Free Motion to Compel - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

ANAHEIM GARDENS, et al., Plaintiffs,

v. THE UNITED STATES, Defendant.

) ) ) ) ) ) ) ) ) )

No. 93-655C (Judge Margaret M. Sweeney)

ALGONQUIN HEIGHTS, et al., Plaintiffs,

v. THE UNITED STATES, Defendant.

) ) ) ) ) ) ) ) ) )

No. 97-582C (Judge Margaret M. Sweeney)

PLAINTIFFS' MOTION TO COMPEL DEFENDANT TO ANSWER QUESTIONS AND TO PRODUCE CERTAIN DOCUMENTS Pursuant to Rule 37(a)(2)(B) of the Rules of the Court of Federal Claims ("RCFC"), Plaintiffs move for an order compelling the Defendant to produce a witness or witnesses to fully testify regarding the identity of any properties that were permitted to prepay their Governmentinsured mortgages under the Emergency Low Income Housing Act of 1987 ("ELIHPA") or the Low Income Housing Preservation and Resident Homeownership Act of 1990 ("LIHPRHA"), including all of the facts and circumstances related to those properties and the prepayment. Additionally, Plaintiffs seek an order compelling the Defendant to produce a witness or

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witnesses to testify about the processing of Plaintiffs' properties under ELIHPA and/or LIHPRHA. Plaintiffs also seek an order pursuant to Rule 37(a)(2)(A) compelling the Government to produce documents related to the properties that were allegedly permitted to prepay under ELIHPA and/or LIHPRHA. Finally, pursuant to Rule 37(a)(4)(A), Plaintiffs seek an order directing the Defendant to pay for the reasonable costs and expenses, including attorneys' fees, associated with Plaintiffs' bringing the instant motion. Pursuant to Rule 37(a)(2)(B) of the RCFC, Plaintiffs certify that they have attempted in good faith to confer with Government counsel to resolve these matters prior to bringing the instant motion, but that those efforts were unsuccessful. BACKGROUND 1. The Plaintiffs' Rule 30(b)(6) Depositions. In August 2007, Plaintiffs served three separate Rule 30(b)(6) deposition notices on the Government. Shortly after the receipt of the notices, the Government stated that it believed that it would produce between four to six witnesses to testify regarding the notices. Accordingly, the parties agreed that a two week deposition period for the Plaintiffs to depose these witnesses would suffice. The Government asked the Plaintiffs for time to identify the actual individuals who would testify. Plaintiffs agreed, and gave the Government until October 12, 2007 to identify the actual witnesses. On October 12, 2007, rather than identifying the promised four to six witnesses, the Government identified only two witnesses, and proceeded to raise extensive objections to all of the Rule 30(b)(6) notices. See Letter from David A. Harrington to Harry J. Kelly dated October 12, 2007, and attached hereto as Exhibit A. Plaintiffs responded to the Government's objections in a letter dated October 16, 2007. See Letter from Harry J. Kelly to David A. Harrington dated October 16, 2007, and attached hereto as Exhibit B. Specifically, Plaintiffs informed Mr.

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Harrington that, in their view, the Government's objections to the Rule 30(b)(6) notices were either baseless and/or premature. Plaintiffs further informed the Government, among other things, that absent a protective order from the Court, they fully intended to question the Government's witnesses about all of the noticed subject matters. 2. Judge Hodges' Warning to the Government. On October 17, 2007, the parties had a conference call with Judge Hodges. During that call, the Rule 30(b)(6) deposition notice dispute was raised and significant time was spent discussing the Government's objections and Plaintiffs responses to those objections. Thereafter, Judge Hodges entered an order stating that the Plaintiffs "[were] entitled to all available information related to their case through normal discovery channels." See Order dated October 22, 2007, attached hereto as Exhibit C. Further, the Court instructed that, "[d]efendant must provide appropriately knowledgeable government officials and other current or former government employees, if any, so that plaintiffs may obtain the information necessary to present their case to the court." Id. Finally, Judge Hodges cautioned that, "[d]efendant's refusal to provide such officials may result in various sanctions, including restrictions on the nature of defenses the Government may offer at trial." Id. Notably, the Government never sought a protective order from the Court limiting any of the subject matters noticed in the Rule 30(b)(6) notices.1 3. The Government's Designation of Mr. Barry. Despite Judge Hodges' order, the Government did not alter its designation of Maurice Barry, a relatively low level HUD employee from the Boston field office, as the 30(b)(6) witness with respect to the majority of two of the three Rule 30(b)(6) notices. Specifically, Mr. Barry was designated to testify about subject

1

Revised Rule 30(b)(6) deposition notices were served on October 19, 2007, in part, to add more clarity for the Government. The subject matters pertinent to the instant motion did not change between the original notice and the revised notice.

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matters 1-6 of the notice attached hereto as Exhibit D, and subject matters 1-4 of the notice attached hereto as Exhibit E. At the heart of the issue in the instant motion is subject matter number three in Exhibit D, and subject matter number 1 in Exhibit E. Subject matter number three in Exhibit D seeks a witness to testify about "[t]he identity of any properties that were permitted to prepay under ELIHPA or LIHPRHA, and all facts and circumstances related to those properties and the prepayment." Given the Government's position that it was not futile for the Plaintiffs' to attempt to obtain HUD's approval to prepay their mortgages, it is essential for Plaintiffs to obtain full discovery with respect to any properties that, according to the Government, actually were allowed to prepay under either ELIHPA or LIHPRHA. Subject matter number one in Exhibit E seeks a witness to testify about "[HUD's] processing of prepayment and other requests under ELIHPA and/or LIHPRHA for the Plaintiffs and subject properties listed in Exhibits A and B." 4. Mr. Barry's Inability to Testify. Unfortunately, Mr. Barry proved to be unable to provide full and authoritative testimony on all of the designated subject matters. Specifically, at the start of his deposition on November 9, 2007, Mr. Barry testified that because he had no personal knowledge of any prepayments under ELIHPA or LIHPRHA, his testimony about subject matter number three in Exhibit D was "cloudy." See Deposition Transcript of Maurice Barry, dated November 9, 2007, ("Barry Deposition I") at p.14, line 21 through p. 17, line 6, attached hereto as Exhibit F. When asked who could testify about subject matter number three if not him, Mr. Barry said that it was potentially someone in Washington at HUD's headquarters. Id. at p 17, line 14 through p. 18, line 20. Mr. Barry further testified that he was aware that Joseph Malloy had given "a certification" with regard to how many properties had applied for prepayment and how many had been permitted to prepay, but that "other than that" he was "not

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sure."2 Id. Even more specifically, he testified that he was not "intimately aware" of the Malloy declaration or a "particular project" that had been permitted to prepay. Id. at p. 154, line 22 through p. 155, line 14. In other words, on November 9th, Mr. Barry never mentioned possessing knowledge about any of the three properties allegedly permitted to prepay under either ELIHPA or LIHPRHA, including one known as Parc Chateau West.3 Indeed, his testimony on November 9th plainly suggested that he was unaware of this property ­ a fact which Plaintiffs later learned was not true. Moreover, although the Government's counsel knew that he had prepared Mr. Barry just days before to testify about Parc Chateau West, he took no action during the November 9th deposition to correct or clarify Mr. Barry's testimony on this subject. It was not until Mr. Barry's second day of deposition testimony on November 14, 2007, that he admitted to knowing about Parc Chateau West.4 See Deposition Transcript of Maurice Barry, dated November 14, 2007 ("Barry Deposition II"), at p. 212, line 13 through p. 228, line 7 attached as Exhibit G. Even then, he only did so in response to a direct question from Plaintiffs' counsel. To make matters worse, although Mr. Barry finally acknowledged on November 14th that he knew about Parc Chateau West, he provided no substantive answers to any specific

2

In response to the Plaintiffs' October 2006 interrogatory asking for this same information, the Government served a response in June 2007, attaching a 1997 declaration from a Joseph Malloy, then HUD's Deputy Director of the Existing Products/Preservation Division. In that declaration given in connection with Greenbrier v. United States, Mr. Malloy asserted that eight properties had applied to prepay their mortgages under ELIHPA or LIHPRHA, and that three had been permitted by HUD to do so. None of the three properties were named. The Government has been on notice since Plaintiffs received that response that Plaintiffs wanted more detailed information about all eight of the properties. Mr. Malloy's declaration is included Exhibit E to Plaintiffs' October 16 th letter to Mr. Harrington which is attached hereto as Exhibit B. The Government's identification of Parc Chateau West did not occur, disturbingly, until the Government served a supplemental interrogatory response on November 2, 2007, despite the fact that the Government was aware of the name of Parc Chateau West as early as June or July of 2007. See Deposition Testimony of Franca Hetue dated November 14, 2007, at p. 59, line 3 through p. 61, line 15 attached hereto as Exhibit H. Prior to acknowledging on November 14 th that he knew about Parc Chateau West, Mr. Barry was asked directly whether his testimony had changed since the prior Friday, November 9 th, with regard to any of the 30(b)(6) subject matters about which he intended to testify. He said no. See Barry Deposition II at p. 207, line 22 though p. 208, line 4.

3

4

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questions about that property and its alleged prepayment. Id. He stated that he could not do so because he could not recall any specifics without being shown documents. Id. at p. 219, line 17 through p. 220, line 3; and p. 224, line 20 through p. 227, line 1. However, it was impossible for Plaintiffs' counsel to show him any documents related to Parc Chateau West, since as Plaintiffs learned during the deposition, those documents were not produced to Plaintiffs.5 See id. at p. 220, line 19 through p. 222, line 20. As a result, Plaintiffs were unable to obtain any substantive testimony regarding subject matter three from Mr. Barry, despite the fact that he was the designated representative on the subject matter. 5. Plaintiffs obtain information concerning other properties that allegedly prepaid only from other witnesses. Plaintiffs' counsel learned through the depositions of two other Government witnesses, who Plaintiffs only noticed as individuals after the Government failed to name them as Rule 30(b)(6) witnesses, that the two other properties referenced in the Malloy declaration may be located in Madison Wisconsin and St. Louis, Missouri. Specifically, Mr. Michael Winiarski, a current HUD employee in Washington, D.C., testified that he believed that one property that was permitted to prepay under either ELIHPA or LIHPRHA was located in Madison, Wisconsin. See Deposition Transcript of Michael Winiarski dated November 13, 2007 at p. 145, line 21 through p. 146, line 8; p. 172, lines 13-21; p. 232, line 17 through p. 235, line 1 attached as Exhibit I. Further, Mr. Mulholland, another current Washington, D.C. based HUD employee, testified that he believed that a property in St. Louis had been permitted to prepay under either ELIHPA or LIHPRHA. See Deposition Transcript of Kelly Mulholland dated November 16, 2007, at p. 70, line 20 through p. 73, line 22 attached as Exhibit J. Indeed, Mr. Mulholland referred Plaintiffs to Sue Warner, a mortgage credit examiner in the St. Louis office
5

To date, despite multiple requests, those documents still have not been produced by the Government.

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as person potentially possessing information about this issue. Id. Despite this knowledge in the possession of two current Government employees, Mr. Barry, the Government's designated Rule 30(b)(6) witness on the subject matter of any properties that allegedly were permitted by HUD to prepay their mortgages under either ELIHPA or LIHPRHA, was unable to offer any testimony regarding either of the two properties. See e.g., Barry Deposition II at p. 227, line 22 through p. 228, line 4. 6. Mr. Barry failed to provide other testimony required by the Plaintiffs' Rule 30(b)(6) notices. With regard to the second Rule 30(b)(6) notice, Mr. Barry stated on the record that he could only testify in a limited manner about subject matters two through four, and that he would not testify at all about subject matter number five. Barry stated, however, that he was prepared to testify about subject matter number one which related to the actual processing of Plaintiffs' properties under ELIPHA and LIHPRHA. Despite that assertion, when asked a series of questions about several properties that were used as examples of ELIHPA processing, Mr. Barry was unable to offer any substantive information about the lengthy delays associated with that processing. Indeed, on no less than four occasions, Mr. Barry stated that he was unable to answer Plaintiffs' questions and suggested that Plaintiffs obtain information from a HUD employee in the relevant North Carolina field office. See, e.g., Barry Deposition II at p. 308, line 12 through p. 312 line 5; p. 318, line 11 through p. 322, line 8; p. 324, line 19 through p. 327, line 6; p. 331, line 3 through p. 333, line 18. Similarly, Mr. Barry was unable to testify about the ELIHPA processing related to several Indiana based properties. See e.g., Id. at p. 416, line 10 through p. 420, line 16. He again testified that to obtain the requested information, Plaintiffs should be asking questions of someone from the HUD Indiana field office. Id.

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7. Documents related to Parc Chateau West. As noted above, Plaintiffs only learned about the existence of documents related Parc Chateau West during Mr. Barry's testimony on November 14, 2007. When the issue first arose, the Government's counsel stated on the record that he was not sure whether the Parc Chateau West documents were produced to Plaintiffs. See Barry Deposition II at p. 220, line 11 through p. 221, line 4. Thereafter, he argued that nonproduction of the documents was defensible because he was not obligated to produce every document used to prepare Mr. Barry for his testimony. Id. at p. 222, lines 1-12. When Plaintiffs' counsel pointed out that the documents were in fact responsive to a document request served by Plaintiffs in October 2006, Mr. Harrington then responded that "[i]f there have been any documents that we have ­ that have not been produced that are responsive to a discovery request, we will look into it, and we will make sure they are produced." Barry Deposition II at p. 222, lines 13-20. In an email dated November 15, 2007, Plaintiffs again requested that Mr. Harrington provide the Parc Chateau West documents prior to the start of Mr. Mulholland's deposition on Friday, November 16, 2007. See Email from Alycia A. Ziarno to David A. Harrington attached as Exhibit K. Mr. Harrington appeared for that deposition but did not bring the documents. He, with agreement voiced by HUD's agency counsel, stated that they did not have access to the Parc Chateau West documents since the documents were apparently located in Boston where they were previously used in preparing Mr. Barry for his testimony. More specifically, Mr. Harrington asserted that the first time he saw the documents was when they were faxed to him during Mr. Barry's preparation in Boston. If true, that fact would render his prior assertion on the record two days earlier on November 14th ­ i.e., that he did not know if the records had been

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produced ­ incorrect, because he knew that he had not produced documents that he had only first seen a few days before. In any event, to date, the records have not been produced to Plaintiffs. These facts indicate several things. First, that the Government's repeated objections that it was impossible and/or unduly burdensome for it to search for information, and prepare a witness to answer questions about the properties identified in the Malloy Declaration were the product of insufficient diligence or a gross overstatement since the Government was aware of the name of Parc Chateau West as early as June or July of 2007, and possessed accessible documents relevant to the property somewhere in the Government's files. Second, that the testimony of Mr. Barry, who contended he could not recall the details of the alleged prepayment by Parc Chateau West even though he had been prepared with documents related to it, is insufficient to satisfy the requirements of Rule 30(b)(6). And finally, that there are serious questions about exactly what documents the government possesses concerning not only Parc Chateau West, but any other properties that allegedly were permitted to prepay their mortgages under ELIHPA or LIHPRHA, the extent and number of those documents, and what happened to any missing or destroyed records such as those Ms. Hetue was unable to locate in June or July of 2007. ARGUMENT 1) The Government Is Obliged To Produce A Rule 30(b)(6) Witness Who Can Respond To the Plaintiffs' Legitimate Discovery Requests. Rule 30(b)(6) of the RCFC requires a party, including the Government, to provide a witness or witnesses to testify on its behalf in a deposition about matters identified with reasonable particularity. If a designated representative does not have personal knowledge of the subject matters to be covered, the entity producing the witness has an obligation to familiarize and prepare the witness so that he or she can testify fully. See e.g., Starlight Int'l v. Herlihy, 186 F.R.D. 626, 638-40 (D. Kan. 1999). A representative who appears at a Rule 30(b)(6) deposition

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who provides evasive or incomplete answers does not satisfy the knowledgeable witness requirement. See RCFC 37(a)(3); see also Fox v. Morris Jupiter Assoc., 2007 U.S. Dist. LEXIS 70880, at *6-7 (S.D. Fla. 2007). Here, as plainly set forth above, the Government failed to produce a witness who could fully testify about subject matter number three in Exhibit D (i.e., the identify of properties allegedly permitted to prepay their HUD-insured mortgages under ELIHPA or LIHPRHA) and subject matter number one in Exhibit E (i.e., HUD's processing of the Plaintiff's properties under ELIHPA and LIHPRHA). First, Mr. Barry evaded answering questions about Parc Chateau West by relying on the Plaintiffs' lack of documents which resulted directly from the Government's failure to produce those documents to the Plaintiffs. Moreover, he was not prepared at all to testify about the properties located in Madison, Wisconsin and St. Louis, Missouri that were identified by two other current Government employees. The Government's inadequate preparation and lack of diligence in investigating the facts underlying the subject matters at issue is particularly egregious in light of Judge Hodges' order of October 22, 2007, and the absence of an appropriate protective order obtained in advance of Mr. Barry's deposition. Apparently, despite Judge Hodges' order, the Government maintains an erroneous belief that the unilateral objections set forth in Mr. Harrington's October 12, 2007 letter, and repeated on the record at Mr. Barry's deposition, were somehow sufficient to preclude the witness from having to fully testify pursuant to the Rule 30(b)(6) notices. However, so long as the Government contends that it was not futile for the Plaintiffs to attempt to prepay their mortgages, any and all documents and testimony relating to any properties that allegedly were permitted to prepay are squarely relevant and must be provided by the Government.

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Moreover, as is plain from the record, Mr. Barry's testimony regarding processing of ELIPHA and LIHPRHA applications was plainly deficient. Even Mr. Barry admitted several times on the record that he could not fully testify about the matters being asked about. Indeed, he suggested at least four times that there were other better sources for the information sought. The Government should have known that it was not proper to tender Mr. Barry as its sole 30(b)(6) representative only to have him testify that someone else within the Government was more knowledgeable about the subject matter about which he was tendered. Again, the Government appears to have proceeded under the mistaken belief, and notwithstanding Judge Hodges' order, that its unilateral objections shielded its witness from having to answer questions about subject matters directly relevant to this case and for which there is no protective order in place. 2) The Government Must Provide Documents Related To The Properties That Allegedly Prepaid and Must Explain Any Lost or Destroyed Documents._________________________________________________ With regard to the documents related to Parc Chateau West as well as any other properties that allegedly were permitted to prepay under ELIHPA or LIHPRHA, Plaintiffs' document requests were served on the Government on October 27, 2006. See Plaintiffs' First Request for Production of Documents attached as Exhibit L. Request No. 3 asks for "all documents. . . describing, discussing, mentioning, relating to or concerning the ability of an owner to prepay a Government insured mortgage on any insured property pursuant to the Preservation Statutes which was a defined term that included both ELIHPA and LIHPRHA. Further, in Instruction No. 3, Plaintiffs specifically requested that for responsive documents that were known to have existed, but that could not be located, or that had been destroyed, or discarded, the Government was to provide the name of the author of the document, the date of the document, the recipient of the document, and to summarize the content of the document.

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Documents related to Parc Chateau West or any other properties that allegedly were permitted to prepay are within the scope of both Request No. 3 and Instruction No. 3 First, any document related to Parc Chateau West's prepayment is plainly a document that "relates to or concerns the ability of an owner to prepay a Government insured mortgage on an insured property" under either ELIHPA or LIHPRHA. It is disingenuous for the Government to argue otherwise. As a result, the Government should have produced the Parc Chateau West documents referred to by Mr. Barry during his November 14th testimony in response to the Plaintiffs' October 2006 requests. To date, the Government has offered absolutely no explanation about why these documents were not discovered until November 2007 when they should have been produced in response to Plaintiffs' October 2006 requests. Further, no explanation has been offered about the circumstances surrounding how and where they were ultimately located. As previously noted, Ms. Hetue testified at her November 14th deposition that she could not locate these documents when she looked for them in June or July of 2007, at least 10 months after they were requested by Plaintiffs' document requests. However, apparently, someone, somewhere in the Government had possession of some relevant Parc Chateau West documents, and the Government eventually figured that out. The Plaintiffs are entitled to full disclosure about how, when and where the documents were located. Moreover, pursuant to Instruction No. 3, the Government owes Plaintiffs an explanation about any missing documents, and more specifically, about what happened to the documents that Ms. Hetue testified did at one time most certainly exist. CONCLUSION In sum, the Government fell woefully short of its obligation to produce a proper Rule 30(b)(6) witness when it produced Mr. Barry to testify about subject matter number three in

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Exhibit D and subject matter number one in Exhibit E. Not only was Mr. Barry not prepared to testify about matters upon which he was allegedly prepared, but he was not prepared to answer fairly basic questions clearly within the scope of the subject matters at issue. Consequently, Plaintiffs request an order compelling the Government to produce a witness or witnesses capable of fully testifying about subject matter number three in Exhibit D and subject matter number one in Exhibit E at a mutually convenient time. In addition, Plaintiffs request an order compelling the Government to (1) produce any and all records related to the Parc Chateau West as well as any other properties allegedly permitted to prepay under either ELIHPA or LIHPRHA, and (2) to provide Plaintiffs with a full explanation about the timing, the manner and the circumstances surrounding the recent discovery of the documents that do exist, and the destruction or loss of the documents that no longer exist. Finally, in light of Defendant's conduct in this regard, pursuant to Rule 37(a)(4)(A), Plaintiffs request that the Government be directed to pay for Plaintiffs' reasonable costs and expenses, including attorneys' fees, in bringing the instant motion.

Dated: December 7, 2007

NIXON PEABODY LLP

__________s/ Harry J. Kelly_________ Harry J. Kelly 401 9th Street N.W., Suite 900 Washington, D.C. 20004 (202) 585-8712 Attorneys for Plaintiffs

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In the United States Court of Federal Claims
* * * * * * * * * * * * * * * ORDER We conducted a status conference on October 17 to discuss various discovery issues. These included the following: Defendant seeks additional contention interrogatories to assess plaintiffs' position regarding ripeness under ELIPHA and LIHPRHA, as it applies to each plaintiff. Plaintiffs argue that the responses to such inquiries would be burdensome and duplicative. Defendant's request for leave to serve Interrogatories twenty-four and twenty-five is GRANTED. The court admonished the parties to conduct discovery with a view toward maximum voluntary exchange of relevant information, and to keep in mind the costs to plaintiffs and defendant in time and resources. Plaintiffs served upon defendant a total of six Rule 30(b)(6) deposition notices for Anaheim Gardens and for Algonquin Heights. Defendant declined, claiming the notices were vague and overbroad; that providing 30(b)(6) witnesses for such purposes would be an undue burden and expense; that some of the information sought is privileged; that some of the information was irrelevant due to the recent Federal Circuit decision in Cienega Gardens; and that the depositions might violate the "one day of seven hours" rule. Claims of privilege should be made on the record as they arise. See RCFC 30(c) (d)(1). The parties should file requests for protective orders prior to scheduled depositions. Plaintiffs are entitled to all available information related to their case through normal discovery channels. Defendant must provide appropriately No. 93-655 C Filed: October 22, 2007

ANAHEIM GARDENS, et al., Plaintiffs, v. UNITED STATES OF AMERICA, Defendant. * * * *

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knowledgeable government officials and other current or former government employees, if any, so that plaintiffs may obtain the information necessary to present their case to the court. Defendant's refusal to provide such officials may result in various sanctions, including restrictions on the nature of defenses the Government may offer at trial. Rules limiting depositions by hours and days are based on practical considerations that should be self-evident. Plaintiffs and defendant must conduct concise, wellorganized, and economical depositions that serve the interests of both the parties and the witnesses. The parties may refer to RCFC 30(d) for resolving circumstances that create a need to extend depositions beyond one day. They may contact the court for further guidance if necessary. The September 21, 2007 Order contains the schedule currently in effect. The parties should have completed document production, and they may be working on supplemental interrogatory responses. The September 21 schedule is reprinted below for the parties' convenience. $ The parties will serve supplemental interrogatory answers by November 2. $ Plaintiffs will conduct depositions on ripeness between November 5 and November 16, 2007. $ Defendant will conduct depositions on ripeness November 26 - December 7. $ Discovery closes on December 7, 2007.

IT IS SO ORDERED. s/ Robert H. Hodges, Jr. Robert H. Hodges, Jr. Judge

2

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Page 1
IN THE UNITED STATES COURT OF FEDERAL CLAIMS

- - - - - - - - - - - - - x ANAHEIM GARDENS, et al., Plaintiffs, V. THE UNITED STATES, Defendant. : : : : : No. 93-655 C

- - - - - - - - - - - - - x ALGONQUIN HEIGHTS, et al.,: Plaintiffs, V. THE UNITED STATES, Defendant. : : : : No. 97-582 C

- - - - - - - - - - - - - x Deposition of MAURICE BARRY Washington, D.C. Friday, November 9, 2007 9:40 a.m.

Reported by:

TRISTAN-JOSEPH, RPR

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Page 14
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Q. Okay. And if I refer to that Act as the

HOPE Act, you'll understand that abbreviated -A. Q. A. Q. I will. -- terminology? I will. By the way, during the position I might

refer to ELIHPA and LIHPRHA or Title II or Title VI together as the Preservation Statutes. And will you understand that abbreviated terminology? A. Q. I will. And throughout the course of the

deposition, if I'm asking you questions about a statute and you're not clear which one I'm asking about, please ask me to clarify that because it will be important today, as we discuss the various statutes, that your answers relate to either Title II and Title VI, or whether they're the same, you can indicate that as well. A. Q. Okay. Let's start with -- I'm going to show Okay?

you what is going to be marked as Exhibit 1.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 If you could just take a moment and just look this document over when you receive it. have a couple of questions for you about it. (Barry Deposition Exhibit No. 1 was marked for Identification.) (Witness reviews document.) THE WITNESS: BY MS. ZIARNO: Q. A. Q. Have you seen this document before? Yes, I have. Okay. You see that on the second page Okay. I

of it there's six subject matters? A. Q. Yes. Could you tell me which of those you're

here to testify about today. A. I believe number one. MR. HARRINGTON: answer this. I can go ahead and

Mr. Barry is going to testify about

all six subject areas on this Deposition Notice, but, of course, he's going to be testifying subject to the objections that we've previously asserted. I don't anticipate that that will pose any

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 problems. You know, for instance, we assert an objection to the last subject area, because we didn't have the knowledge about who was doing the drafting and the development of various forms. You can ask Mr. Barry about that, but I think, you know, you'll find out exactly what I'm saying. MS. ZIARNO: Exactly. And we get to

objections as we go through the testimony. BY MS. ZIARNO: Q. And I would like, on the record, though,

for you to state, as the witness, which of these six subject areas you're going to be prepared to testify about today. A. Number one, number two. Three is cloudy because it says, "The identity of any properties that were permitted to prepay under ELIHPA and LIHPRHA, and all facts and circumstances relating to those properties and the prepayment." I did not have any personal knowledge of

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 any prepayments under ELIHPA or LIHPRHA. Number four, you know, number four could fall into that same issue, other than understanding what the criteria and methodology might be, even though I had no personal experience with any properties that prepaid. Number five -- I can speak to number six, although, as my counsel has stated, you know, I'm not aware of who drafted, you know, the specific notices and handbooks and that type of thing -Q. A. Q. If I could --- relating to those statutes. Thank you. If you could look at the top of this page where it states that, Pursuant to Rule 30(b)6, "you," in this case, meaning the "government," shall designate the most knowledgeable person or persons to testify on behalf -- on its behalf as to the following subject matters, and then we go through the six that we just talked about. Who would you direct us to as the most

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 knowledgeable person or persons with respect to number three, if it's not you? MR. HARRINGTON: Object. It's vague,

and that we've asserted the objections as to number three. To the extent that you have any answer to that, you can go ahead and answer. THE WITNESS: You know, potentially, it I'm not sure --

could be somebody in Washington.

in Washington headquarters, you know, is what I mean by that, I'm not exactly sure who remains in headquarters, who, you know, was aware of properties that had prepaid. I understand that, at one point in time, Joseph Malloy, who was, I believe, at the time, the Assistant Development Director in Washington, gave a certification with regards to how many properties had come in for prepayment and how many properties actually prepaid. Other than that, I'm not sure. BY MS. ZIARNO: Q. Okay. And the same question with

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 A. And that's why I say mainly. I don't

recall it ever being used for Title II because it was just different ways in which we expressed to the owners what those values were and they weren't done beforehand. POA. They were done at the time of the

I mean, at the time of preliminary approval

of the POA. So some of the same information may wind up in a letter but not in this form. Q. In the course of processing under

Title II or Title VI, did you ever rely on Federal Register notices? A. Federal Register, yes. I wouldn't term

them notices, but I refer to them as the Federal Register. Q. A. Q. A. Q. A. Q. So you've read a Federal -Sure. -- Register -Sure. -- section before? Sure. And I apologize if you've already

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 processing? A. Q. 4350.6. The infamous large handbook I have here answered this question, but did you ever process a Plan of Action under Title II that requested prepayment and termination of the affordability restrictions? A. Q. A. Q. No. Did the Boston office? Not that I'm aware of. Are you aware of HUD ever processing

such an application? A. that, no. Not with project names or anything like I believe it's been done based on the

certification, if you will, from Joe Malloy, but I'm not intimately aware of that -- of a particular project. Q. minutes. What guidance did use under Title VI for Let's turn to Title VI for a few

under the table that I was hoping not to have to get to.

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Washington, DC

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Page 1
UNITED STATES COURT OF FEDERAL CLAIMS ANAHEIM GARDENS, et al., Plaintiffs, v. THE UNITED STATES, Defendant. ALGONQUIN HEIGHTS, et al., Plaintiffs, v. THE UNITED STATES, Defendant. ) ) ) No. 93-655C ) ) ) ) ) No. 97-582C ) )

- - - - - - - - - - -

DEPOSITION OF FRANCA GUIDA HETUE Wednesday, November 14, 2007 Washington, D.C.

Reported by:

Cheryl A. Lord, RPR, CRR

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Q. A. We had a call-in for files, for all files,

preservation files. Q. Do you remember receiving any kind of a

notice at any point indicating that you were to preserve records relating to any properties because of pending litigation? A. Q. Just recently. When you say, just recently, are you saying

like in the last 3 months? A. Q. I think it was February, March time frame. Between the time you started as

preservation coordinator and now, did you receive any such notice? A. Q. I did not. And the notice that you were referring to

in February or March of 2007, was that also in connection with the Park Chateau West? A. No. That was Algonquin series case. So you were asked at some other point to

look for the Park Chateau West documents? A. When I was pulling documents for the

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lawyers, there were missing documents. So the lawyers

had asked me to provide -- asked me if I had any prepayments. Q. A. Q. A. Q. And I said yes.

And what time frame was that? June, July. Of this year? Yes. So that's when you went to look for the

Park Chateau West? A. Q. not there? A. Q. Right. Was there any indication of anybody having Yes. At that point you determined that they were

put a removal tag or checking out a document of any kind? A. Q. No. Do you keep a log as to who checks in and

checks out those kinds of files? A. Q. No, we don't. Okay. When was the last time you saw the

Park Chateau West documents?

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A. A. Q. Do you recall? No, I don't recall. Would it have been around the time of the

final approval or sometime later? Do you have knowledge? Probably around the time of the final

approval, because I was just the preservation coordinator. There was a project manager that

actually had that property in the portfolio. Q. of records? Are they in a locked room or secured place, or are they generally open to anybody who is in the office? A. Q. Anybody in the office has access. Bear with me a moment. Just take a moment Who else would have access to those kinds

to find a particular document. MR. KELLY: What number are we on?

(Discussion off the record.) (Exhibit Hetue 4 was marked for identification.) -

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Washington, DC

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

- - - - - - - - - - - - - x ANAHEIM GARDENS, et al., Plaintiffs, V. THE UNITED STATES, Defendant. : : : : : No. 93-655 C

- - - - - - - - - - - - - x ALGONQUIN HEIGHTS, et al.,: Plaintiffs, V. THE UNITED STATES, Defendant. : : : : No. 97-582 C

- - - - - - - - - - - - - x Deposition of MICHAEL WINIARSKI Washington, D.C. Tuesday, November 13, 2007 9:39 a.m.

Reported by:

TRISTAN-JOSEPH, RPR

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 A. Q. Q. A. Q. -- okay? Yes, I'm just . . . We'll take a break in just a -- I just

want to finish the last series of a couple questions, I swear. But I understand that you did not receive them yourself and, obviously, the Field Office initially received the Notice of Intents, and that's fine. But I'm just wondering in connection with the work that you did on the database, did you ever encounter or come across either an actual document, a Notice of Intent, seeking to prepay, or whatever notice that you got to put into the database indicating that an order had sought to prepay? A. Q. Yes, I believe we did. Was that under ELIHPA or LIHPRHA? Do you know? I cannot recall at this time. Okay. Do you remember whether any of

those applications to prepay eventually were

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 later. Were there any discussions that took place at HUD with respect to the enactment of LIHPRHA and what, if any, impact it had on Owners' rights generally? A. You're saying do we have meetings approved by HUD? A. There was at least one that I recall There's

getting -- I used to know all the details. one that was allowed to prepay. it was ELIHPA or LIHPRHA. Q. A. Which property was that?

I don't recall if

Do you recall?

I can't remember the name, but it was in

Madison, Wisconsin, I believe. Q. Okay. We can talk about that a little

internally -Q. A. Q. A. Q. A. Yeah. -- at HUD about that? Yeah. For that specific program. Mm-hmm? No. It would have just been the

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 A. Q. A. Q. For prepayment? For prepayment under Title II. I don't recall that. From the time that an Owner -- and I

realize that you didn't begin to work full-time for the Preservation Division until 1992, do you know what kind of contact prior to that time the Field Office would have once they received a Notice of Intent would they be required to contact someone at headquarters and send some kind of information to them? A. Q. I don't know specifically. Okay. Do you remember seeing any of the

application -- I think you said earlier before lunch than an application to prepay was approved for one property and it was located in Madison, Wisconsin? A. Q. property? A. Q. I can't recall, no. Several of the properties, the I believe so, yes. Did we identify the name of that

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 A. Q. BY MR. KELLY: Q. This document is the Defendant's (Winiarski Deposition Exhibit No. 12 was marked for Identification.)

Submittal Response To Plaintiff's Second Set Of Interrogatories, and it's dated November 2nd. Have you seen this document before, sir? I don't believe so. Do you know whether you participated in

drafting this or assisted in drafting these responses? A. Q. I don't think so. If you could take look at page -- well, It has the heading

it's marked as page Arabic 1. "Interrogatories." A. Q. Yes. Okay.

And the last sentence or the next

to the last sentence of this page says, "One of the three projects permitted to prepay was Parc Chateau West project, which submitted a Plan of Action that satisfied the statutory criteria for prepayment under the Preservation Statutes."

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 under? A. Q. No, I don't. And you don't have any recollection of under the Preservation Statutes. Do you know which statute it had applied

the actual content of the Plan of Action and what evidence that it showed that authorized HUD to make those findings, do you? A. Q. No, I don't. Okay. What about the other project that

you identified, do you have any specific recollection as to which statute it was proceeding under for purposes of prepayment? A. Q. I can't recall at this time. You just don't remember, it could be

either one; is that right? A. It could be either one. Yeah, I know it

was a prepaid transaction, but I can't recall the way it proceeded. Q. Were there -- and do you have any

recollection of the specific criteria that allowed that property to prepay?

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 A. Q. A. Q. A. No. Okay. Do you know who Maurice Barry is?

Yes, I do. Who is it Maurice Barry? Well, he's a person that I used to work

with from the Boston office. Q. What was the context in which you used

to work with him? A. Well, I met him on a few occasions.

Most of the time was just to get information from him or to provide information to him about processing things we were looking for. Q. Mr. Barry? A. A fair amount during the program How often were you in contact with

operational years, I think in '92 to -- before the HOPE. I don't remember all the times but pretty

much he was responsible for Boston properties, and when we needed information about Boston properties, I'd contact him, or if he was going to let us know something was happening, he would contact me. Q. Was this information for purposes of

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

- - - - - - - - - - - - - x ANAHEIM GARDENS, et al., Plaintiffs, V. THE UNITED STATES, Defendant. : : : : : No. 93-655 C

- - - - - - - - - - - - - x ALGONQUIN HEIGHTS, et al.,: Plaintiffs, V. THE UNITED STATES, Defendant. : : : : No. 97-582 C

- - - - - - - - - - - - - x Deposition of KERRY MULHOLLAND Washington, D.C. November 16, 2007 9:39 a.m.

Reported by:

TRISTAN-JOSEPH, RPR

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 program? A. Well, you'd have to ask the selecting I didn't ask to go

official that sent me there. there. Q.

Did you ever talk to any mortgagees

about the Preservation Program and what they were or were not able to approve for an Owner? MR. HARRINGTON: You can answer. THE WITNESS: If somebody called me up Objection. It's vague.

and asked me about the 241 program, the 241(f) program, then, from a mortgage credit standpoint, I would have talked to them about the 241(f) program. BY MS. ZIARNO: Q. What about if a mortgagee had a question

about whether or not an Owner could prepay their mortgage? A. question. Q. Are you aware of any properties that I don't remember ever getting that

were ever permitted to prepay their mortgages under Title II or Title VI and terminate their

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 what? That's where the Preservation Office headquarters -A. Well, that's where -area. Q. If it were in '94, before your acting affordability restrictions? A. I had heard about one project in

Saint Louis which I don't have any details. Q. A. When did you hear about that? In '95, '94, somewhere in that general

director position, would that have come out of perhaps one of the preservation working group meetings you were talking about? A. I honestly can't say. You know, six

floors is a small place, you know, a lot of people over the years and people talk. a general all conversation. It could have been

It could have been at

one of those, or it could have been when I was actually the director and somebody mentioned it to me. Q. The reference to the sixth floor is

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Q. A. located -Q. A. Q. Okay. -- which would include preservation. You'll have to forgive me. I've -- were located? That's where Multifamily Housing is

actually never been to HUD. Do you recall the context of why the Saint Louis prepayment was even mentioned? A. Well, what I recall is somebody was And they I don't

unhappy about it, and they prepaid. wanted to do something else with HUD.

remember what they wanted to do, whether it was to come in and refinance their project or they decided to change their mind, and everyone wanted to come back in and get preservation incentives, something along those lines. Q. The somebody who was unhappy was that

somebody at HUD was unhappy with a prepayment or somebody on the other side of the deal was unhappy with the prepayment? A. I don't know who was unhappy. You'd

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 said? A. Q. A. Right. Okay. But again, I don't know whether she had ask? A. Let's see. There is still a mortgage have to find somebody who has some familiarity with the project. Q. A. How would I do that? That would be a good question since this The senior management in the

has been a long time.

Saint Louis office has been removed, retired. Q. Anybody you can think of, of who I would

credit examiner who probably was there around that time, who may or may not remember. I don't know

whether she had any dealings with preservation. Q. A. What's her name? It used to be Sue Warner. It's Sue --

or is it still Sue Warner? Q.

Yeah, yeah, Sue Warner.

And she's a mortgage credit examiner you

any dealings with preservation. Q. Understood.

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