Free Response to Motion - District Court of Arizona - Arizona

In The Matter Of:
Meritage Corporation v. ` ,
‘ J Hancock

I g Kerz Krause _
September 26 2006 I
:
it Gr@rz and Associates Court Reporters
3030 North Central Avenue
- Suite 1102
.' Pboenzlx, AZ USA 85012
(602) 264-2230 or [888) 529-9990
` ` Original File KK092606 ZX?] 224 Pages
Min-U?SCript® File zu.- 22009 74 m
Word Index included with this Min·U-Scripte
Case 2:04—cv— Case 2:04-cv—00384-ROS Docgment 515-13 Filed 08/20/2007 Page 1 of 3

Meritagc Corporation v. Ken Krause
‘ Hancock September 26, 2006
P“9° 158 Page 160,
11] facts or information that Greg Hancock told Meritage m O: Okay_ Okay Do you _, do you have Exhibit 7 in
, U 12) management about his activities with respect to the _ [al from of you? No you gamma,. wm., H?
*°l Olympic P'°*’°'“°‘· °*Y“‘*°‘° D"°’°P‘“°"'· W°‘"”‘"°'· °' ESi§?§i§%iii-’?i*$¥"E¥i?i`??
[4] Riata West, Correct, as far as you know? W gi what is it;
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131 ````` 'o`é"6iE§yQ 'i·d`uléé`§i611lE¢`é1i1é {1211-3“11`11E`1h£“113"1gl1 " ° 0 ` ` " ` ` `
my Q: What's your — what‘s your basis of that (,1 number, [ho total uno ·
l*°l _¤¤dcl$l¤¤¤li¤8? [10] Do you see that down near the bottom?
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1141 Q: Okay So — is you.r basis for your understanding my O: Okay what docs that mean?
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1%% ``````` 6`é"6ik3i`i5l¥é§`iii5?i£é5}i`Eii3¥`iii3¥‘§"iii¥`i6i£ii `'``````````'``"`i ` "````f``f````*````b'
1111 ¤¤m¤·-I coms ¤11·M¤1¤g¤ ¤¤¤·au1¤¤1¤¤ stu at ma
11111 Q: Okay Do you have any belief that they knew 119] pu-gcnm, Pom; in dmc; k
r=¤i =·*>¤·¤ mc Gfcg **¤¤c=>c*='$ =¤ tan rcspcct to Wcsrwiridané Rim Wcsr chroueli thc Glympic @11 Vnivnnn ii§`\iéQ1i,`iQ1’111é` §i{1$Q11`§éQ$1I`&1111$1l1¢1 exhibit to help you
1221 entities in thc summer of 2001? [22] out hc,-c_
1291 Mn. misses: He doesnt me at to udp
_ I241 Ol Md didiYd“ "' cdmillg back td clrc qu°5d°l'*· with 1241 out.All he’s got to do is look at this one, Counsel.
Es] respect to — at that time period, summer of 200l,fal1 of 1251 MR GQLDHNE; wc1_[_ maps wishful mimdng
• N F’¤9c 159 page 161
(1) 2001, are you aware of any information that Greg Hancock [1] on counsel-; Pm-L h
121 told Meritage management about his involvement in Olympic [Z] MR @13355; jus; -1cft 10 Sm;] 7'988_"
on Prcpcrtics or Olympic Dcvclcpmcm? 161 (Deposition Exhibit Nd. 8 was marked rdr
111 1d¤11tmd11101..>
111 me wmessl 1 C3I'1'[ .16 thc 6l11c1111111611.
[71 Oi Summer of 2001, fall of ZOUL 17] question, here's the information I would need t0 know}
111 started 61 dc - 11..: S\.Ibd.iViSl01't. 61.1 policy was
{W1 _ Q? Oh! $0 as fill 35 Ydll kl'l°W· YOU did ll°t °b5€l’V¢ 1101 generally within 15 to 50 days we would be — we would
l1 1) him tolling Mcfilagc ¤b0lll his il’¤Y<>iV¢¤1€l’ii1 €0¥l`¢€i? [11] have a trailer on the site and be ready to sell houses in
nz: dm ¤¤b IQ! l·¢i ¤1¢ l'€P€at dl¢ <1*l¤¤'-i°¤· lc it ¤’*-*¢ dnt Widl (13) So if you would take any place that has ‘ _
(141 l”€Spc€l l0 thc €<>¤dll€l ill thc Slll2¤¤1¢1” of 20011 aflcf . 114] starts, what would be available to sell would be lots left
1151 Jl-\l'l¤ I. 2001- lh-l”0¤Bh dw €¤d of 2001. YOU did lldi °b$°l’V€ [15] to start, and there would be other lots that would be
U6) GYCB H¤~¤¢<>€k idling M€l”ii¤E¢ ¤b<>UT hi5 i¤V°lV€ll‘l¢lli with 1161 available to seU if development had sta.rtcd,but we
rm Glympic Properties. Olympic Dcyc|¤pmc¤¤.WcS¤W¤id Oi F·l¤*¤ [17] hadn’t even srmed any houses, so -
HB1 Wc$*» <=¤lf¤¤¤? _ tw: BY MH. GOLDFINE:
llgl ¤= pid thc Pt¤i•=cl lot saws ¤=1»¤¤~ mis: you in
i..1.-. Q .,.,“ Q 1111 \·lDd€1'$Z3HCii.l1g 1111: import 611116 9,664 numbc.1
.1.l .1.
. tili 1'QQ1 ééliivhy dflflli y1511` "1Q1$`11`$}1141`*6 “1$eé1{ 1l1`5.111CL1"`5; "` " A ` 1 -
1231 BY.MR._GOLDF|NEZ .. . [23]. Exhibit N0. 8- _ . O
*“l °’ Wim “‘”"b°’ is um? Q “ ’·‘¢* "€¥·?55E§¤=’%?€$`?=Li§§i§;??E’·=§$Q€§Eéi"
` _=*=,-* $2 ‘.=. ..‘< last- di urls thm thc pt¤iccl-ililiigi?liil$'icp¤ll? O i l ii H
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Mm_U_S¤Qlatse 2:04-cv-00384-ROS Docurrkiytnfili ;5&i?Pt®F1le6 Wiiigiiwi (F4§§EPagi3c—d1i52§_ Page 161
Case 2 :04-cv—00384—FlOS Document 515-13 Filed 08/20/2007 Page 2 of 3

Ken Krause Meritage Corporation v.
September 26, 2006 Hauizock ‘

P¤9° 162 ' Page 164
l ..€EfA¤ iwc uc. ~ · 3**:- §g,`,· ig; ll] Q: So your view with respect to each of these .-
*?l?J_. - 2 =*`N: iii-»’QQ`I?-2: (2] neighborhoods is that those were lots that were available { l
la) Q: Let me — let me ask you a couple of questions isi to bc sold;
"’ l““ “"‘· - =-* :15; -r-i¤ 1
isi ls that the project lot sums report - .i- ‘:-· - =>_ jj, -
·f$i-t.{Y¢Fp;,i€jIl$z‘ ” I ‘ U : ``_. V ‘: Q?. ‘ ~ _;· -- -if-I ls] U `What about lots? U U
0 °= · EXW NW y ·t;=
it OM ls tw W numbe M in =h= t»sts
la] total line of Exhibit No. 8 tied to the 9,664 number in —, _i ¤.i‘{s.
lm} [hc EX-h-ibn No- 7? (10) l Do have a there al report that l
tliljl?f?Qzj*-;-;’?E€€§§{¢Si--i`$?· ·- t - ·,’:=tt-g-:{;;"=E€;" ` -1;;. - » J ·`ii?. · w-,15;} [11] gets down into further detail to show which ones
U2! Qi Ok3Y·Th°$€ an a1W°Y$ in Cach °f mcs': "€P°"$ {12] development had started versus which ones development
(tal for each and every week? ’I`hey're supposed to be the exact (,3) l.ia,_·ln·[ smiled?
Wl smc numbcr ‘ ’ lis) MR. FFIISBEE: lt's the other exhibit.
rig.; 3;5§??€$§§£i?QiZ-.:1?.?i§§i§ig;%i§£;,Y. t.-t-r l-r [I5) THE WITNESS: Well,y0u know, irs -
U6) Q: ·‘ €°¤'°€'? {ssl basically we're saying, I think, that there's about 7, 8,
if; lm 16 — about 2.00010tS 1h¤tI‘m Surmlsing were not
lis) Q: Okay. Let's talk about a couple of the columns [ia] available to sell at this poil-i[_ .
{10) in the project lot status report. l.et's talk about the [ia] We would have .. we wgldd have - maybe of
T20) d¤5¢d ¢0i¤m¤- [20] the 8,000 — approximately 8,000 total lots remaining to
-r-t;-. [21] een, il would eiuier be 6,000 that were for sale at the
{221 Q: Okay.} assume that-- and the closed column, mi [ima -
[za) those lots are not available to be sold again by Meritage, [23] BY.MR_ (_;()l_pFlNE; `
` _€°¤'¤¤¥? {24] Q: And what's — l mean, how do you come up with _
esi thatlircm me document? i ‘
PBQQ 163 Page 165
*" °’ Om "‘°‘”· “‘“"s ’°“‘ ”‘°‘" ‘"*"‘ ‘“P°°‘ °°
tit “¤¤<*=* ·=¤·=v==*<>t>=¤—·=·¤="t ~= um =v=·¤=¤*·= *0 ¤= SOM at
<··· M ¤¤¤<=·¤=·¤ vm *¤ ¤¤¤¤- F=¤~¤~ M- ZM i
lsl Q: Yeah. lfyou look at the left-hand side, t.l·ley [6] Q; ()kay_
m '“"° “ — ‘”‘“* “PP"·‘” ‘° °° '“’° * ""° "°“‘““g’· `“°P°" l e

0** °* °‘“Y·""“** ‘°5P°°‘ “° “‘° *"°i°°‘* ““* "C
M ¤¤¤=* the =*¤V·=*¤¤=¤*¤¤*" me- M um ¤t¤i<=¤t$
lizi liiiisliecl lots available to be sold ie me public?
=t*`.

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mi his te S=1·=i¤ me — y · —·.‘·
i=. ·-:- - »e- ‘=·==. i -·t··=== i·¤ ··=:= ¤ ···= 2 -:‘i
@115-<€§2¥*?h9P§?é· -- - i = .-»-===· ; .i`` s;z5E§se€:t=&%%=€r;=>%i¥ i.=- i.-‘ .·-i· · - -».·*t.··: i »==e ‘1·-·-‘i·=.-= · Yi;
[zi] 0: Okay. Does it help to have finished lots to sell (ai) Q; Okay
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¤ti , -,- -... -, .·._ ; .·i. e ·..i t 2 - - ~ = - --E¥ 1 ‘-<·i t t
i MR. GREG HANCOCK: lt wom hurt. _ _ , _:.__. ; i;;ij_,g.:;,e;e§:_.. gg---? -.._ _
l25l BY MR- GOLUFINE las]. thatl understand,-did Greg Hancoclt tell you U it n
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