EFTA01130196.pdf
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1 UNITED STATES BANKRUPTCY COURT
SOUTHER DISTRICT OF FLORIDA
2 FORT LAUDERDALE DIVISION
3
4 IN RE: NO.: 09-34791-RBR
5 ROTHSTEIN ROSENFELDT ADLER, P.A.
6
7
8 VIDEOTAPED
9 DEPOSITION
10 OF
11 JOHN JACK SCAROLA
12
13
14
15 350 East Las Olas Boulevard
Fort Lauderdale, Florida
16 July 2, 2013
Scheduled for 10:00 a.m.
17 Commencing at 10:07 a.m. to 5:23 p.m.
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1 UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
2 FORT LAUDERDALE DIVISION
3
4 IN RE: CHAPTER 7
5
BANYON 1030-32, LLC CASE NOS: 10-36691-RBR
6 BANYON INCOME FUND, L.P. 11-40929-RBR
7 Debtors. Jointly Administered Under
Case No. 10-33691-RBR
8
/
9
10
11
12 VIDEOTAPED
13 DEPOSITION
14 OF
15 JOHN JACK SCAROLA
16
17
18
19 350 East Las Olas Boulevard
Fort Lauderdale, Florida
20 July 2, 2013
Scheduled for 10:00 a m.
21 Commencing at 10:07 a.m. to 5:23 p.m.
22
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1 APPEARANCES:
2 On behalf of TD Bank, N.A.:
WILLIAM O.L. "WEN" HUTCHINSON, Esquire
3 JOSEPH SHEERIN, Esquire
MCGUIREWOODS
4 201 North Tyron Street
Suite 3000
5 Charlotte, North Carolina 28202
6 On behalf Herbert Stettin, Trustee:
JOHN H. GENOVESE, Esquire
7 MICHAEL A. FRIEDMAN, Esquire
GENOVESE JOBLOVE & BATTISTA, P.A.
8 100 Southeast Second Street
44th Floor
9 Miami, Florida 33131
-and-
10 DAVID GAY, Esquire
BERGER SINGERMAN
11 350 East Las Olas Boulevard
Suite 1000
12 Fort Lauderdale, Florida 33301
13 On behalf of Robert Furr, Trustee:
JASON S. RIGOLI, Esquire
14 FURR & COHEN, P.A.
One Boca Place, Suite 337W
15 2255 Glades Road
Boca Raton, Florida 33431
16
On behalf of the Plaintiffs:
17 ADAM MOSKOWITZ, Esquire
KOZYAK TROPIN & THROCKMORTON, P.A.
18 2525 Ponce de Leon Boulevard
Ninth Floor
19 Miami, Florida 33131-2335
20 On behalf of the Plaintiffs:
William Scherer, Esquire
21 CONRAD & SCHERER, LLP
633 South Federal Highway
22 Eighth Floor
Fort Lauderdale, Florida 33301
23
24
25
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1 CONT. APPEARANCES:
2 On behalf of Unsecured Creditors Committee:
MICHAEL J. GOLDBERG, Esquire
3 350 East Las Olas Boulevard
Suite 1600
4 Fort Lauderdale, Florida 33301-2229
5 On behalf of Morse Operations and
The Estate of Ed Morse:
6 JOHN M. MULLIN, Esquire
TRIPP SCOTT
7 110 Southeast Sixth Street
Fifteenth Floor
8 Fort Lauderdale, Florida 33301
9
10 ALSO PRESENT:
11 Patricia Diaz, FPR, RPR
12 Dean J. Chimerakis, Videographer
Custom Video Services, Inc.
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1 INDEX
2 WITNESS: PAGE
3 JOHN JACK SCAROLA
4 DIRECT EXAMINATION BY MR. HUTCHINSON 7
CROSS-EXAMINATION BY MR. GENOVESE 173
5 CROSS-EXAMINATION BY MR. MOSKOWITZ 216
6
7
8 EXHIBITS
9 -
10 NO. DESCRIPTION PAGE
11 Exhibit No. 1 Subpoena 7
12 Exhibit No. 2 Subpoena for Christian 9
Searcy
13
Exhibit No. 3 Transcript of May 17, 2013 48
14 Hearing
15 Exhibit No. 4 Plaintiff's First Request 68
for Production of Documents
16 to TD Bank
17 Exhibit No. 5 TD Bank Victims Notice of 79
Filing Expert Disclosures
18
Exhibit No. 6 Time Summary 81
19
Exhibit No. 7 Conspiracy Chart 111
20
Exhibit No. 8 Statute 768.72 124
21
Exhibit No. 9 Statute 768.73 148
22
Exhibit No. 10 Handwritten Notes 163
23
Exhibit No. 11 Handwritten Notes 168
24
25
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1 THE VIDEOGRAPHER: Today's date is July 2nd,
2 2013. The time is approximately 10:10 a.m. Eastern
3 Standard Time. We are here to videotape the
4 deposition of John Jack Scarola in regard to
5 Rothstein, Rosenfeldt, Adler, PA, Case 09-34791
6 BKCRVR.
7 The court reporter is Patty Diaz with
8 Ouellette and Mauldin Court Reporting. My name is
9 Dean Chimerakis, videographer, with Custom Video
10 Services of Miami.
11 Will counsel please state your appearance for
12 the record?
13 MR. HUTCHINSON: Wayne Hutchinson with
14 McGuireWoods on behalf of TD Bank, N.A., and with
15 me is Joe Sheerin.
16 MR. GENOVESE: John Genovese, Genovese,
17 Joblove and Battista on behalf of Herb Stettin.
18 Along with me is my colleague, Michael Friedman.
19 MR. RIGOLI: Jason Rigoli, Furr & Cohen on
20 behalf of Robert Furr, Chapter 7 Trustee for Banyon
21 1030-32 and Banyon Income Fund.
22 MR. MOSKOWITZ: Adam Moskowitz, Bill Scherer
23 and Javi Lopez on behalf of the plaintiffs in the
24 case.
25 MR. MULLIN: John Mullin from Tripp, Scott on
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1 behalf of the Estate of Ed Morse and Morse
2 Operations, Inc.
3 MR. GOLDBERG: Mike Goldberg on behalf of the
4 Creditors Committee.
5 MR. GAY: David Gay with Berger Singerman
6 counsel on behalf of Herbert Stettin.
7 Thereupon,
8 JOHN SCAROLA
9 was called as a witness and, having been duly sworn, was
10 examined and testified as follows:
11 THE WITNESS: I do.
12 DIRECT EXAMINATION
13 BY MR. HUTCHINSON:
14 Q. Good morning, Mr. Scarola. We met before the
15 deposition. Would you please state your name for the
16 record?
17 A. Good morning. My name is John Scarola. I am
18 also most commonly known as Jack.
19 Q. Mr. Scarola, I will show you what I marked as
20 Exhibit 1. Do you recognize Exhibit 1?
21 (Exhibit No. 1, Subpoena, was marked for
22 identification.)
23 A. It appears to be a copy of the subpoena for
24 this deposition that was served upon my office and
25 accepted at my direction.
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1 BY MR. HUTCHINSON:
2 Q. And are you appearing here today pursuant to
3 this subpoena?
4 A. I am.
5 Q. And this subpoena includes a document request,
6 does it not?
7 A. It does.
8 Q. And have you produced all documents that are
9 responsive to the request included therein?
10 A. I believe I have.
11 Q. Does that include some documents that you have
12 brought with you here today?
13 A. That is correct.
14 Q. Based on what was previously produced and what
15 you brought here today, you believe that all documents
16 responsive to these requests have now been provided.
17 Correct?
18 A. I don't have personal knowledge of the
19 production that was not made by me. I am told that you
20 have already received duplicate copies of most of the
21 materials that I brought today, but I have brought with
22 me all of those materials in my possession that are
23 responsive to the subpoena.
24 Q. And you are fine with us looking through those
25 materials to confirm that we have them and if not,
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1 making any copies that we need to make so that we have
2 them for our records?
3 A. Yes. I know that there are documents that are
4 included in the group of documents that I brought this
5 morning that were not produced to you because they are
6 my personal notes with regard to my review of the other
7 materials.
8 Q. But you are not aware of any additional
9 materials that either have not been provided or are not
10 with you here today?
11 A. I am not.
12 Q. Let me show you what I marked -- is marked as
13 Exhibit 2.
14 (Exhibit No. 2, Subpoena for Christian Searcy,
15 was marked for identification.)
16 A. Yes, sir.
17 BY MR. HUTCHINSON:
18 Q. Do you recognize Exhibit 2, sir?
19 A. I do.
20 Q. What is Exhibit 2?
21 A. Exhibit 2 is a copy of a subpoena that was
22 accepted by my office on behalf of Christian Searcy and
23 I have seen a copy of this subpoena as well.
24 Q. And am I correct that this subpoena also
25 includes certain document requests?
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1 A. It does.
2 Q. And we have not received a separate response
3 to this subpoena from your law firm. Is your document
4 production individually supposed to respond to this
5 subpoena as well?
6 A. It is.
7 Q. So as we sit here today, you have no knowledge
8 of additional documents responsive to the request,
9 including Exhibit 2, that are responsive therein that
10 have not either been provided to us previously or are
11 not in the materials that you brought here today?
12 A. That is correct. Certainly, it's possible
13 that I may have overlooked something, but I don't think
14 SO.
15 Q. Mr. Scarola, in what fields are you an expert?
16 A. I am a trial lawyer who has been practicing in
17 the area of litigation since 1972. I am Board-certified
18 in personal injury and in business litigation as well
19 and I believe that both certifications have been in
20 place since they were offered by the Florida Bar.
21 Q. And if you were going to list the fields in
22 which you believe that you are an expert, what fields
23 how would you describe those fields and what would they
24 be?
25 A. Well, for purposes of the deposition today, I
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1 have been asked to express opinions with regard to the
2 punitive damage value of claims against TD Bank and I
3 present myself as having sufficient expertise in that
4 area to express those opinions.
5 Q. So it's your understanding that your opinions
6 in this matter are limited to the value of potential
7 punitive damages claims against TD. Is that correct?
8 A. That certainly is the primary focus of what I
9 have been asked to do, and while I may have formed some
10 tangential opinions that relate to that primary area,
11 that is the focus of what I have done.
12 Q. What qualifies you as an expert on punitive
13 damages and the values of punitive damages claims?
14 A. The total of 40 years experience that I have
15 had litigating both criminal and civil cases, including
16 many punitive damages claims.
17 Q. At what point during that 40-year career did
18 you become an expert on valuating punitive damages
19 claims?
20 A. I cannot tell you the point in time at which
21 someone would have independently recognized my
22 expertise. It has been an evolving process, so that's a
23 question that I can't answer for you, except to tell you
24 that it is my personal assessment that I am certainly
25 there now.
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1 Q. Are there any specific factors that you
2 believe makes you qualified to be an expert on the
3 valuation of punitive damages claims other than your
4 general experience?
5 A. Yes. It is an area of the law that I have
6 studied. It is an area of the law that I have focused
7 study upon. That is, I am sure that over the course of
8 particularly the last 35 years I have taken CLE courses
9 that have dealt with the topic of punitive damages as
10 well as having taught multiple courses dealing with the
11 topic of punitive damages.
12 So, it is as a consequence of practical
13 experience, formal education and self-study that I have
14 accumulated the degree of expertise that I have in this
15 area.
16 Q. Let's talk about the CLE courses that you have
17 taught that deal with the valuation of punitive damages
18 claims. Can you please tell me about those courses,
19 their titles and when they were offered?
20 A. I'm sorry, but I cannot give you the course
21 titles nor can I tell you the specific dates on which
22 the courses were offered.
23 What I can tell you is that I have lectured on
24 both the state and local level on the topic of punitive
25 damages and have also been invited to give lectures on
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1 punitive damages in front of at least one other state
2 Bar Association.
3 Q. What state Bar Association was that that you
4 are referring to?
5 A. Ohio.
6 Q. Were they the sponsor of the continuing
7 education class?
8 A. They were.
9 Q. And where was that lecture?
10 A. It actually occurred when that Bar Association
11 met in Palm Beach County.
12 Q. And when was that?
13 A. I can't give you the date.
14 Q. Was it in the last five years?
15 A. I'm not sure.
16 Q. What's your best estimate of when that would
17 have been?
18 A. Approximately, five years ago.
19 Q. And did you prepare materials for that CLE
20 presentation?
21 A. I don't know whether I prepared materials
22 specifically for that CLE presentation or whether I
23 relied upon materials previously prepared and having
24 lectured on the topic prior to that lecture.
25 Q. Would you still have the materials that you
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1 would have used in these past lectures?
2 A. Probably some of them.
3 Q. Is the information contained in those
4 materials anything that you relied upon in forming the
5 opinions in this case?
6 A. The information contained within those
7 materials include principles that I relied upon in
8 formulating my opinions in this case, I think would be a
9 more accurate way to state the relationship between
10 those materials and my opinion.
11 Q. And to the extent that you can find any of
12 those ---
13 A. You've got them.
14 Q. Okay. Are those materials with you here
15 today?
16 A. They are. If they exist, they are in that
17 box.
18 Q. Thank you very much.
19 A. You are welcome.
20 Q. Other than the lectures at the Ohio State Bar
21 Association, were your other CLE lectures all
22 sponsored -- were the classes all sponsored by the
23 Florida Bar Association?
24 A. No.
25 Q. Who were the other CLE classes sponsored by
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1 wherein you lectured on punitive damages?
2 A. Palm Beach County Bar Association, Palm Beach
3 County Justice Association, Florida Justice Association.
4 Q. And over how many years did those lectures
5 occur?
6 A. Certainly within the past 20 years, and I
7 don't know that I can accurately narrow it down beyond
8 that. It's a topic that I have been dealing with
9 significantly over at least the last 20 years.
10 Q. Have you lectured on the punitive damages
11 aspect of the Florida Tort Reform Acts that were
12 implemented in the late 1990s?
13 A. I have.
14 Q. What would have been your topics on -- what's
15 been the subject matters of those lectures on those
16 topics?
17 A. The implications from both the legal and
18 practical standpoint of the legislative changes.
19 Q. And what do you recall about those
20 implications?
21 A. I recall that the Florida legislature has,
22 from time to time, been imposing various restrictions on
23 the common law ability to recover punitive damages.
24 Q. In your opinion, does the Florida Legislature
25 have the right to do that?
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1 A. It is my personal opinion that the Florida
2 Legislature has a limited right to deal with imposing
3 restrictions on the ability to recover punitive damages,
4 that there are constitutional limitations on how those
5 restrictions may be imposed.
6 Q. What constitutional limitations are you
7 referring to?
8 A. The due process and equal protection clauses
9 of both the United States Constitution and the Florida
10 Constitution.
11 Q. Are you claiming -- is it your -- are you
12 offering an opinion in this matter that there is a
13 property right with respect to a punitive damages claim?
14 A. No. I am not offering that opinion. I am
15 assuming for purposes of the opinions that I will be
16 expressing today that the current legislative
17 limitations that have been imposed upon the ability to
18 recover punitive damages pass constitutional muster.
19 Q. They do pass constitutional muster?
20 A. I have assumed that for purposes of the
21 opinions that I am expressing today.
22 Q. So, you are not offering an opinion in this
23 matter that the current statutes limiting punitive
24 damage awards are somehow unconstitutional or not
25 applicable to this matter?
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1 A. I am not offering that opinion today.
2 Q. And you are not planning on offering that
3 opinion at the confirmation hearing?
4 A. I don't plan on offering that opinion at the
5 confirmation hearing, no.
6 Q. Let's go back. You talked about that you've
7 lectured on the practical implications of the new -- of
8 the punitive damages tort reform that was implemented in
9 the late 1990s. What is your understanding of the
10 practical implications of those reforms?
11 A. That really is a very broad question and I
12 would prefer that it be more focussed before I attempt
13 to answer it.
14 In what regard?
15 Q. Well, are there limits on the -- the amount of
16 punitive damages? Is it your understanding there are
17 limits on the amount of punitive damages that can be
18 recovered as a result of such reforms?
19 A. Yes, under some circumstances.
20 Q. And what are those circumstances?
21 A. Those that are specifically described in the
22 statute.
23 Q. Do you recall any of those circumstances
24 without referencing the statute?
25 A. I think I can recall some of them without
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1 referencing the statute. Certainly, if you want the
2 most accurate answer I am able to give you, I've got a
3 copy of the statute in the materials that have been
4 provided, and it would be easier to have it in front of
5 me. But if what you would like to do is test my memory,
6 you know, I will play that game with you.
7 Q. Well, we are not playing games.
8 A. Okay.
9 Q. But what do you recall about the statutory
10 limitations?
11 A. I recall that there are limitations that would
12 impose a three times compensatory damage limit under
13 some circumstances, limitations that impose a four time
14 compensatory damage limitation under some circumstances.
15 There is expressed statutory language that indicates
16 that there is no statutory limitation under other
17 circumstances, and I recall that there is specific
18 language in the statute that indicates that the statute
19 is primarily applicable to products liability claims.
20 Q. Are you offering an opinion in this matter
21 that the statutes are somehow not applicable to the
22 claims at issue?
23 A. It is my opinion that the circumstances of the
24 punitive damage claims against TD Bank take those damage
25 claims outside the statutory limitations.
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1 Q. Is that -- is it your opinion that it's
2 outside the statutory limitations because they are not
3 product liability claims?
4 A. It's my opinion that they are outside the
5 statutory limitations for multiple reasons; one, because
6 they are not within those provisions of the statute that
7 impose limitations, but secondly, because the nature of
8 the misconduct is such that I believe that that
9 misconduct takes the claims outside of the statutory
10 limitations.
11 Q. And we will certainly get into that in more
12 detail, but generally, are those the two reasons why you
13 believe that the conduct at issue in the underlying
14 claims in this matter are outside the punitive damages
15 limitations?
16 A. Generally, yes. When we are talking about
17 punitive damages limitations right now, we are simply
18 focusing on statutory limitations.
19 Q. Yes, sir.
20 Did you have any involvement with the punitive
21 damages tort reform that was implemented in the late
22 1990s?
23 A. I am not sure what it is you are asking me.
24 If you are asking whether I had any involvement in
25 formulating the law, the answer to that question is I
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1 did not.
2 Q. Who did? To your knowledge, who did formulate
3 the law?
4 A. The Florida Legislature.
5 Q. Do you have any idea who wrote the law?
6 A. I don't know the names of any of the
7 draftsmen, and I would be surprised if the end result
8 were not the product of input from multiple sources.
9 Q. Do you have any personal knowledge of that?
10 A. I don't, no, at least none that I recall.
11 There may have been some point in time when I had
12 occasion to attempt to review the legislative history,
13 but I don't remember that.
14 Q. Would the draftsmen of the punitive damages
15 statute be the best resource in terms of trying to
16 determine the intent behind the statutes?
17 A. Not necessarily, no.
18 Q. Who would be?
19 A. The Florida Supreme Court ultimately.
20 Q. And the Supreme Court looks to legislative
21 history at times to determine the intent of the statute;
22 does it not?
23 A. If it is necessary to go beyond the plain
24 meaning of the language of the statute, that is a
25 consideration that the Court might view. I don't -- I
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1 don't know that that would be necessary under the
2 circumstances of this statute and it certainly does not
3 appear to have been necessary up to this point in time.
4 Q. But you are not going to offer any opinions in
5 this matter on the nature and the intent of the statute
6 beyond the statutory language. Correct?
7 A. That is correct.
8 Q. And you have no personal knowledge of the
9 nature and intent of the enactment of the statute.
10 Correct?
11 A. I do not have any personal knowledge regarding
12 the drafting process nor the deliberative process of the
13 Legislature, nor do I think that either of those matters
14 is relevant.
15 Q. Do you know what groups were involved in the
16 lobbying effort for the tort reform effort?
17 A. I can make reasoned assumptions in that
18 regard, but I don't have any direct knowledge.
19 Q. In addition to the CLE courses you have taken
20 and taught on punitive damages, you also said that you
21 have done a good bit of studies conducted for punitive
22 damage purposes. Is that correct, or you have
23 researched punitive damages?
24 A. I have, yes.
25 Q. Can you please describe those research efforts
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1 over the years?
2 A. I have read case law. I have read treatises.
3 I have read articles in professional journals. That's
4 what comes to mind immediately.
5 Q. Is there any treatise out there that you have
6 read that you believe to be the most authoritative
7 treatise on the status of damages in the State of
8 Florida?
9 A. There is no treatise that I would accept as
10 generally authoritative on all issues with regard to
11 punitive damages.
12 Q. Is there any treatises that you would accept
13 as authoritative on some of the issues with respect to
14 punitive damages?
15 A. Well, that would depend upon a particular
16 issue and my review of the way in which the treatise
17 treats that issue. So, I can't answer that broadly.
18 Q. Are there any issues in this matter that you
19 intend to opine upon that you believe a certain treatise
20 would be authoritative?
21 A. I have not expressly reviewed any treatise for
22 purposes of formulating my opinions in this matter and
23 ascertaining whether those opinions conform with that
24 treatise so I can't answer that question.
25 What I will tell you is that I have assembled
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1 over the years some fairly extensive research materials
2 with regard to punitive damages. They certainly don't
3 include everything that I have reviewed, but it has been
4 my standard operating procedure as a trial lawyer to
5 preserve copies of materials that I think may be of some
6 significance with regard to a matter that I am currently
7 involved in or that I might reasonably anticipate would
8 become relevant to future matters, and I have kept those
9 research files and produced them for you today.
10 I selected from those files the punitive
11 damage files that I thought might be most relevant to
12 the inquiry that is being conducted.
13 Q. Thank you. So you keep a punitive damage --
14 A. I am not sure once you see them you are going
15 to want to say thank you, but I have them here.
16 Q. We appreciate it. How many times ---
17 A. Nor do I think you are going to appreciate it
18 when you get a chance to look at them, but they are
19 here.
20 Q. Thank you.
21 How many times have you testified as an expert
22 on punitive damages?
23 A. I don't have a recollection of ever having
24 served as a punitive damage expert before today.
25 Q. Have you ever been ---
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1 A. I am a virgin.
2 Q. Have you ever -- I will move on.
3 Have you ever been asked to serve as a
4 punitive damages expert before today?
S A. I have not, no.
6 Q. Have you ever heard of a punitive damages
7 expert before today?
8 A. Certainly not in the context of someone
9 testifying about the value of a punitive damage claim
10 but there are -- there are certainly a lot of folks out
11 there who have training and experience that formulate
12 opinions with regard to the punitive damage value of
13 cases in the ordinary course of their litigation
14 practice.
15 Q. But you have never heard -- how long, sir,
16 have you been litigating cases?
17 A. Since 1972.
18 Q. Since 1972, have you ever heard of another
19 person offering an opinion as to the value of a punitive
20 damages claim?
21 A. Many times, yes.
22 Q. And --
23 A. As a routine matter.
24 Q. Testifying in court?
25 A. No, sir. No. That wasn't the question.
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1 That's not how I understood your question.
2 Q. I'm sorry. Then let me repeat or rephrase my
3 question.
4 Since 1972, have you ever heard or seen
5 someone testify as an expert as to the value of a
6 punitive damages claim?
7 A. You know, as you are asking that question, I
8 am thinking back to one occasion where I believe that,
9 in fact, did occur in a case that I personally
10 litigated.
11 Q. Can you tell me about that case and the
12 circumstances of that testimony?
13 A. Yes. The case was a claim against Bankers
14 Multiple Line Insurance Company. The full style of the
15 case was Farish versus Bankers Multiple Line. It was a
16 tortious interference claim against John D. MacArthur
17 and Bankers Multiple, which was a liability insurer that
18 was owned by MacArthur.
19 Joseph Farish was a trial lawyer who had been
20 hired by the widow of a young man who was walking down
21 the street when a truck came by carrying concrete
22 culverts. The truckload was not properly secured. A
23 culvert fell off the truck and crushed him as he was
24 walking down the street. The truck was owned by a
25 MacArthur Company and insured by Bankers Multiple Line
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1 Insurance Company.
2 The widow was an employee of John D. MacArthur
3 at a hotel that MacArthur also owned called The
4 Colonnades, and when MacArthur found out about the
5 widow's claim against his company and his insurance
6 company, he befriended the widow and convinced her to
7 terminate the services of MacArthur and to retain the
8 services of a young woman who had virtually no
9 litigation experience whatsoever who proceeded then to
10 settle the widow's claim very cheaply.
11 I represented Mr. Farish in a tortious
12 interference claim, and one of the issues was the value
13 of the underlying case. And there was expert witness
14 testimony that was given in that case about the value of
15 the claim absent the tortious interference.
16 I am blanking on the name of the trial lawyer
17 or trial lawyers who gave that testimony. That was
18 probably 25 years ago.
19 Q. So you did not present such testimony?
20 A. I'm surprised myself by remembering how much I
21 remembered about that.
22 Q. You did not present such testimony?
23 A. I did not present the testimony, no.
24 Q. In all your years of trying cases, have you
25 ever retained an expert to opine on the value of
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1 punitive damage claims that you or your client was
2 asserting?
3 A. Only the circumstances that I just described,
4 and -- well, that's the best answer I can give at this
5 time.
6 Q. Other than the research and studies that you
7 have previously described, have you performed any other
8 type of research during your career that supports your
9 purported expertise?
10 A. The process of evaluating punitive damages
11 claims is a process that goes on on a very frequent
12 basis in the course of my practice. So, to that extent,
13 the answer to your question is certainly yes.
14 Q. So you are saying you evaluate the punitive
15 claims of your own cases?
16 A. And sometimes -- well, often the cases of
17 others in my law firm and occasionally the cases of
18 lawyers outside my law firm who seek my opinion or my
19 firm's opinions with regard to the value of their cases.
20 Q. So, other than evaluating the claims that you
21 just described, your own cases, others in the firm,
22 other lawyers and so forth, have you done any other
23 research during your career that supports your purported
24 expertise?
25 A. The study that I have described to you
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1 earlier.
2 Q. Other than what we have talked about here
3 today?
4 A. I can't think of anything else that would
5 directly be relevant. Something else may come to mind.
6 If it does, I will let you know. That's all I can think
7 of right now.
8 Q. Okay. You referred to the process of
9 evaluating a punitive damages claim.
10 A. Yes, sir.
11 Q. Is that a process that you developed or was
12 that developed by some other punitive damages expert?
13 A. It is a process that has developed over the
14 course of my personal practice. That is, I haven't
15 taken somebody else's evaluative process and adopted
16 that as my own.
17 Q. And is your process an accepted process in the
18 legal industry for evaluating the value of punitive
19 damages claims?
20 A. I think the answer to that question is yes.
21 Q. Okay. And how do you know that it's -- would
22 you say it's widely accepted in the legal industry as a
23 process for evaluating the value of punitive damages
24 claims?
25 A. Yes.
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1 Q. Has your method been published?
2 A. It has been.
3 Q. Where has this been published?
4 A. It has been published in court opinions of
5 which I am aware. It has been published in legal
6 treatises of which I am aware, and it has been published
7 in the CLE materials that I, myself, have written in
8 connection with lectures in this area that I have given.
9 Q. Okay. So, there is a court opinion out there
10 that discusses your internal process for evaluating the
11 value of punitive damages claims?
12 A. There is a court opinion out there that
13 addresses the issue of how punitive damages should be
14 evaluated, yes.
15 Q. And let's make sure we are talking, using the
16 same words here. How a punitive damages claim should be
17 evaluated versus how you -- how one values a purported
18 punitive damages claim. Are we talking about the same
19 thing?
20 A. That's a distinction that I don't understand.
21 Maybe I can be helpful to you here so we don't spend a
22 lot of time mis-communicating.
23 Q. That would be great.
24 A. There are authorities that identify
25 aggravating and mitigating circumstances that are
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1 appropriately taken into consideration in assessing the
2 amount of punitive damages necessary to serve the dual
3 purpose of punitive damages recognized in the State of
4 Florida, punishment and deterrence. The case that most
5 specifically addresses those factors is the
6 Johns-Manville case, which is included in the materials
7 that have been provided to you.
8 Q. Just so we are clear, when we are talking
9 about the publication of your process to evaluate
10 punitive damages, do these cases say this is how Jack
11 Scarola does it and we think that that's the proper way
12 to do it, or do these cases discuss different factors
13 that a court should consider in evaluating punitive
14 damages and you have adopted parts of that in your
15 process?
16 A. There is no published opinion that attributes
17 this process to me. There are published opinions that
18 identify appropriate factors to be taken into
19 consideration by both judges and juries in determining
20 the appropriate amount of punitive damages necessary to
21 serve the dual purpose of punishment and deterrence.
22 Q. Are there any publications, other than the
23 court opinions, that discuss Jack Scarola's process,
24 your individual process that you have utilized in this
25 matter to evaluate or to place a value on the potential
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Pagc 31
1 punitive damages claims in the underlying cases?
2 A. Except for my own materials, which obviously
3 include my name, I am not aware and would be very
4 surprised to find any case or treatise or other
5 publication that attributes the identification of
6 aggravating and mitigating circumstances to Jack
7 Scarola. This is not something that I authored, except
8 to the extent that it's incorporated in CLE outlines.
9 It is a recognition of the appropriateness of
10 specifically identified factors in both cases and
11 treatises to asses the appropriate amount of punitive
12 damages in order to serve the dual function of
13 punishment and deterrence.
14 Q. Punishment and deterrence, are those the
15 purposes of punitive damages under Florida law?
16 A. Yes, sir.
17 Q. Are punitive damages under Florida law meant
18 to compensate a plaintiff?
19 A. They are not, except to a limited extent that
20 is recognized in the case law, and that is that there is
21 a recognition in the case law that the plaintiff who
22 undertakes the prosecution of a punitive damage claim is
23 serving a function in effect as a public prosecutor to
24 preserve the integrity of the judicial system and to
25 preserve appropriate standards within, in this context,
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1 the business community. So, to motivate individuals to
2 undertake the difficult task of prosecuting a punitive
3 damage claim, one of the factors that is taken into
4 consideration are the costs involved in prosecuting that
5 claim.
6 Q. And what case ---
7 A. So punitive damages help to compensate the
8 plaintiff for undertaking that broader societal purpose.
9 Q. To recoup the costs incurred in protecting
10 society's or the state's interest in pursuing punitive
11 damages?
12 A. Yes, sir.
13 Q. And what case do you believe best describes
14 that function?
15 A. Well, I know it's described in more than one
16 case, but the one that comes to mind immediately is
17 Johns-Manville.
18 Q. What is your process for placing a value on
19 potential punitive damages claims?
20 A. It is to review the evidence in the light of
21 recognized aggravating and mitigating circumstances, to
22 assess the way in which those factors impact upon the
23 intended purpose of punitive damages to punish the
24 wrongdoer and to deter others similarly situated from
25 engaging in the same kind of wrongdoing, to review any
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1 statutory limitations that might apply and to consider
2 any constitutional limitations that might apply in
3 arriving at an opinion as to what I believe the range of
4 punitive damage value of a case is likely to be.
5 I would also take into consideration the
6 extent to which the same or similar circumstances have
7 already been assessed by an independent finder of fact.
8 Q. Let me make sure I got all of this down. It
9 seems like there is several different factors. First,
10 the evidence with respect to the claims at issue. You
11 would review that. You would review any statutory
12 limitations.
13 A. May I interrupt for just a moment?
14 Q. Yes, sir.
15 A. Because the evidence I am reviewing is
16 particularly that evidence that relates to the
17 aggravating and mitigating circumstances with respect to
18 punitive damages. I would not necessarily find it
19 necessary to review all of the evidence with respect to
20 a given matter and have not undertaken to attempt to
21 review all of the evidence with regard to this case.
22 Q. Would you review any of the evidence to
23 ascertain the viability of the underlying claims?
24 A. Certainly to some extent, yes, and I need in
25 circumstances such as this to make some assumptions with
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1 regard to the viability of the underlying case and have
2 done so here. Obviously, if this is were my own case, I
3 would be assessing all of the evidence with regard to
4 the viability of the underlying case.
5 Q. You said you had made certain assumptions in
6 this matter concerning the viability of the underlying
7 claims. Correct?
8 A. That is correct.
9 Q. What assumptions have you made?
10 A. That the underlying claims are accurately
11 described in the complaints that I have reviewed, that
12 they are accurately described in court orders that I
13 have reviewed, that they are accurately described in
14 pleadings and memoranda that I have reviewed, and to a
15 limited extent that they have been accurately described
16 in verbal communications that I have had with both
17 Mr. Moskowitz and Mr. Scherer.
18 Q. So, for your analysis of the viability of the
19 underlying claims in this matter, are you accepting all
20 of plaintiffs' allegations to be true?
21 A. Yes. I have accepted the allegations in the
22 complaint to be true to the extent that any particular
23 allegation was or is shown not to be accurate that may
24 or may not affect my opinion, and that's something that
25 I would need to view in the context of the overall case.
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1 Q. And are you accepting all of the
2 representations from Mr. Scherer and Mr. Moskowitz as
3 true with respect to the underlying facts?
4 A. They have been very limited, bu
1 UNITED STATES BANKRUPTCY COURT
SOUTHER DISTRICT OF FLORIDA
2 FORT LAUDERDALE DIVISION
3
4 IN RE: NO.: 09-34791-RBR
5 ROTHSTEIN ROSENFELDT ADLER, P.A.
6
7
8 VIDEOTAPED
9 DEPOSITION
10 OF
11 JOHN JACK SCAROLA
12
13
14
15 350 East Las Olas Boulevard
Fort Lauderdale, Florida
16 July 2, 2013
Scheduled for 10:00 a.m.
17 Commencing at 10:07 a.m. to 5:23 p.m.
18
19
20
21
22
23
24
25
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1 UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
2 FORT LAUDERDALE DIVISION
3
4 IN RE: CHAPTER 7
5
BANYON 1030-32, LLC CASE NOS: 10-36691-RBR
6 BANYON INCOME FUND, L.P. 11-40929-RBR
7 Debtors. Jointly Administered Under
Case No. 10-33691-RBR
8
/
9
10
11
12 VIDEOTAPED
13 DEPOSITION
14 OF
15 JOHN JACK SCAROLA
16
17
18
19 350 East Las Olas Boulevard
Fort Lauderdale, Florida
20 July 2, 2013
Scheduled for 10:00 a m.
21 Commencing at 10:07 a.m. to 5:23 p.m.
22
23
24
25
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1 APPEARANCES:
2 On behalf of TD Bank, N.A.:
WILLIAM O.L. "WEN" HUTCHINSON, Esquire
3 JOSEPH SHEERIN, Esquire
MCGUIREWOODS
4 201 North Tyron Street
Suite 3000
5 Charlotte, North Carolina 28202
6 On behalf Herbert Stettin, Trustee:
JOHN H. GENOVESE, Esquire
7 MICHAEL A. FRIEDMAN, Esquire
GENOVESE JOBLOVE & BATTISTA, P.A.
8 100 Southeast Second Street
44th Floor
9 Miami, Florida 33131
-and-
10 DAVID GAY, Esquire
BERGER SINGERMAN
11 350 East Las Olas Boulevard
Suite 1000
12 Fort Lauderdale, Florida 33301
13 On behalf of Robert Furr, Trustee:
JASON S. RIGOLI, Esquire
14 FURR & COHEN, P.A.
One Boca Place, Suite 337W
15 2255 Glades Road
Boca Raton, Florida 33431
16
On behalf of the Plaintiffs:
17 ADAM MOSKOWITZ, Esquire
KOZYAK TROPIN & THROCKMORTON, P.A.
18 2525 Ponce de Leon Boulevard
Ninth Floor
19 Miami, Florida 33131-2335
20 On behalf of the Plaintiffs:
William Scherer, Esquire
21 CONRAD & SCHERER, LLP
633 South Federal Highway
22 Eighth Floor
Fort Lauderdale, Florida 33301
23
24
25
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1 CONT. APPEARANCES:
2 On behalf of Unsecured Creditors Committee:
MICHAEL J. GOLDBERG, Esquire
3 350 East Las Olas Boulevard
Suite 1600
4 Fort Lauderdale, Florida 33301-2229
5 On behalf of Morse Operations and
The Estate of Ed Morse:
6 JOHN M. MULLIN, Esquire
TRIPP SCOTT
7 110 Southeast Sixth Street
Fifteenth Floor
8 Fort Lauderdale, Florida 33301
9
10 ALSO PRESENT:
11 Patricia Diaz, FPR, RPR
12 Dean J. Chimerakis, Videographer
Custom Video Services, Inc.
13
14
15
16
17
18
19
20
21
22
23
24
25
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1 INDEX
2 WITNESS: PAGE
3 JOHN JACK SCAROLA
4 DIRECT EXAMINATION BY MR. HUTCHINSON 7
CROSS-EXAMINATION BY MR. GENOVESE 173
5 CROSS-EXAMINATION BY MR. MOSKOWITZ 216
6
7
8 EXHIBITS
9 -
10 NO. DESCRIPTION PAGE
11 Exhibit No. 1 Subpoena 7
12 Exhibit No. 2 Subpoena for Christian 9
Searcy
13
Exhibit No. 3 Transcript of May 17, 2013 48
14 Hearing
15 Exhibit No. 4 Plaintiff's First Request 68
for Production of Documents
16 to TD Bank
17 Exhibit No. 5 TD Bank Victims Notice of 79
Filing Expert Disclosures
18
Exhibit No. 6 Time Summary 81
19
Exhibit No. 7 Conspiracy Chart 111
20
Exhibit No. 8 Statute 768.72 124
21
Exhibit No. 9 Statute 768.73 148
22
Exhibit No. 10 Handwritten Notes 163
23
Exhibit No. 11 Handwritten Notes 168
24
25
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1 THE VIDEOGRAPHER: Today's date is July 2nd,
2 2013. The time is approximately 10:10 a.m. Eastern
3 Standard Time. We are here to videotape the
4 deposition of John Jack Scarola in regard to
5 Rothstein, Rosenfeldt, Adler, PA, Case 09-34791
6 BKCRVR.
7 The court reporter is Patty Diaz with
8 Ouellette and Mauldin Court Reporting. My name is
9 Dean Chimerakis, videographer, with Custom Video
10 Services of Miami.
11 Will counsel please state your appearance for
12 the record?
13 MR. HUTCHINSON: Wayne Hutchinson with
14 McGuireWoods on behalf of TD Bank, N.A., and with
15 me is Joe Sheerin.
16 MR. GENOVESE: John Genovese, Genovese,
17 Joblove and Battista on behalf of Herb Stettin.
18 Along with me is my colleague, Michael Friedman.
19 MR. RIGOLI: Jason Rigoli, Furr & Cohen on
20 behalf of Robert Furr, Chapter 7 Trustee for Banyon
21 1030-32 and Banyon Income Fund.
22 MR. MOSKOWITZ: Adam Moskowitz, Bill Scherer
23 and Javi Lopez on behalf of the plaintiffs in the
24 case.
25 MR. MULLIN: John Mullin from Tripp, Scott on
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1 behalf of the Estate of Ed Morse and Morse
2 Operations, Inc.
3 MR. GOLDBERG: Mike Goldberg on behalf of the
4 Creditors Committee.
5 MR. GAY: David Gay with Berger Singerman
6 counsel on behalf of Herbert Stettin.
7 Thereupon,
8 JOHN SCAROLA
9 was called as a witness and, having been duly sworn, was
10 examined and testified as follows:
11 THE WITNESS: I do.
12 DIRECT EXAMINATION
13 BY MR. HUTCHINSON:
14 Q. Good morning, Mr. Scarola. We met before the
15 deposition. Would you please state your name for the
16 record?
17 A. Good morning. My name is John Scarola. I am
18 also most commonly known as Jack.
19 Q. Mr. Scarola, I will show you what I marked as
20 Exhibit 1. Do you recognize Exhibit 1?
21 (Exhibit No. 1, Subpoena, was marked for
22 identification.)
23 A. It appears to be a copy of the subpoena for
24 this deposition that was served upon my office and
25 accepted at my direction.
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1 BY MR. HUTCHINSON:
2 Q. And are you appearing here today pursuant to
3 this subpoena?
4 A. I am.
5 Q. And this subpoena includes a document request,
6 does it not?
7 A. It does.
8 Q. And have you produced all documents that are
9 responsive to the request included therein?
10 A. I believe I have.
11 Q. Does that include some documents that you have
12 brought with you here today?
13 A. That is correct.
14 Q. Based on what was previously produced and what
15 you brought here today, you believe that all documents
16 responsive to these requests have now been provided.
17 Correct?
18 A. I don't have personal knowledge of the
19 production that was not made by me. I am told that you
20 have already received duplicate copies of most of the
21 materials that I brought today, but I have brought with
22 me all of those materials in my possession that are
23 responsive to the subpoena.
24 Q. And you are fine with us looking through those
25 materials to confirm that we have them and if not,
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1 making any copies that we need to make so that we have
2 them for our records?
3 A. Yes. I know that there are documents that are
4 included in the group of documents that I brought this
5 morning that were not produced to you because they are
6 my personal notes with regard to my review of the other
7 materials.
8 Q. But you are not aware of any additional
9 materials that either have not been provided or are not
10 with you here today?
11 A. I am not.
12 Q. Let me show you what I marked -- is marked as
13 Exhibit 2.
14 (Exhibit No. 2, Subpoena for Christian Searcy,
15 was marked for identification.)
16 A. Yes, sir.
17 BY MR. HUTCHINSON:
18 Q. Do you recognize Exhibit 2, sir?
19 A. I do.
20 Q. What is Exhibit 2?
21 A. Exhibit 2 is a copy of a subpoena that was
22 accepted by my office on behalf of Christian Searcy and
23 I have seen a copy of this subpoena as well.
24 Q. And am I correct that this subpoena also
25 includes certain document requests?
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Pagc 10
1 A. It does.
2 Q. And we have not received a separate response
3 to this subpoena from your law firm. Is your document
4 production individually supposed to respond to this
5 subpoena as well?
6 A. It is.
7 Q. So as we sit here today, you have no knowledge
8 of additional documents responsive to the request,
9 including Exhibit 2, that are responsive therein that
10 have not either been provided to us previously or are
11 not in the materials that you brought here today?
12 A. That is correct. Certainly, it's possible
13 that I may have overlooked something, but I don't think
14 SO.
15 Q. Mr. Scarola, in what fields are you an expert?
16 A. I am a trial lawyer who has been practicing in
17 the area of litigation since 1972. I am Board-certified
18 in personal injury and in business litigation as well
19 and I believe that both certifications have been in
20 place since they were offered by the Florida Bar.
21 Q. And if you were going to list the fields in
22 which you believe that you are an expert, what fields
23 how would you describe those fields and what would they
24 be?
25 A. Well, for purposes of the deposition today, I
OUELLETTE & MAULDIN COURT REPORTERS, INC.
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Rigel]
1 have been asked to express opinions with regard to the
2 punitive damage value of claims against TD Bank and I
3 present myself as having sufficient expertise in that
4 area to express those opinions.
5 Q. So it's your understanding that your opinions
6 in this matter are limited to the value of potential
7 punitive damages claims against TD. Is that correct?
8 A. That certainly is the primary focus of what I
9 have been asked to do, and while I may have formed some
10 tangential opinions that relate to that primary area,
11 that is the focus of what I have done.
12 Q. What qualifies you as an expert on punitive
13 damages and the values of punitive damages claims?
14 A. The total of 40 years experience that I have
15 had litigating both criminal and civil cases, including
16 many punitive damages claims.
17 Q. At what point during that 40-year career did
18 you become an expert on valuating punitive damages
19 claims?
20 A. I cannot tell you the point in time at which
21 someone would have independently recognized my
22 expertise. It has been an evolving process, so that's a
23 question that I can't answer for you, except to tell you
24 that it is my personal assessment that I am certainly
25 there now.
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1 Q. Are there any specific factors that you
2 believe makes you qualified to be an expert on the
3 valuation of punitive damages claims other than your
4 general experience?
5 A. Yes. It is an area of the law that I have
6 studied. It is an area of the law that I have focused
7 study upon. That is, I am sure that over the course of
8 particularly the last 35 years I have taken CLE courses
9 that have dealt with the topic of punitive damages as
10 well as having taught multiple courses dealing with the
11 topic of punitive damages.
12 So, it is as a consequence of practical
13 experience, formal education and self-study that I have
14 accumulated the degree of expertise that I have in this
15 area.
16 Q. Let's talk about the CLE courses that you have
17 taught that deal with the valuation of punitive damages
18 claims. Can you please tell me about those courses,
19 their titles and when they were offered?
20 A. I'm sorry, but I cannot give you the course
21 titles nor can I tell you the specific dates on which
22 the courses were offered.
23 What I can tell you is that I have lectured on
24 both the state and local level on the topic of punitive
25 damages and have also been invited to give lectures on
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PagcB
1 punitive damages in front of at least one other state
2 Bar Association.
3 Q. What state Bar Association was that that you
4 are referring to?
5 A. Ohio.
6 Q. Were they the sponsor of the continuing
7 education class?
8 A. They were.
9 Q. And where was that lecture?
10 A. It actually occurred when that Bar Association
11 met in Palm Beach County.
12 Q. And when was that?
13 A. I can't give you the date.
14 Q. Was it in the last five years?
15 A. I'm not sure.
16 Q. What's your best estimate of when that would
17 have been?
18 A. Approximately, five years ago.
19 Q. And did you prepare materials for that CLE
20 presentation?
21 A. I don't know whether I prepared materials
22 specifically for that CLE presentation or whether I
23 relied upon materials previously prepared and having
24 lectured on the topic prior to that lecture.
25 Q. Would you still have the materials that you
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1 would have used in these past lectures?
2 A. Probably some of them.
3 Q. Is the information contained in those
4 materials anything that you relied upon in forming the
5 opinions in this case?
6 A. The information contained within those
7 materials include principles that I relied upon in
8 formulating my opinions in this case, I think would be a
9 more accurate way to state the relationship between
10 those materials and my opinion.
11 Q. And to the extent that you can find any of
12 those ---
13 A. You've got them.
14 Q. Okay. Are those materials with you here
15 today?
16 A. They are. If they exist, they are in that
17 box.
18 Q. Thank you very much.
19 A. You are welcome.
20 Q. Other than the lectures at the Ohio State Bar
21 Association, were your other CLE lectures all
22 sponsored -- were the classes all sponsored by the
23 Florida Bar Association?
24 A. No.
25 Q. Who were the other CLE classes sponsored by
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Pagc 15
1 wherein you lectured on punitive damages?
2 A. Palm Beach County Bar Association, Palm Beach
3 County Justice Association, Florida Justice Association.
4 Q. And over how many years did those lectures
5 occur?
6 A. Certainly within the past 20 years, and I
7 don't know that I can accurately narrow it down beyond
8 that. It's a topic that I have been dealing with
9 significantly over at least the last 20 years.
10 Q. Have you lectured on the punitive damages
11 aspect of the Florida Tort Reform Acts that were
12 implemented in the late 1990s?
13 A. I have.
14 Q. What would have been your topics on -- what's
15 been the subject matters of those lectures on those
16 topics?
17 A. The implications from both the legal and
18 practical standpoint of the legislative changes.
19 Q. And what do you recall about those
20 implications?
21 A. I recall that the Florida legislature has,
22 from time to time, been imposing various restrictions on
23 the common law ability to recover punitive damages.
24 Q. In your opinion, does the Florida Legislature
25 have the right to do that?
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1 A. It is my personal opinion that the Florida
2 Legislature has a limited right to deal with imposing
3 restrictions on the ability to recover punitive damages,
4 that there are constitutional limitations on how those
5 restrictions may be imposed.
6 Q. What constitutional limitations are you
7 referring to?
8 A. The due process and equal protection clauses
9 of both the United States Constitution and the Florida
10 Constitution.
11 Q. Are you claiming -- is it your -- are you
12 offering an opinion in this matter that there is a
13 property right with respect to a punitive damages claim?
14 A. No. I am not offering that opinion. I am
15 assuming for purposes of the opinions that I will be
16 expressing today that the current legislative
17 limitations that have been imposed upon the ability to
18 recover punitive damages pass constitutional muster.
19 Q. They do pass constitutional muster?
20 A. I have assumed that for purposes of the
21 opinions that I am expressing today.
22 Q. So, you are not offering an opinion in this
23 matter that the current statutes limiting punitive
24 damage awards are somehow unconstitutional or not
25 applicable to this matter?
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1 A. I am not offering that opinion today.
2 Q. And you are not planning on offering that
3 opinion at the confirmation hearing?
4 A. I don't plan on offering that opinion at the
5 confirmation hearing, no.
6 Q. Let's go back. You talked about that you've
7 lectured on the practical implications of the new -- of
8 the punitive damages tort reform that was implemented in
9 the late 1990s. What is your understanding of the
10 practical implications of those reforms?
11 A. That really is a very broad question and I
12 would prefer that it be more focussed before I attempt
13 to answer it.
14 In what regard?
15 Q. Well, are there limits on the -- the amount of
16 punitive damages? Is it your understanding there are
17 limits on the amount of punitive damages that can be
18 recovered as a result of such reforms?
19 A. Yes, under some circumstances.
20 Q. And what are those circumstances?
21 A. Those that are specifically described in the
22 statute.
23 Q. Do you recall any of those circumstances
24 without referencing the statute?
25 A. I think I can recall some of them without
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1 referencing the statute. Certainly, if you want the
2 most accurate answer I am able to give you, I've got a
3 copy of the statute in the materials that have been
4 provided, and it would be easier to have it in front of
5 me. But if what you would like to do is test my memory,
6 you know, I will play that game with you.
7 Q. Well, we are not playing games.
8 A. Okay.
9 Q. But what do you recall about the statutory
10 limitations?
11 A. I recall that there are limitations that would
12 impose a three times compensatory damage limit under
13 some circumstances, limitations that impose a four time
14 compensatory damage limitation under some circumstances.
15 There is expressed statutory language that indicates
16 that there is no statutory limitation under other
17 circumstances, and I recall that there is specific
18 language in the statute that indicates that the statute
19 is primarily applicable to products liability claims.
20 Q. Are you offering an opinion in this matter
21 that the statutes are somehow not applicable to the
22 claims at issue?
23 A. It is my opinion that the circumstances of the
24 punitive damage claims against TD Bank take those damage
25 claims outside the statutory limitations.
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1 Q. Is that -- is it your opinion that it's
2 outside the statutory limitations because they are not
3 product liability claims?
4 A. It's my opinion that they are outside the
5 statutory limitations for multiple reasons; one, because
6 they are not within those provisions of the statute that
7 impose limitations, but secondly, because the nature of
8 the misconduct is such that I believe that that
9 misconduct takes the claims outside of the statutory
10 limitations.
11 Q. And we will certainly get into that in more
12 detail, but generally, are those the two reasons why you
13 believe that the conduct at issue in the underlying
14 claims in this matter are outside the punitive damages
15 limitations?
16 A. Generally, yes. When we are talking about
17 punitive damages limitations right now, we are simply
18 focusing on statutory limitations.
19 Q. Yes, sir.
20 Did you have any involvement with the punitive
21 damages tort reform that was implemented in the late
22 1990s?
23 A. I am not sure what it is you are asking me.
24 If you are asking whether I had any involvement in
25 formulating the law, the answer to that question is I
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1 did not.
2 Q. Who did? To your knowledge, who did formulate
3 the law?
4 A. The Florida Legislature.
5 Q. Do you have any idea who wrote the law?
6 A. I don't know the names of any of the
7 draftsmen, and I would be surprised if the end result
8 were not the product of input from multiple sources.
9 Q. Do you have any personal knowledge of that?
10 A. I don't, no, at least none that I recall.
11 There may have been some point in time when I had
12 occasion to attempt to review the legislative history,
13 but I don't remember that.
14 Q. Would the draftsmen of the punitive damages
15 statute be the best resource in terms of trying to
16 determine the intent behind the statutes?
17 A. Not necessarily, no.
18 Q. Who would be?
19 A. The Florida Supreme Court ultimately.
20 Q. And the Supreme Court looks to legislative
21 history at times to determine the intent of the statute;
22 does it not?
23 A. If it is necessary to go beyond the plain
24 meaning of the language of the statute, that is a
25 consideration that the Court might view. I don't -- I
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1 don't know that that would be necessary under the
2 circumstances of this statute and it certainly does not
3 appear to have been necessary up to this point in time.
4 Q. But you are not going to offer any opinions in
5 this matter on the nature and the intent of the statute
6 beyond the statutory language. Correct?
7 A. That is correct.
8 Q. And you have no personal knowledge of the
9 nature and intent of the enactment of the statute.
10 Correct?
11 A. I do not have any personal knowledge regarding
12 the drafting process nor the deliberative process of the
13 Legislature, nor do I think that either of those matters
14 is relevant.
15 Q. Do you know what groups were involved in the
16 lobbying effort for the tort reform effort?
17 A. I can make reasoned assumptions in that
18 regard, but I don't have any direct knowledge.
19 Q. In addition to the CLE courses you have taken
20 and taught on punitive damages, you also said that you
21 have done a good bit of studies conducted for punitive
22 damage purposes. Is that correct, or you have
23 researched punitive damages?
24 A. I have, yes.
25 Q. Can you please describe those research efforts
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1 over the years?
2 A. I have read case law. I have read treatises.
3 I have read articles in professional journals. That's
4 what comes to mind immediately.
5 Q. Is there any treatise out there that you have
6 read that you believe to be the most authoritative
7 treatise on the status of damages in the State of
8 Florida?
9 A. There is no treatise that I would accept as
10 generally authoritative on all issues with regard to
11 punitive damages.
12 Q. Is there any treatises that you would accept
13 as authoritative on some of the issues with respect to
14 punitive damages?
15 A. Well, that would depend upon a particular
16 issue and my review of the way in which the treatise
17 treats that issue. So, I can't answer that broadly.
18 Q. Are there any issues in this matter that you
19 intend to opine upon that you believe a certain treatise
20 would be authoritative?
21 A. I have not expressly reviewed any treatise for
22 purposes of formulating my opinions in this matter and
23 ascertaining whether those opinions conform with that
24 treatise so I can't answer that question.
25 What I will tell you is that I have assembled
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1 over the years some fairly extensive research materials
2 with regard to punitive damages. They certainly don't
3 include everything that I have reviewed, but it has been
4 my standard operating procedure as a trial lawyer to
5 preserve copies of materials that I think may be of some
6 significance with regard to a matter that I am currently
7 involved in or that I might reasonably anticipate would
8 become relevant to future matters, and I have kept those
9 research files and produced them for you today.
10 I selected from those files the punitive
11 damage files that I thought might be most relevant to
12 the inquiry that is being conducted.
13 Q. Thank you. So you keep a punitive damage --
14 A. I am not sure once you see them you are going
15 to want to say thank you, but I have them here.
16 Q. We appreciate it. How many times ---
17 A. Nor do I think you are going to appreciate it
18 when you get a chance to look at them, but they are
19 here.
20 Q. Thank you.
21 How many times have you testified as an expert
22 on punitive damages?
23 A. I don't have a recollection of ever having
24 served as a punitive damage expert before today.
25 Q. Have you ever been ---
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1 A. I am a virgin.
2 Q. Have you ever -- I will move on.
3 Have you ever been asked to serve as a
4 punitive damages expert before today?
S A. I have not, no.
6 Q. Have you ever heard of a punitive damages
7 expert before today?
8 A. Certainly not in the context of someone
9 testifying about the value of a punitive damage claim
10 but there are -- there are certainly a lot of folks out
11 there who have training and experience that formulate
12 opinions with regard to the punitive damage value of
13 cases in the ordinary course of their litigation
14 practice.
15 Q. But you have never heard -- how long, sir,
16 have you been litigating cases?
17 A. Since 1972.
18 Q. Since 1972, have you ever heard of another
19 person offering an opinion as to the value of a punitive
20 damages claim?
21 A. Many times, yes.
22 Q. And --
23 A. As a routine matter.
24 Q. Testifying in court?
25 A. No, sir. No. That wasn't the question.
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1 That's not how I understood your question.
2 Q. I'm sorry. Then let me repeat or rephrase my
3 question.
4 Since 1972, have you ever heard or seen
5 someone testify as an expert as to the value of a
6 punitive damages claim?
7 A. You know, as you are asking that question, I
8 am thinking back to one occasion where I believe that,
9 in fact, did occur in a case that I personally
10 litigated.
11 Q. Can you tell me about that case and the
12 circumstances of that testimony?
13 A. Yes. The case was a claim against Bankers
14 Multiple Line Insurance Company. The full style of the
15 case was Farish versus Bankers Multiple Line. It was a
16 tortious interference claim against John D. MacArthur
17 and Bankers Multiple, which was a liability insurer that
18 was owned by MacArthur.
19 Joseph Farish was a trial lawyer who had been
20 hired by the widow of a young man who was walking down
21 the street when a truck came by carrying concrete
22 culverts. The truckload was not properly secured. A
23 culvert fell off the truck and crushed him as he was
24 walking down the street. The truck was owned by a
25 MacArthur Company and insured by Bankers Multiple Line
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1 Insurance Company.
2 The widow was an employee of John D. MacArthur
3 at a hotel that MacArthur also owned called The
4 Colonnades, and when MacArthur found out about the
5 widow's claim against his company and his insurance
6 company, he befriended the widow and convinced her to
7 terminate the services of MacArthur and to retain the
8 services of a young woman who had virtually no
9 litigation experience whatsoever who proceeded then to
10 settle the widow's claim very cheaply.
11 I represented Mr. Farish in a tortious
12 interference claim, and one of the issues was the value
13 of the underlying case. And there was expert witness
14 testimony that was given in that case about the value of
15 the claim absent the tortious interference.
16 I am blanking on the name of the trial lawyer
17 or trial lawyers who gave that testimony. That was
18 probably 25 years ago.
19 Q. So you did not present such testimony?
20 A. I'm surprised myself by remembering how much I
21 remembered about that.
22 Q. You did not present such testimony?
23 A. I did not present the testimony, no.
24 Q. In all your years of trying cases, have you
25 ever retained an expert to opine on the value of
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1 punitive damage claims that you or your client was
2 asserting?
3 A. Only the circumstances that I just described,
4 and -- well, that's the best answer I can give at this
5 time.
6 Q. Other than the research and studies that you
7 have previously described, have you performed any other
8 type of research during your career that supports your
9 purported expertise?
10 A. The process of evaluating punitive damages
11 claims is a process that goes on on a very frequent
12 basis in the course of my practice. So, to that extent,
13 the answer to your question is certainly yes.
14 Q. So you are saying you evaluate the punitive
15 claims of your own cases?
16 A. And sometimes -- well, often the cases of
17 others in my law firm and occasionally the cases of
18 lawyers outside my law firm who seek my opinion or my
19 firm's opinions with regard to the value of their cases.
20 Q. So, other than evaluating the claims that you
21 just described, your own cases, others in the firm,
22 other lawyers and so forth, have you done any other
23 research during your career that supports your purported
24 expertise?
25 A. The study that I have described to you
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1 earlier.
2 Q. Other than what we have talked about here
3 today?
4 A. I can't think of anything else that would
5 directly be relevant. Something else may come to mind.
6 If it does, I will let you know. That's all I can think
7 of right now.
8 Q. Okay. You referred to the process of
9 evaluating a punitive damages claim.
10 A. Yes, sir.
11 Q. Is that a process that you developed or was
12 that developed by some other punitive damages expert?
13 A. It is a process that has developed over the
14 course of my personal practice. That is, I haven't
15 taken somebody else's evaluative process and adopted
16 that as my own.
17 Q. And is your process an accepted process in the
18 legal industry for evaluating the value of punitive
19 damages claims?
20 A. I think the answer to that question is yes.
21 Q. Okay. And how do you know that it's -- would
22 you say it's widely accepted in the legal industry as a
23 process for evaluating the value of punitive damages
24 claims?
25 A. Yes.
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1 Q. Has your method been published?
2 A. It has been.
3 Q. Where has this been published?
4 A. It has been published in court opinions of
5 which I am aware. It has been published in legal
6 treatises of which I am aware, and it has been published
7 in the CLE materials that I, myself, have written in
8 connection with lectures in this area that I have given.
9 Q. Okay. So, there is a court opinion out there
10 that discusses your internal process for evaluating the
11 value of punitive damages claims?
12 A. There is a court opinion out there that
13 addresses the issue of how punitive damages should be
14 evaluated, yes.
15 Q. And let's make sure we are talking, using the
16 same words here. How a punitive damages claim should be
17 evaluated versus how you -- how one values a purported
18 punitive damages claim. Are we talking about the same
19 thing?
20 A. That's a distinction that I don't understand.
21 Maybe I can be helpful to you here so we don't spend a
22 lot of time mis-communicating.
23 Q. That would be great.
24 A. There are authorities that identify
25 aggravating and mitigating circumstances that are
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1 appropriately taken into consideration in assessing the
2 amount of punitive damages necessary to serve the dual
3 purpose of punitive damages recognized in the State of
4 Florida, punishment and deterrence. The case that most
5 specifically addresses those factors is the
6 Johns-Manville case, which is included in the materials
7 that have been provided to you.
8 Q. Just so we are clear, when we are talking
9 about the publication of your process to evaluate
10 punitive damages, do these cases say this is how Jack
11 Scarola does it and we think that that's the proper way
12 to do it, or do these cases discuss different factors
13 that a court should consider in evaluating punitive
14 damages and you have adopted parts of that in your
15 process?
16 A. There is no published opinion that attributes
17 this process to me. There are published opinions that
18 identify appropriate factors to be taken into
19 consideration by both judges and juries in determining
20 the appropriate amount of punitive damages necessary to
21 serve the dual purpose of punishment and deterrence.
22 Q. Are there any publications, other than the
23 court opinions, that discuss Jack Scarola's process,
24 your individual process that you have utilized in this
25 matter to evaluate or to place a value on the potential
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1 punitive damages claims in the underlying cases?
2 A. Except for my own materials, which obviously
3 include my name, I am not aware and would be very
4 surprised to find any case or treatise or other
5 publication that attributes the identification of
6 aggravating and mitigating circumstances to Jack
7 Scarola. This is not something that I authored, except
8 to the extent that it's incorporated in CLE outlines.
9 It is a recognition of the appropriateness of
10 specifically identified factors in both cases and
11 treatises to asses the appropriate amount of punitive
12 damages in order to serve the dual function of
13 punishment and deterrence.
14 Q. Punishment and deterrence, are those the
15 purposes of punitive damages under Florida law?
16 A. Yes, sir.
17 Q. Are punitive damages under Florida law meant
18 to compensate a plaintiff?
19 A. They are not, except to a limited extent that
20 is recognized in the case law, and that is that there is
21 a recognition in the case law that the plaintiff who
22 undertakes the prosecution of a punitive damage claim is
23 serving a function in effect as a public prosecutor to
24 preserve the integrity of the judicial system and to
25 preserve appropriate standards within, in this context,
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1 the business community. So, to motivate individuals to
2 undertake the difficult task of prosecuting a punitive
3 damage claim, one of the factors that is taken into
4 consideration are the costs involved in prosecuting that
5 claim.
6 Q. And what case ---
7 A. So punitive damages help to compensate the
8 plaintiff for undertaking that broader societal purpose.
9 Q. To recoup the costs incurred in protecting
10 society's or the state's interest in pursuing punitive
11 damages?
12 A. Yes, sir.
13 Q. And what case do you believe best describes
14 that function?
15 A. Well, I know it's described in more than one
16 case, but the one that comes to mind immediately is
17 Johns-Manville.
18 Q. What is your process for placing a value on
19 potential punitive damages claims?
20 A. It is to review the evidence in the light of
21 recognized aggravating and mitigating circumstances, to
22 assess the way in which those factors impact upon the
23 intended purpose of punitive damages to punish the
24 wrongdoer and to deter others similarly situated from
25 engaging in the same kind of wrongdoing, to review any
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1 statutory limitations that might apply and to consider
2 any constitutional limitations that might apply in
3 arriving at an opinion as to what I believe the range of
4 punitive damage value of a case is likely to be.
5 I would also take into consideration the
6 extent to which the same or similar circumstances have
7 already been assessed by an independent finder of fact.
8 Q. Let me make sure I got all of this down. It
9 seems like there is several different factors. First,
10 the evidence with respect to the claims at issue. You
11 would review that. You would review any statutory
12 limitations.
13 A. May I interrupt for just a moment?
14 Q. Yes, sir.
15 A. Because the evidence I am reviewing is
16 particularly that evidence that relates to the
17 aggravating and mitigating circumstances with respect to
18 punitive damages. I would not necessarily find it
19 necessary to review all of the evidence with respect to
20 a given matter and have not undertaken to attempt to
21 review all of the evidence with regard to this case.
22 Q. Would you review any of the evidence to
23 ascertain the viability of the underlying claims?
24 A. Certainly to some extent, yes, and I need in
25 circumstances such as this to make some assumptions with
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1 regard to the viability of the underlying case and have
2 done so here. Obviously, if this is were my own case, I
3 would be assessing all of the evidence with regard to
4 the viability of the underlying case.
5 Q. You said you had made certain assumptions in
6 this matter concerning the viability of the underlying
7 claims. Correct?
8 A. That is correct.
9 Q. What assumptions have you made?
10 A. That the underlying claims are accurately
11 described in the complaints that I have reviewed, that
12 they are accurately described in court orders that I
13 have reviewed, that they are accurately described in
14 pleadings and memoranda that I have reviewed, and to a
15 limited extent that they have been accurately described
16 in verbal communications that I have had with both
17 Mr. Moskowitz and Mr. Scherer.
18 Q. So, for your analysis of the viability of the
19 underlying claims in this matter, are you accepting all
20 of plaintiffs' allegations to be true?
21 A. Yes. I have accepted the allegations in the
22 complaint to be true to the extent that any particular
23 allegation was or is shown not to be accurate that may
24 or may not affect my opinion, and that's something that
25 I would need to view in the context of the overall case.
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1 Q. And are you accepting all of the
2 representations from Mr. Scherer and Mr. Moskowitz as
3 true with respect to the underlying facts?
4 A. They have been very limited, bu