let me rephrase it because I think we're saying the same thing; that while it was an issue of them moving into the house, for whatever reason, whether *474 they were mistaken, you were mistaken, whatever, it was

16 resolved by the amendment that became part of the 17 contract? 18 A The answer to that -- there's no mistake about 19 moving in or moving out -- moving into a house. You 20 should never move into a house because you don't have 21 rights to do so. But it did get resolved by this 22 amendment. 23 Q Okay. So that's really not something for the 24 jury to consider one way or the other because it's just 25 been taken care of?

85 A I disagree with that. Q Well, didn't you agree by this amendment to

make that a non-issue? A I agreed that -- that this amendment resolved the problem. I don't think that anybody ought to -- when you have an agreement, you don't move into somebody else's property without asking them. Those are two separate matters. But I did resolve it through this agreement.

Q All right. And wouldn't it be true, sir, that you don't know whether or not the Grosses conversed with Mr. Buttemiller, who was the real estate agent that was representing VSDH in the transaction?

A I don't know, no. About moving into the house? *475 Q Right. 16 A I have no idea. 17 Q All right. So -- and then let's talk about the 18 rest of the addendum. Just, if you would, I think this 19 might be helpful. 20 MR. ALDOUS: May I approach, Your Honor? 21 THE COURT: You may. 22 Q (By Mr. Aldous) All right. So we agreed that 23 VSDH and the Grosses entered into this contract where 24 VSDH, if certain conditions were met, agreed to buy back 25 this property, right?

86 A Right. Q And you say that they didn't meet certain of

the conditions. So I want to -- if you would, just tell us what the reasons are why -- I mean, first of all, you agree VSDH did not buy the property back, right?

A VSDH did not buy the property back. Q Okay. Tell us the reasons why -- why didn't

VSDH buy the property back? A Well, we could start with the -- the one that's most prevalent to me, being VSDH, is that we had a contractual obligation that they were going to go and improve -- well, they were going to let me review plans and specs before improving the property. And they went ahead and improved the property without me reviewing *476 plans and specs or VSDH. Let's make sure when I say

16 "me," in this capacity -- I'll use my name -- I'll use 17 Hickok as the guarantor, but VSDH is -- or when I use 18 this terminology, VSDH is who I'm talking about at all 19 times unless I use my name as Hickok. 20 Q Could I just put review plans as one of the 21 reasons why you didn't do it? 22 A Right. 23 Q All right. So you contend you didn't review 24 plans and specifications prior to the start of 25 construction?

87 A Yes, sir. Q All right. Any other reasons why VSDH didn't

buy this property back? A That's going to be the main reason. There's other reasons, which is they did not put up an escrow account per our agreement. We have a written contractual agreement that they didn't adhere to.

Q All right. Other than the escrow clause that we've kind of alluded to briefly, anything else? Review plans, escrow?

A And part of my -- as I'm contemplating to buy back the house, if I have the obligation, if I've determined that I have the obligation to buy back the house, then they've sold the house before the end of the *477 period when I can buy the house back.

16 Q September 1, 2009, right? 17 A Yes, sir. 18 Q Okay. Any other reasons other than the three 19 that I have written up here? 20 A Those are the three that come off the top of my 21 head right this minute. 22 Q Well, I mean -- and just to be fair to you, I 23 know -- 24 A There's more. But go ahead. 25 Q But, see, that's just it. You know, this is

88 the one chance I get with you. So I want you to tell me everything that you've got on your mind as to reasons why VSDH didn't buy this house back.

A Excuse me for a minute. Let me review the contract real quick. Q All right. Would you like some Jeopardy music? I take that as a, no. A I think we can just rely on those three. Q All right. By the way, before we came into

trial today, you had previously given testimony outside of court in what's called a deposition, right?

A I did have my deposition taken. Yes, sir. Q And just for clarification, a deposition is

when you get sworn in and the lawyer on the other side *478 or whomever gets to ask you questions under oath? 16 A Yes, sir. 17 Q And even though it's not in court like this, it 18 still counts as testimony under oath, right? 19 A Yes, sir. 20 Q All right. You had a chance to review your 21 deposition before you came to trial today, right? 22 A Yes, sir. 23 Q Any recollection that you have from your 24 deposition of anything other than these three things? 25 A I'm sorry. I can't think of anything else off

89 the top of my head right now. You're free to remind me. Q No. That's all right. I just wanted you to do your thing. Now, in terms of this particular deal, you agree with me that the contract that is -- that's set forth as Exhibit 3 was signed in June of 2007, right?

A Yes, sir. Q On the page that's marked Page 29, it shows the

contract earnest money receipt of $50,000 on 6-4, 2007; is that your recollection?

A That's what the contract -- it looks like the title company stated they received it then. Q Is that when the contract becomes binding? A That's when you have consideration between a

buyer and a seller. Yes, sir. *479 Q So would it be okay with you if I said that 16 6-4-2007 was the contract date? 17 A Yes, sir. 18 THE COURT: You may approach. 19 MR. ALDOUS: I'm sorry, Your Honor. You 20 know what? I forgot. I apologize. 21 Q (By Mr. Aldous) 6-4-2007 contract date, right? 22 And we just looked at the change in the contract that 23 extended the closing to June 29, 2007, right? 24 A Yes, sir. 25 Q So we looked at your closing statement too,

90 which is Exhibit 98, which shows that you did some things on the 29th, right?

A Yes, sir. Q So we have 6-29-07 is the closing date, okay,

right? A Yes, sir. Q Now, prior to agreeing to the contract where

VSDH is selling this home, but agreeing to buy it back, do you recall meeting with Ken Gross?

A Rephrase that question for me, if you would. Q Do you have any recollection of meeting with

Ken Gross prior to the time this contract was signed? A No, sir. Q Now, you know that Mr. Gross remembers meeting *480 with you?

16 A Yes, he -- I remember reading that in his 17 deposition. 18 Q Is it you just don't have any recollection of 19 it? 20 A I have no recollection of that. 21 Q Just knowing the type of person that you are 22 and knowing that this is not the standard type deal, 23 wouldn't you want to know what sort of improvement 24 Mr. Gross is counting on in terms of adding to the 25 property?

91 A Well, it's outlined in the contract. Q All right. Did you -- as you sit here today,

and I know it's a long time ago, do you have any recollection of getting any kind of information or input as to what the addition would be except for what was set forth in the contract?

A No, sir. Q In terms of the ways this house was laid out,

was there any question in your mind as to where that addition had to go?

A Well, you could put it a lot -- there was a lot of extra land. You could have done a lot of things to that house.

Q Well, you -- just a moment. I'm sorry. I have *481 to get my brain to think for me right back here. 16 So you have no recollection of meeting 17 with Mr. Gross before the sale, and you have -- the only 18 thing that you can recall definitively that you had 19 regarding what addition they were going to build was 20 what was part of the contract? 21 A Yes, sir. I had several conversations with the 22 broker, John Buttemiller, who told me Ken Gross was a 23 builder and he would like to buy the house and do some 24 improvements to the house, which subsequently led to all 25 the language in the contract.

92 Q Well, you're an experienced real estate investor. Would you agree with that? A Okay. Yes, sir. Q And when somebody's saying they want to make

changes to the home and that that's part -- wants to be part of the deal, don't you want to know what those potential changes are?

A That's exactly why the language is in the contract; that the plans and specs have to be approved by us.

Q I see. But before you even agreed to the deal, didn't you want to know what the vision was? What are you thinking about adding on to the house?

A As far as VSDH was concerned, Mr. Gross didn't *482 have to do any improvements to the house -- 16 Q Right. 17 A -- as far as we were concerned. But if he did 18 any improvements to the house, I wanted to know that he 19 was going to do quality improvement if I had to do a 20 buyback on the house. 21 Q Well, how were the plans going to tell you 22 whether or not it's a quality improvement? 23 A Well, the plans laid out -- they give you all 24 of the specs down to the detail, what color the light 25 switches are to what kind of lights you're putting in

93 the house. And you could put in something that's very -- not very appealing, and you could put in something that is very appealing. And I used the example earlier that you could paint the walls purple or black or something like that, but the plans will say it's going to be a white wall. It's going to be this color of tile. It's going to be real detailed.

Q Is it your belief that architectural plans will show what color paint is going on the walls? A Absolutely. I just got finished remodeling my house, and I had to have the exact paint color because, you know, you can't put white down. You put down eggshell white by Sherman Williams paint.

Q On the architectural plans? *483 A On the specs that come as part of the 16 architectural plans. Keep in mind, you're using the 17 term "architectural plans." That is plans and specs in 18 my viewpoint. 19 Q Uh-huh. All right. So, if you would, I want 20 you to turn to Exhibit 24 and 25. Are you there? 21 A Yes, sir. 22 Q So Exhibit 24 is the notification -- or a fax 23 from Ken Gross to you, dated October 16, 2008. And the 24 reason Exhibit 25 is in there is to show that you 25 actually -- your fax machine received the fax.

94 A Yes, sir. Q You don't have any reason to dispute that, do

you? A No, sir. Q All right. So Exhibit 24 is this fax from Ken

Gross to you, Doug Hickok, right? A Yes, sir. Q And it has your fax number as (972)732-6644.

That's your fax number, right? A Yes, sir. Q And it says, "Subject, White Wing Cove. Doug,

I hope all is well with you and that you enjoyed your summer. We've run into Van a couple of times at the club, but our paths have not crossed. I am beginning *484 construction of the addition and wanted to show you the

16 plans for approval. If you give me an address, I will 17 be happy to send them to you for your review." You see 18 that? 19 A Yes, sir. 20 Q Now, I did not see any document that says you 21 sent them your address so that you could get a copy of 22 the plans. Have you seen that? 23 A I don't think I did. 24 Q You didn't? 25 A No, sir.

95 Q Is there any reason why you didn't just give them your address? A Well, I think Mr. Gross and I sat up a time to meet at the house -- Q Okay. A -- to look at the plans. Q So let's go through that. But, first of all, I

want to just go through this part. "In addition, I have found the roofing material and it is a very good match." Now you understood that to be the comparison of the roofing material on the main house with what was going to go on the addition?

A It appears that way, yes. Q Is that the way you took it? *485 A Probably at the time, sure.

16 Q Yeah. It says, "As you know, this roof is over 17 80 years old and came off of another home, so we had to 18 go on an extensive search. You may recall that there is 19 some light green tiles and they were very difficult to 20 find, but I was able to locate those as well. I wanted 21 to get as close of a match as possible." And that -- 22 you would agree that that's a good thing, right? 23 A That's a good thing. 24 Q All right. "We are purchasing the tile from 25 the same company that Paul Kramer used and they

96 personally inspected the home." Now Paul Kramer is the general contractor that built the home for VSDH originally, correct?

A Yes, sir. Q All right. "They also brought out samples that

looked identical, but they obviously do not guarantee an exact match. Do you want to see the tiles as well? If so, I could arrange to have them here at your convenience."

Do you recall if you let -- when you set up the time, if you let Mr. Gross know that you'd like to see the tiles there as well?

A I do not recall. Q Okay. "I also wanted to let you know that I *486 have received little, if any, cooperation from Paul

16 Kramer in completing many of the items that were on the 17 initial inspection report. Further, he has refused to 18 warranty the home for the required one year on 19 workmanship and material. I have attached our letter to 20 him with the punch list for your review. How do you 21 want me to proceed? We certainly feel that he's 22 obligated to repair all the items on the list, many of 23 which were from the initial inspection." 24 My question to you regarding that is: Do 25 you recall ever discussing that with Mr. Kramer?

97 A No, sir, I do not. Q Did you ever check with Mr. Kramer to see

whether or not he completed any sort of repairs out there?

A No, sir, I did not. Q Okay. So as of October 16, 2008, you have this

fax from Ken Gross to you, right? A Yes, sir. Q And he's saying, hey, you want me to mail it to

you? And you said, no, I'll come out, right? A I probably said something along those lines. Q Now you set up, I believe, a time to come out

and visit for October 31st. Do you recall that? A I believe that was in an email with Mr. Gross. *487 Q All right. So why don't you look at Exhibit 16 No. 27. Do you see it? Are you there? 17 A Yes. 18 Q From you on February -- Friday, October 31, at 19 8:43 a.m., "I just left you a voice message to inform 20 you that I cannot meet today at 11:00. Unfortunately, I 21 am out of town this weekend. In summary, I will give 22 you a call early next week to schedule a time to get 23 together. My apologies." Do you see that? 24 A Yes, sir. 25 Q Now, do you recall what it was that required

98 you to go out of town? Was it some sort of emergency, vacation, what?

A It looks like we were scheduled to meet on a weekend. I'm not sure. It appears that way from that. So my wife could have had me doing something at the last minute or I -- something came up. I don't know what it was.

Q Well, you see this was sent on Friday, October 31st? A Yes, sir. Q "I just left you a message saying that we

cannot meet today at 11:00"? A Okay. Excuse me. Yeah. For some reason, I couldn't do it that -- I had to do something. *488 Q We don't know what it was? 16 A Right. 17 Q But can we all agree that it wasn't the 18 Grosses' fault that you weren't able to make the meeting 19 that day? 20 A That was me -- unfortunately, I had set up a 21 time with him that I couldn't make it. 22 Q Well, can we agree that it wasn't the Grosses' 23 fault that you couldn't make the meeting? 24 A We can agree to that. 25 Q All right. Good. So the next -- the email

99 back to you was on October 31st at 8:57, a few minutes after yours. "No problem, Doug. Just call me next week and we can reschedule. Thanks, Ken." Do you see that?

A Yes, sir. Q Was Mr. Gross accommodating to you? A Sure. Q Okay. Great. Now, the next thing that happened

was you actually went out and -- to look at the property, right?

A Yes, sir. Q Do you recall when you went? A I don't. I don't know the exact day or week.

Obviously, it looks like it had to be sometime in that next week, or it could have been the following week. *489 Q As we sit here today, you don't know whether it

16 was a week or a month after that day, do you? 17 A I do not, no. 18 Q At the time that you went out there, it was 19 your belief -- you said, I think, that it's your -- that 20 they had started construction? 21 A No. I was positive they started construction 22 when I went out there. 23 Q I misspoke. I'm sorry. The Grosses had 24 started construction on the addition when you went out 25 there?

100 A When I got to the house -- Q By the time you got there? A -- I noticed that they had started

construction. Q Right. And as you sit here today, you can't tell -- or you can't tell us how far along they were? A Well, I think I can give an estimate. I mean, I think in my deposition, I thought it was about 50 percent complete, only because there were walls up. I think I -- this is -- I think this is five, seven years ago. So there was like an addition added on over maybe the garage or something, and it was walled up. And you could see they had done some roof work. So it was what we call in the business, it was weathered in. In other *490 words, the outside was done, but none of the inside

16 finishes were in place or anything. 17 Q So it's your belief, based on your memory as 18 you sit here today, that it was more than just framing? 19 A It was -- well, I may just call it framing and 20 roofing were in place. 21 Q Okay. Now, when you were there, you walked the 22 addition; is that correct? 23 A Mr. Gross and I walked into the upper area of 24 the construction work. Yes, sir. 25 Q And you were offered an opportunity to review

101 the plans? A Yes, sir. Q Did you review the plans? A You know, sitting here today, I just remember

that I was kind of in more of a state of shock because I thought I was going out to look at the -- you know, look at the plans before the construction. And now, all the sudden, the cart was in front of the horse. I'm looking at the construction, and I haven't even seen the plans yet. But I did look at the plans. And did I look at them in detail? No, I didn't look at them in great detail.

MR. ALDOUS: May I approach, Your Honor? THE COURT: You may. *491 Q (By Mr. Aldous) I'm going to show what is

16 marked as Exhibit 125, but not admitted yet. 17 MR. ALDOUS: Do you want me to show you 18 first? 19 THE COURT: I take it that defense counsel 20 has already seen it. 21 MR. ALDOUS: Thank you, Your Honor. 22 THE COURT: You may approach. 23 Q (By Mr. Aldous) Let me show you this very 24 unwieldy set of plans here. And my question to you, 25 sir, is: Can you tell us if these are the plans you saw

102 on that day when you were there? A There is no way for me to know. I couldn't tell you. Q And -- fair enough. Let me ask it a little differently. Is it you don't recall -- no matter what I put in front of you, you wouldn't recall? In other words, even if I knew these were the plans, you just wouldn't recall?

A Here's what I recall. They were documents. I mean, these are typical plan sizes, but Mr. Gross did have plans. And we flipped through a couple of pages, and what was the contents I cannot recall.

Q Okay. So, to summarize, you looked at plans, they looked like this, but you can't tell if these are *492 them? 16 A Correct. 17 Q So in the fall of 2007, did you have a child 18 who was looking for colleges at that time? 19 A He graduated -- my first child graduated high 20 school in 2009, so the fall of 2000 -- it might be a 21 little early, so I don't know. 22 Q I'm sorry, 2008. I said 2007. 23 A Okay. Yes, sir. I would say in 2008 my child 24 was probably looking to go to school somewhere. 25 Q Do you recall going on some college visits with

103 your child? MR. SHAW: Your Honor, I object as to relevance. THE COURT: Mr. Aldous, what's the relevance? MR. ALDOUS: There's a -- my clients will testify as to a specific discussion with him concerning college visits and that sort of thing, and I wanted to see if that was within the realm of what he --

THE COURT: I'll give you a little leeway. MR. ALDOUS: Thank you.

Q (By Mr. Aldous) Were you going on college visits with your oldest child at that time? A I would probably guess so. Yes, sir. *493 Q Do you recall discussing that with the Grosses? 16 A We did. We had some, you know, just friendly 17 chat, but I do not recall the content of the 18 conversation. 19 Q Okay. Do you recall at any point in time 20 suggesting that you did not like the way the addition 21 looked? 22 A I think my response to them was -- it was 23 really straightforward and candid. Mr. Gross, I haven't 24 approved these plans. You are -- you know, you've 25 already started construction.

104 Q You specifically recall that? A I specifically recall that. And then going

from there, did we -- did we talk about the improvements and what they looked like? We walked all around the house. And I think maybe in a -- in a friendly sense I said, hey, this looks good, you know. But one thing that does jump out at me is they had also done some work in -- right off the kitchen area, which was part of the existing house. They were changing part of the existing house and not -- it wasn't new construction.

It was some -- lining up some bookcases or TV cabinet or something, and that kind of jumped out at me. And then Mr. Gross, I believe, told me he had spent maybe 40 or $50,000 more out of his pocket and wanted to *494 know maybe is there a chance that maybe you might work

16 with me on that. And I did say, no, to that. 17 Q Now you're sure that that conversation took 18 place, even though the construction was still ongoing? 19 A There is only -- I've only talked to Mr. Gross 20 once to my recollection, and it was at his house on that 21 day. 22 Q Is there anything else that you specifically 23 recall other than saying you didn't approve the plans 24 and you saw that there's some movement in the house? 25 A The only other thing I specifically recall is

105 being introduced to Mrs. Gross, who is in the kitchen area as we were going -- I think as Mr. Gross and I were going out the door.

Q Now, did you ever say to Mr. Gross, you know what, I don't like the way this looks? I would change this or that or do you have any suggestions as to what you would have done differently even as of today?

A No. I think -- honestly, I'm sitting there thinking, wow, did my partner, Van Shaw, approve these plans and I didn't know about it when I walked into this house. That's what I was thinking. And I didn't know the answer to that until I walked outside of it because I did say, Mr. Gross, you did not have me approve these plans. *495 Q Did you at any point in time, even as of today,

16 say what you believed to be a different way of or better 17 way of doing it, the addition? 18 A I don't think I would have. I mean, everybody 19 has got their own opinion of what they like. I don't 20 know that I would have said something like that. 21 Q All right. Now the plans continued. That is, 22 the building continued, and it was complete. And if you 23 would, turn to Exhibit No. 30. Are you there, sir? 24 A Yes, sir. 25 Q This is dated February 23rd, 2009, sometime,

106 obviously, after the fall. It says, "Doug, I'm finished with the addition and just wanted your final inspection and approval. I ended up going above and beyond some of the items, including a larger wet bar," you know, et cetera, et cetera. Do you see this?

A Yes, sir. THE COURT: Can the jury see behind that sign? MR. ALDOUS: I'm trying not to move it. THE COURT: No, no. I'm talking about

your -- MR. ALDOUS: Oh, sorry. Permission to move that? THE COURT: Yes, you may. *496 Q (By Mr. Aldous) You see at this point in time, 16 he says in that last paragraph, "In total, I'm 17 approximately 20 to 25,000 over our budget. Of course, 18 I will eat that amount but wanted approval on everything 19 else. In general, I would like for you to walk the 20 property and provide your overall approval. I showed it 21 to Phoebie and Jeff in the sales office, and they think 22 it is really going to add value as we originally 23 planned. Please let me know when you can come by. I 24 hope all is well with you." Do you see that? 25 A Yes, sir.

107 Q Now, you never went by to look at it; is that correct? A No, sir. Q You never responded to this by saying, hey,

listen, you already breached the agreement by not giving me the plan?

A I think my response maybe to the Grosses at that time was you're going to -- you're dealing with Mr. Shaw after this point. I didn't -- this probably got sent to me, and I don't know if I did forward it on to Mr. Shaw. I presume I did, but he was going to handle it from here on out.

Q Well, you see that this is dated February 23rd, 2009? *497 A Yes, sir. 16 Q I show that the -- that when you said that Van 17 was doing it wasn't until they actually exercised the 18 option in April, late April. Do you have anything to 19 show differently? 20 A I don't have anything to show differently, 21 other than I do know this. I think I had a conversation 22 when I left the Grosses' house after looking at the 23 plans. I immediately got in my car and I called Van 24 Shaw. And I said, "Van, did you approve the plans for 25 the Grosses to add this addition on to the house?"

108 And he immediately said, no, and he then said, "Hey, Doug, let me take it from here." And that's really about when I kind of stepped out of the -- you know, the role of being the liaison on this project.

Q Do you recall sending an email back to Mr. Gross in response to this February 23rd, 2009, email saying, "Hey, I'm not dealing with this anymore. Mr. Shaw is"?

A I may have, but I do not recall. Q Let me put it this way. Well, if you will,

look at Exhibit 35. You see that? A Yes, sir. Q The one on the bottom says, "Doug, I hope this

message finds you well. We sent this notice via fax as *498 well, but wanted to be sure you received this. Per our 16 contract dated 6-12-09 to purchase the home located at 17 2004 White Wing Cove in Westlake, please be advised that 18 we have hereby notified you of our decision to exercise 19 the option to sell back the property for the original 20 sales price of $2,851,871 on or before September 1st, 21 2009. As such, please advise us if you intend to market 22 the property or if you would like to discuss any other 23 options, including an early buyback or otherwise." 24 Now, it would appear from this email from 25 Betsy Gross that they did not know at that point in time

109 that you were asserting that they somehow breached the agreement by not providing you plans and specifications. Would you agree with that?

A I think they would have known they breached the agreement by not giving me plans and specs because they didn't.

Q So they just ignored that in this email? Is that what -- A They absolutely ignored it in the process of the contractual obligation. Q Okay. Then your response on May 1st, 2009, was, "I forwarded the attached onto Van Shaw. He is handling this matter." Now, sir, can you tell the jury another exhibit that shows that that -- that before this *499 date, May 1st, 2009, you told the Grosses to deal with

16 Van Shaw? 17 A I don't think I had any discussions with the 18 Grosses to tell them to deal with Van Shaw. 19 Q Whether by email or otherwise? 20 A No. I didn't have any case to talk to -- I 21 don't think to Mr. Gross or anybody talked to me to tell 22 them to deal with Van Shaw. 23 Q All right. So your testimony earlier when you 24 received the final walk-through approval type letter 25 from Ken Gross in February of 2009, I didn't see any

110 reference anywhere that said you had referred them to Van Shaw as a result of that email.

A I think my response to you, sir, was that at that point in time, that this matter had already been referred to Van Shaw from my being to Van Shaw, I think is exactly what I said to you.

Q All right. Maybe I just didn't hear it right. But what I'm asking is: You didn't tell the Grosses February 23rd, when you received the email saying, "I'm finished. Come look," you didn't say this matter has been turned over to Van Shaw?

A I hate to sound redundant, but I met with the Grosses one time. Q Well, even if you didn't -- *500 A And I met with them at -- 16 Q -- meet with them, you could have sent them an 17 email. 18 THE COURT: Wait a minute. You cannot 19 both talk at the same time. The court reporter can only 20 take down one person. So show one another the courtesy 21 of allowing the other to finish before you start. 22 MR. ALDOUS: I apologize, Your Honor. 23 Q (By Mr. Aldous) Mr. Hickok, just -- whether you 24 spoke to them directly or not, did you send them an 25 email, a letter, a fax, anything to indicate that the

111 matter had been turned over to Van Shaw prior to this May 1st email that I showed you?

A I don't believe I did. And I don't believe I had an obligation to tell them that. I think Mr. Shaw started communicating with them.

Q Okay. I just -- I'm probably not asking my questions very good. But -- so did you respond in any way, email, voice, or otherwise to the Grosses to their request for you to come back and look at the property on final walk through in February of '09?

A As I said, no, sir. I did not respond to that email. Q Thank you. MR. ALDOUS: May I approach, Your Honor? *501 THE COURT: You may. 16 Q (By Mr. Aldous) Now, when you turned this 17 matter over to Van Shaw as of May of 2009, do you know 18 what reasons Mr. Shaw gave the Grosses as to why VSDH 19 wasn't going to buy it back? 20 A Go ahead. Please restate that one more time. 21 Q Yeah. That probably wasn't a good question. 22 Let me rephrase it. Do you know what Van Shaw told the 23 Grosses as to why VSDH wasn't going to buy it back? 24 A I do not. 25 Q I believe that you were copied on this. Turn

112 to Exhibit 65. Are you there? A Yes, sir. Q So on May 18th, the bottom email, it shows

Betsy Gross emailing Van Shaw, May 18, saying, "Hi, Van. Thanks for your reply. I'm traveling this week," blah-blah-blah. And then there's, "As mentioned, we are very interested in discussing several options regarding the buyback and below are several possible steps. Obviously, we can follow the existing terms and consummate the buyback in September. However, we are very interested in one of several alternatives; execute an early buyback with a discount off the buyback price for said early termination, execute an early buyback but include a rental agreement where we stay in the home up *502 until September or even longer depending on the terms,

16 C, an outright purchase by us at a discounted price. 17 Recall, we gave full asking price at the time when a 18 significant discount off asking price would have been 19 realistic since the home had been sitting vacant for two 20 years. Further, as we know too well, the economy in 21 home sales have seriously at that time" -- I think that 22 probably should say seriously tanked since that time, 23 but anyway. 24 MR. CHAIKEN: Objection, argumentative. 25 THE COURT: Overruled.

113 Q (By Mr. Aldous) "A combination of one of the above and/or purchase of one Lot 111, which we previously mentioned to Doug but never heard back. Let me know next time you and ideally Doug will be out in this direction so we can set up a time to meet, maybe after you give Frank another run for his money on the golf course."

Now above that is Mr. Shaw 's statement. "Betsy, thank you for your email today. I'm glad to talk, but I want to make sure you're aware that the entity that sold the home is not financially solvent. So that will no doubt have a huge impact on our discussion. Not sure when I will be out that way, but maybe we can meet somewhere else. I'm not sure where *503 your office is, but that may be a possibility." Do you

16 see that? 17 A Yes, sir. 18 Q Now at that time, was VSDH financially 19 insolvent? 20 A No. I don't know what -- I don't know what 21 Mr. Shaw is saying from a standpoint of having a few 22 assets that had some assets. Did it have any cash? It 23 had no cash. 24 Q Do you have your deposition up there? 25 A I don't have it with me.

114 MR. ALDOUS: May I approach, Your Honor? THE COURT: You may.

Q (By Mr. Aldous) So this is a copy of your deposition I'm handing you so that you can look at it and refer to it if you need to. All right?

A Okay. Q To your knowledge, has VSDH been --

THE COURT: Mr. Aldous? MR. ALDOUS: I'm sorry, Your Honor. THE COURT: What are you attempting to do? MR. ALDOUS: I'm going to ask him the

question again. THE COURT: Okay. Page and line? MR. ALDOUS: Oh, this is at Page 54, Line *504 20, but I'm not impeaching him yet. I'm just asking a

16 question. 17 THE COURT: I understand, but you need to 18 show it to the Court. 19 MR. ALDOUS: I'm sorry. 20 Q (By Mr. Aldous) Just forget the deposition. 21 Please answer this question. To your knowledge, has 22 VSDH been insolvent since the time of this transaction 23 at any point in time? 24 A You want me to answer that? 25 Q Yes.

115 A Absolutely not. Q Perfect. Do you know why Mr. Shaw was telling

the Grosses that the entity that sold the home is not financially solvent?

A I don't know if Mr. Shaw looks at it the same way I do. There's a -- you know, if you -- you could have a hundred million dollars in property and you can't go buy a Coke because you don't have any cash. So I don't know what Mr. Shaw is thinking.

Q I see. So maybe y'all just think differently and that maybe a better way to say it would have been we are cash poor at the moment?

A That would have been more accurate. Q All right. If you would, take a look at *505 Exhibit 54. It may not be in that notebook. I'm sorry.

16 A It is not. 17 MR. CHAIKEN: I'm sorry. I didn't hear 18 the reference number. 19 THE COURT: Fifty-four. 20 MR. CHAIKEN: Five, four? Thank you, 21 Judge. Forgive me. I didn't rise when I addressed the 22 Court. Forgive me. 23 MR. ALDOUS: May I approach, Your Honor? 24 THE COURT: You may. 25 MR. ALDOUS: This has not been admitted

116 yet. THE COURT: You may approach. Q (By Mr. Aldous) Mr. Hickok, I'm handing you what's been marked as Exhibit 54. Would you take a look at it for just a second?

A Yes, sir. Q Is this a series of emails on which you were

copied between the Grosses and Mr. Shaw? A Yes, sir. MR. ALDOUS: Your Honor, we move to admit Exhibit 54. THE COURT: Any objections? MR. CHAIKEN: Objection, lacks foundation,

hearsay. *506 THE COURT: Overruled. 16 Q (By Mr. Aldous) So if we turn to the last page 17 and start with the oldest email first on Exhibit 54, 18 it's dated June 2nd, 2009. Do you see that? 19 A Yes, sir. 20 Q By the way, on the two lines, it says Van Shaw 21 and D. Hickok at Marquisgroup.net. Is that one of your 22 companies, Marquis Group? 23 A Yes, sir. 24 Q Okay. So that is your email address? 25 A Yes.

117 Q It says, "Dear Van and Doug, I heard you guys were out here beating up on Wally last week." Now that's just a way of saying you were playing golf with him, not that you were really beating Wally up, right?

A I believe so. Q I mean, you would remember if you really beat

him up, right? A Wally's a lot bigger than I am. Q All right. "Since you come here often, can we

set up a time to get together with both of you to discuss the buyback? As you are aware, we have timely invoked the buyback option and will fully cooperate with any efforts to list the home since our listing time expired as of the buyback notice. I suspect you will *507 want the home listed and shown, and we'll be happy to

16 help with those efforts. It is our understanding that 17 VSDH Vaquero Venture is still in existence; although, 18 you have stated that it is no longer financially 19 solvent. Regardless, both of you have personally 20 guaranteed the buyback in the event VSDH fails to 21 perform under the terms of the buyback option. As I'm 22 sure you can understand, we need to start looking for a 23 new home immediately so that we can move out by 24 September 1, which is only 90 days away. Time is of the 25 essence. So please let us knows when it's a good time

118 and place to meet." You see that? A Yes, sir. Q Now the response was from Van Shaw, and it

doesn't reflect as to whether or not you actually received it. But if it was a reply, it says, "Thanks for your last email. In reply, I do not recall that Doug or I personally guaranteed the agreement as you state and do not have a copy of the same. I ask that you send me a copy of that to me. I will need to examine that and the underlying agreement you refer to." Do you see that?

A Yes, sir. Q Now, first of all, you had already sent this

agreement over to Mr. Shaw, hadn't you? *508 A This agreement, I'm not sure what you're 16 referring to. 17 Q Well, the buyback agreement and all that. 18 A Again, you're going to have to be more specific 19 for me. 20 Q Well, how many agreements did you have with the 21 Grosses? 22 A Well, I didn't even know that you were talking 23 about an agreement with the Grosses. You said, "this 24 agreement." 25 Q I'm sorry. Let me rephrase.

119 A Be more specific, please. Q I'll be more specific. You had already emailed

the agreement to Mr. Shaw as soon as you received the first fax saying we want to exercise a buyback?

A Are you talking about the buyback agreement? You're saying, "the agreement." The buyback agreement, the contract?

Q Isn't it true, sir, that you sent both the contract and the buyback provision? A Mr. Shaw probably had a copy of the contract and the buyback agreement or the addendum, the whole contract from the day we closed the contract with the Grosses.

Q Do you know why Mr. Shaw is asking for a copy *509 of that from Mrs. Gross? 16 A Well, the -- make sure I understand this 17 correctly, Mr. Aldous. You're talking about the 18 contract or the agreement. He's talking about a 19 guarantee agreement, and there isn't a guarantee 20 agreement that exists. 21 Q There isn't? That's interesting. 22 If you would turn to Page 92 -- or Exhibit 92. I'm 23 sorry. Do you see the email from you to Van Shaw, Gross 24 contract for sell for your review? 25 A Yes, sir.

120 Q Do you see that? Do you see the date on it, April 29, 2009? A Yes, sir. Q That's one day after they faxed you the notice

that they wanted to exercise the buyback? A Sure. Q Did you see all the stuff attached to it? A Yes, sir. Q It includes the whole contract that was

executed, right? A It does, but it doesn't include a guarantee agreement. MR. ALDOUS: May I approach, Your Honor? THE COURT: You may. *510 Q (By Mr. Aldous) On Exhibit 3 -- or you can look

16 even on Exhibit 92, the one that you sent over to Van 17 Shaw. It has in the addendum, Addendum A, the specific 18 paragraph that is shown right there in front of you on 19 the easel. You see that? 20 A I can't see the easel, but I can see the 21 paragraph. 22 Q Well, here. I'll put it up here for you. Doug 23 Hickok and Van Shaw as partners in VSDH Vaquero, Ltd., 24 each hereby personally guarantee seller's obligations 25 under the buyback option granted from VSDH to the buyer

121 hereunder. In the event VSDH fails to perform fully under the terms of the buyback option, each of its partners set forth herein above shall be personally responsible jointly and severally to perform the obligations of VSDH under the buyback option. Do you see that?

A I see the statement. Yes, sir. Q What do you call that? A A statement. Q Just a statement? A Yes, sir. Q Does it say that you personally guaranteed the

seller's obligations? A It says -- it is a statement that says that, *511 but there is no executed agreement. Mr. Aldous, I've 16 been with real estate for a long time, and I have signed 17 lots of guarantees. And a guarantee is a separate form. 18 As I told Mr. Buttemiller -- I mean, we would look at 19 guaranteeing this project, but I had to get Van to 20 agree, Number one. And I had to have my attorney review 21 the guarantee agreement. We never got the guarantee 22 agreement. And, you know, Van wasn't about to guarantee 23 this thing, and neither was I. 24 Q Is that -- is it your testimony that because of 25 your experience, you know that this isn't a proper

122 contract term? A Absolutely. Q Let's just run through this. Does this at

least appear to say from a contract's perspective that you and Van Shaw each personally guarantee sellers -- that is VSDH's obligation under the buyback option?

MR. CHAIKEN: Objection, Your Honor. Calls for a legal conclusion as phrased. THE COURT: Overruled. He said he's familiar with this -- this process and what a guarantee looks like. So I'll allow him to answer based on his personal knowledge.

A Again, restate the question. Q (By Mr. Aldous) Sure. You would agree with me *512 that at least the way this is worded, you, Doug Hickok,

16 and Van Shaw personally -- each personally guarantee 17 VSDH's obligations under the buyback option? 18 A It -- the wording, yes, verbatim, the way you 19 read that, that says that. But a guarantee has to have 20 a personal signature attached to it, and I don't think I 21 can speak as VSDH for Mr. Shaw. Or if it says 22 Mr. Aldous guarantees this, that doesn't mean anything. 23 It has to have a signature attached to it. 24 Q Mr. Hickok, you're not a lawyer, are you? 25 A No, sir.

123 Q Did somebody tell you that you wouldn't be responsible on this guarantee if you didn't sign it in a certain way?

A No, sir. I knew that, that you have to have an agreement. You have to have a guarantee agreement like the bank puts in front of me or I would put in front of anybody else that says I personally guarantee this.

Q All right. So that's your personal belief, right? A That's my personal belief. I'm not a lawyer, though. Q All right. So why didn't you just cross this out? A There was no reason to cross it out. *513 Q Well, Exhibit No. 1, which has previously been 16 admitted, is a letter or fax from Ken Gross to John 17 Buttemiller dated 5-25-07. That is during the 18 negotiation time for this sale of this contract, right? 19 A Right. 20 Q And this says in here, "I've marked a insert. 21 When completing the improvements, buyer will review with 22 seller the plans," et cetera. You want to rely on that 23 one, right? 24 A Okay. 25 Q This says, "We would like to suggest an

124 addendum number 4 that reads, "Doug Hickok and Van Shaw, person -- as partners in VSDH Vaquero Venture, Ltd., each hereby agree to personally guarantee seller's obligation under the buyback option granted by VSDH to buyer hereunder."

A Yes, sir. Q So, you see that it was important enough to

Mr. Gross to include within the contract the addendum? A I didn't see the rest. Could you put that top -- I don't even know where that document came from. Could you go all the way to the top?

Q Yeah. A That's between -- Q It's number one in your notebook if you want to *514 look at it.

16 A It's to John -- to John from who? 17 Q From Ken Gross. You see that? 18 A Okay. Now I can see the whole thing. Okay. 19 All right. Right. And Mr. Buttemiller called me about 20 that. 21 Q All right. And then it showed up in the 22 contract? 23 A Yes, sir. 24 Q And your initials are right down there at the 25 bottom, right?

125 A My initials are on behalf of the VSDH Venture just like -- Q Well, did you -- A -- it is on every other page of the contract. Q I apologize. I didn't mean to interrupt you.

But what I'm saying is, if you believe that you could not be held responsible under this personal guarantee, why didn't you cross it out and say this isn't effective?

A I didn't have to because there's no guarantee. You have to have a guarantee agreement, Mr. Aldous. I know that much.

Q Are you saying that you wanted the Grosses to believe that this was part of the contract when you *515 believed that it wasn't? 16 A No, sir. I'm not saying that whatsoever. I am 17 saying that I expected to go to closing and there would 18 be a guarantee agreement or something there at closing, 19 and there was never a guarantee agreement. 20 Q So you agreed with it, but the fact that there 21 was no guarantee agreement meant you were off the hook? 22 A No. That just means I'm not going to -- I'm 23 not raising my hand and going I didn't -- there's no 24 guarantee agreement here at closing. I'm just signing 25 the documents I'm supposed to sign at closing.

126 Q So is it kind of like, "You know what? They're not going to make me do it. Then I'm off the hook"? A Well, you're not giving the whole state of affairs here. There's two things. I told Mr. Buttemiller that Van Shaw -- I had to talk to Van Shaw. The intent was there to guarantee this -- this --

MR. ALDOUS: I apologize, Mr. Hickok. But I'm going to object because that is hearsay when you're talking about what was said outside of court.

THE COURT: Sustained. MR. ALDOUS: And I also move to strike and

have an instruction provided. THE COURT: Motion to strike is granted. The jury is to disregard any statements that Mr. Hickok *516 says that Mr. Shaw made. 16 Q (By Mr. Aldous) Sir, Mr. Hickok, I just want to 17 know. You knew that this was a provision in the 18 contract that was important to the Grosses because they 19 added it, correct? 20 A It was a provision that the Grosses wanted in 21 the contract. Yes, it is. Did we agree to it? No, we 22 never got to where we agreed to it because we never 23 signed a document that outlines what the guarantee is 24 all about. 25 MR. ALDOUS: Objection, nonresponsive

127 portion after "yes." THE COURT: Sustained. It is now 2:30. We'll take a ten-minute recess. During this recess, the jury is under the same instructions you've been previously given. You're not to discuss this case among yourselves or with anyone else until such time as the case has either been submitted to you for your deliberations or you have been discharged as jurors.

All rise. Jury is excused. (Jury exits the courtroom) THE COURT: You may step down, Mr. Hickok. We stand in recess. (Recess taken) MR. SHAW: Your Honor, we had a discussion *517 a moment ago in the Court's chambers, and there was some

16 discussion about whether or not a conflict has arisen 17 with me as a witness. And it sounds like now that 18 conflict has arisen. I -- the Court inquired about 19 waiver. I cannot and VSDH will not waive that conflict. 20 So given that, I think I need to move for a mistrial and 21 VSDH will need to hire other counsel. 22 THE COURT: Mr. Aldous? 23 MR. ALDOUS: Your Honor, the defense has 24 waived any of this argument by, number one, originally 25 getting a continuance in this court based upon the

128 potential for a conflict, then taking no action after the Court gave them a continuance, then having me ask them repeatedly, "Are you going to withdraw? " and then not withdraw, then have me file a motion to disqualify Mr. Shaw on the basis of his representations to the Court, and have them then file a mandamus to have it set aside, have the mandamus granted and set aside, and then come back in and sit here since the time that the Court had granted -- that is the appellate court granted the mandamus and done nothing. Whatever it is, it's been waived.

Mr. Shaw's not produced an agreement, the VSDH agreement that calls for however many votes or whatever. And there's no evidence before you as to *518 whether or not it could have been waived or not.

16 But the only thing we do know is this has now come up 17 about four or five times and always been used to avoid 18 resolution to this case, and it should be just summarily 19 denied by the Court. 20 MR. CHAIKEN: May I just make one comment? 21 THE COURT: One. 22 MR. CHAIKEN: Mr. Aldous referred to the 23 defense, okay, has done this, that, and the other thing. 24 I have not made any motion. The only issue that is 25 before -- that pertains to Mr. Hickok, who is my client,

129 is the -- as the Court indicated, there may be a conflict emerging. And it may be to a point where there needs to be a waiver of the conflict. That's what we discussed in chambers. And I would represent to the Court that Mr. Hickok -- as you would expect me to have done, I conferred with him, and there's no waiver of any such conflict. There never has been. And I've always indicated I intended to call Mr. Shaw as a witness. I think the only fact difference is that today Mr. Aldous, who had previously said he probably would not call him, also indicated that he intends to possibly call him as well.

THE COURT: All right. This is what the Court's going to do. It is now 3:17 p.m. I will recess *519 for the afternoon. The parties will be allowed to brief 16 the issue. I will hear it first thing in the morning. 17 MR. SHAW: Thank you, Your Honor. 18 THE COURT: All rise. Bring in the jury. 19 (Jury enters the courtroom) 20 THE COURT: You may be seated. 21 Ladies and gentlemen of the jury, I'm 22 sorry that we kept you back in recess longer than 23 anticipated, but some issues have come up that require 24 my making some rulings before any further evidence may 25 be presented to you. As a result of that, we're going

130 to recess today. You will return tomorrow morning at 9:30 outside in the hallway. Someone from the court will let you back into the jury room at that time.

During the overnight recess, you will be under the same instructions that you have been previously given. You're not to discuss this case among yourselves or with anyone else until such time as the case has either been submitted to you for your deliberations or you have been discharged as jurors.

All rise. The jury is excused for the day. You may step down, Mr. Hickok. (Jury exits the courtroom) THE COURT: You may be seated. *520 All right. Mr. Chaiken?

16 MR. CHAIKEN: Your Honor, I just want to 17 make clear what Mr. Hickok's position is on this matter 18 that has arisen this afternoon by explaining to the 19 Court that it has always been and remains our position 20 that Mr. Shaw is a witness that we intended to call. 21 I've made that clear from day one. I've never, never 22 retreated from that position. I've also made clear from 23 day one that to the extent that there are any conflicts 24 of interest arising from that situation, Mr. Hickok was 25 not waiving any conflicts. He's not --

131 THE COURT: That part has not been made clear. MR. CHAIKEN: There has been prior discussion, I believe, in connection with the disqualification where I made clear to the Court that he was not waiving any conflicts that might exist. When the Court brought the issue up in chambers a few minutes ago, I again conferred with my client. Mr. Hickok does not waive any conflicts.

Now, having said that, I object to the continuance that's been requested. We're here. We are ready to continue forward. Mr. Hickok is prepared to go forward and try the case. But what happens is a matter between the Court and Mr. Shaw, both in his capacity as *521 a witness, as a partner in the partnership, and as

16 counsel of record. And so I just want the Court to 17 understand I'm not joining in the motion and I'm 18 prepared to move forward. But we're not waiving any 19 conflicts that arise in connection with the matter. 20 So I just want the Court to be aware of 21 what Mr. Hickok's position is because Mr. Aldous tried 22 to lump the defendants together in this matter, and 23 we're not lumped together with respect to where we're 24 at. Thank you. 25 THE COURT: Do you have anything in

132 response, Mr. Aldous? MR. ALDOUS: Your Honor, I would just say that I'll be able to produce to you about ten cases that say that if you don't move to enforce a -- an issue like this that you waive it. And this has been black letter law for a long time. And although Mr. Chaiken says that they've held onto and they don't waive anything, the law says differently. And the law's going to be the same with respect to VSDH, who represents -- who is represented by Mr. Shaw. So I'll be happy to produce those cases to you, and I'm confident I will.

THE COURT: We'll see you tomorrow morning. Let's see. What time? 9:30. MR. SHAW: All right. Thank you, Your *522 Honor. 16 THE COURT: Okay. We stand in recess. 17 (Proceedings concluded for the day) 18 19 20 21 22 23 24 25

133 STATE OF TEXAS )

COUNTY OF DALLAS )

I further certify that this Reporter's Record of the proceedings truly and correctly reflects the exhibits, if any, admitted by the respective parties. *523 WITNESS MY OFFICIAL HAND this the 10th day of October, 2015.

16 17 /s/ Cathye G. Moreno Cathye G. Moreno, Texas CSR #6076 Expiration Date: 12/31/16 18 Official Court Reporter 19

County Court at Law No. 1 600 Commerce Street, Suite 550 Dallas, Texas 75202 20 cathyemoreno@sbcglobal.net 21

(214)653-7496 22 23 24 25

134 *524 TAB 26 *525 1 REPORTER'S RECORD VOLUME 4 OF 10 VOLUMES CAUSE NO. CC-09-05232-A

VSDH VAQUERO VENTURE, LTD.

)IN THE COUNTY COURT ) Plaintiff/Counter-Defendant, ) ) ) ) )AT LAW NO. 1 )

V.

KEN GROSS and BETSY GROSS Defendants/Counter-Plaintiffs, )

) ) ) )

V.

EVAN L. SHAW and DOUGLAS M. HICKOK ) ) Intervenors/Counter-Defendants, )DALLAS COUNTY, TEXAS -------------------------------------------------------

TRIAL ON THE MERITS

------------------------------------------------------- *526 16 On the 16th day of June 2015, the following 17 proceedings came on to be heard within the presence of 18 19 a jury in the above-entitled and -numbered cause before 20 the Honorable D'METRIA BENSON, judge presiding, held in 21 Dallas, Dallas County, Texas. 22 Proceedings reported by computerized stenotype 23 machine. Reporter's Record produced by computer-aided 24 transcription. 25

APPEARANCES:

MR. STEVEN E. ALDOUS SBN 00982100 Forshey Prostok, LLP 500 Crescent Court Suite 240 Dallas, Texas 75201 (214)716-2100 ATTORNEY FOR DEFENDANTS/COUNTER-PLAINTIFFS KEN GROSS and BETSY GROSS

- AND -

VSDH VAQUERO HOMES, INC. AND VSDH HOMES, INC.

20 21 22 23 24 25

3 INDEX JUNE 16, 2015 PAGE VOL. PROCEEDINGS.............................. 4 4 MR. SHAW'S MOTION FOR MISTRIAL........... 4 4 GARCIA HEARING BY MR. SHAW............... 6 4 COURT'S RULING........................... 18 4 GROSSES' WITNESSES Direct Cross Voir Dire Vol. Douglas Hickok 23, 100 35,67 -- 4

121 115,117 Ken Gross 123 172,194 -- 4 END OF PROCEEDINGS....................... 210 4 REPORTER'S CERTIFICATE................... 211 4

EXHIBIT INDEX DEFENDANTS' NO. DESCRIPTION OFFERED ADMITTED VOL. 115 Luxury Home Magazine *528 209 210 4 16 Featuring Pictures of the Property 17 116 Photograph of the 209 210 4 18

Property 19 125 House Plans for 130 130 4 Improvements 20 21 22 23 24 25

4

PROCEEDINGS

June 16, 2015 (Off-the-record discussion held) THE COURT: All right. You wanted to say

something, Mr. Shaw. MR. SHAW: Thank you, Your Honor. Comes now VSDH and files this -- and Van

Shaw as counsel files this motion to withdraw and for a mistrial on the following facts: One, yesterday approximately 2:50 p.m. in chambers, Mr. Aldous followed by Mr. Chaiken advised the Court that they were planning to call me individually as a witness. That was on the heels of Mr. Hickok testifying regarding VSDH and particularly about the solvency or insolvency of the *529 same and then on the matters of dealing with the Grosses

16 on the buyback issue and lateraling all of that 17 communication and correspondence to Van Shaw to handle 18 for the -- for VSDH. 19 I then became concerned over DR 3.08. The 20 Court asked the parties, particularly Mr. Chaiken and 21 VSDH, if they would waive any objection to Van -- 22 THE COURT: The Court did not ask if you 23 would waive. The Court indicated that it might be a 24 circumstance where waiver would be appropriate -- 25 MR. SHAW: I stand corrected.

5 THE COURT: -- or that a conflict had arisen. MR. SHAW: I stand corrected. And Mr. Chaiken advised that Mr. Chaiken would not waive any conflict. The Court recessed so the parties could look into that issue. And I believe that the testimony that now -- Mr. Aldous today has advised the Court Mr. Aldous will not call me as a witness. Mr. Chaiken has continued to advise the Court today that Mr. Chaiken will call me as a witness. I previously had filed a motion for continuance based on 3.08. After reviewing the motion and after dealing with Mr. Aldous and the Grosses, I did not think my withdrawal was required at that time.

Mr. Aldous moved the Court for my *530 withdrawal. The Court granted it, and the Court of 16 Appeals subsequently ruled that the record was 17 insufficient to require my withdrawal at that time. I 18 did not believe my withdrawal was required until 19 yesterday on the heels of Mr. Hickok's testimony. And I 20 want to call Mr. Chaiken as a witness to testify as to 21 the facts that I will be called on. May I do that? 22 THE COURT: Are you asking for a Garcia 23 hearing? 24 MR. SHAW: Yes, Your Honor. 25 THE COURT: You may do so.

6 MR. SHAW: I'm sorry? THE COURT: I said then you may do so. MR. SHAW: Okay. Thank you. Mr. Chaiken, will you please -- THE COURT: Mr. Chaiken, raise your right

hand. (Witness sworn) MR. SHAW: Mr. Chaiken, would you please

state your name? MR. CHAIKEN: Kenneth Chaiken. MR. SHAW: You're a lawyer for Doug Hickok

in this case? MR. CHAIKEN: I represent Mr. Hickok in his personal capacity in this case. *531 MR. SHAW: You have expressed an intention 16 to call me as a witness in this case. Is that accurate? 17 MR. CHAIKEN: I have previously and once 18 again expressed my intent to call you as a witness in 19 this case. The circumstances as to why I'm calling you 20 now are different than why I was going to call you 21 previously and my expectation as to why I would call you 22 previously. 23 MR. SHAW: Did the Court of Appeals get it 24 wrong when they said that you had expressed an interest 25 to call me as a rebuttal witness -- possibly as a

7 rebuttal witness only? MR. CHAIKEN: I'm not commenting as to whether the Court of Appeals got something right or wrong. I previously had expressed an intention to call you as a rebuttal witness with regard to specific issues.

MR. SHAW: All right. And then based on the current state of affairs and Mr. Hickok's testimony of yesterday, will you please state the inquiry that you will make of me in general?

MR. CHAIKEN: Are you asking me to describe the nature of the testimony that I am anticipating eliciting?

MR. SHAW: I am. *532 MR. CHAIKEN: Well, yesterday, in response 16 to questions that were asked of him by Mr. Aldous, 17 Mr. Hickok was referred to an email that you had written 18 in which you had stated that VSDH Vaquero, Ltd., the 19 entity, was insolvent at a time when you were solely and 20 exclusively handling, for lack of a better word, 21 responses to inquiries that were made by the Grosses 22 regarding whether VSDH, the obligor under a buyback 23 obligation, was going to perform the buyback that they 24 had requested VSDH to perform. 25 Mr. Hickok was asked whether he agreed

8 with you in that statement that you had made whether VSDH was insolvent at the time that you wrote that memo, which created an adversarial response between you on that issue, at least as stated in your email, and Mr. Hickok's version as to his knowledge of what the partnership's solvency was at that time.

And because the issue relates to whether the Grosses were justified or permitted to sell the property before the buyback date and they, I expect, are going to argue that they were entitled to rely upon your statement concerning solvency as to ability to perform the buyback, meaning the partnership, I need to have you testify about the facts and circumstances that existed at the time, including any additional communications *533 that you may have had on behalf of the partnership on

16 the buyback issue. 17 And there will be a probability at the 18 very least that your testimony, while you are serving as 19 an advocate for the partnership, will be contrary to 20 testimony given by the other partner. And you will be 21 called upon to continue acting as an attorney pending a 22 judicatory proceeding, having given testimony that is 23 adverse to your client because it conflicts with the 24 other member of your client and the testimony that he 25 has given. And the purpose of the testimony relates to

9 the ultimate issue of, as I think you've described it, first breach.

MR. SHAW: Do you believe there's a genuine need for my testimony? MR. CHAIKEN: You are swarming all over this issue, okay. Your conduct, okay, as the sole and exclusive actor on behalf of the partnership, has been called into question. Mr. Aldous has called a witness to contradict you, okay, and or who has contradicted you on a statement that you made that forms the basis of his client's alleged reliance and actions.

It is absolutely material for the jury to hear what happened, what you meant, why it happened the way it did, and the totality of the circumstances. *534 Otherwise, it remains completely unaddressed by the

16 witness who -- which is you, who has the sole knowledge 17 of those relevant facts. 18 MR. SHAW: Do you believe that will be 19 material to the -- VSDH and its case and defense? 20 MR. CHAIKEN: I believe it will be 21 material because VSDH has a defense, okay, that has been 22 asserted that involves whether or not it had an 23 obligation to buy back the property under this buyback 24 option. And that defense is crucial to avoid any claim 25 for breach of the buyback obligation.

10 Now that -- that benefits Mr. Hickok as well, okay. And so it's not only essential on behalf of VSDH, but it's also essential on behalf of my client with regard to his defense as well because those defense -- that particular defense is a common defense, a shared defense. But it's essential to establishing the defense of the partnership as well as any guarantor, the partnership obligation.

MR. SHAW: Do you believe it would be prejudicial to the interest of VSDH? MR. CHAIKEN: Well, if you're called upon to testify on an essential fact related to that defense and your testimony is contrary to the testimony given by the partnership already, okay, by Mr. Hickok -- the *535 question wasn't whether he was insolvent. It was

16 whether the partnership was insolvent. Then the lawyer 17 representing the partnership in this case is going to be 18 called upon to continue advocating the defense having 19 given testimony that is adverse, okay, to the 20 partnership because it contradicts the other witness. 21 And if another lawyer was standing here 22 handling that issue, then you wouldn't have the problem 23 that is encompassed from my understanding of Rule 308. 24 But, again, I didn't intend to call you on these issues 25 until Mr. Hickok took the stand and Mr. Hickok was asked

11 to comment on whether he agreed with what you had stated in an email.

MR. SHAW: Did you anticipate that was coming? MR. CHAIKEN: Well, I heard Mr. Aldous say that he didn't think that was a material issue. But, nevertheless, it was testimony that he elicited yesterday for a specific person.

THE COURT: Nonresponsive. Yes or no, Mr. Chaiken? MR. CHAIKEN: I had not anticipated calling you on that issue prior to yesterday when the need arose to have you explain the email, et cetera.

THE COURT: Yes or no? *536 MR. CHAIKEN: I had not anticipated him 16 prior to yesterday. No. 17 MR. SHAW: Pass the witness. 18 THE COURT: Mr. Aldous? 19 MR. ALDOUS: Mr. Chaiken, you said that 20 there was a probability that Mr. Shaw will give 21 testimony that will conflict with Mr. Hickok. Is there 22 anything you're speaking of other than the solvency 23 issue that was in the email that was discussed with 24 Mr. Hickok? 25 MR. CHAIKEN: There is a possibility of

12 some other issues. MR. ALDOUS: Exactly what do you say that is going to be elicited from Mr. Shaw that is in conflict with Mr. Hickok?

MR. CHAIKEN: I have another issue of concern. But until the testimony has been elicited from Mr. Hickok, I can't say whether or not that need arises.

MR. ALDOUS: So, as of right now, the only issue that you say that there's a conflict of evidence is relating to the issue that Mr. Shaw said that VSDH was insolvent and Mr. Hickok testified that it was not insolvent? Yes or no?

MR. CHAIKEN: I can't answer your question as a yes or no based upon the way you phrased it. *537 MR. ALDOUS: What about my question is 16 somehow confusing? 17 MR. CHAIKEN: Well, you asked me about an 18 issue, and then you talked about insolvency. The issue 19 is the defense and how that testimony on insolvency 20 relates to the defense. 21 MR. ALDOUS: No. Let me ask the question 22 again because I probably didn't ask it right. 23 MR. CHAIKEN: Okay. 24 MR. ALDOUS: What fact do you expect to 25 elicit from Mr. Shaw that is in conflict with what

13 Mr. Hickok said other than the issue of the solvency of VSDH on or about May 18, 2009?

MR. CHAIKEN: Well, if Mr. Hickok states what he stated in his email -- I'm sorry. Mr. Shaw states what he stated in his email, then I expect that he is going to testify directly in conflict with what his client representative, Mr. Hickok, at least representative for purposes of that testimony, testified on the question of insolvency. And I expect that there may be -- there may be some other adverse points that are raised through Mr. Shaw's testimony concerning what he had communicated to the Grosses, but I don't know specifically what those are until I ask him the questions. *538 MR. ALDOUS: So, to summarize, the only

16 issue of which you're aware right now in which 17 Mr. Shaw's testimony might be adverse to Mr. Hickok's 18 testimony is the issue relating to the solvency of VSDH 19 as it's reflected in the email? 20 MR. CHAIKEN: No, that's not correct. 21 MR. ALDOUS: Oh, my God. Objection, 22 nonresponsive. 23 THE COURT: Sustained. 24 MR. ALDOUS: Can you answer the freaking 25 question or not? Excuse me.

14 THE COURT: That is inappropriate, Mr. -- MR. CHAIKEN: You know, I resent that

because your question was "correct or not." THE COURT: Mr. Chaiken, I don't care if you resent it. Just answer the question. MR. CHAIKEN: It's not correct. Your question was: Was it correct? MR. ALDOUS: I just want to know -- so can you tell the Court -- can you articulate right now what issue you're going to elicit from Mr. Shaw that is going to conflict with Mr. Hickok's testimony, other than the issue relating to the solvency of VSDH? If you can't articulate, say you can't.

MR. CHAIKEN: At this time, that's the *539 specific fact that I can point to that would be adverse 16 to the interest of the partnership. 17 MR. ALDOUS: And would you agree with me 18 that the email that is currently in evidence that 19 reflects that Mr. Shaw said that VSDH is insolvent in an 20 email to the Grosses has been in this case since prior 21 to 2013? 22 MR. CHAIKEN: Well, first of all, the 23 email doesn't say that VSDH is insolvent. It says that 24 VSDH is not solvent, which may have a different meaning 25 than insolvency. Second of all, it has been in the

15 case; but my need to call Mr. Shaw to testify about what he meant didn't arise, okay, until Mr. Hickok responded to your question about insolvency yesterday.

MR. ALDOUS: So when Mr. Shaw explained what he meant in his email, how is that harmful to either Mr. Hickok or VSDH?

MR. CHAIKEN: If he testifies that the entity was insolvent, okay, on the date that he wrote that email, then he is testifying adversely to the -- and giving testimony that is adverse to the partnership because the other partner has already testified that it is not and was not insolvent at that time. So you have a conflict between the two partners, one of whom is continuing to serve as the advocate for the partnership *540 which would be prejudicial to have the advocate

16 testifying adversely to the interest of the partnership 17 on a material defense. 18 MR. ALDOUS: Is it also possible that 19 Mr. Shaw will give testimony which is entirely 20 consistent with Mr. Hickok's statement that insolvency 21 could mean cash poor as opposed to traditional 22 insolvency? 23 MR. CHAIKEN: It is possible that 24 Mr. Hickok -- I'm sorry -- Mr. Shaw will testify that 25 what he said in the email isn't what he meant and that

16 the jury will perceive him to be other than truthful with respect to --

THE COURT: That's not the question. MR. CHAIKEN: It's possible he could say a

great many things. I don't know what he's going to say. MR. ALDOUS: And is it also true that as you stand here right now there is no other fact that you believe is crucial to establish with Mr. Shaw, other than to explain his testimony concerning his email?

MR. CHAIKEN: Well, I think there are many other facts that are crucial to establish with Mr. Shaw, but none that I can think of at the moment that would be adverse to the partnership or its defense.

MR. ALDOUS: Pass the witness. *541 MR. SHAW: The DR speaks in terms of 16 belief that the lawyer is or may be a witness necessary 17 to establish an essential fact. You testified that, 18 depending on some testimony from Mr. Hickok, there may 19 be another area of inquiry where you would think I would 20 be in violation of the DR. Is that accurate? 21 MR. CHAIKEN: I can conceive of -- 22 THE COURT: Yes or no? 23 MR. CHAIKEN: Well, the answer that I gave 24 earlier was that there may be, but I can't articulate it 25 right now.

17 MR. SHAW: Okay. I pass the witness. MR. ALDOUS: Nothing further. THE COURT: All right. The Court has in

front of it a copy of Mr. Shaw's motion for continuance filed on December 6, 2013, where Mr. Shaw specifically states that he will be prohibited from serving as trial counsel if he is called as a fact witness, and cites to Rule 3.08 of the Disciplinary Rules of Professional Conduct. A continuance was granted with respect to that.

After the testimony that arose yesterday, Mr. Chaiken, you stated on the record, "Your Honor, I just want to make it clear that Mr. Hickok's position on this matter that has arisen this afternoon, I was *542 complaining to the Court that it has always been and

16 remains our position that Mr. Shaw is a witness, and we 17 intend to call him. And I made that clear from day one. 18 I have never, ever retreated from that position. I also 19 made clear from day one that to the extent that there 20 are any conflicts of interest that arise from that 21 situation, Mr. Hickok was not waiving any. He is not." 22 So your testimony today is that you said 23 you were only going to call Mr. Shaw for rebuttal, but 24 yesterday on the record what you said was that you have 25 maintained from the beginning that you were always going

18 to call Mr. Shaw. MR. CHAIKEN: For rebuttal is what I intended. THE COURT: You didn't say rebuttal yesterday. MR. CHAIKEN: I wasn't asked that issue, that question. THE COURT: No, that was voluntary. You made a voluntary statement. Trial will proceed. MR. SHAW: Thank you, Your Honor. THE COURT: Also, yesterday we discussed

time limits. The Court has decided that each party will have ten hours, except the defendants will be splitting *543 their ten hours, five hours each if you so choose,

16 however you want to spend your ten hours since you are 17 aligned, with the exception of that one area. 18 Yesterday we spent -- let's see, I have to 19 figure how much of the time was spent on direct versus 20 cross-examination. 21 MR. SHAW: He hasn't been crossed yet. 22 MR. CHAIKEN: There's been no 23 cross-examination yet. 24 THE COURT: There were some objections and 25 some -- let's see. What else did we have? We'll skip

19 the objections. I don't think they were that significant. It appears that we started yesterday in direct examination. It looks like we started before lunch. Okay. We started with Mr. Hickok at 11:23. We stopped for lunch at 12:15, if I'm not mistaken. Yes. We started after lunch at 1:22. We took a recess at 2:30, actually 2:31. And then after that, we did not resume any questioning. There was discussion on the record about Mr. Shaw's motion.

MR. ALDOUS: Your Honor, I show that is two hours and one minute. THE COURT: All right. That leaves you seven hours and 59 minutes. MR. ALDOUS: Thank you, Your Honor. *544 MR. CHAIKEN: Your Honor, may I ask for 16 clarification on that? The time limits are for what 17 specifically per side; case in chief? 18 THE COURT: Yes. But if you take up an 19 excessive amount of time on someone's cross-examination, 20 that will count against you. 21 MR. CHAIKEN: Will the Court let us know 22 if that time's being charged against us as we go? 23 THE COURT: Yes. 24 MR. SHAW: So just to get this straight, 25 the cross-exam time doesn't count against the party

20 itself, that's asking the cross-exam questions; is that accurate?

MR. CHAIKEN: Unless it's excessive is my understanding. THE COURT: All right. We'll get the jury and get started. We stand in recess. (Recess taken) THE COURT: Mr. Chaiken, Mr. Shaw, have

you determined how you will split your hours? MR. SHAW: No, Your Honor. May we discuss it over lunch and then report? THE COURT: You may. MR. CHAIKEN: Your Honor, may I ask a

question? *545 THE COURT: You may. 16 MR. CHAIKEN: Ultimately, does it matter 17 how we're going to do it if it's just between the two of 18 us to split it? 19 THE COURT: Yes. 20 MR. CHAIKEN: Okay. I was only asking 21 because we need to declare before we -- we need to 22 declare before we get up to our case in chief? 23 THE COURT: Yes. How else will I keep 24 time? 25 MR. CHAIKEN: Because it's a total amount

21 of time in the defendants' case in chief, so the defendants' case in chief is -- the Court has indicated is a combined case in chief, so it's just running time.

THE COURT: You've had separate time for opening and you asked for separate time for close, so there will be separate time for your examination.

MR. CHAIKEN: Are we on the record? THE REPORTER: I am. Am I not supposed to

be? MR. CHAIKEN: I would just like to interpose an objection to that time constraint. I don't believe it's an authorized time constraint under the Texas Rules of Civil Procedure. Having said that, I'll honor the Court's request. *546 THE COURT: So noted.

16 MR. CHAIKEN: And I would just observe 17 also for the record that on the issue of opening and 18 voir dire, the Court gave the defendants a combined 19 amount of time to use however they saw fit without a 20 declaration in advance of who was going to use how much 21 time. That was the block time. 22 THE COURT: I did specifically ask the 23 parties how they were going to do it. And, in fact, 24 during voir dire, you had separate time from Mr. Shaw. 25 MR. CHAIKEN: Your Honor, Mr. Hagood --

22 Mr. Hagood took some of the blocked time that had been allocated to the defense on a combined basis, and then I just took the rest of the time. I'm sure that it was all recorded on how much time total was spent. But there had not been an advance declaration that Mr. Hagood would take X amount of time or that we would take Y amount of time.

THE COURT: I believe we had discussed that in advance, but I think the issue is -- MR. CHAIKEN: And I'm not trying to quarrel with the Court. I just want to make a record that we're --

THE COURT: And you've done it. MR. CHAIKEN: -- that we're on the second *547 day of trial, and we're getting a time limitation

16 imposed that had not been previously imposed. And now 17 the Court has asked for the defense to predict what the 18 split of a block amount of the defense case in chief is, 19 and I just -- I object to the request, but I'll answer 20 it for the Court. 21 THE COURT: All right. Dan, you may 22 bring in the jury. 23 All rise. 24 (Jury enters the courtroom) 25 THE COURT: You may be seated.

23 You may continue, Mr. Aldous. MR. ALDOUS: Thank you, Your Honor.

DOUGLAS HICKOK,

having been first duly sworn, testified as follows: CONTINUED DIRECT EXAMINATION BY MR. ALDOUS: Q Mr. Hickok, we were -- when we left off yesterday, we were discussing the guarantee language that's in the contract. I don't want to rehash that, but I do want to ask you some questions. Now, you indicated that you're an experienced real estate investor; is that accurate?

A Yes, sir. Q So you know the Secretary of State has records *548 that reflect every time somebody opens a company or

16 establishes a company. You're aware of that? 17 A I would say, yes, as a corporation, I think, or 18 a limited partnership. But not as a -- maybe as an 19 assumed name also. But I'm not positive on all of that. 20 I'm not a lawyer. 21 Q So, would it surprise you at all to find that 22 you are a member or a -- in some capacity associated 23 with over 40 entities that do real estate investing? 24 MR. CHAIKEN: Your Honor, objection, 25 relevance.

24 THE COURT: Relevance, Mr. Aldous? MR. ALDOUS: Your Honor, this is relevant

to whether or not he has a true belief as to whether the guarantee is effective or not.

THE COURT: I'll allow it. THE WITNESS: Yes, I would say that's

probably true. MR. ALDOUS: May I approach, Your Honor? THE COURT: You may.

Q (By Mr. Aldous) When we were visiting yesterday, we talked about the three reasons why you indicated VSDH did not repurchase the home. And one of the ones that you said and the last one that's up there is that the Grosses sold the home prior to September *549 1st, 2009, right?

16 A Yes, sir. 17 Q So if you look at Exhibit No. 3, which is in 18 the notebook there in front of you, it has the contract, 19 right? 20 A Yes, sir. 21 Q And the language that you're referring to is in 22 the addendum that's attached to the contract and 23 specifically the portion that is labeled B, correct? 24 A Correct. 25 Q The section says that if the buyer -- and

25 that's the Grosses, right? A Yes, sir. Q -- timely and properly exercises the buyback

option, which you and I agreed yesterday that they -- they timely did it, whether or not you agree that they were entitled to it is a different issue. But they timely did it?

A Yes, sir. Q The buyer may not sell or convey any right,

title, or interest into the property to any third party unless seller breaches its obligation to repurchase the property pursuant to the buyback option due to no fault of the buyer. Did I read that right?

A You did. *550 Q Now, would you agree with me that if the jury 16 determines that VSDH breached the obligation to buy back 17 the property, then the Grosses were free to sell it? 18 A I mean, I'm not a lawyer, but it could read 19 that way, I guess. It's more of a legal response 20 probably. 21 Q Now in your experience, would you agree with me 22 that if someone says that they're not going to perform, 23 that's the same thing as saying we're breaching the 24 contract, if there's no excuse? 25 MR. CHAIKEN: Objection, calls for a legal

26 conclusion. THE COURT: Overruled. A I don't think I'm equipped to answer that. Q (By Mr. Aldous) All right. So would it be true

then you don't know if -- if you tell someone -- if a contract says I'm supposed to pay you for your wages and somebody -- and then you say I'm not going to pay your wages, you don't know whether or not you have to wait until the end of the pay period to see whether they pay or if you can take their word for it?

A Correct. Q All right. When we spoke earlier or yesterday,

you agree with me that because of the various reasons that you had given as of May 1st, 2009, VSDH was not *551 going to buy this property back, correct?

16 A Restate the question again please. 17 Q Yesterday when we were talking, I asked you, as 18 of May 1st, 2009, when the Grosses exercised the buyback 19 option, at that time you had already determined that 20 VSDH was not going to perform the buyback, correct? 21 A I said that -- I believe I said that the 22 Grosses were in default of the contract. I don't know 23 -- I'd have to -- I don't know if I said that they -- we 24 would not buy it back. 25 Q Let me ask it a little differently. Would you

27 agree that because of your belief that the Grosses were in violation of the contract, VSDH had no intention to honor that buyback as of May 1st, 2009?

A I mean, I totally disagree with that. I think we have the opportunity to look at buying it back if we want to buy it back. We could -- you know, VSDH could do what they want to whether they were in default or not.

Q All right. And so it's your position now that it was at that point, that is May of 2009, it was VSDH's option to either exercise -- to go ahead and buy back the property or not?

A VSDH could look at the situation and determine if they wanted to buy it back. *552 Q Now, we also looked at the emails particularly 16 at May of 2009, where you said that from now on Van Shaw 17 is handling this matter on behalf of VSDH. Do you 18 recall that? 19 A I recall looking at emails. Yes, sir. 20 MR. ALDOUS: May I approach, Your Honor? 21 THE COURT: You may. 22 MR. ALDOUS: I need to just make sure that 23 this is in evidence. 24 Q (By Mr. Aldous) If you would, turn to Exhibit 25 38. This has previously been admitted into evidence in

28 this case. First of all, you see that this is from Mr. Gross to both you and Van Shaw. Do you see that?

THE COURT: Excuse me, Mr. Aldous. I think you're going to need to move this so that the jurors can see.

MR. ALDOUS: Oh, yes, ma'am. Q (By Mr. Aldous) Do you see that? A Yes, sir. Q It says, "Van, per your offer yesterday to

allow us to enter into an agreement with a prospective buyer, can you give us that agreement? Recall that our contract says that after May 1st, 2009, if we enter into a contract to sell the home, the buyback option goes away. Please confirm that we can enter into a contract *553 and a sale while not altering the buyback language and

16 responsibility as it exists in our contract. It is in 17 everyone's best interest to list and sell the property 18 now, thus mitigating damages." 19 Do you recall receiving the email that is 20 Exhibit 38? 21 A I do not. No. 22 Q Do you recall whether or not you responded to 23 the email that is Exhibit 38? 24 A I do not recall. 25 Q Do you recall whether or not Mr. Shaw responded

29 to the email that is Exhibit 38? A I do not recall. Q So, as we sit here today, you have no

recollection of whether or not either you or Van said to Mr. or Mrs. Gross, "Sure, go ahead and sell the property if you feel like you need to"?

A Not to my knowledge. No. Q All right. And would it also be true that you

have no recollection of saying, "No, don't sell the property because we still might exercise the buyback option"?

A That -- rephrase that. Q I said can I also assume that you have no

recollection of sending an email saying to the Grosses, *554 "Do not sell the property because we could still 16 exercise the buyback"? 17 A That's true. 18 Q All right. If you would, turn to Exhibit 59. 19 And I'm sorry. Before you do that, I just want to put 20 this back up here, Exhibit 38. Do see the date on this, 21 June 28, 2009? 22 A Yes, sir. 23 Q Are you aware of whether or not the Grosses had 24 a meeting on that day with Mr. Shaw? 25 A I'm not aware of that. No.

30 Q All right. Let me go ahead and-- MR. ALDOUS: May I approach, Your Honor? THE COURT: You may.

Q (By Mr. Aldous) I want to go ahead and write this date on here. So we know that in May of 2009, the Grosses exercised the buyback, right?

A Yes, sir. Q And we know that as of Exhibit 38 on June 28,

2009, the Grosses said, "Will you agree to let us sell the place," right?

A Yes, sir. Q All right. Now if you would, turn to Exhibit

59. MR. ALDOUS: And I'm sorry, Your Honor. *555 Can I take that down now? 16 THE COURT: You may. 17 Q (By Mr. Aldous) Exhibit 59 is an email, once 18 again, from Mr. Gross to you and Van Shaw, dated August 19 18, 2009. Do you see that? 20 A Yes, sir. 21 Q It says, "Doug and Van, as you are aware per 22 our contract, our obligation on this home expires on 23 9-1-09. Since you have stated you do not intend to 24 perform per the contract, we have listed the home. We 25 had Roxann Taylor conduct an assessment of the market,

31 and she recommended a listing price of 2.5 million. Since listing, we have had few showings; however, someone today offered 2.415 million cash, but with a very short closing, one week.

Unless we hear otherwise by noon tomorrow from either of you, we will be moving forward with this deal, recognizing that there are still many issues that may stop this transaction; such as any counteroffer, the appraisal, short closing time, alternative living for us, inspection, including the items that you never repaired per our contract, and golf membership. If you'd like to discuss any of these issues, please call me." -- He gives his phone number -- "otherwise, we will assume you approve of this sale." *556 Now, do you see that, sir?

16 A Sure I do. 17 Q Did you respond at all to this email? 18 A I don't believe I did. 19 Q Do you know whether or not Mr. Shaw responded 20 to this email? 21 A I do not know. 22 Q At this point in time, is it your testimony, 23 sir, that VSDH was still willing to repurchase the home 24 pursuant to the buyback? 25 A I'm saying we were looking at the opportunity

32 to repurchase it. Sure. MR. ALDOUS: May I approach, Your Honor? THE COURT: You may.

Q (By Mr. Aldous) Exhibit 59 is dated August 18, 2009. MR. ALDOUS: May I approach the witness, Your Honor? THE COURT: You may. Is this a copy for the Court? MR. ALDOUS: Yes, Your Honor. THE COURT: You may approach. MR. CHAIKEN: Hang on just a moment,

please. You said Exhibit 63? MR. ALDOUS: Yes. *557 MR. CHAIKEN: Your Exhibit 63? 16 MR. ALDOUS: Correct. Do you need a copy? 17 MR. CHAIKEN: No. May we approach, 18 please? 19 THE COURT: You may. 20 (Sidebar conference held) 21 THE COURT: You may proceed. 22 MR. ALDOUS: Thank you, Your Honor. 23 Q (By Mr. Aldous) Now, Mr. Hickok, I'm going to 24 hand you something that's been marked as Exhibit 63. 25 I'm not going to admit this document, but can you tell

33 me if you recognize that document? A I think it's a legal -- MR. CHAIKEN: Your Honor, I'll object to the response only because to preserve the record. He was just asked whether he recognizes it, not to describe what it is. It's not being offered into evidence. I would object to any reference to what it is.

THE COURT: No speaking objections. Just answer whether or not you recognize

the document. A I really don't recognize it. I'm not familiar with it. Q (By Mr. Aldous) Sir, are you aware that you filed a case against the Grosses on July 7, 2009? *558 A I mean, this has been a long proceeding. Maybe 16 we did. We did file originally a case, I believe, as a 17 plaintiff. 18 Q That's right. And do you see the file-stamp 19 date on here? 20 A Yes, sir. 21 Q And when you say, "We filed a case against the 22 Grosses," are you referring to VSDH and you, yourself, 23 and -- 24 A I'm speaking directly on behalf of VSDH. 25 Q All right. Were you aware that you had filed a

34 petition and intervention in this case? A Maybe I did. I'm just not a legal person. I don't know what really a petition of intervention is. Q So you just got through telling the jury that VSDH was willing to buy the property back on August 18, 2009, but you had sued -- VSDH had sued the Grosses on July 7, 2009; isn't that right?

A If you say so. Q Do you find anything inconsistent in your

testimony that y'all were willing to buy back the house and the fact that you had sued the Grosses to avoid buying back the house in July of 2009?

MR. CHAIKEN: Your Honor, argumentative and mischaracterizes the witness' prior testimony. *559 THE COURT: Overruled. 16 A I'm not sure that we sued the Grosses for the 17 reasons you're stating. I think we probably sued the 18 Grosses because they didn't do what they said they were 19 going to do under the terms of the contract. That 20 doesn't mean we would not buy back the house. 21 Q (By Mr. Aldous) So as I understand it, despite 22 the fact that -- 23 MR. ALDOUS: May I approach, Your Honor? 24 THE COURT: You may. 25 Q (By Mr. Aldous) On July 7, despite the fact

35 that VSDH sued the Grosses on July 7, 2009, it's your testimony that you were still willing to perform on the buyback?

A My testimony is, sir, as part of VSDH had a right under the contract until September 1 of 2009 to buy back the house.

MR. ALDOUS: I'll pass the witness, Your Honor. THE COURT: Mr. Shaw. MR. SHAW: Thank you, Your Honor.

CROSS-EXAMINATION BY MR. SHAW: Q Doug, give us a little background on you, please. How old are you? *560 A I'm 58 years old. 16 Q What town do you live in? 17 A Dallas, Texas. 18 Q All right. Are you married? 19 A Yes, sir. 20 Q How long have you been married? 21 A Probably pushing a 30-year anniversary. 22 Q And you have two children? 23 A Two boys. 24 Q Their ages? 25 A Twenty-five and 23.

36 Q All right. Went to grade school in Dallas? A Yes, sir. Q Where did you go? A Well, grade school goes back to Withers

Elementary, when I met you, all the way through W. T. White High School, part of the DISD.

Q All right. You got out of W. T. White in what year? A 1974. Q And then you went to college. Where did you

go? A I spent one year at Texas Tech University and then I transferred from there to the University of Texas in Austin. *561 Q Graduated from the University of Texas

16 approximately when? 17 A Four years later in 1974. Excuse me, 1978. 18 Q In 1978? 19 A Yes, sir. 20 Q All right. The -- and then you went to work, 21 right? 22 A No, sir. I worked my way through college, and 23 so I worked when I was in college, as I did in high 24 school. But I also went to work immediately the day 25 after I graduated.

37 Q All right. Tell the jury a little bit about your working career, please. A Oh, goodness. I started in college as a bank teller, just, you know, learning how to -- you know, I had to fend for myself, so I had to get a job as a bank teller. If I could count, they hired me. But so I did that. And then when I graduated college, I went to work for a bank called Capital Bank here in Dallas at Mockingbird and Central. I believe I spent five years there before Citibank in New York hired me away to participate in their Dallas office here in Dallas.

Around 1986 -- and don't hold me to these exact dates. It's been a while ago. In 1986, I split off from Citibank and went to work for a real estate *562 firm here in Dallas by the name of Hampton Partners.

16 Hampton Partners was a small real estate firm that just 17 basically helped finance people -- looked for financing 18 to buy projects. 19 On or about 1991, our family moved to 20 Austin just for quality of life to raise two boys -- 21 well, one boy at the time. Our second son was born in 22 Austin. I set up my own firm called the Marquis Group. 23 And at that point in time I just really started on an 24 endeavor. It was -- I mean, I was going to have to go 25 work at McDonalds or try to make a real estate deal.

38 And I learned through my history of just being a banker how to try to put transactions together, and I bought my first apartment complex down in Austin adjacent to the University of Texas.

Q All right. And since that time, you've been doing what? A Since that time, I've been a real estate investor on my own, forming partnerships with various people.

Q You and I have been friends, we told the jury, a long time, right? A Yes, sir. Q You worked at Wolf Nursery in college. I

worked across the street at the carwash. *563 A Well, that was high school, by the way; but, 16 yes. That was a long time ago. 17 Q And my boys are the same ages as yours? 18 A Yes, sir. 19 Q And we've been friends forever? 20 A Yes, sir. 21 Q I've been an investor with you many times? 22 A Yes, sir. 23 Q The -- presently -- so it came about on these 24 -- this house -- how did it come about that this house 25 came to get built between the -- by VSDH?

39 A I think you and I came to -- met one day and talked about building a couple of spec houses with a mutual friend, Paul Kramer, in that subdivision. And we decided we'd go ahead and do it. He built quality homes and we'd get together and build a house together.

Q And we built two next door to each other. Wally Maya owns one now and then we're talking about the one the Grosses were with; is that right?

A Yes, sir. Q Okay. The -- now let's talk a little bit,

please, about the exhibits. I want to show you the exhibit. Can you see the screen, the front?

A Yes, sir. Q Okay. Do you have a monitor there? Does this *564 come up on your monitor too?

16 A Yes, it does. 17 Q Okay. So we looked at this before. This is 18 the entity and this is the Grosses, right? 19 A Yes, sir. 20 Q And then this is a multi-page contract, right? 21 THE COURT: Mr. Shaw, just a second. 22 Yes, Mr. Aldous. 23 MR. ALDOUS: Could you -- I just didn't 24 know which exhibit. 25 MR. SHAW: Defendant's Exhibit 6. I mean

40 -- well, Plaintiff's Exhibit 6. Q (By Mr. Shaw) Now that thing has a signature page on it, and Mr. Aldous showed it to you earlier. Is that right?

A Yes, sir. Q Now we see the signature page. That's

Mr. Gross, that's Mrs. Gross, that's you. A That's me on behalf of the partnership. Yes, sir. Q Right. It's got a seller. It's got another line if you were going to sign it individually. MR. ALDOUS: Objection, Your Honor, leading and legally irrelevant. THE COURT: Sustained. *565 Q (By Mr. Shaw) All right. Did you sign down 16 here under seller? 17 A No, sir. 18 Q Individually? 19 A No. 20 Q Did you ever sign this document individually? 21 A No form or fashion did I sign it as an 22 individual. 23 Q Now, this document also has some reference to 24 some lawyers; is that right? 25 A Yes, sir.

41 Q And it had a lawyer for the Grosses, the buyer's attorney; is that right? A Yes, sir. Q Mack Zimmerman. And it's got the seller's

attorney. That's VSDH. And that's Hap Stern; is that right?

A Yes, sir. Q All right. Now the document also had some

contact information; is that right? A There's notice provision. Yes, sir. Q All right. And this address here for seller,

5305 Village Creek, Plano, what's that? A That's my office address. Q All right. Was that your office address then? *566 A Yes, sir.

16 Q And now? 17 A Yes, sir. 18 Q Continuously? 19 A Yes, sir. 20 Q It has your address and it has your email; is 21 that right? I'm sorry. Your phone, your fax, and your 22 email; is that right? 23 A Yes, sir. 24 Q So all of that information is contained in the 25 original contract; is that fair?

42 A Sure. Yes, sir. Q Okay. Then we talked about -- or at least I

think I've shown this page before to the jury. It's Page 7. And it's got this Section 22, agreement of the parties. Do you see that?

A Yes, sir. Q Is this significant to you? A Very significant because it lists the other

parts of the contract that are not the normal form, which is that Addendum A and Addendum, I think, B.

Q Okay. What about cannot be changed except by written agreement? A Oh, absolutely, yes. Q Why is that significant? *567 A Well, that makes the -- that constitutes the

16 contract. You've got to make sure everything is in 17 writing. 18 Q Okay. The -- and why is that important? 19 A Well, I think any time you have an agreement, 20 you want it to be in writing so there's not hearsay. 21 Q Okay. The -- and are the written terms 22 important in your mind? 23 A They are most important. 24 Q Okay. Addendum A, Mr. Aldous went over this 25 with you some. I want to spend a moment with you on it.

43 Okay? A Yes, sir. Q So Section 1, buyback, VSDH, the seller, grants

the Grosses, as buyers, the option, the buyback. You see that?

A Yes, sir. Q And what's the significance, if any, to you of

this September 1, 2009 date that's reflected in there? A Well, that's the outside date that was mutually agreed upon for the buyback. Q It says, "On September 1, 2009, or such earlier date as may be mutually agreed between buyer and seller." Was there ever an earlier date that was mutually agreed between buyer and seller? *568 A Not to my knowledge.

16 Q So September 1, 2009, is the date; is that 17 right? 18 A Yes, sir. 19 Q Okay. Then you get down to the buyer exercises 20 -- well, it kind of goes out of order, and I want to 21 talk about this escrow agreement first. Okay. So we 22 talked about -- or there's been some talk about the 23 buyer and improving the property. You remember that 24 discussion? 25 A Yes, sir.

44 Q Okay. And so it said, "Before commencing construction, buyer will review with seller the plans and specifications and receive general consent." Was that important to you?

A Very much so important. Q A multimillion-dollar house, right? A Yes, sir. Q What would you say about the quality of the

house that VSDH built? A I think it's top quality. Q Okay. So why was this section important to you

about -- about making sure that you generally agreed with the plans and specs of any improvements?

A Well, to preserve the integrity of the quality *569 of the house. 16 Q All right. What do you mean by that? 17 A Well, again, I think I discussed this along the 18 way that I wanted to make sure that there was going to 19 be quality construction to place in that house. I think 20 there's -- the agreement goes on to say that I need to 21 be -- you know, go out there and monitor it and look at 22 the construction and so on. But, really, it's mostly 23 about what is going to happen in that house, what's it 24 going to look like. 25 Q Okay. And you testified that these plans and

45 specs were never given to you; is that fair? A Absolutely, they were not. Q Okay. Then it talks about this escrow

agreement, right? We talked about that a little bit. A Yes, sir. Q And it talks about -- Mr. Aldous went over with

you. There's some financial pages, right? A Yes, sir. Q Okay. Addendum B, part of the contract, right? A Yes, sir. Q So this thing says, "The attached Addendum B is

the spreadsheet of improvement costs proposed by the buyer to be made to the property." Now, is that plans and specifications? *570 A It has nothing to do with plans and

16 specifications. 17 Q Okay. What are they called? What's the 18 contract identified as? 19 A They say it's a spreadsheet of improvements and 20 costs. 21 Q Okay. And what do they say up here they're 22 supposed to go over with you? 23 A Buyer will review with seller the plans and 24 specifications. 25 Q Okay. So they say -- the contract says,

46 spreadsheet of improvements and costs, total of $156,000. It says the buyer agrees to escrow the funds with the title company and enter into an escrow agreement acceptable to the seller and buyer that outlines the proposed improvements to the property and a disbursement to such funds.

Did I read that right? A Yes, sir. Q Okay. Now, what are you talking about here?

What do you understand this to mean when it says to enter into a contract with the title company acceptable to the seller and buyer that outlines the proposed improvements to the property and the disbursement. Tell the jury a little bit about what that's about. *571 A Well, what happens is if you have a buyer and a

16 seller that reach an agreement that they're going to put 17 up -- like this case it's $156,000 -- you don't want 18 them to hold the money and they don't want me to hold 19 the money, so it's held by a third party. In this case, 20 it's the title company outlined in the contract. And 21 then you enter into an agreement as to what's going to 22 happen with this money, what is all going to take place 23 with this money. So, in essence, that's what it is. 24 You have a third party and an agreement between both 25 parties, the buyer and seller.

47 Q Okay. And it talks about their -- the proposed improvements. So if this escrow -- was this thing ever followed through with your title company?

A No, sir. Q Did you ever enter into this -- it says enter

into an escrow agreement acceptable to seller and buyer. Did you ever enter into an escrow agreement acceptable to seller?

A I never entered into an escrow agreement acceptable to buyer and seller. Q Okay. Were you -- was VSDH ever given that option? A VSDH never was given that option. Q Okay. So -- and then it says, "that outlines *572 the proposed improvements." Now, you talked about

16 earlier, hey, you need to know colors and textures and 17 materials and all that kind of stuff, right? 18 A Yes, sir. 19 Q You've got a multimillion-dollar house, right? 20 A Yes, sir. 21 Q And you told us the reasons why you wanted to 22 -- why the contract says and why you wanted the rights 23 that you wanted? 24 A Yes, sir. 25 Q All right. To preserve the integrity of that

48 home, and make sure it was acceptable to you -- to VSDH? A Well, in addition, I don't want liens filed on the house by them not paying it. If they had the money and decided to --

THE COURT: Give to the bailiff. MR. SHAW: I'm sorry? THE COURT: The telephone, Mr. Chaiken,

give it to the bailiff. MR. CHAIKEN: I thought I had turned it off. I apologize. Q (By Mr. Shaw) So -- but the proposed improvements, that was most important? A Most important, most important, yes, sir. Q All right. Now, going back, this is Addendum A. *573 This is Page 2, buyer's improvements. Now going back to

16 Page 1. All right. Now it talks about the buyback, the 17 buyer exercises the buyback option. That's later in 18 time, right? 19 A Yes. That's like on May 2nd, they have to 20 exercise the buyback by that date. 21 Q It's May 1st, right? 22 A May 1st then. Okay. I'm sorry. 23 Q And you've got until September 1. VSDH has 24 until September 1, 2009; is that accurate? 25 A Yes, sir.

49 Q Okay. Now it says that the buyer -- Section B, buyer may not sell or convey any rights or interests to third parties unless seller breaches its obligation to repurchase. Now, could you breach the obligation prior to September 1?

A I don't think so. MR. ALDOUS: Objection, Your Honor. That calls for a legal conclusion. THE COURT: Sustained. MR. SHAW: Okay.

Q (By Mr. Shaw) Did you believe you had until September 1? A Yes, sir. Q Okay. The -- comes down here and it says, "On *574 or before September 1, unless buyer and seller agree

16 upon another stated date buyer shall vacate." Did I 17 read that right? 18 A Yes, sir. 19 Q Okay. Then it comes down here later on, it 20 says, "Should the buyer enter into a contract to sell 21 the property, the buyback option will immediately 22 terminate and will no longer be available to buyer." 23 Did I read that right? 24 A Yes, sir. 25 Q It's your understanding -- do you have an

50 understanding as to whether or not the Grosses entered into a contract prior to September 1, 2009, to sell the property to somebody else?

A Yes, they did. Q And do you have an understanding as to whether

or not the Grosses owned the property on September 1, 2009?

A I know they did not. Q So, were all of those dates and everything in

that contract important to you? A Yes, sir. Q That was -- was that a negotiated document? A Yes, sir. Q Between the Grosses and VSDH? *575 A Yes, sir.

16 Q Okay. Now you said earlier, you said, hey, I 17 initialed in my corporate capacity the pages of the 18 addendum, right? 19 A Yes, sir. 20 Q Okay. And you made a distinction. You said, 21 "I did not sign that document personally." 22 MR. ALDOUS: Objection, Your Honor, that's 23 legally irrelevant. 24 THE COURT: Overruled. 25 Q (By Mr. Shaw) Did you say that?

51 A Yes, sir. Q You also said that you anticipated that to --

for you to be personally liable on the buyback, you anticipated another document?

A Yes, sir. Q That's what you said? A Yes, sir. Q All right. Now, if this -- the Grosses had a

lawyer. We talked about that, right? A Yes, sir. Q And you anticipated another document. Why did

you anticipate another document if you were going to be personally liable?

A Well, because the contract is between VSDH and *576 the Grosses. It's not a contract with me. It's not a 16 contract with Mr. Shaw. It's a contract between VSDH 17 and the Grosses; therefore, something else has to be 18 signed that says that Doug Hickok's a guarantor or Van 19 Shaw's a guarantor, in this case both. 20 Q Okay. Let's look at Addendum A again. Doug 21 Hickok and Van Shaw, as partners, hereby personally 22 guarantee seller's obligations under the buyback, right? 23 A Yes, sir. 24 Q Is there any document Van Shaw signed to 25 personally guaranty that?

52 A No, sir. Neither is there one that Doug Hickok signed. Q How can Van Shaw be personally responsible if Van Shaw didn't sign it? MR. ALDOUS: Objection, Your Honor, irrelevant. He's not in the case. THE COURT: Sustained. Q (By Mr. Shaw) So, in your experience in personally -- you have personally guaranteed things before in your history?

A Yes, sir. Q And have you ever not signed an independent

document in your individual capacity if you were going to personally guarantee something? *577 A You might, yes. I probably have, but it said

16 Doug Hickok individual guarantor outlined next to it. 17 It might be on the same document, but 90 percent of the 18 cases it's a separate legal document that says guarantee 19 across the top. 20 Q And when it says Doug Hickok guarantor, do you 21 sign that Doug Hickok as guarantor? 22 A You sign it Doug Hickok with guarantor 23 underneath it. Yes, sir. 24 Q Right. And it might be some company name 25 that's also part of the entity -- part of the contract;

53 is that right? A Well, there would be a separate line for the company to sign. There would be a separate line for any guarantor to sign.

Q Okay. So when we looked at this thing, separate line for the company to sign, separate line for Hickok to sign. That's what you're talking about, right?

MR. ALDOUS: Objection, form, and that's not what the document says. That's leading also, Your Honor.

THE COURT: Sustained. MR. SHAW: Okay.

Q (By Mr. Shaw) When you're talking about separate line for the company, are you saying like this? *578 A Yes, sir. 16 Q Okay. And then you're saying a separate line 17 for Hickok as guarantor. Are you saying that would be 18 here and it might say Doug Hickok as guarantor? 19 A Yes, sir. You probably have to cross out that 20 seller and put in Doug Hickok as -- you'd definitely 21 have to put Doug Hickok as guarantor. 22 Q Okay. So you were willing to sign a personal 23 guarantee agreement if the terms were acceptable to you 24 and Van Shaw; is that right? 25 A Pursuant to my discussion with the Grosses'

54 agent, John Buttemiller, I needed to have Van Shaw and I both sign this agreement. In addition, I needed to have a separate agreement. I needed to review it.

THE COURT: Mr. Aldous? MR. ALDOUS: Your Honor, I object to the

characterization as Mr. Buttemiller as being our agent. There's no facts in evidence on that.

THE COURT: Sustained. Q (By Mr. Shaw) Okay. So, generally, if there was going to be a buyback and Doug Hickok was going to personally guarantee it or Van Shaw was going to personally guarantee it, in this situation, who would you have expected or anticipated would prepare that document? *579 A I would say the lawyers would prepare the

16 document. 17 Q The lawyers for who? 18 A It probably would have been on the buyback the 19 Grosses or our lawyer or the partnership lawyer. 20 Q Okay. The Grosses' lawyer. Did the Grosses' 21 lawyer ever send you the buyback? 22 A Are you talking about the buyback? 23 Q Yes. I'm sorry. Did the Grosses' lawyer ever 24 send you a guarantee agreement? 25 A No, sir.

55 Q Okay. You have things that you're doing in your life with your family and your business, right? A Yes, sir. Q Would you generally say you're a busy guy? A Very busy. Q Okay. Do you have more things going on at one

time than just one thing, one thing, one thing, right? A Yes, sir. Q When did you first realize, hey, I didn't sign

a personal guarantee on this thing? When did you first realize that?

A I don't know. I mean, I'm thinking back on that as part of the process of this trial, and it may have come up right when we started realizing that the *580 Grosses were in default under their contract with us

16 when we searched back through all the documents. 17 Q Okay. The -- so do you remember in May of 2009 18 when the Grosses wrote a letter about -- or wrote an 19 email about wanting to institute the buyback? 20 A I'm not -- that's not real fresh. It's been 21 placed in front of me in these proceedings, but it's not 22 fresh in my mind. No, sir. 23 Q Now that I'm thinking back for a minute, let me 24 go off track for just a minute. There's been some talk 25 of the escrow agreement and the failure of the Grosses

56 to cite that. Do you remember that? MR. ALDOUS: Your Honor, I'm not sure what exhibit -- MR. SHAW: Exhibit 29. THE COURT: Defendant's or plaintiff's? MR. SHAW: Well, it's marked here as

Defendant's, Judge, but I think it was previously -- MR. CHAIKEN: That's ours. MR. SHAW: Right. I believe that's in

evidence. THE COURT: Approach. (Sidebar conference held) THE COURT: You may proceed. MR. SHAW: Thank you, Judge. I'm going to *581 approach and ask for the witness copy, please.

16 Q (By Mr. Shaw) Sir, let me have that book for a 17 moment. Thank you, Douglas. 18 Okay. Now, do you remember this July 3, 19 2007, letter that was written from a lawyer at this 20 Smith, Stern, Friedman & Nelms firm? 21 A You'd have to show me the rest of that document 22 there. 23 Q All right. Recognize this fellow, Leonard 24 Stern? 25 A Yes, sir.

57 Q Who's that? A Leonard Stern, nickname Hap, is my attorney. Q Okay. So Mr. Stern writes this letter July 3,

2007. The closing had just been in the end of June; is that right, June 28 or 29?

A Yes, sir. Q Okay. So Mr. Stern writes and he says, "This

firm represents the seller," right? A Sure. Q That's VSDH, right? A Yes, sir. Q It says, "The closing was consummated on June

29, 2007; is that right? A Yes, sir. *582 Q And he refers to the addendum that we've been 16 talking about that addendum, haven't we? 17 A Yes, sir. 18 Q Okay. Buyer agrees to escrow $156,000 19 acceptable to seller and buyer. Remember that? 20 A Yes, sir. 21 Q Okay. Paragraph 2 of the addendum, "Contract 22 further provides that buyer will obtain seller's consent 23 to the plans and specifications applicable to the 24 improvements? 25 A Yes, sir.

58 Q Proposed performance standards, you see that? A Yes, sir. Q Okay. Now, Mr. Stern goes on. He says,

"Notwithstanding, the buyer failed or refused to enter into the escrow agreement. Instead, buyer breached the agreement with the mortgage, the First Horizon, to fund the cost. Please be advised seller reserves all rights under the contract, may be available, respectfully requests that buyer comply with all other aspects without limitation, obtaining seller's consent to the plans and specifications applicable to the construction improvements." Do you see that?

A Yes, sir. Q Satisfaction of such obligation shall be a *583 condition precedent to the buyer's right to exercise the

16 buyback option. Do you see that? 17 A Yes, sir. 18 Q Okay. Now, did the buyer, to your knowledge, 19 ever cure the default that Hap Stern's writing about 20 here July 3, 2007? 21 A No, sir. 22 Q Was that important to you that that was not 23 cured? Was that significant to you? 24 A It was very significant to me because that puts 25 him in default under the contract.

59 Q Okay. And why is that significant? A Their default? Q Yes, sir. A Well, it basically in my mind at that time, it

put the buyback in jeopardy. Q Okay. And tell me about that. A Well, if they -- if they had done what they

said they were going to do under the terms of the contract, then the contract required us to buy back the property when they asked us to buy it back. They didn't do that; so, therefore, we have a judgment call. We can buy it back if we want to, but we don't have to buy it back.

Q Okay. Now, the -- and is that what you were *584 telling the jury earlier, that you were evaluating that 16 issue? 17 A I think we had the right to evaluate that issue 18 until September 1. 19 Q Okay. Now let me show you Defendant's Exhibit 20 54, which was previously -- let me make sure it is -- 21 which was previously shown. 22 MR. SHAW: Is -- Your Honor, is Exhibit 54 23 in evidence? I believe it is. And this would be Gross 24 54. 25 THE COURT: VSDH or --

60 MR. SHAW: Gross. THE COURT: Gross, no. THE REPORTER: It was admitted yesterday. MR. ALDOUS: I believe that I offered it

after proving it up yesterday, first time. THE COURT: Okay. MR. SHAW: May I show Gross 54, Your

Honor? THE COURT: You may. Q (By Mr. Shaw) This is Exhibit Gross 54, okay, Doug. All right. Are you with me? And I believe this was gone over yesterday. Do you remember this?

A I remember the discussion about it. Yes, sir. Q Okay. And I wrote Betsy Gross June 7, 2009, I *585 said, "Thank you for the June 6th email. Please call to

16 discuss." I gave my number. "I did review the 17 enclosures you sent and note that the entity is no 18 longer the responsible party. It does not contain any 19 personal guarantee which is what I remembered. I look 20 forward to speaking with you." Do you remember that? 21 A I remember talking about it. Yes, sir. 22 Q Okay. When the Grosses triggered this buyback 23 in May, I asked you to send me the contract; is that 24 right? 25 A I believe I saw something in evidence about me

61 sending it to you at that time. Q Because I had forgotten exactly -- or did you remember in May exactly whether you had signed a personal guarantee or not?

MR. ALDOUS: Well, Your Honor, I was objecting because he started out testifying, but then he changed it to a question.

MR. SHAW: I did. I saw him stand up and I changed it. Q (By Mr. Shaw) Did you remember that -- whether you had or had not personally signed a separate guarantee agreement on this buyback in early May, 2009?

A I think I need to say that it was around -- sometime around May when my memory was reconfirmed that *586 I did not sign -- 16 Q Okay. 17 A -- a guarantee. 18 Q You had a vague recollection that even though 19 you expected to sign a guarantee, never came, you never 20 signed one? 21 A I -- at the time, I could not remember until I 22 went through the files and then -- but I'm not sure at 23 what time -- what date that was that I went through the 24 files to determine that I did not sign one. 25 Q All right. So, the way this closing worked

62 where you thought another document was going to come later, a personal guarantee, and you were going to sign it, how does that work? How do these closings, particularly this one that was kind of condensed and rushed, how does that work?

A Well, I think you -- you have a contract that's in place, right, and the contract, you know, it has certain documents or needs that have to happen at the time of the transfer of title, which is the closing date, whenever you buy something is at that point in time. So you go in -- or as I testified to, you either go in individually or you go in as both parties or they may even bring the documents to my office and they say, "Sign all this," and, literally, place documents maybe *587 about this thick. I don't know if anybody's bought a

16 house, but it's -- today, it's probably like this. But 17 it's probably like that, and then you just start signing 18 where they have their -- you know, their initials to 19 sign. 20 Q Okay. So there's a lot of documents and all of 21 them might be there in proper order at one time or all 22 of them might not; is that fair? 23 A That's possible. Yes, sir. 24 Q And sometimes there are some follow-up 25 documents needed; is that fair?

63 A Yes, sir. Q And in this case, there was a follow-up

document needed in your mind. You were ready to sign it, just never got it, fair?

A I think my position was, as I've stated earlier, that I -- as I told Mr. Buttemiller, I was willing to sign a guarantee as long as Mr. Shaw agreed to sign a guarantee, as long as it was in the form acceptable to myself on my guarantee. And then Mr. Shaw has to speak for himself.

Q The -- there was some talk, Doug, about this, about this contract. And you sent me the contents that was in --

THE COURT: Do you have an exhibit number? *588 MR. SHAW: I'm sorry. Gross 92. 16 A It looks like I sent you -- 17 MR. SHAW: Hang on just a second. Let me 18 make sure the judge confirms it. 19 MR. ALDOUS: It's in. I just didn't know 20 what number he was referring to. I'm sorry. 21 THE COURT: It's just a number. 22 MR. SHAW: Okay. 23 Q (By Mr. Shaw) So, Doug, when this document -- 24 you're sending me the contract; is that right? 25 A Yes, sir.

64 Q All right. And that's because you and I both had some foggy memory in what had happened in the last couple of years, and so we needed to see the contract to figure out what was up. Is that fair.

MR. ALDOUS: Your Honor, I object to -- THE COURT: Sustained. MR. ALDOUS: -- to the sidebar. THE COURT: Rephrase, Mr. Shaw. MR. SHAW: Yes.

Q (By Mr. Shaw) Did you have a good memory, Doug, of that contract when I asked you to send it to me? A Probably not because it was executed a couple of years earlier, so I would say, no, to that. Q Okay. If you're going to approve plans and *589 specifications on a house like this for the Grosses -- 16 and you said you went out there in November of 2008, and 17 you were surprised how far along it was, the condition. 18 Remember that generally? 19 A Yes, sir. 20 Q All right. Paul Kramer was the builder that 21 built this house, right? 22 A Yes, sir. 23 Q All right. Would you have asked Paul Kramer to 24 look at the plans and specs before you did anything? 25 A I would have definitely asked a professional or

65 somebody in the business to review the plans and specs. Q Would somebody like Paul Kramer be the person? A It could have been. Yes, sir. Q All right. And why? A Because they do it on a day-to-day basis. They

build houses. They understand and can read plans and specs much better than I could.

Q Okay. And so would you want some independent look at the plans and specs before you said okay? A Yes, sir. Q All right. Gross 38, June 28, 2009, are you

with me? A Yes, sir. Q Okay. It was written by me. Counsel talked to *590 you about it, right?

16 A Yes, sir. 17 Q It says, "Per your offer yesterday to allow us 18 to enter into an agreement, can you give us that 19 agreement? Recall that the contract says that after May 20 1, if we enter into a contract to sell the home, the 21 buyback option goes away," right? 22 A Yes, sir. 23 Q You have no knowledge of any agreement ever 24 being given to the Grosses to enter into a buyback -- 25 enter into a contract and keep the buyback option, fair?

66 A I mean, there was no -- no agreement entered into that would have rescinded the -- you know, the buyback.

Q All right. And reading that document, is there any question in your mind that the Grosses recognized that?

MR. ALDOUS: Let me just object, Your Honor, that he's asking for a speculation. THE COURT: Sustained. Q (By Mr. Shaw) After looking at the contract, was your memory the same; that if the Grosses entered into a contract to sell the home, the buyback option went away?

A That's correct. *591 Q And you believe that existed and was proper? 16 A Yes, sir. 17 MR. SHAW: That's all I have. I pass the 18 witness. Thank you, sir. 19 THE COURT: Mr. Chaiken? 20 MR. CHAIKEN: Yes, Your Honor. 21 THE COURT: No, stop. It is 12:23. We'll 22 take a luncheon recess until 1:25. During this recess, 23 the jury is under the same instructions you've been 24 previously given. You're not to discuss this case among 25 yourselves or with anyone else until such time as the

67 case has been submitted to you for your deliberations or you have been discharged as jurors. The jury is excused for recess.

(Jury exits the courtroom) THE COURT: You may step down, Mr. Hickok. THE WITNESS: Thank you. (Lunch recess taken) THE COURT: All rise. (Jury enters the courtroom) THE COURT: You may be seated. Mr. Chaiken, you may proceed. MR. CHAIKEN: Thank you, Judge.

CROSS-EXAMINATION BY MR. CHAIKEN: *592 Q Mr. Hickok, may I call you Doug? 16 A Yes, sir. 17 Q I feel kind of funny calling you Mr. Hickok. 18 I've known you for so long. Doug, I'm going to do my 19 best to try to cover some topics that I think need 20 either some clarification or new material so that we 21 don't spend too much time going over matters that have 22 been, you know, cleared up already. 23 You have an exhibit book sitting in front 24 of you, and I would like you to please turn to the 25 document that is under Tab Number 53.

68 A I do not have a 53. I only have a 52 and it goes to 59. THE COURT: Are you talking VSDH exhibits or are you talking about Gross exhibits? MR. CHAIKEN: No, this is -- 53 is -- I apologize. It is one of the admitted exhibits and -- well, let me just do this.

Q (By Mr. Chaiken) Let me show you -- can you see Exhibit 53? Well, I can't publish it to the jury. Forgive me.

Do you know who John Buttemiller is? A Yes, sir. Q Who is John Buttemiller? A I believe he's a broker or a real estate sales *593 person with the Carroll Realty.

16 Q Was he involved in the buy-sell transaction 17 between VSDH Vaquero, Ltd. and Mr. and Mrs. Gross? 18 A Yes, sir. 19 Q Can you tell the ladies and gentlemen of the 20 jury what a real estate broker does just generally in a 21 transaction of this nature in case they are not familiar 22 with what the broker's role is in the transaction? 23 A A real estate broker functions as an 24 intermediary or an agent. In the case of this 25 transaction, there was one broker. So he was an agent

69 for the Grosses and also an agent for VSDH. So that is if there is something we don't converse -- the Grosses and VSDH don't converse a lot, a lot of the language, a lot of the negotiation is handled through the broker. So if they want a message delivered to me, then the broker will deliver it to me, and vice versa. VSDH will deliver it to the Grosses.

Q In your experience in real estate transactions involving the buying or selling of real property, are there occasions when real estate brokers or agents represent just one of the parties in the transaction?

A Yes, sir. Q Okay. Do you have a recollection in this

particular transaction as to whether Mr. Buttemiller *594 represented both parties or just one of the parties? 16 A Represented both parties. 17 Q So when -- did you deal with Mr. Buttemiller 18 directly in the transaction? 19 A I dealt with them, you know, through the 20 contract stage. Yes, sir. 21 Q So you spoke with him, right? 22 A Yes, sir. 23 Q Did you understand that if he was asking you 24 something on behalf of the Grosses that he was 25 authorized to act for them in asking you for whatever it

70 might be? A Yes, sir. Q He appeared to be authorized based on your

understanding of the intermediary relationship; is that right?

A Yes, sir. Q All right. And I want to talk to you about a

couple of aspects of the -- of the contract that you signed. Before I do that, though, Exhibit No. 6, which you were shown yesterday by Mr. Aldous and that Mr. Shaw showed you a little while ago, spoke about a cash sales price in the new home contract with the Grosses of $2,851,871. Do you recall seeing that?

A Yes, sir. *595 Q Right. Now, if I understand the testimony that 16 has been given thus far -- 17 THE COURT: Excuse me, Mr. Chaiken. Would 18 you clarify Gross Exhibit 6 or VSDH Exhibit 6? 19 MR. CHAIKEN: I was referring to 20 Mr. Hickok having been shown what is Gross 2, not 6. I 21 apologize. I misspoke. 22 Q (By Mr. Chaiken) Now this is Gross Exhibit 3, 23 and Gross Exhibit 3 has a purchase price where it 24 scratches through the $2,851,000 number. And it's 25 replaced with 2,695,000; is that correct?

71 A Yes, sir. Q All right. Can you explain to the ladies and

gentlemen of the jury how the price went from 2,851,000 to $2,695,000?

A Well, I mean, my opinion is that the 2,851, the original purchase price there is a price that we agreed to with the Grosses. And I -- in my opinion, what happened is that they were going to take the $156,000 out of that amount of money, the 2,851 and go fix up the house. And I guess something along the way, maybe their lender or something said we're not letting you take the money out. And they wanted the contract price to be 2,695,000, and the money gets placed over in with their lender. I think that's changed it. I'm not sure *596 exactly everything that happened there, but that's just

16 -- it was a change for some reason. 17 Q I want to make sure that the ladies and 18 gentlemen of the jury understand this concept. They 19 were paying $2,851,000 when the contract had that as a 20 purchase price, right? 21 A Right. But I'm -- I'm going to give them out 22 of that 2,851, I'm going to give them $156,000 back. 23 Q They wanted you to give them the money back? 24 A I believe that was what our original agreement 25 was.

72 Q Okay. A I don't have a copy of the original agreement,

but -- the whole original agreement. Q But for whatever reason, that had an issue that required them to scale the price back so, in your understanding, they could get their loan?

A I don't believe it was. It would have had to have been on the Grosses' side for some reason for -- they had to change it up.

Q Okay. Doug, will you turn to Gross Number -- well, before we do that, I want you to look at the bottom of the first page of the new home contract. You see right here? You see up on the screen?

A I'm looking at it here. *597 Q Okay. Now, there's been a lot of discussion 16 about signatures and initials. And you see your initial 17 on the bottom of the first page of the contract; is that 18 right? 19 A Yes, sir. 20 Q Okay. And next to your initial, what is the 21 word that you see? 22 A Seller. 23 Q And next to that going this way, you see 24 initials next to the word, "buyer"; is that right? 25 A Yes, sir.

73 Q What does that mean to you? A Probability the initials of the buyer, which

would be both the Grosses. Q Okay. And when you see your initial next to the word, "seller," what do you understand the purpose or whose initial that is?

A Well, that's an initial on behalf of the seller, which is the partnership, VSDH. Q All right. And then it says -- can you read what it says here over above this TAR1604? A It says, "Initialed for identification by the buyer and seller." Q What does it mean to you to initial a document for identification in your experience as a real estate *598 investor, seller, and person who enters into these kinds 16 of contracts on a routine basis? 17 A When you initial at the bottom of a page, just 18 to make sure that the page doesn't get changed on you. 19 In other words, if this was left blank and you didn't 20 have your initials on it, somebody else could just stick 21 another similar page in there and, say, change up the 22 price or change up the document on the way to the title 23 company or anything. So you initial it to make sure it 24 doesn't happen. 25 Q And in this case, when you placed your initials

74 on the first page of the contract at the bottom of the document, who did you intend to initial the document for or on whose behalf did you intend to initial it?

A Again, the partnership is VSDH, Ltd. Q And there's no place there for a guarantor or

any individual's signature, only for the buyer and the seller; is that right?

A Again, there is no place anywhere on this contract or anywhere for a guarantor to sign or anything.

Q Okay. And the second page of the exhibit and of the contract, similar situation; is that right? A Yes, sir. Q The same would be true with the third page, *599 right?

16 A Yes, sir. 17 Q Okay. And Page 4 of 9, right? 18 A Yes, sir. 19 Q And that would be true all the way through the 20 page that ends -- let's see here -- 7 of 9, correct? 21 A Yes, sir. 22 Q See that there. All right. Now, when you get 23 to Page 8 of 9, you don't see any initials, right? 24 A Well, first off, there's no blank at the bottom 25 of the page for an initial. There's just a signature

75 line that represents that it's been signed. So it can't be slip sheeted because it's been signed.

Q Because it has a signature on it already? A Yes, sir. Q Okay. And you see your signature next to the

initials VP under the -- above the space that says seller, VSDH, Vaquero Venture, Ltd., right?

A Yes, sir. Q All right. And on page number -- excuse me.

I'm going the wrong way here -- 9 of 9, there also is no place for initialing, right?

A Again, because there are natural signatures on that page or natural handwriting. Q Now, do you recall -- and I'm going to come *600 back to this initialing issue in a moment. But do you 16 recall the testimony earlier -- I think it was yesterday 17 -- responses to some of Mr. Aldous' questions about a 18 first amendment to the new home contract? Remember this 19 document? 20 A Yes, sir. 21 Q Now this document amended the main contract, 22 right? 23 A Yes, sir. 24 Q That was your testimony. Now you recall 25 speaking with Mr. Shaw earlier about Paragraph Number 22

76 of the contract that says agreement of the parties, right?

A Yes, sir. Q All right. And it says this contract contains

the entire agreement of the parties. Who do you understand the parties to be?

A The parties to the contract are VSDH, as the seller, and then the Grosses, as the buyer. Q Any other parties? A No, sir. Q All right. And it says, "And cannot be changed

except by their written agreement." Did I read that right?

A Yes, sir. *601 Q Who do you understand the word "their" to 16 pertain to? 17 A The buyer and the seller. 18 Q All right. Now, who are the parties to the 19 first amendment to the new home contract? 20 A It's VSDH Vaquero Venture, Ltd. I just call it 21 VSDH, and then there's Ken and Betsy Gross. One's the 22 seller, obviously, which is VSDH; and the buyer is Ken 23 and Betsy Gross. 24 Q All right. And on Page 2 of that agreement, 25 who is the seller?

77 A The seller is VSDH Vaquero Venture, Ltd. Q Okay. And who signed it on behalf of the

seller? A Well, it is -- actually, the general partners always sign on behalf of a partnership, and then I signed on behalf of that general partner, which is Doug M. Hickok as the vice president of that entity.

Q Because the entity isn't a human being, it can't sign its name, right, so you sign for it; is that right?

A I think it's like Mr. Shaw said with the -- like Dell Computer. I mean, it's an entity. It's a company.

Q And then if we look at the last page of the *602 amendment, we see signatures by the purchaser. And you 16 see Ken Gross and Betsy Gross, right? 17 A Yes, sir. 18 Q Now, looking at the rest of the page, where 19 does it say Doug Hickok? 20 A I don't see my name on that page. 21 Q Why isn't your name on either of the signature 22 pages? 23 A Well, my name is only on there on behalf of 24 VSDH as the seller of the property. 25 Q And you weren't a party to the contract, right?

78 A Personally, I was not a party to the contract. Q Now when I say, "you," I mean you, Douglas

Hickok, right? A Right. Q All right. But if you were a party to the

contract prior to this first amendment, would you agree that Paragraph 22 of the contract would have required your signature on an amendment?

MR. ALDOUS: Your Honor, I object. That calls for a legal conclusion. THE COURT: Sustained. Q (By Mr. Aldous) Paragraph 22 we just talked about, right? It says the contract contains the entire agreement of the parties and cannot be changed except by *603 their written agreement, right?

16 A Yes, sir. 17 Q Did you ever sign any amendments or changes to 18 the contract? 19 A If you're talking about me personally -- 20 Q When I say, "you," I mean you. 21 A Okay. Me personally, no. I never signed 22 anything related to this transaction personally. 23 Q Is that because you weren't a party? 24 A I'm not a party to the contract. I'm not the 25 buyer. I'm not the seller.

79 Q Now I want to go back to the addendum to the contract. And this is the fist page of Addendum A that's received a lot of attention, right?

A We've talked about it a lot. Yes. Q And on the first page of Addendum A, which

contains the buyback option, or at least until it continues on to the next page, we see the same initials that we saw on the -- in the blocks of the pre-printed contract, the form contract, for seller and for buyer, right?

A Yes, sir. Q Right. And why was this page initialed by you? A Well, again, it's part of the original -- it's

all part of the whole contract. And although they *604 didn't have a little seller and a buyer blank there, you 16 can see I, kind of, under my initial, I put a line. So 17 it's kind of like I put a line on behalf of the seller, 18 and the seller, again, is VSDH. That is initialed only 19 as VSDH. 20 Q So it's basically continuing the practice that 21 was on the form? 22 A Yes. It's on every page of the contract. 23 Q Except those that were signed by somebody? 24 A Yes. Yes, sir. 25 Q Okay. And, of course, this page, Addendum A,

80 talks about the Grosses and the VSDH seller's obligations under the buyback option, right?

A Yes, sir. Q And so you initialed it on whose behalf? A I initialed on behalf of the seller, and the

Grosses initialed on behalf of the buyer. Q Okay. And when we get to the next page of the addendum, we see your initials and the Grosses' initials again at the bottom; is that right?

A Yes, sir. Q Okay. And when you initialed this page, on

whose behalf were you initialing; your own or the partnership?

A Again, I never initialed or wrote my name as an *605 individual. I only wrote it on behalf of the 16 partnership, and those were initials at that point in 17 time. 18 Q All right. Now I want to call your attention 19 to the last page of the addendum. And you see right 20 here where it says, In addition, in Paragraph 15 in the 21 body of the contract under default, seller reinstates 22 language stricken. And then it says in quotes, seek 23 such other relief as may be provided by law or both, end 24 quote. Did I read that right? 25 A Yes, sir.

81 Q All right. So were you the seller? A Yes, sir. Q You, Doug Hickok, were the seller? A No, not me personally. Of course, not. Again,

I said it so many times. No, VSDH is the seller. Q Okay. And where does it say in this language that Doug Hickok or Van Shaw, guarantors, reinstate language stricken?

A Again, you don't see that anywhere on this contract. Q So now, let's look at, if we may, Paragraph 15 of the contract. And you see Paragraph 15 right here on Page 5 of the contract that says default. All right?

A Yes, sir. *606 Q Are you with me right over here? 16 A I am. 17 Q Okay. Now, it has some typewriting on there 18 right? There's text that was typed into the form -- 19 A Sure. 20 Q -- that talks about default, right? 21 A Yes, sir. 22 Q All right. And then you see starting right 23 here, okay, going all the way down to here and then over 24 here cross-throughs. Do you see that? 25 A Yes, sir.

82 Q Is that the stricken language that was referred to at the end of the addendum that seller reinstated? A Yes, sir. Q Okay. Now, what is your understanding of the

cross-throughs that are contained in Paragraph 15 where the language is blacked out?

A Well, I have to read it real quick. Excuse me. Q In other words, what was the purpose of

blacking it out? A Oh, the purpose of blacking it out is to make it no longer a part of the contract. Q Okay. A Then the buyer and the seller initial off to

the side, which you can see out there that they're in *607 agreement for the blackout. 16 Q So, in other words, they initial that change; 17 is that right? 18 A Yes, sir. 19 Q All right. And when you initialed that change, 20 you were initialing it on whose behalf? 21 A On behalf of the seller. 22 Q All right. Now, this contract originally said 23 that -- and let me get to the part here, right here 24 where it says -- beginning with, "If seller." You see 25 that part there?

83 A Yes, sir. Q So it says, "If seller fails to comply with

this contract for any other reason," and "other reason" would refer back up to the language above, except for the fault of the buyer. It says, "Seller will be in default and buyer may" -- and then you see that line right here?

A Yes, sir. Q Okay. You go over to this line and it says

what? Can you read what that says? A It says, "As it's sole and exclusive remedy entered" -- I can't see. Q Either. Does it look like "either"? A Okay. Either. *608 Q Either. And then you go back to, a, enforce

16 specific performance. And then we see a strike-through, 17 right? 18 A Yes, sir. 19 Q "Or terminate this contract and receive the 20 earnest money thereby releasing both parties from this 21 contract." Did I read that right? 22 A Yes, sir. 23 Q And before this part was stricken out where it 24 says -- it said, "seek such other relief as may be 25 provided by law or both," right?

84 A Yes, sir. Q All right. And the seller, based upon the

portion of the addendum that we read a little while ago, reinstated seek such other relief as may be allowed or provided by law or both, right?

A Yes, sir. Q Doug Hickok never did that, right? A No, sir. Q Guarantor never did that, if there was a

guarantor? A No, sir. Q Van Shaw never did that, did he? A No, sir. Q All right. Do you understand that you are *609 being sued for damages in this case?

16 A Are you saying me personally -- 17 Q Yes, sir. Have you been sued? 18 A -- or VSDH? 19 Q The Grosses are suing you to recover damages, 20 right? 21 A Right. Me, personally, yes, sir. 22 Q Okay. Now I want to talk to you about the 23 whole idea of a personal guarantee in this transaction. 24 All right? And so yesterday, in response to some 25 questions that were asked of you by Mr. Gross -- I mean

85 -- I'm sorry -- Mr. Aldous on behalf of Mr. and Mrs. Gross, there was discussion about exhibit, Gross Exhibit 1, which was a May 25th, '07, it looks like a memo or a letter from Mr. Gross to Mr. Buttemiller, right?

A Yes, sir. Q And what you have here is Mr. Gross telling

this realtor, this broker, "Here's our proposed changes." And he says, "In addition to the corrected copy, please insert the following." All right? And it says, "Where I have marked A, insert, 'When completing the improvements, buyer will review with seller the plans and specifications and receive general consent, consent not to be unreasonably withheld to proceed with *610 the improvements.'" Did I read that right?

16 A Yes, sir. 17 Q And it says, "Seller understands that buyer has 18 the right to make minor changes and decisions during the 19 process of completing the improvements provided they are 20 in the best interest of completing the improvements in 21 the most logical and reasonable manner." Did I read that 22 right? 23 A Yes, sir. 24 Q All right. Now I want to look at -- and this 25 is language that Mr. Gross wrote and asked

86 Mr. Buttemiller to insert into the contract, right? A Yes, sir. Q All right. Now, what I wanted to do is I want

to look at the language on that topic that actually got into the contract. And this is Paragraph 2, entitled buyer improvements. All right. And it be starts off by saying, "Before commencing construction, buyer will review with seller the plans and specifications and receive general consent, consent not to be unreasonably withheld to proceed with improvements." Did I read that right?

A Yes, sir. Q So what Mr. Gross had proposed was when he was

doing it and he was completing it, he will review with *611 the seller the plans and specifications and receive 16 general consent, right? 17 A Yes, sir. 18 Q But what the Grosses agreed to in the contract 19 was to review with the seller the plans and 20 specifications and receive general consent to proceed 21 with the improvements before commencing construction, 22 right? 23 A Yes, sir. 24 Q And I believe you've testified ad nauseam at 25 this point that before commencing construction, the

87 buyer did not review with the seller the plans and specifications or receive general consent, right?

MR. ALDOUS: Objection, Your Honor, leading. THE COURT: Sustained. Q (By Mr. Chaiken) Well, before commencing construction, did the Grosses review with the seller the plans and specifications and receive general consent before commencing that construction?

A They did not. Q Okay. Now, Mr. Gross also told Mr. Buttemiller

via his May 25th, '07 message, "We would like to suggest a new addendum Number 4 that reads" -- and then we see what it says there, right? *612 It says, "Doug Hickok and Van Shaw, as

16 partners in VSDH Vaquero Venture, Ltd., each hereby 17 agree to personally guarantee seller's obligations under 18 the buyback option granted by VSDH to buyer hereunder." 19 And we can read the rest of it. 20 Now that language was suggested by 21 Mr. Gross to Mr. Buttemiller, right? 22 A Correct. 23 Q It wasn't suggested by a lawyer acting for 24 Mr. Gross, right? 25 MR. ALDOUS: Let me object, Your Honor.

88 He's not demonstrated personal knowledge of that. Q (By Mr. Chaiken) Let me ask him. Do you have personal knowledge of whether a lawyer ever recommended that letter -- that language to Mr. Buttemiller?

A I do not. Q All right. Now I want to talk to you about

your -- your impression and your perception of what happened after -- well, let me ask you this question.

How did you find out about this whole proposed guarantee issue? Who told you? A Mr. Buttemiller. Q And when Mr. Buttemiller told you that, in what

capacity did you understand he was acting? A He was acting as agent for the Grosses. *613 Q Okay. And did he call you and talk to you 16 about a guarantee idea? 17 A He did call me. Yes, sir. 18 Q All right. And tell me and tell the jury what 19 that conversation was like to the best of your 20 recollection. 21 A Well, to give you the full background, there 22 was originally -- 23 MR. ALDOUS: Your Honor, I would object. 24 That's hearsay. 25 MR. CHAIKEN: Your Honor, it's an

89 exception under 803.1 or 3, and it's also not hearsay under 801(E)(2)(C) Or (D) because it is a statement of a person authorized by the party for making statements or by an agent concerning the subject matter in the scope of the agency.

THE COURT: Overruled. MR. ALDOUS: Well, Your Honor, he hasn't

established what the scope of the agency is, other than to say that he is a real estate agent. And I believe that this real estate agent was agent for both parties.

THE COURT: That's the testimony thus far. So you'll need to lay a foundation before you can go into that issue more specifically.

Q (By Mr. Chaiken) When Mr. Buttemiller called *614 you to talk about a guarantee issue, okay, who did you 16 understand he was acting for in communicating with you? 17 A He was acting for the Grosses. 18 Q And did you understand that communication to be 19 within the scope of his agency for the Grosses? 20 A Sure. 21 Q Okay. Was there any doubt in your mind that he 22 was authorized to speak about the subject matter of a 23 guarantee on behalf of the Grosses with you? 24 A I thought for sure he was authorized to do so. 25 Q So tell us what he told you.

90 A Well, there was originally a different Addendum A that didn't have this language in there about a guarantee, and so this came to me as a surprise. He called me on the phone and asked me would you and Van be willing to guarantee this -- this buyback. And my response was real simple. Okay. I didn't have a problem with the concept of guaranteeing it, but I certainly couldn't speak for Mr. Shaw. So, therefore, I had to get Mr. Shaw's approval.

And I also had to look at what the guarantee said. I wanted to see what the guarantee agreement said. So I asked him for those two things; one, to get a copy of the guarantee agreement and, two, I needed to talk to Mr. Shaw before I could really *615 respond.

16 Q And when you say that you told him you needed 17 to see a copy of the guarantee agreement, were you 18 referring to a particular type of document? 19 A A guarantee agreement is what I was referring 20 to. It's actually a document that shows what -- it 21 literally may be two, three, five pages long that says 22 here's what you're guaranteeing. Here's all the, you 23 know, covenants and everything of the guarantee. 24 Q And would it be an agreement that was set up 25 for signature by whoever the guarantor or guarantors

91 were? A Absolutely. Q Okay. So you had asked him to provide you a

proposed guarantee in that format, one that set out who the guarantors were, what the scope of the guarantees were and had signatures that you were being asked to sign; is that right?

A Yes, sir. Q And that Mr. Shaw was going to be asked to

sign, right? A Yes, sir. Q And you communicated to Mr. Buttemiller what

about Mr. Shaw? A That I communicated -- I'm not sure what your *616 question is. 16 Q You said you told him that you had to run it by 17 Mr. Shaw; is that right? 18 A Yes. I can't speak on behalf of Mr. Shaw. 19 Q Okay. And did you ever get a proposed 20 guarantee form of the nature you just described from 21 Mr. Buttemiller? 22 A No, I didn't. I'm not sure that this 23 conversation didn't happen a few days -- I don't know 24 when exactly it happened. It happened evidently 25 sometime between the date of this memo and the date we

92 signed the contract and put it in the title company. Q Did Mr. Buttemiller tell you that he'd get you the guarantee form so that you could run it by Mr. Shaw?

A He told me he would, absolutely. I would get a guarantee form. Q Okay. And did he ever -- did anybody else -- excuse me -- on behalf of the Grosses ever provide you with a guarantee form that they wanted you and/or Mr. Shaw to sign as guarantors?

A I didn't get one from Mr. Buttemiller, I didn't get one from Mr. Gross, and I didn't get one from the Grosses' lawyer.

Q Okay. And is that effectively where the *617 conversation about guarantees ended? 16 A There was not another word said about a 17 guarantee. 18 Q Okay. And when you got to the closing, did 19 anybody have a guarantee form there for you or Mr. Shaw 20 to sign? 21 A As I said earlier, I'm not sure if I did or 22 didn't sign a guarantee at closing because there was a 23 stack of documents like this. I don't remember until I 24 went back preparing -- well, back when we got into the 25 dispute with the Grosses and we looked through all the

93 documents, I realized we didn't have a guarantee. Q So you were never given a guarantee to sign at closing; is that right? A I -- no, because there's nothing in the file. Q Okay. I want you to please look with me at

Gross Exhibit No. 15, which has already been admitted into evidence. This exhibit is entitled construction loan agreement. Do you see that?

A Yes, sir. Q And it says at the top, the construction loan

-- "This construction loan agreement is made and entered into on the 27th day of June by and between Kenneth Gross and Betsy Gross herein after called borrower and First Horizon Home Loans, a division of First Tennessee *618 Bank National Association hereinafter called lender."

16 And it says, "Impact Health, Inc, d/b/a 17 Impact Estates, hereinafter called contractor, is 18 executing this agreement, not as a contract party hereto 19 entitled to any benefits, but for representations and 20 warranties and indemnities," and it goes on and says 21 what it says. See that document? 22 A Yes, sir. 23 Q Okay. Now, do you remember the date on which 24 the purchase and sales transaction where VSDH sold the 25 residence to the Grosses closed?

94 A I thought it was on June 29th of 2007. I would have to look at the -- Q All right. But it was right around the time period of the date of this document, right? A Right. Q Okay. Now, let me show you Page 3 of this

agreement, okay? All right. Now I want you to look right here, Mr. Hickok, under Paragraph D(2) (H), this part right here.

A Yes, sir. Q Let's see if we can read this together. Do you

want to read it? A Sure. It says, "Unless otherwise specifically approved in writing by lender, construction on the *619 project will commence on or before 15 days from the date 16 of this agreement and borrower and/or contractor will 17 cause the construction of the project to be completed on 18 or before December 23rd, 2007, in accordance with the 19 plans and specifications approved by the lender free and 20 clear of all liens or claims from liens or for liens for 21 material, supplies and/or labor performed in connection 22 with the construction of the project." 23 Q Okay. Now, did Mr. or Mrs. Gross ever tell 24 VSDH or you that they had signed an agreement with their 25 lender that required them to commence construction on

95 the property on or before 15 days from the date of this agreement, which, as we just talked about, was June 27th of 2007 and complete construction on or before December 23rd, 2007?

A No, sir. They did not. Q Did they tell you at any time in the

transaction that they had to complete that construction within that time period in accordance with plans and specifications approved by the lender?

A No, they did not. Q Did they ever tell you why they did not

commence construction within -- on or before 15 days from the date of their agreement with their lender that required them to do so -- commence within 15 days? *620 A No, sir, they didn't.

16 Q Did they ever tell you why they didn't complete 17 it on or before December 23rd of 2007? 18 MR. ALDOUS: Your Honor, I object. 19 There's no relevance to the agreement between the 20 Grosses and their bank. 21 THE COURT: What's the relevance, 22 Mr. Chaiken? 23 MR. CHAIKEN: Your Honor, the relevance of 24 this document is that they -- that they had obligations 25 to their lender to start and complete the construction

96 in accordance with the plans and specifications that they never delivered to VSDH. And I want to show that they had an obligation not only to have them but to have them done and approved within a certain period of time.

THE COURT: How is that relevant to the cause before the Court? MR. CHAIKEN: Well, because they have argued that they commenced construction in accordance with the -- with approval at a visit that occurred much later.

THE COURT: I'm going to sustain the objection. Do you have any further questions? MR. CHAIKEN: I do, Judge. I was just looking for my next exhibit here. I'm sorry, Judge. *621 I'll move rapidly here. 16 Q (By Mr. Chaiken) I want to talk to you 17 briefly, Doug, about the buyback option in a second 18 here. You've given some testimony -- well, let me ask 19 you. You were asked by Mr. Aldous whether VSDH intended 20 to buy back the property as of May of 2009 when the 21 Grosses sent a letter saying they wanted you to buy it 22 or VSDH to buy it back. You recall that testimony? 23 A Yes. 24 Q Okay. Now I believe you've testified that at 25 that point in time, VSDH had a question about whether or

97 not it was obligated to buy the property back under the buyback option. Was that your testimony?

A Yes, sir. Q Okay. And what was VSDH doing about the

buyback option, other than you telling Mr. Shaw to handle it, during the period of time from the May 1st declaration date and the September 1st, 2009 buyback date?

A You have to rephrase that question for me. Q Yeah. Was VSDH Vaquero Venture, Ltd., thinking

about whether to proceed to buy the property back on September 1st, 2009, notwithstanding the fact that the Grosses -- or that VSDH believed that the Grosses already had breached the contract? *622 A Yes.

16 Q Okay. And you had -- I believe you said 17 earlier you had the option to do so if you wanted to; is 18 that right? 19 A Yes, sir. 20 Q When did you, Doug Hickok, ever communicate to 21 the Grosses or to anybody else that VSDH was not going 22 to perform the buyback obligation on -- I'm sorry -- the 23 buyback on September 1st, 2009, the buyback date? 24 A There was never any communication from VSDH, 25 Doug Hickok, to -- that basically said we were not going

98 to perform the buyback. A Now, you've read this addendum A, the buyback option, while you've been sitting on the stand for the past day and a half now, correct?

A Yes, sir. Q Can you point to me where in that buyback

obligation -- or the buyback option language -- excuse me -- there is any obligation on the part of VSDH to tell the Grosses, yes, we're going to do it, no, we're not going to do it on September 1st 2009 after they sent their declaration date notice?

A It doesn't exist. Q So there was no obligation in the contract for

VSDH to tell the Grosses, yes, we're going to do it, no, *623 we're not going do it; is that right? 16 A That's correct. 17 Q All right. Were you and Mr. Shaw receiving 18 lots of emails from the Grosses shortly after the 19 declaration date of May 1st, 2009, pressing you to find 20 out whether you're going to do it, meaning VSDH was 21 going to do it or not going to do it? 22 A Yes. I believe Mr. Shaw handled most of those. 23 I've been revisiting them today in court. 24 Q And in the June to July timeframe, were the 25 Grosses telling you that if you didn't do it and you

99 didn't tell them you were going to do it, they were going to go the legal route?

A I absolutely saw that in one of their emails to us that they were going to -- which meant, to me, they're going to sue us.

Q Did you see any emails written by Mr. and Mrs. Gross and sent to you and Mr. Shaw before the September 1st, 2009 date that were copied to people that you knew or understood were lawyers other than Mr. Shaw?

MR. ALDOUS: Your Honor, I would invoke the best evidence rule, saying that if he's going to testify about the contents of the document, he needs to produce the document.

THE COURT: Sustained. *624 Q (By Mr. Chaiken) At any time prior to September 16 1st, 2009, did you on behalf of VSDH feel as if the 17 Grosses were threatening you with litigation if you did 18 not commit to the buyback option and to buying the 19 property back? 20 A I think that was the underlying theme, 21 absolutely. 22 Q Did you personally feel as though Mr. and 23 Mrs. Gross were threatening you personally with 24 litigation or a lawsuit if you didn't say you personally 25 would buy it back if VSDH did not?

100 A Again, I believe that was the underlying tone. Q Did you appreciate those -- that tone or those

threats? MR. ALDOUS: Your Honor, I object. That's irrelevant. THE COURT: Sustained. MR. CHAIKEN: Your Honor, I will reserve

the rest of my questions for Mr. Hickok until the defendants' case in chief. Pass the witness at this time.

THE COURT: Mr. Aldous? MR. ALDOUS: Thank you, Your Honor. May I sit over here?

REDIRECT EXAMINATION

*625 BY MR. ALDOUS: 16 Q Sir, Exhibit 15 that you refer to, the 17 construction loan agreement between the Grosses and 18 their bank, VSDH is not a party to this agreement, are 19 they? 20 A No, sir. That's a tri-party agreement between 21 them, their contractor, and their bank. 22 Q And the contractor was Mr. Grosses' company, 23 Impact Estates, correct? 24 A I'm not sure of that. 25 Q So would it be true that the first time that

101 you looked at this construction loan agreement was in connection with this case?

A Yes, sir. Q And so this construction loan agreement that

your counsel brought out, Exhibit 15, had nothing to do with any action you took prior to the time of this lawsuit?

A That's true. Q Now, you indicated that there was never a

communication from you, yourself, or VSDH that they were not going to honor the buyback clause of the contract; is that what you said, sir?

A Yes, sir. Q Isn't it true that you turned over to Mr. Shaw *626 the issue relating to the buyback after May of 2009?

16 A Yes, sir. 17 Q Isn't it true that Mr. Shaw had authority to 18 act for you and VSDH with regard to the buyback 19 provision? 20 A No, sir. 21 Q So you turned the matter over to VSDH -- you 22 represented to the Grosses that you were turning this 23 matter over to Van Shaw and in reality had no authority 24 to act on behalf of VSDH? 25 A No, sir. That's not what you said. You said

102 on my behalf and on VSDH's behalf. He had the authority to act on behalf of VSDH, not on my behalf.

Q All right. I apologize. A Okay. Thank you. Q Would you agree with me that Van Shaw had the

authority to act on behalf of VSDH with regard to the Grosses and the buyback after May of 2009?

A Yes, sir. Q And if Mr. Shaw told the Grosses that VSDH was

not going to perform on the buyback, that came with the authority of VSDH; do you agree with that?

A I agree with that. Q All right. Now on Exhibit 3, whatever the

contract is, Exhibit 3 under the tab -- the Gross *627 Exhibit 3. You were asked some questions about 16 paragraph No. 5 and the little blurb that comes after 17 that in the addendum on Page 35. 18 A In the addendum, okay. 19 Q Yes, sir. I will give you just a second to get 20 there. 21 A You've got it up on the screen? 22 Q I do. Okay. I'm going to it a little bit 23 bigger. Oh, the other way. 24 Now you see in there it says you were 25 asked some questions about whether you, Doug Hickok,

103 agreed to this particular provision that says, "In addition," in Paragraph 15 in the body of the contract under default, "Seller reinstates language stricken, seeks such other relief as may be provided by law or both," correct?

A Correct. Q And you agree with me that VSDH agreed that

that was going to be a term of the buyback agreement? A I agree that VSDH agreed to that, but not Doug Hickok. Q Well, why don't you just try to answer the question I'm asking you. The question I'm asking you is: VSDH agreed that that blurb would be a term of the buyback option, right? *628 A You're going to have to restate that for me

16 because I'm not sure what exactly you're saying. The 17 term of the buyback option, I don't understand what 18 you're saying. 19 Q Well, you indicated that when you initialed 20 this, that this became a term that you agreed to as part 21 of VSDH, right? 22 A Only on behalf of VSDH. 23 Q I don't know how I can make my question any 24 clearer, sir. Did VSDH agree that this particular part 25 of the addendum would be a term of the buyback?

104 A Yes, sir. Q Okay. VSDH Exhibit 6, do you have that up

there? A No, sir. I just have 5. MR. CHAIKEN: It was Gross 6. It was really 2. Excuse me. I think it's what you're referring to. I'm trying to be helpful here. Excuse my interruption.

MR. ALDOUS: Let me just put it on the screen for you. Q (By Mr. Aldous) This has already been admitted into evidence as VSDH Exhibit 6. Do you see the new home contract there?

A Yes, sir. *629 Q Do you see it has the $2,851,871 figure? 16 A Yes, sir. 17 Q Now you agree that later on that changed, 18 right? 19 A Yes, sir. 20 Q All right. Now, if you turn to the addendum -- 21 and you don't have to turn because you don't have it. I 22 do. Do you see here's the addendum that we've been 23 talking about? 24 A Yes, sir. 25 Q And you see that it's pretty much the same as

105 what eventually got signed off on, but there's a couple of changes, right?

A Yes, sir. Q For instance, Exhibit 3 Gross shows that

there's handwriting in there that says, "declare the buyback option becomes null and void." Do you see that right there at the bottom, casualty? Do you see --

A Yes. Q -- that little interlineation? A Yes. Q Now if you look at it here, that's also a part

of this. So there was no change really to the casualty portion of this, right?

A Correct. *630 Q Now, did you strike out the part that says 16 seller may, at its option, object to either declare the 17 buyback -- that portion that's struck out? 18 A I couldn't tell you. 19 Q Is it an appropriate way to deal with language 20 in the contract that you disagree with to strike it out 21 and make an initial? 22 A Yes, sir. 23 Q And that's one of the ways you let the other 24 party know you don't agree with that? 25 A Yes. The two parties to the contract. Yes,

106 sir. Q Right. And then if you look at Exhibit 6, VSDH Exhibit 6, you see that this has virtually no handwriting on it, including the portion related to the escrow agreement on Paragraph 3. Do you see that?

A Yes, sir. Q That changed, didn't it? A Yes, sir. Q So when you look at the one that was -- the

contract that actually ended up, you see that in the escrow agreement somebody's taken a black magic marker and marked through a whole sentence?

A Yes, sir. Q Do you see that and added the language that *631 says "at closing"?

16 A Yes, sir. 17 Q Do you know who did that? 18 A I do not. 19 Q Was it one of the parties to the agreement 20 trying to tell the other party to the agreement, hey, I 21 don't agree with that? 22 A Or it could have been the agent. 23 Q Agent at somebody's suggestion? 24 A Yes, sir. 25 Q But the agent wouldn't do it without a

107 direction from either VSDH or the Grosses, right? A I believe so. Q The part that was stricken out, do you see the

part that is blacked out there? A Yes, sir. Q It's after the sentence of property. If you

look at this, it says what was stricken out is a total of 156,871 of these improvements have been incorporated into the 2.851 sales price. Do you see that?

A Yes, sir. Q That's what you were referring to earlier,

right? A Yes, sir. MR. ALDOUS: May I approach, Your Honor? *632 THE COURT: You may. 16 MR. ALDOUS: I forgot I don't have to 17 approach. 18 Q (By Mr. Aldous) If you look at Exhibit 105, 19 which is already in evidence -- 20 A Okay. 21 Q -- you see that that's an email from you to 22 John Buttemiller and Gary Sommerfelt, Hap Stern, and Van 23 Shaw, basically the VSDH side of the equation, right? 24 A Yes, sir. 25 Q And it's dated June 20, 2007. Do you see it?

108 A Yes, sir. Q It says, "Per your request on behalf of the

buyer, I have reduced the purchase price by removing the amount of the escrow funds in the contract to 2,695." That's exactly what you talked about, right?

A Yes, sir. Q The buyer requested this, right? A Yes, sir. Q In addition, in Paragraph 3 of Addendum A, the

appropriate language was removed and inserted, "Please see the attached," right?

A Yes, sir. Q And you say, "Hey, look, if this looks good,

please sign off"? *633 A Yes, sir. 16 Q And that's the way it's handled, right? 17 A Yes, sir. 18 Q And there's nothing unusual about this? 19 A Well, it was -- no, I don't think there was 20 anything unusual about it. No. 21 Q When somebody suggests a change, if you agree 22 to it, you try to incorporate the change into the 23 agreement and let everybody know that the agreement has 24 now been changed? 25 A Yes, sir.

109 Q So, Mr. Hickok, this Paragraph 4 of the Exhibit 3, Paragraph 4, what do you call that? I want to use your language. What do you call that paragraph?

A It's a -- it's a portion of the contract inserted there between VSDH and the Grosses. It's a paragraph.

Q Okay. In your mind, what is this paragraph meant to accomplish? A I think it's meant to accomplish that in the perfect world, I think from your standpoint, the Grosses' standpoint, is to have Doug Hickok and Van Shaw guarantee this. That was what the Grosses wanted to have happen.

Q And so you recognize that at least the way this *634 paragraph is worded, it says that you and Van Shaw 16 personally guarantee the seller's obligations under the 17 buyback option, granted from VSDH, the seller, in the 18 event VSDH fails to perform fully under the terms of the 19 buyback, each of its partners set forth above shall be 20 personally responsible, personally responsible, right? 21 A That's what it says. 22 Q So you recognize that this was meant to be a 23 personal guarantee? 24 A Well, it may have meant to be, but it can't. 25 Q So here's my question to you. I think the jury

110 wants to know. Why didn't you just black through that? A Well, probably because it -- this was already in the title company. It's not -- I don't have a copy of the contract.

Q Well, before when it was -- originally came in, you said it was suggested to and put in there by Mr. Buttemiller. You were expecting another document. You didn't get it, but why didn't you just strike through that and say it didn't work?

A Well, I didn't get the document. If you would have delivered -- if they would have delivered me a guarantee agreement with this in the title company, we could have then looked at signing the guarantee agreement. We never got that. My intent -- okay. *635 Q Let me just make sure. I want to make sure

16 what you're telling me. Now, you're not a lawyer, 17 correct? 18 A No, sir. 19 Q And you have -- you don't have the ability to 20 testify to what the legal ramifications of a document 21 are, correct? 22 A No, sir. 23 Q You agree with what I said? 24 A Yes, sir. 25 Q We had a double negative.

111 A Yeah. Q So, although you recognize that this was a --

this Paragraph 4 was a purported personal guarantee, you did not strike through it in any form or fashion?

A Correct. Q All right. Now you indicated in your testimony

that -- and I wrote these down. And if I say it wrong, would you let me know?

A Okay. Q I wrote down that you said the written terms of

the contract are most important? A Yes, sir. Q That everything in a contract is important and

that's why you read it? *636 A Yes, sir. 16 Q So -- and, in fact, you said, I believe, the 17 reason that you initialed all these pages is so that you 18 don't get slip sheeted? 19 A Correct. 20 Q Now, to me slip sheeted, that's kind of like a 21 term of art, right? That means somebody slipped a sheet 22 in and tried to get some extra terms that weren't agreed 23 to? 24 A Well said. 25 Q And that's why you initial every one of these

112 pages? A Correct. Q And when you initialed this page, Addendum 4

right there and you put the line underneath it -- A Yes, sir. Q -- you put your initials and you didn't

indicate one way or the other whether or not that was for VSDH or for you personally. Agreed?

A Well, it could only have been for VSDH. They're the only party to this contract. MR. ALDOUS: Objection, nonresponsive, Your Honor. THE COURT: Sustained. Q (By Mr. Aldous) Let me just ask you again. On *637 this page where your initial is, it doesn't say Doug 16 Hickok personally; it doesn't say Doug Hickok as 17 representative of VSDH? 18 A Correct. 19 Q Now you indicated that -- I asked you this 20 question before only with respect to Exhibit 59. And 21 it's dated August 18, 2009. This is the one where the 22 Grosses got a contract, they're willing to sell it, they 23 reach out to you and say, "Hey, one more time, let us 24 know." And I think you said, "I didn't respond to 25 this," right?

113 A I don't believe I did. Q Right. And we talked about the fact that you

guys had already sued the Grosses. Do you recall that? A I don't remember the exact date, maybe. Q July 7, 2009. A Okay. I'll take your word for it. Q Okay. Here's my question for you. Had you

guys at VSDH gone out and gotten like a loan approval or something to buy back the home so that you could do it by September 1st as of August 18th?

A Didn't get a loan approval, no. Q Did you ever on behalf of VSDH seek to get a

loan approval to buy this house back? A No, sir. *638 Q You had some testimony about how important it 16 was to you that the addition, to the extent that it 17 happened, that you made sure that it didn't have purple 18 walls and things like that. Do you recall that? 19 A I do. 20 Q And that that's one of the reasons that you 21 wanted to make sure that you had some approval and that 22 sort of thing, right? 23 A Correct. 24 Q Now I showed you earlier where when the Grosses 25 -- the Grosses got done with the addition, they sent you

114 a thing and said, "Hey, come on out and take a look." If it was so important to you what the -- and you didn't know what the addition was going to look like, wouldn't you want to go see, see what they built to see whether or not it matches up with the rest of the house?

A When it was all finished? Q Yes, sir. A The answer to the question is, yes, except for

the fact that they had already violated the agreement. Q But I thought you told us that it was still your option and if you guys wanted to, you could buy this house back?

A Sure, we could. We had until September 1 to go look at those improvements if we chose to. *639 Q So you didn't go look at them and you really 16 were willing to buy it back, but you had no idea what 17 the addition looked like? 18 A Had not -- I was more concerned about the 19 estimated prices outlined in the Grosses' emails to us 20 as -- I think this came up in our discussion was, wow, 21 did this house get devalued because of the improvements? 22 MR. ALDOUS: Objection, Your Honor, 23 nonresponsive. 24 THE COURT: Sustained. 25 Q (By Mr. Aldous) Mr. Hickok, do you recall in

115 2008 that the United States experienced somewhat of a financial downturn?

A Sure. Q Did you in the real estate business experience

a downturn? A Some forms and fashions, yes; others, no. Q Do you think maybe that the drop in value of

the real estate prices had anything to do with the economy going down?

A Again, that's a pretty general statement. Q I'm asking for a general answer. A Well, I think in specific locations, no, and

other locations, yes. Q But at the end of the day, despite the *640 invitation to go take a look at this addition, you 16 didn't take it, right? 17 A No, sir, we did not. 18 MR. ALDOUS: I'll pass the witness, Your 19 Honor. 20 THE COURT: Mr. Shaw? 21 MR. SHAW: Thank you. RECROSS EXAMINATION 22 23 BY MR. SHAW: 24 Q There was some talk about -- this is out of 25 VSDH Exhibit 6, the addendum -- some talk about Section

116 4 and well, why didn't you strike it? Were you opposed to Section 4 at the time you signed this contract?

A No. Q Was VSDH opposed to this at the time it signed

the contract? A No. Q You had, as I understand it, two things you

wanted. You wanted to see the personal guarantee agreement; is that right?

A Yes, sir. Q And you wanted my agreement to personally

guarantee? A Yes, sir. Q You wanted me to sign something and you wanted *641 to see the terms?

16 A Yes, sir. 17 Q And you to sign something? 18 A Yes, sir. 19 Q All right. Those three things and you never 20 got that document? 21 A No, sir. 22 Q All right. Now, I have been a lawyer many years 23 and you've been -- 24 MR. ALDOUS: I feel an objection coming 25 on. I just thought I would stand up right now.

117 THE COURT: I think you ought to rephrase that question, Mr. Shaw. MR. SHAW: All right. Q (By Mr. Shaw) You didn't get a loan on this house in 2009, fair? You didn't get a loan? A I didn't get one. No. I didn't get one. Q All right. Did you have an understanding that

I had the financial ability to close on this home without a loan?

A Yes, sir. Q So I could have bought it without a loan -- A Yes, sir. Q -- is what you understood?

MR. SHAW: Okay. Pass the witness. *642 THE COURT: Mr. Chaiken? 16 MR. CHAIKEN: Yeah, I've just got a couple 17 of clarifications. CROSS-EXAMINATION 18 19 BY MR. CHAIKEN: 20 Q Mr. Aldous a few minutes ago stated in the 21 beginning of a question to you something along the lines 22 of VSDH was willing to buy it back, but wouldn't go out 23 there and look at it in response to the Grosses' 24 invitation. You recall that? 25 A Yes, sir.

118 Q Prior to September 1st of 2009, had VSDH decided whether it was willing to buy the property back or not?

A It had not decided. Q Did it still have time left up until September

1st, 2009, to make that decision? A Yes, sir. Q To make the decision as to whether Mr. Shaw

would put up the money, that was the buyback price or some other price that may have been part of what the Grosses were discussing with you-all as a possible way to resolve the buyback issue?

A Yes, sir. Q And were you considering -- when I say "you", *643 VSDH -- was VSDH considering alternatives that the

16 Grosses were proposing in order to accelerate this whole 17 buyback concept? 18 A Yes, sir. 19 Q But no agreement was ever reached, right? 20 A No, sir. 21 Q Now why did VSDH sue the Grosses in July of 22 2009? 23 MR. ALDOUS: Well, Your Honor, I object to 24 that because he indicated he had no personal knowledge 25 of it.

119 THE COURT: Sustained. MR. CHAIKEN: I'll address that later with

Mr. Shaw. Q (By Mr. Chaiken) Last thing I want to talk to you about, and I would make this brief, is Exhibit No. 24, which is the October 18th, 2008 letter from Mr. Gross to you. Okay? And, specifically, the language that says I am beginning construction of the addition and wanted to show you the plans for approval. And it says if you give me an address, I'll be happy to send them to you for your review, right?

A Yes, sir. Q And yesterday, Mr. Aldous said in forming a

question to you, "I've never seen a document that gave *644 the Grosses an address"; do you remember that 16 conversation? 17 A I do remember that. 18 Q And then he said, "Well, when did they get a 19 document that had the address?" Remember all that? 20 A Yes, sir. 21 Q Okay. Now, I want you to look at -- this is 22 from Exhibit No. 3, and it is the contract right here. 23 And it says, "All notices from one party to the other 24 must be in writing and are effective when mailed to, 25 hand-delivered, or transmitted facsimile or electronic

120 transmission as follows to seller." And then you've already talked about this with Mr. Shaw. But there's an address, right?

A Yes, sir. Q And that was the address for the seller, VSDH,

in the contract, right? A Correct. Q It's an address that never changed, right? A No, sir. Q And that Mr. Gross was aware of when he and his

wife signed this contract with that address in it, right?

A Correct. Q All right. So he didn't need you to give him *645 an address; he already knew where to send it, right?

16 A Correct. 17 Q All right. Now, when Mr. Gross said in his 18 letter, "I am beginning construction of the addition," 19 did you come to find out that that statement was not 20 true? 21 A I did. I mean, when I read this, I -- I was 22 under the impression they were thinking about beginning 23 construction. And I found out they were well along with 24 construction when I went out there. 25 Q So the correct statement in here would have

121 been, "I've begun construction and wanted to show you the plans for approval," correct?

A Correct. MR. CHAIKEN: Now I will reserve the balance of my questions until the -- of Mr. Hickok until the defendants' case in chief if necessary. Thank you, Judge.

THE COURT: So this is your second reservation? MR. CHAIKEN: Well, it is. THE COURT: Mr. Aldous? MR. ALDOUS: Thank you, Your Honor. FURTHER REDIRECT EXAMINATION

BY MR. ALDOUS: *646 Q Mr. Hickok, you just said that the October 16, 16 2008, that the Grosses must have started construction, 17 but you didn't even go out there until weeks later, 18 right? 19 A Of course. But when I went out there, they 20 were well along with construction. 21 Q Well along and you -- but you can't tell us 22 when you went out there, so you don't know what had 23 happened on 10-16, do you? 24 A I can actually say on 10-16 from my 25 professional opinion that they were at least two months

122 or more along with construction and probably a six-month construction period.

Q Did it take you two months to show up out there to take a look? A I don't think so. Q You don't think so? A No, sir, I don't. Q Are you sure maybe that it's just you're not

speculating on that? A I think I would have received another email from the Grosses wanting me out there tomorrow or the next day. They would have kept on trying to email me to get me out there.

MR. ALDOUS: Okay. I'll pass the witness. *647 THE COURT: Mr. Shaw? 16 MR. SHAW: Nothing further. Thank you. 17 THE COURT: Mr. Chaiken? 18 MR. CHAIKEN: Same reservation, Judge. 19 Thank you. 20 THE COURT: All right. Are there any 21 questions from the jury? Anybody write down any 22 questions for this witness? 23 All right. We will take a recess until 24 3:00 o'clock. During this recess, the jury is under the 25 same instructions you've been previously given. You're

123 not to discuss this case among yourselves or with anyone else until such time as this case has been submitted to you for your deliberation or you have been discharged as jurors.

All rise. The jury is excused. (Jury exits the courtroom) THE COURT: You may step down. We stand in recess. (Recess taken) THE COURT: All rise. (Jury enters the courtroom) THE COURT: You may be seated. You may call your next witness,

Mr. Aldous. *648 MR. ALDOUS: Your Honor, we would call Ken 16 Gross. 17 THE COURT: Raise your right hand, please. 18 (Witness sworn) 19 KENNETH GROSS, 20 having been first duly sworn, testified as follows: DIRECT EXAMINATION 21 22 BY MR. ALDOUS: 23 Q First of all, Ken, don't lean back so far in 24 that chair because it will eject you right out the back. 25 State your name please.

124 A Ken Gross. Q Ken, so you've been sitting in here in the

courtroom. I guess you're the Ken Gross that everybody has been talking about, right?

A Yes, sir. Q So tell me, are you married? A Yes, sir. Q Is this your wife right here? A Yes, sir. Q Is that Betsy? A Yes, sir. Q How long have you guys been married? A Twenty-seven years. Q I shouldn't have put you on the spot. Sorry. *649 A Twenty-seven years.

16 Q So do you have any kids? 17 A Yes, sir. 18 Q Tell me about it. 19 A A daughter, Alison. 20 Q And then do you have some other daughters from 21 your previous marriage? 22 A Yes, two. 23 Q And where do they live? 24 A They live in Indiana. 25 Q Is that where you're originally from?

125 A Yes, sir. Q So tell me about your work history. A I started out in the medical industry in

pharmaceutical sales and then moved up into sales management, and then about ten years ago, I moved into the building industry.

Q How did you get started in that? A Lightening had hit our house and we had a house

fire and it was a significant fire. And I couldn't find anybody to rebuild the house, so I ended up doing it myself and then just sort of started from there.

Q What type of work does Betsy do? A She's in medical sales as well.

MR. ALDOUS: Your Honor, is it okay if I *650 get him some water? 16 THE COURT: You may. 17 Q (By Mr. Aldous) So you're kind of a soft-spoken 18 guy. You're going to have to speak up and make sure you 19 speak up loud -- loud enough for everybody to hear. 20 Will you do that for me? 21 A Yes, sir. 22 Q I'd like to take you back to 2007 and please 23 tell us how it is that you began looking in Vaquero and 24 why. 25 A My wife and I had looked around at

126 opportunities to grow the business and were looking at developments where we could build a spec home and showcase our work as part of my career. And the Westlake development was appealing because it was just in the initial phases of development.

Q And when you say, "our business," what are you referring to? A My building business. Q What is it called? A Impact Estates. Q And when you were going and looking in this

area, did you have an idea of where you might want to build a model home?

A Yes. We found a lot in the development in 2005 *651 and purchased that lot, and then it subsequently 16 flooded. We were unaware that it had a flooding 17 problem. And in 2007 when we had real heavy rains, the 18 property flooded. 19 Q And when you say, "the development," what are 20 you referring to? 21 A Vaquero. 22 Q So at some point in time, did you identify this 23 house, that is the one on White Wing Cove, as a 24 potential? 25 A Yes, sir. When the one property flooded, we

127 realized that we weren't going to be able to build on it, so we were looking for a home that we could move into for an approximate two-year period of time while we found another lot and then built a home of our own to move into.

Q So how did it all come about where you identified this house and you decided that you would do some kind of deal on it?

A Having bought the lot, I was fairly familiar with the development, and I saw these two homes from actually when they were under construction. And then they were finished and sat vacant for, I think, over two years and realized that these homes weren't selling for a reason. And the one home that we ended up purchasing *652 in particular did not have a guest room downstairs and

16 it did not have an elevator. So for a home in this 17 price range to have an elderly parent or somebody have 18 to navigate stairs and not have a guest room downstairs, 19 I felt was probably one of the reasons why the home 20 wasn't selling. 21 Q And in terms of being able to sell in this type 22 of area -- I mean, price range, did you believe that it 23 had to have that feature? 24 A Yes, sir. It was that and also at that time a 25 lot of media rooms were very popular, and this home

128 didn't have a media room either. Q Now, were you familiar with the Vaquero sales people that were out there who -- the real estate agent that was part of Vaquero?

A Yes, sir. Q And how did you become familiar with him? A Well, there was one gentleman who transacted

the sale of the lot that flooded and he subsequently left and then Mr. Buttemiller, who was referred to earlier, replaced him. And he was the one -- Mr. Buttemiller was the person that I contacted about purchasing the home on White Wing.

Q So tell us -- take us through how it happened that you actually got into the home and started making *653 the proposal. 16 A Well, originally, we were thinking about 17 renting, but I thought that possibly there might be an 18 objection to renting a home of that price range. So I 19 wondered if there would be an opportunity to buy the 20 home, take it off their hands for a couple of years, and 21 then buy it back from us, helping them and also helping 22 us. 23 Q How were you helping them? 24 A Well, they wouldn't have had anymore carrying 25 interest. I believe they mentioned earlier that they

129 were paying for the carrying interest on a couple million dollar loan.

Q And what about the addition? A Well, the addition I felt was something that

was needed in order to sell the home. That's why I thought it hadn't sold. So my proposal was that I would put on a guest room, an outdoor guest room, like casita I think they're called, and a pool bath, and then above that a media room.

MR. ALDOUS: May I approach, Your Honor? THE COURT: You may.

Q (By Mr. Aldous) Let me show you what's been marked as Exhibit 125. And before saying what it is, just say do you recognize this? *654 A Yes.

16 Q Thank you. 17 MR. ALDOUS: Your Honor, would you like to 18 look at it before I give it to them? 19 THE COURT: Show it to them first. 20 You may approach. 21 Q (By Mr. Aldous) Mr. Gross, is Exhibit 125 -- 22 could you tell us what it is? 23 A Those are the plans for the improvements on 24 White Wing Cove, the home that is in discussion. 25 Q Are these the plans that you had created?

130 A Yes, sir. MR. ALDOUS: Your Honor, we move to admit Exhibit 125. THE COURT: Any objection? MR. CHAIKEN: Objection, failure to

properly authenticate under 901. The instrument purports to be prepared by somebody else. It would also constitute hearsay and have hearsay within hearsay.

THE COURT: Response, Mr. Aldous? MR. ALDOUS: Well, Your Honor, I don't

know how to respond to say that it's hearsay. I'm not saying that it speaks for the matter -- for the truth other than they just are plans. And he authenticated them as the plans he received. *655 THE COURT: Overruled.

16 Does that have an exhibit number? 17 MR. ALDOUS: 125, Your Honor. 18 THE COURT: Exhibit 125 is admitted. 19 Q (By Mr. Aldous) Now, Ken, these are not the 20 easiest things to haul around, but there is one part of 21 it that I want to look at, which is on the first page. 22 And I'll have to really back up on this. All right. Do 23 you see the part of -- the first page of Exhibit 125 24 shows a plot plan. 25 A Yes, sir.

131 Q Can you tell us what that is? A That's the existing home and the garage and the

proposed remodel on the top. Q Now, the garage, is the garage this area that I'm pointing to with my finger? A Yes, sir. THE COURT: Mr. Aldous? MR. ALDOUS: I apologize. I'm sorry.

It's kind of hard because the paper keeps rolling up on me.

Q (By Mr. Aldous) The existing home is exactly what it means. That's where the house was? A Yes. Q And the proposed remodel, is that the casita *656 type bedroom, pool bath that you're referring to?

16 A Yes. 17 Q Over here on this side, on the left-hand side 18 of the home, what was over here? 19 A Master bedroom. 20 THE COURT: Excuse me just a minute, 21 Mr. Aldous. 22 For those of you seated in 3 through -- 4 23 through 6, if you think you could see better in the back 24 row, you're free to move back there. 25 You may proceed.

132 MR. ALDOUS: Thank you, Your Honor. Q (By Mr. Aldous) So, Ken, why wouldn't you put the proposed remodel on the left-hand side of the home over here?

A Well, the left side was the master bedroom, so you really wouldn't put a guest bedroom off the master bedroom.

Q Just from your standpoint as the builder, is there any -- in your opinion, would any builder put an addition with a guest room off the master bedroom?

A No. Q On this side of the home over here where the

proposed remodel was, what was over there? A The kitchen was behind the garage, and the *657 laundry room was behind the kitchen. So where you see 16 the proposed remodel, to the left of that is a covered 17 porch. Right underneath that porch, as we look at the 18 picture, was where the laundry room was. 19 Q And then what was above the garage? 20 A Above the garage was a game room that had a 21 sloped ceiling. It was just an open room that they were 22 calling a game room. 23 Q Now when you were suggesting the proposed 24 remodel, were you extending the game room? 25 A Yes. It was really a great set up for this

133 addition. And the casita, as they're called, or guest bedroom, was perfect in that it offered a lot of privacy. It was somewhat imperfect, you could say, because you had to go outside to get to it. But some people really like that. So pros and cons there. And the pool bath was right off the covered area that I just mentioned earlier. So you had a pool bath and a guest bath that could be used for privacy. And then above it with the game room being where it was located, it was just a natural to have the media room off the game room.

Q Was this area right here where the pool was? A Yes, sir. Q All right.

MR. ALDOUS: Your Honor, may I approach *658 the witness? 16 THE COURT: You may. 17 Q (By Mr. Aldous) These sheets, that is the 18 following sheets, are a little bit bigger. And I'd like 19 for you to hold that end of it and see if you can 20 describe for us what is shown on this page. That is the 21 second page of Exhibit 125. 22 A This is the upstairs. These are the stairs 23 going up. This was the existing game room that I 24 referred to and the exiting roof. And then this is 25 where the media room was located upstairs, and then

134 below that was the guest bedroom. Q And what is shown over here on the right? A That is basically the foundation or slab area. Q All right. So you had to actually add some

foundation? A Yes, sir. Q Now the third page, which refers to

manufacturing specifications and so forth, can you explain to us what this shows?

A Yes, sir. This is the existing utility room I spoke about, but then I was going outside of the home. You have a covered porch, a nice double door, a large guest bedroom or office or whatever it would be used for in the future, pool bath, shower, wet bar, and a huge *659 walk-in closet. It also had its own foyer entry so if

16 it were used as a teenage room or an in-law suite or 17 something, they would have their own private access to 18 the area and not interrupt. 19 Q Now the next page, what does that show? 20 A That shows the media room. This was the 21 existing game room, so I came up with a plan to add an 22 additional bathroom up there because I felt that it 23 probably needed it. If you had this type of set up 24 again in this quality of home, you would not use an 25 upstairs bathroom, one of the children's bathrooms. So

135 we put in a bathroom, a wet bar. It's showing a closet, but I went above and beyond and made it a wet bar with a microwave. And then the media room is off that area.

Q So rather than having to leave the game room or the media room to go to the restroom or to get to the bar, you could stay in that area?

A Yes, sir. Q Can you tell us what the elevations show? A Yes. This is the remodel. This is the

existing laundry room that they're kind of showing, and that as you look at this new part, this is the covered entry that I was referring to where the guest room was, and the media room was above.

Q Now this on the bottom here, what is that, the *660 rear of it? 16 A That's the rear view and that's a side view. 17 Q All right. And then the final page? 18 A This was the existing garage. And you can see 19 we built off the garage, kept these dormers exactly the 20 same, put in a similar window, and then had its own 21 separate entry as I mentioned earlier. 22 Q Now, Ken, these plans have a date on them, and 23 the date on them is August 23, 2007. Do you see that? 24 A Yes, sir. 25 Q Are these the first set of plans that you had?

136 A No. Q How is it -- is it typical to just have one set

of plans that are created and that's it? A Well, you work toward a final plan, but there's typically multiple drafts along the way. Q Is it your practice to retain the roof -- the previous versions once you get the revision? A No. I always throw them out for fear that I would have an old version and give it to a subcontractor and it would be incorrect.

Q Now, in June of 2007, when you were going to try to make the pitch to build this addition, did you have any meetings with anybody at the house?

A Yes, sir. *661 Q Who did you meet with? 16 A I met with John Buttemiller and Mr. Hickok. 17 Q Did Mr. Hickok come by the house where you were 18 proposing to do the remodel? 19 A He sure did. 20 Q And that was before you ever contracted to buy 21 that house? 22 A Yes, sir. 23 Q Why did you feel that was necessary? 24 A One, I wanted to make sure that everybody was 25 in agreement; and, two, we were in the process -- we

137 hadn't come to a contractual agreement. So how could you or any prospective party agree on what would be in a contract for a purchase and a remodel without discussing it beforehand, looking at the property, walking it?

Q Tell us what happened at the meeting with Mr. Hickok and Mr. Buttemiller. A They came out. It was a hot day. I remember it. We walked outside, walked inside, and I basically laid out for Mr. Hickok that, as I said earlier, the home lacked a couple of things and that I could make the improvements and it might benefit everybody. So we walked the back of the property. We walked around the garage. We discussed in detail.

I had even drawn out on a piece of paper *662 the proposed addition where it would go, what the plan 16 would be for the guest room, for the upstairs media 17 room. Doug was in agreement. He asked Mr. Buttemiller 18 his thoughts, and we ended the meeting with let's, you 19 know, proceed. He was going to contact Mr. Shaw, but 20 then we were going to proceed with potentially putting 21 together the deal. 22 Q Now, do you know whether or not you had drawn 23 plans at that time? 24 A When I met with Mr. Hickok, no. But I did have 25 a drawing on paper of where things would go, and really

138 it was the only logical place that it could go because the pool took up the rest of the place and the master.

Q When you had your meeting with Mr. Hickok and Mr. Buttemiller, was there any question as to what you were proposing?

A No. Q Mr. Hickok testified something like, well,

you'd want to know what the specifications are because you want to make sure they don't have purple walls or anything like that. Did y'all have any discussions about what the addition would be like with respect to the rest of the house?

A We did. He was concerned, I would think, that, as he said -- and I believe him on this -- that it would *663 be of quality construction. And I guaranteed to him 16 that it would. For example, the home had mahogany 17 doors. They're very expensive doors. The home had 18 hand-forged hardware where normally you could go into 19 Home Depot and buy a nice lock for $20. These 20 hand-forged locks were $300. It had an old Spanish flat 21 tile roof that I found out came off an old home in 22 Houston. It was about 80 years old. So one of the 23 discussions that we had was making the improvements in 24 like kind to the rest of the house and using a similar 25 quality and materials.

139 Q What does that mean to a builder when you say "like kind"? A Mahogany doors, the oak wood floors. Q It means doing the same thing that's in the

house? A Yes, sir. Q After your meeting with Mr. Hickok and

Mr. Buttemiller, who drafted the contract? A They did. Q When you say, "they," who are you referring to? A I'm assuming it was their lawyer. Q In other words, you didn't draft the contract? A No, sir. Q And when you received the contract, was there *664 anything that you thought of that was very important to

16 you with respect to this potential deal? 17 A Yes, there were two issues. One was that the 18 home would have to have some type of personal guarantee 19 in the event that their legal entity went belly up. And 20 the other was that if we were going to agree on what the 21 improvements were, then consent should not be 22 unreasonably withheld. 23 Q Now, are you testifying that you showed 24 Mr. Buttemiller or Mr. Hickok drawn plans other than the 25 handwritten plan that you had for this project prior to

140 closing? A No. Q Do you know when you showed them plans for the

first time? A Well, I had a drawn-out plan the first time we met. The formal plans were drafted subsequently, and copies were provided to Buttemiller. I had to give copies to the HOA. I had to give copies to the homeowners association. Excuse me. I had to give copies to the city for approval. We had an issue with the home was over the building setback line on one side. So the homeowners association had to approve that, and so did the city.

Q You had to get a variance? *665 A Yes, sir. 16 Q So as I understand it, at the time of closing, 17 that is you guys wrote up the contract and that's 18 Exhibit 3, and we've talked about that, right? 19 A Yes, sir. 20 Q And you then went out and you were getting a 21 loan where the bank was going to hold the money in 22 escrow for the building of the addition, right? 23 A Yes, sir. 24 Q Would the bank loan you money if you didn't 25 have plans and specifications at that time?

141 A No. Q So prior to the time of closing, you had plans

and specifications? A Yes. Q In fact, you recall that they showed Exhibit

15, which was the construction loan agreement between you and the bank, right?

A Yes. Q Did that agreement require you to build this

thing in accordance with plans and specifications? A Yes. Q Does that mean that you submitted plans and

specifications to the bank? A Yes. *666 Q Up there is the notebook that contains the 16 exhibits that have been admitted. 17 MR. ALDOUS: Thank you, Your Honor. 18 Q (By Mr. Aldous) And if you look at Exhibit 1, 19 it is your fax to Mr. Buttemiller dated May 25, 2007. 20 A Yes. 21 Q Now, with respect to that date, the fact that 22 you're sending this on that date means that you've 23 already looked at a form of an agreement, right? 24 A Yes. 25 Q The language that you asked them to submit into

142 the part where it says, "Where I marked insert A." Do you see that?

A Yes. Q What part did you add to that? A That was the improvements will be -- receive

general consent, consent not to be unreasonably withheld to proceed with the improvements.

Q What was your thinking on adding that in? A I didn't want to get into a situation where

they were delaying me and/or holding me up over, you know, door knobs or minor issues.

Q Did you think that that language was going to take care of that? A Yes, sir. *667 Q Then you had down below that, it said, "We 16 would like to suggest a new Addendum 4 that reads," and 17 then you have what I'm going to refer to as the personal 18 guarantee? 19 A Yes, sir. 20 Q And why is it that you wanted the personal 21 guarantee there? 22 A As I said earlier, in the event that the 23 business went bankrupt or belly up or was insolvent, 24 that I would have some guarantee that the home would be 25 purchased back, personally.

143 Q In other words, that not just the business, but the people would also be responsible? A Yes. Q Did all of the suggestions that you made in

Exhibit 1 get incorporated into the agreement? A I believe so. Q Now, there were some questions from Mr. Chaiken

to Mr. Hickok about your agreement with the bank and the fact that the agreement with the bank said you were supposed to start construction at a certain period of time?

A Yes. Q Did you and the bank reach some sort of

agreement as to starting later? *668 A Yes. 16 Q Tell me about that. 17 A Well, honestly, I was unaware that the contract 18 said you had to start in 15 days. There was a broker 19 who was representing -- 20 MR. SHAW: I'm going to object to hearsay 21 and narrative because I don't know where this is going 22 in particular. 23 MR. CHAIKEN: I join in the objection of 24 hearsay. 25 THE COURT: Overruled.

144 Q (By Mr. Aldous) You can answer. A Oh, what's the question again? I'm sorry. Q You just -- now you're putting it back on me to

remember what the question was? THE COURT: We can have the court reporter read it back. MR. ALDOUS: That's all right, Your Honor. I do remember. Q (By Mr. Aldous) So, with respect to the agreement that I asked if you and the bank agreed to allow you to start later, and you said -- I believe you said, "I didn't realize that there was a 15 day" --

A Yes. There was -- that was just an oversight on my part. But the bank never contacted me either. *669 And it's been so long ago. I can't remember. But there 16 was a broker who represented, you know, the bank and us 17 as the intermediary. And he never brought it to my 18 attention, so it wasn't really until I think almost a 19 year later that the bank called and said, hey, you've 20 got to start this construction. And then at that -- 21 MR. CHAIKEN: Your Honor, I object and 22 motion to strike where he's testifying to what the bank 23 said. That is hearsay. 24 THE COURT: Sustained. Rephrase your 25 question, Mr. Aldous.

145 Q (By Mr. Aldous) Did the bank allow you to start later than what was called for in the construction loan agreement?

MR. CHAIKEN: Same objection, hearsay -- THE COURT: Overruled. MR. CHAIKEN: -- what the bank allows.

Calls for hearsay. THE COURT: Overruled. A Yes. Q (By Mr. Aldous) When you and Betsy closed this

contract in June of 2007, did you actually physically sign the closing documents at the same time as VSDH and Mr. Hickok?

A No. *670 Q Tell us how that happened. 16 A We went to the closing first. It was their 17 title company. They provided the title company, so we 18 went down there and closed. And then I assume they 19 closed sometime thereafter. 20 Q When you say, "we closed," what do you mean? 21 A Signed all the documents and the loan was 22 funded. 23 Q Now, attached to the contract, which is Gross 24 Exhibit 3, are several pages of Addendum B, which are 25 the 2004 White Wing -- no, 1,082 square-foot addition

146 casita with FR bedroom and shared pool bath. Did you prepare this document?

A Yes. Q Can you describe for us what it is? A Basically it's the specifications of what will

go into the construction of the improvements. Q And so if you would, just take a couple of entries, whatever they are, and describe for us what they mean. For instance, under concrete, it says slab. Then it says unit 546. What does that mean?

A 546 square feet of concrete. You'll see, for example, the framing. We got labor of 15,000. We got material, 10,000. I've got cedar pergola for the porch that I mentioned earlier of $2,000. I have my roofing *671 material and labor in there, windows, gutters.

16 Q Now, so some of it -- when you say units, some 17 of it is just how many you need for that space, but some 18 of it's based upon square footage; is that right? 19 A Yes, sir. 20 Q So when you say electrical down towards the 21 bottom where it says electrical under mechanical, it 22 says 1092. Is that the same thing as saying for -- that 23 much square footage you had to -- we're going to pay 24 that much? 25 A Yes.

147 Q On the next page, there's additional material that is referred to. And it says, for instance, stone materials, tons. And it says 25. Does that mean 25 tons of stone?

A Yes, sir. Q And is that based upon how much you thought you

were going to have to cover? A Yes. Q And then so all of these related to what you

measured out as being necessary to complete a 1,092 square-foot addition that you proposed?

A Yes. Q All of this was attached to the contract as

Addendum B? *672 MR. SHAW: Your Honor, the leading 16 continued. I need to object to it. 17 THE COURT: Rephrase, Mr. Aldous. 18 Q (By Mr. Aldous) Was Addendum B attached to the 19 contract at the time of closing? 20 A Yes, sir. 21 Q Did anybody request this document that is 22 Addendum B? 23 A Yes. Mr. Hickok and Mr. Shaw requested it 24 through John Buttemiller as part of the contract, it be 25 produced.

148 Q There's some statements about whether or not these particular items that are listed in the Addendum B constitute specifications. In your mind, are they?

A Yes. Q There was an indication that specification

means type and color of paint and so forth. Do you agree with that?

A Perhaps under a commercial construction, which Mr. Hickok was referencing, you might have office buildings painted eggshell. In this case, we were matching the interior colors of the home. We were matching the wood floor, which was oak. We were matching the stone, which was an Austin chop. So it was pretty obvious to, I thought, everyone involved of what *673 the specifications were.

16 Q Let me ask it a little differently. Were you 17 under any confusion as to what was expected in terms of 18 the addition as it related to the original house? 19 A No, sir. 20 Q Is it your belief that anyone else involved in 21 the transaction was somehow confused as to what it meant 22 when you said "like kind" in terms of the new addition? 23 MR. CHAIKEN: Objection, calls for 24 speculation about what somebody else believed or was 25 confused.

149 THE COURT: No speaking objections. MR. CHAIKEN: Speculation. THE COURT: Overruled.

A No, sir. Q (By Mr. Aldous) Did anyone involved with this

transaction, be it Mr. Buttemiller, Mr. Hickok, or anyone else, express to you that they were confused by your Addendum B and what was anticipated in terms of the addition?

A No, sir. Q There's also a part in the closing that's been

referenced by Mr. Hickok and it relates to the escrow. Do you recall that testimony?

A Yes. *674 Q Let me put up on the screen the provision 16 relating to the escrow. So did you seek, you know, or 17 look into whether or not your lender would agree to 18 escrow funds with the title company? 19 A Yes. 20 Q What did they -- what was the result? 21 A The result was that our lender was not going to 22 fund the loan or loan us the money unless the money was 23 held in their account since they're the ones with the 24 risk. 25 Q So if -- by the way, did you -- were you ever

150 -- did anyone ever connected with the transaction object to that?

A No. In fact, I contacted Mr. Buttemiller and that's why the contract was changed and agreed to from the 2.851 to the 2.695 number that was discussed earlier.

Q So, as I understand it, your bank, the one that's loaning you the money to buy the home and do the addition, is not going to let someone else hold the money for the addition, right?

A Correct. Q And if that's a condition of closing, would you

have been able to close if, for instance, VSDH said, hey, we're not going to do it unless you put the money *675 in with the Chicago Title?

16 A No. 17 Q In other words, the deal wouldn't have gotten 18 done? 19 A Yes. Correct, yes. 20 Q At that point in time -- so VSDH, is it your 21 understanding they could have said, "I'm sorry. That 22 doesn't comply with the contract; and, therefore, we're 23 going to just keep your earnest money and go on our 24 way"? 25 A They could have, but they modified the contract

151 to accommodate that. Q All right. And so when you hear somebody say that you violated or breached the agreement as a result of not escrowing the funds at the title company, what's your response?

A I don't see how that's true whatsoever. Q Was it your belief that everybody had agreed to

it and that's how the deal got closed? A Yes, sir. Q In the terms -- so when you're building a home

for somebody else and you -- you're using their funds, whether it be through the bank or whatever, as the builder, you don't get 100 of that right off the bat, do you? *676 A No.

16 MR. SHAW: Your Honor, the leading 17 continues, and I need to object to it. 18 THE COURT: Sustained. Be careful how you 19 phrase your objections, though, Mr. Shaw. 20 MR. SHAW: I'm sorry, Your Honor. 21 Q (By Mr. Aldous) How is a typical transaction 22 when there's going to be a builder who's building a 23 house on behalf of somebody? 24 A The bank holds the money and they call it a 25 draw against the construction process. So if you

152 complete the foundation, you're paid for the foundation, the framing.

Q And is it the draw -- are the draws limited to the amount of work that's been completed? A Yes and inspected. Q Is that the way that the, I guess, the

borrowers protect and make sure the builder does what he says he's going to do?

MR. SHAW: Objection, leading, Your Honor. THE COURT: Overruled. THE WITNESS: Yes, sir.

Q (By Mr. Aldous) In this transaction, it was -- was it a bit different than that typical transaction? A No. The lender, First Horizon, which then *677 became Met Life, had the same requirements. We could 16 not draw upon the funds until the work was completed and 17 the property was inspected for the work -- said work for 18 the draw. 19 Q All right. Now I want to turn to the part 20 about in 2008. First of all, under Section 2, before 21 commencing construction, buyer will review with seller 22 the plans and specifications and receive general consent 23 -- do you see that -- consent not to be unreasonably 24 withheld? 25 A Yes.

153 Q So you heard Mr. Hickok and his statement as to he thinks that you violated that. Do you agree? A No. Q Why not? A Well, from the very beginning, there was

agreement on what was being constructed. We knew it was going to be a guest room and a media room. I had produced plans for the lenders. We talked about Mr. Buttemiller had plans, and then when we were commencing construction, I tried to get ahold of Mr. Hickok to come review the plans with difficulty in getting cooperation.

Q What do you mean by that? A Well, we -- I tried calling him on multiple *678 occasions, and he never returned my calls. I finally

16 ended up having to fax him to get his attention. And 17 then it was several days that passed before we 18 communicated. We set up a time to meet. Again, he 19 couldn't meet right away, but it was like another two 20 weeks. 21 So this was already almost a month that 22 had gone by. We were set to meet on -- it was 23 Halloween, October 31. I get an email he can't meet. 24 He's out of town. Another couple of weeks go by. So it 25 was a protracted process to get them to approve the

154 plans. Q Well, at that time, were you concerned at all about whether or not there was going to be any kind of disagreement with the plans?

A No. Q Why not? A Again, we were in agreement that it was going

to be a guest bedroom down, a media room up. The specifications were all spelled out, what it was. It was in like kind, using the same materials. So there was no -- no disagreement from my perspective at that point in time.

Q Now, when Mr. Hickok did finally come out to the house, he testified that you were halfway done. Is *679 that accurate? 16 A No, sir. 17 Q Tell us how far along you were and why you 18 started. 19 A Well, we started because the bank had notified 20 us that we had to finish construction by the beginning 21 of the following year, which only gave me about three, 22 four months to complete the process. So when Mr. Hickok 23 came out, I had the foundation poured and most of the -- 24 MR. CHAIKEN: Your Honor, I'm sorry. I 25 have to interpose an objection and move to strike on the

155 grounds of hearsay. He's testifying as to what the bank told him he had to do.

THE COURT: Overruled. Q (By Mr. Aldous) So Mr. Hickok came out and you had the foundation and what? A The foundation came out and the home was partially framed. It wasn't completed. The roof was not on for sure.

Q So what do you mean by partially framed? Just describe for me what that means. A Well, first phase is the foundation. The second phase is the framing, and that means just, you know, all the walls, closing everything in, putting the roof on. And then once the frame is complete, then you *680 start to do the electrical. We call it the mechanicals;

16 the heat, air-conditioning. 17 Q Now you said that the roof was not on. It 18 wasn't weathered in; is that right? 19 A Yes, correct. 20 Q So what does that mean, "weathered in"? 21 A That means if it rains, water can get into the 22 improvements and damage. You know, if you were to put 23 the drywall up without it being weathered in, you would 24 destroy the drywall. 25 Q So take us through the visit from Mr. Hickok

156 and what occurred. A When he finally did come out, it was a very cordial discussion. I toured him around the bottom half first, the outside, which was the guest room, the pool bath. We looked at the plans. We then went upstairs. We had to go through the home to go upstairs. He looked at the upstairs, the media room area that was framed. And we came downstairs and had a great discussion with Betsy about our children both looking for colleges, and it was very cordial. And we specifically asked him how things looked. He said, "Great." I said, "So I can proceed?" He said, "Yes."

Q At any point in time, did he say to you, "Oh, you didn't call me before you started construction," or, *681 "you didn't show me the plans before you started 16 construction"? 17 A No. 18 Q Did he make any complaint that you had breached 19 the contract by starting what had happened? 20 A No, sir. 21 Q If Mr. Hickok said to you, "Hey, dude, I don't 22 like what you've done. You need to redo this," what 23 would you have redone? 24 A If it was something reasonable, like if I had 25 put a wall in the wrong location, yes, I definitely

157 would have moved it. Q If he would have made any kind of suggestion that he thought it was important for you to comply with, would you have done it?

A Yes. Q Within reason? A Yes. Q If he told you to put in purple walls, you

wouldn't have done that, right? A Probably not. Q So after that visit, what else occurred after

that? Did you hear back from Mr. Hickok after that visit?

A Never heard anything, and we just continued on *682 with the construction of the property. 16 Q So let me show you -- or take a look at exhibit 17 -- hold on just a second -- Exhibit 30 in the notebook. 18 Do you see that? Are you there? 19 A Yes. 20 Q So this is an email that you sent to Mr. Hickok 21 on February 23rd, 2009. Do you see that? 22 A Yes. 23 Q Based upon what you're saying here, can you 24 tell us where you were in the construction on the 25 project?

158 A We were, I think, basically finished. Q If you would, just walk us through and tell us

what some of this stuff means. It says, "I'm finished with the addition and wanted your final inspection and approval. I ended up going above and beyond with some items, including a larger wet bar, including refrigerator and microwave in the upstairs game room."

A Yes. As I mentioned earlier, we spent about 20 to 25,000 extra. There were just things that I thought would benefit the home and would make the improvements better overall. For example, Number 4, marble in the pool bath versus the slate that was in the specifications, I just thought it would be a natural and it would be a, you know, higher quality overall. *683 Q Well, it says here, "I ended up going above and

16 beyond with some items." You went above and beyond 17 what? 18 A The specifications. 19 Q Was that the Addendum B that we talked about? 20 A Yes, specifications were Addendum B. 21 Q And you're saying that these items were over 22 and above what was in Addendum B? 23 A Yes, sir. 24 Q Is it your belief that these items were an 25 upgrade from what was reflected in Addendum B?

159 A Yes. Q What did it mean when you say upgraded mahogany

crown in the downstairs guest room? A Just putting in extra materials that were above and beyond what was in the specifications. Q Well, the crown molding, was it specified to be something less than mahogany? A I can't remember. I think the -- I think the molding in the house was paint grade, and I think we went with mahogany in the downstairs guest room. I can't recall. There are pictures that we have that would show exactly what we ended up with. That was probably a somewhat minor thing. But, you know, some of the major things, like moving -- I don't know if it's in *684 here. I moved all the AC equipment. It was right by

16 the guest room door. And you know how air-conditioners 17 are loud, so I spent like two or $3,000 extra to move it 18 to the other side of the addition so that you wouldn't 19 have air-conditioners right by the entry door. 20 Q What else do you remember that was something 21 that was -- what you consider to be significant? 22 A Well, the wet bar upstairs, the microwave, 23 making that more of an entertaining area than just 24 having a closet. 25 Q Number 10 says, "I put in media room equipment,

160 and this was not in the budget, but will take it with us in the event we move."

A Yes. Q Why was that important as far as you're

concerned? A It was about $10,000 worth of media room equipment. Q In terms of the house and the addition, is a media room without the equipment as effective in marketing a house as one with equipment?

A We ended up -- the buyer ended up requesting that it be left, so we ended up leaving it with the purchaser of the home.

Q Well, is it -- just from a builder's *685 perspective, is it easier to market a house with the 16 media room that actually has the equipment in it? 17 A Yes, yes. I'm sorry. Yes. 18 Q Did you ever receive a response from Mr. Hickok 19 saying that he would like to come over and take a look 20 at the house and what you'd done? 21 A No. 22 Q The next thing that occurred was Exhibit 34, 23 which is the 4/27/2009 buyback option exercise. 24 A Yes. 25 Q So what was the plan that you and Betsy come up

161 with in terms of the house? A Well, we knew we were only going to choose to live there for a couple of years and that we were going to exercise the buyback. On top of that, the market crashed. The economy crashed. And we decided we were going to exercise the buyback. So we notified Doug and Van that we were doing so.

Q In response to your email or your letter, did you receive a response from Mr. Hickok? A Yes. It was to the effect that he was no longer handling the issue and that Mr. Shaw would be handling the issue.

Q Let me show you what has been marked as and admitted as Exhibit 65. This is an email after *686 Mr. Hickok said y'all need to talk to Van. All right? 16 A Yes. 17 Q Now you see her email there on the 18th -- 18 A Yes. 19 Q -- where she says, hey, there's some potential 20 options here? And do you see Mr. Shaw's response, 21 "Betsy, thank you for your email today. I'm glad to 22 talk, but I want to make sure you're aware that the 23 entity that sold the home is not financially solvent. 24 So that will no doubt have a huge impact on our 25 discussion. Not sure when I will be out that way, but

162 maybe we can meet somewhere else. I'm not sure where your office is, but that may be a possibility. Please let me know where you suggest"? Do you see that?

A Yes, sir. Q Now, I don't want to go through all these other

emails and things. But up until the time that you guys put the house on the market, did Van Shaw or Doug Hickok ever contact you and say, hey, you breached the agreement; therefore, we're not going to follow through?

A No. Q However, did Van Shaw tell you that they were

not going to perform the buyback? A Yes. Q Tell us that about that. *687 A We had a phone conversation in which he told me

16 about that. We arranged a meeting. 17 Q Told you what? 18 A That the company was insolvent and that they 19 could not buy the property back. 20 Q What else did he tell you? 21 A He said that they might be able to get us a lot 22 in return or in exchange. And the lot that he was 23 discussing was worth way less than what we were looking 24 at as a potential loss on their breach. 25 Q At any point in time up to, let's just say,

163 June 28th, did you -- of 2009, did anybody ever suggest to you that you were in breach of this agreement?

A No. Q Now you saw earlier the letter that came from

Hap Stern -- I think it was Exhibit 29 -- that said something to the effect of, "Hey, you didn't do this escrow and we reserve all rights." You saw that?

A Yes. Q Do you recall whether or not -- I mean, what

did that mean to you? A Honestly, I was scratching my head with regard to it. They closed. They took the money. We signed first. They closed. They knew that we had to change that. So I was surprised. In hindsight, I could see *688 why. But at the time, it was just -- it was sort of

16 inconsequential. 17 Q Now let me just turn to Exhibit -- I hate 18 getting old because that means I've got to use reading 19 glasses when the light's low. 20 THE COURT: Would you turn on the lights? 21 MR. ALDOUS: Thank you. 22 Q (By Mr. Aldous) I'm missing an exhibit, but 23 forget that. Let me just show you what -- if you recall 24 -- do you recall having a meeting on June 28, 2009, with 25 Mr. Shaw?

164 A Yes. Q What took place at that meeting? A It was basically a re-summarization of what he

had prior told us; that they were not going to perform under the buyback clause, that they were not personally guaranteed, and that, you know, they -- really, that was it. I mean, nothing that they were going to do.

Q Were you upset? A Yeah. It was our worst fear to be honest. Q Let me show you what has previously been

admitted as Gross Exhibit 59. On August 18th, you had already put the house on the market. Why did you put the house on the market?

A They told us they weren't going to perform, so *689 we had really no other option but to try to sell it 16 ourselves. 17 Q And Exhibit 59, you received an offer, right? 18 A Yes, sir. 19 Q Tell us about what happened. 20 A Well, Roxann Taylor -- Roxann Taylor met with 21 us and she showed us the comps in the neighborhood, and 22 we agreed on a price based on the comps and the market, 23 you know, that had crashed. And so we agreed on a price 24 at 2.5. The home sat for, you know, a month or two with 25 virtually no showings. There might have been one or two

165 showings. It was not optimistic. And lo and behold, a buyer came along and offered us a cash deal through Roxann Taylor. But we had to be out within a very short period of time. She wanted the closing to be whenever it was, August 21st or a couple of weeks before September 1st. We asked her, through Roxann, whether she would wait until after September 1. And she said, "No. If you do that, the deal is off."

Q This exhibit where you sent the email to Mr. Hickok and Mr. Shaw, was this kind of like your last attempt?

A Yes, sir. Q Did you ever get a response to this? *690 A Nothing.

16 Q Were you aware at the time you sent this that 17 -- that VSDH, Mr. Hickok, and Mr. Shaw had sued you -- 18 A No. 19 Q -- and Betsy in this court? 20 A No, sir. 21 Q When they filed that case in July 7th of 2009, 22 did they ever have you served up and to this point, 23 August 18? 24 A No, sir. 25 Q So at no point in time did they inform you that

166 they had sued you? A No, sir. Q I'd like to look at some photographs here that

we have that have previously been admitted as Exhibit 116. First of all, can you tell us where these photos came from?

A Yes. They're from the home at 2004 White Wing. Q Well, I mean, I know that. But I mean -- A Oh, you mean the location within. That's a

picture of the back patio area looking toward the laundry room.

Q Okay. I'm not doing very good. I mean, who took these pictures and for what purpose? A Roxann Taylor did as part of the listing *691 agreement and marketing of the property. 16 Q So now, going to -- where is this looking? 17 A That's looking at the rear -- off the rear 18 patio. 19 Q And the rear patio being the rear patio where 20 the addition was? 21 A No. That's looking at the laundry room. The 22 addition is behind it to the left. 23 Q Okay. What do you got here? 24 A That's the pool with the addition to the right. 25 Q So the part that you built on is the part over

167 here that you can see a structure? A Yes. And we also -- I believe this was at our expense. We tore out -- that whole area that you see in front was some big blocks of squares of concrete that had mondo grass, and you could trip over it. So we tore all that out and put in flagstone.

Q Right here? A Yes, sir. I think we made that much more

beautiful, and then we created a flagstone walkway back to the guest bedroom that you can see.

Q All right. What you got here? A That's the addition. You can see the porch

that I talked about, the covered entryway. You can see that the cedar beams, support posts, match the other *692 existing of the first picture you showed. There's the

16 stone. There's the tile roof. 17 Q The next photograph? 18 A That was the library, which was unchanged. 19 Q That was part of the original house? 20 A Yes. This was taken at the time we listed the 21 property. 22 Q All right. 23 A The upstairs foyer or entryway to my daughter's 24 bedroom. And then to the left would go back to the game 25 room, but that is existing.

168 Q Okay. A I think that's a pretty good shot of the

addition on the left and the existing home on the right. You can see the tile roof.

Q Is this the addition here? A Yes, sir. Q And when you say the tile roof, you're saying

how it matched up with that? A Yes, sir. Same windows. Q This is the grass that you grew? A That's looking off the backside of the

addition. Yes. Q Okay. A One of the bedrooms, unchanged. *693 Q Okay.

16 A Bathrooms. Excuse me. Again, similar, 17 unchanged bathroom. Unchanged bedroom. Again, 18 unchanged, that was my daughter's bedroom. 19 Q All right. Let me see if I can get to the part 20 where it changed. 21 A Yes. That's the guest casita or office. You 22 can see we've got the same hardwood floors. We have the 23 mahogany doors to your right. There's the mahogany 24 crown. 25 Q When you say, "crown," you're talking about the

169 molding? A Yes, the crown molding. Q As opposed to the Crown Royal or anything like

that? A Yeah. Same color paint that the rest of the house had. Q And this, what is this? A That was an area that we added as well. That

was at our expense. I believe if you go back to the specifications -- I didn't mention it earlier, but there was a column that had "other." Those were items that we agreed to do on our own; and, yet, were seeking approval to do those so that Mr. Hickok and Mr. Shaw would not be surprised by any of the improvements. But that was a *694 front outdoor courtyard patio that we entered -- that we

16 constructed. Excuse me. 17 Q Is this the entrance to the bedroom downstairs? 18 A No. That's an entrance to what was -- what is 19 the kitchen. 20 Q Oh, okay. And just -- there's a front photo of 21 the house? 22 A Yes, sir. 23 Q And then what do we got here? 24 A That's the game room. And off in the distance 25 you can see -- when you go through the arched opening,

170 we have the wet bar on the right. And then looking through is the media room.

Q What you got there? A That's the media room. Q All right. Now in addition to the photos that

were prepared and shown on Ms. Taylor's website for the sale, was there also a brochure that she created?

A Yes, sir. Q We previously have admitted Exhibit 115.

That's not the house, right? A No. That was the cover of the edition -- Q Oh. A -- the edition of the magazine that it was in.

That's it. *695 Q And then the photos down below of the portion 16 of it as she was trying to sell it, right? 17 A Yes. And you can see that the existing 18 matched. 19 Q Sorry? 20 A For example, the room on the middle right there 21 is the great room. You can see where we matched the 22 mahogany doors, the paint color, the oak floor. 23 Q Is this what you're referring to? 24 A Yes, sir. 25 Q All right.

171 MR. ALDOUS: Thank you, Your Honor. THE COURT: Dan?

Q (By Mr. Aldous) I kind of want to ask you. So during this whole process before you exercised the buyback option, did you consider there to be any kind of animosity or combativeness with VSDH and Mr. Shaw or Mr. Hickok?

A Other than the letter that their attorney sent after the closing, there was really little interaction, but certainly no animosity. Betsy had, I think, run into Mr. Shaw on a couple of occasions and had a very cordial discussion or discussions with him as well.

Q Now your next-door neighbor, Mr. Maya -- A Yes. *696 Q -- were you aware that he was friends and,

16 slash, an investor with Mr. Hickok? 17 A Yes. 18 Q Did they -- were they in the home before? 19 A Yes. 20 Q Had you had them into the home after the 21 addition was done? 22 A I can't say for certain, but I would think they 23 would. We had dinners together. We were neighbors. 24 MR. ALDOUS: All right. I think I'll pass 25 the witness now, Your Honor.

172 THE COURT: Mr. Shaw? MR. SHAW: Thank you, Your Honor.

CROSS-EXAMINATION BY MR. SHAW: Q Mr. Gross, let me get started kind of at the top and work through it with you please. You said -- what's your business?

A Yes, sir. Q Yes, sir. Your business is what? A Home building, remodeling. Q What did you say the name was? A Impact Estates. Q Now, that's not the only business you've got,

is it? *697 A At this point in time, no. 16 Q All right. Tell us what other businesses you 17 have. 18 A Just one other. 19 Q Which is? 20 A Carabela Custom Homes. 21 Q So there's a different home building company 22 you've got? 23 A Yes, it's inactive. I mean, it's active from 24 the secretary of state, but I've not -- I have not done 25 a project under that name.

173 Q Well, you're involved with Impact Health, Inc., aren't you? A Yes. That's the S corp and the Impact Estates is doing business as, which is under the umbrella of Impact Health.

Q You're involved with Impact Luxury Estates; is that right? A Yes. Q You're involved with Impact Concrete; is that

right? A That was an old business that we tried to start in the concrete business. Q You're involved with Impact Concrete Solutions; is that right? *698 A They were basically the same entities where we 16 were trying to get into the concrete business. 17 Q And Carabela Custom Homes, Inc., when did you 18 start that? 19 A I think we registered it a couple of years ago. 20 Q How long have you been a home builder? 21 A Since our fire, 2000 and -- about 2000, the 22 year 2000. 23 Q Fifteen years? 24 A Yes, sir. 25 Q And you've built more than six, $2 million

174 homes; is that right? A No, sir. Q How many have you built? A Probably around six, but they weren't over two

million. They were million-dollar homes, but I built a couple in Las Colinas that were maybe under a million.

Q You're a sophisticated home builder, right? A Yes. Whatever sophisticated means. Q Well, you agree you're sophisticated, fair? A Yes. Q You had the means to buy a $2.6 million home in

2007, right? A Yes. Q The -- now, you sold your prior home to Dr. and *699 Jodi Lash; is that right?

16 MR. ALDOUS: Your Honor, I would object 17 and I would ask to approach the bench. 18 THE COURT: You may approach. 19 (Sidebar conference held) 20 THE COURT: You may proceed. 21 MR. SHAW: Thank you, Your Honor. 22 Q (By Mr. Shaw) Now you said you had a lot in 23 Vaquero when you bought this home in that same 24 development; is that accurate? 25 A Yes.

175 Q And you had a -- some property that you said was flooded? A Yes. Q And what happened as a result of that? A Well, the rain --

MR. ALDOUS: Objection, Your Honor. What happened as a result of that is -- doesn't allow me to sufficiently object. I'm not sure what he's asking.

THE COURT: Rephrase. Q (By Mr. Shaw) You said you couldn't or didn't build on that property? A Yes. Q Why? A Because it flooded and the homeowners *700 association would not allow us. We submitted plans for

16 construction, and they said we could not put the home up 17 until the flooding issue was resolved. 18 Q So what did you do to resolve that issue? 19 A Ultimately, we made about $200,000 in 20 improvements to correct it and then subsequently sold 21 the property. 22 Q And how long was it after when you did the 23 improvements? 24 MR. ALDOUS: Your Honor, I object as 25 relevant.

176 THE COURT: Sustained. Q (By Mr. Shaw) So you bought the home here. And how long did you think it was going to take you to build on that lot that you had wanted to that had been flooded?

A We -- I don't know if I quite understand your question. But it would take us about a year-and-a-half to two years to construct any home in that development with the planning process taking about six to nine months for drawing plans and submission for approval.

Q And what kind of home did you want to build, what price range? A On which lot? Q On the flooded lot. *701 A I think we had plans for a large home that was

16 around 2 million. I can't remember the final. It's 17 been so long ago. 18 Q When you say a "showcase home," what is that? 19 A Just a home that we could show the quality of 20 construction. 21 Q The -- so you decided that you will look for a 22 home and you find the home we're here about; is that 23 right? 24 A Yes. 25 Q And you had a lawyer as part of this

177 transaction, right? A Yes. Q Mack Zimmerman? A Yes, sir. Q Why do we see paperwork where you're coming up

with terms for the contract instead of your lawyer? A He drafted the language and I presented it to John Buttemiller. Q Okay. Why didn't your lawyer present it? A I think it was just an order to expedite the

transaction. Q You have a position that you would not have purchased the property if myself and Mr. Hickok were not personally liable? *702 A Yes, sir.

16 Q No doubt about it, right? That's your 17 position? 18 A Yes, sir. 19 Q You had a lawyer? 20 A Yes, sir. 21 Q You never got a signature from me at all, did 22 you? 23 A We closed first. You closed after, and you did 24 not sign it. Your title company should have caught 25 that, but they did not.

178 Q What should they have done? A I would think they would have -- you picked the

title company. I would have thought or hoped that they would have asked you to consummate the contract.

Q Did your lawyer pick that up? A No. My lawyer was only involved in the

language. Q Okay. What language? A The language you just referred to, the buyback. Q So why wasn't your lawyer involved in the rest

of it? Who stopped your lawyer from being involved? A No one. He could have been. In hindsight, he probably should have been, but we had no reason to believe that things weren't going to proceed as we had *703 agreed upon.

16 Q Okay. Exhibit 16, VSDH Exhibit 6, where was 17 Shaw going to sign? 18 A Right below that. 19 Q Where? 20 A Seller. 21 Q Well, Shaw wasn't a seller, was he? 22 A Well, you were a seller and -- well, you were 23 supposed to be. VSDH was the seller, and you were 24 supposed to personally guarantee it. 25 Q So saying seller wouldn't have been right for

179 Shaw to sign, would it? A Yes. Q How would Shaw be a seller, if VSDH -- A Your -- Q -- Ltd., owned it? A Aren't you a partner of VSDH or -- Q No. I'm -- that's an entity. That's like Dell

Computers. And Michael Dell -- when Michael Dell isn't an owner -- isn't personally liable for what Dell Computers does. Do you understand the distinction?

A Not really. MR. ALDOUS: Your Honor, I object he's asking him legal -- THE COURT: Sustained. *704 Q (By Mr. Shaw) Let's look. Your name is typed 16 in, Ken Gross? 17 A Yes. 18 Q Mrs. Gross' name is typed in? 19 A Yes. 20 Q Vaquero Venture, Ltd.'s name is typed in? 21 A Yes. 22 Q Where is Shaw's name or Hickok's name typed in? 23 A You guys prepared the contract. I did not. 24 Q You guys, who is you guys? 25 A You're a lawyer. I'm assuming Hap Stern.

180 Q Your testimony to this jury is Hap Stern prepared the contract? A No. Q Okay. Wait a second. Let's make sure we're

clear on things then because when you say something, I'm going to hold you to it. Okay?

MR. ALDOUS: Objection, Your Honor, to the sidebar comment. THE COURT: Sustained. Q (By Mr. Shaw) Hap Stern's going to be here to testify. Okay? So your testimony is -- you've now retracted. You're not saying Hap Stern prepared the contract, are you?

MR. ALDOUS: Objection, Your Honor, *705 sidebar comment. 16 THE COURT: Sustained. 17 Q (By Mr. Shaw) Who are you saying prepared the 18 contract, sir? 19 A Mr. Buttemiller presented us with the contract. 20 So who prepared it from your side, I don't know. Our 21 attorney added the buyback language. And I added, with 22 my attorney's approval, the consent language, not to be 23 reasonably withheld. 24 Q Who did Mr. Buttemiller represent? 25 A He represented both parties.

181 Q Who? A You and -- Q Well, who's "you"? A Van Shaw and Mr. Hickok, as well as VSDH. Q Now, are you saying Van Shaw had an agreement

with Mr. Buttemiller to represent Van Shaw? A On the personal guarantee side, I'm assuming he did. He was the one who was -- I don't know what the word is.

Q You're assuming. Do you know whether or not Mr. Buttemiller and I ever discussed anything about this matter?

A I'd assume he did since he was representing you. *706 Q Do you know is what I'm asking. 16 A I don't understand the question. 17 Q Do you know whether Mr. Buttemiller and I ever 18 had discussion one about anything dealing with this 19 matter, including personal liability? 20 A No. I can't -- I can't testify to what you 21 discussed with Mr. Buttemiller. 22 Q Okay. Are you familiar with this intermediary 23 -- 24 A Yes, sir. 25 Q -- notice?

182 A Yes, sir. Q That's between Vaquero, the Grosses; is that

right? A Yes, sir. Q And that says that -- somewhere in here that

Mr. Buttemiller is representing both parties? A Yes, sir. Q It never says Mr. Buttemiller is representing

Van Shaw or Doug Hickok, true? A I guess. Q Okay. So you never talked to me about personal

liability at all, did you? A No, sir. Q When you signed the contract, my name never *707 appeared anywhere on their signature line, did it?

16 A No, sir. 17 Q Doug Hickok's name never appeared anywhere on a 18 signature line, did it? 19 A Yes, it did. 20 Q When you signed the contract, where did Doug 21 Hickok's name appear? 22 A It says seller. Then his line I'm assuming is 23 his signature. 24 Q I thought you said you signed this first? 25 A We signed this. I don't know whether you

183 signed it first or we signed it first, but this is -- this is the document that ultimately ended up going to the title company. We closed first.

Q I never signed this, right? A No. Q You said you signed this first. I never signed

this. A No, no. Q Okay. A I didn't mean that. Q Now, are you saying that Mr. Hickok's name

appears under VSDH Vaquero, Ltd., before you signed your name?

A I can't remember. *708 Q Well, you said you signed -- you went to the 16 title company, you signed first, and so you assumed the 17 title company would have me sign it. Is that what you 18 said? 19 MR. ALDOUS: Your Honor, I object because 20 that assumes fact not in evidence. 21 THE COURT: Sustained. 22 Q (By Mr. Shaw) What did you say about what you 23 expected the title company to do regarding my signature 24 or Mr. Hickok's signature? 25 A I thought they would have had you execute the

184 document before funding -- given you guys the money. Q Where would I have executed the document? A Where it says seller. Q Okay. Now did you ever go over that with

Mr. Zimmerman and say, "Mr. Zimmerman, here's what needs to happen," or did Mr. Zimmerman ever tell you words to that effect?

MR. ALDOUS: Your Honor, I object as to attorney-client stuff. THE COURT: Sustained. Q (By Mr. Shaw) Should you have had your lawyer more involved? A I didn't see any reason to. I thought we agreed on everything, and we were going to be gentlemen *709 about it and live up to our agreement. 16 Q Sir, I never -- I never talked to you before 17 this closing, not once in my life, right? 18 MR. ALDOUS: Your Honor, I would object to 19 if he's testifying, 20 THE COURT: Counsel, approach. 21 (Sidebar conference held) 22 THE COURT: You may proceed. 23 Q (By Mr. Shaw) Sir, let me get back to that. 24 Have you and I ever talked ever before this deal? 25 A No, sir.

185 Q So when you said, "I thought we were going to be gentlemen," et cetera, you were not referring to any communications or dealings with me at all; is that accurate?

A Yes. Q Now looking back on it in hindsight, should

your lawyer -- should you have had your lawyer more involved?

A I thought you were going to live up to the personal guarantee. I thought the title company was going to assume -- was going to take the responsibility for making sure the documents were executed correctly. They were not. And you're not a party, I don't think, to the lawsuit, so you're -- we're not -- I don't think *710 we're here today to discuss whether or not you're

16 liable. I think we're here to discuss whether 17 Mr. Hickok is. 18 Q Looking what -- given what we know now, we're 19 in trial, we're going through this, do you wish you 20 would have had your lawyer more involved? 21 MR. ALDOUS: Your Honor, I object as 22 relevance. 23 THE COURT: Sustained. 24 Q (By Mr. Shaw) How many separate homes have you 25 bought or sold in your career?

186 MR. ALDOUS: Objection, Your Honor, relevance. THE COURT: Sustained. Q (By Mr. Shaw) Did you think that prior to contracting for this home that the contracts were flying around in a -- kind of a rapid change procession?

A No. Q Were the contracts flying around as to the

addendum? A No. There was some communication back and forth, but I just viewed it as normal parties trying to come to final agreement on what the language would be.

Q The -- when you had the conversation with Doug pre-purchase that you testified to, are you telling us *711 that you had those plans that you've got here? 16 A No, sir. 17 Q The -- you were adding a foundation to this 18 home; is that right? 19 A Yes, sir. 20 Q Was the foundation engineered by a soil 21 engineer? 22 A Yes, sir. 23 Q Who was the soil engineer? 24 A I believe I used Graham-Martin in -- 25 Q Graham-Martin is a structural engineer, not a

187 soil engineer. A Oh, soil engineer. I can't recall whether we used a soil engineer. I know that a soil test was conducted, so I'm almost positive that we had a soil engineer, but --

Q Did you share that with Mr. Hickok? A Before -- Q At any time, did you ever show Mr. Hickok the

soil report for the addition? A No. That wasn't part of the agreement. Q Did you ever show Mr. Hickok the structural

design of the foundation or the building? A I believe that was all onsite when he came out and viewed the plans. *712 Q What was all onsite? 16 A I had all the engineering plans. I had the 17 foundation plans, the structural -- I mean, the plans 18 you saw today. He could have asked for them. I would 19 have been happy to produce them. 20 Q Did you show them to him is what I asked. 21 A I can't recall. They were all out. I do 22 remember going through -- I had the complete set of 23 construction plans. The city requires you to keep 24 everything onsite, the engineered foundation plan, 25 everything that's submitted. It was all there.

188 Q The city requires a permit. MR. ALDOUS: Your Honor, I would ask that he allow him to finish his answer before he interrupts him with another question.

THE COURT: Please allow him to finish, Mr. Shaw. Q (By Mr. Shaw) Were you finished? A No. Q Okay. Please finish. A The city requires us to submit all plans as

part of the approval process. They don't necessarily require a foundation plan if you don't want to do one. But in this case, there was a foundation plan with a foundation engineer, so it became part of the city *713 approved plan.

16 Q In order to do this work, you have to go to the 17 city and get a permit? 18 A Yes, sir. 19 Q And you have to be honest with the city about 20 what you're doing? 21 A Yes, sir. 22 Q Were you honest with the city about what you 23 were doing? 24 MR. ALDOUS: Objection, Your Honor, 25 relevance. And I also ask to approach.

189 THE COURT: You may approach. (Sidebar conference held) THE COURT: You may proceed.

Q (By Mr. Shaw) Sir, when you got -- you went and asked for a permit from the city, right? A Yes. Q And you paid for that, right? A Yes. Q And The city wants to know what the value of

the improvement is, right? A Yes. Q What did you tell the city the value of the

improvement was in this case? A I can't recall. *714 Q Did you tell them the value of the improvement 16 was what you're telling the jury you spent on this 17 improvement? 18 MR. ALDOUS: Objection, Your Honor. If 19 he's asking him a question about a document, he needs to 20 show him the document. 21 THE COURT: Do you have a document, 22 Mr. Shaw? 23 MR. SHAW: I'm not asking him about a 24 document. I'm asking him about his dealings with the 25 city.

190 THE COURT: Are you asking if he had a conversation with someone from the city or did -- MR. SHAW: I'm asking him what he represented to the -- THE COURT: -- did -- let me finish, Mr. Shaw. MR. SHAW: Okay. THE COURT: Are you asking him if he had a

conversation with someone from the city or if he had a document exchanged with the city?

MR. SHAW: Either way. I don't know. THE COURT: Clarify then. MR. SHAW: Okay.

Q (By Mr. Shaw) Are you -- when you dealt with *715 the city as to value, did you deal with them orally or 16 in writing? 17 A Typically it's in writing and it's an estimated 18 value. 19 Q What did you think the value was going to be 20 for the work? 21 A It's hard to -- well, the value -- I know what 22 the cost of the improvements were, but that's different 23 than what the estimated value is of a home based upon 24 it's resale. 25 Q So the city wants to know what the value of the

191 work is and not what the cost of it is; is that what you're telling us?

A That's the way I interpret it. Q Okay. So, if you were spending -- what was the

cost of the improvements you were anticipating? A $156,000 on the contract. Q And what was the value of that improvement you

were anticipating? A I have no idea what I put on the paper. Typically, it would be less than what the costs are. Q Why would you tell the city less than what you were -- A Because you don't know what the value of the improvements are. It's speculative until you sell the *716 home or it's re-appraised with the improvements. 16 Q So your testimony is you never represented to 17 the city what the cost of the improvement is, fair? 18 A They asked for what -- 19 MR. ALDOUS: Objection, Your Honor. Once 20 again, I'm going to re-urge my objection to the best 21 evidence rule. 22 THE COURT: Sustained. 23 Q (By Mr. Shaw) Did the city ever ask you for the 24 cost of the improvement? 25 A No.

192 Q Has any city -- in your dealings with -- what is the -- city of Westlake? A Yes, sir. Q Has the city ever asked you for that? A Most cities ask for the estimated value. And,

as I just said, the value is subjective. And certainly at that time it was very subjective because the improvements -- the value of the home was far less than -- even with the improvements.

Q Now, did you believe that Mr. Buttemiller had any legal training? A I don't know. I can't speak for that. Q Did you have any legal training? A No. *717 Q Why did you move into this property before you

16 bought it? 17 A We had set a closing date with Mr. Hickok and 18 you through Mr. Buttemiller and move-in date. And then 19 when the title company changed -- excuse me -- when my 20 bank changed the holding of the improvements, it delayed 21 the contract. So it was an approximate two-week period 22 of time, and we were supposed to be out of our home. So 23 I asked Mr. Buttemiller if it would be okay to ask you 24 guys to take up residence. And he said, "Not a problem. 25 I'll check with those guys." He got back to us and we

193 moved in. He said it was okay. Q So who did Mr. Buttemiller tell you he spoke to? A I don't recall whether it was you or Doug or -- I don't know. Q Is there any paper trail you've ever seen about this? A The only paper trail I saw is that we subsequently agreed that I would pay you 8,500 for the two weeks that we were in the home.

Q When you say, "you," who are you referring to? A I'm sorry. You and Mr. Hickok and VSDH. Q I'm confused. Me, Mr. Hickok, or all three of

us? *718 A All three. 16 Q Why do you think I'm individually involved in 17 this? 18 A In hindsight, you're not. But at the time -- 19 you asked at the time, so that was my assumption at the 20 time. 21 Q You constructed the improvements between 22 October 16th, 2008 and February 2009; is that right? 23 A That sounds correct. Yes, sir. 24 Q And you built a casita, you built a guest room, 25 you built a media room above it; is that right?

194 A The casita was the guest room, yes. And then a media room was above, correct. Q What else did you do? A That was it -- the wet bar. Q When did you put on the front patio? A I think it was around the same time. Q The whole issue -- did you know that the

contract had a provision that said the terms could only be altered by written agreement?

A Yes. Q Did you always know that existed? A Yes.

MR. SHAW: I'll pass the witness. Thank you. *719 THE COURT: Mr. Chaiken? 16 MR. CHAIKEN: We're just going to switch 17 so I'm closer in case I need the overhead. CROSS-EXAMINATION 18 19 BY MR. CHAIKEN: 20 Q Good afternoon, Mr. Gross. 21 A Good afternoon. 22 Q You know who I am, right? 23 A Yes, sir. 24 Q And you know who I represent, right? 25 A Yes, sir.

195 Q If I understood your testimony a short while ago, you testified that you expected the title company to have Van Shaw sign documents at closing. Do you recall giving that testimony just a few short minutes ago?

A Yes. Q All right. And one of the things you expected

the title company to have Mr. Shaw sign at closing would have been a guarantee, a personal guarantee, right?

A Yes, sir. Q Okay. And, likewise, you expected the title

company to have Douglas Hickok sign a personal guarantee at closing, right, just like you expected of Mr. Shaw?

A No. I believe his signature was already on it *720 as I mentioned earlier. 16 Q His signature was already on it and that's your 17 testimony? 18 A Yes, sir. 19 Q Okay. Now you own a company called Impact 20 Homes, right? 21 A Impact Estates. 22 Q Impact Estates. Is it a corporation, an LLC, a 23 limited partnership? 24 A It's a DBA. 25 Q It's a DBA for what?

196 A For Impact Health. Q Impact Health is what? A S corp. Q It's a corporation, right? A Yes, sir. Q Ever sign documents as an officer of Impact

Health? A Well, whenever I sign a contract, if it was under Impact Estates, I guess it would be as an officer of Impact Health.

Q Okay. And you would certainly designate your capacity as an officer of Impact Estates, right? A Yes. Q So there was no confusion that the party *721 signing was Impact Health and not Ken Gross personally,

16 right? 17 A We weren't -- the agreement was between Ken and 18 Betsy Gross and VSDH. 19 MR. CHAIKEN: Objection, nonresponsive. 20 THE COURT: The question was, "So there 21 was no confusion that the party signing was Impact 22 Health and not Ken Gross personally, right?" 23 THE WITNESS: And I -- 24 THE COURT: That's the question he was 25 asking.

197 THE WITNESS: That's the way understood it. I don't understand the question because the agreement wasn't with Impact Health. It was with Ken and Betsy Gross.

THE COURT: I think you need to rephrase, Mr. Chaiken. Q (By Mr. Chaiken) My question was -- you just finished telling me that there are times when would sign an agreement as an officer of Impact Health, right?

A Yes. Q And when you did that, you would identify

yourself as an officer of Impact Health, right? A Yes, sir. Q A corporation, right? *722 A Yes, sir.

16 Q And the reason that you would sign an agreement 17 on behalf of Impact Health as an officer of Impact 18 Health was because a human being would have to sign a 19 document for Impact Health, right? 20 A Yes, sir. 21 Q You understood that concept, right? 22 A Yes. 23 Q Okay. And you likewise understood that the 24 reason you would identify yourself as -- were you the 25 president, vice president, or what were you?

198 MR. ALDOUS: Your Honor, Mr. Gross' corporate dealings are irrelevant to this proceeding. THE COURT: Sustained. MR. CHAIKEN: Your Honor, may we approach? THE COURT: You may. (Sidebar conference held) THE COURT: Ladies and gentlemen of the

jury, the testimony is probably going to be for another 35 minutes. So we'll take a five-minute recess now.

During this recess, you're under the same instruction you've been previously given. You're not to discuss the case among yourselves or with anyone else until such time as the case has either been submitted to you for your deliberations or you have been discharged *723 as jurors.

16 All rise. The jury is excused. 17 (Jury exits the courtroom) 18 THE COURT: You may step down, Mr. Gross. 19 We stand in recess. 20 THE WITNESS: Thank you, Your Honor. 21 (Recess taken) 22 THE COURT: You may bring in the jury. 23 All rise. 24 (Jury enters the courtroom) 25 THE COURT: You may be seated.

199 You may proceed, Mr. Chaiken. Q (By Mr. Chaiken) Mr. Gross, do you know the rule called the statute of frauds? A No. Q You never heard of that rule before?

MR. ALDOUS: Your Honor, I just don't get the relevance. THE COURT: What's the relevance? MR. CHAIKEN: I believe that he has --

well, I don't want to comment in front of the jury. May we approach?

THE COURT: You may. (Sidebar conference held) THE COURT: You may proceed. *724 Q (By Mr. Chaiken) Mr. Gross, have you ever

16 heard the concept about just agreeing in principle? 17 A Yes. 18 Q Do you understand that in order to sell a piece 19 of property, the agreement has to be in writing? 20 A Not always, but in this case it was. In most 21 cases it probably is, but -- 22 Q Do you know that rule of the statute of frauds 23 that an agreement regarding the sell of writing -- I'm 24 sorry -- the sell of real estate has to be in writing? 25 MR. ALDOUS: Your Honor, that's asking him

200 for a legal conclusion. THE COURT: Sustained. Q (By Mr. Chaiken) And you're not aware, correct? A No, sir. Q You had a lawyer in the transaction, correct? A On that one part, yes, sir. Q And you don't know what the legal effect is of

an individual signing his name to a contract designating his capacity as an officer of an entity, correct?

A I have an opinion, but I'm not a lawyer. Q Okay. And in this case, you will agree --

referring to Gross Exhibit 3, this is the signature page on the contract; is that right? *725 A Yes, sir.

16 Q That's the only place that we see the parties' 17 signatures, right? 18 A Yes, sir. 19 Q And the parties -- the parties were buyer, 20 Kenneth P. Gross, and that's you, right? 21 A Yes, sir. 22 Q And you were acting as an individual, right? 23 A Yes. 24 Q So you just signed your name, right? 25 A Yes.

201 Q All right. Then it says buyer, Betsy D. Gross. Do you see your wife's signature there? Recognize it? A Yes. Q And she was a buyer, right? A Yes. Q And she was acting in her individual capacity,

right? A Yes. Q And so she signed it personally. You

understood that, right? A Yes. Q And then you see seller, VSDH Vaquero Venture,

Ltd. Then it says VSDH Homes, comma, Inc., GP, right? A Yes. *726 Q And above that line you see a signature, right? 16 A Yes, sir. 17 MR. CHAIKEN: May I proceed, Judge? 18 THE COURT: There was no reason for you to 19 stop. 20 MR. CHAIKEN: Your Honor was coughing. 21 THE COURT: You may proceed. 22 MR. CHAIKEN: Thank you. 23 Q (By Mr. Chaiken) And you see next to 24 Mr. Hickok's signature the initials VP, right? 25 A Yes, sir.

202 Q All right. And you understood that VP meant vice president, right? A Yes. Q All right. And you don't see Mr. Hickok's

signature anywhere on Exhibit 3 -- feel free to look at that. It's there -- in any other capacity other than as vice president of the seller, VSDH Vaquero, Ltd., and it's general partner, VSDH Homes, Inc., GP, correct?

A I wouldn't agree with that. No. Q You see his signature someplace else on the

document? A No. I see it on that page. Q The exhibit is in front of you, Number 3. A Yes. *727 Q Where else do you see Mr. Hickok's signature?

16 A I thought you asked where do I see his 17 signature as VP. I see his signature, which to me 18 represented that he was signing it under both VSDH and 19 personally guaranteeing. 20 MR. CHAIKEN: Objection, nonresponsive. 21 Move to strike. 22 THE COURT: Overruled. I think he's 23 explaining what he thought he heard you asking. I think 24 you might need to ask another question or re-ask it. 25 Q (By Mr. Chaiken) My question to you,

203 Mr. Gross, is: Where do you see a signature by Mr. Hickok, other than the one that we're looking at on the screen right now that says VP of the seller, VSDH Vaquero, Ltd., VSDH Homes, Inc., GP?

A Right there, yes. That's the only one. Q That's the only signature, right? A Yes, sir. Q You don't see a signature anywhere on that

document that looks like yours, where it says Douglas M. Hickok, correct?

A No, sir. Q Above a line that says Douglas M. Hickok,

right? A No, sir. *728 Q And Mr. Hickok's signature as vice president of 16 the seller, VSDH Vaquero Venture, Ltd., and VSDH Homes, 17 Inc., GP is a lot like those signatures that you put on 18 documents in your capacity as an officer for Impact 19 Homes when you are signing in a corporate capacity, 20 correct? 21 MR. ALDOUS: Objection, Your Honor. He's 22 asking this witness for a legal conclusion as to the 23 effect of his signature. 24 MR. CHAIKEN: I'm not asking for the 25 effect.

204 THE COURT: Sustained. Q (By Mr. Chaiken) Mr. Gross, when you are signing your name to a document on behalf of Impact Homes, the corporation that you identified, as an officer, you sign it to identify yourself as an officer just like Mr. Hickok did in this instance, correct?

A No, sir. Q You don't? A No, sir. Q You just sign your name personally? A Yes, sir. Q Okay. But here Mr. Hickok didn't sign his name

personally. He signed it as VP of VSDH Vaquero Venture, Ltd., right? *729 MR. ALDOUS: Objection, Your Honor. He's

16 asking the witness for a legal conclusion. 17 MR. CHAIKEN: Not a legal conclusion. 18 MR. ALDOUS: The effect of his signature. 19 MR. CHAIKEN: I'm not asking for the 20 effect. 21 THE COURT: Hang on. Rephrase your 22 question, Mr. Chaiken. 23 Q (By Mr. Chaiken) You testified earlier in 24 response to Mr. Shaw's questions that the documents were 25 not prepared properly. Remember giving that testimony?

205 A Yes. Q And that is your belief, correct? A If those were -- I don't know if those were my

exact words, but I had hoped that you two -- MR. CHAIKEN: Your Honor, I move to strike anything after, "Those were not my exact words." THE COURT: Are you addressing the Court? MR. CHAIKEN: My apologies. I move to

strike the attempt to answer beyond the answer to the question as nonresponsive. He said --

THE COURT: I'm looking at what he said. MR. CHAIKEN: Okay. THE COURT: Let him finish his answer.

Then I'll consider your objection. *730 THE WITNESS: Could you rephrase the 16 question, please? 17 Q (By Mr. Chaiken) In response to Mr. Shaw's 18 questions earlier, referring to the guarantee issue, you 19 stated the documents were not prepared properly. 20 Remember giving that testimony? 21 A Yes. 22 MR. CHAIKEN: Reserving the right to call 23 Mr. Gross in the defendants' case in chief if necessary. 24 At this time I pass the witness. 25 THE COURT: It is now 5:14. We will

206 recess for the day. MR. ALDOUS: I have no further questions of this witness. THE COURT: Okay. The witness is excused. You may step down. THE WITNESS: Thank you, Your Honor. THE COURT: I repeat. We will recess for

the day. It is now 5:14 p.m. The jury will return tomorrow at 9:30 a.m.

During this overnight recess, you're under the same instructions you have been previously given. You're not to discuss this case among yourselves or with anyone else until such time as the case has either been submitted to you for your deliberations or you have been *731 discharged as jurors. The jury is excused for the

16 evening. 17 All rise. 18 (Jury exits the courtroom) 19 THE COURT: All right. We stand in recess 20 for the evening. 21 Just so that you know what your totals are 22 at this point in time, the plaintiff has used -- as I 23 stated before, 3 hours and 39 minutes. Defendants have 24 used 2 hours and 32 minutes. 25 MR. CHAIKEN: Two, 20, right?

207 THE COURT: Two hours and 32 minutes. MR. ALDOUS: The Grosses would offer

Exhibits 115 and 116, which -- I apologize to the Court. I didn't realize they were not admitted.

THE COURT: Mr. Shaw? MR. SHAW: May I see them, Judge? The

photos themselves, I don't have any objection to. I want to see if there's other information on them.

THE COURT: They're just photos. MR. ALDOUS: Just photos. MR. SHAW: Okay, just photos, I have no

objection, Your Honor. Well, I do have an objection, Judge. When they say -- they say this information. They have information on them other than being just -- *732 THE COURT: The jury's gone. You may

16 speak at a normal volume. 17 MR. SHAW: Okay. I have an objection. I 18 don't have any objection to the photos, but the text I 19 do have objection to. 20 THE COURT: Where it says Westlake, 2.5 21 million? 22 MR. SHAW: Price and the whole thing. 23 THE COURT: The problem is the jury's 24 already seen it. 25 MR. SHAW: Yeah, but it's sure not

208 admitted into evidence. THE COURT: And you didn't object to it before. MR. SHAW: I didn't, but it wasn't offered in evidence. THE COURT: Well, that's because everybody assumed it was and -- MR. ALDOUS: Do you mind if I ask counsel because with regard to the pre -- what are you referring to?

MR. SHAW: Any of this, any of it, anything other than the photo. MR. CHAIKEN: You know, I have a problem as well. I mean, it's not authenticated and it appears *733 to be printed off the Internet by Cooper & Scully. And, 16 I mean, there's all kinds of comments with regard to -- 17 it's not been authenticated. Nobody has proven them up. 18 THE COURT: It was authenticated. 19 MR. SHAW: I'm not worried it fairly and 20 accurately represents. I would agree to that part of 21 it. 22 THE COURT: The witness authenticated it 23 when he said that these are pictures of the property, 24 and he -- 25 MR. CHAIKEN: That's what he said that

209 they're pictures of the property. THE COURT: -- talked about the improvement that they made. He talked about the location.

MR. ALDOUS: He said what they listed it for, and he said they listed it with Roxann Taylor. MR. SHAW: He did. MR. ALDOUS: So, I mean, I offer it. THE COURT: All right. So your

objections, Ms. Shaw. MR. SHAW: My objections are to the text included with any of the photos is objectionable because there's no predicate to support the text. And if there is, it's hearsay. *734 THE COURT: And the text that you're

16 referencing would be the location of the property -- 17 MR. SHAW: Well -- 18 THE COURT: -- and the listed value and 19 the name of the realtor? 20 MR. SHAW: Yes, Your Honor, anything like 21 Westlake, two and a half million, you know, that sort of 22 thing. I don't think it's the end of the world, but -- 23 THE COURT: I believe there was testimony 24 as to that, though. 25 MR. SHAW: Well, there was, but --

210 THE COURT: Okay. MR. SHAW: -- I'm not saying that's

anything new. It's just -- THE COURT: You just don't like it? MR. CHAIKEN: I would withdraw my

objection. THE COURT: All right. Exhibits 15 and 16 are admitted -- 115 and 116 are admitted. And I would admonish the parties. Please be careful because there is a large number of exhibits. And it's possible to inadvertently, as in this instance, present something.

(Proceedings concluded for the day) *735 16 17 18 19 20 21 22 23 24 25

211 STATE OF TEXAS )

COUNTY OF DALLAS )

I further certify that this Reporter's Record of the proceedings truly and correctly reflects the exhibits, if any, admitted by the respective parties. *736 WITNESS MY OFFICIAL HAND this the 12th day of October, 2015.

16 17 /s/ Cathye G. Moreno Cathye G. Moreno, Texas CSR #6076 Expiration Date: 12/31/16 18 Official Court Reporter 19

County Court at Law No. 1 600 Commerce Street, Suite 550 Dallas, Texas 75202 20 cathyemoreno@sbcglobal.net 21

(214)653-7496 22 23 24 25

TAB 27 *737 1 REPORTER'S RECORD VOLUME 5 OF 10 VOLUMES CAUSE NO. CC-09-05232-A

VSDH VAQUERO VENTURE, LTD.

)IN THE COUNTY COURT ) Plaintiff/Counter-Defendant, ) ) ) ) )AT LAW NO. 1 )

V.

KEN GROSS and BETSY GROSS Defendants/Counter-Plaintiffs, )

) ) ) )

V.

EVAN L. SHAW and DOUGLAS M. HICKOK ) ) Intervenors/Counter-Defendants, )DALLAS COUNTY, TEXAS -------------------------------------------------------

TRIAL ON THE MERITS

------------------------------------------------------- *738 16 On the 17th day of June 2015, the following 17 proceedings came on to be heard within the presence of 18 19 a jury in the above-entitled and -numbered cause before 20 the Honorable D'METRIA BENSON, judge presiding, held in 21 Dallas, Dallas County, Texas. 22 Proceedings reported by computerized stenotype 23 machine. Reporter's Record produced by computer-aided 24 transcription. 25

APPEARANCES:

MR. STEVEN E. ALDOUS SBN 00982100 Forshey Prostok, LLP 500 Crescent Court Suite 240 Dallas, Texas 75201 (214)716-2100 ATTORNEY FOR DEFENDANTS/COUNTER-PLAINTIFFS KEN GROSS and BETSY GROSS

- AND -

VSDH VAQUERO HOMES, INC. AND VSDH HOMES, INC.

20 21 22 23 24 25

3 INDEX JUNE 17, 2015 PAGE VOL. PROCEEDINGS.............................. 4 5

STIPULATION AS TO ATTORNEY FEE SUBMISSION 4 5

GROSSES' WITNESSES Direct Cross Voir Dire Vol. Betsy Gross 11,106 30,99,110 -- 5 Roxann Taylor 114,134 128,131,136 -- 5 THE GROSSES REST......................... 137 5

HICKOK'S MOTION FOR DIRECTED VERDICT..... 140 5

COURT'S RULING ON DIRECTED VERDICT MOTION 155 5

VSDH'S MOTION FOR DIRECTED VERDICT....... 156 5

COURT'S RULING ON DIRECTED VERDICT MOTION 158 5

BILL OF EXCEPTIONS BY MR. SHAW........... 159 5

HICKOK'S WITNESS Direct Cross Voir Dire Vol. Evan Lane Shaw *740 167,198 187 -- 5

16 17

END OF PROCEEDINGS....................... 204 5 18

REPORTER'S CERTIFICATE................... 205 5

EXHIBIT INDEX

20 GROSSES' NO. DESCRIPTION OFFERED ADMITTED VOL. 36 June 15, 2009 email 21 82 82 5 22

from Ken Gross to Hickok and Shaw 23 24 25

PROCEEDINGS

June 17, 2015 THE COURT: All right. Mr. Aldous, you may approach. MR. ALDOUS: Thank you, Your Honor. I would like for us to put our agreement on the record regarding submission of attorney's fees to Your Honor.

THE COURT: You may do so. MR. ALDOUS: It's my understanding that

the attorneys -- all parties have agreed that the attorney's fees issue will not be submitted to the jury, but will be decided by the Court in a form and fashion that the Court desires, with at least an opportunity for everybody to submit affidavits related to the attorney's *741 fees on the same day and with each party an opportunity

16 to respond to those affidavits. 17 MR. SHAW: Agreed by VSDH. 18 MR. CHAIKEN: That's agreed. 19 THE COURT: So noted for the record. 20 MR. ALDOUS: Thank you. 21 (Brief recess taken) 22 THE COURT: We are on the record. 23 You may proceed, Mr. Aldous. 24 MR. ALDOUS: Your Honor, there's been a 25 suggestion by counsel for VSDH that he's going to call

5 two separate types of witnesses; one being Ms. Lash to testify as to a lawsuit the Lashes were involved with in terms of the Grosses and, according to Mr. Shaw, that a finding by a jury of civil fraud. That evidence is inadmissible for the purpose of Rules 404 through 406 and 607 through 609, because it is only offered to show that he committed a fraud in another unrelated matter; and, therefore, he's a bad guy in this case.

The rules, as set forth, do not allow evidence of another wrong to be used to show that someone acted in conformity therewith. And to the extent that it would be potentially admissible under any exception to that, it would have to be so closely related to be part of the same scheme or is only *742 admissible if they are so connected with the transaction

16 at issue that they may all be parts of a system, scheme, 17 or plan. 18 In this situation, that involved the sale 19 of the Grosses' home, and it related to some -- an 20 allegation of water leaking through the windows of the 21 Grosses' home. It had nothing to do with this 22 transaction; and, therefore, any evidence that would be 23 offered in that regard would be violative of those 24 rules. 25 The second type of evidence that Mr. Shaw

6 indicated to the Court was that he would call witnesses to talk about the truthfulness or untruthfulness or whatever character traits of Mr. Gross. That evidence is likewise inadmissible. The only time that that is admissible is if a person is charged with an action involving moral turpitude and he introduces evidence of his moral character to fight that, then the defense -- or the other side can bring up evidence of specific acts in cross-examination.

Even if it's in cross-examination, no extrinsic evidence of that can be -- of specific acts can be offered unless it's a conviction of a crime. And that's not the issue here. So for those reasons, none of that's admissible. And if Mr. Shaw's represented to *743 the Court that that's the purpose for calling those

16 witnesses, then they need not be called. 17 THE COURT: Mr. Shaw? 18 MR. SHAW: I appreciate Mr. Aldous telling 19 me who I should and shouldn't call to trial, but I'm 20 going to respectfully decline to follow his advice. I 21 have prepared a brief. As I sit here looking at 22 Mr. Aldous' brief, I will call witnesses that will 23 provide -- 24 THE COURT: Did you give him a copy of 25 this?

7 MR. SHAW: No, Your Honor. I didn't know I was going to file a brief until I read Mr. Aldous' brief.

MR. ALDOUS: Thank you, Your Honor. MR. SHAW: The facts -- THE COURT: Let's give him a minute to

look at it. We gave you a minute to look at his. Did you file your brief electronically? MR. SHAW: I did not. I just had that in

my notebook. I just had that on my person, so I thought it might be a good proof.

THE COURT: Give me a minute to look at this. MR. SHAW: Yes, Your Honor. *744 THE COURT: All right. You may proceed. 16 MR. SHAW: I plan to call -- 17 THE COURT: Wait until Mr. Aldous gets 18 here. I'm sorry. 19 MR. SHAW: I plan to call several 20 witnesses to testify as to opinion and reputation, which 21 is admissible under Rule 404 of the Texas Rules of 22 Evidence. And so the -- Mr. Aldous' claims that opinion 23 and reputation are not viable evidence is in error and 24 not in compliance with the Texas law. Those rules exist 25 to support the claim that when the truth of a person is

8 at issue, then you can call opinion and reputation witnesses, and that's what I plan to do.

THE COURT: Mr. Aldous? MR. ALDOUS: I appreciate Mr. Shaw telling

me what Texas law says. But, likewise, I will point out that Rule 404 says when a reputation or character evidence is admissible, I agree that if it is admissible, it's admissible in different ways. But you have to get to the first part. That is, "Is it admissible?" Rule 404 controls this.

Evidence of a person's character is not -- or character trait is not admissible for the purpose of proving action in conformity therewith on a particular occasion except if the character of an accused -- that *745 being in a criminal -- by an accused in a criminal case

16 or by the prosecution to rebut this thing or by a party 17 accused in a civil case of conduct involving moral 18 turpitude or by the accusing party to rebut the same. 19 So what that means is if VSDH had accused 20 Mr. Gross of some -- by pleading of fraud or something 21 of that nature and we had offered evidence of character 22 traits that he's not fraudulent, then they could have 23 cross-examined him on that. This is not the character 24 of a victim in a criminal case and is not referring to 25 the character of a witness under Rule 607 through 609.

9 Furthermore, evidence of other crimes, wrongs, or acts are not admissible to prove the character of a person to show action and conformity therewith.

So you first have to get to the -- the issue is: Is it admissible? So in every civil case, what Mr. Shaw is saying, is that any time that somebody -- the jury has to weigh the credibility of the witnesses, you can call people in to say, "No, I know that sorry SOB, and he is not truthful." And we know that that's not the law. The jury is the sole judge of the credibility of the witnesses. And unless it has become an issue based upon the law, you just don't get to get into it.

THE COURT: Mr. Shaw? *746 MR. SHAW: I don't have to prove, and I'm 16 not going to prove, Mr. Gross' actions. A specific 17 instance that I am allowed to prove is opinion, opinion 18 and reputation in the community, and that's what I'm 19 going to do. When Mr. Gross takes the stand and wants 20 the jury to believe him and brings his case, he puts his 21 truthfulness and veracity at issue. The only way a jury 22 can properly measure that is to hear from witnesses who 23 know of Mr. Gross' truthfulness or veracity by opinion 24 or reputation. 25 Plaintiff -- VSDH would be prejudiced if

10 it was not allowed to bring community people to testify about the opinion and reputation of Mr. Gross as the statements that Mr. Gross makes in his case about the facts are key. And this case turns out to be a swearing match, and Mr. Gross' veracity is at issue because of that.

THE COURT: Okay. I'm not going to allow the character witness testimony. You can make your offer of proof and bill of exceptions --

MR. SHAW: Thank you, Your Honor. THE COURT: -- at an appropriate time. MR. SHAW: Okay. Thank you. What about

-- is that for both opinion and reputation, Your Honor? THE COURT: Opinion as to? *747 MR. SHAW: The truthfulness of Mr. Gross. 16 I was offering it for two separate -- two separate ways 17 to talk about the veracity of Mr. Gross, by opinion and 18 by reputation. 19 THE COURT: It is for both, because it 20 appears that that's what the rules address, both opinion 21 and reputation testimony. 22 MR. SHAW: All right. Thank you. 23 THE COURT: Are we ready now to bring in 24 the jury? 25 MR. ALDOUS: Yes, Your Honor.

11 THE COURT: Mr. Shaw? MR. SHAW: Yes, Your Honor. MR. CHAIKEN: Yes, Your Honor. THE COURT: You may bring in the jury. All rise. (Jury enters the courtroom) THE COURT: You may be seated. Mr. Aldous, you may call your next

witness. MR. ALDOUS: Your Honor, I would call Betsy Gross. THE COURT: Raise your right hand, please. (Witness sworn) THE COURT: You may be seated. *748 You may proceed.

16 BETSY GROSS, 17 having been first duly sworn, testified as follows: DIRECT EXAMINATION 18 19 BY MR. ALDOUS: 20 Q Could you introduce yourself, please? 21 A Betsy Gross. 22 Q Betsy, I know that we've covered a lot of stuff 23 and you've been in the courtroom, so I'd like to just 24 get to the part where we start talking about this 25 situation. First of all, were you involved in the

12 negotiations with VSDH, Mr. Hickok, and Mr. Buttemiller before you guys purchased the house?

A No. Q All right. So the house I'm talking about, you

know, of course, is 2004 White Wing Cove. So from now on, if I say, "the house," that's the one I'm talking about. Okay?

A Uh-huh. Q Did you know -- well, so what was your role

with Ken in terms of the house, in buying it? A So, I was fully aware of all of his discussions and that he was having meetings and that, you know, as a family, that was a group decision. But he was managing all the interactions between John Buttemiller and Doug *749 Hickok and anyone else. That was more his -- you know,

16 as a couple, you kind of -- you do this and I do other 17 things. And I was working and so that was his. 18 Q By the way, what is your job? 19 A I am head of reimbursement for a medical device 20 company. 21 Q What's the name of the company? 22 A Intersect ENT. 23 Q Now back to the house. So, although you were 24 up to date on stuff, you weren't the one that directly 25 dealt with Mr. Buttemiller or Mr. Hickok in terms of

13 buying the house? A Correct. Q Did you have any specific desire to have the

personal guarantee part -- language part of the contract?

A Absolutely. That was something that we had discussed. And I said I would only feel comfortable doing the deal if there was some language in there that protected us that included a personal guarantee.

Q And from the time that you guys bought this house, what was your plan over the next couple of years in terms of what you were going to do?

A So this was -- it was always intended to be a short-term thing. We wanted to invest in this house as *750 a business deal for his building business. It was an 16 opportunity for him to build up a reputation, show the 17 quality of work that he could do. But it was always 18 intended to be a short-term investment, nothing long 19 term. 20 Q Now, after you guys moved -- first of all, 21 there was a statement about you guys moving into the 22 house before being permitted to by Mr. Hickok. Did you 23 guys break into the house and go live there? 24 A No. 25 Q Tell us how that happened.

14 A So we asked for permission and John Buttemiller gave us the key. And there was an alarm system on the house, so that would have had to have been disengaged. So we were given a key, and there were discussions that happened between Ken and John about giving us temporary ability to live in the house until the deal was --

MR. CHAIKEN: Your Honor, I object to the hearsay portion of it. THE COURT: Overruled. Q (By Mr. Aldous) Go ahead. A -- until the deal was consummated in terms of

the details of the rent that we were going to pay, which it was a high amount of rent per day.

Q Okay. Now the -- after you guys moved into the *751 house, did you occasionally run into either Mr. Shaw or 16 Mr. Hickok? 17 A Yes. 18 Q Tell us about that, please. 19 A There were a few different occasions I can 20 think of that I ran into either Mr. Shaw or Mr. Hickok. 21 One is I remember it was -- so we moved into the house 22 around June or July, and I remember meeting -- 23 Q Of 2007? 24 A I'm sorry. Of 2007. And I remember meeting 25 doctor or -- doctor, sorry. I deal with doctors all the

15 time. I remember meeting Mr. Shaw for the first time at a Christmas party, and he was introduced to me. And I said something along the lines of, "Oh, it's so nice to meet you. I'm so glad we're doing this deal together and Ken's going to build a great house and it's going to be great." And he was very complimentary and, oh, yeah, you know, we're looking forward to doing this too and yahoo, you know, everything was great.

Q Just very cordial? A Sure. Q After the addition was started, did you bump

into Mr. Shaw again? A Uh-huh. Q Is that a "yes"? *752 A Yes. I'm sorry.

16 Q It's hard to type down, "uh-huh." 17 A My apologies. So on another occasion, it was 18 actually in Mexico on a spring break. I was with my 19 daughter and her friend and her mother and happened to 20 be walking down the street and ran into Van Shaw on the 21 street and said, "Van, Hi. How are you?" And he said 22 something along the lines of, "Where's Ken?" And I 23 said, "Oh, he's back working on the house, you know." 24 And he said, "Oh, you ought to come out to our yacht," 25 he said.

16 Q Very cordial? A Very cordial. Q All right. After the -- you heard testimony

from both Ken and Mr. Hickok about the visit that Mr. Hickok made to the home after the construction was started on the addition; is that right?

A Yes. Q Could you tell us what you recall about that

visit? A I distinctly remember that day. And Ken -- Q Why do you distinctly remember it? A Well, a few things. It was the first time that

I had ever met Doug. And I remember that Ken really wanted me to be there and I was running late. And so by *753 the time I got there, they had already finished touring

16 most of the property. And so I ran into them when they 17 were in the kitchen and the plans were sprawled all over 18 the kitchen counter and the kitchen table. And so Ken 19 introduced me to Doug. 20 And somehow we got into a cordial 21 conversation about kids and college, and he had just 22 gotten back from a trip. And I distinctly remember they 23 had seen University of Georgia, University of Alabama, 24 and he talked about University of Texas and how his son 25 was looking at different schools. And we were just

17 sharing notes about college tours because we were at that stage as well.

Q During that entire visit, did Mr. Hickok at any time say, "I can't believe you guys started this thing without us"?

A Absolutely not. To the contrary, I remember saying to him, "Doesn't everything look great? You just saw everything." "Oh, yeah. It looks great, looks fantastic."

Q Any complaints that he raised at that time? A Absolutely not. Q Did Mr. Hickok say, "You guys have already

breached the contract"? A Absolutely not. *754 Q In your mind, was there any -- in your mind, 16 was there any -- ever any question as to what the 17 addition was going to look like in terms of the finish 18 out? 19 A No. There wasn't any question to me, for sure, 20 because it was a beautiful house, and we couldn't 21 exactly put something low quality on top of it. And 22 that wouldn't help Ken's business if he built -- he 23 wanted to use this to market his business. So he's not 24 going to build an addition that looked ugly and cheap. 25 He had to match the existing quality of the home.

18 Q And was that always the plan from your perspective? A Yes. Q Now after the visit and then completion of the

home, you and Ken sent the notice saying we're going to exercise the buyback; is that right?

A Correct. Q And I notice that you were on some of those

emails. Were you now more involved at this point in terms of the buyback?

A Yes. Q So when you exercise -- or when you sent the

notice on the buyback, what do you recall? A I remember we had had many conversations. Ken *755 and I had had many conversations about, well, we have to 16 make a decision. Do we want to stay here and buy the 17 house? Do we want to exercise the buyback? What do we 18 want to do? And we together made the decision; no, we 19 need to stick with the original plan. As much as it's a 20 beautiful house, this is not the original plan. We 21 really can't continue to stay here. We need to exercise 22 the buyback. So let's make sure we notify them. 23 And I don't remember why it is that I took 24 the initiative to send the email, but I did. I probably 25 just said, "If you want, I'll be happy to send it." And

19 I typed it and sent it separately via Federal Express. Q All right. And did you get a response that was satisfactory, I guess, to you? A I got a response that was shocking, but I -- Q What was that? A I think it was shown in here, but it was the

response basically that the company was bankrupt. Q They used the term insolvent? A Insolvent. I'm sorry. Q So just in terms of how this went, after you

guys exercised the buyback, who, if anybody, at VSDH did you deal with?

A So my memory is that any communication -- which I have had very little communication with Doug Hickok at *756 all throughout all of this, but any communication at 16 that point really ceased. And now the only 17 communication that existed was between -- was with Van 18 Shaw. 19 Q All right. And did you personally speak with 20 Mr. Shaw? 21 A Yes. 22 Q Can you -- do you remember when? 23 A I don't think any phone conversation between me 24 and Mr. Shaw ever happened, but there was a meeting 25 where Ken and I went and met with him at the Vaquero

20 Real Estate office to talk about other options because we said, "Okay. Well, if you're bankrupt, then is there something else we can come up with? Let's be creative. Is there some way we can make this work out among ourselves? And so --

MR. SHAW: Your Honor, may we approach? THE COURT: You may. (Sidebar conference held) THE COURT: You may proceed. MR. ALDOUS: Thank you, Your Honor.

Q (By Mr. Aldous) So, Betsy, irrespective of what was actually discussed. When you and Ken left the meeting with Mr. Shaw, did you have an impression about whether or not VSDH or its members would honor the *757 buyback part of the contract?

16 A They made it clear that they were not going to. 17 Q At some point in time after that, you guys 18 hired Roxann Taylor and put the house on the market; is 19 that right? 20 A Yes. 21 Q When you guys put the house on the market 22 originally, did you get very much in terms of interest 23 from the purchaser -- any purchasing public? 24 A No. 25 Q When you -- did you eventually get an offer?

21 A We eventually did. Yes. Q And what is your recollection of that offer? A I remember that it was -- the price was pretty

good given the market was very slow and that it was going to require us to have to find somewhere else to live and move out in ten days.

Q You remember the ten-day part? A I remember that. Q Just a moment. Do you have the notebook up

there with you? A Yes. Which one? Q It would be the Gross Exhibits, Exhibit 47.

It's previously been admitted into evidence. And the handwriting on here is atrocious. Or maybe it's *758 just my eyes are atrocious because I can see it pretty

16 good right now. 17 If you see, this is the contract between 18 you and Ken and Melissa Browning. Do you see that? 19 A Yes. 20 Q And the purchase price, the price that she 21 agreed to pay there is $2,415,600? 22 A Yes. 23 MR. ALDOUS: May I approach, Your Honor? 24 THE COURT: You may. 25 MR. ALDOUS: Your Honor, would you mind if

22 I put it over there? THE COURT: That's fine. MR. ALDOUS: Because then that way it's --

everybody can see it and I don't kill Cathye. I'll try not to kill anybody.

Q (By Mr. Aldous) Now have you gone and looked at the settlement statement that is Exhibit 42, the settlement statement from your guys sale of the house to Ms. Browning to determine the damages that you believe you guys suffered as a result of the non-buyback and the breach of contract?

A Yes. Q Exhibit 42 is the settlement statement for that

sale, right? Do you have it up there in front of you? *759 A I don't have it. Oh, that's 42? 16 Q Yeah. Sorry. 17 A Yes, I have it. 18 MR. ALDOUS: All right. May I approach 19 again, Your Honor? 20 THE COURT: You may. 21 Q (By Mr. Aldous) Now you remember from the -- 22 THE COURT: You need to move that forward 23 just a little bit. 24 MR. ALDOUS: This way? 25 THE COURT: Yes.

23 MR. ALDOUS: All right. Q (By Mr. Aldous) The price that they agreed to buy it back from -- that is VSDH was $2,851,871, right? A Correct. Q I'm going to write that there. Okay? A Okay. Q Now in terms of the sales price that you guys

got, you got $2,415,600, right, that's reflected? A Correct. Q Now, but that's not the end of the story, is

it? Didn't you guys have to pay a bunch of fees and things like that in the sale with Ms. Browning?

A Correct. So since we had to sell the house since they didn't buy it back, then we had to pay all *760 the realtor's fees and the closing cost. 16 Q All right. So if we look at Exhibit 42, for 17 instance, the realtor fee is reflected on here. Well, 18 so if you see on the right-hand side, it says summary of 19 seller's transaction. Do you see that? 20 A Correct. 21 Q And that summary of the seller's transaction 22 starts with the amount that -- the contract sales price, 23 right? 24 A Correct. 25 Q And then after that, you had to pay $108,000

24 for the -- $108,702 for the realtor's fee, right? A That's right. Q And that is reflected on Line Number 703 on the

second page, right? A Correct. Q In addition to that, you had to pay the title

-- a title fee. And I don't know if that's title insurance or what. Do you know what that is?

A It looks like title insurance of $11,863. Q And that's on Line 1108? A Yes. Q I have to write better.

Now in addition to that, you have, for instance, the Texas certification from HUD or tax *761 certification I guess is what it is, which is only 16 $45.11. But all of these are listed on Exhibit 42, 17 right? 18 A Correct. 19 Q So the tax certification is $45.11 and then you 20 have the release fee -- I'm sorry, the guarantee fee 21 from HUD, which is $5. And then you had the -- what's 22 the next fee? 23 A I'm not sure which order you want to go in, but 24 there was a government recording and transfer charge of 25 $48.

25 Q Right. Okay. A There is a home warranty. She wanted a home

warranty on the home for $950. Q All right. A There's a transfer fee to the homeowner's

association of $925. Q Okay. A There's homeowner's association dues. Q Well, you wouldn't have had to pay -- you only

paid for the dues up to the time you used it, right? A Right. Correct. Q What about a resale certificate from HUD for

$274? A Oh, yeah. I'm sorry. I missed that one. *762 Q And then you also had the escrow? 16 A Of $2,500. There was a pool -- it was a minor 17 pool repair issue of $658. 18 Q All right. Now if you add up all those and you 19 take it from the sales price or actually added back into 20 this, the number comes outs to be approximately 21 $562,241.55, right? 22 MR. CHAIKEN: Leading. I'm sorry. 23 Objection, leading. 24 THE COURT: Rephrase. 25 Q (By Mr. Aldous) So we did the math earlier so

26 that we don't have to do the math now. Do you recall what the math said?

A I remember that the math was somewhere around $562,000. Q Do you recall if the number would have been $241? A That number sounds approximately correct. Q All right. So at the end of the day, the

failure or the refusal of VSDH to buy back in accordance with what you guys thought you had agreed and what you ended up getting out --

MR. CHAIKEN: I'm sorry, Your Honor. Objection, leading. THE COURT: He hasn't finished the *763 question yet. 16 MR. CHAIKEN: He began by leading. 17 THE COURT: Overruled. 18 Q (By Mr. Aldous) And the -- less what you got on 19 the sale, adding back in all the fees you had to pay, 20 what is the total damages that you guys suffered? 21 A As a result of them not buying -- as a result 22 of VSDH not buying the property back as they originally 23 said they would, our loss was about $562,000. 24 Q Now, in addition to the $562,000 that you guys 25 lost in the sale, did you also have some additional

27 things that ended up that you had put into the house that you ended up not being able to get anything back for it?

A So there was like as part of the sale, the person who purchased the house also said they wanted to buy all the media equipment that was in the movie room, which was not surprising. And that was about $10,000 worth of equipment and screens. And then there was the furniture in the -- so the addition that we put on, they loved all the furniture that we put in. So they wanted all the media furniture, so there was about $10,000 worth of furniture that she purchased from us.

Q Now in terms of -- when you say, "purchased," there was no extra money that she gave you? *764 A No. She said as part -- "I'll buy the house 16 for this price and I want you to throw in those things." 17 So we had paid for those things, and then she said it 18 was kind of a contingency of her offer. 19 Q I see. Now, Mrs. Gross, reviewed in your 20 perspective, would you have, as a spouse, agreed to do 21 this deal without the personal guarantee language being 22 in the contract? 23 A Never. 24 Q And if they'd come back to you, that is VSDH, 25 to you and your husband and said, "No, we're not

28 personally guaranteeing this," what would you have done? A Bought another house. Q A different house? A Correct. There are many options available.

MR. ALDOUS: All right. Thank you for your time. I'll pass the witness. THE COURT: Mr. Shaw? MR. CHAIKEN: Can you switch places with

me? Thank you. Can you give us just a moment, Your Honor. THE COURT: So you're going to go next

instead of Mr. Shaw? MR. CHAIKEN: Yes, Your Honor. I think I'm going to proceed here. *765 MR. ALDOUS: Your Honor, do you mind if I 16 move the easel so that if they have to exit -- 17 THE COURT: You may. 18 MR. ALDOUS: -- the jury room, I don't 19 want them to run into it and hurt themselves. 20 MR. CHAIKEN: May I approach? 21 THE COURT: You may approach. And he's 22 willing to let you use his easel. You may do so. 23 MR. CHAIKEN: It doesn't matter to me 24 which easel we use. Can I set it up over there -- 25 THE BAILIFF: Same place.

29 MR. CHAIKEN: -- if that's okay with you. THE COURT: That's fine. MR. CHAIKEN: May I go place this on the

easel? THE COURT: You may. MR. CHAIKEN: Thank you. MR. ALDOUS: Your Honor, a couple of the

jurors are raising their hands. THE COURT: Yes. JUROR ONE AND TWO: May we move up to the

top? THE COURT: Yes. You need to move that over further to the

right and a little forward, Mr. Chaiken. *766 MR. CHAIKEN: Oh, sure. Move it over? 16 THE COURT: A little to the right and a 17 little forward. 18 MR. CHAIKEN: To the right and forward. 19 I'm happy to do exactly that. I got it. 20 THE COURT: Can you see that, Mrs. Gross? 21 THE WITNESS: Yes. 22 THE COURT: Yes, that's fine. 23 MR. CHAIKEN: Can the jurors see it? Oh, 24 good. 25 THE COURT: You may approach.

30 MR. CHAIKEN: May I proceed, Your Honor? THE COURT: You may. MR. CHAIKEN: Thank you.

CROSS-EXAMINATION BY MR. CHAIKEN: Q Good morning, Mrs. Gross. A Good morning. Q You and I have never actually personally met;

is that correct? A Correct. Q Other than in passing here in the courtroom

when we've been down here from time to time. You didn't give a deposition in this case or anything of that nature, correct? *767 A Correct.

16 Q You just finished testifying in response to 17 Mr. Aldous' questions about a sale of the house that 18 we've been talking about to a third party, right? You 19 and Mr. Gross made a voluntary decision to sell the 20 house to a lady by the name of Melissa Browning, 21 correct? 22 A No. I would not call it voluntary. 23 Q Somebody put a gun to your head and say, "Sell 24 the house"? 25 A Not a gun to my head; although, that did happen

31 to me two weeks ago, by the way. But -- Q That's terrible. I'm sorry. A Yeah. Q So Mrs. Gross -- A But -- Q Mrs. Gross, excuse me, Mrs. Gross. A Sorry. Q The -- you-all hired a real estate broker named

Roxann Taylor to list the property for sale, correct? A Correct. Q Okay. And that was prior to September 1st of

2009, right? A Correct. Q And that was a conscious decision that you and *768 your husband, Ken Gross, made sometime in July or August

16 of 2009, right? 17 A Correct. 18 Q Okay. And you and your husband had been 19 involved in building houses and selling houses to other 20 people, right? 21 A I'm not involved in the building and selling of 22 houses that Impact Estates builds. 23 Q But your husband is, right? 24 A That's his business. Yes. 25 Q Okay. And he markets those properties and

32 sells those properties, right? A Correct. Q And if you had wanted to do so, when you

decided -- your husband decided to voluntarily sell the house back in 2009 before September of 2009, you could have sold it by owner or through Impact Estates if you wanted to, correct?

A Impact Estates is not a real estate company, so I would think you have to be a real estate company to sell a house. We could have done a "for sale by owner," but --

Q But you elected not to do so? A -- I don't think that's required.

THE COURT: Mr. Chaiken, let her finish *769 her answers before you -- 16 MR. CHAIKEN: Forgive me. I didn't mean 17 to interrupt. 18 THE COURT: And then she will show you the 19 same courtesy, okay? Only one person can talk at a 20 time. 21 You may finish, Mrs. Gross. 22 THE WITNESS: Thank you. 23 Q (By Mr. Chaiken) Now, bottom line is you and 24 your husband, just like you made a conscious decision to 25 sell the house before September 1st of 2009, made a

33 conscious decision to hire Ms. Taylor to list the property and sell it, right?

A We were forced to do that. Yes. MR. CHAIKEN: Objection, nonresponsive. THE COURT: Overruled.

Q (By Mr. Chaiken) You made the decision with your husband, correct? A Correct. Q VSDH didn't tell you, "Go sell the house,"

right? A They told us they were not going to buy back the house. Q Okay. And you chose the timing of the sale of the house, correct, you and your husband? *770 A Yes. 16 Q Okay. You chose when to list it, right? 17 A Yes. 18 Q You chose when to have it marketed by 19 Ms. Taylor? 20 A Yes. 21 Q You decided and chose to pay Ms. Taylor -- is 22 it Miss Taylor or Mrs. Taylor -- a commission if she 23 sold the house, right? 24 A Correct. 25 Q These were decisions that you and your husband

34 made on your own, correct? A We chose to do that when we were forced to do that. Yes. Q I understand that it's your contention that you were forced to do it, okay? The point I'm making is these were decisions that you and your husband made on your own, correct?

A Based on the response from VSDH, that is the decision that we made. Yes. MR. CHAIKEN: Your Honor, object to the nonresponsive portion. Move to strike. THE COURT: Overruled. Q (By Mr. Chaiken) Mrs. Gross, you just finished testifying to this jury that in May or late April of *771 2009, you and your husband made a decision that you were 16 going to exercise the buyback option so that you could 17 move to another house. It was part of your plan. Do 18 you recall that testimony? 19 A Yes. 20 Q You also just told the ladies and gentlemen of 21 the jury that you sold the house to Ms. Browning, 22 correct? 23 A Yes. 24 Q And you sold it when you did because you were 25 trying to facilitate that plan to move someplace else,

35 correct? A Can you restate your question? Q Yes. You and your husband decided you were

moving someplace else, and you wanted to be rid of the house that you-all had purchased from VSDH, right?

A We wanted to exercise the buyback option, yes. Q So that you could move to another house, right? A Correct. Q Okay. And you did move to another house,

right? A Correct. Q Are you still in that house? A No. Q Okay. Now you voluntarily entered into a *772 contract with Ms. Browning to sell the house to her for

16 whatever the purchase price was, correct? You and your 17 husband agreed this is what we will sell the house to 18 this woman for, right? 19 A After asking VSDH whether or not -- 20 Q Right or wrong? 21 A -- we should -- 22 Q Right or wrong? 23 THE COURT: Mr. Chaiken, let her finish 24 her answer. If you don't like it, you can object to it. 25 MR. CHAIKEN: I will.

36 A We asked VSDH if they -- we gave them an option as to whether or not we should move forward with the deal. They never responded; therefore, we saw there was no other option other than to protect ourselves and sell the home.

Q When did you offer VSDH the opportunity to buy the property for 2.4 -- whatever the price you sold it to Ms. Browning for?

A We had a buyback option agreement with VSDH at a set price that we all agreed to. So -- Q Maybe -- oh, I'm sorry. I didn't mean to interrupt. Please continue. A We had a buyback agreement with VSDH that VSDH would buy back the house at a certain price. *773 Q Right. And the agreement that you had, the 16 buyback agreement, was that VSDH, if it was obligated to 17 do so under the buyback agreement, would pay $2.8 18 something million on September 1st, 2009, right? 19 A Yes. But we had to notify them on May the 1st 20 of that decision. 21 Q Right. And prior to that date 9-1-09, you and 22 your husband made a decision to enter into a contract 23 with Ms. Browning to sell the property to her for just 24 under $2.5 million, right? 25 A But we never would have done that if -- yes, we

37 did. But we never would have done that if VSDH had honored the buyback agreement.

MR. CHAIKEN: Your Honor, I object to the nonresponsive portion of the question. THE COURT: Overruled. MR. CHAIKEN: I didn't ask her why she did

it. I asked her whether she did it. THE COURT: Overruled. Q (By Mr. Chaiken) And my question to you earlier -- and I appreciate your telling me -- is: When did you offer -- prior to September 1st, 2009, when did you offer VSDH the opportunity to buy the house before September 1st, 2009 for the same price that you agreed to sell it to Ms. Browning? *774 A We didn't offer that option to them.

16 Q Okay. 17 Q Now you were in the courtroom yesterday when 18 your husband testified, right? 19 A Yes. 20 Q Okay. Now do you recall that your husband 21 right at the end of his testimony yesterday told the 22 jury that the documents, the closing documents -- and he 23 had referred to a guarantee -- had not been prepared 24 correctly? Remember that testimony at the very end of 25 his -- of his examination yesterday?

38 A I don't remember exactly what he said. No. Q Okay. And if the documents were not prepared

correctly, you and Mr. Gross nevertheless decided to close the transaction when you bought the house, right, whether the documents were correct or incorrect?

A Can I answer that question with more than a "yes" or "no"? Q No. I'd just like you to answer my question. did you close the transaction? A Did we -- we signed the documents before they signed the documents. Q I understand. A That is correct. Q And whatever documents were prepared, were not *775 prepared or correctly prepared or incorrectly prepared,

16 you closed the transaction anyway, right? 17 A We thought the documents were prepared 18 correctly at the time that we signed them. 19 Q Okay. So you disagree with your husband who 20 testified yesterday that the documents were not prepared 21 correctly? 22 MR. ALDOUS: Your Honor, I would just 23 object to asking this witness whether she recalls what 24 the testimony was yesterday. I mean, I don't have a 25 problem with asking if she disagrees or not, if he said.

39 THE COURT: Rephrase, Mr. Chaiken. Q (By Mr. Chaiken) If your husband testified to the jury yesterday that the documents were not prepared correctly, you would disagree with him, right?

A I'm not sure the context in which he answered that question. I don't know exactly how the question was phrased and exactly how the question was answered.

Q Thank you. A It would not be the first time I would disagree

with my husband. Q I bet. A Well, that wasn't nice. Q You have a book up there. And I'd like you --

and it's what we've been referring to as the Grosses' *776 Exhibits. And that's the book you were talking with 16 Mr. Aldous about a few minutes ago. I'm sorry. Give me 17 one second here. My book came apart. 18 Now, you were in the courtroom when 19 Exhibit No. 1, this document right here, was discussed 20 with your husband, right? 21 A Yes. 22 Q And you recall, don't you, that your husband 23 acknowledged that the language that we see here in terms 24 of an addition to the -- to the addendum to the contract 25 was language that he wrote and he proposed, right?

40 A No. I disagree with that. Q He didn't write that language and he didn't

propose it in his email to Mr. Buttemiller? A He sent that email to John Buttemiller with that language which was recommended by an attorney with whom he consulted. And the attorney wrote the language and gave it to Ken, and Ken then in turn said to John Buttemiller this is language which I want to have added to the contract.

Q Okay. But VSDH and its lawyers didn't put this language in the contract, right? A Well, VSDH wrote the contract and the language is in the contract. Q So is it your testimony that VSDH or its *777 lawyers put this language in the contract, that they -- 16 that this was their language and they wrote the contract 17 with this language in it? 18 A No. What I'm saying is we submitted, as is 19 proven in this email, we said we want this language in 20 the contract. And that language is, in fact, in the 21 contract. How it got in there, I don't know, but it's 22 in there. 23 Q Okay. Well, yesterday your husband testified 24 that the contract was written by VSDH and its lawyers. 25 And you just testified to the same thing a moment ago.

41 MR. ALDOUS: Your Honor, I object on relevance in terms of whether she remembers the testimony from yesterday. That's irrelevant.

THE COURT: Sustained. Q (By Mr. Chaiken) You just testified a moment ago that the contract was prepared by VSDH and its lawyers, right?

A That is my understanding. Q That's your understanding. So you have an

understanding as to who prepared the contract? A Yes. Q "They," meaning VSDH and its lawyers, did not

prepare this language. This was language that was prepared and proposed by your husband through *778 Mr. Buttemiller, correct?

16 A Yes. That was proposed and it's in the 17 contract. 18 Q Your husband's not a lawyer, right? 19 A Correct. 20 Q All right. Now, I want to talk to you about 21 this situation regarding the meeting that you have 22 testified about occurring over at the house, the one 23 that you said Doug Hickok attended that you walked in on 24 after the tour had been provided by your husband. You 25 know the meeting I'm talking about?

42 A Yes. Q When did that meeting occur? Do you know the

date? A It was sometime in the fall. Q Sometime in the fall, all right. And you were

unaware of any prior meeting that Doug Hickok had with your husband or anybody else at the house prior to that meeting, correct?

A No. That's not correct. Q All right. Now the meeting was set up by

invitation by your husband, right? A Correct. Q And Mr. Hickok did come out there, right? A Correct. *779 Q And so yesterday were you -- do you recall the

16 testimony from your husband about how he kept asking and 17 asking and asking for Mr. Hickok to come out to the 18 property and he kept -- he was being put off and put off 19 and put off? Remember that testimony? 20 A I do. I remember that happening -- 21 Q Okay. 22 A -- because Ken really wanted me to be there, 23 and he had tried to schedule it several times before. 24 Q Now, your husband is a very competent user of 25 email. Would you agree?

43 A I guess. I don't get a lot of emails from him. Q You don't? Okay. Do you see him doing a lot

of emailing, got his face in the phone or whatever? A I think most people these days send a lot of emails. Q Okay. And you're aware of your husband's practice of confirming things in email, right? A No, I'm not. I don't know the nature of his emails. Q Okay. I'm sorry. Give me a second here to find where I am trying to go. All right. I'm there now.

So, I want to show you what's been marked as Exhibit 24. You saw it up there yesterday when you *780 were sitting in the courtroom. And you understand that 16 this is an October 16th, '08 letter from your husband to 17 Mr. Hickok inviting Mr. Hickok to come out and look at 18 the plans for approval, and reporting some other 19 information about what y'all were going to possibly do 20 with regard to roofing materials and complaining about 21 Paul Kramer, right? 22 A Well, complaining about the fact that Paul 23 Kramer never fixed the repairs that were part of the 24 purchase agreement of the house. Yes. 25 Q All right.

44 A Not Paul Kramer personally. Q Got it. Now, I've never seen another written

invitation by you or your husband to Mr. Hickok or anybody else to come out to the house prior to this one which is dated October 16, '08. Have you?

A The only emails that I've seen are in the testimony over the past few days. Q All right. So October 16, '08 is in the fall of '08, right? A Correct. Q All right. Now I want to show you Exhibit No.

27. All right. Exhibit No. 27 is two emails. You see it?

A Yes. *781 Q And right here we have an email from Mr. Hickok 16 that is dated October 31st at 8:43 a.m., right? And it 17 says, "I just left you a voice message informing you 18 that I cannot meet today at 11:00. Unfortunately, I'm 19 out of town this weekend. In summary, I will give you a 20 call early next week to schedule a time to get 21 together." And then it says, "My apologies," right? 22 A Correct. 23 Q Now, you agree with me that if Mr. Hickok was 24 writing this at 8:43 a.m. on the 31st to talk about a 25 meeting that had been scheduled that day, the meeting

45 had been scheduled at some time prior to his writing that email, right?

A Correct. Q It could have been a day before. It could have

been three days before. It could have been five days before. You don't know, right?

A Correct. Q All right. But what you do know from reading

this email that was authored by Mr. Hickok on the 31st is that he responded to your husband's request to schedule a meeting, right?

A Yes. Q All right. Now, when Mr. Hickok told -- and,

by the way, have you ever seen any other emails or *782 documents about scheduling the meeting because I 16 haven't? I was just wondering if you ever have. 17 A Not that I recall. 18 Q All right. And when Mr. Hickok on the 31st 19 sent this email to your husband apologizing for being 20 unable to get there that day and committing to 21 scheduling next week to -- a time to get together, your 22 husband's response was this email right here, right? 23 And it says, "No problem, Doug. Just call me next week 24 and we can reschedule. Thanks, Ken," right? 25 A Yes.

46 Q Now, your husband didn't say, "Well, Doug, you keep putting me off, you keep putting me off. We need to schedule this thing. This is urgent," nothing like that, right? What he said was, "No problem, Doug. Just call me next week and we can reschedule." That's what he said, right?

A Yes. It was a cordial response. Q Yes, it was. And he had no problem with the

fact that it had to be rescheduled. He didn't say anything about any urgent need to have the meeting, nothing like that, right? You don't see anything like that in this email, right?

A Not in this email, no. Q Okay. And you were in the courtroom yesterday *783 when your husband testified that your lender had, around

16 this time period, put him under the gun a little bit and 17 said, "Hey, you need to start this construction now and 18 you need to finish it by the end of the year." Remember 19 that? 20 MR. ALDOUS: Your Honor, I would object 21 to -- on relevance with regard to what she recalls and 22 whether she was in the courtroom when the testimony 23 happened. 24 THE COURT: Sustained. 25 Q (By Mr. Chaiken) In October of 2008, were you

47 aware that your lender had demanded that you and your husband start the construction and demanded that it be done by the end of the year?

A I wouldn't characterize it as a demand. Q Let me rephrase it then. Were you aware that

the lender had contacted your husband and it said," You need to start the construction," and they complained about his failure to do so earlier and that you and your husband on the one hand and the lender on the other hand reached an agreement to start the construction at about that time and finish it by the end of the year?

A I wouldn't characterize it as a complaint. Q What about the rest of it? Would you agree

that there was an agreement made to start it and to *784 finish it by the end of the year? 16 A What I would say is I know that there was a 17 discussion that happened between the bank after the bank 18 had merged saying, "Hey, by the way, what's the status 19 of the construction? What are your timelines? When's 20 it going to be finished," and that Ken and the bank 21 reached an agreement of what was going to happen and we 22 lived up to that agreement. 23 Q Okay. And did you happen to hear your 24 husband's testimony yesterday on when it was that he 25 agreed that the construction was going to be finished?

48 A I don't recall what -- exactly what he said. Q Okay. Do you see anything in Exhibit No. 25 --

I'm sorry -- 27, which is still up here on the overhead that says, "Hey, Doug, I've got to get this construction started right away because I've got to get it finished by the end of the year"?

A It does not state that in this email. No, it does not. Q All right. And just so we're clear, sometime in the fall, Mr. Hickok came out to the house, met with your husband, and then you joined them in having a pleasant conversation about kids and everything else, right?

A And how good the house looked. *785 Q You're testimony is that he told you how good 16 the house looked, right? 17 A I remember saying to him, "Everything looks 18 great, doesn't it?" And he said, "Yeah, it looks 19 terrific." 20 Q Now, when you were testifying in response to 21 Mr. Aldous, I wrote down that you testified that -- when 22 referring to -- you were describing how you ran into Van 23 in Mexico and that -- and then the next thing you 24 remember -- you knew about was this meeting that 25 occurred where Doug came out to the house. And you said

49 after construction had started, right? So when Mr. Hickok came out, construction had already started, right?

A Yes. Q All right. And you understood that -- that

your husband was inviting Mr. Hickok to come out, according to Exhibit No. 24, to look at the house, okay, because he wanted to show Mr. Hickok the plans for his approval, right? Right?

A That's what it states in here. Yes. Q All right. So when I read that, that indicates

to me that -- that when somebody is saying, "I want to show you the plans for approval. Come on out to the house," that person has never previously shown this *786 person the plan for approval. And so -- so I'm not

16 seeing any other communication from your husband saying, 17 "Here are the plans. Please approve them." Have you 18 ever seen anything like that? 19 A The fact that that's not in this email doesn't 20 mean that that conversation never took place. 21 MR. CHAIKEN: Objection, nonresponsive. 22 THE COURT: Sustained. 23 Q (By Mr. Chaiken) My question to you was: Have 24 you ever seen another communication from your husband or 25 anybody acting for him to Mr. Hickok saying, you know,

50 "Here are the plans, you know, for your approval"? A I don't recall if there -- if I've seen something else that says that. I'd have to look through all the other documents.

MR. CHAIKEN: All right. Your Honor, may I approach the board? THE COURT: You may. Q (By Mr. Chaiken) I want to see if we can list some points of agreement, okay? You will agree with me that as of the meeting date -- we'll call that meeting date -- we don't know when the meeting date was -- construction already began, right?

A Yes, that's true. Q All right. And before -- before the meeting, *787 your husband invited Doug Hickok -- I'll call him DH,

16 okay -- to review the plans for approval. Are we in 17 agreement on that? 18 A Yes. How many times he did, I'm not sure. 19 Q Okay. That's what I'm saying, as of the 20 meeting. Oh, and just so we're clear, when I say, 21 "before the meeting," this one was on 10 -- 22 MR. CHAIKEN: Van, what's the date of the 23 letter there? Can you slide that down for me? 24 MR. SHAW: 10-16. 25 Q (By Mr. Chaiken) 10-16. Excuse me.

51 And the other thing we can agree upon is that you have never seen another writing asking Mr. Hickok to review the plans for approval, you? That's what I'm saying.

A I don't know if I can state that I've never seen another email that he has -- or any other communication. I don't know that I can say that.

Q Can you point to any, a written communication? A My inability to point to something doesn't mean

that I've never seen it -- Q Okay. A -- or that it doesn't exist. Q We'll just leave that blank. We can't agree on

that issue. *788 Now, let's see if we can agree on one 16 other point with respect to this issue. Exhibit 1 is -- 17 right here is language about completing the improvements 18 and the buyer reviewing with seller the plans and 19 specifications, right? This is your husband's language 20 to Mr. Buttemiller. 21 A What's your question again? I'm sorry. 22 Q You agree that that's -- here is evidence of 23 your husband proposing language about when completing 24 improvements, the buyer will review with the seller the 25 plans and specifications?

52 A Before proceeding. Q Right. And this was a -- this was a concept

that was raised by your husband in his May 25, 2007, email to Mr. Buttemiller, right?

A Correct. Q All right. And then the contract, which is

Exhibit 3 if you want to look at it, with the addendum was --

THE COURT: Three Gross or 3 VSDH? MR. CHAIKEN: Three Gross.

Q (By Mr. Chaiken) -- signed, right? And it had your initials on it as a buyer right here at the bottom. See them right there?

A Yes. *789 Q And then your initials right up here on the 16 escrow agreement clause, right? 17 A Yes. 18 Q All right. And you were a party to this. You 19 were one of the two buyers, right? 20 A Yes. 21 Q Okay. And you understand that when this 22 contract talks about "buyer," it's talking about you, 23 right? 24 A Correct. 25 Q And your husband?

53 A Correct. Q Right. And so the language that ended up in

the contract that you and your husband signed regarding buyer improvements was language that says, "Before commencing construction, buyer will review with seller the plans and specifications and receive general consent to proceed with the improvements," right?

A Well, you forgot some words in there about consent not to be unreasonably withheld. Q Right. Consent not to be unreasonably withheld, right? A Right. Q Okay. So in order for somebody to consent or

not consent or whatever, they have to be given the *790 opportunity to look at what it is so that they can 16 consent or not consent, right? 17 A Correct. 18 Q And in this particular instance, what you and 19 your husband agreed to do in the contract was to review 20 the plans with Mr. -- I'm sorry -- with VSDH, the 21 seller, right -- you knew they were the seller -- before 22 commencing construction and receiving general consent to 23 proceed with the improvements, right? 24 A Yes. 25 Q Okay. And you'll agree with me that the only

54 invitation in writing -- THE COURT: Would you like to approach? MR. CHAIKEN: I'm sorry. I should ask

before I stand up. THE COURT: You may approach. MR. CHAIKEN: May I approach? Thank you.

Q (By Mr. Chaiken) Can we agree that the only written invitation that we see, okay, in this courtroom to VSDH, the seller, to come out, look at the improvements, review the plans for approval would be the October 16, '08 letter that we just spent time talking about?

A No, I disagree. Q Okay. But you can't show me another written *791 invitation to review the plans, right?

16 A I don't know if it exists in any of these 17 binders. And even if it doesn't exist in one of these 18 binders, I can't say that it doesn't exist at all. 19 Q So we can't agree on that point is what you're 20 telling me? 21 A No. 22 Q All right. Because you don't know, right? 23 A Correct. I don't know -- 24 Q Okay. 25 A -- if it exists or not.

55 Q Fair enough. I'm just trying -- A There could be a dozen -- Q -- to see what we can agree on -- A -- emails. Q -- and what we can't agree on.

THE COURT: Mr. Chaiken, you can't both talk at the same time. MR. CHAIKEN: Okay. THE COURT: You may be seated. MR. CHAIKEN: Forgive me.

Q (By Mr. Chaiken) Mrs. Gross, did you read the contract when -- or before you signed it? A I can't say I read every last word, but there were certain parts that I definitely read very closely. *792 Q Okay. So, some people read every word; some 16 people don't read every word. It kind of happens, 17 right? 18 A Correct. 19 Q So if you're not a lawyer and you're reading a 20 contract, you know, you might miss something in the 21 contract, right? 22 A Sure. 23 Q You might not realize something's written in, 24 right? 25 A Correct.

56 Q And that's true of you, right? A Sure. Q And that could be true of Mr. Hickok, right? A Correct. Q All right. And I want to ask you whether when

you read this contract before you signed it, you were aware of this Provision Number 21 that says, "All notices from one party to the other must be in writing and are effective when mailed to, hand-delivered at, or transmitted by facsimile or electronic transmission as follows." And then it talks about to seller. It gives his address, phone number, facsimile and an email address. You see that?

A Yes. *793 Q Okay. Were you aware of that information when 16 you signed the contract? 17 A I probably didn't pay attention to that. 18 Q Okay. Did you and your husband keep a copy of 19 the contract? 20 A Sure. 21 Q So you had that information at your home after 22 you closed so that if you or he wanted to send the plans 23 to VSDH -- and you had them and you might have had them 24 a year earlier. You might have had them six months 25 earlier, whatever, or even on October 16 when the

57 invitation to approve them, okay, by your husband was sent. It could have been sent by mail; it could have been sent by facsimile or email, right?

A Yes, but I don't know whether that address is a business address, a home address. I know that Mr. Hickok has several homes in multiple states.

Q But you had an address to talk about what the seller's address was, right? A Yes, but I just -- I don't know whose address that is. Q Well, it's seller's address, right? A But it -- it also has, though -- the email

address underneath that is for Marquis Group. So is that Marquis Group's address or is that Doug Hickok's *794 personal address or is that VSDH's address? I don't

16 know. 17 Q Mrs. Gross? 18 A It just has an address. 19 Q Mrs. Gross, you see this address right here? 20 A Yes. 21 Q Okay. And it's in a notice provision and it 22 talks about where notices in writing that have to be 23 sent in writing to be effective, and it talks about 24 where it should be delivered to either of the parties. 25 Okay. And what it says here is to seller. You just

58 told me you know who the seller was, right? A Right. Q And that's VSDH, right? A Right. So now looking at that, you're right.

That makes sense. Q That would make sense. A That would be VSDH's address. Q Right. And this is the email address that VSDH

provided in case you wanted to deliver by email instead of mail or hand-delivery or other electronic communication, right?

A Got it. Yes. Q Right. And you had a fax machine -- a fax

number there too, right? *795 A Yes. 16 Q So at any time, okay, prior to October 31 of 17 2008, you or your husband wanted to send the plans to 18 VSDH, the seller, for approval before beginning 19 construction, you could have sent it in any of those 20 ways to any of those places, right? 21 A In theory, yes. 22 Q All right. And I'm focusing on this question 23 specifically, okay, which is this Paragraph Number 21, 24 because -- you see where it says, "All notices from one 25 party to the other must be in writing and are effective

59 when mailed to, hand-delivered at, or transmitted by facsimile or electronic transmission as follows"? You see that?

A Yes. Q All right. And back to the things that we

could agree upon. Let's see if we can. Can we at least agree that you are not aware of any written notice to VSDH sent by mail, hand-delivery at the address listed in the contract, by facsimile or electronic transmission that included the plans for approval? All I'm asking you is: Can we agree that you're not aware of any?

A Not aware of -- for clarification, "not aware of" makes it sound as though I don't know of any. Am I not aware? I don't know if there are -- I don't know if *796 there are and I don't know if there weren't.

16 Q Okay. So, in other words, you would agree with 17 me that you don't know of any, okay -- 18 A But that doesn't -- 19 Q -- but there might have been; you just don't 20 know. Can we agree on that? 21 A Correct. There might have been. 22 Q Okay. Let's see if we can agree on one more 23 thing on this point, and then we'll move along. By the 24 way, are you okay? You need water or anything? 25 A No, I'm fine.

60 Q Sure. Okay. I know this is kind of tedious. And I misspoke. I'm actually asking two things, not one. Okay? First thing I'm going to ask about is: Can we agree that the October 16th, '08, letter from your husband inviting Doug Hickok to review the plans for approval, okay, at the house sometime after that date is not sending those plans to Mr. Hickok or VSDH for such an approval? Can we agree on that?

A We can agree that it does not appear that plans were attached to that email. Q Okay. And asking somebody to come somewhere to look at the -- at the plans, other than their own office address, in this case would not be sending the plans in writing to that person to seek their approval at their *797 address, right? Can we agree on that?

16 A Your question is a little confusing, but -- 17 Q Let me try to make it less confusing, okay? I 18 don't want to confuse you. 19 In his letter, your husband said, "If you 20 give me an address, I'll be happy to send them to you 21 for your review," right? 22 A Right. He was trying to cordially say, confirm 23 which address you'd like me to send them to, is how I 24 read that. 25 Q Right. What he was really saying is, is that I

61 understand I have an obligation under the contract to send you the plans for your review under the notice provision of the contract, right?

A I think that's taking a lot of latitude with your statement, but -- Q Is it unreasonable latitude? A I think all this says is, I'd like to review

the plans with you. How are you doing? Tell me where to send them. Do you want it sent to your house in Colorado or your house here? Where would you like them sent? That's all that's saying.

Q All right. Okay. Now I just want to cover that last point I told you that I was going to cover on this issue, and here it is in the addendum. I want to *798 make sure that everybody understands what the contract

16 obligations were here. Paragraph 2, buyers improvements, 17 it says again, "Before commencing construction buyer 18 will review with seller the plans and specifications and 19 receive general consent, consent not to be unreasonably 20 withheld, to proceed with the improvements." I read 21 that right? 22 A Yes. 23 Q Okay. 24 MR. ALDOUS: Your Honor, that -- I object, 25 repetitive.

62 MR. CHAIKEN: Well -- MR. ALDOUS: Cumulative. THE COURT: Sustained. MR. CHAIKEN: Okay. I'll move on.

Q (By Mr. Chaiken) Now, do you see anywhere in this paragraph any -- any requirement for the buyer after commencing construction to seek approval of the plans? Feel free --

A State that again. Q Feel free to read -- A What's your question? Q Show me where in Paragraph Number 2 right here,

in Exhibit 3, the contract, the addendum, where it says that the buyer, which is you and your husband, are *799 required to review with seller plans and specifications

16 and receive consent after construction has already 17 occurred? 18 A It says buyer will periodically update seller 19 regarding progress and timelines. And so I would 20 interpret that as along the way, we will provide 21 updates. 22 Q Provide updates, but he doesn't have to review 23 the plans and specifications and obtain approval of 24 them, right? 25 A No. But I think it's -- no, it does not state

63 that. Q So, once you present the plans and specifications to VSDH for approval -- A Uh-huh. Q -- okay, and you get the approval of the plans

and the specifications under the contract, you don't have to ask for plans -- for approval of those plans after you start the construction, right?

A It says you're supposed to review the plans and specifications. Q Before construction, right? A Before commencing. Q Right. And then after that, you're not

required to get consent to the plans and specifications *800 from the seller, right? You can give them periodic 16 updates. You can tell them how things are coming along. 17 But you don't have to give the concept to the plans and 18 specifications, right, for their approval? 19 A It doesn't state that in that paragraph. 20 Q So, in other words, once you have presented the 21 plans to the seller and the seller has given you concept 22 or approval of the plans, then there would be no need to 23 call upon the seller to -- to review the plans and 24 approve them, right, under the contract? 25 A Yes. But I think that the approval already

64 occurred. Q Right. That's my point. A They already approved the plans and

specifications. Q All right. So let's see if we can agree on this concept. All right? You and your husband contend, because you've now testified to it and your husband testified to it yesterday, that the seller had approved the plans and the specifications prior to this meeting that occurred, right?

A Yes. Q Well, if that is true, there would have been no

need to send an invitation to the seller in October of '08 inviting them to approve the plans and *801 specifications at the beginning of construction, right?

16 If it had already been done, why are you doing it again? 17 A Because their nonresponsiveness and their 18 uncooperation was causing concern that led to us wanting 19 to start putting everything in writing since they would 20 not respond to phone calls, would not respond to 21 requests for meetings. And so while there were 22 conversations about here's where the house is going to 23 be, here's what it's going to look like, here's what the 24 plans are. There was a detailed list in the contract of 25 exactly what the house was going to include. There was

65 a meeting on site to say, "Here's what it's going to include." Now, all the sudden, the fact that they wouldn't respond to calls, wouldn't respond to meetings, wouldn't respond to anything, all the sudden it was, we'd better start putting things in writing.

Q So, let's see if we can agree on this. Okay? The reason your husband sent Exhibit No. 25, this October 16th, '08, letter to Mr. Hickok in inviting him to review the plans for approval because he's beginning construction and saying that he'd be happy to send them for review, is because there had never been a review of the plans by the seller and an approval of those plans before that date?

A I disagree. *802 Q Certainly, there's no writing that evidences 16 that it ever occurred, right? Can we agree on that, 17 none that you're aware of at least? 18 A Not that I have seen. 19 Q Okay. All right. Now, are you in the habit of 20 recording telephone conversations? 21 A No. 22 Q Is your husband in the habit of doing so? 23 A I have no idea. 24 Q Are you aware of your husband ever recording 25 telephone conversations?

66 MR. ALDOUS: Your Honor, I object and request for permission to approach. THE COURT: You may approach. (Sidebar conference held) THE COURT: You may proceed.

Q (By Mr. Chaiken) So I want to see if we can agree on something else, okay, based upon the testimony that you've just given, okay, about this need to start putting everything in writing because the seller was nonresponsive and the seller was putting you off and they weren't, you know, responding to you-all when you were asking them for things and so on and so forth, okay? That was all before you sent your buyback notice, right? *803 A Correct.

16 Q So I'm guessing things were not as amicable 17 from your perspective prior to the -- to sending out the 18 buyback notice as your husband described yesterday right 19 up until the buyback notice? 20 A I would disagree. I feel like we were getting 21 mixed messages, you know. When I ran into Van Shaw and 22 he's like, yeah, everything's great. It's going to be 23 great. 24 Q Okay. But all the sudden, you felt the need to 25 start documenting everything, right?

67 A Well, especially on the execution of the buyback option. It was very clear. And because of the magnitude of that decision --

Q Sure. A -- that had to be in writing. Q Everything had to be in writing with respect to

that, right? A Well, on the buyback option -- Q Sure. A -- it was very clear in the contract. Q So, I'm a little confused, Mrs. Gross. If

everything had to be in writing with regard to the buyback option, okay -- and I'll take you at your word that that's what you believed was necessary -- why are *804 you telling us that everything had to be in writing in

16 October of '08, which was, what, eight months before the 17 buyback option was triggered by you? 18 A Say that again. 19 Q You just finished telling the jury that all the 20 sudden, everything needed to be in writing in October of 21 '08, okay? And then you started saying, well, it all 22 needed to be in writing at the time of the buyback 23 option. So the relationship from your perspective had 24 changed, okay, as of October of '08, necessitating that 25 everything be put in writing, right?

68 A What I'm saying is in October '08, after numerous attempts at Ken trying to get Doug Hickok to come out to the house, he likely -- I can't speak for him. But it certainly appears and my recollection is that he said, "I better put something in writing because maybe this will get them to respond."

Q Got it. A "And we better have something in writing." Q All right. A But we also didn't want to have a contentious

relationship with what we thought was amicable parties. Q All right. I want to turn our attention now to the issue of the escrow agreement, okay? You were in the courtroom when there was a discussion about the *805 escrow agreement, right?

16 A Yes. 17 Q All right. So let's see what we can agree to, 18 okay? Can we agree that the escrow agreement provision 19 of the contract as written and as signed by you and your 20 husband as the buyer said, "Buyer agrees to escrow funds 21 totaling $156,871 with the title company and enter into 22 an escrow agreement acceptable to seller and buyer that 23 outlines the proposed improvements to the property and 24 the disbursement of such funds"? Can we agree that 25 that's what the contract says?

69 A That's what it says. Q Can we agree that you and your husband

understood that's what the contract said when you signed it?

A Yes. Q All right. Can we agree that the escrow that

occurred, as testified to by your husband, was one that put those funds with your lender, not the title company?

A Because it was required by the lender. That is true. Q Okay. So let's see if we can agree on the following. MR. CHAIKEN: Your Honor, may I approach? THE COURT: You may. *806 Q (By Mr. Chaiken) We'll call this escrow issue.

16 First thing we're going to say is that Grosses put 17 escrow money with their lender, not the title company. 18 We're in agreement with that, right? 19 A We're in agreement that the lender required us 20 to put the funds with them and not -- so the funds were 21 escrowed but the bank required that they hold the funds, 22 not the title company. 23 Q Right. And so the reason that the Grosses, you 24 and your husband, put the escrow funds described in 25 Paragraph of the addendum with your lender, instead of

70 the title company, is because lender required it? A Correct. And we notified the seller. Q Okay. Lender required this. And so you had a

contract that said the funds go to the title company. We have agreed on that, right? And rather than put up with the title company, for whatever reason, you put it with your lender, right?

A The lender required it, and we notified the seller that the lender required it. Q Okay. And you -- you entered into an agreement with the lender with regard to those escrow funds? A Yes. Q Okay. So you had an agreement with lender,

okay. Now, you had an agreement with the lender *807 regarding this escrow arrangement. When did you enter 16 into an escrow agreement acceptable to VSDH and you that 17 outlines the proposed improvements to the property and 18 the disbursement of such funds? 19 A I seem to recall seeing a document in the last 20 48 hours that was very clear that we communicated to 21 VSDH that the funds had to be held with the bank and not 22 with the title company. 23 MR. CHAIKEN: Objection, nonresponsive. 24 THE COURT: Sustained. 25 Q (By Mr. Chaiken) My question, Mrs. Gross, is:

71 When did you and your husband enter into an escrow agreement acceptable to VSDH and to you and your husband that outlined the proposed improvements to the property and the disbursement of escrow funds?

A I'm having a hard -- I have to think about how to answer your question because we entered into that agreement with VSDH when VSDH was made known of the fact that that was a requirement by the lender.

Q So it's your testimony to this jury that you and your husband signed an escrow agreement and that VSDH signed an escrow agreement that was acceptable to both of you and it outlined the proposed improvements to the property and the disbursement of the funds? Is that your testimony? *808 A Well, the fact that the funds were held by

16 someone other than the title company certainly didn't 17 stop them from cashing the check. 18 MR. CHAIKEN: Objection, nonresponsive. 19 THE COURT: Overruled. 20 Q (By Mr. Chaiken) Did you and your husband sign 21 your names to a written agreement with VSDH that 22 outlines the proposed improvements to the property and 23 the disbursement of the escrow funds; yes or no? 24 A To the first half of your question, yes. The 25 proposed improvements to the property are fully detailed

72 in one of the addendums to the contract. As to the escrow agreement, we notified VSDH of the lender's requirement.

Q So the answer is, no, you did not enter into the escrow agreement? A So the answer is, no -- what's your question? Q You didn't enter into the escrow agreement

acceptable to seller and buyer that outlined the proposed improvements to the property and the disbursement of the funds?

A We did not enter into an escrow agreement with the title company. Q Okay. A That's correct. *809 Q Not with the title company, with the seller.

16 A Which line are you referring to, sir? 17 Q I'll ask the question again. Did you and your 18 husband sign an agreement with VSDH that out -- an 19 escrow agreement, okay, that outlines the proposed 20 improvements to the property and the disbursement of 21 such funds or not? 22 A I don't know. 23 Q Okay. So we can agree -- 24 MR. CHAIKEN: May I approach, Your Honor? 25 I'm sorry.

73 THE COURT: You may. Q (By Mr. Chaiken) So can we agree that you don't know whether you signed such an agreement? Can we say that?

A What we can agree on is that we entered into an agreement that all parties signed and -- MR. CHAIKEN: Your Honor, objection, nonresponsive. THE COURT: Overruled. Q (By Mr. Chaiken) Can we agree that you are not -- THE COURT: I overruled it. MR. CHAIKEN: I'm asking another question. THE COURT: She didn't finish her answer. *810 She started to tell you what they -- what she could

16 agree to. You're asking her to agree and she said, "We 17 can agree to -- and then didn't finish it. So allow -- 18 MR. CHAIKEN: I thought she stopped 19 speaking. 20 THE COURT: her to -- we can't talk at the 21 same time, Mr. Chaiken. You objected, which is why she 22 stopped. She can finish her answer. 23 A I don't remember the question. 24 MR. CHAIKEN: I'll move along. 25 Q (By Mr. Chaiken) Did you have an understanding

74 as to what the purpose of Paragraph 3 here in the escrow agreement was?

A Yes. Q Would it be fair to say that one of the

purposes of the requirement to enter into an escrow agreement with the seller that outlined the proposed improvement to the property and the disbursement of the funds was so that you had a signed agreement after this contract that we're talking about here, okay, that actually outlined the proposed improvements in that document along with the disbursement schedule?

A My understanding was that the purpose of the escrow agreement is to make sure that the person who's going to do these improvements follows through with *811 doing those improvements --

16 Q Okay. 17 A -- and spends the money on those improvements 18 and not on a trip to Vegas. 19 Q Right. And one of the other purposes was to 20 outline proposed improvements in a signed written 21 agreement between the two parties, right? 22 A It would -- yes, that there would be a signed 23 agreement of what's going to happen and -- 24 Q Right. 25 A -- the escrow agent would monitor the

75 disbursement of funds. Q Got it. Now, you and your husband have testified that VSDH consented to that arrangement, had no problem with it, right? That's what you're telling the jury. When I say, "that arrangement," instead of signing the agreement that was called for by the contract, escrowing the money instead with the lender pursuant to an agreement with the lender?

MR. ALDOUS: Objection, Your Honor. Calls for a legal conclusion as to what is required by the contract.

THE COURT: Rephrase your question, Mr. Chaiken. MR. CHAIKEN: Sure. *812 Q (By Mr. Chaiken) Your testimony to this jury 16 is that VSDH was okay with you escrowing the escrow 17 funds with your lender and not signing the specific 18 escrow agreement with VSDH, right? 19 A My testimony is that they were aware that an 20 escrow agreement with the bank was required instead of 21 with the title company. 22 Q Were they okay? 23 A And, yet, they still moved forward with the 24 agreement and cashed the check. That's my testimony. 25 Q Okay. Because I thought I heard you tell the

76 jury that they were okay with it; they knew about it and everything was just fine?

A That's what I just said a second time. They were aware of it. They moved forward with the agreement and they cashed the check.

Q Got it. The check meaning the check for the purchase price that you owed them to buy the house? A That we agreed to pay them, yes. Q Okay. A The fact that the funds were held somewhere

else certainly didn't stand in the way of them cashing that check and moving forward.

Q Got it. And then, of course, you found out about how VSDH felt about that arrangement on July 3rd *813 of 2007, when you received what's marked as VSDH's 16 Number 29, which is a letter from a lawyer named 17 Mr. Stern, who told you that you and your husband had 18 not complied with the addendum's requirement to escrow 19 the funds with the title company and escrow -- I'm sorry 20 -- and sign an agreement, an escrow agreement, with the 21 seller, right? You got this letter? 22 A I had forgotten about it until I saw it 23 yesterday. Yes. 24 Q Got it. And you knew at that time, can we 25 agree, that the seller did not approve of the

77 arrangement that you and your husband agreed to with your lender, okay, instead of doing what was stated in the contract, which was escrowing the money with the title company and entering into a specific escrow agreement outlining the plans and specifications, right?

A I remember being very surprised by receiving that letter because we had notified them that we had to do the escrow agreement with the bank instead; and, yet, they still moved forward with the deal and still cashed the check.

Q Well, they never told you, "Yeah, that's okay. Go ahead. Do it that way"? A By them signing the agreement, to me, with knowledge that we had to do it with the bank, my *814 understanding was that they didn't disagree with it. 16 They didn't have a problem with it. 17 Q They signed the agreement before the escrow 18 situation arose and you-all changed the plan. In other 19 words, the escrow agreement requirement was in the 20 contract when you signed the contract of purchase and 21 sale, right? It was supposed to happen later, right? 22 A Right. 23 Q Right. Okay. And so that's the only agreement 24 that they signed, right? 25 A Right.

78 Q All right. I'm glad we could clarify that. Please look, if you will, at Exhibit No. 30, which is your Exhibit No. 30, Grosses' Exhibit No. 30. And I just want to briefly talk with you about something here. This is a February 23, 2009, memo from your husband to Mr. Hickok. And he says, "I finished with the addition and just wanted your final inspection and approval." Did I read that right?

A Yes. Q Okay. So he, is asking for approval of things

at this point that were already done, right? A They had been completed. Anything is changeable, but they had been completed. Yes. Q So you didn't get approval of the things that *815 are listed here before construction of them, right? 16 A I'm -- I don't know whether he got approval of 17 doing those things beforehand or not. 18 Q Okay. And the plans and specifications that 19 deal with all of these ten items, they were -- as your 20 husband I think described them, they were things above 21 and beyond what the plaintiff required, right? 22 A Correct. 23 Q So, number one, your husband hadn't finished 24 construction of the improvements by the end of 2008, 25 which is what his agreement was with the lender to do,

79 right, because he didn't finish until February of 2009? A I don't know what the agreement was with the lender. But I do know that the lender has never come back to us and said that they have any problem --

Q Got it. A -- with the finish date. Q And this Exhibit No. 30 has your husband asking

for VSDH's approval after the fact of a change in the plans and specifications or an addition to the change (sic) and specifications, right? They're already done, right?

A Yes. Q Okay. A I can't imagine anyone objecting to $20,000 *816 worth of free upgrades; but, yes, they were already

16 done. 17 Q Well, while we're on the topic of objecting to 18 free upgrades or upgrades or the type of construction, 19 whatever, let's see if we can agree on this. What you 20 think is a beautiful home and beautiful construction may 21 not be what somebody else thinks is a beautiful home and 22 beautiful construction, right? 23 A True. 24 Q Everybody has different tastes, right? 25 A True.

80 Q And you understand that the reason that consent from VSDH for approval of the plans and specifications before construction was so that VSDH could determine whether what you and your husband might have thought was beautiful and good construction was beautiful and good construction from their point of view in case they were in a position to have to buy the property back, right?

A Sure. Q Okay. So while you might have unilaterally

with your husband decided we're going to put these things in and we're going to do it this way, okay, what you wanted to do and what you did might not have been acceptable to VSDH, right?

A That's true. It might not have been. *817 Q But you-all went ahead and did those things 16 anyway and then asked for approval after the fact, 17 right? 18 A We moved forward based upon comments from Doug 19 Hickok saying everything looks great, everything looks 20 terrific, and based upon the fact that we had received 21 no communication whatsoever at any point in time saying, 22 "Stop, cease. What you're doing is unacceptable." We 23 had absolutely zero signal from anyone saying that what 24 we were doing was not okay. 25 Q My question was a little different. My

81 question was that with regard to these above and beyond items, you and your husband made a unilateral decision to do these things in a house that you were planning, a couple of months later, to try to sell back to VSDH. And you told them about it after the fact, and you sought their approval after the fact, right?

A And the reason why we did that is because if there was anything that they did not like between February 23 and May 1st, we could have easily changed it back.

MR. CHAIKEN: Your Honor, objection, nonresponsive. THE COURT: Overruled. Q (By Mr. Chaiken) All right. Let's move on to *818 another topic. 16 THE COURT: How much longer do you think 17 you'll be, Mr. Chaiken? 18 MR. CHAIKEN: I have a bit to go, maybe 19 another hour. 20 THE COURT: Then we'll take a luncheon 21 recess. It's now 12:15. The jury is under the same 22 instructions you've been previously given. During this 23 recess, you're not to discuss this case among yourselves 24 or with anyone else until such time as the case has 25 either been submitted to you for your deliberations or

82 you have been discharged as jurors. All rise. The jury is excused for lunch. (Jury exits the courtroom) THE COURT: You may be seated. MR. ALDOUS: Can she step down, Your

Honor? THE COURT: Yes, you may step down. (Lunch recess taken) THE COURT: All right. Counsel, approach. Okay. We'll go on the record. Mr. Chaiken? MR. CHAIKEN: Your Honor, during the

break, Mr. Aldous and I spoke about a document on the Grosses' exhibit list, which was the subject of a *819 deferred ruling by the Court, which was Exhibit No. 36.

16 And we've agreed that that document may be admitted and 17 we would request the admission of Exhibit No. 36 at this 18 time. 19 MR. ALDOUS: No objection. 20 THE COURT: All right. Exhibit 36 is 21 admitted. 22 MR. CHAIKEN: And, Your Honor, so in 23 keeping with the Court's procedures, I don't know if you 24 have the exhibit in front of you, but I have an extra 25 copy of it if you'd like it during the examination.

83 THE COURT: It's a one-page document? MR. CHAIKEN: It's a one-page document.

You already have it? THE COURT: Gross 00472? MR. CHAIKEN: That would be correct, Your

Honor. So you have it already. THE COURT: All right. If there's nothing further, we'll bring in the jury. All rise. (Jury enters the courtroom) THE COURT: You may be seated. All right. Mr. Chaiken, you may proceed. MR. CHAIKEN: I appreciate it, Your Honor.

Q (By Mr. Chaiken) Good afternoon, Mrs. Gross. *820 A Hello. 16 Q I hope you had an enjoyable lunch? 17 A Uh-huh. 18 Q I want to talk to you about a couple of things 19 before I turn you over to Mr. Shaw. Can you tell the 20 ladies and gentlemen of the jury who Jana Reist is and 21 Brent Cooper, who those two people are? 22 A They're attorneys. 23 Q Okay. So is it fair to say that as of June of 24 2009, you and your husband had enlisted the help of 25 attorneys Reist and Cooper to help you-all in dealing

84 with the -- I'll call it a situation involving the buyback option after you had sent notice of the exercise of it?

A We did retain them at one point, but I can't remember the exact date. Q Okay. But -- so you did retain them; you just don't remember when? A Correct. Q Okay. And were these lawyers that you had a

relationship with? A No prior relationship. No. Q Now, I want to ask you a couple of questions

and I'm going to request that you -- that you answer, "yes," or, "no," to these questions. Okay? *821 All right. The first question is: I'm

16 going to show you what is Exhibit 36. It's Grosses' 36. 17 Does exhibit -- Exhibit No. 36, is it dated June 15th, 18 2009? 19 A Yes. 20 Q Is it written by -- whose Kenny G? Is that 21 your husband? 22 A Yes. 23 Q Okay. And is it sent to Doug Hickok with a 24 copy to Van Shaw -- 25 A Yes.

85 Q -- and you? A Yes. Q All right. And it's also blind copied to Jana

Reist and Brent Cooper, right? A Yes. Q And does it say that -- does it say the

following? And I'll point to the language here. I know you -- this is to Doug, right? And it says, "I know you previously said that you were referring this matter to Van, but he cannot speak to your personal intentions. Only you can do that," right?

A That's what it says. Q Okay. And that was your understanding as of

June 15, 2009, that with regard to personal intentions *822 of Mr. Hickok, only Mr. Hickok could speak, right? 16 A Yes. 17 Q And if I understood your testimony earlier, 18 after the trigger of the buyback, okay, when you sent 19 notice of the buyback date or the buyback election, Van 20 Shaw is the only person who you actually communicated 21 with about the buyback situation, right? 22 A Because Doug Hickok said I'm turning this 23 matter over to Van Shaw. So, yes, that is true. 24 Q And, again, I'd like you to answer "yes" or 25 "no" to these questions, okay?

86 THE COURT: She's allowed to give a complete answer, Mr. Chaiken. MR. CHAIKEN: All right. Q (By Mr. Chaiken) But the answer is, is that Mr. Shaw was the one who was communicating the information that you believed related to the question of whether VSDH would buy back the contract -- buy back the house or not, right?

A It was my understanding that Van -- that Doug Hickok said, "I'm turning this matter over to Van Shaw and that Van Shaw was going to speak on behalf of VSDH."

Q On behalf of VSDH, but not Doug Hickok, right? A Correct. Q All right. And when Van Shaw communicated to *823 you whatever it is he communicated to you about whether

16 VSDH would buy or not buy it back, he was speaking for 17 VSDH, right? 18 A Van Shaw, yes. 19 Q Okay. And you never had any communications of 20 any kind with Doug Hickok about his personal intentions, 21 correct? 22 A We tried to. 23 Q But you never had them, right? 24 A Other than him turning over the matter to Van 25 Shaw, no.

87 Q Okay. Let's see if we can agree on a couple of other points, okay? The words of the contract, Exhibit 3, say that all -- and I'm talking about Paragraph 21 here. "All notices from one party to the other must be in writing and are effective when mailed to, hand-delivered at, or transmitted by facsimile or electronic transmission as follows." And then you have the information below. That's the words of the contract, right?

A Yes. Q So we can agree on that. Can we agree on the

following: There is no written document by VSDH, authored by VSDH, stating these words, "VSDH will not perform a buyback of the property"? *824 A I disagree.

16 Q What writing is there that has those words in 17 it? 18 A There's an email from Van Shaw stating that the 19 company is insolvent, and that implies that the company 20 is not going to perform. And that implication was 21 echoed by the comments stated verbally by Van Shaw when 22 we met with Van Shaw. 23 MR. CHAIKEN: I object to the 24 nonresponsive answer. Excuse me. I object to the 25 nonresponsive answer.

88 THE COURT: Overruled. She says there's an email. MR. CHAIKEN: I'm sorry? THE COURT: I said overruled. She said

there was an email. Q (By Mr. Chaiken) My question to you, Mrs. Gross, is: Is there a writing that used the precise words that I'm about to say; VSDH will not perform the buyback of the property?

A To my knowledge, those exact words were not used, but the message was still communicated using other language.

Q So we're talking about implications now, right? A Or semantics. *825 Q Okay. Let's see if we can agree on another

16 concept. Paragraph 22 of the contract says, "This 17 contract contains the entire agreement of the parties 18 and cannot be changed except by their written agreement. 19 That incorporates, "Addenda which are" -- 20 THE COURT: Yes, Mr. Aldous. 21 MR. ALDOUS: Your Honor, I object to this 22 question as asking this witness the way it was phrased 23 to interpret the contract. 24 THE COURT: What was the rest of your 25 question, Mr. Chaiken?

89 MR. CHAIKEN: I hadn't finished reading the sentence from the contract. But I believe I asked whether this contract says these things.

THE COURT: I was asking what the rest of your question was. Q (By Mr. Chaiken) -- addenda, which are a part of this contract are -- and then it says check all applicable boxes. Is that what it says?

A Yes. It does say that. And the box that is checked is Addendum A and Addendum B. Q Okay. Now, let's look at the buyback option. The buyback option says that there is a grant by VSDH to you and your husband of an option to put the property to the seller. It says, i.e., requires seller to *826 re-purchase the property for the original sales price of

16 2,851,871. See that? 17 A Yes. 18 Q Now I just want to ask you a quick question 19 about that. The sales price of the contract that you 20 closed on was $2,695,000, correct? 21 A Correct. 22 Q All right. Now the buyback says that on or 23 before May 1st, 2009, buyer must exercise the buyback 24 option by delivering written notice thereof to seller, 25 which you did before May 1st, 2009, right?

90 A Correct. Q All right. And then in Exhibit B, it tells us

what happens if you send that notice, right? A Yes. Q Okay. Can you show me anywhere -- well, let's

do it this way. Have you read that Exhibit B recently, that portion of that Paragraph B? A Yes. Q All right. And you would agree with me, would

you not, that no place in there are there words that say that VSDH after receiving your declaration notice is required to tell you one way or the other whether they're actually going to buy the property back? No *827 words in the contract that say they've got to tell you,

16 right? 17 A It doesn't say that they're required to -- 18 Q Okay. 19 A -- but they did tell us that they weren't going 20 to. 21 Q All right. So let's just see if we can agree 22 on one simple concept. Whether they did or didn't, the 23 agreement doesn't say that they're required to tell you 24 one way or the other. Can we agree on that? 25 A Yes,

91 Q All right. Now, after you sent VSDH the declaration notice, you and your husband very shortly thereafter reached out to VSDH, and you asked VSDH on many occasions whether VSDH was going to buy it back or not, right?

A Correct, because they wouldn't respond to any email, so we kept trying to get them to answer the question.

Q And you even got to the point of engaging a lawyer to help you with regard to your quest to get an answer as to whether they were or were not going to buy the property, right?

A Yes. Q Okay. And you were unhappy about the fact that *828 VSDH would not tell you one way or the other whether it

16 would or it would not buy back the property, right? 17 A It was very frustrating because there were 18 great implications to us if they -- if we waited until 19 September 1st and then all the sudden they said, oh, 20 well, I guess we're not going to. Then we would have 21 lost precious time to be able to protect ourselves. 22 Q But all along, you understood that VSDH was not 23 under any contractual requirement to tell you one way or 24 the other whether they would buy the property back on or 25 before the buyback date, which is September 1st, 2009;

92 you understood that, right? A I under -- well, now I understand as you're pointing out the language that they were not under a contractual obligation to. We had hoped that they would do the right thing and tell us what they were going to do.

Q All right. Now -- A And they did tell us. Q Let's see if we can agree on the following

statements. See if you agree that this is true. After you sent the buyback notice to VSDH, you and Ken Gross proposed a buyback by VSDH to occur prior to September 1st of 2009?

A After we sent the declaration and after they *829 told us the company was insolvent and after we met with 16 them to brainstorm about multiple options, yes, we did 17 communicate as was shown in the document yesterday that 18 as being one of many options that we would have been 19 more than happy to consider. 20 Q Okay. 21 A There were multiple things that we would have 22 been happy to reach an agreement -- 23 Q Okay. 24 A -- if they would only respond. 25 Q And they were responding to you -- to those

93 proposals, right, about those options? You were talking.

A I don't know if -- there was very, very, very little communication. Q Okay. A It was very one-sided. Q Now, there was never an agreement reached

between you and your husband on the one hand and VSDH on the other hand to accelerate the buyback date; in other words, make it earlier, right?

A Correct. Q All right. And VSDH had the right not to agree

to move the buyback date to an earlier date, correct? MR. ALDOUS: Objection, Your Honor. It *830 calls for a legal conclusion. 16 THE COURT: Sustained. 17 Q (By Mr. Chaiken) Are you aware of any 18 requirement in the contract for VSDH to agree to move 19 the buyback date to an earlier date? 20 A I'm not sure if that's in there or not. 21 Q Okay. Now, you and your husband entered into a 22 contract to sell the property to Melissa Browning prior 23 to September 1st of '09, correct? 24 MR. ALDOUS: Objection, Your Honor, 25 cumulative, asked and answered.

94 THE COURT: Sustained. Q (By Mr. Chaiken) And when you offered -- I'm sorry -- entered into the contract with Ms. Browning to sell it to her, it was after May 1st of 2009, right?

A Yes. Q So it was after you sent the buyback notice,

right? A And it was also after we sent an email to VSDH saying we were happy to not consummate this deal if you would like to --

MR. CHAIKEN: Your Honor, objection to the nonresponsive portion of the answer. THE COURT: Overruled. Let her finish her answer, and then you can object to it after she's *831 finished it. 16 You may finish your answer. 17 A And it was also after we sent an email to VSDH 18 saying we have an offer, we don't have to accept it, and 19 you have 24 hours to respond. But this is a great deal, 20 and this could meet everybody's needs, and -- but we 21 don't have to do this deal, so just let us know. And 22 they never responded. 23 MR. CHAIKEN: Objection to the 24 nonresponsive portion of the answer. 25 THE COURT: Overruled.

95 Q (By Mr. Chaiken) When you and your husband entered into a contract with Melissa Browning to sell her the property after May 1st, 2009, and before September 1st of 2009, you understood that the contract said that should the buyer enter into a contract to sell the property, the buyback option will immediately terminate and will no longer be available to buyer, right?

A I see those words in there and that explains why the language in our email to them said what it said, because I remember from yesterday it said something about if you don't respond and if we proceed, that should not in any way remove the buyback responsibility or something along those lines. I remember it saying *832 that.

16 Q Right. But when you entered into a contract 17 with Ms. Browning, you were aware that the contract said 18 that if the buyer enters into a contract to sell the 19 property, the buyback option will immediately terminate 20 and will no longer be available to buyer, right? 21 A We -- yes, that was in there. 22 Q Okay. And you went ahead and you entered into 23 the contract with Ms. Browning before the 09-01 buyback 24 date, right? 25 A Yes.

96 Q Okay. You sold the property to Ms. Browning before 09-01 of '09, right? A After they did not respond and say they wanted us to stop the deal; yes, we did move forward with the deal.

Q The answer is you sold it after 09-01-09, right -- I'm sorry, before 09-01-09? A When we did not receive a response from them, yes, we did sell the property before 09-01-09. Q Regardless of why you sold it before that date? A Yes. Q We can agree on that, right? A Yes. Q All right. Your reason for selling it before *833 September 1st, '09 -- and when I say, "selling it," I

16 mean selling it to Mrs. Browning -- was because VSDH 17 would not commit to buying it back on or before 18 September 1st of '09, right? 19 A Because they told us they were not going to buy 20 it back, yes. 21 Q And they wouldn't commit to doing it, right? 22 A Correct. 23 Q All right. On September 1st of 2009, would you 24 agree that on that date no one could buy the property 25 from you and Ken Gross?

97 A That's true. Q And why is that true? A Because since they had not responded, we moved

forward with the transaction and sold it and it was now owned by Mrs. Browning.

Q So, in other words, when September 1st came around, you and your husband couldn't sell the property to VSDH, right?

A Correct. It was no longer owned by us at that time. Q And you couldn't sell it to Doug Hickok, right? A Correct. But we had also offered him the

opportunity and VSDH the opportunity to stop that transaction at any point in time. *834 Q To stop the transaction, okay. Was there an

16 obligation in the contract for them to stop a 17 transaction? 18 MR. ALDOUS: Objection, Your Honor. That 19 calls for a legal conclusion. 20 THE COURT: Sustained. 21 Q (By Mr. Chaiken) Are there words in the 22 contract that offered VSDH the ability to stop a 23 transaction if you entered into a contract to sell it to 24 somebody else? 25 A We stated in our email to them we can stop this

98 -- something along the lines of we can stop this transaction. You just have to let us know. There might be some implications, but we can. And we made that very clear.

Q Maybe you're not understanding my question. Are there words in the contract, this document right here, that says, "If we enter into a contract, okay, with somebody else to sell the property to them before September 1st, '09, you can stop it"?

MR. ALDOUS: That's still asking the witness for a legal conclusion. MR. CHAIKEN: I'm not asking for a legal conclusion. MR. ALDOUS: I'm sorry. I object. That *835 asks for a legal conclusion. 16 MR. CHAIKEN: I was asking her if there 17 were words in the contract that say that. 18 THE COURT: Which would mean she'd have to 19 interpret it, correct? 20 MR. CHAIKEN: No. She just has to look 21 and see whether those words are there. 22 THE COURT: Move on, Mr. Chaiken. You 23 have beaten this horse to death. 24 MR. CHAIKEN: I will pass the witness, 25 Judge.

99 THE COURT: Mr. Shaw? MR. SHAW: Thank you, Your Honor.

CROSS-EXAMINATION BY MR. SHAW: Q Mrs. Gross, just a few, please. You said that when Doug Hickok came to the property in the fall of 2008, you were present; is that right?

A For part of that meeting, yes. Q All right. And we know from the email train

that the meeting that Mr. Hickok had at the house was after October 31, 2008; is that fair?

A That is a fair conclusion based on the email dates. Yes. Q All right. Now, you said in response to your *836 lawyer -- I wrote it down. You said, "Doug said the 16 house looked great and it looked fantastic." Do you 17 remember that? 18 A Yes. 19 Q Okay. Then when Ken asked you some questions 20 you said, "Doug said it looked terrific." You remember 21 that? 22 A I do. 23 Q All right. 24 A And I don't know which words he chose, but I 25 remember that the language was complimentary.

100 Q Okay. Now, when Doug got there, your husband, I thought, testified that the only thing that existed on the work was that there was a concrete slab and some sticks nailed to the concrete slab. There was no roof, there were no windows, there were no doors, there were no walls, there was no nothing. It was some sticks and concrete. Am I wrong about that?

A When are you saying that he said that? Q When Doug -- I'm saying when Doug was present,

was there more than sticks and concrete? A No. That's not what you said immediately before that. You said that when -- Q This is what I'm asking you -- A When are you claiming that Ken said that? *837 Q When Doug was present, was the construction

16 more than sticks and concrete? 17 A As Ken said yesterday, at the time that 18 Mr. Hickok came to the property, there was -- he didn't 19 use the term sticks. There was foundation and there was 20 framing and -- I know there was a foundation and 21 framing. I know there was not drywall. I distinctly 22 remember that. 23 Q Was there a roof? 24 A How much more was there? There might have been 25 a plywood roof, but I know there was not the cement tile

101 roof. But beyond that, I can't remember. Q Let me show you what I've drawn. It's kind of rough. I'm not a real good artist. But that's -- what I've drawn is a slab and some sticks. That -- is that part of the frame of the home?

A First of all, that's not anything like what any stage of construction would look like because you can't just have two-by-fours vertically standing up without anything connecting to them on the top.

Q Well, there wasn't a -- A So it definitely didn't look anything like

that. Q All right. Your husband said there was no roof, right? So at any rate, this thing was two *838 stories, right? Is it two stories? 16 A Yes. 17 Q Okay. If there's no roof -- 18 A It still wouldn't have looked like that. 19 Q -- what else is there? So there's going to be 20 some sticks coming across here, some wood; is that 21 right? 22 A It still would not have looked like that. 23 Q Well, here's what I'm driving at. What could 24 Mr. Hickok have seen if it was just wood and concrete? 25 A He could have seen a lot.

102 Q What could he have seen if there was no walls, there was no roof, there were no doors, there was no windows, there was no drywall, there was no paint, there's no nothing. What could he have seen that --

A There's a lot he could have seen. Q Okay. What? A For example -- Q What? A So, he would have been able to see all of the

walls and where the rooms laid out within the foundation. He would have because that would have -- if there -- I know that there was framing that was done.

Q Okay. A So all of the framing would have been done *839 outlining where each of the rooms would have been. He

16 also would have seen where the media room upstairs 17 connected to the game room and the fact that it was 18 contiguous; therefore, the style would have to be 19 replicated from one room to the next. So he would have 20 been able to see where the entry doors were. He would 21 have been able to see where the bathroom was. He would 22 have been able to see where the bathroom and the little 23 wet bar was downstairs. He would have been able to see 24 where the windows would be. 25 Q So how far along was construction approximately

103 when Doug was there? A I can't state percentages. But what I recall was that there was certainly foundation and framing. And that would mean all of the framing, interior and exterior framing.

Q So a lot? A And I don't remember -- a lot, but not that

anything -- I mean, anything could have been changed. But the framing would have been completed, and there would have been at least a plywood roof of some sort on it.

Q So in your mind, there was substantial construction? A I would call that initial stages of *840 construction personally. 16 Q So you wouldn't call it substantial? 17 A Substantial is a very subjective term. 18 Q Well, I'm asking you your term. Is that what 19 you would call it? 20 A There was significant construction, all of 21 which was still modifiable. 22 Q Well, how do you modify concrete? 23 A You take a jackhammer and you jackhammer it up 24 and you get rid of it or you add to it. 25 Q You just -- you've done that before where

104 you've taken a whole area that's built and take the whole concrete and the foundation that's engineered by an engineer out?

A Me personally? No. Q Well, no. I mean, you've -- A But have I seen it done? Absolutely. Q All right. Do you have any legal or accounting

experience? A No. I'm a nurse by training. Q Okay. Now, the contract, we've been through

it. And I just want to make sure I understand one thing. You say that the spreadsheet is specifications. Did I get that part of it right?

A I think it reads as specifications to me. *841 Q Okay. Now this is from VSDH Exhibit 6, and 16 this is the -- part of the addendum. We've talked about 17 this, right? 18 A Yes. 19 Q Okay. So down here in Section 3, it talks 20 about spreadsheet, right? 21 A Yes. 22 Q Okay. And then it says that the buyers agree 23 to enter into an escrow agreement acceptable to seller 24 that outlines the proposed terms of improvements and 25 property. So they say -- this is a future event. The

105 buyer agrees to enter into escrow funds title, enter into an escrow contract acceptable to buyer that outlines the proposed improvements. So this seems to say something different than what the spreadsheet contemplates. Would you agree with me on that?

A Well, the words are different. It doesn't mean that the same document could not have been used for the same purpose.

Q Okay. Let's look at above. The buyer -- we've talked about this. The buyer will review with seller the plans and specifications. Now it never says spreadsheet there, does it?

A No, it does not. Q But whatever the contract said, whatever it *842 says, you agree to live by; is that fair?

16 A I -- when I signed the agreement, I was 17 responsible for living by it and did. 18 MR. SHAW: I pass the witness. 19 THE COURT: Mr. Aldous? 20 MR. ALDOUS: Thank you, Your Honor. May I 21 approach the court reporter, Your Honor? 22 THE COURT: You may. 23 MR. ALDOUS: And, Your Honor, can we 24 approach? 25 THE COURT: You may.

106 (Sidebar conference held) THE COURT: All right. You may proceed.

REDIRECT EXAMINATION BY MR. ALDOUS: Q Okay. Mrs. Gross, here are VSDH's exhibits. Okay? I'm going to direct you to Number 57. A Okay. Q Do you recall being asked questions about

whether or not you gave Doug Hickok the opportunity to do something personally himself? Do you recall those questions?

A Yes. Vaguely. Q Say it -- I'm sorry? A Vaguely. *843 Q So -- I've got all kinds of mess here. If

16 you'll give me one second. It appears as though I've 17 misplaced an exhibit. Shocker. Ah-hah, I have it. 18 Let me show you what's been previously 19 marked and is in evidence as Exhibit 36. Do you recall 20 being questioned about this email from your husband to 21 Doug saying, you know, I know you said Van's going to 22 speak for you, but, you know, are you going to do 23 personally? 24 A Yes. 25 Q What -- why did you guys send this?

107 A Well, because Doug had made it clear that Van Shaw was taking over representation for anything related to VSDH, but we had personal guarantee in the contract. And so only Doug could respond as to whether or not he was going to honor the personal guarantee that he signed in the contract.

Q Now, if you would, turn to the other, Exhibit 57, that is up there. Mr. Hickok actually responded to your email, didn't he?

A Yes. Q And let me show you what his response was.

This is June 17th, approximately two days after your email. And what does he say there? "I've been out of the office for the past week plus. As I stated in the *844 past, Van is handling the resolution of this matter.

16 Unfortunately, he's out of the country but will be 17 returning this weekend. I'm confident that he will be 18 in touch with you shortly thereafter. My apologies for 19 not addressing your concerns. However, I must reiterate 20 that Van is the point person." Is that what that says? 21 A Yes. 22 Q Based upon that, did you take it that Van Shaw 23 had the ability to react -- to answer for Doug Hickok? 24 A Yes. 25 MR. CHAIKEN: What exhibit number was

108 that? MR. ALDOUS: 57, your 57. Q (By Mr. Aldous) The only other thing I want to ask you about is you testified that in, I guess, late May or June of -- when you believe that you were not getting responses from the other party to let you know or to make you feel confident. And that's when you suggested to Ken that he put stuff in writing.

A Yes. Q Do you recall that?

I want you to turn to the Gross Exhibit 35. Let me make sure this is in. It's already admitted. And you see the bottom of it is your email to Doug saying, "I hope this finds you well. We have sent *845 this notice via fax. We wanted to make sure you

16 received this per our contract," and then it goes on to 17 say, "We are exercising our sell back option," right? 18 A Right. And even down below, it says, "If you 19 want to discuss any other options, including an early 20 buyback or otherwise." 21 Q All right. Then his -- Mr. Hickok's response 22 to you was, "I forwarded the attached onto Van Shaw. 23 He's handling this matter," right? 24 A Correct. 25 Q And your response to Ken is what I wanted to

109 refer you to. It says, "FYI, at least now we have the confirmation we were seeking. However, this makes me nervous." What did you mean?

A It made me nervous that they were going to try to get out of the deal that they had signed. We had made an agreement with them, and now they were turning this into a legal matter. And they weren't going to live up to what they said they were going to do.

Q Before that time where you said to Ken, "Maybe you ought to start writing stuff down," were you guys operating like that?

A I didn't feel like we were. We tried numerous occasions to meet with them. We had cordial interactions with them. They led us to believe *846 everything was okay based upon the nature of their

16 responses. We were trying to act -- provide options, 17 come up with solutions. 18 Q Before May of 2009, were you anticipating that 19 you'd ever be in the courtroom right now having somebody 20 else resolve this? 21 A Absolutely not. 22 MR. ALDOUS: I'll pass the witness. 23 THE COURT: Mr. Chaiken? 24 MR. CHAIKEN: May we approach, please? 25 THE COURT: You may.

110 (Sidebar conference held) THE COURT: You may proceed.

RECROSS-EXAMINATION BY MR. CHAIKEN: Q Mrs. Gross, Mr. Aldous was talking to you a few moments ago about this Exhibit No. 57, and he showed you this email right here. And do you see the subject line of the document there? It says, "Re, for settlement purposes only, confidential." Do you see that?

A Yes. Q Okay. And Mr. Hickok, can you tell by looking

at this, was responding to some other email that he had gotten?

A It appears that way. Yes. *847 Q Okay. And what Mr. Hickok was saying here is, 16 "I've been out of the office for the past week plus. As 17 I stated in the past, Van is handling the resolution to 18 this matter. Unfortunately, he is out of the country 19 but will be returning this weekend. I'm confident that 20 he will be in touch with you shortly thereafter. My 21 apologies for not addressing your concerns. However, I 22 must reiterate that Van is the point person." Did I 23 read that right? 24 A Yes. 25 Q And when you got this and when your husband got

111 this and showed it to you, you both understood that Mr. Hickok was referring you back to Van Shaw for a possible resolution of whatever was going on between you-all, right, as of June 17th of 2009?

A To discuss a possible resolution. Yes. Q Okay. And, in fact, Mr. Shaw did get back in

touch with you to talk about potential options and resolutions to whatever it was that you-all were seeking a resolution for, right?

A Yes. Q Okay. But in June of -- June 18th of 2009, in

response to Mr. Hickok's message, your husband reiterated that since there are issues that impact -- "There are issues that impact you," meaning Doug, *848 "individually, since Van is stating that a personal

16 guarantee does not exist and he cannot speak for you," 17 right? That's what your husband wrote? 18 A You said it was 57. I just want to read the 19 bottom of that page again. "There are issues that 20 impact you individually since Van is stating the 21 personal guarantee does not exist and he can't speak for 22 you." Yes, it does say that. 23 Q So, once again, your husband is expressing his 24 understanding. And this message is signed Ken and 25 Betsy, right?

112 A Written by Ken, but signed Ken and Betsy, yes. Q Okay. So he's expressing once again yours and

his understanding that Van cannot speak for Doug on the personal issues, right?

A Yes, which is confusing; but, yes. Q Okay. And then it says over here, "It's just

not right, not to mention the legal ramifications." Did I read that right?

A Yes. Q Was -- were you and your husband at that time

threatening Doug Hickok with legal ramifications if -- and this was on -- on June 18th, 2009?

A Not threatening, just stating the obvious that if they weren't going to honor the buyback agreement, *849 there would be some legal ramifications to that that we 16 would have to explore. 17 Q And you were -- you were mentioning to them 18 that you would possibly be exploring those legal 19 ramifications, correct? 20 A That we would have to explore what our rights 21 were, what we needed to do, what it meant. 22 Q So at least as of June the 18th, you were 23 envisioning yourself being in a courtroom, right? 24 A No. This is a nightmare. I would never want 25 to envision myself having to go through five years of

113 this. No. Q This is a nightmare. What, litigation is a nightmare? A Yes. Q Okay. Why is litigation a nightmare?

MR. ALDOUS: Objection, Your Honor. That's irrelevant and it's also not material. THE COURT: Sustained. MR. CHAIKEN: Pass the witness. MR. SHAW: Nothing further. THE COURT: Mr. Aldous? MR. ALDOUS: Nothing, Your Honor. I'm

sorry. THE COURT: The witness is excused. You *850 may step down. 16 You may call your next witness. 17 MR. ALDOUS: Is it all right if I step out 18 in the hall and call her, Your Honor? 19 THE COURT: You may. 20 MR. ALDOUS: Your Honor, it appears that 21 the witness went on a walkabout. I'm going to have to 22 find her. Her coat's still there. She may have just 23 stepped in the women's restroom. 24 THE COURT: All right. Ladies and 25 gentlemen of the jury, you can stand and stretch if

114 you'd like. We'll just stand in recess. During this recess, you're under the same instructions you've been previously given. You're not to discuss this case among yourselves or with anyone else until such time as the case has either been submitted to you for your deliberations or you have been discharged as jurors.

All rise. The jury is excused for recess. (Recess taken) THE COURT: You may bring in the jury. (Jury enters is the courtroom) THE COURT: You may be seated. You may call your next witness. MR. ALDOUS: Yes, Your Honor. We would *851 call Roxann Taylor.

16 THE COURT: Raise your right hand, please. 17 You may be seated. 18 THE WITNESS: Thank you. 19 THE COURT: You may proceed. 20 MR. ALDOUS: Thank you, Your Honor. ROXANN TAYLOR, 21 22 having been first duly sworn, testified as follows: 23 DIRECT EXAMINATION 24 BY MR. ALDOUS: 25 Q So, Ms. Taylor, if I refer to some of these

115 exhibits, you see it's got on the little tabs, the numbered tabs, and if you want to look at them, you can look at them. All right? I will let you know.

A Okay. I didn't bring my glasses. Q That's all right. A Thank you. Q First of all, tell the -- would you introduce

yourself to the jury? A Hi, my name is Roxann Taylor and I'm a real estate broker. I own a real estate company with an office in Southlake and one in Flower Mound.

Q How long have you been selling real estate, Ms. Taylor? A In two years, it will be 40 years. *852 Q And during that entire time, have you been 16 involved in some way in the real estate business? 17 A Yes, sir. 18 Q How long have you had your own company? 19 A Since the 1990s. 20 Q Are you a licensed real estate agent? 21 A Yes, sir. 22 Q Are you also a licensed broker? 23 A Yes, sir. 24 Q What's the difference between a license for a 25 broker and an agent? Or what's it mean to people in

116 the business, I guess? A The buck stops with me. I'm responsible for the people that I sponsor underneath me. I make the decisions for the business, and my fiduciary duty is higher. And I've got to make sure that everybody's doing everything right.

Q So in terms of, I guess, the hierarchy, the agents report to the broker who has their license and holds their license?

A Uh-huh, that's correct. Q Okay. And you are the broker for your firm? A Yes, sir. Q Is there a -- what's the name of your firm? A Engel & Volkers Dallas Southlake. *853 Q Now, are you familiar with the -- Ken and Betsy

16 Gross? 17 A Yes. 18 Q How did you meet the Grosses? 19 A I met them originally in 2002 when they had a 20 home that they wanted to sell in Southlake, and I sold 21 their home for them. 22 Q Later on, did you also list and work with them 23 on 2004 White Wing Cove in Vaquero? 24 A Yes, on the sale of it. 25 Q Okay.

117 MR. ALDOUS: May I approach, Your Honor? THE COURT: You may.

Q (By Mr. Aldous) So let me turn this to 52 for you. Sometimes it's just faster for me to do it. There you go.

Ms. Taylor, do you recognize Exhibit 52? A Uh-huh, it has my handwriting all over it. Q All right. What is Exhibit 52? A It's a copy of a listing agreement agreeing to

market the property at 2004 White Wing Cove? A Is this the sort of agreement that you sign with someone who's a seller who wants your help in trying to sell a home?

A Yes, sir. *854 Q Now, typically in a listing agreement, do you 16 agree as to what price the property will be offered for? 17 A Yes, sir. 18 Q On the second page of Exhibit 52, of Gross 19 Exhibit 52, is a listing price that's handwritten in 20 there of $2,500,000. Do you see that? 21 A Yes, sir. 22 Q Is that your handwriting, ma'am? 23 A Yes, sir. 24 Q Are you the one that made the recommendation to 25 have the house placed on the market for $2,500,000?

118 A The Grosses and myself went through all the numbers, and I'm quite familiar with the numbers if you want me to get into that at all.

Q I do, but let me approach. MR. ALDOUS: Your Honor, may I approach? THE COURT: For what purpose? MR. ALDOUS: I have another exhibit that

has been deferred. THE COURT: Okay. So you'll need to show it to opposing counsel first, then to the Court before you approach.

You may approach. MR. ALDOUS: Thank you, Your Honor.

Q (By Mr. Aldous) Ms. Taylor, do you recognize *855 Exhibit 41? 16 A It's like a market analysis sheet. 17 Q Is this something that your office prepared? 18 A Yes. It looks like that it is from my office. 19 Q Is this the type of report that you would 20 prepare in an effort to determine what price to list a 21 home that's going on sale? 22 A Yes. And it has some of the Zs on here. 23 Q What does the Z stand for? 24 A We don't do it anymore. Two years ago, the 25 board had us stop Z'ing out the final sales price of a

119 property. They wouldn't let us do it anymore; that once you sell a property for a particular price, you have to publish it if it was in the Multiple Listing Service. At the time that we went to put the Grosses' home on the market, there -- almost half of the sales were Z'd out where you couldn't tell how much they sold for.

MR. ALDOUS: Your Honor, we move to admit Exhibit 41. THE COURT: Any objection? MR. CHAIKEN: Your Honor, objection. And

we have a disclosure issue, and I'd request an opportunity to approach.

THE COURT: You may approach. (Sidebar conference held) *856 MR. ALDOUS: Your Honor, I withdraw the

16 request. 17 THE COURT: All right. It's withdrawn. 18 Q (By Mr. Aldous) Ms. Taylor, did you perform a 19 comparative market analysis of the south Westlake area, 20 the Southlake area, prior to coming up with a price that 21 you thought should be offered for the -- or should be 22 put on the market for the house at 2004 White Wing Cove? 23 MR. CHAIKEN: Your Honor, I object to the 24 question, and it is seeking to elicit an undisclosed 25 expert opinion. May we approach?

120 THE COURT: You may approach. In the future, I will remind you again, Mr. Chaiken, to not make speaking objections.

(Sidebar conference held) THE COURT: You may proceed.

Q (By Mr. Aldous) Ms. Taylor, my question to you was: Did you perform a market analysis with regard to the area surrounding this home prior to the time that you recommended to the Grosses what to -- you know, what your recommendation would be for the listing?

A Yes, sir. Q Now when you do a market analysis of that kind,

tell us what you do. A First of all, I'm looking at -- everything's *857 about location and where the property is located. 16 Mr. Grosses' home was located in Vaquero, which is a 17 private, gated, guarded community of which I have a lot 18 of knowledge of since before it was even built. The 19 developer had me drive across the piece of land with him 20 and I helped him come up with some of the original 21 plans. I was one of the first realtors to market the 22 area. I watched every road go in, every home be built, 23 and I continue to market the place because I know I have 24 my fingers on the pulse of what's going on. 25 In 2008, when we went into the recession,

121 the sales were not that good. That piece of paper, that brought back a lot of memories when you just showed that to me because there were a lot of homes on the market, and they weren't selling. The nine sales that had happened in the previous year to when we put a price tag on the property, four of them were Z'd out that we could not get the information. But there were five properties that we were able to obtain the information on and what they had sold for, and they had sold anywhere from 142 a foot to 244 a foot, except for one property that I actually had just sold myself the previous month. It was similar in size, similar builder, similar lot size, same year built.

MR. SHAW: Your Honor, we would just *858 object to the narrative nature. 16 THE COURT: Sustained. 17 A That is a market analysis. 18 Q (By Mr. Aldous) So, Ms. Taylor, when you say 19 the price per foot, are you referring to the price per 20 square foot? 21 A Yes, sir. 22 Q So if a home has 7,000 square feet, you put 23 whatever the -- what you believe to be the going rate 24 for per square foot for that area for that house from 25 what you can get, and then that's how you come up with a

122 listing price? A And then I add some to it so there's some wiggle room for negotiation. Q All right. You were talking about a previous sale that you were involved with where you actually sold a home that was very similar to this one.

A Uh-huh. Q Is that right? A We have a couple of builders in the area that

are very well respected. The original builder, I believe, of this home was Paul Kramer; is that correct?

A Yes. Q And there's another builder by the name of

Scott Simmons that builds very high-quality homes and *859 very respected in the area. The home that I had just 16 sold was a Scott Simmons home. It was within 100 feet 17 of being the same size. It was -- had a four-car 18 garage, had similar amenities on the inside, built the 19 same year. 20 MR. SHAW: Your Honor, I'm going to object 21 to the narrative nature. May we approach? 22 THE COURT: You may. 23 THE WITNESS: Does that mean I can't talk 24 anymore? 25 THE COURT: Not until I finish talking

123 with them. For whatever reason, they love this little corner.

(Sidebar conference held) THE COURT: You may proceed. MR. ALDOUS: Thank you, Your Honor.

Q (By Mr. Aldous) So, Ms. Taylor, where we were at was you were saying that you had just sold a home from another builder that was of similar size and location to the home, the Grosses' home.

A It was two blocks away Q When you -- and you had said that that home

actually sold and closed? A It was a closed sale, probably about three weeks before we listed Ken's. *860 Q And when you -- so you knew, obviously, what 16 that house actually sold for per square foot? 17 A 304 something a foot -- $304 a foot, which 18 nothing had sold above $200 something a square foot. 19 Q Based upon all the factors that you knew of and 20 your own personal experience, do you believe that the 21 price that you recommended to be put on the market for 22 this house was the best price that you could recommend? 23 A Yes, sir. 24 Q Now, subsequently to the -- to the listing 25 agreement, you received an offer on the home; is that

124 correct? A Yes, sir. MR. ALDOUS: May I approach, Your Honor? THE COURT: You may. THE WITNESS: Probably a couple of months

later. I wish it was sooner. MR. ALDOUS: That's all right. Q (By Mr. Aldous) If you would, take a look at Exhibit 47, which is already in evidence. Is that a contract offer that you received as the agent on behalf of the Grosses?

A Uh-huh. And, in actuality, what -- on when I received it because it was written by an agent in my own firm. I had Mrs. Zarazan represent the Grosses. *861 Q So you had a different agent in your office

16 represent the Grosses for the purpose of the contract 17 and any closing? 18 A Yes, sir. 19 Q Is that so that you can make sure that both 20 sides remain fair to one another? 21 A Yes, because there was another agent in my 22 office that represented the buyer. 23 Q All right. So the Exhibit 47, which is the 24 contract for sale, has a sales price of $2,415,600? 25 A Yes, sir.

125 Q Were there any other parts of this that -- other than just the price that from an agent's perspective, particularly at this period of time, you thought was important?

A It was cash. Q Tell us what you mean by that and why it's

important to you. A Because it means we're going to have a real sale. Working through the appraisal market today and obtaining mortgages during that time period in the middle of a recession, it was difficult for borrowers to get financing. I mean, The scenario couldn't have been any better. It was a wonderful thing.

Q Just so that I can understand what you're *862 saying, you're saying at that period of time where this 16 house was going under contract, it was difficult to get 17 loans to buy houses? 18 A Yes, sir. 19 Q And so when you say a, "cash offer," that means 20 there was no loan involved? 21 A That's correct. 22 Q Based upon your training and your experience 23 and all your years in the real estate business, did you 24 recommend that Ken and Betsy sell at this price? 25 A There was some negotiations that were going on.

126 The buyer, from what I understood, expected to get a little bit off because they were paying cash.

Q Right. A And they knew that that was a good thing for

them. Maggie shared with me that the Grosses wanted to be able to get the most that they could because they had put a lot of money into the property.

Q All told, do you believe that this was -- this deal that's reflected by Exhibit 47 was in the best interest of the Grosses?

A Absolutely. Q The last thing I want to ask you about was the

closing on this -- on the sale of the Grosses' house was a fairly quick process, right? *863 A Yes, sir.

16 Q Is it typical for a closing to be that quick? 17 A No, sir. 18 Q Why do you say that? 19 A Because there's always obstacles to go through. 20 I call them hurdles. You've just got to fall over them 21 or go around them. 22 MR. ALDOUS: May I approach, Your Honor? 23 THE COURT: You may. 24 Q (By Mr. Aldous) Ms. Taylor, if you'll take a 25 look at Exhibit 42, which has already been admitted into

127 evidence, is that a settlement statement relating to the sale of the Grosses' property?

A Yes, sir. Q Now, according to the settlement statement,

that reflects generally all the charges that get made against, for instance, the borrower or the -- I mean, the seller or the buyer, correct?

A Yes, sir. Q One thing I wanted to ask you about is on the

second page. It is a line item Number 703. It says, "Commissions paid at settlement." The charge for your work on this was $108,702; is that right? And when I say, "yours," I mean your firm.

A My firm, yes. *864 Q And is that a standard going rate for what you 16 were doing back then? 17 A No. 18 Q Is it a better rate? 19 A Much better. I only charged them four and a 20 half percent instead of six percent. They were a 21 multiple-time client of mine. And the Grosses had 22 indicated that they were in a situation where they 23 needed to sell and every penny counted, and I was 24 willing to participate. 25 MR. ALDOUS: Thank you, ma'am. I'll pass

128 the witness, Your Honor. THE COURT: Mr. Shaw? MR. SHAW: Thank you.

CROSS-EXAMINATION BY MR. SHAW: Q Ms. Taylor, I get to ask you some questions now. The other work for the Grosses, what have you done?

A In 2002, I sold a home for them that they owned on Fairway View Terrace. Q Is that in Southlake? A In Southlake in Timarron. And then a couple of

years later, I sold another home for them on Eagle Bend Drive, also in Timarron. *865 Q Okay.

16 A And then I sold them a lot in Vaquero, a 17 different parcel. And subsequent to this one, I sold 18 them another property. 19 Q Where was that? 20 A In Vaquero. 21 Q What street in Vaquero? 22 A It's a lot that was -- somebody was desperate 23 to sell it for a very little amount of money. 24 Q All right. Now you mentioned two witnesses, 25 two people that are going to be witnesses in this case.

129 One is Paul Kramer and one is Scott Simmons. A They are going to be witnesses? Q Yes, ma'am. A Oh.

MR. ALDOUS: Your Honor, let me object to the sidebar comment. THE COURT: Sustained. Q (By Mr. Shaw) Will you tell the jury a little bit about -- you said that they were builders; is that right?

A Yes, sir. Q And high-quality builders? A Both Paul and Scott are. They've had extremely

good reputations. *866 Q And the quality of product they build is what? 16 A Very high quality. They have been in demand. 17 Q Did you ever see any contract that the Grosses 18 signed with the -- who they bought this White Wing home 19 from? 20 A I did not. I wasn't part of the purchase at 21 that time, and I was not aware of any of the other 22 things that this is about today until 2011 when I got 23 this little thing in the mail. 24 Q Now, as a licensed real estate broker -- 25 A Uh-huh.

130 Q -- are you allowed to provide the appraised value for a property? A What do you mean an appraised value? Q Well, are you able to perform an appraisal of

or provide an opinion of value for real property? A I can give a BPO, which is a broker's price opinion. But I can't do a licensed appraisal unless I was a licensed appraiser.

Q And are you a licensed appraiser? A No, I am not. Q If somebody goes to the bank and wants to buy

some real estate -- let's say it's some real estate you're selling or buying for a client -- does the bank require a formal appraisal? *867 A Appraisal, yes.

16 Q And that's different than what you do in terms 17 of evaluation? 18 A We were basically looking at the same 19 information. 20 Q What do those people have that are able to do 21 an appraisal in the state of Texas that you don't have? 22 A A license. 23 Q Okay. And do you know what they have to do to 24 get that license? 25 A No, I do not. I have never been interested in

131 being an appraiser. Q All right. Ms. Taylor, I appreciate your time. MR. SHAW: I pass the witness. THE WITNESS: Thank you. THE COURT: Mr. Chaiken?

CROSS-EXAMINATION BY MR. CHAIKEN: Q Hi, Ms. Taylor. How are you? A Hi. Q You and I have never had an opportunity to meet

prior to this moment. My name's Ken Chaiken. A Hi. Q And I'm a lawyer in this case, and I represent

Doug Hickok. You know Doug over there? *868 A You know something? I've heard the name, but 16 I've never met the man. 17 Q Okay. So you know of Mr. Hickok? 18 A I've heard the name before. 19 Q I just have a couple -- 20 MR. SHAW: Your Honor, that's Scott 21 Simmons. And the rule's been invoked and he's a 22 witness. 23 THE COURT: Sir, you'll need to stay out 24 in the hallway until we call you in for testimony. 25 MR. CHAIKEN: Thanks, Judge.

132 THE COURT: You may proceed. Q (By Mr. Chaiken) Ms. Taylor, if I understood your testimony a couple of minutes ago, you didn't know anything about the events in this case until sometime in 2011; is that right?

A Uh-huh. Q So, in other words, somebody reached out to you

and said there's a lawsuit between the Grosses and VSDH, and that's the first time you became aware of any issues between the Grosses and VSDH Vaquero, Ltd., right?

A Yeah. I couldn't -- I mean, I got served this little notice and somebody handed me a dollar bill. Q And you didn't know anything else about there being some disagreement or some issue or some concern *869 between the parties back when the house was sold in 16 August of 2009, right? 17 A I didn't even know about this relationship or 18 this corporation or something that Mr. Shaw is in. I 19 didn't even know until today that Van was one of the 20 parties in it. I mean, I just don't know anything about 21 it. 22 Q And when the Grosses enlisted your services -- 23 A Uh-huh. 24 Q -- to sell the property, they didn't tell you 25 that they were selling the property in order to rapidly

133 sell it prior to a buyback date that was in a contract with somebody else?

A No. They were selling it because they needed to sell it. Q And why would they need to sell it? MR. ALDOUS: Objection, Your Honor. A I mean, I don't -- THE COURT: Sustained. A They just told me they needed to sell -- THE COURT: Wait, wait, wait. When there's an objection, you have to wait until I make a ruling. If I sustain the objection, that means you don't get to answer. If I overrule the objection, then you do get to answer. Okay? *870 THE WITNESS: Okay.

16 THE COURT: And I sustained the objection, 17 so now he has to ask you a different question. 18 THE WITNESS: Okay. Thank you. 19 Q (By Mr. Chaiken) Did the Grosses tell you what 20 the reason was that they were selling the house? 21 MR. ALDOUS: Objection, Your Honor. I 22 just objected to that very exact same question. 23 THE COURT: Let's see. 24 THE WITNESS: Am I waiting for someone to 25 tell me?

134 THE COURT: Yes. You're waiting for me to make a ruling. THE WITNESS: Okay. THE COURT: It's basically the same

question. The ruling is the same, sustained. MR. CHAIKEN: Thank you, Ms. Taylor. REDIRECT EXAMINATION BY MR. ALDOUS: Q Ms. Taylor, I had another question and I totally forgot about this. Did you -- as part of your actions on behalf of the Grosses, did you, of course, look at the house and tour the house and all the parts of it?

A Yes, sir. I'm extremely thorough. *871 Q Right. Thank you. With regard to the 16 addition, the casita, were you aware that Mr. -- that 17 Mr. Gross was the general contractor on the addition of 18 the casita? 19 A Yes. He had told me that he had built it. 20 Q From your personal view, do you have any kind 21 of opinion as to what sort of construction went on or at 22 least from an aesthetic standpoint with regard to the 23 casita that you witnessed and looked at? 24 A You mean how it was constructed? 25 Q Yeah. You know, that's probably a better

135 question. What did the casita look like? Did it look good?

A It looked great. Q Was there -- I mean, did you think that it

looked like the rest of the house? A It looked as great. I thought it would have maybe an appeal to a buyer that had a returning child home or some other use. I was somewhat concerned that sometimes you don't get full value if something -- because somebody has to have a need to have that extra space because it wasn't connected on the first floor.

Q I see. So you're saying like the in-law suite sort of situation -- A Yes. *872 Q -- or something like that? But just in terms 16 of if you looked at it, was there anything that you 17 looked at and you said, "Oh, my. This needs to be 18 corrected or this isn't good," in terms of the way it 19 looked construction wise? 20 A Absolutely not. It was beautiful. 21 Q All right. 22 A I mean, I was willing to press the envelope on 23 trying to get them more money than the other one. I had 24 just sold the other one for 2.3. 25 MR. ALDOUS: Thank you for your time.

136 I'll pass the witness, Your Honor. THE COURT: Mr. Shaw? MR. SHAW: Nothing, Your Honor. THE COURT: Mr. Chaiken?

CROSS-EXAMINATION BY MR. CHAIKEN: Q (By Mr. Chaiken) I have just one more question, I think one more question for you, Ms. Taylor. When you say you were willing to press the envelope to get them more money, they decided how much money that they were going to sell this house for; is that right?

A The seller is always the one that makes the decision. But they do it by asking guidance and having facts and figures. You know, it's my decision then if I *873 want to take the listing or not.

16 Q Sure. And, ultimately, you understood that 17 they were selling the property because they had some 18 need to do so, correct? 19 A Uh-huh. 20 Q And you didn't know what that need was? 21 A When somebody says they need to sell their 22 property, they need to sell their property. 23 MR. CHAIKEN: Thank you. 24 MR. ALDOUS: That's it, Your Honor. 25 THE COURT: All right. The witness is

137 excused. You may step down. You're free to go. THE WITNESS: Thank you, Your Honor. THE COURT: You're welcome. All right. All right. You may call your

next witness, Mr. Aldous. MR. ALDOUS: Your Honor, at this point, considering the stipulations that we've already put on the record, plaintiff rests.

THE COURT: All right. Mr. Shaw, you may call your first witness. MR. SHAW: We will -- THE COURT: Why is everybody standing up?

Planning to go somewhere? MR. SHAW: Your Honor, I don't know if -- *874 THE COURT: Got a party that we've not 16 been invited to? 17 MR. SHAW: I don't know if you want to 18 entertain a motion at this time. Otherwise, we'd call 19 Scott Simmons. 20 MR. ALDOUS: And, Your Honor, I believe 21 that we had already had a discussion about this 22 particular witness. 23 THE COURT: All right. So at this time, 24 ladies and gentlemen of the jury, we're going to take 25 another recess to deal with some matters outside of your

138 presence. Feel free to enjoy your time in the jury room.

All rise. The jury is instructed you're not to discuss this case among yourselves or anyone else until such time as this case has either been submitted to you for your deliberations or you have been discharged as jurors. The jury is excused.

(Jury exits the courtroom) THE COURT: All right. Counsel, you may

approach the bench. Everyone else may be seated. Feel free to move around the cabin. (Brief interruption) MR. ALDOUS: Your Honor, so Mr. Shaw is now *875 calling this builder not because he knows anything about

16 this deal or because he knows anything about the house 17 but because he was in litigation with Mr. Gross, and he 18 wants to call him to come in and say something about how 19 he must be a bad person because he sued me and all this 20 other stuff in an unrelated case. And my -- 21 THE COURT: So are you calling him for the 22 purposes of making a bill of exceptions or an offer of 23 proof? 24 MR. SHAW: I am going to call him on 25 opinion and reputation. And so if the Court won't allow

139 me to do that in personal, I would like to make a bill on it.

THE COURT: Okay. You may do so. You may do it right now. MR. SHAW: All right. Thank you. MR. CHAIKEN: Your Honor, but before we -- THE COURT: Always, always, Mr. Chaiken,

you could never just like let it go, right? You always have to like add a little --

(Everybody talking at once) THE REPORTER: I can't get everybody. So,

are we on the record because everybody is talking? THE COURT: Evidently so because Mr. Chaiken wants to make some kind of a motion about *876 what? 16 MR. CHAIKEN: The plaintiff just rested, 17 okay, and so I believe I have a right under Rule 268 to 18 make a motion for directed verdict. 19 THE COURT: You do. But, you know, 20 perhaps you should have said that at the same time that 21 Mr. Shaw said that he wanted to make a motion. 22 MR. CHAIKEN: He said that there were 23 motions that needed to be made. 24 THE COURT: No, he said he had a motion 25 that he wanted to make.

140 MR. CHAIKEN: Okay. And I have a motion that I would like to make. THE COURT: All right. You may make your motion then before we do Mr. Shaw's offer of proof. MR. CHAIKEN: Okay. At this time, Your Honor, on behalf of Douglas Hickok, Mr. Hickok orally moves for --

THE COURT: Mr. Chaiken, remember the voice. The jury can hear through the doors, and your voice is very booming.

MR. ALDOUS: You do have a big voice. THE COURT: You have a stage voice. MR. ALDOUS: I think you should be on

stage. *877 MR. CHAIKEN: Mr. Hickok makes a motion 16 for total or partial directed verdict -- 17 THE COURT: Total or partial? 18 MR. CHAIKEN: In the alternative. 19 THE COURT: Okay. 20 MR. CHAIKEN: -- and does so for the 21 following specific reasons: Number one, Mr. Hickok has 22 been sued for the recovery of damages resulting from the 23 alleged failure on the part of VSDH to buy back the 24 residence in question and for personally not buying it 25 back. The problem that necessitates that a directed

141 verdict be granted in his favor is that the Grosses struck through the contract remedies allowing them to pursue other remedies at law and stated that their sole and exclusive remedies would be, in the event of a default by the seller, which was VSDH, a pursuit of specific performance or termination of the contract.

The sole and exclusive remedies provision, via the addendum to the contract, which at the time, according to the Grosses, Mr. Hickok was a party to personally, although there's some dispute about whether he was or he wasn't. They contend that he was. It did contain some language in the addenda that reinstated the remedy of such other relief as may be provided by law or both, meaning they could seek specific performance or *878 such other relief as may be provided by law.

16 But the only party in the addendum to the 17 contract that reinstated the language was the seller, 18 and that is VSDH. VSDH is not Mr. Hickok and Mr. Hickok 19 is not VSDH. And Mr. Hickok is not the seller. So to 20 the extent that Mr. Hickok was the -- was, via his 21 signature or representative capacity and/or his 22 initialing of the addendum, a party to the contract for 23 limited purposes or otherwise, Mr. Hickok never agreed 24 to reinstate the stricken remedies and is entitled to 25 rely upon the sole and exclusive remedies provision of

142 Paragraph 15 of the contract, which precludes the pursuit of damages.

Moreover, the evidence in this case is that if Mr. Hickok was a party, he was only party to a purported guarantee; although, he denies that he was a party to such a guarantee or that such a guarantee is enforceable against him as a matter of law. But if the Court were to find that the guarantee existed and that he was a party to the guarantee, the guarantee is at most a guarantee of performance, meaning that he only guaranteed the buyback of the property in accordance specifically with the buyback option language.

The buyback language specifically provided that the buyback date was September the 1st of 2009. *879 And if Mr. Hickok was a guarantor and if Mr. Hickok were 16 suing as a guarantor and there's a finding of that, 17 although, he continues to deny that, he would have had 18 no ability to perform his guarantee obligation, his only 19 guarantee obligation, which is not a guarantee of 20 payment. It's not a guarantee of damages. It's not a 21 guarantee of anything other than to buy back the 22 property if on September 1st, '09, VSDH failed to do so. 23 By September 1st of 2009, the Grosses 24 already had sold the property to another person. And 25 Mrs. Gross admitted on the stand that on September 1st,

143 2009, Mr. Hickok could not have purchased the property back; i.e., performed the purported guarantee obligation to buy the property back if VSDH failed to do so on that date in that he did not sign any agreement of indemnity. He did not sign any agreement or guarantee of payment. The guarantee that is purported -- or the purported guarantee speaks nothing about his obligation to pay any financial obligations on the part of VSDH.

He cannot be held liable either for damages or he cannot be held liable for any purported failure by the Grosses -- I'm sorry -- by VSDH to purchase the property if it was obligated to do so because that obligation would have accrued on the 1st of September of '09, and on that date the property could *880 not be sold or, if stated differently, could not be

16 purchased by Mr. Hickok if he stepped up and tried to 17 buy it. 18 There is also no evidence that he refused 19 to buy it in the record or that he ever communicated his 20 intent not to buy it. The only evidence is that 21 Mr. Shaw told him -- told the Grosses that there was no 22 personal guarantee. And the sole evidence is that on 23 behalf of VSDH, Mr. -- I'm sorry -- Mr. Shaw 24 communicated that VSDH was insolvent. And never was 25 there any evidence that Mr. Hickok communicated to

144 anybody that he would not perform. But his obligation to perform, if at all, if he had one, if we find in this case that he did have a guarantee obligation, he only owed it after September the 1st. And at that time, his ability to perform was frustrated and rendered impossible by the Grosses' prior sale of the property to a third party.

Now, in addition, even if all of that were not correct, Mr. Hickok would only be liable under a guarantee if there was an enforceable guarantee against him, which we contend there was not, and if VSDH had actually defaulted on its obligation to buy back the property on 09-01 of 2009. But there's no evidence of a default by VSDH, thus no -- no default of that nature *881 could trigger any purported guaranteed liability.

16 In addition, Mr. Hickok has been sued for 17 fraud in a real estate transaction via their third 18 amended counterclaim, which, of course, is styled as a 19 counterclaim because at the time they were in the 20 position of being a defendant. The Grosses' alleged 21 that Hickok committed statutory fraud in the real estate 22 transaction in violation of Section 27.01 of the Texas 23 Business and Commerce Code. 24 The elements of that cause of action are 25 as follows: There was a transaction involving real

145 estate or stock. During the transaction, the defendant made a false representation of fact, made a false promise, or benefited by not disclosing that a third parties' representation or promise was false, the false representation or promise was made for the purpose of inducing the plaintiff to enter into the contract, the plaintiff relied on the false representation or promise by entering into the contract, and the reliance caused the plaintiff injury.

And I cite Section 27.01 of the Texas Business and Commerce Code and Schlumberger Tech versus Swanson, 959 S.W.2d 171 at Page 182, which is a Texas 1997 Supreme Court case.

THE COURT: Do you have a copy of it? *882 MR. CHAIKEN: I don't have a copy of the 16 Schlumberger case, but I can provide it to the Court. 17 Here, there's no evidence of one or more 18 of -- and let me emphasize that there has to be proof on 19 all five of those elements because there is an "and" 20 provision, okay, not an "or" provision in the stated 21 cause of action in the Business and Commerce Code. 22 Here, there is no evidence that during the 23 transaction Mr. Hickok made any false representation of 24 fact. There's no evidence that he made any false 25 promise or that he benefited by not disclosing that a

146 representation or a promise made by a third party was false. In order for a representation or promise to qualify as actionable under 27.01(a)(2) capital (A) and (A)(2)(B) of the Texas Business and Commerce Code --

THE COURT: Do you have a written motion that you're reading from? MR. CHAIKEN: No, I'm reading from some notes that I have, memos that I've typed from prior motions.

There is -- I'm sorry. The promise or representation at issue must be false at the time it was made. The only evidence of any promise or representation made by Mr. Hickok was that he would communicate with Mr. Shaw, and that was in response to a *883 request tendered to him by the broker, Mr. Buttemiller.

16 And he would ask Mr. Shaw whether he would agree to 17 personally guarantee the transaction, and they would 18 consider doing so if a guarantee was provided to them to 19 sign mutually. The only -- there's no evidence of any 20 actual false representation or promise that Mr. Hickok 21 made for the purpose of inducing the Grosses to enter 22 into the contract. 23 In fact, the only evidence that the 24 Grosses introduced is that because there was a denial of 25 the guarantee after the fact, there was -- there was

147 some type of false representation or promise. But because -- but a denial made after the fact is not a false promise or representation to induce the entry of a contract. There's no evidence that the Grosses relied on any false representation or promise by Mr. Hickok in entering into the contract. And there's certainly no evidence that they -- that there was any injury or damage in that they sold the property to a third party, depriving VSDH and, if VSDH defaulted, Mr. Hickok of any opportunity to buy the property back on or after the buyback date. And they did so in lieu of pursuing the remedies of specific performance that they expressly had reserved in the contract as their sole and exclusive remedy. *884 In addition, Mr. Hickok cannot be held

16 liable as a matter of law based on the evidence in the 17 record, being the contract itself in Paragraph 22 of the 18 contract, which is a merger clause. A merger clause is 19 one that bars a claim for purported representations or 20 agreements allegedly made. And there's been no 21 representations made. There's an allegation that an 22 agreement was made by Mr. Hickok before the contract was 23 signed that he and Mr. Shaw would guarantee that they 24 would buy back the property pursuant to the buyback 25 option if the partnership did not.

148 According to the Grosses, they relied on -- I'm sorry -- the contract -- excuse me -- states that the -- and it's the first amendment to the contract itself, which was introduced into evidence in Paragraph C at Page 2. The amendment embodies the entire agreement and understanding between the purchaser and seller with respect to its subject matter and supercedes all prior agreements and understandings, written or oral, between purchaser and seller related to that subject matter. This amendment may be amended, waived, or discharged only by an instrument in writing executed by the party against which enforcement of the amendment, waiver, or discharge is sought.

Furthermore, there is no evidence that *885 there was any reliance or justifiable reliance upon any 16 representation or promise made by Mr. Hickok because no 17 representation or promise was identified as being relied 18 upon with regard to an inducement of the contract. 19 Consequently, for each and any of those 20 reasons, Mr. Hickok moves for a directed verdict, 21 dismissing the claims of breach of contract against him 22 and dismissing the fraud in a real estate transaction 23 against him and, furthermore, dismissing any claim for 24 damages against him given the sole and exclusive 25 remedies provision of the contract, which the Grosses

149 allege he became a party to. Thank you, Judge. THE COURT: Well, let's see. That was 14 minutes nonstop. Did you breathe? MR. CHAIKEN: Yeah, I was breathing. I can talk and breathe at the same time. THE COURT: Mr. Aldous? MR. ALDOUS: Your Honor, to take a line

from O Brother Where Art Thou, that don't make no sense. First of all is the guarantee -- just with regard to the contract portion of the guarantee agreement -- sets forth that Mr. Hickok personally guarantees seller's obligation. And in the event VSDH fails to fully perform under the terms of the buyback option, each of his partners set forth here shall be personally *886 responsible. Mr. Hickok, therefore, guaranteed the

16 obligations and performance of the terms of the 17 agreement. 18 One of the terms of the agreement was that 19 they struck through -- that the language that was 20 stricken through was, "Seek such other relief as may be 21 provided by law or both: That means that the principal 22 obligor, being VSDH, agreed to that. That means that 23 Mr. Hickok has guaranteed that portion of it. 24 As a result, the question is really 25 whether or not VSDH breached its agreement to purchase

150 the property back. The answer to that is there's plenty of evidence both ways. And the evidence specifically is that Mr. Shaw said that they unequivocally would not perform, which -- as an anticipatory breach of contract, which is the same as breach of contract. That means that under the agreement itself that if VSDH breached the agreement, a party is relieved from any further responsibility under a contract once the other party's breached, meaning we didn't have to sit there on our hands and wait and see whether or not they were going to admit that they breached the agreement. We could sell it right away. And/or the jury has sufficient evidence to make that decision as to who breached first.

Two, with regard to the issue of whether *887 or not there's any evidence of a breach -- I mean, I'm 16 sorry -- of fraud in a real estate transaction, 17 Mr. Hickok admitted that this was -- a purports to be -- 18 addendum purports to have a guarantee agreement that he 19 believed he was not responsible for it because of some 20 other document that he had to sign. He was aware it was 21 in the document. He did not strike through it. 22 Contrary to counsel's assertion, I don't need to get 23 Mr. Hickok to -- I don't have to have him admit it that 24 it was a fraudulent statement. But there's sufficient 25 evidence to say that it was done with intent.

151 In fact, as you can recall, his -- once he referred the matter to Van Shaw for response, Mr. Shaw's response was nobody guaranteed this; although, the agreement specifically sets forth a personal guarantee. So there's plenty of evidence of a fraudulent statement made and that it was known to be fraudulent at the time. I believe these issues are just for the jury to decide.

THE COURT: Then there's the damages issue. MR. ALDOUS: I'm sorry? THE COURT: Damages. MR. ALDOUS: Was that with regard to

specific performance versus -- THE COURT: No, damages. *888 MR. ALDOUS: My understanding of what his 16 argument was is that we were limited to specific 17 performance, which is clearly not the case. Once a 18 party has breached, you no longer have to worry about -- 19 and you can immediately sue for damages. The black 20 letter law says as soon as they said, "We're not going 21 to perform," that is a breach. We can sue them for 22 money damages, and that means the guarantor as well. 23 There is absolutely nothing in the 24 contract that says the guarantor must be given any sort 25 of allowance for him to then go back and say, "Wait a

152 minute. I demand specific performance." Even if that was true in this case, he punted the whole issue to Mr. Shaw, who said, "We will not perform." So there's plenty on that. And so the way I understand it is he's tying that in, but clearly that is the specific performance and damages.

But with regard to the way this is set up is they agreed to pay 2,851,000 to buy -- purchase the property back. I've demonstrated that they didn't do that, which is a breach. They said they weren't going to do it. We relied on it. We moved forward. We sold the house at a loss, a loss that we wouldn't have sustained but for their failure to comply with the contract and to comply with the guarantee and then *889 fraud, of course, on the same damages.

16 And I will say, Your Honor, that I look at 17 those two causes of action as -- obviously, I don't 18 think that I could elect to win under both, you know. 19 THE COURT: It's only one recovery. 20 MR. ALDOUS: Right. So -- but there's 21 clearly evidence of both. 22 MR. CHAIKEN: May I respond? 23 THE COURT: Briefly, Mr. Chaiken, briefly. 24 You've already -- just so you know, he responded in five 25 minutes to your 14.

153 MR. CHAIKEN: That's good. The problem is his response is inadequate, and let me explain why. Mr. Aldous just made a statement that is patently, okay, incorrect. And it is expressly contrary to what the contract itself says. First of all, he said that the purported guarantee language was a guarantee to perform all of VSDH's obligations under the contract and that he tried to link that to the obligations of the seller with regard to what remedies can and cannot be pursued.

The problem with that argument is that if this is a guarantee, and it's not because under the statute of frauds in order for it to be a guarantee, it would have to be a -- it's a personal -- allegedly a personal undertaking to answer for a default of another, *890 it would have to be in writing and signed personally in

16 a personal capacity by the guarantor. That is a 17 question of law, which at this point is not the basis of 18 the motion for directed verdict. 19 But the language of the purported 20 guarantee itself in no way purports to obligate the 21 purported guarantors to perform all of seller's 22 obligations under the contract. To the contrary, all it 23 obligates, if anything, the purported guarantors to do 24 is to guarantee the partnership's obligations under the 25 buyback option. That's it. Okay?

154 And it's only in the event that the -- that VSDH fails to perform under the specific terms of the buyback option at which time the putative guarantors agree to be personally responsible to perform the obligations of VSDH under the buyback option, okay, not to pay damages if VSDH fails. It's not an indemnity, and it's certainly not an obligation to perform any other of VSDH's obligations under the contract.

Consequently, as a matter of contract construction and as a matter of law, the only party that agreed to reinstate stricken language allowing for the pursuit of remedies as may be provided by law, okay, is the seller. There's nothing but evidence that the seller and Mr. Hickok are not one in the same. There's *891 no mention of Mr. Hickok, guarantors, or anybody else

16 agreeing to reinstate the stricken language. The 17 addenda is part of the contract, and the contract says 18 that the sole and exclusive remedies available to the 19 Grosses if the seller fails to comply with the contract 20 for any other reason, okay, and the seller is in 21 default. 22 Okay. So, in other words, they're going 23 to attribute the default to a guarantor. Okay. The 24 buyer may, as a sole and exclusive remedy, enforce 25 specific performance, terminate the contract, and

155 receive the earnest money, thereby releasing both parties from this contract. They never sued for specific performance. They waived by striking the -- the other remedies provided by law by virtue of a failure to perform. It doesn't reinstate what has been stricken -- what has been contractually agreed upon as waived, okay, in the way of remedies. And so, at most, they could have sued Mr. Hickok for specific performance, not damages, if he was a guarantor under this agreement.

And the only other comment that I'll make is that there is no evidence of the specific elements of fraud in a real estate transaction, being the five elements. And they all must be proven, specified in *892 Texas Business and Commerce Code Section 27.01 and the

16 Schlumberger Tech versus -- Technology versus Swanson 17 case. And Mr. Aldous' statement that there's just 18 evidence of fraud does not identify the evidence in 19 support of each of those elements. And for those 20 reasons, Your Honor, we would request that the directed 21 verdict be granted in favor of Mr. Hickok. 22 THE COURT: The Court is disinclined to 23 grant directed verdict at this point in time; however, 24 the Court is not opposed to reconsidering it after the 25 defendants present their case in chief.

156 MR. SHAW: Your Honor, without waiving this, I'd like to move as well. I'll be brief. THE COURT: All right. MR. SHAW: Thank you. Your Honor, I

believe that VSDH -- I'm looking at the third amended counterclaim of the Grosses -- are sued under three causes of action. Roman numeral 5 on Page 6, it's out of the declaratory judgment cause of action. That cause of action is barred because VSDH, Hickok, and Shaw filed suit in 2008 initially. Once the case is at the Court, a party is then not in a counterclaim allowed to bring a declaratory judgment action because the matters are already before the Court and pending. And this case --

THE COURT: What case in 2008? *893 MR. SHAW: 2009, I'm sorry. The original 16 petition filed in this case was by VSDH, followed 17 shortly thereafter by interventions of Shaw and Hickok. 18 And so once those appearances were made to the Court and 19 the cause of action was teed up, the Grosses were not 20 allowed thereafter to file a declaratory judgment action 21 and seek to invoke the remedies allowed for under the 22 Declaratory Judgment Act. So we move for directed 23 verdict on that. 24 On the fraud in the real estate 25 transaction, the Grosses seek damages against and

157 liability against VSDH based on that cause of action. There is no evidence or certainly insufficient evidence to support any finding of fraud against VSDH. There was -- along the same lines as Hickok, there was a discussion that -- that VSDH would personally guarantee the buyback, would guarantee the buyback and it did. And that's what we're here about. But there is no fraud as to VSDH. And so we move for a directed verdict on that count as well.

Finally, on the breach of contract cause of action, we move for directed verdict because the contract clearly provided that once the Grosses entered into a contract with another party, the buyback provision was terminated. Further, the contract *894 provided that the Grosses -- that VSDH had until

16 09-01-2009 to execute the buyback. The Grosses sold the 17 property by that time. And, as such, the Grosses have 18 waived any rights that -- for liability or damages 19 against VSDH. So we move for directed verdict on all 20 three of those. 21 THE COURT: Mr. Aldous? 22 MR. ALDOUS: Your Honor, with regard to 23 the declaratory judgment action cause of action, his 24 argument is a legal one. It's not based upon the 25 evidence that was produced in trial. So, I don't think

158 -- and I'll firmly state on the record, I don't believe the Court has to decide that on directed verdict. But it can be dealt with at a later time. And with respect to the breach of contract and the fraud portion of it, I would state that the representations -- the false representation of Mr. Hickok were made both individually and as a representative of VSDH. And so they would apply as well. I'll rest on my other arguments that I made with regard to the breach of contract.

MR. SHAW: I don't understand the false representations that were referred to with Hickok that would impugn any fraud on VSDH.

MR. ALDOUS: The law is pretty clear, I think, that an agent of a company that commits fraud is *895 responsible. Both the company to which he responds to 16 is vicariously responsible, and he is personally 17 responsible as well. Irrespective of the fact that it 18 relates to a guarantee, it has everything to do with 19 whether or not he made a false statement, knowing it was 20 false at the time. And so that's what I would say. 21 THE COURT: The Court repeats its previous 22 ruling, disinclined to grant a declaratory -- I mean, 23 excuse me -- a directed verdict at this time, but is 24 open to considering it after the defendant has presented 25 -- or defendants have presented their case in chief.

159 MR. SHAW: Thank you, Your Honor. MR. ALDOUS: Can we have a moment for a

restroom break? THE COURT: You may. (Recess taken) THE COURT: Raise your right hand. (Witnesses sworn)

JAMES SIMMONS,

having been first duly sworn, testified as follows: DIRECT EXAMINATION BY MR. SHAW: Q All right. Sir, will you please state your full, legal name? A James Scott Simmons. *896 Q How old are you? 16 A Forty-four. 17 Q You presently live in Dallas? 18 A Yes. 19 Q And before that you -- I'm sorry -- before that 20 you lived in Southlake? 21 A Before that, I lived in Vaquero in Westlake. 22 Q Okay. In the last 15 years, tell us where 23 you've lived generally, please. 24 A Last 15 years, I lived in Southlake and in 25 Westlake and in Dallas.

160 Q All right. Westlake is where Vaquero is? A Yes. Q And your profession, please? A I'm a home builder. Q How long have you been a home builder? A Twenty-five years. Q And in your business dealings, have you had an

opportunity to meet a guy named Ken Gross, who's the movant in this lawsuit?

A Yes. Q Generally, when did you first meet Mr. Gross? A It was around 2006. Q And what did that -- how did you come to know

him? *897 THE COURT: You can speak a little bit 16 louder, just not much. 17 MR. SHAW: Okay. 18 THE COURT: Cathye's straining over there. 19 MR. SHAW: Yes, Your Honor. 20 Q (By Mr. Shaw) And how did you come to know him? 21 A Mr. and Mrs. Gross owned a property that was 22 next door to me. 23 Q That was in Vaquero? 24 A Yes. 25 Q And that was a raw piece of land?

161 A Vacant lot. Q And so you had -- you were living next door to

that little vacant lot; is that right? A Yes. Q And, generally, what was the business or the

dealings you had with Mr. Gross regarding his lot or your home?

A Well, my wife and I got sued personally over us living downhill from the Grosses' vacant lot. I think, in my opinion, we were the first people in the state of Texas that's probably ever happened to, and it cost us a lot of money and a lot of agony and a lot of years of going through a lawsuit. And we finally went to a -- to a head and got settled. They didn't live up to their *898 end of the bargain they were supposed to.

16 Q Okay. So Gross sued you for generally what? 17 What did -- that you understood was he suing you for? 18 A They basically sued me and my wife to try to 19 get money from us. 20 Q And it ultimately settled? 21 A Yes. 22 Q And as a result of the settlement, was 23 Mr. Gross required to undertake certain activities? 24 A Yes. He was regarding that lot. 25 Q His vacant lot?

162 A Their vacant lot. Q And did Mr. Gross undertake the activities he

was required to undertake per the settlement agreement? A Not during the -- I'm sorry. Excuse me. Not per the settlement agreement. Q Not timely? A Not timely. Q And what happened then? A I had a countersuit. Q You had a countersuit? A We had a countersuit to force them to do their

end of the bargain of the settlement. Q All right. And approximately how many years did this go over? *899 A It took almost five years for this to go 16 through and about $200,000 worth of attorney fees to my 17 wife and myself. 18 Q And this was 2006 to 2011, or what years would 19 you say it was? 20 A Yes. I believe it was completed in maybe '13. 21 Q Okay. So 2013? 22 A 2012, maybe, 2012 at the end. 23 Q It started when approximately, the lawsuit? 24 A It started around 2007. 25 Q Did you have dealings with Mr. Gross before the

163 lawsuit was filed? A Yes, before it was filed. Q Okay. And he -- you and he conferred about

various matters? A We thought we were going to try to work this out together against the developer and try to get the developer and the civil engineer to work through it. And for whatever reason, they elected to sue my wife and

I.

Q Mr. Gross did -- A Yes. Q -- and his wife? And so have you had any other

dealings with Mr. Gross? A No. I never want to. *900 Q Did you form an opinion about Mr. Gross' 16 character for truth -- his propensity for truthfulness? 17 A Yes. 18 Q And what opinion did you form? 19 A My opinion is he does not live up to what he's 20 supposed to do. He's untruthful and unethical. 21 Q Did you have lawyers and there were other 22 parties in that case as well; is that right? 23 A Yes. 24 Q And have you spoken to those people about 25 Mr. Gross and about how Mr. Gross conducts himself

164 generally? A Yes. Q And have you determined from people in that

community if Mr. Gross has a reputation? A Yes. Q Does Mr. Gross have a reputation? A He absolutely does. Q Is his reputation good or bad? A It's not good. Q Would you say it's bad? A I'd say it's pretty bad, yes, extremely bad. Q Extremely bad. The -- and would that be an

extremely bad reputation for telling the truth? A Yes. *901 Q Do you believe that that's the reputation that 16 Mr. Gross holds in the community? 17 A Yes. 18 Q Who do you -- do you know some specific people 19 that hold that reputation of Mr. Gross? 20 A Yes. 21 Q Who are they, some of them? Just list some. 22 A My attorney, both of my attorneys, John Sloan, 23 Jim Moore, Roxann Taylor, who I saw in the hallway 24 walking out of here. She's the first one that told me 25 to watch out for him.

165 Q All right. I -- Mr. Simmons, I appreciate you coming. MR. SHAW: I pass the witness. Counsel may ask you some questions. CROSS-EXAMINATION BY MR. ALDOUS: Q Mr. Simmons, my name is Steven Aldous. You and I have never met before; is that right? A Correct. Q You understand that I represent the Grosses in

this matter? A Yes, sir. Q I don't want to argue with you about whether or

not you're right or wrong, but would you agree with me *902 at least that your experience in the legal system with 16 Mr. Gross has effected the way you see Mr. Gross? 17 A Absolutely. 18 Q Would you agree with me that you have no 19 knowledge of the dispute that's ongoing between VSDH and 20 the Grosses related to 2004 White Wing Cove? 21 A I have no knowledge. 22 MR. ALDOUS: Pass the witness. 23 REDIRECT EXAMINATION 24 BY MR. SHAW: 25 Q You do have -- know the reputation of

166 Mr. Gross, though? A Yes. Q Do you know the facts of this case? A I don't know the facts of this case.

MR. SHAW: All right. Pass the witness. Your Honor, we offer -- we offer that

testimony. THE COURT: Court's ruling remains the same. MR. SHAW: Scott, I certainly appreciate you coming. All right, Your Honor. We have a second witness ready, Hap Stern, the lawyer. He's here in the hall. *903 THE COURT: For the same purposes?

16 MR. SHAW: No, no. 17 THE COURT: So you're ready to bring in 18 the jury? 19 MR. SHAW: That's the only one for that. 20 Yeah. 21 THE COURT: Okay. All rise. You may 22 bring in the jury. 23 MR. CHAIKEN: Your Honor, could I have two 24 minutes to confer with Mr. Shaw? 25 THE COURT: You may.

167 MR. CHAIKEN: We might move this along faster if we have this conversation. (Jury enters the courtroom) THE COURT: I'm sorry. Ladies and

gentlemen of the jury, go back in the jury room please. (Jury exits the courtroom) (Brief recess taken) THE COURT: All rise. You may bring in

the jury. (Jury enters the courtroom) THE COURT: You may be seated. You may call your next witness. MR. CHAIKEN: Your Honor, defense calls

Van Shaw. *904 THE COURT: Raise your right hand, please. 16 (Witness sworn) 17 THE COURT: You may be seated. 18 You may proceed. 19 MR. CHAIKEN: Thank you, Judge. And I 20 will sit down. I promise. EVAN LANE SHAW, 21 22 having been first duly sworn, testified as follows: 23 DIRECT EXAMINATION 24 BY MR. CHAIKEN: 25 Q Good afternoon, Mr. Shaw.

168 A Good afternoon. Q State your full name for the record. A Evan Lane Shaw. Q You've heard testimony and you have yourself

acknowledged that you are one of the limited partners of VSDH Vaquero Limited Partnership, right?

A That is correct. Q Tell the jury a little bit about yourself, your

background, and your education, and what you've been doing for the past 35 years.

A I was born in Dallas Baylor. I graduated from W.T. White High School in Dallas in 1974. Like Mr. Hickok, I went to Texas Tech and stayed six months, and then I transferred to the University of Texas at *905 Austin. I graduated in 1978 with an accounting degree.

16 I went directly to law school at SMU. I graduated from 17 that school with a law degree in 1981. 18 Along the way, I -- at Texas, I was an 19 accounting major. I was going to be a tax lawyer, was 20 my plan. And I obtained my Certified Public Accountant 21 designation while I was in law school. So my plan was 22 to have my designation, get out, and be a tax lawyer. I 23 did that for a year. I went to Chicago with U.S. Steel, 24 and I was a tax lawyer in Chicago for that company. 25 That wasn't really a good fit for me and

169 found out a little too late tax law probably wasn't where I was going to be interested. And so I came back to Dallas in 1982 and been here ever since. I worked for a friend of mine's dad who was a lawyer until 1990. From 1990 forward, I had my own firm. I've got two lawyers that work for me, Collen Meyer, a 30-year-old fellow. He's been with me about four years. And I've got Janet Randle. Janet's probably 62 --

THE COURT: She would not appreciate that, Mr. Shaw. MR. SHAW: She would not. And she doesn't look it, though. A But she's been with me about eight years and we do a lot of civil trial litigation. I'm married. Got *906 married in 1988 and 27 years ago. I have two children, 16 25 and 20 -- just turned 25 and 23, two boys, the same 17 age as Mr. Hickok's. And so they're out of the house 18 now, and so it's just my bride and I and my work. 19 Q Mr. Shaw, can I call you Van? Is that okay? 20 A Why not. 21 Q It's hard for me to call you Mr. Shaw. Van, 22 you have already spoken at length in this case sitting 23 over here, and one of the things that you testified to 24 -- not testified, but you mentioned in a question was 25 that back in the September of 2009 timeframe, you had

170 the money, if it was needed, to put up to buy the property that we're talking about back from the Grosses, and -- you know, if there was an obligation to perform the buyback. Do you recall that testimony?

A I do. Q Now, is there any secret that you've been a

successful attorney and real estate investor? A I don't know about any secret about it. I certainly don't blab anything about it, but I've done well.

Q And I'm not asking you to brag about it, but, I mean, you've been involved in a lot of transactions over the years, right?

A Certainly. *907 Q And a lot of legal cases, right? 16 A A lot. 17 Q You have a law license, right? 18 A I do. 19 Q Law license is in good standing, always has 20 been? 21 A Yes, sir. 22 Q Okay. And explain to the ladies and gentlemen 23 of the jury what one of the major requirements of 24 holding a law license is in terms of dealing with other 25 people. Do you have to be truthful?

171 MR. ALDOUS: Your Honor, let me object to this line of testimony. First of all, this witness has not been listed as any kind of expert witness, and it's improper bolstering to use the code of ethics as a witness.

THE COURT: Sustained. Q (By Mr. Chaiken) Mr. Shaw, there's been some testimony in this case that after Ken and Betsy Gross exercised the buyback option in the contract we've been talking about here for several days that you were communicating with them on behalf of VSDH. Do you recall that testimony?

A Certainly. Q And you were present this morning, were you *908 not, when Mrs. Gross testified that -- that you had made

16 some comments about the solvency of VSDH in June of 2009 17 that she believes implied that VSDH would not perform 18 the buyback obligation. Did you hear that testimony? 19 A I did. 20 Q Okay. So what I'd like you to do is I'd like 21 you to explain to the jury when you were communicating 22 -- first of all, when you were communicating with 23 Mrs. Gross and Mr. Gross back in the June of '09 24 timeframe, this is before the buyback date but after the 25 notice that they wanted you to buy -- or VSDH to buy it

172 back, why were you talking to the Grosses at all? A Well, the Grosses inquired and I didn't have any reason not to talk to them. Q Under the contract -- and you reviewed the contract, right? A I did in -- right at the end of April or 1st of May 2009. I had not seen it for several years. Q And when you got the contract, did you determine whether or not there was any obligation in it for VSDH -- or any language in it that called for VSDH to tell the Grosses one way or the other whether it would perform the buyback obligation?

MR. ALDOUS: Objection, Your Honor. That's calling for expert testimony concerning the *909 contents of the contract from a witness who's not been 16 designated as an expert. 17 THE COURT: Sustained. Just remember, no 18 speak objections, Mr. Aldous. 19 MR. ALDOUS: Sorry, Your Honor. 20 THE COURT: I have admonished Mr. Chaiken. 21 It's only fair that I should admonish you as well. 22 MR. ALDOUS: Thank you, Your Honor. I 23 apologize for my passion. 24 THE COURT: Mr. Chaiken? 25 MR. CHAIKEN: I'm just waiting to see if

173 he'll apologize for the bad joke. THE COURT: You may proceed. Q (By Mr. Chaiken) Now during the June of '09 timeframe, were you and Mr. and Mrs. Gross talking about options that might be available in response to their anxiousness, if you will, to find out what was going to happen with this buyback?

A We discussed some. Q And why did you comment to Mr. and Mrs. Gross

in the June of '09 timeframe that VSDH was -- was not solvent at that time?

A Well, VSDH had until September 1 to close. I was concerned whether VSDH was going to financially have the money to close if it wanted to close. So I didn't *910 want to surprise the Grosses at the end if VSDH wanted

16 to close and did not have the money. So I wanted to 17 make sure that they knew, you know, where we were on 18 that. 19 Q Now, the Grosses have indicated that you 20 indicated to them that VSDH was going to go bankrupt. 21 Did you ever tell them it was going to go bankrupt? 22 A Never did. 23 Q And when you were describing the concept of 24 insolvency -- let me rephrase. You were in the 25 courtroom when Doug Hickok was on the stand and Doug was

174 asked in June of '09 was -- was VSDH insolvent. You remember that testimony?

A I do. Q Okay. And his answer to the question was, "It

absolutely wasn't insolvent." Recall that testimony? A Certainly. Q So when you were reporting to the Grosses that

in June of '09 VSDH was not solvent, what did you mean by that? What were you -- what were you communicating to them?

A I'm a CPA. I know what solvency means. I don't -- Mr. Hickok's a smart guy, but I don't know if he knows the definition of solvency, at least the same definition that I know. But solvency to me means that *911 you don't have the cash readily available to meet your

16 obligation. That's all it means. It means you don't 17 have the cash readily available. It doesn't mean 18 anything other than that. 19 Q Now, were you -- were you at some point during 20 the June, July, or August timeframe, end of September 21 timeframe, were you developing any concerns about 22 whether there was a legal fight on the horizon with the 23 Grosses? 24 A I saw the Grosses hire attorneys and engage in 25 activities. I knew that was certainly a problem.

175 Q And were you concerned about it? A Well, I mean, I'm a lawyer so I don't know --

when you say, "concerned," I don't know what you mean exactly by that. You know, I certainly didn't want one if I -- you know, that's -- I wasn't looking forward to it. But I didn't think from a liability or damage standpoint --

MR. ALDOUS: Objection, Your Honor. THE COURT: Sustained.

Q (By Mr. Chaiken) When I was asking about whether you were concerned about it, I mean, were you concerned that the conversations were developing increasing intention and that it sounded like, you know, hey, the Grosses are talking about litigation, not *912 whether it was liability or anything, but was there

16 litigation. You know, here comes litigation. If you 17 don't do what we want, here's litigation. Did you have 18 that concern? 19 A I did. 20 Q Okay. And is it fair to say that hairs on your 21 back of your neck started to rise with respect to that? 22 A Well, I don't know exactly what you mean by 23 that. I mean, did I -- did I get the idea there was -- 24 the Grosses were lawyered up and litigation was coming? 25 Yeah, I got that idea.

176 Q All right. Now I want to show you an exhibit that has been discussed and that has been previously marked as Gross Exhibit 83. And I'm going to start -- because it's an email chain, I'm going to start backwards and then move to the front page, okay?

A That's all right. MR. ALDOUS: Could I get an exhibit number? MR. CHAIKEN: Yes, 83. THE COURT: I'm sorry? MR. CHAIKEN: Eight, three. THE COURT: 83 Gross or 83 VSDH? MR. CHAIKEN: It's Gross.

Q (By Mr. Chaiken) And, see here, you've got *913 this May 14th, 2009 email from Betsy Gross to you 16 talking about it's been a while since she bumped into 17 you walking up the street in Cabo. Were you on a yacht 18 in Cabo? 19 A I don't really like the water. I've never 20 owned a yacht, never been on one but once. So, no. 21 Q And then Mrs. Gross says we went to Jamaica 22 this year for spring break. Instead, it talks about how 23 Doug had directed her to you to discuss the next steps 24 with the house in Vaquero and it talks about how they 25 had notified Doug of the desire to exercise the buyback

177 clause. And Mrs. Gross says, "However, we would really like to chat with you regarding various options, which could be mutually beneficial. Is there any chance you'll be out in this area sometime soon so we could discuss? If not, can you provide some options for getting on the phone ASAP?"

And you responded, "Good to hear from you. Hope all is well. I am planning to review the documentation and am glad to talk. I want to let you know that the entity that sold the home is not financially solvent, so that will no doubt impact where this goes. Please call me when you can." Did I read that right?

A You did. *914 Q Is that your email? 16 A What's the date of my email, please? What's 17 the top of that? 18 Q Your email is May 17 -- excuse me. I'm sorry. 19 I should have pulled that down when I was reading from 20 it. May 17th of 2009. 21 A Okay. 22 Q Okay? Now, when you were communicating to 23 Mrs. Gross -- 24 A May I make one comment? 25 Q I'm sorry?

178 A This is in all caps. I'm not yelling. I just see better in all caps. Q I see. Okay. Thank you. MR. ALDOUS: I'm sorry, Your Honor. I didn't hear him. Could you speak up? MR. CHAIKEN: You want to hear in all caps? MR. ALDOUS: I apologize. Q (By Mr. Chaiken) And so when you told Mrs. Gross that the entity's financial solvency will no doubt have impact where this goes, were you referring to the discussion of the options that she wanted to chat with you about?

A I was. *915 Q Okay. And Mrs. Gross responded to you shortly 16 thereafter with an email dated May 18th, 2009. And she 17 talked about you coming out to see the changes to the 18 house. And then she talked about a couple of options. 19 You see the options that are there? One of which is, 20 "We can follow the existing terms and consummate the 21 buyback in September." And then she says, "However, we 22 are very interested in one of several alternatives." 23 And then the first one is, "Execute an early buyback 24 with a discount off the buyback price for said early 25 termination." You see that?

179 A I do. Q And then it says something about a rental

agreement or an outright purchase by the Grosses of the property at a discounted price. And then it talks about a combination of one of the above or a purchase of another lot. Did I read that right? Did I read that correctly?

A Are you under C? Q Right here. A You said right here. Q I'm just saying -- A I'm looking on my screen. Maybe it shows --

I'm looking at my screen. Is that where you are? Q Did I just properly characterize what *916 Mrs. Gross was doing was she was offering settlement 16 options? 17 A There were several options there. 18 Q Okay. And when you fast forward it to the 19 August of 2009 timeframe, you were told that the Grosses 20 might sell the property to somebody else, right? 21 A There's an email, I believe, that says that. 22 Q And what did you understand that the 23 consequences might be under the contract if the Grosses 24 -- at the time if the Grosses entered into a contract 25 with somebody else and sold the property to somebody

180 else before the buyback date? A Well, I didn't see that email for a day or two. So when you say, "at the time," what -- what are you saying?

Q What I'm saying is that in August of 2009 when -- when the Grosses were giving notice that they were going to sell the property to somebody else and that they had a buyer in mind, did you understand what the contract said if they sold the property to somebody else?

A Yeah. Q And did you have an understanding as to what

would happen to the buyback option if that happened? A Yes. *917 Q Okay. What was your understanding based upon 16 your review of the contract? 17 MR. ALDOUS: Objection, Your Honor. That 18 calls for expert testimony regarding the effectiveness 19 of the contract. 20 THE COURT: Sustained. Rephrase it. 21 Q (By Mr. Chaiken) I'm going to show you the 22 buyback option. And this is from Gross Exhibit 3. And 23 is this the provision that you reviewed with regard to 24 what might happen under the contract to the buyback 25 option if the Grosses entered into a contract to sell

181 the property to somebody else? Can you see that? A Is this Gross 3? Q Yes. It's the contract, Gross 3. A It's easier -- I can't see it that well. Let

me go get my glasses. Okay. Yes, sir. I see it. Q Okay. And in reviewing the contract at the time and this provision at the time, what did you understand the contract said would happen? If the Grosses, as the buyers, entered into a contract to sell the property, what would happen to the buyback option?

A Well, I didn't look at it in August of 2009. Q Okay. A But I had looked at it in May of 2009. Q Forgive me. Okay. With that qualification, *918 what did you come to understand would happen if they

16 entered into a contract with somebody else? 17 A Well, I knew that the -- that the document 18 said, "should buyer enter into a contract to sell the 19 property, the buyback option will immediately terminate 20 and will no longer be available to the buyer." That was 21 in a letter from the Grosses as well. 22 Q All right. Now, I want to show you -- and this 23 document is already in evidence. But forgive me because 24 I don't recall what number it is. But somebody will be 25 able to tell me here in a moment.

182 MR. ALDOUS: Well, Your Honor, I object. MR. CHAIKEN: Okay. MR. ALDOUS: You can't do that. I'm

sorry. MR. CHAIKEN: Fair enough. I want to make a record of what it is, but -- Q (By Mr. Chaiken) Do you recall seeing an email that's been put up and is in evidence where the Grosses were asking you if they could go ahead and sell the property to somebody else but reserve the buyback option?

A Yes. I think that may be the same one I just referred to that referred to that language. Q Okay. And what would have been problematic *919 about agreeing to let them sell the property while 16 reserving the buyback option? 17 A Well, if the property was sold, then there 18 would be no possibility of performance. 19 Q And if they entered into a contract with 20 somebody else under the language of Addendum A that you 21 just referred to, by doing so, they would invalidate the 22 buyback option, right? 23 A Yes, sir. 24 Q So, in essence, they were asking you for -- 25 were they asking you kind of for their cake and eat it

183 too to let us sell it and we can come back to you? MR. ALDOUS: Objection to the sidebar. THE COURT: Sustained. MR. ALDOUS: Thank you. MR. CHAIKEN: I'll move along.

Q (By Mr. Chaiken) Now I want to go back to Exhibit 83, Van. A Okay. Q Okay. And in response to --I found the

exhibit. This is Exhibit Gross 38. A Okay. Q So this email says -- it was written to you by

Mr. Gross. And it says, "Per your offer yesterday to allow us to enter into an agreement with a prospective *920 buyer, can you give us that agreement? Recall that our

16 contract says that after May 1st, 2009, if we enter into 17 a contract to sell the home, the buyback option goes 18 away." Did I read that right? 19 A Yes, sir. 20 Q Okay. So if I read this correctly, was this 21 telling -- was this confirming that you had previously 22 told them the day before that they could go ahead and 23 enter into an agreement with a prospective buyer, but 24 that you wouldn't waive the -- the going away with the 25 buyback option if they did?

184 MR. ALDOUS: Objection, Your Honor, leading. THE COURT: Sustained. Q (By Mr. Chaiken) Well, what did you tell them the day before about entering into an agreement with the prospective buyer?

A I didn't tell them they could enter into an agreement with a prospective buyer. Q Well, did you ever tell them that they could enter into a prospective buy -- agreement with the buyer and not have the buyback option go away? Was there any time that you told them that?

A I want to make sure I'm clear what you're asking me. Did I ever tell them they could enter into a *921 contract and the buyback option would still exist? 16 Q Yes. Did you ever tell them that? 17 A I never did. No. 18 Q And did you understand that's what they were 19 asking of you in the second paragraph of Exhibit 38 20 where they asked you, "Can we enter into a contract and 21 a sale while not altering the buyback language 22 responsibility as it existed in our contract?" 23 A I think generally that's right. 24 Q All right. Now, back to Exhibit Number 83, 25 after Mrs. Gross sent you her email talking about

185 several options and next steps, you wrote her back and you restated that the entity was not financially solvent, so that will no doubt have a huge impact on our discussion. And then it said not sure when I will be out that way, but maybe we can meet somewhere else. I'm not sure where your office is, but that may be a possibility. Please let me know when and where you suggest. Did I read that right?

A Well, I misspelled, "please." I want to apologize for that; but, otherwise, you did. Q And so you were telling the Grosses, you know, not withstanding the financial position of -- what were you telling them about the plans of VSDH notwithstanding its financial condition with regard to not really having *922 cash at that time. Were you telling them -- continue

16 talking to them? 17 A Yeah. 18 Q Were you willing to talk to them? 19 A Certainly. 20 Q Okay. And did you ever send anything in 21 writing to the Grosses that you know of that said VSDH 22 is not going to perform the buyback obligation? 23 A Did not. 24 Q Now, $64,000 question, everybody wants to hear 25 what Van Shaw has to say about it. The Grosses say that

186 you talked to them on the telephone and you told them VSDH will not perform under the buyback option. Did you ever tell them that, Mr. Shaw?

A Never, ever. Q Is there any doubt in your mind about that,

Van? A I know I never told them that. Q How do you know? A Because VSDH was considering what to do. Q And when did VSDH believe that it had the

ability to continue considering that until -- what time? A It knew what it had. It had until September 1. Q Now during the conversations that you had with

the Grosses, you told them there was no personal *923 guarantee by you or Doug Hickok in the transaction. Do 16 you recall seeing -- hearing discussion about that and 17 seeing emails that you wrote to that effect? 18 A Yes, sir. 19 Q Okay. Why did you tell the Grosses there was 20 no personal guarantee in the transaction? 21 A Because when I looked at the document in May of 22 2009, there was no personal guarantee. 23 Q And what caused you to conclude there was no 24 personal guarantee? 25 MR. ALDOUS: That's objectionable. That

187 calls for legal conclusion. THE COURT: Sustained. MR. CHAIKEN: Van, thanks. I pass the witness. MR. ALDOUS: Sir, are you -- I'm sorry, Your Honor. THE COURT: Mr. Aldous, you may proceed.

CROSS-EXAMINATION BY MR. ALDOUS: Q Are you telling this jury that you were straight up with the Grosses when you just said that you never once told them that VSDH wasn't going to perform?

A I never told them VSDH was never going to perform. *924 Q You see this email right here? I'm having a 16 little trouble with this, Mr. Shaw. It says, June 15, 17 2009. It's Exhibit 36. It's an email that's directed 18 to both you and to Doug Hickok. Do you see it? 19 A I'm going to appreciate it if you'll give me a 20 little courtesy when you talk to me. 21 THE COURT: Mr. Shaw, it's not so nice on 22 the witness stand. 23 MR. SHAW: It is not. I take that back. 24 Okay. I've got it in front of me. 25 Q (By Mr. Aldous) Do you see on here that it's

188 directed to both you and to Mr. Hickok? A I do. Q Do you see in here where it says, "Doug, I

called and left a message on your voicemail regarding our contract with 2004 White Wing Cove. I spoke to Van and he said that VSDH does not have enough money to honor our contract and buy back the house. Thus, VSDH does not intend to perform our contract. Do you see that?

A I read that. Q Did you ever once respond by email or otherwise

and say, "You know what? That's not accurate"? A I don't know if I responded. Q Until you got up on that witness stand? *925 A Certainly I've said that before.

16 Q Where is it? 17 A Thus VSDH does not intend to perform is nothing 18 I ever said, never, ever. 19 Q I'm saying, why didn't you just extend the 20 courtesy and say, "You know what? You guys got it 21 wrong. Mr. and Mrs. Gross, that is not what I said." 22 You didn't ever do that, did you, sir? 23 A This wasn't written to me, counsel. 24 Q Do you see your name attached to it up there? 25 A I see where I was copied. Whether I read it,

189 got it, reviewed it, I don't know. It's directed to Doug.

Q Doug, your partner in VSDH? A Doug was my partner in VSDH. Q Now when you got this statement, did Mr. -- did

Mr. Hickok call you up and say, "Van Shaw, did you tell them that VSDH wasn't going to perform? "

A You know, this was in 2009, six years ago. I'm not going to be able to tell you if he called me up and what he said. But I can tell you I never told them that.

Q Well, here's my question: Although you're now telling the jury that you don't recall ever saying that to them, I'm saying where is your response to this *926 particular email to say, "You know what, folks? You

16 just have it wrong"? 17 A There was no -- I don't recall not sending it 18 to them because I never said it to them. 19 Q Okay. Well, this is in June -- I'm sorry, June 20 15 of 2009; is that right? 21 A Yes, sir. 22 Q Now if you will, go to Exhibit 38. Do you see 23 that this is an email? Also, this one's directed to 24 you. It's dated June 28, 2009. 25 A I do.

190 Q And do you see that it says, "Per your offer yesterday to allow us to enter into an agreement with a prospective buyer, can you give us that agreement? Recall that our contract says that after May 1st, 2009, if we enter into a contract to sell the home, the buyback option goes away." Now my question to you, sir, is: Did you ever respond to this email in writing?

A They had a lawyer. I don't know if I responded to this in writing. But when they get lawyered up, that changes things.

Q Is that every man for himself? A That was not every man for himself. But it

certainly changes things when they have a lawyer representing them. And, here, they're trying not to let *927 me know they've got a lawyer representing them, but I

16 knew it. 17 Q Was that the way, because it was a bcc on 18 there? 19 A That's right. 20 Q So you knew that they were lawyered up. So 21 that prevented you from responding to the email and 22 saying "Hey, I didn't tell you that. I want to make 23 sure you understand?" 24 A Here's what I'm thinking. I'm thinking they're 25 writing things because they're looking down the road and

191 they've got a lawyer that says, "Write them this. Write them that. Write them this. Let's set up Shaw for this, this, and this. Let's do that. Let's set him up and then let me, as the lawyer, hide behind the scene and then orchestrate stuff so it looks like it's just Shaw and the Grosses when it's not."

I'm not going to play that game. I'm not going to let them get me into that game, sir. That's not proper. It's not fair. If the lawyer wants to come out front, let's talk. But I'm not going to do that.

Q Well, VSDH had a lawyer all along. That was you, right? A My lawyer was disclosed. I'm there in the wide open. I'm not having Mr. Hickok write letters and bcc *928 me, "Doug, write this. Write that. Do this." I'm not 16 doing that. 17 Q You would like it if you were the only lawyer 18 in the deal and it upset you that the Grosses hired a 19 lawyer? 20 A It didn't upset me at all, counsel. 21 Q Well, tell us if you would -- 22 (Talking at the same time) 23 THE COURT: Wait a minute, gentlemen. You 24 can't talk over one another. 25 A What upset me is that they're trying to set me

192 up with the lawyer hiding in the bushes. I never hid in the bushes, never, ever. That's not my style.

Q (By Mr. Aldous) Right. And so your response to this email -- since you're not hiding in the bushes, your response to this email that says, "You know what? I never told you that I would let you sell this house."

A Counsel, this is written for a setup for this day. That's what this is written for. Get the lawyer. Get him out front and let's talk. But to do this -- I never said that. And let me ask you this. If I said it, why does it say, "Per your offer yesterday to allow us, can you" --

THE COURT: Mr. Shaw? MR. SHAW: I'm sorry, Your Honor. *929 Q (By Mr. Aldous) Mr. Shaw, is there any reason

16 that you would not respond to this, other than the fact 17 that you believe that it was a lawyer and it was a setup 18 for you? 19 A I knew it was a setup, Counsel. And that's why 20 I didn't respond. 21 Q Is there any reason why you didn't just respond 22 to say, "You can sell the home, but the contract is what 23 the contract says, and we're going to rely on it"? 24 A Counsel, it was a setup. That's why I didn't 25 respond.

193 Q Let me ask you this. So on Exhibit 59, when you got the email from -- on August 18, 2009 that asked you about selling the home, you didn't respond to that either?

A Sir, this is a setup. All of this communication, the Grosses were fully represented. MR. ALDOUS: May I approach, Your Honor? THE COURT: You may.

Q (By Mr. Aldous) Let's talk about setups. THE COURT: Wait a second. What is the document? You have to provide a copy. MR. ALDOUS: Can I just see if it's in the notebook real quick? THE COURT: Yes. You may approach. *930 MR. ALDOUS: Thank you, Your Honor. 16 Q (By Mr. Aldous) Mr. Shaw, let me hand you, just 17 for refreshing your memory, exhibit -- that's been 18 marked Gross Exhibit 64. Is that the original petition 19 that you filed in this court against the Grosses? 20 A It is. 21 Q And you signed this as the lawyer on behalf of 22 VSDH. That's Vaquero Venture, Ltd., right? 23 A I did. 24 Q And it's dated July 5th, 2009, correct, on the 25 file stamp?

194 A I think that's two, but I'm not sure. Q My bad. July 2nd, 2009, correct? A Yes, sir. Q And then you also at the same time filed -- or

shortly thereafter filed petitions in intervention on behalf of yourself; is that correct?

A I did. Q And on behalf of Mr. Hickok; is that correct? A I did. Q And one of the things that you do after you

file a lawsuit is you serve the opposing party; isn't that right?

A That's the process. I don't personally do that. *931 Q Right. You hire somebody, typically a process 16 server, and do that? 17 A Or the sheriff. 18 Q And sometimes if you know that they're 19 represented -- the other side is represented by a 20 lawyer, sometimes you can just call the lawyer and say, 21 "Will you accept service?" 22 A That's right. 23 Q Now, did you ever before August 18th, 2009, 24 have a process server serve the Grosses with this 25 lawsuit?

195 A I issued service. Q I'm sorry. Maybe I -- let me rephrase it. Did

you hire a process server to serve the Grosses prior to August 18th of 2009?

A I'm sure we did. I don't handle that part of it at my office. Q Are you aware that the Grosses had no idea that they had been sued as of August 18, 2009? A I heard Mr. Gross testify to that two days ago. Q Do you understand that maybe they wouldn't be

sending you an email on August 18th, 2009, asking you to agree to this if they'd known they'd been sued?

A I don't believe -- I believe they knew they'd been sued because when you get -- file suit, it shows up *932 on a record. And their lawyers were in Dallas. And 16 they get a record of what suit's filed, who the 17 plaintiff is, who the defendant is, and what court it's 18 in. They get that the next day. 19 Q You mean if you subscribe -- 20 A Electronically. 21 Q -- to the service? 22 A That's right. 23 Q And if you subscribe -- 24 A They were at Cooper & Scully. 25 THE COURT: You can't talk at the same

196 time, gentlemen. A They have that service. Q (By Mr. Aldous) Now are you testifying as a

matter of fact here today, Mr. Shaw, that you know that they had that service?

A They -- Q I'm talking about their lawyers. You know

their lawyers were subscribed to that service? A In the past, I have known that their lawyers were subscribed to that service because I'll be called after I file a lawsuit. And they'll call me and say, "Hey, I saw you did this." It's a big firm. Somebody will call me on it.

Q Did you do anything to serve the lawyers with *933 that lawsuit? In other words, you already know -- you 16 say it's a setup. Did you send any of the petitions 17 over to the lawyers and say, "You know what? I sued 18 y'all. I know y'all are out there. Come on out"? 19 A Well, I already knew it. I didn't have to send 20 them anything. 21 Q Let me just see if I can get to the end of 22 this. Would you agree with me that you never sent an 23 email to the Grosses, whether they'd lawyered up or not, 24 retracting your statement that VSDH was insolvent? 25 A I never sent an email and said it was solvent,

197 if that's what you're saying. Q Or saying that my previous email saying it was insolvent is not accurate? A I never sent an email saying if it's insolvent, it's inaccurate. Q And isn't it true, sir, that ever since the beginning of this time, every email that you said -- you've said that no personal guarantee existed in this contract?

A I don't know about every email I ever sent. But certainly my opinion was there was no personal guarantee.

Q And in terms of your representations to the Grosses, you've always maintained that there was no *934 personal guarantee by you or Mr. Hickok in this case? 16 A When you say, "always maintained," I don't know 17 how many times. We talked about that at least once. 18 And I told them I looked at the document and there was 19 no personal guarantee. 20 Q All right. 21 A I don't -- I don't know. I certainly never 22 said that every time we talked to them or anything like 23 that. 24 Q Well, let me flip it over. Let me flip it 25 over. You never sent them an email saying that my

198 previous statement that there was no personal guarantee is not right?

A My personal -- my previous statement was right. There is no personal guarantee. Q I'm sure that my tricky lawyer question is probably a little bit hard to understand, but let me ask it again. You never sent an email to the Grosses saying, "My previous statement that there is no personal guarantee in this contract is hereby withdrawn or changed or different"?

A I never changed my mind, so I'm not going to write the Grosses and say I changed my mind when I hadn't changed my mind.

MR. ALDOUS: I'll pass the witness, Your *935 Honor. 16 THE COURT: Mr. Chaiken? 17 REDIRECT EXAMINATION 18 BY MR. CHAIKEN: 19 Q All right. Van, just a couple more questions 20 here. 21 A What exhibit is that, please? 22 Q Actually, let's do it this way. This is Number 23 59, okay? On August the 18th, Mr. and Mrs. Gross are 24 telling you that they have a contract to sell the 25 property or somebody had offered $2,415,000 in cash with

199 a short closing. You see that? A I do. Q So they're telling you somebody else did so.

And what time did Mr. Kenny G -- I'm sorry -- Kenny G, 3558, Mr. Gross, what time did -- does it look like he sent that email to you on August the 18th?

A The email reflects 7:24 p.m. Q Okay. And then it says, "Unless we hear

otherwise by noon tomorrow from either or both of you, we will be moving forward with this deal. Recognize that there are still many issues that may stop the transaction," you know, so on and so forth.

And then it said, "If you would like to discuss any of these issues, please call me at this *936 number. Otherwise, we will assume you approve of this 16 sale." You see that? 17 A I'm looking for the "otherwise." 18 Q Right over here. Right there, see, 19 "otherwise." 20 A Okay. I'm with you. 21 Q "We will assume youapprove of this sale." 22 A Yes, sir. 23 Q So at 7:24 in the evening on August 18th, which 24 is after business hours, and you don't know where you 25 were that day and whether you were even reading emails,

200 right? A Kind of. Q Okay. What's, "kind of"? A Well, I think I was enrolling my oldest one in

college at that time out of town. Q All right. And -- MR. ALDOUS: I'm sorry. I didn't -- THE WITNESS: Out of town, enrolling my

oldest one in college. MR. ALDOUS: Oh, you said enrolling my oldest one in college. Okay. I'm sorry. I just didn't hear.

Q (By Mr. Chaiken) And the Grosses are stating to you, "Unless we hear otherwise by noon tomorrow from *937 either or both of you, we're going to go forward with 16 the deal," right? That's what it says. 17 A It says, "Otherwise, we will assume you approve 18 of this sale." 19 Q They didn't give you much time to approve or 20 disapprove, did they? 21 MR. ALDOUS: Objection, leading. 22 THE COURT: Sustained. 23 Q (By Mr. Chaiken) Did they give you a 24 reasonable amount of time to respond to that if they 25 really expected a response from you?

201 A No. Q And -- and they told you, if we don't hear from

you -- we don't know if we will -- we're just going to assume that it's okay, that you approve it, right?

A That's what it says. Q Now here's the question. Did you ever approve

the sale? A No, I never approved the sale. Q And did they ever offer you the opportunity,

prior to the buyback date, to buy the property for $2,415,000 in cash?

A They did not. Q Would you have considered such an offer if they

had made it to you? *938 A I would have. 16 Q Is it something you might have considered 17 doing? 18 A I don't know at this stage, you know, six years 19 ago. I was certainly -- I'm open to looking at it, 20 certainly. And I was investigating along -- you know, 21 some of what was going on. So I don't know. 22 Q And they went ahead and they did it, right? 23 They entered into a -- 24 A I've learned that now. 25 Q -- contract with that buyer, right?

202 A I learned that now. Q Okay. And you had never told them they could

do so and keep the buyback option in force and effect, right?

A I never agreed that they could enter into a contract and maintain the buyback option. Q And they asked you that, right, if you would? A If this is what we talked about earlier, I'm

not changing my testimony. Q All right. Now, I want to ask you a real quick question here, which is: When you filed a lawsuit against the Grosses on behalf of VSDH, what was the lawsuit complaining about?

MR. ALDOUS: Objection, Your Honor, *939 relevance. 16 THE COURT: What's the relevance, 17 Mr. Chaiken? 18 MR. CHAIKEN: He opened the door to the 19 filing of lawsuit. 20 THE COURT: What's the relevance? 21 MR. CHAIKEN: The relevance is that he 22 filed the lawsuit for a reason, not -- not as a 23 posturing maneuver. And I'd like him to explain what 24 the reason he filed the lawsuit was to the jury. 25 THE COURT: I'll allow it. I will also

203 point out to you that it is 5:23 p.m. MR. CHAIKEN: Just about there. A The reason was the failure of the Grosses to obtain approval for the construction. Q (By Mr. Chaiken) And when you filed that lawsuit, Mr. Aldous asked you, well, why didn't you -- why didn't you send a copy over to the lawyers, the Grosses' lawyers? At that point in time, did you even know who the lawyers were?

A I think I did. Q Okay. And how did you come to know? A I had met with the Grosses prior to that, and I

think I had learned it then. Q Okay. And I last want to talk to you about *940 Exhibit 36. It says -- Mr. Aldous talked to you about 16 it. It says, "Mr. Gross wrote Mr. Hickok and told him 17 that he had spoken to you and you said that VSDH does 18 not have enough money to honor our contract and buy back 19 the house; thus, VSDH does not intend to perform per our 20 contract." 21 Now, is there any doubt in your mind about 22 whether you told Mr. Gross what is written there? 23 A Well, I certainly told the Grosses that the 24 company had solvency issues. I never ever said it 25 wasn't going to buy back the property.

204 Q And did you ever tell the Grosses that VSDH does not intend to perform per our contract? A I never said that. MR. CHAIKEN: I will pass the witness. THE COURT: Mr. Aldous? MR. ALDOUS: I have nothing further, Your

Honor. THE COURT: The witness is excused. You may step down unless you wish to question yourself. MR. SHAW: No. THE COURT: All right. It's now 5:25 p.m.

We will recess for the day. During this overnight recess, the jury is under the same instructions that you've been previously *941 given. You're not to discuss this case among yourselves 16 or with anyone else until such time as the case has been 17 either submitted to you for your deliberations or you 18 have been discharged as jurors. 19 All rise. The jury is excused for the 20 evening. You'll return tomorrow morning at 10:00 a.m. 21 (Jury exits the courtroom) 22 THE COURT: All right. We stand in recess 23 for the day. 24 (Proceedings concluded for the day) 25

205 STATE OF TEXAS )

COUNTY OF DALLAS )

I further certify that this Reporter's Record of the proceedings truly and correctly reflects the exhibits, if any, admitted by the respective parties. *942 WITNESS MY OFFICIAL HAND this the 16th day of October, 2015.

16 17 /s/ Cathye G. Moreno Cathye G. Moreno, Texas CSR #6076 Expiration Date: 12/31/16 18 Official Court Reporter 19

County Court at Law No. 1 600 Commerce Street, Suite 550 Dallas, Texas 75202 20 cathyemoreno@sbcglobal.net 21

(214)653-7496 22 23 24 25

TAB 28 *943 1 REPORTER'S RECORD VOLUME 6 OF 10 VOLUMES CAUSE NO. CC-09-05232-A

VSDH VAQUERO VENTURE, LTD.

)IN THE COUNTY COURT ) Plaintiff/Counter-Defendant, ) ) ) ) )AT LAW NO. 1 )

V.

KEN GROSS and BETSY GROSS Defendants/Counter-Plaintiffs, )

) ) ) )

V.

EVAN L. SHAW and DOUGLAS M. HICKOK ) ) Intervenors/Counter-Defendants, )DALLAS COUNTY, TEXAS -------------------------------------------------------

TRIAL ON THE MERITS

------------------------------------------------------- *944 16 On the 18th day of June 2015, the following 17 proceedings came on to be heard within the presence of 18 19 a jury in the above-entitled and -numbered cause before 20 the Honorable D'METRIA BENSON, judge presiding, held in 21 Dallas, Dallas County, Texas. 22 Proceedings reported by computerized stenotype 23 machine. Reporter's Record produced by computer-aided 24 transcription. 25

APPEARANCES:

MR. STEVEN E. ALDOUS SBN 00982100 Forshey Prostok, LLP 500 Crescent Court Suite 240 Dallas, Texas 75201 (214)716-2100 ATTORNEY FOR DEFENDANTS/COUNTER-PLAINTIFFS KEN GROSS and BETSY GROSS

- AND -

VSDH VAQUERO HOMES, INC. AND VSDH HOMES, INC.

20 21 22 23 24 25

3 INDEX JUNE 18, 2015 PAGE VOL. PROCEEDINGS.............................. 4 6 VSDH'S WITNESSES Direct Cross Voir Dire Vol. Paul Kramer 11 36 25 6 ALL PARTIES REST AND CLOSE............... 39 6

GROSSES' MOTION FOR DIRECTED VERDICT..... 41 6

COURT'S RULING ON DIRECTED VERDICT MOTION 54 6 COURT'S RULING ON DIRECTED VERDICT MOTION 61 6 COURT'S RULING ON DIRECTED VERDICT MOTION 76 6 HICKOK'S MOTION FOR DIRECTED VERDICT..... 79 6 GROSSES' MOTION FOR A TRIAL AMENDMENT.... 84 6 COURT'S RULING ON THE TRIAL AMENDMENT.... 88 6 COURT'S RULING ON DIRECTED VERDICT MOTION 91 6 *946 COURT'S RULING ON DIRECTED VERDICT MOTION 96 6

16 COURT'S RULING ON DIRECTED VERDICT MOTION 99 6 17 FORMAL CHARGE CONFERENCE................. 106 6 18 COURT'S CHARGE TO THE JURY............... 123 6 19

CLOSING ARGUMENT BY MR. ALDOUS........... 136 6 20 CLOSING ARGUMENT BY MR. SHAW............. 149 6 21 CLOSING ARGUMENT BY MR. CHAIKEN.......... 158 6 22 END OF PROCEEDINGS....................... 177 6 23 REPORTER'S CERTIFICATE................... 178 6 24 EXHIBIT INDEX (NONE) 25

PROCEEDINGS

June 18, 2015 THE COURT: All right. Counsel may approach. (Jury is not present in the courtroom) THE COURT: Mr. Chaiken? MR. CHAIKEN: Can we go on the record? THE COURT: You're on the record. MR. CHAIKEN: I didn't see her hands

moving. Judge, yesterday during one of the bench conferences, I heard -- well, maybe I didn't hear. I'm not sure what I heard that requires a little clarification. One issue that concerned me is whether I *947 call any additional witness or not. Mr. Aldous made a

16 statement during one of the bench conferences that the 17 Court has already decided the issue of whether 18 Mr. Hickok is a party to the contract and/or that the 19 Court has decided that he is a guarantor. 20 I'm not aware of the Court having made 21 that finding on either of those issues. But if the 22 Court has made that finding, then I would like a record 23 of the fact that it happened so it will dictate the 24 course of how we continue our defense. 25 And, secondly, if the Court has not made

5 that finding, then I don't -- I have not had a clarity as to whether the Court is of the opinion that those issues are the questions for the Court to decide as opposed to questions to be submitted to the jury. And that also dictates the course of the continuation of our defense. So can I get some guidance on those two points, please, or at least some clarification?

THE COURT: Mr. Aldous? MR. ALDOUS: Your Honor, it's my

understanding that the time for me to make a motion for directed verdict with respect to any of the claims raised by them is after they've rested, which I intend to do. It's my understanding the Court has told us that the real issue for jury determination is whether the *948 underlying contract was breached, but that the law is

16 that the guaranty is clear and unambiguous -- in other 17 words, not a jury issue -- that the signatures of 18 Mr. Hickok in any capacity and the initialing is 19 sufficient as a matter of law to bind him on a guaranty. 20 So the issue really for the jury to decide 21 is whether or not the underlying agreement was breached; 22 and, therefore, whether or not the guaranty has come 23 into fruition. And I intend to make a motion in that 24 regard. 25 THE COURT: Okay. Any rulings that would

6 substantiate that? I know that I denied summary judgment, but I don't know that I made any specific determinations. But it's been a while, so...

MR. ALDOUS: I don't believe that Your Honor has made a ruling in that regard. MR. CHAIKEN: And I don't believe so either, but the second component of my -- so that takes care of the first of my two concerns because I've now got clarification that that hasn't been decided at this point.

The second concern that I have, though, was what it is that the Court has told us is to be tried to the jury, and -- and ,again, I don't -- I don't have the same degree of clarity that Mr. Aldous believes he *949 has with regard to whether, a, the question of whether

16 Mr. Hickok is a party to the contract is an issue to go 17 to the jury or whether the Court believes is a legal 18 question. And when I say, "party," I mean, did he 19 execute the contract; and then, secondly, whether the 20 issue of whether he -- there's a sufficient guaranty to 21 have an enforceable guaranty obligation in the contract. 22 And so I do know that under the statute of 23 fraud, 2701, the question of whether or not a party who 24 undertook -- did, in fact, undertake in accordance with 25 the requirements of the statute of fraud to answer for a

7 default for another is a question of law. And so I don't think there's any dispute with regard to the fact that the Court made a decision as to whether or not if Mr. Hickok is a party to the contract. There is -- whether there is or isn't a guaranty, that's an enforceable event. But on the question of whether he is a party by virtue of signature, I don't share Mr. Aldous's clarity.

THE COURT: Are you talking about in his individual capacity? MR. CHAIKEN: I'm talking about in his individual capacity, is he a party to the contract? THE COURT: I don't know that that's ever been an issue that's been raised. *950 MR. ALDOUS: Only with respect to the 16 guaranty. It's whether or not his signature is 17 sufficient to bind him to the guaranty. I don't 18 characterize it the same way he does. 19 MR. CHAIKEN: Well, that -- the issue -- 20 MR. ALDOUS: I think that's a -- 21 MR. CHAIKEN: Well, the issue is founded 22 upon signature and whether he signed it or not, and I 23 believe that's a fact question. I didn't put it in my 24 proposed charge due to this ambiguity that I left the 25 court with yesterday based on the comments that were

8 made. But -- but in terms of whether that's an issue the Court believes is a legal question or not, you know, I -- because there is -- there is in the PJC, there is an opportunity in a breach of contract case to submit a question as to whether Party A and Party B entered into an agreement. Okay.

Well, the elements of entering into an agreement are that they sign the agreement, you know, especially if it has to be in writing. And so the question is: Are we submitting that question to the jury, or is it a legal question for the Court to decide?

THE COURT:. I think that's an issue that arises after we get to the charge conference. MR. SHAW: Okay. *951 MR. CHAIKEN: Okay. 16 THE COURT: But as of this point in time, 17 there is no pleading that I'm aware of that says that 18 Mr. Hickok in his personal capacity was a party to the 19 contract, but there is a pleading I'm aware of that says 20 that he, in his personal capacity, is liable as a 21 guarantor. 22 MR. CHAIKEN: Right. Okay. As long -- 23 THE COURT: That's what's being tried 24 before the Court. 25 MR. CHAIKEN: Well, but -- and just for

9 one other point of clarity, okay -- THE COURT: Your three minutes have passed. MR. CHAIKEN: He has an affirmative defense in the case, okay, denying execution. Okay. And it's a verified defense under Rule 94. And so that issue is in play by virtue of his defense either way. Okay. And so I just -- the reason I'm raising all of this is because I heard Mr. Aldous say yesterday that the Court has already decided that these were legal questions and not jury questions.

I heard him say it again just a moment ago, and I don't believe the Court has decided that one way or the other. And I just want to make sure that I *952 know where we stand on that issue.

16 THE COURT: The Court stands where the 17 Court just said it stood. 18 MR. CHAIKEN: Okay. Fair enough. 19 THE COURT: Is there anything else before 20 we bring in the jury? 21 MR. ALDOUS: Your, Honor, do you need the 22 flash drive with the charge on it or was my email 23 sufficient? 24 THE COURT: The email is sufficient. 25 MR. CHAIKEN: I'm going to -- I'm going to

10 offer one amendment to what I submitted this morning, but I'll do that afterwards.

THE COURT: Okay. You may bring in the jury. All rise. (Jury enters the courtroom) THE COURT: You may be seated. MR. CHAIKEN: Your Honor, I apologize in

advance. I've got something going on with my throat. And so I do have water, but I keep coughing nevertheless.

THE COURT: All right. Mr. Shaw? MR. SHAW: Your Honor, we call Paul

Kramer. *953 THE COURT: All right. Is he in the 16 hallway? 17 MR. SHAW: Yes. 18 THE COURT: Would you please raise your 19 right hand? 20 (Witness sworn) 21 THE COURT: You may be seated. 22 You may proceed. 23 MR. SHAW: Thank you. PAUL KRAMER, 24 25 having been first duly sworn, testified as follows:

11 DIRECT EXAMINATION BY MR. SHAW: Q Sir, your full legal name? A Paul James Kramer. Q How old a man are you? A Sixty-three. Q What town do you live in? A Colleyville. Q What is your profession? A I'm employed as a builder. Q The -- give us a little history on you, please.

Where were you raised? A California. Q And when did you come to Texas on a full-time *954 basis approximately?

16 A Late 1980s. 17 Q What was the reason? 18 A I accepted a position with a plastic 19 manufacturing firm based in Grand Prairie. 20 Q And what was your position? 21 A My initial position was salesman. 22 Q How long did you stay with them? 23 A From about 1987 until 2000. 24 Q When you left, in what position were you? 25 A I was president of the company.

12 Q And when you -- since you left, generally tell the jury what you've been doing for employment. A Building homes, high-end residential homes. Q What part of Texas have you done that in

generally? A Most of it in northeast Tarrant County, Colleyville, Southlake, Westlake, a few in Dallas. Q The jury might not be generally familiar with where Colleyville is. Where is it from here generally? A Colleyville's about 20 minutes from here. It's between Dallas and Fort Worth, southwest of the airport. Q Southwest of the airport? A Yes. Q All right. And you said you're presently *955 employed by a company?

16 A Yes. 17 Q What's your position? 18 A Manager. 19 Q What's the name of the company? 20 A Shawco Construction, LLC, d/b/a Paul Kramer 21 Construction. 22 Q That has kind of a ring to it, Shawco. What is 23 my relation to that company? 24 A You own it. 25 Q And how long have I owned the company you work

13 for? A Since late 2012. Q The -- tell the jury a little bit. When did

you first meet me approximately? A I met you, I believe, in the early or mid-1980s. You did legal work for the plastic company that I eventually went to work for.

Q All right. And did I continue in that legal work all the way through the time you left the company? A I believe so. Q Okay. And then after you left the company, you

and I developed a friendship while you were there; is that right?

A That's correct. *956 Q And after you left the company, you were 16 building homes for yourself; is that right? 17 A I built homes. I owned a company myself that I 18 built homes and I built spec homes and built homes for 19 clients. 20 Q All right. Approximately how many homes have 21 you built? 22 A 130. 23 Q And, generally, what price range would you say 24 most of those were in? 25 A The average is a little bit over

14 three-and-a-half million. The range is about 800,000 to 9 million. Really, only a couple of them were under a million.

Q Did you know of or do you know of any builder, certainly in your area, that has the experience of building homes in that price range more than you?

A Not that I'm aware of. Q So you started building in 2000 or around there

and -- A I started building before that. I started building when I was still employed with the plastic company.

Q Okay. And was that kind of a hobby or moonlight or what was that? *957 A Initially, I built a home for my family. And 16 based upon the amount of time I had put in that 17 endeavor, my wife at the time and I decided to start 18 building some homes to make up additional income for our 19 family. 20 Q In the early 2000s, did you start building in 21 the development called Vaquero? 22 A Yes. 23 Q And at some point in time, did you understand 24 that Mr. Hickok and I owned some land in Vaquero? 25 A Yes. There was a time I think between you that

15 you owned about 12 residential lots. Q And you knew Doug from me and from -- socially? A Yeah. Q So how did it -- you built the home we're here

about; is that right? A Yes. Q What entity did you use to build this home? A I believe it was under Castlegate Homes. Q Is that a name of a building entity that you

used regularly? A Yes. Q And so tell the jury a little bit about how it

came about that VSDH, the entity Doug and I owned this lot in, and you came about building this home? *958 A Well, I was doing quite a bit of building right

16 in that area at the time, and I suggested that there was 17 very hot. It was a very desirable area. And since you 18 had those lots that we build a couple of spec homes 19 wherein I would build them and you and Mr. Hickok would 20 put the lots in the deal and obtain the combination of 21 cash or financing. But, ultimately -- well, I didn't 22 have to put any money in, and then we would split any 23 profit. 24 Q And did you build two homes next door to each 25 other, the Gross home that we're here about and the one

16 next door to that? A That's correct. Yes. Q So when you went about building the Gross home,

briefly tell the jury what you did in order to make sure that you were building a quality product that you were going to be happy with?

A I hired someone that I believed to be one of the top architects in the metroplex, Richard Drummond Davis. Actually, on those two homes, what I did is -- I didn't want to have to spend a couple of years designing the home, which is how long that process tended to take. And I had Mr. Davis suggest some plans or homes that he had designed before that he was really pleased with the results and that would work on these lots and ultimately *959 picked two houses. And then we took those plans and

16 adapted them to fit, you know, on these two pieces of 17 property. 18 Q Well, why did you think -- is Mr. Davis out of 19 Dallas? 20 A Yes. 21 Q Why did you think he was such a good architect? 22 A When I built my first house, I researched 23 architectural firms for about two years, and my research 24 resulted in me having a very short list of three or four 25 top architects. And the other main one was Larry

17 Boerder. And at that point, I had had Richard Davis design a couple of houses for clients, at least a couple, maybe more, and the same for Mr. Boerder. In my research into becoming a builder told me that having strong architecture was a very, very important component of building quality houses.

Q And is that kind of a rule you've lived by? A Yes. Q The -- generally, what would you say is --

other than -- well, along with strong architecture, what's kind of important to you in building a quality product?

A Well, the site that it's built on, the -- is the quality of the lot or the land and the *960 specifications of the house, not just the design, but 16 the finish-out specifications and the mechanical 17 specifications that they're all detailed to result in an 18 extraordinarily high quality product and then the use of 19 the best labor possible, which for many years, I 20 employed a lot of the subcontractors myself. My firm 21 employed as employees trim carpenters and tile 22 installers, masons and -- and painters. 23 MR. SHAW: Okay. Your Honor, may I have 24 the overhead, please? 25 Q (By Mr. Shaw) All right. Let's start with,

18 Mr. Kramer, is that a picture of the exterior, front exterior of the home? And these are from Gross Exhibit 116.

A Yes. Q Okay. And are you happy with the way that home

ended up looking? A Ended up looking when I finished building it? Q Yes, sir. A Yes. Q Okay. Another photo from 116, is that another

front picture? A Yes. Q The -- describe, please -- all these photos are

going to be from Exhibit 116. Describe, please, what *961 this is. 16 A That's the foyer, the -- I guess you could call 17 it the entry. You see that the front door was 18 hand-carved. We built that -- my own employees built 19 that door by hand, and all the carvings were done by 20 hand. The stair newel is, you know, not what you would 21 see in a typical home. And then it has the -- 22 Q Is this the newel? 23 A Yes, sorry. And then paneling that you see on 24 the wall on the left side of -- yes -- the staircase is 25 all, you know, nicely detailed. It has stained

19 baseboards, which is the -- the piece of trim that you could see at the bottom of each side of the entry door there. Right. And it has a base cap. It's a two-piece trim. It's just pretty typical of an entry in a home of this size and price range that we would build; the lighting, the sconces. I don't really recall if those were antiques or if I bought them new, but I would have taken a lot of time to select those.

Q All right. Thank you. What is this, please? A That's the kitchen. Q Okay. I may have a better picture of that.

And tell us about the quality and detail in there, please.

A Well, the cabinetry is what's called beaded *962 inset, which is kind of hard to see from these pictures. 16 But the cabinet doors have to fit exactly in the opening 17 and have a little beaded trim as opposed to an overlay 18 door. Overlay doors, the cabinet door kinds of laps 19 over the opening. These cabinets in person look just a 20 lot nicer. They're a lot harder to make. They all have 21 Blum undermount drawer glides, which is a special drawer 22 glide so you don't see drawer glides on each side of the 23 drawer and the drawer closes by itself. 24 The cabinets themselves, the crown molding 25 on the top is something I designed several years ago.

20 That's just different and a little more substantial than the standard crowns that are sold. Most of the -- the appliances are pretty typical high-end appliances that you're going to see in a house this range. The tile and the back splash is a heavy relief tile that I picked out. But overall it's just -- it's good quality. It's got exceptionally good quality cabinets and just finish elements, like the trim.

Q All right. What's that, please? A I'm not sure which area that is. It looks like

a butler's pantry or bar. Q All right. There, again, this is another kitchen -- another view from the kitchen; is that right? A Yes. You can't see it real well in the *963 picture, but the crown molding where the ceiling and the 16 wall intersect, if -- you can see it above the cabinets. 17 But that was a multi-piece crown that -- that we 18 designed for my own home a few years before. And I 19 think it was three or four pieces of trim melded 20 together to just give a very distinctive look. 21 Q How thick is it? I mean, how -- 22 A Well, it encroaches on -- part of it's on the 23 ceiling; part of it's on the wall. I'm not really sure. 24 Q All right. 25 A Maybe 10 or 12 inches.

21 Q Okay. What's that, please? It says master bath on the photo. A Right. Master bathroom, similar style of cabinets. The trim is the -- similar but it's smaller because the room really couldn't handle the same trim. I think we removed a couple of pieces probably but used essentially the same -- the same look in there. In this picture, you can see something I didn't notice on the other picture. If you look at those doors that are to the left of the shower, the trim that goes around it is sitting on plinth block. That's a piece of trim that we use. The casing, which is the trim around the door, is sort of like the legs on each side. But instead of just coming down to the floor, they sit on these blocks, and *964 it helps the baseboard tie into it. It's just a detail

16 that you really have to see in person to appreciate. 17 Q What's that? 18 A That's a library. Again, you'd see extensive 19 trim work, which is, I think, one of the many features 20 of the homes I built that -- it has the wood paneling 21 that's all stained. Then the ceiling is -- it has a 22 coffered ceiling, and if -- 23 Q What did you say? 24 A Coffered ceiling where there's -- it looks like 25 beams up above in the ceiling.

22 Q Right. A And in between the beams, it has a dental mold,

which is a molding. They call it dental because it's sort of like teeth. It's notched, but -- and they sell dental mold in different sizes, but none of them really have much time style to them. We designed a piece of trim that's a -- that's used as a -- sometimes as a chair rail, and we cut it with a chop saw into individual little blocks. So each of these little bumps you see in the ceiling, rather than it be one big piece of trim, each individual piece is nailed on. It has to be spaced out separately. It just looks completely different than just buying a stock piece of trim.

Q For a lot of what you've done here, did you *965 find something you like and copy it, or how did this 16 come about? 17 A A combination. Some of these elements I 18 learned from either Larry Boerder or Richard Davis, 19 these architects. Many of them I found old homes and 20 copied it. I didn't really technically design any of 21 them. I'm a really, really good copycat, though. 22 Q So, overall, would you say this is -- pictures 23 the high quality that you wanted and built into that 24 home? 25 A Yes.

23 Q Okay. Now, the -- are you aware that the home has been altered? A Yes. MR. SHAW: Your Honor, may I approach? And I don't know the exhibit number of the plans that Mr. Aldous put into evidence.

THE COURT: You may. I believe that that is Exhibit Number -- MR. ALDOUS: 125, Your Honor. THE COURT: Okay.

MR. SHAW.

Q (By Mr. Shaw) Okay. Mr. Kramer, you've not seen these before, have you? A No, I have not. *966 MR. ALDOUS: Your Honor, I object at this 16 point. Counsel has not designated this witness in any 17 expert capacity to hand him a set of plans and to ask 18 his opinion. 19 THE COURT: Okay. Counsel, approach. 20 (Sidebar conference held) 21 THE COURT: You may proceed. 22 MR. SHAW: Thank you. 23 Q (By Mr. Shaw) Mr. Kramer, are you familiar with 24 that? Who designed those plans? 25 A It appears they were generated by Paragon

24 Planning d/b/a Paragon Design Group. Q Are you familiar with that group? A Yes. Q Is that a group you would have used?

MR. ALDOUS: Objection, Your Honor. That calls for opinion testimony, and he hasn't been designated.

THE COURT: Overruled. A I would not have used him. Q (By Mr. Shaw) Is that an architect group? A No. Q What is it? A In the state of Texas, you don't have to be a

licensed architect to design a home. Anybody can design *967 a home. This firm, I believe the gentleman that owns 16 it's name is Robert or Richard Leeper. He does not have 17 an architectural degree or he's not an architect. He 18 learned how to draw on some software and -- 19 MR. ALDOUS: Objection, Your Honor. I'd 20 like to take -- 21 THE COURT: Sustained. 22 Q (By Mr. Shaw) Does he have the quality of 23 experience and -- that you would use? 24 MR. ALDOUS: Objection, Your Honor. That 25 calls for a hearsay response. I will take the witness

25 on voir dire to demonstrate that. THE COURT: All right. Ladies and gentlemen of the jury, we're going to take a brief recess. We've got some matters to discuss outside of your presence. During this recess, you're under the same instructions that you have been previously given. You're not to discuss this case among yourselves or with anyone else until such time as the case has either been submitted to you for your deliberations or you have been discharged as jurors.

All rise. The jury is excused. (Jury exits the courtroom) THE COURT: You may be seated. You may proceed, Mr. Aldous. *968 VOIR DIRE EXAMINATION

15 16 BY MR. ALDOUS: 17 Q Mr. Kramer, the fellow that you said owns 18 Paragon, how do you know what his training or experience 19 is? 20 A I was involved in two projects that he was 21 involved in. 22 Q Would it be true, sir, that it's only because 23 of what he told you or what you read about his 24 qualifications outside of court? 25 A I'm sorry. I didn't follow you.

26 Q So, how do you know what his qualifications are? Did somebody tell you? A He told me that he was not an architect. Q All right. And he told you that way back

during the time that you worked with him, right? A Yes. Q Is the only basis of your knowledge of what his

training and experience is related to your conversations with that particular individual?

A No. Q Did you also read about him on the website? A No. Q How else do you know about it? A Because every single architect that generates *969 plans would show their AIA designation that they were an

16 architect and they would stamp the plan with an 17 architectural seal. 18 Q Let me rephrase my question. I'm not asking 19 you about whether or not specifically he is known to you 20 to be an architect, but whether or not you have 21 knowledge of his training and experience without regard 22 to whether he's a licensed architect. Is the source of 23 that information from the individual you spoke with? 24 A I don't recall. 25 Q Is it from something else you read?

27 A No. Q Would it be fair to say that whatever knowledge

you have of this individual's training and experience came from sources other than your personal observation?

A Well, they come from my personal observation in the two projects that I was involved in that he did work on.

Q Right. But what I'm saying is during that -- during that time, you learned about it from someone. You didn't watch him go to school?

A Of course not. Q And you didn't grade his papers in school? A No. Q All you know about what his training is is what *970 he represented to you or what you believe to be true

16 based upon other information you got outside of this 17 courtroom? 18 A Yes. 19 MR. ALDOUS: Okay. That's it, Your Honor. 20 I renew my objection as to hearsay. He's testifying 21 about the qualifications of somebody who's not here. 22 THE COURT: Any response, Mr. Shaw? 23 MR. SHAW: He's testifying -- would -- and 24 would you have used him; if not, why? He's testifying 25 because he -- Kramer believes this guy is not X Y, or Z.

28 THE COURT: So he's testifying based upon hearsay knowledge. MR. SHAW: What he believes only, not for the truth of the matter, only what Kramer believes. THE COURT: His beliefs are based on the information he acquired -- MR. SHAW: Right. THE COURT: -- through hearsay -- MR. SHAW: That's right. THE COURT: -- which is not subject to

cross-examination. MR. SHAW: Hearsay's not -- THE COURT: So you'll move on to another

topic area. *971 MR. SHAW: All right. 16 THE COURT: All rise. You may bring the 17 jury back in. 18 MR. ALDOUS: Your Honor, is my -- is the 19 objection sustained? 20 THE COURT: Yes, the objection is 21 sustained. 22 MR. ALDOUS: Thank you. 23 (Jury enters the courtroom) 24 THE COURT: You may be seated. 25 You may proceed.

29 MR. SHAW: Thank you. CONTINUED DIRECT EXAMINATION

BY MR. SHAW: Q Mr. Kramer, would those plans have been acceptable to you? A No. Q The -- what are specifications? A Specifications are generally just as the name

would indicate. They're details, by example, of the specifications on a complete set of plans for a new home would show what type of material to be used, what type of framing material to use. It would show what piece of trim to use in every area. It would show what the flooring was. It would show whether the door was a *972 hollow-core door, a solid door, or how many panels the

16 door had. 17 It would show what type of electrical 18 wiring to use. It would show what type of electrical 19 panel to use. It would show what type of plumbing lines 20 to run, whether copper or plastic, and it would show the 21 size of the water meter, the size of the main water 22 line. It would show what the paint colors would -- 23 Q Very, very detailed? 24 A It would show -- the specs and plans are like a 25 road map. You give the map to somebody, and they can

30 get to the location. They can -- it tells them everything they need to do to build a house.

Q All right. VSDH Exhibit 6, is this spreadsheet -- would you consider this -- and let me show it to you a little better.

MR. ALDOUS: Your Honor, I'm going to go ahead and object at this time. THE COURT: Sustained. MR. ALDOUS: Thank you.

Q (By Mr. Shaw) If you were given this document, Mr. Kramer, would this be the road map, Exhibit 6, that you could use to build that home?

MR. ALDOUS: Your Honor, same objection. THE COURT: Sustained. *973 Q (By Mr. Shaw) Would you have used Exhibit 6 --

16 MR. ALDOUS: Objection. 17 MR. SHAW: -- to build that home? 18 MR. ALDOUS: Objection, Your Honor. 19 THE COURT: Sustained. 20 Q (By Mr. Shaw) Why are specifications important? 21 A Well, without them, the general contractor 22 wouldn't know what they're supposed to build without 23 obtaining the specifications from the general contractor 24 for their portion of the work, a subcontractor wouldn't 25 know the scope of the work. They wouldn't know what to

31 do. The trim supplier wouldn't know what type of trim to send out. The sheetrock contractor wouldn't know how to finish the sheetrock, whether it was smooth or textured. The sheetrook supplier wouldn't know whether to send out half-inch board or five-eights board. I mean, it's -- it's the directions. It's everything.

Q Would you have built the plan that is before you? It's an additional casita and video room above it. I think they call it a -- what do they call a video -- what do they call a movie room?

MR. CHAIKEN: Media room. Q (By Mr. Shaw) Media room. Would you have built that plan, a media room on top and a guest room below it? *974 MR. ALDOUS: Objection, Your Honor, calls

16 for -- 17 THE COURT: Sustained. 18 MR. SHAW. 19 Q (By Mr. Shaw) If you were given that plan, 20 would you recommend the implementation -- would you have 21 followed it? 22 MR. ALDOUS: Objection, Your Honor. 23 THE COURT: Sustained. 24 Q (By Mr. Shaw) Let me ask you this, Mr. Kramer. 25 These are from Exhibit 116 of Gross. This is the casita

32 room that Mr. Gross built that we're talking about here. Do you see that?

A Yes. Q Okay. Do you see a like, kind room to what you

built? MR. ALDOUS: Objection, Your Honor. THE COURT: Sustained.

Q (By Mr. Shaw) Does this photograph have the molding that you built? MR. ALDOUS: Objection, Your Honor. THE COURT: Overruled.

A I can't tell from the picture. It looks similar to some parts of the house, obviously not the parts of the house we just looked at. *975 Q (By Mr. Shaw) How about the baseboards?

16 A I can't really tell from the picture. 17 Q Let's look at the media room. Does that look 18 similar? 19 A Well, it's just plain walls. I mean, it looks 20 identical to the finish-out of the garage probably. 21 Q This room? 22 A Except for the wood floors. 23 Q Okay. How about this room? 24 A Same thing. I mean, it's -- it's plain walls 25 with -- I can't tell if the baseboards are the same. It

33 could be. It's just -- it's just more simplistic. Q Would that be something that you would say matched your quality? MR. ALDOUS: Objection, Your Honor. THE COURT: Sustained.

Q (By Mr. Shaw) The back of the home, when you completed your work, Mr. Kramer, where did the construction stop?

A I'm sorry. Could you repeat that? I'm not sure if I understand the question. Q When you completed your work on the home before this addition, where did your work stop on this back, if you can tell at all?

A Are you asking me where the original house *976 stopped? 16 Q Yes. Yes, sir. 17 A Okay. If you -- if you point up to the left 18 side of the pool, right there. Now go up from there, up 19 higher to the left. I can't remember exactly. It's 20 been a while. I think that probably was the laundry 21 room. So that would have been -- I think the laundry 22 room was the very back of the house, somewhere right 23 around there. The part to the left of there where the 24 additional porch is, that's all added for sure, and the 25 dormers above it I believe are added.

34 Q What is important in a backyard? A My experience in homes, 2 million and above

certainly is the size of the property. People almost universally want at least an acre lot, if not two. But one acre is the real common desire and having -- having a sizable amount of property. This house was fairly tight on the lot to start with because it wasn't -- I believe it may be three-quarters of an acre. It was a pretty good sized house. The addition, in my view --

MR. ALDOUS: Objection, Your Honor. THE COURT: Sustained.

Q (By Mr. Shaw) Does the addition take up land? A Yes. Q And is that something that you think is a *977 benefit?

16 MR. ALDOUS: Objection, Your Honor. 17 THE COURT: Sustained. 18 Q (By Mr. Shaw) In 2009, this home -- the Grosses 19 sold this home, okay, August 2009. Did you sell any 20 similar property in 2009? 21 A In 2009, I sold a spec house that I had built. 22 It was not in Vaquero. It was in a much lesser 23 neighborhood in Colleyville. It wasn't a neighborhood 24 that had a golf course and any amenities that I believe 25 is very close in size to the subject house after the

35 add-on, within a couple hundred square feet. I sold that in December.

MR. ALDOUS: Let me just object. I believe he's gone beyond the question. THE COURT: Sustained. MR. SHAW: All right.

Q (By Mr. Shaw) Did you sell a similar home? A Yes. Q And how much? A $2,850,000. Q In the same year? A December 2009. Q A lesser community? A Much lesser. *978 Q The -- do you think that the work by Mr. Gross

16 added value or decreased value to the home we're here 17 about? 18 MR. ALDOUS: Objection, Your Honor. 19 THE COURT: Sustained. 20 MR. SHAW: I'll pass the witness. Thank 21 you, sir. 22 THE WITNESS: Yes. 23 THE COURT: Mr. Aldous? 24 MR. ALDOUS: Thank you. CROSS-EXAMINATION 25

BY MR. ALDOUS:

Q Mr. Kramer, my name is Steve Aldous and we just -- we haven't met before today, but I'm here representing the Grosses. All right?

A I understand. Q Let me just ask you. Have you built spec homes

before that you were very proud of? A Sure. Q And in terms of some of those spec homes, some

sell quicker than others. Would you agree with that? A Yes. Q Would you agree that, although you were proud

of the way you built this home, that it did not sell as quickly as you would have hoped? *979 A It was too long ago for me to really say what

16 my expectation would be, but I can tell you that in 17 building spec homes, I have never had an expectation 18 they were going to sell real fast because I price them 19 at a price level that wasn't necessarily designed for it 20 to sell real fast. But certainly I would agree that it 21 didn't sell quickly. 22 Q And that could be for any number of reasons; 23 just maybe you didn't find the right buyer during that 24 period of time, right? 25 A Absolutely.

37 Q Sometimes economic factors play into it. Would you agree with that? A I don't think in this case it applies, but it could. Q Well, for instance, do you still do business under Kramer Construction, LLC.? A The entity is -- exists, but I do not do business. I work for Shawco. Q So did you used to build houses under Kramer Construction, LLC? A Yes. Q And now you work for Mr. Shaw? A Yes, Q So why was the change from Kramer Construction, *980 LLC, to working for Mr. Shaw?

16 A I lost about $9 million in investment money. 17 Q Was some of that loss related to homes that -- 18 or neighborhoods that you were planning? 19 A What did you say I was -- I'm sorry. 20 Q Let me rephrase that. 21 A It's okay. 22 Q That was a terrible question. Were some of 23 your losses related to investments in real estate? 24 A Yes. 25 Q And just for whatever reason, that made it to

38 where you could no longer do business as Kramer Construction?

A No. I could have. I chose not to. Q As a result of your losses, were you -- did you

need someone to help in terms of investing in your livelihood?

A I wouldn't say that because my -- the entity was still operating, and it could have continued to operate. And it operated right up until the time I went to work for Mr. Shaw. I didn't want to run a business anymore. I had lost a lot of money. I feel I'm a lot better at building homes than running the financial aspects of business.

Q How long have you known Mr. Shaw? *981 A Twenty-five years. 16 Q Are you grateful for him for giving you the job 17 with Shawco? 18 A Sure. 19 MR. ALDOUS: All right. Thank you, sir. 20 I'll pass the witness. 21 THE COURT: Mr. Shaw? 22 MR. CHAIKEN: Your Honor, I have no 23 questions. 24 MR. SHAW: I have nothing further. 25 THE COURT: The witness is excused.

39 THE WITNESS: Thank you. THE COURT: You may step down. Any further witnesses from VSDH? MR. SHAW: VSDH rests, Your Honor. THE COURT: All right. Mr. Chaiken? MR. CHAIKEN: Your Honor, Mr. Hickok

rests. THE COURT: All right. Mr. Aldous, does plaintiff close? MR. ALDOUS: Close. THE COURT: Mr. Shaw? MR. SHAW: Close. MR. CHAIKEN: We close as well, Your

Honor. *982 THE COURT: All right. Ladies and 16 gentlemen of the jury, what we're going to do at this 17 time is take a luncheon recess because it's lunchtime. 18 It's going to be a little bit longer recess because we 19 will be preparing the charge of the Court in this 20 matter. After the charge is prepared, the charge will 21 be read to you and closing arguments will begin. So the 22 jury should return at 2:30. 23 All rise. During this luncheon recess, 24 the jury is under the same instructions that you've been 25 previously given. You're not to discuss this case among

40 yourselves or with anyone else until such time as the case has been submitted to you for your deliberations or you have been discharged as jurors. You're free to go.

(Jury exits the courtroom) MR. ALDOUS: Your Honor, I will have a

motion to present. THE COURT: Just wait until the jury is gone. MR. ALDOUS: I wanted to make sure you knew. THE COURT: Do we want to let the alternate go after the arguments? MR. SHAW: Fine with me. THE COURT: Mr. Chaiken? *983 MR. CHAIKEN: I have no objection.

16 THE COURT: Mr. Aldous? 17 MR. ALDOUS: That would be fine, Your 18 Honor. 19 THE COURT: Okay. You said that you 20 wanted to make a motion. 21 MR. ALDOUS: I did, Your Honor. I mean, I 22 do. 23 MR. CHAIKEN: Your Honor, as do I after 24 he's -- 25 MR. SHAW: As do I.

41 MR. ALDOUS: Your Honor, I'd like to make a motion for a directed verdict on three issues. First is the motion for directed verdict on the guaranty of one of the elements of the guaranty. To prove the guaranty, you have to have showed the existence of the guaranty, the terms of the underlying contract, conditions giving rise to liability, and the failure of the guarantor to perform.

I'm moving with respect to the existence of a guaranty. The evidence is conclusive that the guaranty language in the contract, which is Paragraph -- is Paragraph 4 of the Addendum A, which is an Exhibit 3 of the Grosses, is clear and unambiguous in that it calls for a personal guaranty by Doug Hickok under the *984 -- of the seller's obligations under the buyback.

16 The -- my understanding is the 17 disagreement, to the extent that it exists, is whether 18 or not the signature of Mr. Hickok, either in the manner 19 in which he signed it for VSDH or in his initial, 20 somehow absolves him from the plain language of the 21 contract. And the case law is pretty clear, Your Honor, 22 and -- with respect to that. First of all, in Dann 23 versus Team Bank from the Fifth Court of Appeals in the 24 top right-hand corner of the copy I gave you is Page 3 25 of 5. This case involves a guaranty.

42 The Court said on the right-hand side just above Headnote 2, "The thrust of Dann's appeal is that she is not liable in her individual capacity under the guaranty. We disagree. Under normal circumstances, a written collateral undertaking given to secure a corporate debt will be rendered meaningless if the primary debtor is found to be the sole party liable thereunder."

THE COURT: Where are you reading that? MR. ALDOUS: Oh, I'm sorry. Headnote 3,

right after where it says Headnote 3. Then continuing, "To circumvent this result, the corporate designations appearing after signatures on documents of this type are considered to be only descriptio personae." That'd be *985 Latin. "Descriptio personae is the use of a word or

16 phrase merely to identify or point out the person 17 intended and not as an intimation that the language in 18 connection with which it occurs is to apply to him only 19 in the technical character which might appear to be 20 indicated by the word." 21 And then the Court goes on to further 22 explain that to treat, you know, the guarantor as -- I 23 mean, the actual signer as the guarantor -- the borrower 24 as the guarantor defeats the purpose of the guaranty. 25 And if you turn to Page 4 of 5, the last sentence of the

43 first full -- or the first paragraph, it says, "We conclude, therefore, that Dann signed the guaranty in her individual capacity and that the designation of her corporate capacity was merely descriptio personae. In other words, the addition of the words, 'president, Cetcon Corporation,' to Dann's signature was merely to identify Dann and was not intended to apply in a technical character."

This case is also supported by another Dallas Court of Appeals opinion, Long versus Motheral. And turning to Page 6 of 7, the first full paragraph starts, "Long contends there was no meeting of the minds because he never signed the application in his individual capacity. He stated in his affidavit, 'I *986 never intended to personally, individually, guarantee

16 any debts of any corporation, including Envy 17 Publications.'" 18 And then it goes on to say, "However, the 19 law presumes a party signing a contract understands and 20 agrees to the contents of the contract." Now it goes on 21 to the next paragraph that says, "Long signed the 22 two-page document twice, one indicating that his title 23 was President & CEO, and the other without an indication 24 of a title. The second, untitled signature was after 25 the personal guarantee paragraph, which includes

44 statements that I personally guarantee all indebtedness hereunder, and I will within five days from the date," et cetera, et cetera.

As the Court will recall, the guaranty in this particular case has Mr. Hickok's admitted initials immediately below the guaranty paragraph. The next paragraph over on the other side says, "Here, the language of the personal guaranty paragraph creates a personal obligation in addition to the application for credit on behalf of the corporation. Long signed the credit application and guaranty twice, once indicating his title and once without. Even if title had signed" -- by the way, I think this is like a misprint -- "had signed the guaranty indicating his corporate office, *987 that would not change his individual liability on the

16 guaranty. The guaranty would be meaningless" -- and I 17 think that should say "without" -- the corporation was 18 purporting to guaranty its own open account." 19 And it goes on. It cites to the Dann case 20 that I just provided to Your Honor. And then it says, 21 "A corporate designation in this case would be only 22 descriptive of his position; it would not change the 23 capacity in which he signed." And this is a 2012 case, 24 and there is -- no petition was filed. 25 In fact, Your Honor, all cases that I was

45 able to find recite the same thing. If the contract specifically designates that it's a personal guaranty and is clear and unambiguous, a signature in any capacity of the individual changed in the guaranty will be sufficient to bind him because the description is considered -- that Latin phrase that I threw out there that I can't remember what it says.

So, that's the first issue that I am seeking a resolution. And the reason being is because, as the Court is aware, they've sought -- put on evidence, you know, that he didn't intend to be bound and so forth. And my contention, based upon these cases, is that matter is a matter of law for Your Honor.

THE COURT: Response, Mr. Shaw? Oh, let's *988 start with -- let me ask. Is this a directed verdict as 16 to VSDH or as to Hickok or as to both? 17 MR. ALDOUS: This is only with respect to 18 the guaranty signed by Mr. Hickok. 19 THE COURT: All right. So Mr. Chaiken, 20 you may respond. 21 MR. CHAIKEN: May I have one moment just 22 to look at this case? I was looking at the first case, 23 and I want to just look at the second case real quickly. 24 MR. ALDOUS: The Dann versus Team Bank 25 case is reported at 788 S.W.2d 182 Tex. App Dallas 1990.

46 And I believe it's writ review -- no writ. And then the other case that I brought is Long versus Motheral, M-o-t-h-e-r-a-l Printing Co. And it is cited at 2012 Tex. App. Lexis 5736. And it's Dallas Court of Appeals 2012, no petition authored by Justice Moseley.

MR. CHAIKEN: Your Honor, we oppose the motion for directed verdict, and there are a number of grounds for it. Number 1, I would note that the Long versus Motheral Printing case is factually distinguishable and legally distinguishable on several points. One, if the Court looks at Page 6 of 7, the description of the facts in that case are, first, that this was not a guaranty of a real estate related contract. *989 And, second, the individual Long signed

16 the document in question once indicating that his title 17 was president and CEO and the other without indicating a 18 title. He actually signed his name, the second untitled 19 signature. The second untitled signature, meaning not 20 indicating a representative capacity, was after the 21 personal guaranty paragraph, which includes statements 22 that I personally guaranty all debts, et cetera. Long 23 did not indicate this signature, excuse me, was in any 24 representative capacity. 25 In this case, we don't have a factually

47 similar situation. There is no signature by Mr. Hickok that doesn't have his designated representative capacity. And so for two reasons this case is not controlling of the facts and circumstances of this one. Number one is because of that factual distinction, and the other is there's no discussion of the implications of the statute of frauds, which is Texas Business & Commerce Code Section 26.01.

Similarly, the other opinion offered by Mr. Aldous, the Dann versus Team Bank case, is likewise distinguishable. The -- in that case, you didn't have any discussion of Business & Commerce Code Section 26.01 that I could find. And, furthermore, in that case, it appears that Dann, the purported guarantor, was also the *990 individual obligor. So there's a question as to whether

16 that individual intended to be liable for the debt in 17 question. 18 The law in Texas has always been quite 19 clear, and I have yet to find a single case -- I'm 20 representing to the Court that I've looked carefully -- 21 where you had the operative facts being a guaranty of 22 performance of a contract of a real estate where all you 23 had was the signature of a purported guarantor in a 24 specifically representative capacity. In this case, 25 Mr. Hickok, the evidence is undisputed he signed a

48 document. His signature is in a representative capacity. All of the evidence, all of the evidence likewise is that his initials were in a representative capacity on behalf of the seller.

Under Section 26.01 of the Business & Commerce Code, a promise or an agreement not covered by the statute is not enforceable unless the promise or agreement is in writing and signed by the person, not somebody in a representative capacity, but the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him. There's no evidence that a partnership can sign an undertaking for an individual partner. The reverse could be true, but not that. *991 And under Subsection (b) of 26.01, the

16 requirement that there be a writing and that it be 17 signed by the person to be charged with the promise or 18 the agreement, it includes a promise by one person to 19 answer for the default of another person. As a matter 20 of statutory law, statutory law, in order for there to 21 be a guaranty agreement or any obligation on the part of 22 Mr. Hickok personally under the new home contract, which 23 is where the purported guaranty language exists, because 24 he's being charged with the authority to a guaranty in 25 particular, he would have to personally sign in a

49 non-representative capacity the writing in question indicating his intent personally to be bound.

In the absence of that personal signature, there is no personal signature on the document. He cannot be held liable as a matter of law. And he would actually cross-move on directed verdict on that issue, as a matter of law, that he is not a party to the new home contract and he is not -- cannot be held to be a guarantor. Nor can the Court find as a matter of law that there is a guaranty agreement or in particular an enforceable guaranty agreement.

THE COURT: Briefly, Mr. Aldous? MR. ALDOUS: Yes, Your Honor. I'm going

to hand the Court a case from the Houston Court of *992 Appeals, called 84 Lumber Company versus Powers, which 16 directly does away with Mr. Chaiken's statute of frauds 17 case or claim. This, again, was a guaranty issue. If 18 you'll turn to Page 4 of 7 under the paragraph marked 19 Number 3, "Powers argues that the credit application was 20 signed in a dual capacity and is, thus, ambiguous." The 21 Court, after reviewing the law and saying that the 22 construction of an unambiguous contract is a question of 23 law for the Court, it goes down to state that -- on the 24 next paragraph -- I mean, the next column over, last 25 sentence, "The instrument standing alone will usually be

50 deemed to fully express the intention of the parties because it is the objective, not subjective, intent that controls."

"The El Paso Court of Appeals was presented similar contract language in the case of Austin Hardwoods. There, as here, immediately above the signature line of the credit application was recited." And it has the guaranty language. "The corporate officer signed the application in his capacity as vice-president. Thereafter, the corporation went into bankruptcy and the creditor company made demand on the officer."

If you go down to the following paragraph, "In light of the signature under the personal guaranty *993 language, the El Paso Court of Appeals failed to see how 16 the above-cited guaranty clause rendered the agreement 17 susceptible to more than one meaning. The language of 18 the agreement was not unclear or indefinite. It clearly 19 evidences application for credit by a corporation 20 guaranteed by the individual signing the application." 21 Now, if you go down to the next paragraph 22 with the sentence that starts, "However, as the guaranty 23 paragraph stipulates, in addition to the creation of a 24 corporate liability, the signing individual further 25 covenants to be individually liable for the debt, again

51 the very essence of the guaranty agreement." If you turn to the next page, which is Page 5 of 7, there is a heading referred to as statute of frauds. "David Powers argues further that the guaranty is deficient because it does not meet all the requirements of the statute of frauds." Similar to what Mr. Chaiken just told the Court. The law under the paragraph, it says, "A guaranty agreement is subject to the statute of frauds."

And then if you go down to where it says headnote 5, "That a signature is followed by a corporate designation does not necessarily serve to relieve the signatory of individual liability. A signature followed by corporate office will result in personal liability *994 where the individual is clearly designated within the

16 instrument as personal surety for the principal." 17 Your Honor, this directly deals with his 18 statutory case claim. And the case law is clear from 19 both the Dallas Court of Appeals and Houston Court of 20 Appeals that if the contract language says, "I, Doug 21 Hickok, guaranty this," and he signed it in any 22 capacity, that defense of, "I didn't mean to. I didn't 23 intend to," is gone. 24 So the next portion of my motion is 25 related to --

52 MR. CHAIKEN: Do I get to respond to that? THE COURT: He's not finished yet. MR. ALDOUS: That's all I have on that

element. THE COURT: Okay. Then you may respond. MR. CHAIKEN: Judge, we -- first of all, I

would note that the Houston Court of Appeals is not controlling. The Dallas Court of Appeals has spoken on a related issue. I mean, under the Dallas Court of Appeals, it doesn't apply because the facts and circumstances in the case per the Dallas Court of Appeals.

THE COURT: Which case are you talking about? *995 MR. CHAIKEN: The two that he cited 16 previously, authority, distinguishable and -- 17 Mr. Aldous turns to the 84 Lumber case out of the 18 Houston Court of Appeals, which is not controlling. 19 But, more importantly, this case does not involve, okay 20 -- at least that I can see -- the secondary 21 consideration that I mentioned earlier, which is that -- 22 that there was a contract touching real estate. This 23 case involves a general credit application. It looks 24 like it's a negotiable-instrument-type situation instead 25 of an obligation to guaranty performance for a real

53 estate related obligation, a purchase obligation. The statute of frauds goes on in addition to identify that a person must personally sign an agreement, okay, if he is going to -- when it involves a promise to answer for debt or default or miscarriage of another person. But also a contract of the sale of real estate must likewise be in writing personally signed by the person in charge of any obligations in that contract. And that is Subsection (b)(4) of the Statute of Frauds, which is Section 26.01 of the Business & Commerce Code. And, furthermore, an agreement which is not to be performed within one year from the date of making the agreement -- and we know that this purported guaranty obligation -- or I should say the buyback *996 obligation that it supposedly guarantees was not

16 performable within a year. 17 Also, it has to be signed personally by 18 the person in a non-representative capacity, the person 19 himself. There is no case which deals with Subsection 20 2, I'm sorry, (b)(2), (b)(4), (b)(6), not a single one. 21 And because it is indisputable and undisputed that the 22 new home contract was an agreement -- I'm sorry -- a 23 contract for the sale of real estate and because it is 24 undisputed and indisputable that it was an agreement 25 which was not to be performed within one year from the

54 date of making the agreement. Okay. And, thirdly, because it purports to be a promise by one person to answer to the default of another person, it must be signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him. And these cases that we've talked about are obviously very factually dependant. They deal with the nature of the debt or the alleged debt in question. And none of them deal with a real estate contract, an agreement to be performed -- not to be performed in one year.

MR. ALDOUS: Just for Cathye's purpose, Your Honor, the 84 Lumber case is 393 S.W.3d 299 Tex. App. Houston, First District, 2012, no petition. *997 THE COURT: I'm going to grant the

16 directed verdict on the existence of a guaranty. 17 MR. ALDOUS: Thank you, Your Honor. The 18 next issue is the failure to mitigate defense that I 19 believe is raised both by VSDH and Mr. Hickok. I don't 20 believe that there's any evidence from which the Court 21 could submit that to the jury. It is just an 22 instruction. But it's the defendant's burden, that is, 23 who's acting as the VSDH and Hickok's burden to prove 24 failure to mitigate as its affirmative defense. In 25 order to do that, the defendant must offer evidence

55 showing not just that the plaintiff's lack of care -- in other words, that the plaintiff lacked care and failing to avoid harm, but also the amount by which the damages were increased by such failure to mitigate.

And that comes from a Tyler case, and it's in the PJC under 115.8. As it stands right now, there's just no evidence that the -- it's on Page 298. It's under, "defendant's burden of proof." The -- my argument really relates to two things; one, they have offered no evidence that it was unreasonable in this situation to offer the --

THE COURT: I'm sorry. What was the number again? MR. ALDOUS: The number of -- *998 THE COURT: PJC. 16 MR. ALDOUS: 115.8. Are you in the 2012 17 book? 18 THE COURT: No. I'm in the 2014 book. 19 MR. ALDOUS: Well, there you go. I didn't 20 know there was a '14 out. 21 THE COURT: You may continue. 22 MR. ALDOUS: There is just -- there simply 23 is no evidence that the Grosses acted unreasonably with 24 respect to the sale or how much that -- even if there 25 was evidence, how much that ended up being part of the

56 500 and something thousand dollars that we've pled. And I just don't think there's any evidence of it. And what I -- by putting the instruction in, although it appears to be harmless, it allows the defense to argue something for which they have no evidence. They'd say, you know, something to the effect of, well, they bought it two years before for this amount and they sold it for this amount, and there's no way it should have been less and that sort of thing.

So, Your Honor, I move for a directed verdict on that particular defense. THE COURT: Mr. Shaw? MR. SHAW: Evidence that the Grosses

failed to mitigate is from the Grosses' own testimony *999 that the Grosses voluntarily decided to sell the home. 16 The Grosses testified nobody had a gun to their head, 17 that it was all a voluntary decision. Kramer testified 18 that a similar house in a lesser neighborhood sold for 19 2.85 million in the immediate timeframe. So I think 20 that those two things require the submission of failure 21 to mitigate. The -- further, the lack of the Grosses to 22 obtain the approval of the plans and specifications is 23 an element of failure to mitigate. 24 THE COURT: Let me make sure I understand 25 you. The house sold for how much originally before --

57 before the additions? MR. SHAW: 2.6 something. THE COURT: Okay. And after the

additions, it sold for?

MR. SHAW: 2.415.

THE COURT: You may continue. MR. SHAW: That was what I had on the

mitigation, Judge. THE COURT: Mr. Chaiken? MR. CHAIKEN: Yes. Thank you. I think

there's a -- there's clearly more than a scintilla of evidence proving that the actions of the Grosses, in whole or in part, in selling the property were unreasonable, which relates to some or all of their *1000 claimed injuries or damages. For example, the evidence

16 was that they voluntarily sold the property prior to the 17 buyback date. That evidence came in several forms. 18 One, it was testified to by Mr. and Mrs. Gross. They 19 tried to argue they were forced, but they also admitted 20 that they unilaterally made the decision to do so. 21 Secondly, they admitted that they 22 voluntarily chose to sell the property through a 23 realtor. They weren't required to do so. There was 24 nothing that required them or compelled them to do so. 25 And that, of course, gave rise to approximately $159,000

58 worth of damages claim that could have been avoided without the use of a realtor. Ms. Taylor, the realtor, testified --

THE COURT: So you're saying they could have sold it themselves and saved the real state commission; is that --

MR. CHAIKEN: Certainly, it could have saved the real estate commission. Sure. And Ms. Taylor testified that she actually tried to get Mr. and Mrs. Gross more money, but they made the unilateral decision to sell the property for less. In fact, she said that she had -- she had recently sold another property in -- that she considered comparable, I guess, that was a different size but sold in proximity to this *1001 sale at a higher price per foot, but that the Grosses

16 were desperate to sell the property. They wanted a cash 17 deal, and they made the unilateral decision to sell it 18 for less than what it might have otherwise brought. 19 And there's also evidence that at the time 20 that they chose voluntarily to sell the property, they 21 -- you know, prior to the buyback date, they -- they had 22 at one time proposed the possibility of selling it to 23 VSDH at a discount. But when they actually got an offer 24 and were marketing the property, they did not offer the 25 opportunity to VSDH or to Mr. Hickok or to Mr. Shaw to

59 purchase the property for the price that had been proposed by the ultimate buyer, Ms. Browning.

And, of course, had they done so, there might not have been a real estate commission attached to that as well or the closing costs that were incurred. And finally you'll recall that the Grosses' position was that they sold the property because they felt some compulsion to do so. The -- and that it related to this transaction. But the realtor testified, Ms. Taylor, that she had no idea, okay, that their need -- there was a need for them to sell. They were anxious to sell the property in a hurry. They -- they set the price on their own. They made no mention whatsoever with regard to the -- to anything having to do with this situation, *1002 meaning the reason for the sale.

16 And when asked what the reason was, 17 Mr. Aldous rose, objected, said it wasn't relevant what 18 the reason was. The Court sustained the objection and 19 so all the jury was left to hear is that there was a 20 need, and it didn't relate to this issue. And the 21 formation of their argument with regard to why they sold 22 is it that it did relate to this issue. So their 23 actions at the time were -- at least there's evidence 24 that they did not constitute efforts to be reasonable in 25 the mitigation of their damages.

60 THE COURT: So you're alleging that the property was not sold for fair market value. MR. CHAIKEN: Well, that's another issue, which is there was no evidence as to what the fair market value --

THE COURT: That's a yes-or-no question. MR. CHAIKEN: I am alleging that as well. THE COURT: Okay. To get to fair market

value, you have to look at what a reasonable buyer -- I mean a reasonable seller would pay a reasonable buyer in a situation where neither is under any compunction to sell, correct? And as far as the real estate agent was concerned, there was no compunction to sell.

MR. CHAIKEN: No. The real estate agent *1003 actually testified that there was an undisclosed need to 16 sell the property. And, furthermore, so did the 17 Grosses. The Grosses have testified that they were 18 under a compulsion to sell the property by virtue of the 19 facts and circumstances of this case. Moreover, fair 20 market value and evidence of fair market value was not 21 what the realtor testified to. She gave no testimony 22 with respect to fair market value. In fact, she could 23 not give testimony on fair market value and only an 24 expert can. Nobody -- there's no evidence of fair 25 market value in the record.

61 THE COURT: Okay. If we have no evidence of fair market value, then how do we have evidence of failure to mitigate?

MR. CHAIKEN: That is -- that is the evidence of failure to mitigate, failing to sell the property for its fair market value, okay, is evidence of a failure to act reasonably to mitigate damages.

THE COURT: But we'd have to know what the fair market value was, correct? MR. CHAIKEN: We would have to know what it was -- THE COURT: And we don't. MR. CHAIKEN: We don't know what it is. THE COURT: Okay. I'm going to grant *1004 directed verdict on the failure to mitigate.

16 MR. ALDOUS: The last item that I have on 17 my list, Your Honor, is the lack of consideration 18 allegation on behalf of Mr. Hickok. The allegation, as 19 I understand it, is that there was no consideration that 20 flowed to Mr. Hickok from signing the guaranty agreement 21 because the home was sold by the company as opposed to 22 him. The Long versus Motheral case that I previously 23 gave the Court and counsel deals with this also on Page 24 7 of 7. 25 MR. CHAIKEN: I can make this easy for

62 you. I'm not asking for submission on failure of consideration or lack of consideration.

MR. ALDOUS: With that understanding, if he's withdrawing that as a defense being asserted in this case, then I will end my motion by saying thanks.

THE COURT: Are you withdrawing it, Mr. Chaiken? MR. CHAIKEN: Yes. There is no -- no basis on the consideration issue. THE COURT: Okay. MR. SHAW: Judge, I want to move for

directed verdict as well. THE COURT: Well, let me ask you. I have not forgotten. *1005 MR. SHAW: All right. I'm sorry. 16 THE COURT: That's everything you have, 17 Mr. Aldous? 18 MR. ALDOUS: That is, Your Honor. 19 THE COURT: All right. Now, Mr. Shaw. 20 MR. SHAW: Thank you, Your Honor. 21 THE COURT: You want to move for directed 22 verdict. Hang on. 23 MR. SHAW: I do. 24 THE COURT: All right. 25 MR. SHAW: I re-urge my motion for

63 directed verdict on two causes; one, the declaratory judgment cause, but, more importantly, the fraud cause. There is no evidence of fraud against VSDH that would support any jury submission in this case. The evidence is that there was an agreement and that VSDH never even dealt with -- frankly never dealt with the Grosses; only dealt through the mutual agent. And

THE COURT: Which one are you arguing about? MR. SHAW: I'm sorry. The fraud claim. THE COURT: Okay. And you're finished

with the declaratory judgment? MR. SHAW: Yes. On the declaratory, I'm just going to re-urge what I urged previously, which was *1006 you cannot -- the Grosses could not add a declaratory 16 judgment case or cause of action to their counterclaim 17 and make it viable because the case that the declaratory 18 judgment dealt with was already before the Court, and 19 the law does not allow that addition. So that's -- 20 THE COURT: So what case law are you 21 citing to for that? 22 MR. SHAW: I don't have the case law, but 23 I'll get it. 24 THE COURT: That would be helpful. 25 MR. SHAW: It would. It's pretty bedrock,

64 but I'll get that, Judge. THE COURT: That's the one that's a legal issue anyway, correct? So it's not going to show up on the jury charge.

MR. SHAW: Right. MR. ALDOUS: I think that's correct, Your

Honor. THE COURT: So I'll give you an opportunity to brief it post trial. MR. ALDOUS: And I have no objection to that. I mean, in other words, I won't assert some sort of waiver or some other junk if it's not ruled on until post trial because that's -- I think that's appropriate.

THE COURT: All right. So let's talk *1007 about the fraud now. 16 MR. SHAW: Okay. There is no proof of any 17 element that would support a fraud submission against 18 VSDH or Douglas Hickok. The -- 19 THE COURT: Are you arguing for 20 Mr. Hickok? 21 MR. SHAW: No. I was just throwing that 22 in because I -- 23 THE COURT: A little gratuitous argument? 24 MR. SHAW: A little gratuitous. But I 25 don't -- I don't think that the record supports any

65 fraud. Certainly Betsy Gross's testimony didn't support any fraud because Mrs. Gross testified that Mrs. Gross wasn't involved in this transaction at the contracting stage. Mr. Gross complained ultimately that VSDH did not buy back the home, but that's not evidence of fraud.

Certainly with the breaches that Mr. Gross undertook along the way started initially with failing to escrow the money and ending with failing to wait until September 9 to sell the home -- September 1 to sell the home and/or to contract to sell the home. So given that, I don't believe there's any evidence to support a fraud submission.

THE COURT: Mr. Aldous? MR. ALDOUS: I'd like to have a candid *1008 conversation with the Court and opposing counsel right

16 now because -- so the fraud claim is based upon the 17 guaranty language and the fact that Mr. Hickok testified 18 that he never intended to honor that because he had -- 19 he thought something else was required. Based upon the 20 rulings of the Court if he did -- if, in fact, the 21 guaranty is signed and is effective and irrespective of 22 what he may have said, I don't -- I mean -- 23 MR. CHAIKEN: There is no fraud claim. 24 MR. ALDOUS: Well, so clearly there is a 25 claim for a false statement of material fact that was

66 known to be false at the time it was made in connection with a real estate transaction. And there's no question that the fact that Mr. Hickok was acting in a capacity as a corporate representative would also bind the corporation or the company. The real question that I have and what I don't know the answer to is if you have now ruled that the guaranty agreement that Mr. Hickok sought to avoid is no longer -- he cannot avoid it by saying I didn't intend to do it. That was the intent I relied upon to file the fraud claim. If the Court's ruling is such that the -- the false nature of the statement is now taken away, does that eliminate the cause of action?

MR. CHAIKEN: It absolutely does. *1009 MR. ALDOUS: I appreciate -- 16 THE COURT: Are you the Court? 17 MR. ALDOUS: -- Mr. Chaiken's help, but -- 18 MR. CHAIKEN: I didn't hear you say it's 19 the Court's opinion. I thought you said you didn't know 20 whether it does. 21 THE COURT: If the Court's ruling is such 22 that the false nature of the statement is now taken 23 away, does that eliminate the cause of action? 24 MR. CHAIKEN: I thought -- I'm sorry. I 25 thought I heard him say he didn't know the answer to the

67 question, whether the Court's ruling on the existence of the guaranty takes away the fraud cause of action.

THE COURT: That was a question to the Court. MR. ALDOUS: I don't know how you handle this. THE COURT: Well, frankly, it's never arisen before. I believe what you asked for directed verdict on was the existence of a guaranty, whether or not there was --

MR. ALDOUS: Which is correct. THE COURT: And I granted you directed

verdict on that. MR. ALDOUS: That's right. *1010 THE COURT: There was, indeed, a guaranty. 16 So the question in fraud is whether or not there was an 17 intent to mislead. 18 MR. ALDOUS: Well -- 19 THE COURT: Plaintiff must establish that 20 there was a false statement -- a false misrepresentation 21 of material fact. 22 MR. ALDOUS: That's where I get it. 23 THE COURT: Made a promise to do an act or 24 benefited by not disclosing that a third-party's 25 representation or promise was false.

68 MR. ALDOUS: Right. But so, to me, it's not the intent. The intent's there because he testified to it. The real issue is: Is it any longer a misstatement of fact? In other words, our problem was that he --

THE COURT: I think that the answer comes from: What was the intent at the time that the agreement was entered into? You don't make that decision after the fact. You make it at the time --

MR. ALDOUS: That's true. THE COURT: -- that the transaction took

place. And that's what would guide that issue. MR. ALDOUS: So -- and I like to kind of simplify this a little bit in my own mind because of its *1011 feeble nature. But if somebody -- if I sued because 16 they represented that the marble was blue and they said, 17 no, it was red and I thought it was red the whole time, 18 but the Court eventually rules that it's blue, is it any 19 longer a misrepresentation, no matter whether you had 20 the intent or not? 21 THE COURT: Well, I think fraud is based 22 on intent. 23 MR. ALDOUS: I agree with that. 24 THE COURT: And so you have to determine 25 the intent at the time that the transaction was entered.

69 You don't do it subsequent to it. MR. ALDOUS: Okay. And then in that case it would still get submitted. THE COURT: Mr. Chaiken? MR. CHAIKEN: First, I would say that it

would have to still constitute -- regardless of what the intent was -- and we can come back to that issue in a minute -- it would still have to constitute a misrepresentation, and it wasn't a misrepresentation if, in fact, he entered into the guaranty. In other words, the argument that he's making is that there was a denial of the existence of the guaranty.

Now, let me tell you. There's a more fundamental problem on the issue. And in this regard, *1012 we -- Mr. Hickok moves for a directed verdict. And let 16 me explain why. Mr. Aldous made a fundamental 17 misstatement of what the claim is for fraud in the 18 Grosses' live pleading. The Grosses' live pleading 19 states -- and this is the -- 20 THE COURT: You want to give me the date 21 of the pleading you're referencing? 22 MR. CHAIKEN: Yes. Well, I think I can. 23 It is -- what I can tell you is that I don't have a 24 file-marked copy, but I have one that has a -- 25 THE COURT: Mr. Aldous, what's the date of

70 your live pleading. MR. CHAIKEN: It was around the 15th day of April 2013. It wasn't signed by Mr. Aldous, which -- THE COURT: Well, that doesn't matter. I just want to know when the live pleading was. MR. ALDOUS: I don't know which one he's referring to. MR. CHAIKEN: It's counter-plaintiff's third amended counterclaim against second amended third-party petition, which is the live -- last pleading that I've ever seen in this case filed against Mr. Hickok by the Grosses. And what's important about that is --

THE COURT: Hang on. I need to find it. *1013 MR. CHAIKEN: Okay. 16 THE COURT: The date again? 17 MR. SHAW: April 2013. 18 MR. CHAIKEN: April 2013, it looks like 19 around the 15th, tax day. That's the service I'm 20 getting anyway. 21 THE COURT: Which paragraph? 22 MR. CHAIKEN: It's Paragraph Roman numeral 23 VII beginning on Page 10. And what it states is -- 24 THE COURT: Let Mr. Aldous get back. 25 (Brief interruption)

71 THE COURT: You may continue. MR. CHAIKEN: Thank you, Judge. Mr. Aldous said that the basis of the

fraud claim was the lack of intent to honor a guaranty. And if the Court looks at Page 10 of the counter-plaintiff's third amended counterclaims and second amended third-party petition, which is the live pleading of the Grosses, the Court will see that they state the following beginning in Paragraph 29. "The Grosses will show that counter-defendants' and third-party defendants' conduct constitutes fraud in a real estate transaction as defined by Section 27.01 of the Texas Business & Commerce Code."

And for the record, counter-defendants and *1014 third-party defendants are collectively identified in 16 this pleading as VSDH Vaquero Venture, Ltd., Evan L. 17 Shaw, and Douglas M. Hickok, who are the 18 counter-defendants and VSDH Vaquero Homes, Inc. and VSDH 19 Homes, Inc. is named as a third-party defendant. 20 And it says, "Counter-defendants and 21 third-party defendants made a false representation that 22 they would buy the property back pursuant to the buyback 23 option in order to induce the Grosses to enter into the 24 contract. The Grosses entered into the contract and 25 purchased the property at the full listed price of

72 $2,851,000" -- I'm sorry -- $2,851,871, even though the property had been listed for two years due to the fact the counter-defendants and the third-party defendants made the false representation that they would buy the property back pursuant to the buyback option. The Grosses' reliance directly and proximately caused them substantial injury as set out above for which they seek appropriate relief."

This allegation relates to a -- the Court sets forth that there was a false representation concerning whether there would be a buyback of the property, not whether there would be entry into a guaranty. So the claim, okay, that has been brought against Mr. Hickok that would underlie the so-called *1015 fraud claim is only related to whether or not he made a

16 representation that he would buy the property back 17 pursuant to the buyback option. His only obligation 18 would be under the guaranty. There's no mention of the 19 guaranty in this fraud claim. Consequently, there is no 20 fraud claim of the nature that Mr. Aldous just 21 represented. 22 THE COURT: On his directed verdict 23 motion? 24 MR. CHAIKEN: In his directed -- in his 25 motion for directed verdict, which is one of the reasons

73 why I'm actually -- THE COURT: No. Actually, this is Mr. Shaw's motion. MR. ALDOUS: That's right. MR. CHAIKEN: And this was one of the

reasons why Mr. Hickok specifically joins in the motion for directed verdict.

THE COURT: Well, you get your chance in a minute. MR. CHAIKEN: Okay. THE COURT: Right now, this is Mr. Shaw's

motion. MR. CHAIKEN: And then the second issue that I need to address in terms of Mr. Aldous' response, *1016 okay, which is what I was just doing, is that, you know, 16 there has to be a -- 17 THE COURT: This is not as to your client 18 at this point in time. 19 MR. CHAIKEN: Okay. Fair enough. 20 THE COURT: You'll get a chance. 21 MR. CHAIKEN: Well, okay. 22 THE COURT: This is between Mr. Shaw and 23 Mr. Aldous because it's as to VSDH, and it's Mr. Shaw's 24 motion. 25 MR. CHAIKEN: Okay. Fair.

74 THE COURT: You represent Mr. Hickok. You'll get your chance to argue -- MR. CHAIKEN: Sure. Go ahead. THE COURT: -- and make your motion with

regard -- MR. CHAIKEN: Go ahead. THE COURT: We can't talk at the same

time, Mr. Chaiken. MR. SHAW: Well -- THE COURT: Okay. Let's go back and look

at what your motion was, Mr. Shaw, because there's been a lot of discussion.

Do you have that Cathye? Okay. I found it. What Mr. Shaw said *1017 was, "There is no proof of any element that would

16 support a fraud submission against VSDH or Mr. Hickok." 17 And then we talked about Mr. Shaw not representing 18 Mr. Hickok. And he says, "I don't think that the record 19 supports any fraud. Certainly Betsy Gross's testimony 20 didn't support any fraud because Mrs. Gross testified 21 that Mrs. Gross wasn't involved in this transaction at 22 the contracting stage. Mr. Gross complained ultimately 23 that VSDH did not buy back the home, but that is not 24 evidence of fraud. Certainly with the breaches that 25 Mr. Gross undertook along the way started initially with

75 failing to escrow the money and ending with failing to wait until September 9 to sell the home -- September 1 to sell the home and/or to contract to sell the home. So given that, there's any evidence to support a fraud submission." So that's what Mr. Shaw said.

And then Mr. Aldous said he wanted to have his candid discussion, and we talked about when fraud would be determined. And I don't think you ever responded to Mr. Shaw's motion, Mr. Aldous.

MR. ALDOUS: Your Honor, with respect to Mr. Shaw's motion, the only evidence of their intent not to perform the buyback is the subsequent non-performance that -- and I'm not sure that it would get to the point of being fraud with respect to just the buyback, not the *1018 guaranty. If I'm limited to the statement in this

16 third- amended petition that the fraud is only related 17 to the -- that they made the false representation they 18 would buy the property back pursuant to the buyback 19 option, then I would agree that with respect to that 20 allegation that there is insufficient evidence of the 21 intent of the parties, that is VSDH and Doug Hickok, to 22 perform on that. So, but if the -- well, I'll just 23 stop there. 24 THE COURT: Okay. 25 MR. ALDOUS: This is only with regard to

76 Mr. Shaw's motion because I would like to oppose Mr. Chaiken's motion just because it's Mr. Chaiken's.

THE COURT: Okay. So I will grant your motion for directed verdict, Mr. Shaw, on the issue of fraud with relation to the buyback provision.

MR. SHAW: And that's the only claim of fraud in this case. So I'm -- I want to make sure that I'm moving for a directed verdict on any and all fraud allegations.

THE COURT: Well, I think that would depend on what was tried by consent. MR. SHAW: I don't think so. They have to -- how could you try that by consent when -- THE COURT: If you addressed the issues *1019 during the course of examination, direct and cross, that 16 would constitute -- 17 MR. SHAW: The only thing I was addressing 18 was whether or not the -- I admitted the company agreed 19 to the buyback, and the company -- 20 THE COURT: No. We're talking beyond the 21 buyback. 22 MR. SHAW: Okay. But the company agreed 23 to the personal guaranty. That's the only evidence of 24 that. The company always agreed to -- 25 THE COURT: Any evidence of what?

77 MR. SHAW: There wouldn't be any evidence to support fraud because the only -- even if you say it was tried by consent, because the only evidence was the company always agreed that there was going to be a personal guaranty.

THE COURT: I don't know. I'm saying that that is a possibility -- MR. SHAW: Okay. All right. THE COURT: -- that's out there. I'm not

making any rulings. MR. SHAW: Okay. I just want to make sure I'm moving for directed verdict on all the fraud allegations. I understand from the pleading there's only one, and it relates to the buyback. *1020 THE COURT: So with respect to what is set

16 out in the pleadings -- 17 MR. SHAW: Okay. 18 THE COURT: -- I'm granting your motion -- 19 MR. SHAW: All right. 20 THE COURT: -- for directed verdict. 21 MR. SHAW: All right. Thank you. 22 THE COURT: That doesn't mean that 23 somebody can't bring up that other issue. 24 MR. SHAW: Okay. 25 THE COURT: And I suspect it will come up,

78 but maybe I'm wrong. THE COURT: Okay. Now -- MR. CHAIKEN: May I ask a question on that

one point, though? On that ruling that you just made, I understood that Mr. Shaw was moving for a directed verdict on that allegation and claim as it was against both VSDH and Mr. Hickok.

THE COURT: No, he wasn't. That's why you're here, Mr. Chaiken. MR. CHAIKEN: Okay. THE COURT: But Mr. Aldous has conceded

that that issue applies to your client as well. MR. CHAIKEN: So would the ruling then granting directed verdict on that aspect of the fraud *1021 claim apply to Mr. Hickok is my question. 16 THE COURT: Yes. 17 MR. CHAIKEN: Thank you. That was the 18 only -- 19 THE COURT: Mr. Aldous has already 20 conceded that. 21 MR. CHAIKEN: Well, but I didn't get a 22 ruling from the Court on that specifically, and I just 23 wanted to -- 24 THE COURT: You didn't let me finish. 25 MR. CHAIKEN: Okay. Thank you. I

79 appreciate that. THE COURT: All right. Do you have another motion, Mr. Shaw, or is that it because you just had two?

MR. SHAW: That's right. THE COURT: Okay. All right. Now it's

your turn, Mr. Hickok. MR. CHAIKEN: Okay. I'm Mr. Chaiken for Mr. Hickok, but I'm happy to be called Mr. Hickok. THE COURT: You're just happy to be called. MR. CHAIKEN: I'm just happy to be called. Obviously, the first argument Mr. Hickok

moves for directed verdict on is that he was not sued *1022 for any claims of fraud relating to the -- to the entry 16 into the -- of the guaranty agreement. The only fraud 17 claim brought against him specifically was the one that 18 we just discussed, which was related to performance of 19 the buyback. But for the same reasons that that claim 20 for fraud would fail, so does the -- so does the -- any 21 alleged claim -- well, let me just start with that. 22 There is no claim for fraud; therefore, 23 there's nothing to submit with respect to entry into the 24 guaranty on a fraud claim. There's been no pleading of 25 that nature, and there's been no allegation of fraud

80 related to the guaranty. So we would move for directed verdict on that one alone.

THE COURT: Do you have any other thing you're going to move for directed verdict? I'd like the list.

MR. CHAIKEN: Yes. So number one is no claim of fraud via guaranty. Second would be that there is also -- if -- were the Court to find that there was such a claim of fraud, there would be a need on the part of the Grosses to introduce and establish evidence of a false representation of a past or existing material fact when the representation is made.

The only allegation, you know, with regard to any aspect of a guaranty-related fraud would be that *1023 there was a representation made regarding a future act 16 of performance at the time that the contract was entered 17 into, and it was made for the purpose of inducing the 18 party to enter into the contract which they entered into 19 because of the presence of the so-called guaranty 20 language in it. There would also have to be evidence of 21 reliance on that -- on that issue -- I'm sorry -- that 22 representation supposedly. 23 THE COURT: So is that your third claim? 24 MR. CHAIKEN: The reliance is -- well, 25 this is also related to fraud, but it's -- but it's

81 reliance. THE COURT: Is it your third issue for directed verdict? MR. CHAIKEN: Yes, reliance. There's no evidence of reliance on any promises regarding the guaranty, specifically because the testimony was clear that what Mrs. Gross expected was a -- was a guaranty by Mr. Hickok and Mr. Shaw. And never did they expect that there would be only a personal guaranty by Mr. Hickok. And so -- so the -- and the language that was in the contract spoke to a joint and several guaranty, which the Court found, as a matter of law, did not apply to Mr. Shaw; but, nevertheless, they got what they asked for. And so there would be no reliance. *1024 They got language of a guaranty.

16 Enforceability is a different question. But they didn't 17 rely on anything to their detriment, and there's no 18 evidence that they did, in entering into the contract. 19 And so -- and there was actually no evidence that there 20 was any offer to enter into a guaranty that was made 21 with no intention of fulfilling that promise. 22 Indeed, to the contrary, all the evidence 23 was that Mr. Hickok, when talking about the possibility 24 of a guaranty, said he would do it if Mr. Shaw did it, 25 which is exactly what was requested by the -- by the

82 Grosses and that the documents were prepared. The document had a guaranty in it. While he didn't believe it was legally enforceable; nevertheless, it was there.

And so they entered into a contract that, according to the Court's ruling, gave them exactly what they wanted, at least in part, which was -- was a -- well, no, in whole actually. It was a -- it was a guaranty language in the -- in the contract itself by both Mr. Shaw and by Mr. Hickok, which is what they requested; although, it wasn't enforceable as to Mr. Shaw. So if anybody defrauded them, it would be Mr. Shaw by not signing the guaranty, but not Mr. Hickok. And so --

THE COURT: Do you agree, Mr. Shaw? *1025 MR. SHAW: Well, I think -- I think there 16 is something to what he's saying. I mean -- 17 THE COURT: That you defrauded them? 18 MR. SHAW: No. I never talked to them, so 19 what would be -- 20 THE COURT: Well, he said -- but you're 21 saying that that's correct; if anybody defrauded, it 22 would have been you. 23 MR. SHAW: Well, I'm saying it's kind of 24 odd that they say they were defrauded by me not being 25 personally liable on it. They never talked to me. And

83 I think I've told them it depended on what I said. MR. CHAIKEN: So on this issue, aside from the fact that there's no claim -- THE COURT: Is there anything else, other than reliance? MR. CHAIKEN: Well, no -- yes. What I'm saying is -- THE COURT: No. I'm getting your list. MR. CHAIKEN: I'm giving it to you. I

just want to summarize what it is under the statute so you will understand what I'm saying.

THE COURT: No, because you'll get to go back and do that. That's why I want a list. MR. CHAIKEN: Yeah, the list -- *1026 THE COURT: I want to define the universe. 16 MR. CHAIKEN: The list is all the elements 17 of Section 27.01(1) -- I'm sorry, (A)(1) and (A)(2) and 18 that -- and (A) -- no, sorry -- and (C) -- excuse me -- 19 and (D). All right. So we got the whole statute, all 20 the elements of the claim. 21 THE COURT: And that's the entirety of 22 your list of a directed verdict? 23 MR. CHAIKEN: That's the list, and I can 24 explain each one of those in detail. 25 THE COURT: You already have.

84 MR. CHAIKEN: Okay. THE COURT: All right. Mr. Aldous, you

may respond. Let's start first with fraud with respect to the guaranty.

MR. ALDOUS: Your Honor, I would move at this time for a trial amendment to add to that paragraph that they've referenced the existence and denial of existence of a guaranty. I'd be happy to dictate it into the record. Or if the Court would give me approximately 45 minutes, I could bring it back to you.

THE COURT: And tell me the basis for moving for a trial amendment. MR. ALDOUS: Okay. Judge, if you have the 2015 version, I'm at Page 773. *1027 THE COURT: 2015? 16 MR. ALDOUS: Yes, ma'am. 17 THE COURT: Response? 18 MR. CHAIKEN: Well, I haven't -- I haven't 19 heard the grounds for the -- for the trial amendment, so 20 we oppose it. 21 THE COURT: Mr. Aldous? 22 MR. ALDOUS: Your Honor, we would offer on 23 -- in Paragraph 29 where it states the Grosses will show 24 the counter-defendant's and third-party defendant's 25 conduct constitutes fraud in a real estate transaction

85 as defined by Section 27.01 of the Texas Business & Commerce Code, the next sentence should read -- my proposed amendment would read, "The counter-defendant's and third-party defendant's made a false representation that they would guaranty the performance of VSDH in the buyback provision of the contract," comma. And that -- then it continues on from there.

The live pleading, as it exists on Page 4, Paragraph 15, sets forth the factual basis that they agreed to a guaranty and that they denied the existence of a guaranty. The trial amendment is sought to conform to the evidence. And because it was omitted unintentionally and that the grounds are that the -- the defendant and cross -- I'm sorry. VSDH and Mr. Hickok *1028 are neither surprised, nor prejudiced by this amendment.

16 THE COURT: Okay. Now, Mr. Chaiken? 17 MR. CHAIKEN: Sure. Well, I would note 18 that throughout the course of the trial when there was 19 discussion regarding intent to perform the guaranty, we 20 objected to the questions; and the Court ruled on those 21 objections. So we certainly have preserved our 22 objection to the issue being presented. And, certainly, 23 we have likewise made our objection here today on the 24 basis that the question or the issue is not supported by 25 the pleadings.

86 And, consequently, there -- there's no ground for the -- the granting of a trial amendment. While issues may be developed and they may relate to other issues that are pled, you know, just by virtue of the nature of the transaction and the mere introduction of some evidence on an unpleaded issue that is not fully developed, it is not fully developed in terms of all of the elements -- for example, those which I mentioned previously in the statute itself -- then there is no trial on that issue. And, consequently, there will be no grounds for a trial amendment on that point.

THE COURT: Mr. Shaw? MR. ALDOUS: Your Honor, before we do

that, do you have any objection to me taking my coat *1029 off? 16 THE COURT: No. 17 MR. SHAW: I'm confused. Is the trial 18 amendment a request to amend the petition to claim that 19 VSDH defrauded the Grosses by Shaw not being personally 20 liable? 21 MR. ALDOUS: No, Your Honor. 22 THE COURT: No. It's based on the facts 23 that are set out in the pleading that -- 24 MR. SHAW: Okay. 25 MR. ALDOUS: If you recall, there was a

87 summary judgment granted for Mr. Shaw on the issue of this a long time ago. So it's only relating to VSDH and Hickok.

MR. SHAW: Okay. But it's -- it's saying that VSDH and Hickok defrauded the Grosses because -- I'm not sure of the "because." That's what I'm trying to understand.

THE COURT: Mr. Aldous? MR. ALDOUS: Because the agreement recited

a personal guaranty of Mr. Hickok, and that personal guaranty was -- the intent was to never comply with that personal guaranty by Mr. Hickok. That misrepresentation was made by Mr. Hickok both individually and as a representative of VSDH. *1030 MR. SHAW: Well, respectfully, Hickok

16 testified Hickok intended to be personally guarantying 17 and intended for Shaw to be personally guarantying, but 18 needed a separate document, was anticipating a separate 19 document, and was going to sign a separate document. So 20 to claim that Hickok committed some type of fraud can't 21 -- isn't supported by the record. 22 One, Hickok never spoke to Gross about 23 that matter; and, two, the only evidence is that Hickok 24 intended to comply with the personal guaranty. VSDH 25 intended to comply with the personal guaranty, but no

88 additional document came forward. THE COURT: So you're saying they intended to comply with the guarantees that were not a part of the agreement that the parties entered into?

MR. SHAW: Hickok said, "I anticipated there would be another document and I would sign it. But this document doesn't personally guaranty me because I didn't sign it." But Hickok also testified, "I told Buttemiller we agree to the personal guarantees. We need to see the other document and no other document ever came." And even Gross testified, "Hey, the title company messed up by not giving another document."

THE COURT: Okay. MR. CHAIKEN: Can I go one step further *1031 and simplify it?

16 THE COURT: No. 17 MR. CHAIKEN: I can't? Okay. 18 THE COURT: No. I think it's pretty 19 simple. The question is: Is there any testimony in the 20 record with regard to the issue of whether or not the 21 guaranty was entered into and whether or not there was 22 reliance on it? So I'm going to allow the trial 23 amendment. Now -- 24 MR. SHAW: I'm going to move -- 25 THE COURT: -- there may be other concerns

89 with regard to that, but the trial amendment will be granted because none of the grounds for denying it have been set out for the Court.

MR. SHAW: Well, I would say we were surprised. I'm surprised by this allegation because I don't think there's any testimony to support it. I don't think that came into the record. So I don't know how we could have tried it by consent because it wasn't -- there wasn't anything in the record on this. It was only Hickok's agreement to personally --

THE COURT: The petition, the last live document, though, specifically stated, "Further, according to Paragraph 4 of addendum A, Hickok and Shaw both agreed to be personally responsible, jointly and *1032 severally, in the event VSDH Vaquero, Ltd., does not

16 fully perform under the terms of the buyback provision. 17 Neither Hickok nor Shaw conditioned his personal 18 guaranty on the other being liable as well." 19 And so it's in that pleading, which is why 20 I'm saying it's tried by consent. 21 MR. SHAW: Okay. 22 THE COURT: You did address those issues. 23 MR. SHAW: All right. And I would like to 24 move for directed verdict on that. 25 THE COURT: Well, you're not there yet.

90 MR. SHAW: Okay. MR. CHAIKEN: Your Honor, one other thing

is that -- THE COURT: Wait a minute. MR. CHAIKEN: Okay. THE COURT: I think it was Mr. Aldous'

opportunity to respond to the fraud and the guaranty. Is that where we were? Because you had already made your argument about it.

MR. CHAIKEN: About? THE COURT: Asking for a directed verdict

on fraud with regard to the guaranty. MR. ALDOUS: My -- do you want me to proceed, Your Honor? My recollection of the evidence is *1033 different than Mr. Chaiken's. My recollection of the 16 evidence is the Court knows the agreement has the 17 guaranty in it. Mr. Hickok testified that he did not 18 believe that he was liable on that, and he did not 19 intend to comply with it unless he got a separate 20 document and that he was not going to honor that. 21 And then post breach, then they followed 22 that up with an email saying that nobody personally 23 guaranteed it. So I believe that the evidence is 24 sufficient of the fraudulent part of that. 25 MR. CHAIKEN: May I respond?

91 THE COURT: You may respond. MR. CHAIKEN: First of all, there's

absolutely no evidence in the record that Mr. Hickok ever testified that he never intended to perform the guaranty and certainly that he never intended to perform any guaranty at the time that -- that he entered into the contract.

To the contrary, the only evidence is -- and the only evidence that he testified to was that he didn't sign it. He didn't believe he signed it in a personal capacity but that he was willing to sign a guaranty. He was willing to do a guaranty, that he would sign an extra document at closing, provided that Mr. Shaw also guaranteed and signed such a document. *1034 So he never denied any intent to perform a

16 guaranty. What he denied is, is that the elements and 17 the actions necessary to create the guaranty had ever 18 occurred. 19 THE COURT: Okay. I'm going to make my 20 ruling on that. I think there's enough evidence to 21 submit that to the jury to make a determination. So 22 with regard to Mr. Hickok's motion for directed verdict 23 on fraud of a guaranty, denied. 24 All right. Let's move on to false 25 representation of defendant.

92 MR. CHAIKEN: Your Honor, the only other thing is we haven't talked about the absence of evidence on the specific elements of the claim itself. Okay. And I haven't been given the opportunity to argue those specific points.

THE COURT: Of the guaranty? MR. CHAIKEN: That's correct. THE COURT: You spent an excessive amount

of time, Mr. Chaiken, going through when I asked you to just give me your list.

MR. CHAIKEN: I gave you a list. THE COURT: You said that -- you didn't

give me a list. You gave me a synopsis of your argument. *1035 MR. CHAIKEN: No.

16 THE COURT: So we're moving along to the 17 false representations of defendant. That's item two in 18 Section 27.01 of your directed verdict motion. 19 MR. CHAIKEN: So I just want to be clear. 20 THE COURT: That is clear. 21 MR. CHAIKEN: Item two in my directed 22 verdict motion? 23 THE COURT: Yes. You said false 24 representation of defendant. But you said that your -- 25 that your directed verdict motion was based on Business

93 & Commerce Code, Section 27.01, Fraud in a Real Estate Transaction. You said Section A(1); you said Section 2, I believe; and then Section C and D.

MR. CHAIKEN: (A)(1), (A)(2) and C and D, so -- THE COURT: So we are now on to A(2). MR. CHAIKEN: A(2), okay. There is no

evidence that there was any false promise to do an act when the false promise was material, made with the intention of not fulfilling it, made to a person for the purpose of inducing that person to enter into a contract, and relied upon that person in entering into that contract. To the contrary, the evidence and the only evidence is that Mr. Hickok said that he was *1036 willing to enter into exactly what Mr. Gross said he

16 wanted, which was a joint and several -- I'm sorry -- a 17 guaranty by both him and Mr. Shaw, provided that 18 Mr. Shaw was also a guarantor. 19 The language was in the contract. The -- 20 although, it -- and it purports to be a guaranty by both 21 of them; although, there's been a determination that one 22 aspect of that guaranty was not enforceable against 23 Mr. Shaw. There -- so exactly what Mr. Gross relied 24 upon in entering into -- Mr. and Mrs. Gross relied upon 25 in entering into the contract, which was if they get a

94 personal guaranty, okay -- they got it in part. They got at least a guaranty, based on the Court's rulings, from Mr. Hickok.

The fact that he denied that it was -- that it was his personal signature and that it was legally unenforceable does not reflect upon whether or not he intended to perform the guaranty at the time that he entered into the contract that had the guaranty language in it, which is a necessary element of the Court's finding that he was, in fact, a guarantor; that by signing the document, it evidenced his intent to be a guarantor. So -- so for that reason, under (A)(2), there is -- there's no evidence and there's insufficient evidence to meet each of those four elements in (A)(2), *1037 (a), (b), (c), and (d). And if that is true, then the

16 claim under subsection (A) of 27.01 fails as a matter of 17 law and for back of evidence. 18 THE COURT: Response? 19 MR. ALDOUS: Your Honor, the -- both Mr. 20 and Mrs. Gross testified they would not have entered 21 into the contract without the requested guarantees. The 22 defendant knew that it was a negotiated term because it 23 was submitted by the Grosses to the contract through 24 Mr. Buttemiller to Mr. -- to VSDH and to Mr. Hickok. 25 And Mr. Hickok was aware that this was a term that they

95 wanted, and Mr. Hickok specifically said in the -- I wrote in my notes that he said, "It's not my job to tell them if their documents are deficient." And that's really the way it -- he went about it. And, to me, those meet the elements of fraud.

MR. SHAW: Your Honor, may I comment on this? THE COURT: No. We haven't gotten to you yet. MR. SHAW: All right. THE COURT: Or did we already get to you?

No, we haven't gotten to you yet. This is Mr. Chaiken's turn because you've already had your directed verdict.

MR. SHAW: All right. *1038 MR. CHAIKEN: Your Honor, that argument 16 actually proves that a directed verdict is warranted. 17 They said they would not have entered into the 18 transaction without the guaranty. They got the guaranty 19 when they entered into the transaction. It's the same 20 guaranty the Court has found exists. And all Mr. Hickok 21 is accused of having said is that the documentation of 22 the guaranty is insufficient. 23 Okay. He didn't say that he didn't intend 24 to perform the guaranty. And there's no evidence, a, 25 that he didn't intend to perform the guaranty at any

96 point in time, including when he entered into the transaction. So, consequently, this is no different than an argument that, well, because he didn't perform the guaranty, he committed fraud. And that's the same argument that they made and that the Court granted directed verdict on with regard to the buyback issue. So this is all forward looking as opposed to past and existing material fact. And so --

THE COURT: The ruling on Number 2 is the same on Number 1, overruled. Let's move on to Number 3, Item (C), 27.01.

MR. CHAIKEN: "A person who makes a false representation or false promise with actual awareness of the falsity thereof commits the fraud described in *1039 Subsection A of this section and is liable to the person

16 defrauded for exemplary damages. Actual awareness may 17 be inferred where objective manifestations indicate that 18 a person acted with actual awareness." 19 THE COURT: That means that you are going 20 too fast. 21 MR. CHAIKEN: Sure. Under Subsection 22 D. 23 THE COURT: We're at Subsection C. 24 MR. CHAIKEN: I understand, but they 25 relate. They are a joint provision, okay. Section D

97 requires evidence that Mr. Hickok had an actual awareness of the falsity of a representation or a promise made by himself or another that he failed to disclose the falsity of the representation or promise to the person allegedly defrauded and that he somehow benefited from the false representation or promise that -- that he committed.

And -- and so, consequently, in this instance, there was no benefit from the false representation, if he made one, in the past because the guaranty was there. And -- and they got exactly what they relied upon and what they requested. And there's no evidence that he had an actual awareness of the falsity of the representation because he never *1040 represented that he wouldn't perform a guaranty. He

16 said to the contrary that he would as long -- 17 THE COURT: Just not the one that was in 18 the agreement that the parties signed? 19 MR. CHAIKEN: No, he never said he 20 wouldn't perform that guaranty. In fact, he said he -- 21 specifically he would perform that guaranty if it was a 22 guaranty by Mr. Shaw and by Mr. -- by Mr. Hickok both. 23 And that's what the -- exactly that language says. Now 24 the fact that it was unenforceable against Mr. Shaw does 25 not render it fraudulent as to Mr. Hickok.

98 He -- you have found that he entered into that agreement that that guaranty always existed and that it was legally enforceable against him. So he -- and he never said he wouldn't perform it. There was no evidence that he said he wouldn't perform it.

THE COURT: Mr. Aldous? MR. ALDOUS: I really disagree with that.

Mr. Hickok put Mr. Shaw in charge of the matter. Mr. Shaw represented by email, which is currently in front of the Court, that there is no personal guaranty when clearly there was. That relates back to Mr. Hickok's own testimony where he said that he did not believe that he was responsible because of the fact that he just said; that is because it wasn't mutually agreed *1041 to even though the Court's already ruled it's a joint

16 and several obligation. 17 So I believe all the evidence comes out 18 there where Mr. Hickok knew what the representation was 19 and the parties' agreement. He knew that he did not 20 intend to comply with it, for whatever reason, that he 21 was actually aware of it, and that he knew that we 22 relied on it. 23 MR. CHAIKEN: The problem with the 24 argument here and the evidence is that what Mr. Aldous 25 is saying is that there was evidence that Mr. Shaw,

99 after -- excuse me -- after -- after the contract was signed, not as part of the inducement, but after the matter was signed said there was no guaranty. He never said there was no intent to perform it. He just said there was no guaranty, okay, and so that's number one.

Number two, if you look at Subsection (D) and you look at all of Section 27.01, it has to be a false representation of a past or existing fact at the time the representation was made, not after the fact of the representation. So, consequently, there can be no actual awareness of the falsity of a representation or promise made in the past, okay, which is the -- the inducement aspect of it, by looking at evidence of what somebody else said after the fact. And so, *1042 consequently, there can be no fraud on that basis as

16 well. 17 THE COURT: I'm going to let the jury 18 decide on that. 19 All right. Mr. Shaw? 20 MR. SHAW: Your Honor, I move for directed 21 verdict on the granted leave to amend plaintiff's 22 petition regarding what I now understand to be a claim 23 of fraud regarding the personal guarantees of -- I 24 assume it's just Hickok. 25 THE COURT: If it's just Hickok, then you

100 don't get to make a directed verdict. If it's VSDH -- MR. SHAW: It's VSDH, but the claim, as I understand it, is VSDH is liable because -- I'm sorry. VSDH is liable on the claims that it misrepresented that Hickok would be personally liable on the guaranty. And so that's what I understand the fraud claim.

The fraud claim, as I understand it, is, hey, VSDH, you knew Hickok wasn't personally liable on the guaranty; and, therefore, and -- but you entered into -- you told the Grosses otherwise is what I understand the state of the pleading to be.

THE COURT: Is that your assertion, Mr. Aldous? MR. ALDOUS: Yes, Your Honor. *1043 THE COURT: Okay. So, we're all on the 16 same page. 17 MR. SHAW: Okay. All right. Now, on the 18 state of the assertion of the pleading, there is no 19 evidence to support a fraud submission because Hickok 20 was very clear. 21 THE COURT: A fraud submission as to VSDH? 22 MR. SHAW: Right. 23 THE COURT: Okay. Because Hickok was 24 clear -- 25 MR. SHAW: It was clear that Hickok fully

101 intended to sign the document to be personally liable. And Hickok fully intended and believed a follow-up document was going to be sent that required -- that was separate and Hickok would sign.

THE COURT: Did he express that -- MR. SHAW: He did. MR. CHAIKEN: Of course, he did. THE COURT: -- to the Grosses at the time

that they entered the agreement? MR. SHAW: He told it to John Buttemiller. MR. CHAIKEN: To their agent. MR. SHAW: He never talked to the Grosses.

He only talked to Buttemiller. And Hickok said -- THE COURT: So he never talked to the *1044 Grosses? 16 MR. SHAW: Right. 17 MR. CHAIKEN: He talked to them through 18 their agent. 19 THE COURT: Mr. Chaiken, sit down. You've 20 had your turn. Sit down. It's too hard for you to not 21 jump in. So, please, sit down. 22 MR. SHAW: Okay. So Hickok did -- Hickok 23 testified, "I told Buttemiller we'll sign it, but you've 24 got to send me a separate document and Shaw's got to 25 sign." And that's -- and Hickok -- that was specific.

102 THE COURT: So that's sort of a fact issue? MR. SHAW: Well, I think it's undisputed that -- so I don't think there's any evidence to submit the fraud because there is no dispute as to that fact. So if there's no -- if that fact exists unrebutted, then there can be no fraud.

THE COURT: Mr. Aldous. MR. ALDOUS: I'm not sure. Maybe I didn't

hear the -- what remains unrebutted? MR. SHAW: The fact that Hickok told Buttemiller, send me a document -- a separate document that sets out the personal guaranty and Shaw -- and I will sign it and Shaw will sign it. *1045 MR. ALDOUS: Well, I understand that he's

16 arguing the flip side of the evidence that's conflicting 17 before the jury related to whether or not fraud 18 occurred. That may be his excuse for why he didn't 19 alert the parties and strike through the language that 20 he knew to be a misrepresentation. But that doesn't 21 mean there's not a fact issue for the jury to resolve on 22 that particular issue. 23 The reality is that he said that he knew 24 at the time of closing when they went through with it 25 that there was a representation in there that he had --

103 was guarantying and that he did not -- was not liable because of the fact that all these other documents and Mr. Shaw had not been signed. He did not intend to follow through with that guaranty and so that's -- that's the evidence.

MR. SHAW: But that is not the evidence. The evidence was he intended to follow through with it. THE COURT: Okay. Let me tell you where I have my concern, Mr. Shaw. You're saying that Mr. Hickok intended to follow through in a separate document.

MR. SHAW: Right. THE COURT: And that's what I understand

your argument is. *1046 MR. SHAW: That's right. 16 THE COURT: I don't recall that he ever 17 testified that he told the Grosses that or that the 18 Grosses testified that he told them that. 19 MR. SHAW: He never told the Grosses. 20 THE COURT: And the issue of whether -- 21 okay. Well, then he definitely did not tell them. 22 MR. SHAW: He talked to Buttemiller, their 23 agent. 24 THE COURT: I think that's a fact that the 25 jury gets to construe, whether or not the agent was told

104 that; and if he was told that, whether or not he conveyed it to the Grosses.

MR. SHAW: Okay. But where -- okay. THE COURT: So that's a fact issue. MR. SHAW: I got you. But where is the

intent? Where's the intention of fraud? THE COURT: The jury may find that there is no intent, but it's still an issue that needs to go to them for determination.

All right. So that's all of our directed verdicts. Okay. MR. CHAIKEN: No, I had some more. THE COURT: No. MR. CHAIKEN: Is the Court -- *1047 THE COURT: Put them in writing.

16 MR. CHAIKEN: I'm sorry? 17 THE COURT: Put them in writing. It is 18 now 1:44. We told the jury to come back at 2:30. We 19 need to get the charge done. 20 MR. CHAIKEN: I need to make a record. 21 THE COURT: You can make your directed 22 verdict in writing. 23 MR. CHAIKEN: I don't have the opportunity 24 to make the directed verdict at the time that I'm making 25 it in writing. Okay.

105 THE COURT: I gave you an opportunity, Mr. Chaiken. I asked you for all of the elements of your directed verdict. I gave you -- I asked you to give me a list.

MR. CHAIKEN: You said on the fraud claim, and that's what I did. THE COURT: No. I did not say on the fraud claim. I said give me a list so that I can go through all of them so that I know what the universe is. You gave me your universe.

MR. CHAIKEN: No. I didn't give you the universe, Your Honor, and I object to that. I think the record will reflect that all I gave you was the motion on the fraud claims. Okay. And you offered me an *1048 opportunity, okay, when I made a directed verdict motion

16 yesterday at the conclusion of the plaintiff's case in 17 chief to re-urge the motions for directed verdict that 18 I'd made yesterday. Okay. And -- 19 THE COURT: I said -- I didn't offer you 20 an opportunity. I said that you could make the -- that 21 I would not prevent you from making or re-urging the -- 22 MR. CHAIKEN: And I would like to re-urge 23 and urge further those motions because at the conclusion 24 of all the evidence, there's grounds for granting a 25 directed verdict on all of those points. And I would

106 like to make my motion. THE COURT: Your motion has already been made. Your motion is in the record. Since you're re-urging what was already urged before, the motion is denied.

MR. CHAIKEN: So the Court is not going to allow me to urge the motion at this point based upon the conclusion of the trial and the conclusion of the trial evidence? Is that -- I just want to have a record of that.

THE COURT: The Court has allowed you to make your -- to re-urge your motion, and I'm denying it. MR. CHAIKEN: I haven't gotten the opportunity to re-urge it. *1049 THE COURT: You've already urged it. The 16 urging is in the record. There is evidence of what it 17 was, so it is being denied. 18 Now, you have 15 minutes for lunch recess, 19 and then we'll do the charge conference -- the informal 20 charge conference in my office. 21 MR. SHAW: Yes, Your Honor. 2:00 o'clock? 22 THE COURT: 2:00 o'clock. 23 (Lunch recess taken) 24 THE COURT: All right. This is the formal 25 charge conference. It's taking place outside of the

107 presence of the jury. Are there any objections to the charge from the plaintiff?

MR. ALDOUS: No, Your Honor. THE COURT: Any objections to the charge

from defendant, VSDH Vaquero Venture, Ltd.? MR. SHAW: There are, Your Honor. THE COURT: Any objections to the charge

from defendant Doug Hickok? MR. CHAIKEN: There are, Your Honor. THE COURT: I'm sorry, Mr. Shaw. Did you

say there are or there -- MR. SHAW: There are. THE COURT: I'm sorry. Okay. Mr. Shaw? MR. SHAW: Your Honor, VSDH objects to *1050 Question No. 1 in that it includes Doug Hickok in the

16 question and alternatively includes an instruction for 17 purposes in answering this question, you are instructed 18 that the Court has determined that Paragraph 4 of 19 Addendum A to the new home contract constitutes Doug 20 Hickok's personal guaranty, et cetera. I believe that 21 that is a comment on the weight of the evidence, even 22 though that's a legal ruling, and that should be omitted 23 and Doug Hickok's name should be omitted from that 24 question. Any question regarding Doug Hickok should be 25 submitted separately.

108 Question No. 2 -- THE COURT: Well, let's just deal with the

number one first. MR. SHAW: All right. THE COURT: Response, Mr. Aldous? MR. ALDOUS: Your Honor, I believe the way

it's submitted is appropriate. THE COURT: All right. The objection to Question No. 1 is overruled. MR. SHAW: Your Honor, while we're doing that, can we have the agreement on the record that -- THE COURT: Yes, we do need to do that. MR. SHAW: An oral request for alteration

or instruction or question will be acceptable to all *1051 parties, won't be objected to on appeal. 16 MR. CHAIKEN: And it's sufficient to 17 preserve error. 18 MR. ALDOUS: Can I restate it? 19 MR. SHAW: Please. 20 MR. ALDOUS: The parties have agreed that 21 they do not need to submit in writing a proposed 22 instruction in a correctly-worded form or a question in 23 correctly-worded form in writing, but may state it on 24 the record and there will be no objection and argument 25 in the Court of Appeals that they waived by failing to

109 submit it in writing and submitting it orally on the record.

MR. SHAW: Okay. Thank you. THE COURT: Is that correct, Mr. Shaw? MR. SHAW: Agreed, Your Honor. THE COURT: Mr. Chaiken? MR. CHAIKEN: Yes. And, Your Honor, on

the individual questions, would the Court hear my objections to those as well because the Court ruled --

THE COURT: Is your objection the same one? MR. CHAIKEN: My objection to Question No. 1 is the same, yes. THE COURT: Okay. It's overruled. *1052 MR. SHAW: Objection to Question No. 2, 16 Judge. Given that Question No. 1 -- given that Question 17 No. 1 includes Doug Hickok's name, which I find 18 objectionable, I don't believe Question No. 2 should be 19 submitted because of his name. There should be a 20 different question addressing Doug Hickok's failure to 21 comply, if any. 22 THE COURT: And that question would be? 23 MR. SHAW: I don't -- I'm submitting it 24 for Doug Hickok, so I just think he should be taken out 25 of the VSDH, Ken Gross issues. And the Hickok and Gross

110 issues should be between Mr. Aldous and Mr. Chaiken. THE COURT: Mr. Aldous? MR. ALDOUS: I disagree. I believe the

way the Court has submitted it is appropriate. THE COURT: Mr. Chaiken? MR. CHAIKEN: I agree with Mr. Shaw. And

I have a proposed instruction -- a proposed question. In lieu of No. 2 as it is stated, which would, of course, change the numbering thereafter; or we could call it 1(A). My proposed request is that given that we object to Doug Hickok being included in Question 1, a follow-up question should read as follows: If you answered "yes" as to -- as to VSDH in Question No. 1, then answer this Question No. 2," or whatever we would *1053 call that subsequent question. "Otherwise, do not

16 answer that question," and that question specifically 17 would be: 18 Did Doug Hickok fail to comply with the 19 guaranty in the new home contract? The grounds of that 20 request would be that Mr. Hickok's liability, if any, 21 under the new home contract is limited to guaranty 22 liability, which is predicated upon a finding of a 23 default by VSDH; and, therefore, the jury is confused by 24 including him in Question No. 1, causing the possibility 25 of an inconsistent result; namely, that there could be a

111 finding of "no" in Question No. 1 for VSDH and a finding of "yes" for Mr. Hickok, which would be an impossibility legally.

THE COURT: Are you finished? MR. CHAIKEN: I am finished. THE COURT: Overruled. We'll go off the record for a minute. (Brief recess taken) THE COURT: Go back on the record. Question No. 3. I'm sorry, Mr. Shaw.

Your next objection. MR. SHAW: No objection to Question No. 3, Your Honor. THE COURT: Mr. Chaiken? *1054 MR. CHAIKEN: One objection, which is the 16 failure to include an instruction among the instructions 17 following the question, which would be pursuant to PJC 18 101.6 in the Hohenberg Brothers versus George Gibbons 19 case, 537 S.W.2d 1 and 3 -- at Page 3 -- I'm sorry -- 20 Texas Supreme Court 1976. Conditions precedent to an 21 obligation to perform are acts or events that are to 22 occur after the contract is made and that must occur 23 before there is a right to immediate performance and 24 before there can be a breach of contractual duty. 25 Failure to comply is waived by the other

112 party's failure to satisfy a condition precedent to the first party's obligation to perform. We believe that that instruction is proper and should be added to the instructions in Question No. 3 and would tender that instruction at this time.

THE COURT: Mr. Aldous? MR. ALDOUS: I disagree, Your Honor. I

believe the way the Court has submitted it is appropriate.

THE COURT: What was that PJC reference again? MR. CHAIKEN: The PJC reference, Your Honor, is 101.6 Hohenberg Brothers versus George E. Gibbons. *1055 THE COURT: I just asked for the PJC, not

16 for the cite. 17 MR. CHAIKEN: Sorry. That's in the PJC 18 specifically. 19 THE COURT: And you're saying that's in 20 relation to Question No. 3? 21 MR. CHAIKEN: Yes. I think it -- 22 THE COURT: Overruled. So that 23 instruction is denied. 24 MR. SHAW: VSDH objects to Question No. 4, 25 Your Honor, as there's no evidence or insufficient

113 evidence to support a fraud submission against VSDH and particularly with the guaranty in the home contract because VSDH did not make a guaranty for the home contract.

Further, this submission would change the -- is violating -- is a violation of the economic loss doctrine. It's an attempt to turn a breach of contract case into a tort case, which is not proper. It's not supported by the evidence or the facts. So we object to this submission of Question No. 4 and the inclusion of VSDH in that submission for those reasons.

THE COURT: Mr. Aldous? MR. ALDOUS: Your Honor, VSDH made a

misrepresentation in the contract through its agent, *1056 Mr. Hickok; and, therefore, I believe that the question 16 is appropriate. 17 THE COURT: All right. Overruled. 18 Mr. Chaiken? 19 MR. CHAIKEN: Yes. Mr. Hickok objects to 20 the first paragraph of Question No. 4. Did any of those 21 listed below commit fraud against Ken and Betsy Gross 22 with regard to the guaranty in the new home contract? 23 My understanding of the allegation, which is an 24 allegation that has been made by way of a trial 25 amendment permitted this afternoon by the Court, is that

114 -- and I quote, defendant made a false representation that they would guaranty performance of VSDH and the buyback provision of the contract.

And then it cites -- or the trial amendment cites or recites back to Paragraph 15 of the -- of the live pleading of which is counter-plaintiff's third amended counterclaims and second-amended third-party petition, which speaks only to the fact that they were alleged of guaranteed and then they denied having guaranteed -- I'm sorry -- having denied the existence of the guaranty. And there's been no pleading and there's been no allegation of any type of fraudulent conduct.

And at most -- and then in addition to *1057 that, we would object to the inclusion of everything 16 starting with "or" under Subsection C of "fraud occurs 17 when," and everything underneath that in that the 18 allegation, via the trial amendment, is specifically 19 related to a representation. And there's no allegation 20 of a false promise. 21 Consequently, to submit on a false promise 22 would be an improper comment on the cause of actions not 23 supported by the pleading. So we would ask for the 24 striking of everything beginning -- everything after 25 Subsection C where it says, Fraud occurs when limiting

115 it to a representation and striking any action regarding a false promise.

THE COURT: Mr. Aldous? MR. ALDOUS: Your Honor, I simply disagree

and believe that the way the Court has submitted it is appropriate.

THE COURT: Overruled. Anything else, Mr. Shaw? MR. SHAW: Yes, Your Honor. VSDH objects

to Question 5 for the same reasons, the limitations of the economic loss doctrine and a failure to have evidence and/or insufficient evidence to support and have evidence sufficient to support the submission of Question No. 5 and ask that it be stricken. *1058 THE COURT: Mr. Aldous?

16 MR. ALDOUS: Your Honor, I believe that 17 the way the Court has submitted the question is 18 supported by the evidence and is appropriate. 19 THE COURT: Overruled. 20 Mr. Chaiken? 21 MR. CHAIKEN: Yes. Mr. Hickok objects to 22 the inclusion of the words, "or promise," in the 23 Question No. 5, given that the pleading that resulted 24 from a trial amendment today fails to mention anything 25 about a promise or a false promise and is limited to

116 alleging a false representation. And, consequently, the question is not -- does not conform to the pleadings and the allegations of fraud that are contained therein.

THE COURT: Mr. Aldous? MR. ALDOUS: Your Honor, I simply

disagree. The evidence and the trial amendment are appropriate and this question is appropriate.

THE COURT: Overruled. Number 6. MR. SHAW: Your Honor, VSDH objects to

Subpart A in Number 6, the definition of loss of the benefit of the bargain. The same creates a -- has a definition that instructs the jury on what the difference in the benefit of the bargain is. It's not a *1059 proper instruction in that it -- for one, it includes

16 the Grosses' real estate fee, which the Grosses elected 17 voluntarily to incur. It doesn't give the jury the 18 ability to determine what losses, if any, the Grosses 19 incurred and instead provides an instruction to the jury 20 about how to do so. So plaintiff objects to the same 21 and believes that the loss of the benefit of the bargain 22 definition should be, "You can consider the following." 23 THE COURT: Plaintiff? 24 MR. SHAW: I'm sorry. Yes, I'm sorry. 25 Yes. On H, it should say loss of benefit of the

117 bargain. The jury can consider the difference between the amount agreed to by the parties upon completion of the buyback option and the new home contract, comma, and the amount received by the Grosses --

THE COURT: You misunderstood me, Mr. Shaw. MR. SHAW: I'm sorry, Your Honor? THE COURT: You said, "So plaintiff

objects to the same." MR. SHAW: I'm sorry, Your Honor. Defendant, VSDH. THE COURT: Okay. MR. SHAW: And the amount received by the

Grosses upon their sale of the property following the *1060 breach; however, you are entitled to determine what 16 expenses were reasonable, if any. 17 THE COURT: Mr. Aldous? 18 MR. ALDOUS: That part is taken care of in 19 Subsection B, which is expenses of mitigation. And it's 20 limited to reasonable and necessary expenses incurred. 21 And the defense can argue that the hiring of a real 22 estate agent wasn't reasonable; therefore, the way it's 23 submitted is appropriate. 24 THE COURT: The objection is overruled. 25 Mr. Chaiken?

118 MR. CHAIKEN: Yes. Mr. Hickok objects to Question No. 6, first, on the language in the second sentence beginning with, "or answered, quote, VSDH Vaquero Venture, Ltd., or Doug Hickok, close quote, in response to Question No. 2." And -- I'm sorry, Your Honor. I'm looking at the wrong place here. And answered "no" for VSDH Vaquero Venture, Ltd., or Doug Hickok in response to Question No. 3.

And it goes on. It says, "Then answer the following question; otherwise, do not answer the following question." The -- that language is confusing and will confuse the jury. It also constitutes an improper comment on the evidence and on the weight of the evidence. And, furthermore, it is not a necessary *1061 instruction. The jury can be permitted to simply -- if

16 they answered "yes" as to VSDH Vaquero Venture, Ltd., or 17 Doug Hickok in response to Question No. 1, proceed to 18 answer the question without a reference to any other 19 conditions. 20 Secondly, Mr. Hickok objects to Subsection 21 A, loss of the benefit of the bargain. The definition 22 that is there reads, "the difference between the amount 23 agreed to by the parties for completion of the buyback 24 option in the new home contract and the amount received 25 by the Grosses upon their sale of the property following

119 the breach." Mr. Hickok believes that the proper measure of that loss and measure of damages would be the difference between the amount of the buyback option and the fair market value of the property at the time that the Grosses sold it following the alleged breach.

THE COURT: Mr. Aldous? MR. ALDOUS: Your Honor, I believe that

that's an inaccurate statement of the law, and I believe the way the Court submitted it is appropriate.

THE COURT: Number 6 is overruled. Mr. Shaw, anything further? MR. SHAW: Your Honor, I've got my same

objection to 7 that I placed for 6. THE COURT: The Court will overrule the *1062 same objection. 16 Mr. Chaiken? 17 MR. CHAIKEN: Your Honor, Mr. Hickok 18 believes that there is a question that should be 19 inserted prior to Question No. 7 or immediately 20 thereafter, but properly before. And the proposed and 21 requested question would -- 22 THE COURT: Could you move the microphone, 23 please? 24 MR. CHAIKEN: -- and instruction would be 25 as follows: Do you find that Ken Gross and/or Betsy

120 Gross waived their right to recover damages from Douglas Hickok?

Then it would be followed by an instruction that reads: In answering this question, consider that waiver is an intentional surrender of a known right or intentional conduct inconsistent with claiming the right. And then there would be an answer, "yes" or "no." The basis of that requested instruction or question and instruction is, as the Court is aware, there was exclusive remedies provision, sole and exclusive remedies provision in the contract that while -- while modified by the seller was not modified by Mr. Hickok as a guarantor.

The Court has found that he is a party to *1063 the contract, but he never agreed to the reinstatement 16 of damages remedies; and, therefore, there is a waiver 17 in the contract of the Grosses' ability to pursue the 18 recovery of damages from Mr. Hickok. 19 THE COURT: Mr. Aldous? 20 MR. ALDOUS: The principal obligor gave -- 21 granted that right; and, therefore, the submission by 22 the Court is appropriate. 23 THE COURT: Overruled. 24 No. 8, are there any objections, 25 Ms. Shaw?

121 MR. SHAW: VSDH objects, Your Honor. MR. CHAIKEN: I'm sorry. And then I was

going to add that Mr. Hickok objects to Question No. 7 on the same grounds as stated with regard to loss of the benefit of the bargain in Question No. 6.

THE COURT: Overruled. MR. SHAW: Question No. 8, VSDH objects

that there's no evidence or insufficient evidence to submit the clear and convincing question to the jury and, further, for the same economic loss limitations and -- that I've previously objected to the other tort submissions. Ask that that question be stricken.

THE COURT: Mr. Aldous? MR. ALDOUS: The Court's submission is *1064 appropriate.

16 THE COURT: Overruled. 17 Mr. Chaiken? 18 MR. CHAIKEN: Yes, Your Honor. Mr. Hickok 19 objects to Question No. 8 on the same grounds as VSDH 20 has just enunciated and, furthermore, objects to the 21 inclusion of everything after item C regarding false 22 representation on the grounds that the case and 23 pleadings -- I'm sorry -- that the pleading, as amended 24 by the trial amendment today, does not speak about false 25 promises in any manner and solely speaks to false

122 representations. And, thus, the question does not conform to the pleadings; and the jury's being asked to resolve a matter that has not been placed in controversy.

THE COURT: All right. The Court will note that Question No. 8 is missing a blank for an answer.

MR. ALDOUS: I just noticed that. THE COURT: And so the space will be

entered that says, "Answer yes or no." And a space will be left for that. Other than that, the objections to No. 8 are overruled.

MR. SHAW: VSDH objects to Question 9, Your Honor, for the same reasons that it posed for *1065 Question 8 and ask that that question be stricken. 16 THE COURT: Mr. Aldous? 17 MR. ALDOUS: Same response, Your Honor. 18 THE COURT: Overruled. 19 Mr. Chaiken? 20 MR. CHAIKEN: Yes. Mr. Hickok objects to 21 the inclusion of Question No. 9 in its entirety given 22 the absence of any evidence with regard to any predicate 23 for exemplary damages. 24 THE COURT: Mr. Aldous? 25 MR. ALDOUS: I believe the Court's

123 instruction is appropriate. THE COURT: Overruled. All right. Anything further? If not,

we'll bring in the jury. MR. SHAW: Can I get a new charge when you redo it or re-print it? May I get a full new one, please?

THE COURT: We're not going to re-print it. This is the fix. MR. SHAW: Okay. Is there an extra copy laying around because I wrote all over mine? THE COURT: You have that original copy that we used in chambers. That should be exactly the same. *1066 All right. Mr. Aldous, are you going to

16 need the overhead? 17 MR. ALDOUS: Yes, Your Honor. 18 THE COURT: All rise. You may bring in 19 the jury. 20 (Jury enters the courtroom) 21 THE COURT: You may be seated. 22 Ladies and gentlemen of the jury, I 23 apologize for keeping you waiting so long. It took us 24 longer to prepare the charge than we anticipated. After 25 everyone has received a copy, I will read the charge of

124 the Court in this case to the jury. Please listen carefully as I read the charge to you. The original will be placed on the table in the jury room when you retire to begin your deliberations upon the verdict in this case.

Ladies and gentlemen of the jury, this case -- after the closing arguments, you will go to the jury room to decide the case, answer the questions that are attached, and reach a verdict. You may discuss the case with other jurors only when you are all together in the jury room. Remember my previous instructions.

Do not discuss the case with anyone else, either in person or by any other means. Do not do any independent investigation about the case or conduct any *1067 research. Do not look up any words in dictionaries or

16 on the Internet. Do not post information about the case 17 on the Internet. Do not share any special knowledge or 18 experiences with the other jurors. Do not use your 19 phone or any other electronic device during your 20 deliberations for any reason. I have given you a number 21 where others may contact you in case of an emergency. 22 Here are the instructions for answering 23 the questions: Number 1: Do not let bias, prejudice, or 24 sympathy play any part in your deliberations. 25 Number 2: Base your answers only on the

125 evidence admitted in court and on the law that is in these instructions and questions. Do not consider or discuss any evidence that was not admitted in the courtroom.

Number 3: You are to make up your own minds about the facts. You are the sole judges of the credibility of the witnesses and the weight to give their testimony. But on matters of law, you must follow all of my instructions.

Number 4: If my instructions use a word in a way that is different from its ordinary meaning, use the meaning I give you, which will be a proper, legal definition.

Number 5: All the questions and answers *1068 are important. No one should say that any question or 16 answer is not important. 17 Number 6: Answer "yes" or "no" to all 18 questions unless you were told otherwise. A "yes" 19 answer must be based on a preponderance of the evidence 20 unless you are told otherwise. Whenever a question 21 requires an answer other than "yes" or "no," your answer 22 must be based on a preponderance of the evidence unless 23 you are told otherwise. 24 The term, "preponderance of the evidence" 25 means the greater weight of credible evidence presented

126 in this case. If you do not find that a preponderance of the evidence supports a "yes" answer, then answer "no." A preponderance of the evidence is not measured by the number of witnesses or by the number of documents admitted in evidence. For a fact to be proved by a preponderance of the evidence, you must find that the fact is more likely true than not true.

Number 7: Do not decide who you think should win before you answer the questions and then just answer the questions to match your decision. Answer each question carefully without considering who will win. Do not discuss or consider the effect your answers will have.

Number 8: Do not answer questions by *1069 drawing straws or by any method of chance. 16 Number 9: Some questions might ask you 17 for a dollar amount. Do not agree in advance to decide 18 on a dollar amount by adding up each juror's amount and 19 then figuring the average. 20 Number 10: Do not trade on your answers. 21 For example, do not say, "I will answer this question 22 your way if you will answer another question my way." 23 Number 11: Unless otherwise instructed, 24 the answers to the questions must be based on the 25 decision of at least five of the six jurors. The same

127 five jurors must agree on every answer. Do not agree to be bound by a vote of anything less than five jurors even if it would be a majority.

As I have said before, if you do not follow these instructions, you will be guilty of jury misconduct; and I might have to order a new trial and start this process over again. This would waste your time and the parties' money and would require the taxpayers of the county to pay for another trial. If a juror breaks any of these rules, tell that person to stop and report it to me immediately.

Definitions and instructions: The jury is instructed that a fact may be established by direct evidence or circumstantial evidence or both. A fact is *1070 established by direct evidence when proved by a witness

16 who saw the act done or hear the words spoken or by 17 documentary evidence. A fact may be established by 18 circumstantial evidence when it may be fairly and 19 reasonably inferred from other facts proved. 20 Question No. 1: Did any of the following 21 parties fail to comply with the new home contract? 22 Answer "yes" or "no" for VSDH Vaquero Venture, Ltd., 23 Doug Hickok, Ken Gross, and Betsy Gross. 24 For purposes of answering this question, 25 you are instructed that the Court has determined that

128 Paragraph 4 of Addendum A to the new home contract constitutes Doug Hickok's personal guaranty of VSDH Vaquero Venture, Ltd's obligation under the buyback options granted from VSDH Vaquero Venture, Ltd. to the Grosses.

Question No. 2: Who of those above whom you have found to have failed to comply with the contract failed to comply with the contract first? Answer for VSDH Vaquero, Ltd., Doug Hickok, Ken Gross, and Betsy Gross.

A failure to comply must be material. The circumstances to consider in determining whether a failure to comply is material include: One, the extent to which the injured party will be deprived of the *1071 benefit which he reasonably expected; two, the extent to

16 which the injured party can be adequately compensated 17 for the part of that benefit of which he will be 18 deprived; three, the extent to which the party failing 19 to perform or to offer to perform will suffer 20 forfeiture; four, the likelihood that the party failing 21 to perform or to offer to perform will cure his failure, 22 taking into account the circumstances including any 23 reasonable assurances; five, the extent to which the 24 behavior of the party failing to perform or to offer to 25 perform comports with standards of good faith and fair

129 dealing. Question No. 3: Was the failure of any of the parties listed below excused? Answer "yes" or "no" for each: VSDH Vaquero Venture, Ltd., Doug Hickok, Ken Gross, and Betsy Gross.

For purposes of answering this question, you are instructed that a failure to comply by one party is excused by the other party's prior repudiation of the same agreement.

A party repudiates an agreement when the party indicates, by the party's words or actions, that the party is not going to perform its obligations under the agreement in the future, showing a fixed intent to abandon, renounce, and refuse to perform the agreement. *1072 For purpose of answering this question,

16 you are instructed that a failure to comply with an 17 agreement by one party is excused by the other party's 18 prior failure to comply with a material obligation of 19 the same agreement. 20 Failure to comply by a party is excused if 21 compliance is waived by the other party. Waiver is an 22 intentional surrender of a known right or intentional 23 conduct inconsistent with claiming the right. 24 Question No. 4: Did any of those listed 25 below commit fraud against Ken and Betsy Gross with

130 regard to the guarantee in the new home contract? Fraud occurs when, a, there is a false representation of a past or existing material fact and, b, the false representation is made to a person for the purpose of inducing that person to enter a contract and, c, the false representation is relied on by the person in entering into that contract; or, a, a party makes a false promise to do an act and, b, the promise is material and, c, the promise is made with the intention of not fulfilling it and, d, the promise is made to a person for the purpose of inducing that person to enter into a contract and, e, that person relies on the promise in entering into that contract.

Answer "yes" or "no" for each: VSDH *1073 Vaquero Venture, Ltd., or Doug Hickok. 16 If you answered "yes" to either question 17 -- to either party in Question No. 4, then answer 18 Question No. 5; otherwise, do not answer Question No. 5. 19 Question No. 5: Did any of those listed 20 below have actual awareness of the falsity of the 21 representation or promise you found to be fraud in 22 Question No. 4? 23 Actual awareness may be inferred where 24 objective manifestations indicate a person acted with 25 actual awareness.

131 Answer "yes" or "no" for each: VSDH Vaquero Venture, Ltd., Doug Hickok. Question No. 6: If you answered "yes" to VSDH Vaquero Venture, Ltd. or Doug Hickok in response to Question No. 1 or answered VSDH Vaquero, Ltd. or Doug Hickok in response to No. 2 and answered "no" for VSDH Vaquero Venture, Ltd. or Doug Hickok in response to Question No. 3, then answer the following question. Otherwise, do not answer the following question.

What sum of money, if any, if paid now in cash would fairly and reasonably compensate Ken and Betsy Gross for their damages, if any, that resulted from the failure to comply you found in answer to Question No. 1? *1074 Consider the following elements of

16 damages, if any, and none other: A, loss of the benefit 17 of the bargain; B, expenses of mitigation. Do not add 18 any amount for interest on any damages, if any. 19 Answer separately in dollars and cents for 20 damages, if any, for, A, loss of the benefit of the 21 bargain, the difference between the amount agreed to by 22 the parties for completion of the buyback option in the 23 new home contract and the amount received by the Grosses 24 upon the sale of the property following the breach; B, 25 expenses of mitigation, reasonable and necessary

132 expenses incurred by Ken and Betsy Gross in selling the property following the breach. And there's a space for an answer there.

If you answered "yes" to any of those listed in Question No. 4, then answer the following question. Otherwise, do not answer the following question.

Question No. 7: What sum of money, if any, if paid now in cash would fairly and reasonably compensate Ken and Betsy Gross for their damages, if any, that resulted from the fraud you found in answer to Question No. 4?

In answering questions about damages, you must answer each question separately. Do not increase *1075 or reduce the amount in one answer because of your 16 answer to any other question about damages. Do not 17 speculate about what any party's ultimate recovery may 18 or may not be. Any recovery will be determined by the 19 Court when it applies the law to your answers at the 20 time of judgment. Do not add any amount for interest on 21 damages, if any. 22 Consider the following elements of 23 damages, if any, and none other: A, loss of the benefit 24 of the bargain; B, expenses of mitigation; C, incidental 25 damages. Do not add any amount for interest on damages,

133 if any. Answer separately in dollars and cents for damages, if any, for A, loss of the benefit of the bargain, the difference between the amount agreed to by the parties for completion of the buyback option in the new home contract and the amount received by the Grosses upon the sale of the property; B, expenses in mitigation, reasonable and necessary expenses incurred by Kenneth Gross and Betsy Gross in selling the property following the breach; C, incidental damages, reasonable and necessary expenses incurred by Kenneth Gross and Betsy Gross to construct the addition above in the amount of $156,871.

Answer the following question only if you *1076 have unanimously answered "yes" to any party in response 16 to Question No. 5. Otherwise, do not answer the 17 following question. To answer "yes" to any part of the 18 following question, your answer must be unanimous. You 19 may answer "no" to any part of the following question 20 only upon a vote of five or more jurors. Otherwise, you 21 must not answer the following question. 22 Question No. 8: Do you find by clear and 23 convincing evidence that the harm to Ken and Betsy Gross 24 resulted from fraud? 25 "Clear and convincing evidence" means the

134 measure or degree of proof that produces a firm belief or conviction of the truth of the allegation sought to be established.

Fraud occurs when, A, there is a false misrepresentation -- excuse me -- a false representation of a past or existing material fact and, B, the false representation is made to a person for the purpose of inducing that person to enter into a contract and, C, the false misrepresentation is relied on by the person entering into that contract; or, A, a party makes a false promise to do an act and, B, the promise is material and, C, the promise is made with the intention of not fulfilling it and, D, the promise is made to a person for the purpose of inducing that person to enter *1077 into a contract and, E, that person relies on the

16 promise in entering into that contract. 17 Answer "yes" or "no." 18 Answer the following question only if you 19 have unanimously answered "yes" to any party in response 20 to Question No. 5. Otherwise, do not answer the 21 following question. 22 You must unanimously agree on the amount 23 of any award of exemplary damages. 24 Question No. 9: What sum of money, if 25 any, if paid now in cash should be assessed against

135 those listed below and awarded to Ken and Betsy Gross as exemplary damages, if any, for the conduct found in response to Question No. 4?

"Exemplary damages" means an amount you may in your discretion award as a penalty or by way of punishment.

Factors to consider in awarding exemplary damages, if any, are: One, the nature of the wrong; two, the character of the conduct involved; three, the degree of culpability of those listed below; four, the situation and sensibilities of the parties concerned; five, the extent to which such conduct offends a public sense of justice and propriety; six, the net worth of those listed below. *1078 Answer in dollars and cents, if any, for

16 each: VSDH Vaquero Venture, Ltd. and Doug Hickok. 17 Mr. Aldous, you may proceed. 18 MR. ALDOUS: Thank you, Your Honor. Your 19 Honor, did I ask you to give me a five-minute warning? 20 THE COURT: Yes, you did. 21 MR. ALDOUS: Thank you. 22 THE COURT: You're going to need to move 23 that more to an angle. I can't see it. 24 MR. ALDOUS: Sure. How's that? 25 THE COURT: That's fine.

136 MR. ALDOUS: Okay. Sorry. Ladies and gentlemen of the jury, I

appreciate all the time and effort that you've put into this. And now I don't have very much time, but this is one of the last chances we get to talk to you. So as I was sitting here thinking, you know, one of the things the Judge told you that you read is that you guys are the sole judges of the credibility of the witnesses and the facts of this case. And what that means is you've got to use your common sense in what you've learned in everyday life to see who was telling the truth and who isn't, because you really have been given two separate choices.

One are the Grosses, who say, you know *1079 what, we were acting like this was all, you know, an 16 agreed deal. We all knew what was going on. We weren't 17 upset about it or concerned about it until in May when 18 they were not answering our phone calls, and then we 19 became concerned about it. Or you have their version of 20 the events, which is, oh, we had all these problems 21 where they didn't comply with the contract; although, we 22 never said that. 23 So I was thinking about how in the world 24 can we, you know, reach that decision where we decide, 25 well, you know, who's right and who's wrong. And, you

137 know, if there's a -- I think the best way to look at it is: Who said what before they ever came to court. And what I mean by that is everybody in this -- you saw all these emails that everybody sent around. And who was consistent with the way they testified here as to what they had in their emails? And that's the Grosses.

If you remember, Exhibit 24 was the email that -- or the -- I'm sorry -- the fax that Ken Gross sent over to Mr. Hickok. And he said, Mr. Hickok, you know, I'm starting construction on this addition, and I'd like for you guys to come on out and take a look at it and take a look at the plans and all of that.

And then Mr. Hickok's response was -- after a couple of phone calls and then this fax was to *1080 make an appointment, and they cancel on the day of the 16 appointment. That's Exhibit 27. He just decided that, 17 you know, it wasn't important enough for him to come 18 that day, and so he decided to come sometime later. 19 Now the reason that that's not a big issue 20 for us in the way it was back then is because we were 21 not planning on trying to work up a case or anything 22 like that, well, like I believe they were. And, 23 instead, we were just operating because we -- everybody 24 knew what was going to be built from the day the deal 25 was done, from the day that Ken walked around and showed

138 Mr. Hickok exactly what he was proposing. Now to believe Mr. Hickok, this experienced real estate broker, he entered into a deal on a $2.8 million house for an addition to be built and them to buy it back without knowing what was going to happen. Is that something that we can accept, that this businessman that has over 40 businesses with separate real estate holdings is all the sudden, he doesn't -- he's not going to find out it wasn't specific and he didn't need it? Well, it's in the contract. I mean, and he kind of said that too. He said the contract itself had the listing of what was going to go into the addition.

But now -- and then, of course, there's *1081 tons of emails that were exchanged over time that you 16 guys saw where the issue of the buyback came up. And 17 not one time is there an email, letter, or anything else 18 from the VSDH side of the equation back to the Grosses 19 to say, you know what? You've already breached the 20 agreement, so we don't have to do anything. 21 It wasn't the way it was. The 22 correspondence from Mr. Shaw was always the same; good 23 to hear from you. Hope all is well. Planning to review 24 the documentation, and I'm glad to talk. I want to let 25 you know that the entity that sold the home is not

139 financially solvent so that you will -- that will no doubt impact where this goes. Please call me when you can.

It was his consistent statement every time. That's Exhibit 84. Exhibit 65, Betsy, thank you for your email today. I'm glad to talk, but I want to make sure you're aware that the entity that sold the home is not financially solvent. Not one time did anybody say, you know what, you guys already breached the agreement because, number one, you didn't let us come out there and take a look at the plans beforehand, not once. Not once did they say, you know what, we would have put the other thing on the other side. We would have put the -- you know, the bathroom on the *1082 other side. We would have not put granite on the -- on

16 the bar. They didn't say any of that. 17 In fact, at no point in time did they 18 raise anything about this deal, other than the fact that 19 VSDH was insolvent. Now, Mr. Shaw might have come in 20 here to the courtroom and said he had the cash to be 21 able to buy this house, but you'll look in vain for any 22 email where he said that to the Grosses. Look, don't 23 panic. Don't sell it. Even though VSDH is insolvent, 24 I've got the ability to take care of it. That's no 25 where in there. At no point in time did he ever say

140 that. In addition, here's Exhibit 88, a letter from Van Shaw, June 7, 2009. Dear Betsy, thank you for your June 6th email. Please call me. I did review the enclosure you sent and note that the entity is the only responsible party. It does not contain any personal guaranty, which is what I remember. So not only are they saying the guarantees that were in the contract, they really don't exist, but now they're saying that we're not going to -- the personal guarantees aren't there, and the entity that you're dealing with is bankrupt.

It was interesting to me that Mr. Chaiken suggested that why didn't you call us and offer us the *1083 deal that you were having to do because we breached the 16 agreement to buy the home back. That's kind of -- it's 17 kind of interesting. I'm going to breach the agreement, 18 but I want to get a better deal. So if you'll give me 19 the deal that you're going to have do so that I can -- 20 so you can avoid some of your damage, that would be good 21 for us. 22 Exhibit 36, June 15th from Ken and Betsy 23 Gross, Doug, I called and left a message on your 24 voicemail. I spoke to Van and he said that VSDH does 25 not have enough money to honor our contract and buy back

141 the house; thus, VSDH does not intend to perform our contract. Where's the response to that saying, wait a minute; that's not right?

Now Mr. Shaw contends that's because everybody was conspiring against him and they had lawyered up, without recognizing that he had been the only lawyer making statements about what the law is or is not during the whole deal. So you have one party who says the same thing that they've said all along. That's the Grosses. And then you have the defense, who has come in here and has now raised all these objections and supposedly breaches of an agreement that they never raised until we got to this courtroom.

Now they're going to point to that letter *1084 from Hap Stern who said, oh, you didn't escrow this 16 stuff and we're going to rely on the contract. We don't 17 waive anything. The reality is they did waive it. They 18 had an opportunity to do something, and they chose not 19 to do it. So if you look at the charge, the questions 20 that have been asked of you, starting with Question 21 No. 1, you were asked if any of the following parties 22 failed to comply with the new home contract. 23 I'd submit to you the answer is "yes" for 24 VSDH and "yes" for Doug Hickok and "no" for Betsy and 25 Ken Gross. And the reason I say this is, you remember

142 all the testimony that we got into about, well, I didn't mean to sign that individually and there was no guaranty, it had to come in a different -- in a different document. Well, the Court's now ruled and instructed you that for the purposes of answering this question, the Court has determined that Paragraph 4 of the addendum to the new home contract constitutes a personal guaranty by Doug Hickok of VSDH's obligations under that agreement.

All that testimony means nothing. The question is: Did VSDH breach? If they breached, then Doug Hickok breached. And that's why I say "yes," "yes," and then, "no." So you might say, well, why are you saying "no" as to Ken and Betsy Gross? Well, the *1085 instruction under Question No. 2 tells you what a

16 material breach is. A material breach is one that the 17 parties really, really wanted and cared about. That 18 escrow agreement that you -- that you heard, their 19 complaint is not that the agreement -- I mean that the 20 money was held in escrow, because it was. Their 21 complaint is that it wasn't held with the title company 22 that they picked. 23 Now, if you're an escrow agent, it doesn't 24 matter who you work for; you're an escrow agent, and 25 you're bound to do what the escrow agreement says.

143 MR. SHAW: Your Honor, he's arguing outside of the evidence. THE COURT: Careful, Mr. Aldous. MR. ALDOUS: Yes, Your Honor. The point is the escrow agreement there --

was there to make sure that the money, the bank loan to the Grosses, was used to build the addition. The money was used by the Grosses to build the addition. It went exactly like it was supposed to go. What that is is a made-up breach to come in here and argue as a way to get out of their responsibility. You say, okay. Well, what about the issue of the plans and specifications? Same thing.

Those plans -- those specifications -- *1086 and, you know, they can say they're not specifications 16 all you want, but when they know it's supposed to be the 17 same like and kind as the rest of the house -- and, by 18 the way, not every room is supposed to look like the 19 foyer or the library with all that elaborate, you know, 20 woodwork and everything like that. I guarantee you that 21 if you had pictures of every one of the bedrooms in 22 there, not one of the bedrooms -- 23 MR. SHAW: Your Honor, I'm going to 24 object. He's arguing outside of the evidence. 25 THE COURT: It's argument, Counsel.

144 MR. SHAW: All right. But there's no evidence to support what he's saying. THE COURT: Mr. Shaw, no gratuitous sidebar, please. MR. ALDOUS: You'll be able to look at the photographs. They're in evidence, and you can determine for yourself. But even Mr. Kramer admitted that not every room was the same. And so the real issue here is: Is this an important, material thing for them? Was it important? And the answer's, "no." They knew what was going to be built. When we asked them to come out and take a look, sure we did because we're being cordial. We didn't know that they were planning every way they could to get out of it. But we were being cordial. *1087 Come on out. Take a look.

16 Mr. Hickok sends a message two weeks later 17 on the day he's supposed to show up, hey, I'm not going 18 to be there. It if was important to him, he would have 19 been there. If it was important to him -- if he didn't 20 know, he would have come. Now, he did come out and he 21 took a look. And this is why I know it wasn't important 22 to him; because, although he said now that I told him, 23 you know, you should have called me out before you 24 started, that's not what the Grosses recall. 25 But the most important thing is: What did

145 he ask that needed to be changed. What did he say? You know what, that's wrong. Don't do it that way. You need to do this. No, wait a minute. You need to use different materials, not a bit. Give me those plans. I need to take them over to somebody else back -- back then let them take a look at them. It never happened. And why? Because it wasn't material. It wasn't important.

The one thing that is interesting is they say that we breached the agreement by selling this on September -- before September 1st, 2009. Despite the fact that we continued to ask them, hey, look. We're going to have to sell this because you've said you're not going to perform. Now they've come into court and *1088 they've said, oh, we never said we weren't going to

16 perform. We could have performed. We may have 17 performed. I didn't -- I never went to get a loan, but 18 I didn't have to get a loan because I had Mr. Shaw's 19 capability to give me cash. They have all sorts of 20 excuses to say here in this courtroom that they sold it 21 early by selling it before September 1st, 2009. 22 But when you look back at what they were 23 selling back then, the only thing they were selling was 24 VSDH is insolvent. Not one time did they say, hey, you 25 know what, just give us a little bit of time. We may

146 buy it back. Now Mr. Shaw stood up on that stand and tried to tell everybody that these folks were trying to set him up. I submit to you the only people that were getting set up right here were the Grosses. They started planning their defense the day the market crashed and they were going to have to buy this back. Ever since then, they've been planning a way and scheming a way to try to get out of paying what they need to pay under this contract. That's been the whole thing.

And you know what? Truthfully, the only people that can stop them are y'all. I can't. THE COURT: Four minutes. MR. ALDOUS: The judge can't, only you. *1089 So the question here is -- on No. 2 is: Who of those

16 above have you found to have failed to comply first? 17 And it has to be VSDH. They failed to comply first. 18 Doug Hickok's then supposed to take up their slack for 19 the guaranty and he didn't. 20 Question No. 3 is: Was the failure of the 21 parties listed below excused? And the answer for -- 22 from my perspective, there is no excuse for VSDH or Doug 23 Hickok. If you found that some other thing that the 24 Grosses did was a breach -- for instance, if you say, 25 you know what, you did breach by selling it early

147 because that's what the contract said. But you can also find that this -- that they repudiated the agreement. What that means is you don't need to wait for them to not perform. Once they say to you, "I'm not going to do it," you are free to act on their word. And that's what it says right here. You're instructed that a party repudiates an agreement when the party indicates by the party's words or actions that he's not going to perform its obligations under the agreement in the future, showing a fixed intention to abandon, renounce, and refuse to perform the agreement.

And then above that it says one party is excused by the other party's prior repudiation. So what happens is once they tell -- I mean, and this is just *1090 standard. This is what everybody knows. Once that

16 somebody tells you, hey, I'm not going to do it, it's 17 like going out -- I'm going to go on a cruise ship. You 18 get three weeks before you're about to leave on the 19 cruise ship. They call you up and say the cruise ship 20 is -- the cruise line is bankrupt. Well, should I go 21 get another one, or should I wait until I find out if 22 you've got a boat in the dock? It makes no sense. 23 Question No. 4 is: Did they commit fraud? 24 And this really goes to their continual and consistent 25 representations that they didn't guaranty anything when

148 for sure they did. It's in the contract. It says so bigger than Dallas. The answer is "yes" to both of these.

Question No. 5: Did they have actual awareness of what they were doing? You heard Mr. Hickok on the stand saying, yeah, I knew there was a guaranty in there, but, hey, you know what, if they didn't make me sign the right documents, that's not my problem. Actual awareness. He worked for VSDH and he was himself.

The next question is the benefit of the bargain damages. And that's why I have the -- the thing clipped over here. If you remember, we went through those; the difference in the price of the top two. And *1091 that would go in this blank here, and then the expenses

16 of the sale will go down below that. The total for both 17 of those is 562,241 bucks. 18 On Question No. 7, the same number is 19 going to end up going for these two. The additional 20 number really goes to -- if you recall the additional 21 expenses that we had of $20,000 related to the 22 construction of the addition. So that's -- 20,000 would 23 go over here. 24 And then the last two questions relate to 25 whether or not you find by clear and convincing evidence

149 -- there should be a blank down here -- that the fraud damaged them. And you heard from both Ken and Betsy that they wouldn't have entered into this deal without the guarantees. So the answer, as far as I'm concerned, is, "yes."

And then finally the last one is: What sum of money, if any -- and, of course, this is all -- this is all up to your discretion. But, you know, a lot of times people think of it in terms of, well, I want to make sure these folks don't do this again. And that's what you need to operate on. What will it do? And you can use all the character, the conduct, the nature of the wrong, whether they've taken advantage or what.

Now, ladies and gentlemen, my time is up. *1092 I will get a chance to talk to you briefly again after 16 they go, but I appreciate your time and attention in 17 this matter. Thank you. 18 THE COURT: Mr. Shaw? 19 MR. SHAW: Thank you, Your Honor. 20 Ladies and gentlemen, Mr. Aldous said it 21 all when he said, let's see what the parties said before 22 they ever came to court. Let's see what the parties 23 said before they ever came to court. That's what he 24 says is important, is the most important. And what they 25 said was set out here in this contract, Exhibit 3. So,

150 what we know is if you want precisely to enforce a contract, you have to precisely honor a contract from the get go.

We had the Grosses agreeing to do certain things. Mr. Aldous wants to make it like it's not important, these things for the Grosses were not important. But that is not true. That is not accurate. We've been through this ad naseum. We've been through the start. They were supposed to have escrowed $156,000 with the title company and enter into an escrow agreement acceptable to the seller and buyer. Never, ever, never did. We know that unequivocally.

Exhibit 29, lawyer writes immediately July 3, 2007. It says we represent the seller. The buyer *1093 agrees to escrow. The contract further provides. But 16 the buyer will obtain the seller's consent to the plans 17 and specifications. That's what they agreed to 18 immediately, and that's what they breached immediately. 19 A lawyer tells them the buyer failed and refused to 20 enter into the escrow. Seller reserves all of its 21 rights. No reply, no response, no nothing. 22 Now, you came here this week and you did 23 your duty. You were required to precisely perform your 24 obligations. You did that admirably, and we appreciate 25 it. You showed up on time. You stayed the entire time.

151 You were attentive. You did that because, as an American citizen, you get your freedom because you have the rights, as American citizens, to freedom; but you have obligations.

And one of them is what you fulfilled this week. And if you don't precisely fulfill your obligations, bad things can happen. You can go to jail; you can get tickets, worse. That's why there are obligations. That's why there's duties. Look at these other agreements that Mr. Aldous talks about. There's some writings. And Mr. Aldous says, well, you know, Shaw said there was an agreement to -- that we could sell the house. We could sell the house. And Shaw said there was an agreement. *1094 So after these people, the Grosses,

16 lawyered up, they write a letter. And you tell me if 17 this letter makes any sense. Per your offer of 18 yesterday to allow us to enter into a contract with a 19 prospective buyer, can you give us that agreement? 20 Well, if I had already given them the agreement, why are 21 they writing me for the agreement? And who were these 22 people that are copied here? 23 Cooper & Scully is a firm, a law firm. 24 They're not telling me. They're trying to hide from the 25 fact that they've got these lawyers. And they're

152 writing these letters and they're making these things up so that one day they can be in front of you.

And then let's look at this one, Exhibit 59. They write a letter August 18. And they tell you at 7:24 p.m., and they tell you we're going to sell this house tomorrow. We're going to list -- we're going to sign a contract tomorrow. And we will assume you approve unless you tell us in three business hours, email three business hours by noon the next day that that's what they're going to do. And sure enough, they did it. And why? We don't know. You don't know. I don't know. We don't know.

We know that Mrs. Gross said they were forced to. We don't know what that means. If they *1095 wanted you to know, they would have told you. 16 MR. ALDOUS: Objection, Your Honor. 17 That's a comment on objections. 18 THE COURT: Sustained. 19 MR. SHAW: Why don't we know what the 20 force was? 21 MR. ALDOUS: Objection, Your Honor. That 22 violates a previous order of the Court. 23 THE COURT: Sustained. 24 MR. SHAW: The contract said that they 25 were going to wait until -- if you'll remember, they

153 were going to wait, and they were not going to -- they were going to wait until September 1, 2009. And why not? Why didn't they wait? And then they said that they were going to -- should the buyer enter into a contract to sell the property, the buyback option will immediately terminate. They knew that. It's in their emails. So they elected voluntarily to undertake that action. And why is this stuff important? Why were the plans and specs important? Why was all this important?

Let's talk about something else for a minute. Tony Romo signed a contract with the Cowboys a couple of years ago. He had back problems, significant back problems. I don't know the terms of his contract. But let's assume the terms were we're going to pay you *1096 some money. As part of this money for the contract, we

16 want to work out a plan with you for you to work out. 17 We want to know where you're going, when you're going, 18 and how many hours. 19 Tony says, fine, and I'll agree to give 20 you that workout plan. And Tony says -- and they say 21 you need back surgery. And Tony says, yeah. And they 22 say we want you, Tony, to post $156,000 with us or an 23 escrow agreement, and we want to set out some plans and 24 specifications for your surgery. We want to know what 25 doctor's doing your surgery, where, what is the surgery

154 you're getting. And we want to have the right to approve that surgery because we're investing a lot of money in you, and we want to have that right.

And, by the way, we want to give you your money back. If you fulfill your obligations, we give your $156,000 on September 1, 2009. But if you enter into a contract with another team before that time, if you don't honor the escrow agreement, if you don't honor the plans and specifications, if you don't wait until September 1, it's all over. Everything's out the door.

And it's reasonable for the Cowboys to do that because they've invested in him. They want to know is he going to a hack for his surgery; is he going to the top-qualified doctor that -- they've got doctors on *1097 staff that all get vetted and approved. And that's what

16 this thing was about. 17 The Grosses agreed to get the plans and 18 specifications. The Grosses don't hire the top-notch 19 architect that designs -- 20 MR. ALDOUS: Objection, Your Honor. 21 That's outside the record. 22 THE COURT: Sustained. 23 MR. SHAW: The Grosses hire some fellow 24 out of Southlake to do it. Why didn't they hire the 25 top-notch architect to do it? Why not? The Grosses

155 then don't do it like the original house is. The addition is not like the original house.

MR. ALDOUS: Objection, Your Honor. That's outside the record. THE COURT: Sustained. MR. SHAW: What we know is that yard is

important; that the Grosses' addition took up yard space. We know that. And for buyers in this quality of home, we know that that's a negative. What we also know is if it wasn't a negative, how could the house go from a $2,800,000 house to a $2,400,000 house after some $200,000 was added? If everything was so beautiful and everything was so copasetic, how could that house get devalued like that in that short of period of time? *1098 Because what we know is, Defendant's

16 Exhibit 2, is that the house was appraised by an 17 appraiser in June of 2007. And we know that the 18 appraisal of the home -- let me find it here -- showed 19 that the home in 2007, when the Grosses bought it and 20 before the Grosses performed one bit of construction, 21 was worth $2,855,000. The day they bought it an 22 independent state certified appraiser determined that 23 was the value of that house. 24 And now they want to say after they did 25 all these improvements, which were so great and were so

156 beautiful and matched the house, the thing decreased in value more than $400,000. Impossible, impossible if those improvements were of that quality. And why -- why, if this was the right price, they wanted to sell the house? Why not wait? If it was the right price, why would some buyer contract and close in six days?

The only reason some buyer would contract and close in six days is because that was a deal. That was a bargain because there's no other reason that someone's going to do -- act like that. I've never heard of it. I bet you've never heard of it, anybody closing in six days on a home from start to finish.

Why did the Grosses pay $180,000 to Ms. Taylor -- *1099 THE COURT: Three minutes. 16 MR. SHAW: -- for that kind of work? And 17 I have some other questions that I want to know about. 18 I want to know, where was Ms. Browning, the buyer? 19 Where was the buyer to say that she got fair market 20 value? Why did she close? We've talked about that, why 21 the buyer wanted to close, why Mrs. Gross -- why they 22 were forced to. We talked about that. 23 Where is the escrow agreement with this 24 bank if they had one? Where's the draw request with 25 this bank if they had one? Where's the evidence of why

157 the original home designer was not hired? Mr. Gross said this was for showcase purposes. Where's the photographs or the videos of construction so he could show people what he did? When Mr. Hickok got there, Mr. Gross says there was nothing hardly done; but, yet, Mr. -- that was November and Mr. Gross had to be through by December 31. Mrs. Gross said, well, no, there were things done more than that. But where are the photographs? If Hickok was wrong, where are the photographs on that?

When Hickok was there, they say, well, you know, he said it was great. There was no sheetrock, no floor, no walls, no windows, no doors, no lighting, no paint, no roof, no nothing. What could he say was so *1100 great, terrific, or fantastic? What would there be?

16 How could Mr. Gross complete the job on December 31 if 17 he was barely through in November? Where are the 18 photographs? Where's the testimony of Mr. Gross's 19 lawyer, Mr. Zimmerman? Where's the testimony from 20 Buttemiller, the agent? Where's the testimony from the 21 title company? Mr. Gross blames all these -- 22 MR. ALDOUS: Your Honor, that violates the 23 previous order of the Court. 24 THE COURT: Sustained. 25 You have one minute remaining, Mr. Shaw.

158 MR. SHAW: Thank you, Your Honor. What we know is that you've got to

precisely honor if you're going to precisely enforce. There was no reason otherwise in this case, and the Grosses are not entitled to recover. Thank you.

THE COURT: Mr. Chaiken? MR. CHAIKEN: Thank you, Your Honor. Ladies and gentlemen, I take very

seriously what I do here in the courtroom, especially when a client of mine, a friend of mine, has been sued in a manner that I think is inappropriate, in a manner that I think is unjust, and more importantly when there is --

MR. ALDOUS: Your Honor, I'm going to *1101 object to personal opinion statements. 16 THE COURT: Sustained. 17 MR. CHAIKEN: -- and when a client of mine 18 is accused of something as serious as fraud. Fraud is a 19 serious thing. And so when I'm here, I may get a little 20 excited in trying to passionately defend my client. And 21 I'm going to show you why Doug Hickok did not do 22 anything wrong that justifies finding him liable in this 23 case from the claims against him. 24 Let's begin with the simple and obvious 25 thing. Mr. Gross asked for -- I'm sorry -- I'll do it

159 this way -- through his real estate agent, not himself, a guaranty. And it looks just like that, and you've seen it a million times. And he said -- actually, Mrs. Gross said, well, we wouldn't have done this deal without it. Okay. We wouldn't have done the deal without that guaranty right there, that language right there. And, you know, we are harmed because, you know, we didn't get -- if we didn't get the guaranty. If we didn't get the guaranty, we were harmed. Okay. We were misled, all these kinds of things.

Well, here's what we know. We know we got the guaranty the same guaranty that they asked for before the contract was signed when Mr. Buttemiller asked for it. They got it in the contract. It's right *1102 there, exactly what they asked for. So what they said

16 they needed and that they would be harmed if they didn't 17 have, they got it. So, no harm. 18 Now, the evidence in this case is that 19 Mr. Hickok was asked about a guaranty, exactly that 20 guaranty. But it required two people's guarantees, his 21 and Van Shaw's. So Mr. Hickok said, no, no, no. I 22 can't promise you that I'm going to do this guaranty 23 that you're asking for. I've got to go ask Mr. Shaw, 24 and he did. Okay. 25 And you know Mr. Hickok's come in here and

160 he has asked the Court to answer a question, which is: Is this form a guaranty, this piece of paper here? Is it sufficient to constitute a guaranty? Okay. And, yeah, after the transaction, there was a question about whether it was. And Doug wasn't the only person who had a question about whether that document was a guaranty, okay, a proper form of guaranty.

The gentleman right over there, Mr. Gross, sat up here and testified "I expected that all the necessary documentation was going to be provided at the title company. And there was a problem with the documentation with regard to the guarantees." He stood right up there and told you. That was the last thing he testified to, that there was a problem with the *1103 documents. It didn't get done right. So that wasn't

16 the only person who had a question about whether or not 17 there was actually a legal guaranty. So did Mr. Gross. 18 And in the end, Mr. Gross still got -- 19 Mrs. Gross got exactly what they asked for, which was 20 the exact guaranty that they requested. And you know 21 what? The only thing Mr. Hickok said about the whole 22 guaranty issue is: I've got to make sure that the 23 guaranty is in a proper document, okay, a document to be 24 signed in the future, a form of guaranty just like 25 Mr. Gross did.

161 Is there any evidence in this record, any evidence shown to you that when Doug Hickok said, "Yeah, we'll do the guaranty. I'll go talk to Mr. Shaw," et cetera, there was never an intention to perform the guaranty back then when he said he would do it? No evidence whatsoever. To the contrary, okay, Doug was trying to get the guaranty. He signed the guaranty in the document.

And, ultimately, when you're asked, was he aware of false statements that he made way back when, a misrepresentation or a false promise, the answer is clearly, "no." He couldn't be aware of it. Do you want to know why? He didn't say anything false. What he said was true. I'll get the guaranty. I've got to go *1104 get the right form of document, okay. I'll do it, sign

16 the document. When there was a question about whether 17 or not that document is a guaranty, Judge said it's a 18 guaranty. All right. They got the guaranty. They got 19 what they wanted. No harm. 20 Well, here's something else. You know, 21 the Grosses talk about how everybody should have 22 complied with the contract and, you know, based upon 23 alleged phone calls and meetings that have never been 24 documented and so on and so forth, you know, they had an 25 excuse for why they went off and sold the house. Okay.

162 And they sold it before the buyback date, September 1st of 2009.

But you know what was interesting? Roxann Taylor sat up here yesterday, the real estate agent, and you heard her say that the Grosses told her that they needed to sell the house. They needed to sell the house. But you know what she also testified to? She said she had no idea that that need had anything whatsoever to do with an alleged failure or refusal by VSDH or anybody else to buy back the property.

So they come here and they say, oh, we sold the property early because of all the bad things VSDH and Doug Hickok did. But when they were telling the real estate agent why they wanted to sell the house, *1105 they didn't make any mention of it, none whatsoever,

16 none whatsoever. And then when they asked the real 17 estate agent, who confirmed they were very anxious to 18 sell the house, to help them out -- and they didn't have 19 to, by the way. They didn't need a real estate agent. 20 They didn't need to incur commission and all that costs 21 related to hiring a real estate agent -- they didn't 22 even accept her advice on what to sell the property for. 23 You know, she said, I could have gotten 24 them more money. I wanted to get them more money. I 25 sold a house down the street, you know, for more money.

163 It was, you know, a different size house, but more per foot. You know, I could have gotten them more money. But, no, no, they just -- they were anxious. They wanted to sell.

But for no reason related to what they're telling you the reason was -- well, while we're on the topic of, you know, supposed telephone conversations and meetings that were not documented before the contract and after -- you know, the contract tells us very clearly, the contract -- the same contract that they wanted to enforce against everybody here says there are no understandings and no agreements, anything outside of the agreement itself. It's got to be right there. It's got to be in writing. It can't be changed except by the *1106 written agreement. It's all right here in the document.

16 The Grosses come in and say, no, no, no, 17 we want to rely on stuff. That's not documented 18 anyplace. Notices have to be in writing. Deliveries 19 have to be in writing, you know. They don't want to 20 rely on any of that. 21 Now, you have seen the addendum in the 22 contract on a bunch of occasions. And all you need to 23 know, and when answering questions about whether Doug 24 Hickok did anything wrong, is the buyback date was on 25 September 1st of 2009. If the -- if the Grosses timely

164 exercised the buyback option, they may not sell or convey any right and title to the property to anybody else until there's been a breach of the buyer or the seller of its obligation to re-purchase.

Well, a breach of the obligation to re-purchase means that VSDH didn't buy the property back by September 1st or on September 1st to designate a buyback date. And we know that because, well, there was an option to do it earlier. You have to have both parties agree to do it earlier. But as the Grosses admitted, everybody knows there was no agreement to do it earlier.

And the other thing is, you know, when you're talking about complying with contracts, you've *1107 got this language right down here. And, you know, it 16 says, "Should the Grosses enter into a contract to sell 17 the property, the buyback option will immediately 18 terminate and will no longer be available to the buyer." 19 So, yet, they come in here and they're 20 asking you, well, we sold the property early. We 21 entered into a contract with Mrs. Browning to sell the 22 property before the buyback date. But forget about what 23 the contract says. That buyback option shouldn't have 24 terminated even though the contract says it should have. 25 Well, again, if you're going to come into

165 court and enforce a contract and sue on a contract, you've got to comply with it. And that contract right there says that the buyback option will immediately terminate and will no longer be available to the buyer.

Now I want to talk about the guaranty language in the contract. Okay. It's really simple, okay. What it says is, is that the guarantors -- and there only ended up being one of them, even though the guaranty talks about both of them -- shall be personally responsible to perform the obligations of VSDH under the buyback option, okay, in the event VSDH fails to perform fully under the terms of the buyback option.

So let's just assume that Doug Hickok got this guaranty out there, and it was, okay, according to *1108 the judge, and September 1st rolls around. Okay. 16 September 1st rolls around. And let's assume that the 17 buyback option hasn't terminated already as a result of 18 the early sale and the early contract by the Grosses to 19 Ms. Browning. How is Doug Hickok going to perform the 20 obligations of VSDH under the buyback option, which is 21 to buy back the property? He couldn't. 22 You heard Mrs. Gross sit up on the stand 23 here and say, well, nobody could have bought it on 9/1 24 of '09 because we didn't own it anymore. So there's no 25 way Doug Hickok could have -- could have bought the

166 property when his only liability to do so, if ever, would have been on or after September 1st of '09 if VSDH didn't do it. That assumes VSDH was required to. And if VSDH was not required to, then neither was Mr. Hickok, ever.

And that brings me to the last point about the contract that I want to talk to you about. The contract, the one that was signed by Mr. and Mrs. Gross, Mr. and Mrs. Gross, the same people come into this courtroom and who sued Mr. Hickok seeking damages from him -- they're asking for damages, money. They want money from him. They don't want performance of the buyback obligation, which is what he agreed to do if VSDH didn't do it. They want money. *1109 But what the contract said when they

16 signed it was that their sole and exclusive remedy in 17 the event VSDH, the seller, was in default -- meaning 18 didn't buy back the property on the buyback date -- was 19 to sue -- terminate the contract -- excuse me -- or, 20 right here, enforce specific performance. See that 21 right there? Enforce specific performance. 22 And what that means is you can come to 23 Court and you can say, Judge, make them perform. Make 24 them buy back the property. But the Grosses didn't do 25 that. They didn't avail themselves of that remedy.

167 They sold the property off to somebody else before that obligation ever came due, if it ever came due. And instead, they come in here and they say, well, we're suing for money damages.

THE COURT: Two minutes. MR. CHAIKEN: And you know when they --

when they look at their -- at the contract, the contract said, yeah, you know, this addendum, the seller will reinstate that remedy, you know, about seeking other relief, like damages. Mr. Hickok didn't. The Grosses say, well, you know, we're coming in here anyway. Forget about what the contract says. We're going to sue Mr. Hickok for damages anyway.

When you answer the questions of the Court *1110 in the charge that's being presented to you and you're 16 asked whether Mr. Hickok failed to comply with the 17 contract, the answer must be, "no," because he was never 18 given the opportunity to do so and because the Grosses 19 couldn't sell him the property if he ever had an 20 obligation to buy it. All right. 21 And if VSDH's defaults, if any, were 22 excused or their failures to comply were excused, so 23 were Mr. Hickok's. And, you know, Mr. Aldous stands up 24 there and says, you know, when they said they wouldn't 25 perform the guaranty, you know that's fraud.

168 When you look at the instructions of the Court and the definitions of fraud in this document and you look at all that, you will see that in order for there to have been any fraud, Mr. Hickok would had to have said something that wasn't true before the contract was signed, okay, indicating that he never had any intention to -- to guaranty the contract. And you already know that that isn't what happened. So when you're asked whether there was fraud, the answer to that question is clearly a big, no, no, in red.

And when you're asked whether there were any damages for fraud, the answer is, "no." You know why? Because Mr. and Mrs. Gross said the only way they would have been harmed with regard to the guaranty is if *1111 there wasn't one, because they wouldn't have entered

16 into the transaction. But because there was one, they 17 couldn't have suffered any harm. 18 Ladies and gentlemen, I really do thank 19 you for your time and your attention, and I look forward 20 to seeing you deliberate and seeing the results of your 21 deliberations. 22 THE COURT: Mr. Aldous? 23 MR. ALDOUS: Thank you, Your Honor. 24 When I started out, I said, you know, 25 deceive, delay, deny; and it's continued in this

169 courtroom. It's amazing to me. Mr. Shaw stood up there with a list of things I wish I knew. I wish I knew. We don't know this. We don't know that. We didn't get this. You saw on the witness stand when he secretly went out and sued the Grosses, but didn't tell them. That was July of 2009, almost six years ago. For six years, he could have answered every one of those questions and he didn't.

How many times did they go to that house to even look at the things to say, you know what, this is crappy work? Not one time. Instead, they brought the original builder in here, who hadn't been in the house since 2007, and said, hey, let me ask you these questions. Did they go out and take any photographs? *1112 Did that even matter to them? No.

16 Why? Because they would rather come in 17 here and raise innuendos and raise possibilities because 18 they know the truth. The truth is it's good. The truth 19 is that there was an economy that tanked, and that's 20 why. They don't want the truth. They wanted innuendo. 21 They want to try to sell you a bag of goods. That's 22 what they want. 23 You know, they sit there and they say -- 24 and it just kills me. They say his -- the Grosses' real 25 estate agent is the one who did this and that. Well,

170 you know what, let's take a look at the actual contract. You see where it says Vaquero Residential Realty, the listing broker, that means that they worked for VSDH. They're acting like, oh, that was our broker and everything he did was on us. Well, it was their broker. They say that -- that if you want to precisely enforce a contract, you must precisely perform.

Let me ask -- let me translate that. If you've got a lawyer who's determined to get out of a contract and he's working with his partners and then they get another lawyer in here, they can raise as many objections to that contract as could be raised. And if -- they will sell it as hard as they can sell it, but you have to buy it in order for it to work because *1113 that's what it is. It is a -- it is a sell job and

16 that's it. 17 There's not one bit -- they said, oh, we 18 don't even know what the -- what the fair market value 19 was. Well, that's right, because the fair market value 20 doesn't have anything to do with it. The question is: 21 Was it reasonable for Betsy and Ken to hire a real 22 estate agent to sell the house? 23 Well, it was sure reasonable when they 24 wanted to sell the house. They had Vaquero Realty as 25 their agent. Well, sure, it's reasonable. Was it

171 reasonable to pay her that? You know what? People charge money for what they do, and she charged less than what she normally charges. Yeah, it was reasonable. All these other charges, not one of them that they mentioned, other than the real estate fee. And all they did was argue innuendo. Not one time did they come out here and show you with any evidence that that was unreasonable.

Mr. Chaiken was up here telling you, you know, there's no fraud here. There's no fraud. They got exactly what they asked for in the guaranty. Well, you know what, we didn't have that until 30 minutes ago when the judge made the ruling. And you know that because during this trial, Mr. Chaiken continually is *1114 asking Mr. Hickok, "Isn't it true you signed this in

16 your personal capacity? You didn't mean to." 17 And the judge said that that's not good. 18 Legally, you're stuck, even though you tried to deceive 19 us, even though you said on the witness stand, "Hey, 20 it's not my problem if they don't give you the right 21 documents." 22 I'm telling you, they're selling you a 23 bill of goods, and you have to buy it in order for it to 24 work. I don't know -- it's got to be difficult because, 25 you know, a committed lawyer and his partners can really

172 raise some problems with a contract. And if you give them three years like they had to make up their defenses, you know it's going to happen. And that's what you got here. You've got a bunch of made-up defenses in an effort to avoid a responsibility that they had.

And why was that? Well, let me tell you something. The reason that escrow agreement didn't really mean anything to them is because, you see this on Exhibit 98, which is the settlement statement from them -- do you see that money, Gross amount due from the seller of $2,695,017? They didn't get that money unless they closed. And I'll tell you what happened.

I don't want to guaranty this. That's *1115 okay, man. Just sign it and we'll get out of it. 16 That's what it was. You don't worry about that buyback. 17 If we've got to do that to get rid of these carrying 18 costs on all this money that we have -- remember, we 19 have this loan of a million nine. We need to get rid of 20 that. We'll worry about this other stuff later. 21 If we do it right and we don't respond and 22 we pretend -- we just say, "Be quiet. Don't do 23 anything," maybe they'll screw up. That's what 24 happened. They wanted the money. They've got the 25 money. Now they're raising a bunch of defenses, and

173 it's because they're saying this is a final stage of their defense, the final stage of their made-up idea.

It's going to be I -- I've now played it out over five-and-a-half years. What we need to do, we just be quiet when they ask us questions and we'll just say they did it. When we say, hey, we're going to have to sell this because of financial conditions, whatever, because it's a good offer -- which is the only evidence you heard from Roxann Taylor; it was a good offer because it was cash. And during that period of time, nobody was getting loans. That's what she said.

Now Mr. Shaw stood up here and said, well, you know, that thing -- that house went down in value. It must have been the addition, because Lord knows they *1116 must have devalued the property. He said that with no

16 evidence. Did anybody come in here and say that it was 17 devalued because of that? 18 To the contrary. But like I said, this is 19 just the last stage in their defense and their effort to 20 avoid their promises and their responsibilities. It's 21 the last stage. And they said -- and you know what? 22 They're rolling the dice with you. They're saying I 23 hope you pick up -- I hope you -- just one little thing, 24 just let us off a little bit, and it'll be all worth it. 25 That's what they're saying.

174 If you don't do 100 percent of justice, you've helped them. You've helped them avoid their responsibilities. If you don't award every bit of that, $1 off, and they say it was worth it. One dollar off and they have -- they won, because that has been the plan all along. The plan is just give them money, close it, move on. We'll take the profit. We'll move on.

Of course, I get worked up about this stuff too, and I appreciate y'all listening and hearing us out. But just remember that when you step back there, you're the only ones who can write in the answers to these questions. And it's got to be based upon what you think the evidence is, not what I think, not what they think. But don't be -- don't be misled by fancy *1117 lawyer arguments about the contract says this or that.

16 Do what's right. 17 Thank you, Your Honor. 18 THE COURT: Ladies and gentlemen, when you 19 go into the jury room to answer the questions, the first 20 thing you will need to do is to choose a presiding 21 juror. The presiding juror has these duties: A, have 22 the complete charge read aloud if it will be helpful to 23 your deliberations; B, preside over your deliberations, 24 meaning manage the discussions and see that you follow 25 these instructions; C, give written questions or

175 comments to the bailiff who will give them to the judge; D, write down the answers you agree on; E, get the signatures for the verdict certificate; and, F, notify the bailiff that you have reached a verdict.

Do you understand the duties of the presiding juror? If you do not, please tell me so now. I assume that you do based on the noddings of your heads.

Instructions for signing the verdict: Number 1, unless otherwise instructed, you may answer the questions on a vote of five jurors. The same five jurors must agree on every answer in the charge. This means you may not have one group of five jurors agree on one answer and a different group of five jurors agree on *1118 another answer.

16 Two: If five jurors agree on every 17 answer, those five jurors sign the verdict. If all six 18 of you agree on every answer, you are unanimous and only 19 the preceding juror signs the verdict. 20 Number 3: All jurors should deliberate on 21 every question. You may end up with all six of you 22 agreeing on some answers while only five of you agree on 23 other answers. But when you sign the verdict, only 24 those five who agree on every answer will sign the 25 verdict.

176 Does everyone understand these questions? If not, please let me know now. All right. Ladies and gentlemen of the jury, at this time, all of the evidence, the charge of the Court, and the closing argument of counsel are before you. I'm going to hand to the bailiff the charge of the Court applicable to the law in this case along with a verdict form. The bailiff will lay this on the table in the jury room. Once all members of your jury are present and assembled in the jury room, the case is formally submitted to you and you may begin your deliberations.

All rise. Please step down from the jury box and accompany the bailiff into the jury room. *1119 (Jury retires to the jury room) 16 THE COURT: Anything further from the 17 plaintiff? 18 MR. ALDOUS: Just a question, Your Honor, 19 but nothing further with regard to trial stuff. 20 THE COURT: From defendant, VSDH? 21 MR. SHAW: Nothing, Your Honor. 22 THE COURT: From defendant, Hickok? 23 MR. CHAIKEN: Not at this time, Your 24 Honor. 25 THE COURT: All right. We stand in recess

177 until the jury returns. (Recess taken) (Alternate juror was released) THE COURT: All rise. (Jury enters the courtroom) THE COURT: All right. Ladies and

gentlemen of the jury, I understand that you would like to go home now and come back tomorrow morning at 9:00 a.m. You're certainly free to do that. I just want to remind you that during this overnight recess, you're under the same restrictions that you've been previously given. You're not to discuss this case among yourselves or with anyone else until such time as you have completed your deliberations in this case and have been *1120 discharged as jurors.

16 You're free to go. We'll see you tomorrow 17 morning. 18 (Proceedings concluded for the day) 19 20 21 22 23 24 25

178 STATE OF TEXAS )

COUNTY OF DALLAS )

I further certify that this Reporter's Record of the proceedings truly and correctly reflects the exhibits, if any, admitted by the respective parties. *1121 WITNESS MY OFFICIAL HAND this the 24th of October, 2015.

16 17 /s/ Cathye G. Moreno Cathye G. Moreno, Texas CSR #6076 Expiration Date: 12/31/16 18 Official Court Reporter 19

County Court at Law No. 1 600 Commerce Street, Suite 550 Dallas, Texas 75202 20 cathyemoreno@sbcglobal.net 21

(214)653-7496 22 23 24 25

TAB 29 *1122 REPORTER'S RECORD VOLUME 7 OF 10 VOLUMES CAUSE NO. CC-09-05232-A

VSDH VAQUERO VENTURE, LTD.

)IN THE COUNTY COURT ) Plaintiff/Counter-Defendant, ) ) ) ) )AT LAW NO. 1 )

V.

KEN GROSS and BETSY GROSS Defendants/Counter-Plaintiffs, )

) ) ) )

V.

EVAN L. SHAW and DOUGLAS M. HICKOK ) ) Intervenors/Counter-Defendants, )DALLAS COUNTY, TEXAS -------------------------------------------------------

TRIAL ON THE MERITS

------------------------------------------------------- *1123 16 On the 19th day of June 2015, the following 17 proceedings came on to be heard within the presence of 18 19 a jury in the above-entitled and -numbered cause before 20 the Honorable D'METRIA BENSON, judge presiding, held in 21 Dallas, Dallas County, Texas. 22 Proceedings reported by computerized stenotype 23 machine. Reporter's Record produced by computer-aided 24 transcription. 25

APPEARANCES:

MR. STEVEN E. ALDOUS SBN 00982100 Forshey Prostok, LLP 500 Crescent Court Suite 240 Dallas, Texas 75201 (214)716-2100 ATTORNEY FOR DEFENDANTS/COUNTER-PLAINTIFFS KEN GROSS and BETSY GROSS

- AND -

VSDH VAQUERO HOMES, INC. AND VSDH HOMES, INC.

20 21 22 23 24 25

3 INDEX JUNE 19, 2015 PAGE VOL. PROCEEDINGS.............................. 4 7 VERDICT OF THE JURY..................... 4 7 END OF PROCEEDINGS....................... 6 7 REPORTER'S CERTIFICATE................... 7 7

EXHIBIT INDEX (NONE)

*1125 16 17 18 19 20 21 22 23 24 25

4

PROCEEDINGS

June 19, 2015 THE COURT: All right. Bring in the jury. (Jury enters the courtroom) THE COURT: You may be seated. Would the presiding juror please stand? Is this your unanimous verdict? PRESIDING JUROR: Yes, ma'am, it is. THE COURT: You may be seated. I will now read the verdict into the

record. Question No. 1: Did any of the following parties fail to comply with the new home contract? VSDH Vaquero, Ltd: Answer, no. *1126 Doug Hickok: Answer, no. 16 Ken Gross, Betsy Gross: Answer, yes. 17 Question No. 2: Who of those whom you 18 have found to have complied -- failed to comply with the 19 contract failed to comply with the contract first? 20 VSDH Vaquero Venture, Ltd: No. 21 Doug Hickok: No. 22 Ken Gross and Betsy Gross: Yes. 23 Question No. 3: Was the failure of any of 24 the parties listed below excused? 25 VSDH Vaquero Venture, Ltd: Yes.

5 Doug Hickok: Yes. Ken Gross and Betsy Gross: No. Question No. 4: Did any of those listed

below commit fraud against Ken and Betsy Gross with regard to the guarantee in the new home contract? Answer "yes" or "no" for each.

VSDH Vaquero Venture, Ltd: No. Doug Hickok: No. Question No. 5 was not answered because it

was predicated upon a "yes" answer to Question No. 4. Question No. 6 was not answered because it was predicated on "yes" answers to Questions No. 1 and No. 2.

Question No. 7 was not answered because it *1127 was predicated on a "yes" answer to Question No. 4. 16 Question No. 5 was not answered because it 17 was predicated upon a "yes" answer -- excuse me. 18 Question No. 8 was not answered because it was 19 predicated upon a "yes" answer to Question No. 5. 20 Question No. 9 was not answered because it 21 was predicated upon a "yes" answer to Question No. 5. 22 Anything further from the plaintiff? 23 MR. ALDOUS: No, Your Honor. 24 THE COURT: From defendant, VSDH? 25 MR. SHAW: No, Your Honor.

6 THE COURT: From defendant, Hickok? MR. CHAIKEN: No, Your Honor. THE COURT: All right. Ladies and

gentlemen of the jury, the Court has previously instructed you that you should observe strict secrecy during the trial and during your deliberation. I am now about to discharge you. And after you're discharged, you will be released from your secrecy. You will then be free to discuss the case and your deliberations with anyone; however, you are also free to decline to discuss the case and your deliberations if you wish.

After you are discharged, it is lawful for the attorneys or other persons to question you to determine whether any of the standards for jury conduct *1128 that I have given you during the course of this trial

16 were violated and to ask you to give an affidavit to 17 that effect. You are free to discuss or not to discuss 18 these matters and to give or not to give an affidavit. 19 Thank you for your service. You are free 20 to go. 21 All rise. The jury is excused. 22 (Proceedings concluded) 23 24 25

7 STATE OF TEXAS )

COUNTY OF DALLAS )

I further certify that this Reporter's Record of the proceedings truly and correctly reflects the exhibits, if any, admitted by the respective parties. *1129 WITNESS MY OFFICIAL HAND this the 24th of October, 2015.

16 17 /s/ Cathye G. Moreno Cathye G. Moreno, Texas CSR #6076 Expiration Date: 12/31/16 18 Official Court Reporter 19

County Court at Law No. 1 600 Commerce Street, Suite 550 Dallas, Texas 75202 20 cathyemoreno@sbcglobal.net 21

(214)653-7496 22 23 24 25

NOTES

[1] By attaching these documents as Exhibits 1 and 3 Plaintiff does not waive any defenses to claims raised or to be raised by Defendants with respect to any allegation made by Defendants/Counterclaimants regarding these documents. PLAINTIFF'S FIRST AMENDED PETITION - Page 2 Pet_lst-Amd.Doc (Name of Owners

[1] Association) A. SUBDIVISION INFORMATION: "Subdivision Information" means: (I) the restrictions applying to the subdivision, (II) the bylaws and rules of the Owners' Association, and (iii) a resale certificate, all of which were provided by the Owners' Association In compliance with Section 207.003 of the Texae Property Code. Check only one box): ' ~ a on, Buyer may the Subdivision Information to Buyer. If Buyer, does not receive the Su terminate the contract at any time prior to closing and t · ey wlll be refunded to Buyer. If Seller delivers the Subdivision lnforma ermlnate the contract for any reason within

[7] days after Buyer rece ts on Information or prior to closing, whichever first' ocicurs, and the earnest er. £i'

[2] Buyer has received and approved the Subdivision Information before signing the contract. "O 3. Buyer does not require delivery of the Subdivision Information. lf Seller becomes aware of any material changes in the Subdivision Information, Seller shall lmmedlately give notice to Buyer. Buyer may terminate the contract prier to closing by giving written notice to Sellar If: (I) any of the Subdivision Information provided was not true; or (II) any material adverse change In the Subdivision Information occurs prior to closing, and the earnest money will be refunded to Buyer. B. FEES: Buyer shall pay any Owners' Association fees resurting from the transfer of the Property,.nst to e11eeeel a11dSeUe1 s11a!ipaya11yexcass. , $818 11 NOTICE TO BUYER REGARDING REPAIRS BY THE OWNERS' ASSOCIATION: The Owners' Association may have the sole responsibility to make certain repairs to the Property. If you are concerned about the condition of any part of the Property which the Owners' Association is required to repair, you should not sign the contract unless you are satisfied that the Owners' Association will make the desired repairs. -{/'. Seller VSDH Vaquero Venture Ltd, i(S j)if fur;u..r ,-a:;...._- bf>. Seller Tha form of this addendum has been approved by !he Texas Real Estate Commission for usa only with slmflar!y approved or promulgated forms of contracts. Such approval relates to this contract form· only. TREC forms are Intended for use only by trained reel estate !lcensees. No repreaenlallon Is made as to the legal velld!ly or adequacy of any provision Jn any specific transactions. It 18 not Intended for complex transactions. Texas Real Estate Commission, P.O. Box 12188, Austin, TX 78711- 2188, 1-800-260-8732 or (6'f2) 459-6544 (http:flwww.trec.s!ate.b:.us) TREC No. 36·4. This form replaces TREC No. 36·3. (TAR-1922) 2-13-06 Page 1of1 Vaquero Residential Realty 1405 Fountain Grass Ct, Wes!lako TX 76262 Phone:8174306600 Pex: 817-430-6601 Vaquero Residential Re-11lly, LL V.SDR Vaqucro V Produced wlth ZlpForm™ by RE FormsNet, LLC 1S025 Fifteen Mlle Road, CllntM Township, MJchlgan48030 ww.y.zjprorm com

[1092] Electrical

[15]

[185] 2,775 Electrical - Additional Art Cans I Switches

[750]

[750] Lightening Rods --"----

[1] Our record does not contain VSDH's petition, only the Grosses' counterclaim. The absence of the petition does not impair our ability to consider the issue in this proceeding. See TEX. R. APP. P. 52.7(a). -2- Shaw as a witness but said he believed it was "more than a 50 percent chance." He also represented that counsel for real party Hickok had previously represented he would call Shaw as a witness, but Hickok's counsel disputed that assertion, saying he may need to call him "simply to rebut testimony that has been offered by Mr. Gross ... regarding certain interactions he has had with Mr. Shaw." In response, VSDH complained the Grosses had failed to produce evidence to trigger disqualification under rule 3.08(a). In particular, they asserted the Grosses failed to show that Shaw would be testifying to an essential fact that could not be obtained by other evidence. The trial court disagreed that evidence needed to be presented as to "what the lawyer would testify to" and orally ruled that Shaw "may stay on the case, but he may not make any presentations before the Court." An oral ruling may be subject to mandamus review if the ruling is clear, specific, enforceable, and adequately shown by the record. See In re Penney, No. 05-14-00503-CV, 2014 WL 2532307, at *2 n.3 (Tex. App.-Dallas June 14, 2014, orig. proceeding) (mem. op.). An appellate court can determine whether an oral ruling meets these criteria by reviewing the