0001
1
2 BEFORE THE BUREAU OF REAL ESTATE
3 DEPARTMENT OF CONSUMER AFFAIRS
4 STATE OF CALIFORNIA
5 JOHN DECURE, ADMINISTRATIVE LAW JUDGE
6
7
8 In the Matter of the Accusation )
Against: ) Case No. H-03010 FR
9 ) OAH No. 2016051017
STACEY ANN HAVENER, ) Volume II
10 )
Respondent. )
11 ________________________________)
12
13
14
15
16 TRANSCRIPT OF PROCEEDINGS
17 Los Angeles, California
18 Friday, November 18, 2016
19
20
21 Reported by:
22 BAILA M. STRAUSS
-and-
23 CLAUDETTE A. HENRY
Hearing Reporters
24
Job No.:
25 12919OAH
0002
1 BEFORE THE BUREAU OF REAL ESTATE
2 DEPARTMENT OF CONSUMER AFFAIRS
3 STATE OF CALIFORNIA
4 JOHN DECURE, ADMINISTRATIVE LAW JUDGE
5
6
7 In the Matter of the Accusation )
Against: ) Case No. H-03010 FR
8 ) OAH No. 2016051017
STACEY ANN HAVENER, ) Volume II
9 )
Respondent. )
10 ________________________________)
11
12
13
14
15
16 TRANSCRIPT OF PROCEEDINGS, taken at
17 320 West Fourth Street, Suite 630, Los Angeles,
18 California, commencing at 9:00 a.m.
19 on Friday, November 18, 2016, heard before
20 JOHN DECURE, Administrative Law Judge,
21 reported by BAILA M. STRAUSS and
22 CLAUDETTE A. HENRY, Hearing Reporters.
23
24
25
0003
1 APPEARANCES:
2 For the COMPLAINANT: BUREAU OF REAL ESTATE
By: DIANE LEE
3 -and-
JUDITH VASAN
4 320 West Fourth Street
Suite 350
5 Los Angeles, California
90013
6
7 For the RESPONDENT: CENTURY LAW GROUP, LLP
By: EDWARD O. LEAR
8 5200 West Century Boulevard
West Tower
9 Suite 345
Los Angeles, California
10 90045
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
0004
1 I N D E X
2 COMPLAINANT’S
Witnesses: Direct Cross Redirect Recross
3
Terre Ashmore 9 72 82
4
Diana Brewster 161 197 203
5
RESPONDENT’S
6 Witness:
7 Linda Sheldon 91 104
8 Craig Lareau 116 140 156
9 Stacey Havener 209
10
11
12 E X H I B I T S
13 Marked for Received
COMPLAINANT’S: Identification in Evidence
14
12 Document dated 3/6/15 167
15
36 Complaint 48 61
16
37 Complaint 62 62
17
38 Letter 63 68
18
39 Receipts 15 16
19
40 Lease Agreement 18 21
20
41 Statement of Condition 21 23
21
42 Letter 55 56
22
43 Notice of Code Violation 57 58
23
44 Unlawful Detainer 58 60
24
45 Unlawful Detainer 68 69
25
0005
1 E X H I B I T S (Continued)
2 Marked for Received
COMPLAINANT’S: Identification in Evidence
3
46 Addendum No. 3 69 70
4
47 Letter 42 47
5
48 Ledger 25 41
6
49 Timeline 71 72
7
52 Text Messages 83
8
9 60 Cost Declaration 206 206
10
11 61 Salesperson Change
12 Application 207 207
13 63 Union Bank
Signatory Card 176 180
14
64 Copy of Check to
15 M. Hudson 180 181
16
RESPONDENT’S:
17
U Dr. Lareau’s Report 124 158
18
V MMPI Report 157 158
19
W Policies and Procedures 98
20
X Resume 93
21
22
23
24
25
0006
1 Los Angeles, California, Friday, November 18, 2016
2 9:00 a.m.
3
4
5 THE COURT: We’re back on the record. This is day two
6 of the Bureau of Real Estate Accusation, which was filed
7 against Stacey Ann Havener, and today is Friday, the 18th of
8 November. The agency is still putting on its case, and
9 you’re going to call another witness?
10 MS. LEE: Yes. We called Terre Ashmore.
11
12 TERRE ASHMORE,
13 called as a witness, and having been first duly sworn by the
14 Court, was examined and testified as follows:
15
16 THE WITNESS: I do.
17 THE COURT: Thank you. Please state and spell your name
18 for the record.
19 THE WITNESS: Terre Ashmore, T-E-R-R-E, A-S-H-M-O-R-E.
20 THE COURT: Thank you. And I just want to mention a few
21 things to you about testifying. Have you ever testified
22 before?
23 THE WITNESS: No.
24 THE COURT: I know there was a lot of buildup that you
25 had to sit here yesterday, waiting, so thank you for that.
0007
1 This is an adversarial proceeding, which means there are two
2 attorneys. Both have the ability, when one attorney is
3 asking a question, they can make an objection at the end of
4 that question, so I tell every witness this. When you’re
5 listening to a question, I want to make sure that you don’t
6 immediately answer.
7 Sometimes, witnesses are so excited to answer
8 that question because they really think they know the
9 answer, they’re ready to testify, that they even answer the
10 question as the attorney is still asking the question. The
11 problem with that is that we’ve got a court reporter who
12 only takes down one voice at a time, so what I want you to
13 do is just really take a calm approach to getting your
14 answers.
15 Meaning, make sure the question is all the way
16 out, and then let a few seconds, maybe three to five
17 seconds, go by so that if one of the attorneys wants to
18 object, they can make an objection before you start giving
19 your answer. All right?
20 THE WITNESS: Okay.
21 THE COURT: The other thing is if you hear a question
22 that’s asked, and you don’t understand what the question is
23 really asking for, say “I don’t understand.” Don’t venture
24 a guess. If you don’t understand the question, the attorney
25 will rephrase it for you. Okay?
0008
1 If you’re asked a question that you just don’t
2 really know the answer, you might understand the question
3 itself, but you just don’t know the answer, what I don’t
4 want you to do is try to come up with some kind of answer
5 anyway. That’s called speculation. I don’t want you
6 guessing or surmising or trying to put something together on
7 the witness stand even if you really don’t have an answer
8 because that’s not evidence; so the correct answer in that
9 circumstance is “I don’t know.” Okay?
10 THE WITNESS: Okay.
11 THE COURT: Any questions?
12 THE WITNESS: No, sir.
13 THE COURT: All right. If you need a break, let me
14 know. Typically, we take routine breaks, so we won’t be
15 going so long that you won’t be able to have a regular
16 break. The other thing I want you to do is, it seems to me
17 that you speak a little bit softly. I want you to raise the
18 octave level as if you’re outside.
19 THE WITNESS: Okay.
20 THE COURT: That way, the person who’s not actually in
21 that empty row in the back, if there was somebody back
22 there, they would hear you clearly. Okay?
23 THE WITNESS: Okay.
24 THE COURT: The attorneys are both listening carefully.
25 I’m taking notes, and the court reporter is pretty much
0009
1 across the courtroom from you. She’s more than 10 feet
2 away, so keep your voice up.
3 THE WITNESS: Okay.
4 THE COURT: All right. Thank you. Go ahead, Ms. Lee.
5
6 DIRECT EXAMINATION
7 BY MS. LEE:
8 Q Good morning.
9 A Good morning.
10 MS. LEE: Did we swear her in?
11 THE COURT: Pardon me?
12 BY MS. LEE:
13 Q Are you originally from the LA area?
14 A No. I was born in Wichita, Kansas.
15 Q And where did you grow up?
16 A I grew up in the Los Angeles area. I grew up in
17 Sunland.
18 Q And at some point, you moved to the Mountain
19 Communities?
20 A Yes, I did.
21 Q And when did you do that?
22 A 2012 —
23 Q Okay. And —
24 A — I moved to Lake Hughes, and then in 2015, I
25 moved to Frazier Park.
0010
1 Q And why did you move to Lake Hughes?
2 A Lake Hughes? I moved there with my husband so that
3 we could farm. We wanted to have a farm, and we wanted to
4 grow a lot of our organic vegetables and things like that.
5 And then we moved to the Frazier Park area. We actually
6 moved to Lockwood Valley, and we moved there for the purpose
7 of the same thing, to farm, to grow our organic vegetables.
8 THE COURT: What valley was that?
9 THE WITNESS: Lockwood Valley.
10 THE COURT: How do you spell that?
11 THE WITNESS: L-O-C-K-W-O-O-D.
12 THE COURT: Okay. Thank you.
13 BY MS. LEE:
14 Q And can you explain its relationship to Frazier
15 Park? Is that another town nearby?
16 A Yes, it is. Lockwood Valley is a town, but it’s
17 just over the border of Ventura.
18 Q And where did you live when you were in LA, before
19 you moved to Lake Hughes?
20 A In Sunland.
21 Q And why did you move from LA?
22 A From LA? Well, I lost the home that I had
23 inherited from my parents to foreclosure.
24 Q When you moved to Lake Hughes, did you rent there?
25 A Yes, we did.
0011
1 Q And why did you move from Lake Hughes?
2 A Lake Hughes — we got into a dispute with our
3 landlord. We had repaired the guesthouse. We were allowed
4 to sublet, so we sublet, and then our landlord took the
5 tenant. And that wasn’t a part of the agreement, so we were
6 in a dispute with him. We agreed to leave and left under
7 threat of eviction.
8 Q And then when you moved to — strike that. When
9 you moved to Lockwood Valley, did you rent there as well?
10 A Yes, we did.
11 Q Was that the property that you lived in right
12 before moving to the property that Ms. Havener helped you
13 with?
14 A No. Lockwood Valley was the property that Ms.
15 Havener helped me with.
16 Q And how did you end up renting this property?
17 A We drove actually around Pine Mountain Club, my
18 husband and I, and we were looking for rentals. Pine
19 Mountain Club is a more exclusive community. We really
20 weren’t familiar with the communities at the time. We just
21 drove around Frazier Park and Pine Mountain Club, and we
22 were looking for rentals.
23 We found her sign on one of the rentals there,
24 and we called her. She invited us to her office. We went
25 there to her office, and she told us that the rental we had
0012
1 observed with her sign was already rented. In fact, we saw
2 three signs, and she said that all three were rented, and
3 she offered to show us Tumbleweed, a rental on Tumbleweed.
4 And that was in Pine Mountain Club.
5 We went to see that. She didn’t accompany us.
6 She gave us the key, and we went there to see it. It was
7 raining. We went there and saw that rental and observed
8 that all of the — it was a chalet style. One hole wall was
9 windows, and all of them were leaking. And there were some
10 other things wrong with the house, so we went back to her
11 office, and we told her we liked the house very much, that
12 we would rent the house happily if she would make some
13 repairs.
14 And she was not happy about us asking for
15 repairs. She said, “If I’d known you were going to be
16 troublemakers, I wouldn’t have allowed you to see the
17 house.”
18 THE COURT: Okay. Let the attorney ask another
19 question. What you want to try to do is focus on the
20 question that’s being asked, and then answer the question
21 and wait for the next one.
22 THE WITNESS: Okay.
23 THE COURT: Go ahead.
24 BY MS. LEE:
25 Q When — — what month was this in?
0013
1 A This was in April of 2015.
2 Q And did you end up renting the house anyway?
3 A We did not rent that house. We were offered
4 another one. We were told that one had been rented, and we
5 were offered the one on Lockwood Valley Road.
6 Q Okay. Did you go see it before you rented that
7 property?
8 A Yes, we did. We went out to see that house. The
9 owner was present, and so was the property manager, Milton.
10 Q And when was this? Was it also in April of 2015?
11 A This was in April of 2015.
12 Q And did you agree to rent that property on Lockwood
13 Valley?
14 A We did.
15 Q And did you see Stacey to come to an agreement
16 about the rental agreement?
17 A We spent some time at the house first. There were
18 a lot of problems with it too, but this time, because we
19 were very cautious about being troublemakers, and we were
20 very anxious to rent a house, we worked out some of those
21 problems with the property manager, Milton, and with the
22 owner, Henri.
23 Q And what do you mean by “worked out some of those
24 problems”?
25 A Well, Milton offered us the rental based on the
0014
1 fact that we would accept it as-is and that we would clean
2 it ourselves. It was really dirty, really messy, and the
3 owner was a hoarder, and he lived in the house. That was
4 his house, so we agreed to clean out the house, and anything
5 that was left behind would become ours to throw out or to
6 keep.
7 Q And were these negotiations in Stacey’s presence?
8 A No, they were not. Milton did these negotiations,
9 and Henri agreed to them. That was the owner, Henri
10 Tahmansian. And when we had come to an agreement, Milton
11 told us to go back to the offices in Pine Mountain Club and
12 talk to Stacey, which we did, and then we met her again.
13 Q And these negotiations with Milton and the property
14 owner, Henri, H-E-N-R-I, were they in person?
15 A Yes, they were.
16 Q So you went to go see Stacey. Again, this is April
17 of 2015?
18 A Right. April 27, actually.
19 Q Can you turn in your binder to Exhibit 39?
20 A Are these yellow stickers for that purpose?
21 Q Yes.
22 THE COURT: Sorry. You said —
23 MS. LEE: 39.
24 THE COURT: 39. Okay. Do you want to assist the
25 witness, please?
0015
1 MS. LEE: Yes.
2 BY MS. LEE:
3 Q Does this document look familiar to you?
4 A Yes, it does.
5 Q Can you describe this document?
6 A This is a receipt for the $800 deposit we presented
7 to Stacey at her office on April 27.
8 Q And when you say “we,” actually, do you mean you
9 and your husband?
10 A My husband was alive at the time.
11 Q And what’s his name?
12 A Romuls Garskis, R-O-M-U-L-S, G-A-R-S-K-I-S.
13 Q And can you go to the second page? Do you
14 recognize this document?
15 A Yes, I do.
16 Q Can you describe what this document is?
17 A This is another receipt for the same payment.
18 Q And did Stacey give this to you?
19 A Yes, she did. And she signed it. She signed both
20 of them.
21 THE COURT: Okay. I’m marking these two documents as
22 39.
23 (Complainant’s Exhibit 39 was marked for
24 identification by the Court.)
25 MS. LEE: Can we have Exhibit 39 marked and entered into
0016
1 evidence?
2 THE COURT: Okay. I just marked 39. You want to move
3 to have it entered? Is there any objection?
4 MR. LEAR: No objection.
5 THE COURT: All right. There being no objection, 39 is
6 received.
7 (Complainant’s Exhibit 39 was received in
8 evidence by the Court.)
9 BY MS. LEE:
10 Q So you gave her $800 in cash that day?
11 A Yes, I did.
12 Q And you said there were some issues with that
13 property. Why did you decide to rent it if there were
14 issues?
15 A Because we had been evicted or under threat of
16 eviction from our previous address, so we were running out
17 of time. My husband was quite ill. We didn’t realize at
18 the time he was dying, but we did know that he was very ill,
19 and we didn’t have a lot of energy left to move our
20 possessions. We were anxious to rent anything we could
21 find.
22 Q And did you inform Stacey that you were being
23 evicted?
24 A Yes, I did. I told her that — I filled out the
25 application, and I presented our credit report. We had run
0017
1 it ourselves. It didn’t list the eviction, but I figured
2 when she looked at the application, she would probably
3 contact our former landlord, and he would probably tell her
4 this; so I made sure she already knew.
5 Q And did you tell her before or at this meeting on
6 April 27, 2015?
7 A Yes, I did.
8 Q Was it at this meeting?
9 A At the meeting with the receipts and the payment?
10 Q Correct. On April 27th, 2015.
11 A Yes, it was.
12 Q What was her response when you told her that you
13 were being evicted from your prior home?
14 A She didn’t seem to be unhappy with that at all. I
15 was surprised. It concerned me. My husband was delighted.
16 He thought that she was on our side, but I was concerned
17 because it seemed to be that had I had someone representing
18 me, I would be concerned about a renter with an eviction
19 history. But nevertheless, we were anxious, and we were
20 happy that she was pleased or not displeased.
21 THE COURT: Okay. So your testimony is that had you
22 owned the place that you were going to be renting, you would
23 have been concerned with yourself as a renter?
24 THE WITNESS: I would. I would.
25 THE COURT: Okay. Ask another question.
0018
1 BY MS. LEE:
2 Q And that’s because of your eviction?
3 A Yes, because of the eviction.
4 Q But she didn’t seem concerned about it?
5 A No, she was not.
6 Q And did you end up signing a residential lease?
7 A I did.
8 Q Was it at that same meeting?
9 A No. The lease was brought to us — let’s see.
10 When did the lease — 4/27. It seems to me it was more like
11 May 2nd.
12 Q Can you turn to Exhibit 40?
13 A Yes. It was May 2nd. 40? Yes.
14 THE COURT: Okay. I’m marking 40, which is a
15 residential lease, or month-to-month rental agreement form,
16 and it’s filled in. And the name of the witness and her
17 husband is listed as the tenants. The name of the owner,
18 whose first name is Heinrich; last name is with the initial
19 T, is listed at the top. And the date on it is 4/20/2015 on
20 the top left corner. That’s marked Exhibit 40.
21 (Complainant’s Exhibit 40 was marked for
22 identification by the Court.)
23 MS. LEE: Your Honor, I believe it says 4/30.
24 THE COURT: That’s right. I can barely read mine, but
25 that looks accurate. Go ahead.
0019
1 THE WITNESS: And 5/1 makes sense. That’s when we
2 signed it. Milton brought it to the property.
3 THE COURT: What you want to do is wait for the next
4 question. Go ahead.
5 BY MS. LEE:
6 Q Are you referring to the dates on the top
7 right-hand corner, the handwritten days?
8 A Yes.
9 Q Are those your notes?
10 A Those are my notes.
11 Q What does that mean?
12 A I wasn’t certain which date it occurred.
13 Q But it was one of those dates?
14 A Right.
15 Q And who brought this to you again?
16 A Milton brought it to the property.
17 Q So you met him at the Lockwood Valley property?
18 A Yes.
19 Q And this is Lockwood Valley Road, not Lockwood
20 Valley the town; correct?
21 A Right. Lockwood Valley Road.
22 Q So you met him there, and he gave this to you. And
23 did you sign it there?
24 A My husband and I signed it. There was no other
25 signature at the time, and Milton would not sign it. He
0020
1 said to take it back to Stacey to have it signed.
2 Q So did you do so?
3 A Yes, we did.
4 Q That same day?
5 A At that same day.
6 Q And so, you met with Stacey, and she signed the
7 document later?
8 A Exactly.
9 Q And before you agreed to this rental agreement,
10 perhaps in your first meeting at the property, did you
11 discuss the rent with Milton?
12 A Yes, I did.
13 Q And what was the discussion like?
14 A Originally, the rent had been offered to us by
15 Stacey at $850, and Milton lowered it to $800.
16 Q When you met with Stacey, she said $850?
17 A $850.
18 Q And when you met with Milton, he said $800?
19 A Right. He was embarrassed by the condition of the
20 property.
21 Q And did you negotiate whether the fixes of the
22 house should be made by you or someone else?
23 A He told us to list everything we needed repaired
24 and to take that up with Stacey, which we did later on. We
25 listed everything.
0021
1 MS. LEE: Can we have marked and moved into evidence
2 Exhibit 40?
3 THE COURT: Okay. 40 was marked already. You want to
4 have it received? Is there any objection?
5 MR. LEAR: No objection.
6 THE COURT: All right. There being no objection, 40 is
7 received in evidence.
8 (Complainant’s Exhibit 40 was received in
9 evidence by the Court.)
10 MS. LEE: Can we have marked Exhibit 41? It’s a
11 statement of condition.
12 THE COURT: All right. I’m marking a form entitled
13 “Statement of Condition” as 41.
14 (Complainant’s Exhibit 41 was marked for
15 identification by the Court.)
16 BY MS. LEE:
17 Q Do you see Exhibit 41?
18 A I do.
19 Q Does this look familiar to you?
20 A Yes. I wrote it.
21 Q And can you describe what this is?
22 A This is a statement of the conditions that we found
23 in the house, and it was not in good condition. I listed
24 everything. You’ll see in this same document, 41, the last
25 page, you’ll see that this is Stacey’s writing. It was the
0022
1 envelope that this came in, and it said “Note the condition
2 on memo form and items you want corrected, if you will
3 correct it or just want approval, if you want owner to
4 correct, or any item you would want corrected but you want
5 reimbursement.”
6 And it says also, “This is noting condition
7 for your protection at the end of the lease.” On the side I
8 wrote, “Fill out this statement of conditions per Stacey.
9 Stacey wrote this on her envelope.”
10 Q So she handed this to you, or did she mail it to
11 you?
12 A It actually arrived with Milton when we went to the
13 property. When we went to rent the property, Milton brought
14 it.
15 Q Okay. That was in April?
16 A Well, no. This was actually May 1st.
17 Q 2015?
18 A Right.
19 Q And I notice on the second page, on the bottom, I
20 believe it’s your writing. It says “Copy given to Milton on
21 July 1st, 2015, when he came to pick up the rent, despite
22 resistance from him to receive it.”
23 A Yes. It took that long for him to allow us to note
24 these conditions of the property. He kept saying that we
25 would be evicted if we found too many things wrong with it.
0023
1 Q So he came — did he come by on July 1st, 2015,
2 himself to pick up the rent from you?
3 A He did.
4 Q He came by to the property on Lockwood Valley Road?
5 A Yes, he did.
6 Q And you gave him the rent on that day, July 1st,
7 2015?
8 A I did.
9 Q And do you remember if it was a check or cash?
10 A It was cash.
11 MS. LEE: Can we have Exhibit 41 moved into evidence?
12 THE COURT: Any objection?
13 MR. LEAR: No objection.
14 THE COURT: All right. There being no objection, 41 is
15 received in evidence.
16 (Complainant’s Exhibit 41 was received in
17 evidence by the Court.)
18 BY MS. LEE:
19 Q Okay. You mention that on July 1st, 2015, you
20 handed him rent in cash. What was the usual way for you to
21 pay rent? Was it via mail? Was it you handed it to
22 someone? How did that work?
23 A I’d say 90 percent of the time, he came and picked
24 up the rent.
25 Q You mean Milton Hudson?
0024
1 A Yes. Milton Hudson did.
2 Q And did you pay by cash or check or both?
3 A Both.
4 Q Was one more usual than the other or not really?
5 A Cash was more common. He preferred cash. There
6 was some delay when I would pay by check because I
7 frequently had cash on me; so he preferred to just have the
8 cash. I would have had to deposit the cash.
9 Q Can you turn to Exhibit 48, please?
10 A I see my error.
11 THE COURT: Okay. Wait for the next question.
12 THE WITNESS: Okay.
13 BY MS. LEE:
14 Q Looks like a handwritten ledger, essentially, of
15 amounts paid. Do you recognize this document?
16 A I do, indeed.
17 Q Did you write this document?
18 A I did.
19 Q Can you describe this document for us?
20 A This is a list of all my payments made to Milton
21 Hudson. These are all my rental payments, my security
22 payments, and some were in cash and some were in check.
23 Q You just mentioned you saw an error. Can you
24 describe that error?
25 THE COURT: Before you get into that, I’m going to mark
0025
1 48. This is the first page of a several-page exhibit that
2 was just described by the witness, which is basically her
3 handwritten ledger, having to do with rents that she paid.
4 But there’s other documents as well attached, so go ahead.
5 You can keep asking questions.
6 (Complainant’s Exhibit 48 was marked for
7 identification by the Court.)
8 BY MS. LEE:
9 Q Can you describe this document?
10 A Did you want me to describe the other pages?
11 Q Just the first page for now.
12 A The first page is just a ledger, and it lists
13 everything from the first payments that I made, which were
14 to Stacey, and is followed by the payments I made to Milton
15 Hudson, and continues through my final payment. No, it
16 doesn’t include my final payment, actually. It says
17 December 2nd I paid $200 cash, and there was actually
18 another payment after that of $200 cash.
19 Q You just said there was an error. Can you tell us
20 what the error is?
21 A The error is for July 1st. I stated that I paid
22 cash, but I did in fact pay by check.
23 Q July 1st?
24 A July 1st, yes. A $600 check.
25 Q You’re saying that you paid cash, not check?
0026
1 A No. No. I paid check. I’m sorry.
2 THE COURT: She wrote “CK” next to the $600. Okay. Ask
3 another question, please.
4 BY MS. LEE:
5 Q You said you started paying Stacey. Can you tell
6 which payments were made to Stacey and which payments were
7 made to Milton?
8 A Yes. I put their initials after the payments they
9 received, so the payments for the application fee of $35 and
10 the $800 cash were made in her office. That was April 25
11 and April 27.
12 Q So SHH stands for —
13 A Stacey Havener Hudson.
14 Q And you stated that 90 percent of the time you
15 would hand the rent over to Milton?
16 A Yes, I did.
17 Q And the other 10 percent — what did you do to pay
18 rent?
19 A I mailed a couple of them. I can’t recall which,
20 and I apparently did not write down when I mailed them.
21 Q Are the ones you mailed within this spreadsheet?
22 A They no doubt are. I didn’t leave any out, except
23 for the final payment. They’re all here, but I didn’t
24 record which ones I mailed. I just know that I mailed some
25 because Milton objected to me sending it to the Pine
0027
1 Mountain Club address.
2 Q Okay. To the best of your recollection, about how
3 many times did you — strike that. Where would you mail it
4 to when he was complaining about not mailing it to that
5 particular address?
6 A He had me mail it to his Frazier Park address. It
7 was a PO Box, and it was — he had actually told me to mail
8 it to the All Season Property Management address, which was
9 in Frazier Park, and that was the PO Box for it; so I mailed
10 at least one other payment and mailed it to that.
11 Q Did he ever leave you a voicemail stating this?
12 A Yes, he did.
13 Q Can you turn to Exhibit 50, page 5?
14 THE COURT: Okay. Do you want to describe briefly what
15 Exhibit 50 is?
16 BY MS. LEE:
17 Q Yes. Can you describe briefly what Exhibit 50 is?
18 A There’s two messages here —
19 THE COURT: No. What is the document itself?
20 MS. LEE: The whole thing.
21 THE WITNESS: It’s a transcript of all the voice-mails I
22 received from Milton Hudson.
23 BY MS. LEE:
24 Q And is this your writing?
25 A It is.
0028
1 Q So you’re the one that transcribed this?
2 A I did. I received these voice-mails, and I
3 transcribed them.
4 Q Go to page 5, the second under No. 8.
5 A Okay.
6 Q On the sixth line it says “PO Box 549 in Frazier
7 Park.”
8 A Yes.
9 Q Is that the address he told you to mail instead of
10 Pine Mountain Club?
11 A Yes.
12 MR. LEAR: Objection. Hearsay. Move to strike.
13 THE COURT: Counsel?
14 MS. LEE: It’s her understanding of where to mail it to
15 and how she got to mail it to this address.
16 THE COURT: Were you aware of this address from anyone
17 else than Mr. Hudson?
18 THE WITNESS: No. Just from Mr. Hudson.
19 THE COURT: You said you mailed at least one payment
20 there?
21 THE WITNESS: Yes.
22 THE COURT: Did you put proper postage on it?
23 THE WITNESS: Yes, I did.
24 THE COURT: As far as you know, was the rent received?
25 THE WITNESS: Yes.
0029
1 THE COURT: The mail was not returned to you
2 undeliverable?
3 THE WITNESS: No, it was not.
4 THE COURT: All right. Overruled.
5 BY MS. LEE:
6 Q Did he tell you to mail it to PO Box 549 in Frazier
7 Park?
8 A He did.
9 Q Did he tell you to mail it there instead of to Pine
10 Mountain Club?
11 A Yes, he did.
12 Q Let’s go back to Exhibit 48, please. Can you go to
13 the rest of Exhibit 48, and can you just briefly describe
14 what these documents are?
15 A It’s a variety of documents, including my checks
16 that have been cashed, some receipts that Milton Hudson
17 wrote to me for this money. Some of the receipts are for
18 checks, and some of the receipts are for cash.
19 Q Can we start with page 2?
20 A All right.
21 Q There’s two receipts on this; correct?
22 A Yes, there is.
23 Q And this receipt — who gave this receipt to you?
24 A This is Milton Hudson’s signature, and he gave me
25 these receipts.
0030
1 Q And when you say he gave it to you, did he
2 literally hand it to you, or he mailed it to you?
3 A He handed it to me.
4 Q And it says here that you paid $200 for rent and
5 partial deposit; is that correct?
6 A No. He made a mistake.
7 Q And how is that a mistake?
8 A This was something that I had — I had paid the
9 rent. This was for the security deposit. The mistake that
10 he made was in writing that it was rent and a partial
11 deposit. It was only for the security deposit. I had
12 already paid the rent to Stacey in the office. I had paid
13 $800 rent for our first month to Stacey in the office, and
14 then I paid him the $200 when he showed up on the day that
15 we moved in. That $200 was our first security payment.
16 Q And that $800 is reflected on the first page that
17 you gave to SHH?
18 A Yes.
19 Q And on the second page, let’s go back to the second
20 page. The writing on the left — is that your writing?
21 A Yes, it is.
22 Q And the second receipt — was that given to you by
23 Milton as well?
24 A Yes, it was.
25 Q And to the best of your knowledge, is that his
0031
1 signature?
2 A Yes, it is.
3 Q Let’s go to the third page. The top two boxes
4 looks like a check and the back of a check; is that correct?
5 A Yes, it is.
6 Q Did you sign this check?
7 A Yes. This is my check. I wrote it. I signed it.
8 I made a memo that the rent was reduced for $200 to
9 compensate us for cleaning because the landlord reneged on
10 Addendum 1, so Milton gave me a courtesy of reducing the
11 rent by $200 to compensate us for cleaning.
12 Q And when you say Milton gave you $200, how did that
13 happen?
14 A Instead of paying $800, I paid $600, and that was
15 by his direction.
16 Q Did you ask for this or did he offer it?
17 A He offered it.
18 Q And you accepted this?
19 A He offered it, actually, several times before I
20 accepted, and I finally accepted.
21 Q And are you aware whether the landlord was okay
22 with this?
23 A No. I wasn’t aware.
24 Q Okay. On the bottom, it’s a receipt —
25 A Not at that time. I’m sorry.
0032
1 Q So you did not know?
2 A Not at that time, no.
3 Q At any point, did you go to Stacey for something,
4 and she told you not to go to her?
5 A Yes. At the very beginning, when we were having so
6 much trouble with the landlord, he would come over to the
7 property without calling or anything, would enter the
8 property, began to take some of our belongings. And I
9 called Stacey, and I told her what was happening, and I
10 complained that he was taking our belongings.
11 And she said, “Well, this is why I don’t have
12 people move in at the same time people move out or anytime
13 in proximity. And don’t call me about this anymore. Please
14 call Milton about this. This is his job.”
15 Q And do you know about when this was?
16 A It was sometime in May.
17 Q So from that point forward, did you generally call
18 Milton instead of Stacey?
19 A I did.
20 Q We’re still on page 3. On the bottom, can you
21 describe that?
22 A On page 3? This is a receipt for the check above
23 it.
24 Q Who handed this to you?
25 A This was Milton. He handed this to me.
0033
1 Q And was it on or about July 22nd, 2015, that he
2 handed this to you?
3 A Yes, he did.
4 Q And when he handed this to you, did you in turn
5 hand him a check?
6 A I did.
7 Q The check is above?
8 A It is.
9 Q All right. Let’s go to the next page. The next
10 page is the same, so let’s go to page 5 instead.
11 A These aren’t numbered. Wait a minute.
12 Q The bottom right-hand corner. It says CALBRE 5.
13 A Oh, I see. Okay.
14 Q Can you describe this document?
15 A This is another one of the checks that I’ve
16 written.
17 Q Okay. And I notice the memo says “Half rent for
18 August. Check coming directly. Balance to follow.” Can
19 you tell me what that means?
20 A I’m sorry. I’m distressed to see that the account
21 number is blotted out. I didn’t do that.
22 Q I did that.
23 A Okay.
24 Q Yeah.
25 A Okay. I had a gift from the church. I received
0034
1 several monetary gifts for my husband’s death and expenses
2 for the funeral. And the church gave us a $200 check, so
3 that came from the church and was mailed to the Pine
4 Mountain Club address. I didn’t have any control of what
5 the church did. They mailed it to the address they found on
6 the website.
7 Q And when did your husband pass away?
8 A He passed away June 12th in 2015.
9 Q And what did he pass away from?
10 A He had liver cancer.
11 Q And when you moved in, you didn’t know he had liver
12 cancer?
13 A No, we did not.
14 Q What did you think he had?
15 A We thought he had a hernia. He had a large lump in
16 his abdomen.
17 Q So in April of 2015, you thought he had a hernia,
18 not liver cancer, and a few months later, he passed away?
19 A Right. We found out shortly after we moved in that
20 it was liver cancer. He didn’t recuperate from the effort
21 of moving in.
22 THE COURT: Ms. Lee, let me interject something. Is
23 there any reason that the bank information that you blocked
24 out, that you redacted on page 5 shouldn’t be redacted on
25 the other checks submitted by the witness?
0035
1 MS. LEE: No reason. They should be all redacted.
2 THE COURT: Okay. So before we’re done with the
3 hearing, I’m going to give them back to you to redact. We
4 don’t want copies of this financial information sitting in a
5 government office for years to come as part of this case
6 file. Somebody could use it to do something, perhaps
7 illegal, and steal your identity in some way; so these are
8 going to be crossed out on the other checks.
9 THE WITNESS: Thank you very much.
10 THE COURT: Okay.
11 BY MS. LEE:
12 Q Let’s go to page 6. Can you describe the top part
13 of this, page 6?
14 A This is a receipt from Milton for $200, on which he
15 has written the balance due. I objected to the balance due,
16 and it’s also the check that corresponds — well, no. It
17 doesn’t correspond. This is a check that I had written for,
18 I believe, one of the eviction notices he left.
19 Q Okay. Let’s focus on the top part first. Okay?
20 A Okay.
21 Q The receipt is dated October 9th, 2015.
22 A Right.
23 Q Is that on or about the date that he gave you this
24 receipt?
25 A It would have been the exact date, yes. He was
0036
1 there.
2 Q And did you give him $200 first, before he gave you
3 this receipt?
4 A Yes.
5 Q And it was on this date that you gave him the $200?
6 A It was.
7 Q And it was for the partial September rent?
8 A Yes, it was. I had started making payments. I
9 couldn’t pay in full.
10 Q Do you remember when you started making payments?
11 A I want to say it was sometime in July or August,
12 something like that.
13 Q And who did you talk to about starting to make
14 partial payments?
15 A Milton.
16 Q And what did you say to him?
17 A I said that I couldn’t pay my rent in full. Would
18 he accept payments?
19 Q And what did he say?
20 A He said yes, he would.
21 Q Was there a certain agreement as far as how much
22 the payments would be?
23 A They would average around $200, each payment.
24 Q So you made more than one payment per month?
25 A I did. Sometimes it would be $200 plus $600. The
0037
1 goal was to reach $800. I wasn’t paying my security
2 anymore. The securities, he said, had been paid.
3 Q So going back to Exhibit 48, page 1, the first page
4 of the exhibit.
5 A Which page?
6 Q The very first page of Exhibit 48. Is this why the
7 payments reflected here, the $200, $400 payments, towards
8 the end of this ledger?
9 A Yes. That’s exactly what was happening. I was
10 making payments.
11 Q I notice most payments were made to MH, which I
12 assume stands for Milton Hudson?
13 A Yes. Correct.
14 Q And a few times they were mailed, but most of the
15 time, they were actually handed to him?
16 A Yes. They were handed to him most of the time.
17 Q And each time, when you did hand him this money,
18 was it at the Lockwood Valley property?
19 A Yes, it was.
20 THE COURT: Okay. This is cumulative testimony. I’ve
21 written notes on all of these questions that have already
22 been answered.
23 MS. LEE: Okay. Let’s go to page No. 6.
24 THE COURT: It does not help to underscore testimony
25 that’s already been given. I’m taking careful notes.
0038
1 BY MS. LEE:
2 Q You said that this is plain wrong on the top left
3 side. Can you describe why you think that’s wrong? Sorry.
4 Not plain wrong, but very wrong. Why do you think that’s
5 wrong?
6 A It’s because I didn’t have a balance due of $1,400.
7 Q And what was the discrepancy? Why does he think
8 you have a balance, and you don’t think you have a balance
9 at that time?
10 A He reported to me that the homeowner had objected
11 strenuously to the $200 deduction that he had given me for
12 cleaning the property and that he had had to charge me for
13 it afterwards, that he would have to have that $200 back.
14 Because I refused to pay that $200 back. We never could
15 come to a correct balance. He continually added it; I
16 continually did not.
17 Q And the bottom of page 6 — is that what it appears
18 to be, a check from you to All Seasons Realty?
19 A Yes. This is one of my payments.
20 Q It was cashed?
21 A It was cashed.
22 Q Can you go to the next page? Can you describe this
23 document?
24 A Yes. This is actually a check that was cashed and
25 a check that I had written. It was just my carbon copy. He
0039
1 never cashed the check that I wrote for this $1,400.
2 Q Now, it says the check is for $200, so are they for
3 different checks?
4 A Yes, they are. On 10/7 was a $200 payment toward
5 rent, and he picked that up. And then at the same time, he
6 took another check. He was supposed to deposit them, give
7 me a little time to put money in the bank for them, and he
8 never did cash the second one for 10/29 for $400.
9 Q Do you know why he didn’t?
10 A No, I don’t know.
11 Q Did you ever try to pay the owner directly?
12 A I tried to pay the owner directly in December. I
13 wanted to start paying the owner directly.
14 Q In December 2015?
15 A Yes.
16 Q Why did you want to do that?
17 A Because in October of 2015, I had had the property
18 inspected by a code enforcement officer, who later called me
19 and alerted me to my property manager not being licensed.
20 And because of that, I didn’t want to deal with him anymore.
21 I felt that maybe my checks and my money was not getting to
22 the property owner. The property owner had come by a couple
23 of times and screamed at me that he hadn’t been paid, and
24 so, I said, “I will pay you directly.” And he wouldn’t
25 accept it.
0040
1 Q And do you know why he wouldn’t accept it?
2 A Milton told me that Henri could not accept it
3 because he was on disability, and he didn’t want anything
4 but cash, and he didn’t want any record that would affect
5 his disability.
6 Q Okay. So you never were able to pay the owner
7 directly?
8 A No, I was not.
9 Q Can you go to page 8, the next page, the last page
10 of Exhibit 48? Can you describe this document?
11 A Let’s see. This is a deposit and a check written.
12 This was a really hard check to get a record of.
13 Q You mean a record from the bank?
14 A Right. There was something strange about this
15 check. We couldn’t figure it out, but they had to do a
16 search for it. I think it shows my deposit. It was
17 probably after a yard sale, and I deposited some money and
18 then wrote a check against it.
19 Q All right. Let’s go to the first page again of the
20 exhibit, your handwriting. I believe you previously stated
21 there was one payment missing in December that you did not
22 write in here; is that correct?
23 A Yes. There was a second payment after December 2nd
24 of $200 cash.
25 Q Do you know when that payment was made?
0041
1 A Not long after the December 2nd one because then I
2 had a dispute with Milton, and I told him I wouldn’t pay him
3 anymore because I didn’t think he was giving the money to
4 Henri.
5 Q Do you recall whether that payment was mailed to
6 him or handed to him or someone else?
7 A It was handed to him.
8 MS. LEE: I would move Exhibit 48 into evidence.
9 THE COURT: Any objection?
10 MR. LEAR: No objection.
11 THE COURT: All right. There being no objection, 48 is
12 received in evidence.
13 (Complainant’s Exhibit 48 was received in
14 evidence by the Court.)
15 BY MS. LEE:
16 Q At some point, did you stop paying rent?
17 A Yes, I did.
18 Q And about when was that?
19 A December of 2015. After I had made two $200
20 payments, I stopped paying rent. I couldn’t find anyone to
21 give it to. I didn’t want to give it to Milton, and Henri
22 wouldn’t accept it.
23 Q About when did you find out that Milton was not
24 licensed?
25 A About November. In October of 2015, when the code
0042
1 enforcement officer alerted me to it, she said for me to go
2 to the Enterprise newspaper and get the articles about the
3 subject, about the license being removed. I did. About
4 November, I went to The Enterprise and asked if they had
5 copies of their back issues, particularly concerning Milton
6 Hudson.
7 Q And when you say Enterprise, you mean Mountain
8 Enterprise?
9 A Yes, the Mountain Enterprise.
10 Q Is that a local newspaper?
11 A Yes, it is.
12 Q Can you turn to Exhibit 47? It’s a one-page
13 document. Do you recognize this document?
14 A I do.
15 Q Can you describe it for us?
16 A Yes. It is a document created by Milton Hudson,
17 and I’ve written all over it. I was quite angry when I
18 received it.
19 THE COURT: Okay. I’m going to mark this as 47. It’s a
20 form that has the words “All Seasons Realty and Property
21 Management” across the top, and a date on the left of
22 2/14/16. It’s a brief “To Whom It May Concern” letter
23 that’s signed by Milton Hudson, and there’s a lot of
24 handwriting that’s also added to this letter. That’s 47.
25 (Complainant’s Exhibit 47 was marked for
0043
1 identification by the Court.)
2 BY MS. LEE:
3 Q So to the best of your knowledge, did Milton Hudson
4 create the typed words on this letter?
5 A He did. He also gave it to me.
6 Q And to the best of your knowledge, is that his
7 signature?
8 A Yes, it is.
9 Q Is the other handwritten writing yours?
10 A Yes, it is.
11 Q And when you say he handed it to you, Milton handed
12 this to you?
13 A Yes, he did.
14 Q “To Whom It May Concern” — who was this original
15 to, if you know, this letter?
16 A He created this for our court appearance on 2/14,
17 and that was the first eviction attempt by Henri. Henri
18 attempted to evict me on that date, and the Court found in
19 my favor. I briefly got to see the evidence as a result of
20 being in court, but then it was taken away —
21 THE COURT: Okay. I want you to answer the question and
22 wait for the next question. All right?
23 THE WITNESS: Yes, sir.
24 THE COURT: It’s improper for you to just give an
25 extended narrative.
0044
1 THE WITNESS: A novel?
2 THE COURT: Yeah. The defense attorney is being very
3 courteous right now.
4 THE WITNESS: Okay.
5 THE COURT: But I have the ability to sustain my own
6 objections, and this is a narrative; so you’ve got to wait
7 for the next question.
8 THE WITNESS: Yes, sir.
9 THE COURT: Go ahead, Counsel.
10 BY MS. LEE:
11 Q You stated that you had — when you said February
12 14, you meant February 14, 2016; correct?
13 A Yes, I did.
14 Q And when you said “court date,” did you mean the
15 unlawful detainer court date?
16 A Yes, I do.
17 Q So when you went to court, who was present in
18 court? Was Milton present in court?
19 A Yes, he was. Or no. I’m sorry. He was not.
20 Q And was the owner —
21 A The owner was present.
22 Q And how did you — did you get any notice of this
23 action against you?
24 A Yes, I did.
25 Q And how did you get this notice?
0045
1 A The notice for this one — Milton put a 3-day
2 notice underneath the windshield wiper of my car.
3 Q How do you know that?
4 A I eventually found it when I drove my car. He also
5 called me and told me that he had done so.
6 Q You said you were angry by this letter. Why were
7 you angry about this letter?
8 A It didn’t list all my payments.
9 Q And did you try to correct it with your handwriting
10 here?
11 A I tried to correct it. I called Milton. I told
12 him how unhappy I was that he hasn’t listed all my payments.
13 Q And what did he say?
14 A He offered to change the document.
15 THE COURT: All right. I don’t usually question
16 witnesses until the attorneys are done, but I’m not clear on
17 something.
18 THE WITNESS: Okay.
19 THE COURT: Is all of the handwriting here your
20 handwriting on this Exhibit 47?
21 THE WITNESS: Yes, it is.
22 THE COURT: Okay. It appears that the typed portion of
23 the letter, To Whom It May Concern — it does not include
24 any actual payment history. Just so I’m sure I understand
25 what you’re testifying to, the letter itself that Mr. Hudson
0046
1 prepared doesn’t appear to reflect any actual rent payments.
2 MS. LEE: Your Honor —
3 THE COURT: No. Don’t interrupt me, please. Isn’t that
4 correct?
5 THE WITNESS: I have the original document on it with
6 all my writing on it, if that would help.
7 THE COURT: Here’s what I’m trying to understand, and
8 I’ve been listening to this line of questioning.
9 THE WITNESS: Yes.
10 THE COURT: When you received this letter, before you
11 wrote anything on it, Mr. Hudson didn’t — he didn’t write
12 actual rent payments out, month and year and amount,
13 anywhere on the letter, did he?
14 THE WITNESS: Yes, he did.
15 THE COURT: Okay. Which part is that?
16 THE WITNESS: The typed portion.
17 THE COURT: Okay. What I have on 47 is one page. This
18 is the problem I’m having. I’ve got a one-page document. I
19 just want to make sure I’m following this properly. Okay?
20 Ms. Ashmore? Take a look over here. This is what I’m
21 looking at. It’s only got “To Whom It May Concern” opening,
22 and then it’s got basically two sentences: “The following
23 are the payments made to All Seasons Realty from yourself in
24 regards to the property. They represent all payments.”
25 Now, the only thing I see below that is your
0047
1 handwriting, and I do see a few dates and numbers here to
2 the left. Is that all that he submitted?
3 THE WITNESS: That’s all that he submitted.
4 THE COURT: And you wrote everything around that?
5 THE WITNESS: Yes, I did.
6 THE COURT: All right. I wasn’t totally clear on it; so
7 he handed this to you, and you looked at those six payments
8 that he had listed?
9 THE WITNESS: Yes.
10 THE COURT: And you determined that didn’t cover
11 everything?
12 THE WITNESS: Yes. I was quite angry.
13 THE COURT: All right. What I’d like you to do,
14 Counsel, is when you question the witness, go
15 chronologically. It’s not clear for the record when we do
16 this in this kind of herky-jerky way; so now I understand
17 what you’re saying. You can continue the questioning.
18 MS. LEE: So can I move Exhibit 47 into evidence?
19 THE COURT: Any objection?
20 MR. LEAR: No objection.
21 THE COURT: All right. There being no objection, 47 is
22 received.
23 (Complainant’s Exhibit 47 was received in
24 evidence by the Court.)
25 ///
0048
1 BY MS. LEE:
2 Q After you wrote these notes on this letter, did you
3 give this to anyone?
4 A I mailed it to the Bureau of Real Estate. I did
5 not show it to Milton. I merely called him and complained.
6 Q When you say you mailed it to the Bureau of Real
7 Estate, was that part of your complaint?
8 A Yes, it was.
9 Q Can you turn to Exhibit 37?
10 THE COURT: Okay. 37 is a licensing subdivider
11 complaint form for the Bureau of Real Estate, and it’s
12 marked.
13 BY MS. LEE:
14 Q Let’s go to 36 first. I apologize. So 36 looks
15 like it’s also a complaint to the Bureau of Real Estate.
16 What’s the difference between 36 and 37?
17 THE COURT: All right. Before you answer, I’m going to
18 mark 36. It’s an identical Bureau of Real Estate form.
19 It’s filled out differently, and it says
20 “Licensing/subdivider complaint” at the top.
21 (Complainant’s Exhibit 36 was marked for
22 identification by the Court.)
23 THE COURT: Go ahead. Do you remember the question?
24 THE WITNESS: I do.
25 THE COURT: Go ahead.
0049
1 THE WITNESS: Number 36 is my Bureau of Real Estate
2 complaint against Milton Hudson, and No. 37 is my Bureau of
3 Real Estate complaint against Stacey Havener Hudson.
4 BY MS. LEE:
5 Q So I noticed under the section “Information about
6 the person/company you’re complaining about,” in box No. 2,
7 you listed Stacey Havener Hudson first in Exhibit 36, but
8 you list Milton Lance Hudson first in Exhibit 37; is that
9 correct?
10 A I’m looking. Yes. I reversed it. Yes.
11 Q And you made two complaints because one was against
12 one person, and another was against another person?
13 A Correct.
14 Q And it looks like it was stamped by the Bureau on
15 January 27, 2016. Was that about when you submitted your
16 complaint?
17 A I mailed it. It was a few days before that.
18 Q And are you aware whether Milton or Stacey had
19 knowledge that you had complained about them?
20 A At one time, apparently, Henri told Milton Hudson
21 that I had filed a complaint because the Bureau of Real
22 Estate contacted the homeowner. And Milton called me to ask
23 me to redact it, to withdraw the complaint.
24 MR. LEAR: Objection. Move to strike. Hearsay. Double
25 hearsay.
0050
1 THE COURT: Sustained. I don’t know that it’s relevant
2 either.
3 BY MS. LEE:
4 Q Can you turn to Exhibit 51?
5 THE COURT: And by the way, that last answer was
6 stricken. Thank you. 51.
7 BY MS. LEE:
8 Q So did Milton know you complained about him to the
9 Bureau of Real Estate?
10 MR. LEAR: Objection. Calls for speculation.
11 Relevance.
12 THE COURT: What’s the relevance?
13 MS. LEE: I’m laying a foundation.
14 THE COURT: What’s the relevance is my question.
15 MS. LEE: I’m laying a foundation because —
16 THE COURT: Here’s what I want you to do. Tell me why
17 it’s relevant because laying a foundation may be what you’re
18 doing, but it doesn’t tell me that it’s relevant, the issue
19 of whether or not Milton Hudson knew that there was a
20 complaint and how he reacted to the complaint. What I want
21 to hear from you is why that’s relevant, not that you’re
22 laying foundation.
23 MS. LEE: He makes a statement against his interest to
24 Ms. Ashmore that he admits that he asked her to withdraw the
25 complaint because inevitably, it just goes back to him
0051
1 because she paid him.
2 THE COURT: Okay. Well, that offer of proof I don’t
3 think holds up. That’s not relevant to anything that’s
4 alleged in the Accusation. I reread the Accusation last
5 night and this morning, and I know a lot more clearly now
6 from memory what was alleged.
7 I don’t see that — the problem is,
8 Mr. Hudson’s license was surrendered. Okay? The Respondent
9 here is the subject of this Accusation, so it is not
10 relevant what Milton Hudson was thinking as a result of a
11 complaint that was made by this witness. Sustained.
12 BY MS. LEE:
13 Q Did Milton Hudson ever tell you that he accepted
14 money from you?
15 MR. LEAR: Objection. Relevance.
16 THE COURT: Go ahead.
17 MS. LEE: Two things. One, it goes to paragraph 40.
18 THE COURT: Okay. Let me ask you something, Counsel.
19 Didn’t you already cover in real detail with this witness
20 this morning the issue of who she paid and how she made the
21 payments? I didn’t hear any objections to any of that
22 testimony. I know there’s cross-examination to come, but I
23 believe you established that; so this is cumulative. Ask
24 another question.
25 MS. LEE: I would also like to say for the record that
0052
1 it is not hearsay, pursuant to Evidence Code 1230.
2 THE COURT: What is not hearsay?
3 MS. LEE: Him stating on the voicemail that he paid —
4 that she paid him.
5 THE COURT: Okay. Let me interrupt you there. The
6 objection right now that’s pending is not a hearsay
7 objection; is that correct?
8 MR. LEAR: I made a relevance objection, but I’m going
9 to add Evidence Code section 452 to that as well.
10 THE COURT: Right. So there’s no hearsay objection as
11 well. Really, the objection has to do with relevance, and
12 that’s what I was addressing with you.
13 MS. LEE: The relevance is he admits to doing unlicensed
14 activity while under the license of the Respondent.
15 THE COURT: Well, once again, he’s not here as a
16 witness. Okay? There is no hearsay objection, but you’ve
17 got a witness who testified competently up until now about
18 her experiences in dealing with him. It is cumulative. It
19 also is not relevant, what he thought, and how he responded
20 to a complaint.
21 He surrendered his license. That’s been
22 established already by the agency. Okay? He was working
23 without a license at this point. How you tie that together
24 later is going to be up to you, but this is not probative at
25 this point. You’ve had a witness testify for over an hour
0053
1 about many of her dealings with Mr. Hudson, so it’s
2 cumulative. Move on.
3 MS. LEE: Okay.
4 THE COURT: Thank you.
5 BY MS. LEE:
6 Q When an unlawful detainer was filed against you,
7 did you deal with Stacey regarding this particular matter?
8 A No, I did not.
9 Q Did you deal with Milton regarding this matter?
10 A I did. I did.
11 Q And you said there was the one court date, the
12 first court date?
13 A Yes.
14 Q And what was the result of that?
15 A Found in my favor.
16 Q I assume there was a second court date, then?
17 A Yes, there was. On 3/14.
18 Q 2016?
19 A 2016.
20 Q And what was the result of that?
21 A It found in my favor.
22 Q Eventually, you moved out from this property;
23 correct?
24 A I did.
25 Q And was that a result of eviction, or what was that
0054
1 a result of?
2 A It was the result of an eviction.
3 Q So you said the first court date was found in your
4 favor. That was in February of 2016?
5 A Yes. 2016.
6 Q And the second court date — it was in March of
7 2016?
8 A Correct.
9 Q And that was found in your favor?
10 A Yes.
11 Q Was there a court date, a future court date, after
12 that that was not found in your favor?
13 A Yes.
14 Q And do you know when was that date?
15 A I forget that date. It was —
16 Q Do you remember the approximate month?
17 A I’m sorry. I can’t remember the approximate month.
18 I know that it resulted in my eviction on June 9.
19 Q So then you were evicted on June 9, 2016?
20 A I was.
21 Q And when was — if you recall, when was your last
22 dealing with Stacey Havener?
23 A My dealing with Stacey Havener was primarily
24 directly with her at the very beginning in May and June of
25 2015 and then through the auspices of Milton. He referred
0055
1 many things to her when he wrote addendums. He would call
2 to have them typed up.
3 Q Can you go to Exhibit 42, please? It’s a one-page
4 letter?
5 A Yes.
6 Q Do you recognize this document?
7 A Yes, I do.
8 Q Is this a letter from you to Milton Hudson?
9 A 42? Am I on the right one? Oh, I’m sorry. I’m
10 not on the right one.
11 THE COURT: All right. 42 is a handwritten letter. It
12 has the witness’s name in the top right corner and Milton
13 Hudson’s name to the lower left. It’s marked.
14 (Complainant’s Exhibit 42 was marked for
15 identification by the Court.)
16 BY MS. LEE:
17 Q Okay. Did you mail this letter on or about October
18 1st, 2015, to the address listed on the left to Milton
19 Hudson?
20 A I did.
21 Q And to your knowledge, did he receive this?
22 A He commented on it.
23 Q And what did he comment on?
24 A He agreed to it. It was something we had
25 negotiated at great length, and it resulted in addendum No.
0056
1 3. It was a reduction in rent.
2 Q And about when was the rent reduced?
3 A The rent was reduced by agreement October 1st, but
4 he didn’t actually come up with an addendum until December
5 2015.
6 Q So two months later?
7 A Right. I refused to go forth with it and just
8 start paying unless I had something clear in writing about
9 it.
10 Q Can we admit Exhibit 42 into evidence?
11 THE COURT: Any objection to 42 being received?
12 MR. LEAR: No objection.
13 THE COURT: There being no objection, 42 is received
14 into evidence.
15 (Complainant’s Exhibit 42 was received in
16 evidence by the Court.)
17 BY MS. LEE:
18 Q Let’s go to Exhibit 43. Can you describe this
19 document that the top says “County of Ventura”?
20 A Yes. This is a notice of violation and pending
21 civil administrative penalties. It’s a code enforcement
22 document.
23 Q And there’s some handwriting on here. Is all the
24 handwriting yours?
25 A Yes, it is.
0057
1 THE COURT: Okay. I’m marking the document that the
2 witness just described as 43.
3 (Complainant’s Exhibit 43 was marked for
4 identification by the Court.)
5 BY MS. LEE:
6 Q Page No. 4 appears to be an envelope. Did this
7 letter come in this envelope?
8 A Yes, it did.
9 Q And on the fifth page, the last page, there appears
10 to be a business card. Did that come in the envelope as
11 well?
12 A No. She handed that to me when she came to the
13 property.
14 Q And is that the person who told you about the
15 Mountain Enterprise newspaper?
16 A Yes, it is.
17 Q Can we admit, move 46 into evidence?
18 MR. LEAR: Objection. Relevance.
19 THE COURT: What’s your offer of proof?
20 MS. LEE: It’s to support her testimony.
21 THE COURT: Which part of her testimony?
22 MS. LEE: The testimony that there were complaints about
23 the property itself, the state of the property, as well as
24 the fact that the code of violations person came, gave her a
25 card, and seemed aware of reporting of Respondent’s real
0058
1 estate activities.
2 THE COURT: All right. I’ll overrule the objection, but
3 just barely. This is going to be received for historical
4 purposes.
5 THE WITNESS: It’s not 46. It’s 43.
6 THE COURT: Did I say 46? I’m sorry. 43 is received.
7 I thought I said 43.
8 (Complainant’s Exhibit 43 was received in
9 evidence by the Court.)
10 BY MS. LEE:
11 Q Can you go to Exhibit 44? It appears to be an
12 unlawful detainer complaint.
13 THE COURT: All right. That’s marked as 44.
14 (Complainant’s Exhibit 44 was marked for
15 identification by the Court.)
16 BY MS. LEE:
17 Q Have you seen this document before?
18 A Yes, I have.
19 Q Can you describe it for us?
20 A It is an unlawful detainer. It’s against me. It’s
21 from the homeowner, Henri Tahmansian. This is not filled
22 out by Henri Tahmansian. He can barely write.
23 THE COURT: Okay. Counsel, ask another question.
24 BY MS. LEE:
25 Q On page No. 4, it appears on the proof of service
0059
1 that it was served by Milton Hudson. To the best of your
2 knowledge, was Milton Hudson the person who served this?
3 A Yes, he was.
4 Q And it’s a 3-day notice to pay rent or quit;
5 correct?
6 A Right. That’s correct.
7 THE COURT: What page was that on?
8 MS. LEE: Page 4. The top says “3-day notice to pay
9 rent or quit.”
10 THE COURT: So you’re looking at the bottom of it?
11 MS. LEE: Yes.
12 THE COURT: Thank you.
13 BY MS. LEE:
14 Q So page No. 5, the next page — is that your
15 answer?
16 A Yes, it is.
17 Q And did you give a copy to the owner or to Milton?
18 A I mailed a copy to the owner.
19 Q And then I notice on page No. 10, onward, this is
20 essentially similar to what is in Exhibit 43, which is the
21 County of Ventura notice of violation?
22 A Yes. I included it in my answer to the unlawful
23 detainer.
24 MS. LEE: Move Exhibit 44 into evidence?
25 THE COURT: Any objection?
0060
1 MR. LEAR: No objection.
2 THE COURT: All right. There being no objection, 44 is
3 received.
4 (Complainant’s Exhibit 44 was received in
5 evidence by the Court.)
6 THE COURT: How much more direct is there, Counsel,
7 time-wise?
8 MS. LEE: Half hour.
9 THE COURT: 30 more minutes? All right. We’re going to
10 take our morning recess, then, right now for 15 minutes.
11 We’re off the record.
12 (Recess)
13 THE COURT: We’re back on the record, and Ms. Ashmore is
14 still testifying on direct. Go ahead, Counsel.
15 BY MS. LEE:
16 Q Can you turn to Exhibit 36, please? This is one of
17 your complaints.
18 A Okay.
19 Q Again, all the writing on here — the handwriting
20 is yours?
21 A Yes, it is.
22 Q And the last page has your signature on it?
23 A Yes, it does.
24 Q And the information that you wrote in here, to the
25 best of your knowledge — take your time to briefly look
0061
1 through it. To the best of your knowledge, is it true and
2 correct?
3 A Yes, it is.
4 Q And I’m also looking at the last page, page 4, line
5 No. 8. It says “Stacey Havener Hudson says she doesn’t
6 handle the rentals.” Did she say that to you?
7 A Yes. That was when I called her.
8 MS. LEE: Can we move Exhibit 36 into evidence?
9 THE COURT: Any objection?
10 MR. LEAR: Objection. Relevance. The earlier testimony
11 from Ms. Ashmore was that this is the complaint that she
12 filed against Mr. Hudson.
13 THE COURT: Overruled. 36 is received.
14 (Complainant’s Exhibit 36 was received in
15 evidence by the Court.)
16 BY MS. LEE:
17 Q Go to Exhibit 37. Are you at Exhibit 37?
18 A I am. Wait a minute. Exhibit 36 is the complaint
19 against Stacey Havener Hudson.
20 Q Okay. So did you misspeak?
21 A I did misspeak.
22 Q So is 36 the complaint you wrote against Stacey
23 Havener Hudson?
24 A Right.
25 Q And then 37 is the complaint you wrote regarding —
0062
1 A Against Milton Havener Hudson.
2 Q Okay. Let’s go to 37, then.
3 A Okay.
4 Q And is all the handwriting on this form yours?
5 A Yes, it is.
6 Q That means the first three pages?
7 A And the handwriting around this little document on
8 page 4 is mine, but the little document is not.
9 Q Okay. That’s on page 4?
10 A That’s on page 4.
11 Q Okay. And can you briefly look through the
12 first — actually, can you briefly look through the document
13 and tell me if everything in here is true and correct, to
14 the best of your knowledge?
15 A Yes, it’s true.
16 MS. LEE: Move Exhibit 37 into evidence.
17 THE COURT: Any objection to 37 being received?
18 MR. LEAR: Yes. Relevance. The witness has testified
19 this is her complaint against Mr. Hudson.
20 THE COURT: Overruled. 37 is received.
21 (Complainant’s Exhibit 37 was marked for
22 identification and received in evidence by the Court.)
23 BY MS. LEE:
24 Q Go to Exhibit 38. I’d like to have marked Exhibit
25 38, a two-page handwritten letter. It appears to be signed
0063
1 by Terre Ashmore, dated January 26th, 2016, top right-hand
2 corner?
3 THE COURT: All right. That’s marked as 38.
4 (Complainant’s Exhibit 38 was marked for
5 identification by the Court.)
6 BY MS. LEE:
7 Q Ms. Ashmore, have you seen this document before?
8 A Yes.
9 Q Did you draft it?
10 A I did.
11 Q And did you give this, or send this, to the Bureau
12 of Real Estate?
13 A I did.
14 Q Briefly looking on the first page, second
15 paragraph, starting at line 4, you wrote “In fact, Stacey
16 Havener Hudson signed addendum No. 1 to lease, which is
17 negotiated and authored entirely by Milton.”
18 THE COURT: Where is that written?
19 MR. LEE: Second paragraph, starting “At no time.”
20 THE COURT: Page 1?
21 MS. LEE: Page 1, starting on line 5.
22 THE COURT: All right. I see it.
23 BY MS. LEE:
24 Q What do you mean by it “was negotiated and authored
25 entirely by Milton”?
0064
1 A Addendum No. 1 was when Henri was present at the
2 property, and my husband was present, and we negotiated with
3 Milton for all of addendum No. 1, but addendum No. 1 was
4 signed by Stacey Havener Hudson.
5 Q So are you saying that the contents of addendum 1
6 — you discussed this with Milton?
7 A With Milton and with Henri.
8 Q Okay. At the property?
9 A Right. And my husband, while he was alive.
10 Q And Stacey was not present?
11 A No, she was not.
12 Q And how do you know as far as who typed this up?
13 Do you know who typed this up, who literally typed up the
14 addendum?
15 A The addendums had a quality about them of
16 articulation. They were well-written. Milton was not a
17 well-spoken person.
18 Q So you don’t know who actually typed the words on
19 to the addendum?
20 A No, I did not.
21 Q But the terms therein were discussed between you
22 and Milton?
23 A They were discussed between me and Milton. It was
24 my observation that Stacey was an articulate person, and
25 while we were discussing this, Milton called a couple of
0065
1 times, and I believe he was speaking to her when he was
2 negotiating this with us.
3 Q All right. Let’s go to the second page. In the
4 second paragraph it refers to addendum No. 2. Can you tell
5 us more about addendum No. 2?
6 A Addendum No. 2 is missing. It occurred around
7 July, around the beginning of July, July 1st or 2nd. And it
8 was brought to the property, and Milton had tried to get me
9 to agree to the $200 reduction in lieu of addendum No. 1’s
10 offer, which was all of the content of the property that was
11 left behind.
12 So he had changed addendum No. 1 to be
13 addendum No. 2, that that would replace addendum No. 1. And
14 he tried to get me to sign it. I resisted for quite some
15 time, through most of June. And then in July, he said,
16 “Well, if you don’t sign this and if you don’t agree to
17 this, then Henri will consequently sue us both.”
18 Q So did you eventually sign this addendum 2?
19 A I did.
20 Q And do you know if Milton signed this?
21 A I insisted that he sign it. I insisted that he
22 sign it in much the way my husband had done when he insisted
23 that Stacey sign the lease, and the lease was signed by
24 Stacey. But Stacey wasn’t present for this addendum, so I
25 insisted that Milton be the signatory, and he did sign it.
0066
1 Q When you say that your husband had to insist that
2 Stacey sign the documents, why did he have to insist?
3 A My husband said that a contract wasn’t legal
4 without all of the signatures of the participants. In other
5 words, we signed the lease, but nobody else signed the
6 lease. And my husband said, “Well, then it’s not a true
7 contract. Someone has to sign.” And he wouldn’t leave her
8 office until she signed.
9 Q So initially, she refused to sign it?
10 A Right.
11 Q Okay. So do you have a copy of addendum No. 2?
12 A No, I don’t.
13 Q And why not?
14 A I was never given a copy. I asked for it several
15 times. In fact, I called Stacey’s office. I spoke to
16 Sierra, I believe, and I asked for addendum No. 2. I also
17 asked Milton repeatedly for addendum No. 2. He said he
18 never had it, he doesn’t have it. He just kept putting me
19 off until I stopped asking.
20 Q Can you briefly look through this two-page letter
21 in Exhibit 38 and let me know if it’s true and correct, to
22 the best of your knowledge, and if not, what you’d like to
23 change?
24 A Yes. I don’t believe that that was authored by
25 Milton. I mean, the points of addendum No. 1 were certainly
0067
1 his points, but it was well-spoken. Addendum No. 1 was
2 legal. It had a legal quality to it.
3 Now, he would negotiate addendum No. 1 and
4 he’d say, “You know, Terre, if any of Henri’s stuff is left
5 behind, you can do whatever the hell you want with it. You
6 can throw it away. You can keep it. You could put it in
7 the back 40. You can do what you want.”
8 But this addendum No. 1 was clear and precise,
9 so I think that it was more likely written by Stacey because
10 she’s an articulate person.
11 THE COURT: Okay. Remember I told you not to speculate?
12 I want you to wait for the next question, please.
13 THE WITNESS: All right.
14 THE COURT: Thank you.
15 THE WITNESS: Can I finish reading this?
16 THE COURT: All right. The question you were answering
17 was whether there was anything that was not correct or not
18 accurate, so you can look at the rest and tell Ms. Lee if
19 there’s anything else that you think is incorrect or
20 inaccurate.
21 THE WITNESS: It’s correct.
22 MS. LEE: Can we move Exhibit 38 into evidence?
23 THE COURT: Any objection to 38 being received?
24 MR. LEAR: No objection.
25 THE COURT: All right. There being no objection, 38 is
0068
1 received.
2 (Complainant’s Exhibit 38 was received in
3 evidence by the Court.)
4 BY MS. LEE:
5 Q Can we go to Exhibit 40, the last page of Exhibit
6 40, page No. 7? When you keep referring to addendum No. 1,
7 is that the addendum No. 1 you’re talking about?
8 A Yes. This is addendum No. 1.
9 Q Let’s go to Exhibit 45. It appears to be a copy of
10 an envelope on the first page, and page 2 and 3 are unlawful
11 detainer documents.
12 THE COURT: All right. That’s marked as 45.
13 (Complainant’s Exhibit 45 was marked for
14 identification by the Court.)
15 BY MS. LEE:
16 Q Can you describe the document on page 2 and 3?
17 A Page 2 and 3 is an unlawful detainer.
18 Q And was it sent in the mail in the envelope on page
19 No. 1?
20 A It was.
21 Q And it appears to be sent by an M. Hudson?
22 A Yes. It was sent by M. Hudson, by Milton Hudson.
23 MS. LEE: Can we move Exhibit 45 into evidence?
24 THE COURT: Okay. Any objection to 45 being received?
25 MR. LEAR: No objection.
0069
1 THE COURT: There being no objection, 45 is received in
2 evidence.
3 (Complainant’s Exhibit 45 was received in
4 evidence by the Court.)
5 BY MS. LEE:
6 Q Turn to the next exhibit, Exhibit 46. It appears
7 to be a one-page addendum No. 3. Can it be marked 46 in
8 evidence?
9 THE COURT: I’ll mark that addendum as 46. Go ahead.
10 (Complainant’s Exhibit 46 was marked for
11 identification by the Court.)
12 BY MS. LEE:
13 Q Ms. Ashmore, are you on Exhibit 46?
14 A Yes, I am.
15 Q Have you seen this document before?
16 A Yes.
17 Q Can you tell us — I notice this is unsigned. Can
18 you tell us why it’s unsigned, if you know?
19 A Yes. I know why it was unsigned. It was the
20 agreement made between Milton and myself and Henri, and
21 Milton would not sign it, even though he presented it to me.
22 Henri would not sign it because he didn’t want to have his
23 disability jeopardized. He wanted Milton to sign it, and
24 so, I did not sign it either, even though it was what we had
25 negotiated for a reduction in rent.
0070
1 Q On the top right-hand corner, it says “Handed to me
2 by Milton Hudson on January 16, 2016.” Is that your
3 handwriting?
4 A Yes, it is.
5 Q And is that what in fact happened?
6 A Yes.
7 MS. LEE: I’ll move Exhibit 46 into evidence.
8 MR. LEAR: Objection. Relevance. Lacks foundation.
9 THE COURT: Overruled as to relevance, and as to
10 foundation, I’m not sure what you’re basing that on.
11 MR. LEAR: I’ll withdraw that.
12 THE COURT: Because, you know, we’re going to cover that
13 issue also in another document later, that contract. I
14 think that the witness has laid sufficient foundation, so
15 all right. 46 is received.
16 (Complainant’s Exhibit 46 was received in
17 evidence by the Court.)
18 THE COURT: I have a quick question for you before we
19 move on. Is this addendum which does not have a number
20 other than “3” typed in it, is this what you’re considering
21 addendum 3 to be?
22 THE WITNESS: Yes.
23 THE COURT: All right. Thank you. I didn’t want to
24 assume that.
25 THE WITNESS: Okay.
0071
1 BY MS. LEE:
2 Q Can we turn to Exhibit 49? It appears to be a
3 three-page handwritten timeline, starting on April 20, 2015.
4 THE COURT: All right. That handwritten timeline is
5 marked as 49.
6 (Complainant’s Exhibit 49 was marked for
7 identification by the Court.)
8 BY MS. LEE:
9 Q Is this a timeline created by you?
10 A Yes, it is.
11 Q And is this your handwriting?
12 A Yes, it is. It’s from one of my journals.
13 Q And I want you to read this, and to the best of
14 your knowledge, if everything in here is true and correct,
15 if not, please make the correction.
16 A Yes. It’s true and correct.
17 Q I notice you ended this timeline essentially around
18 May 18th, 2015. Is there a particular reason you ended on
19 that date?
20 A It was too hard for me to continue. It was right
21 on the eve of my husband’s prognosis for terminal cancer,
22 and I couldn’t continue to write any more of the timeline,
23 based on his illness and death. And it became too troubling
24 for me to intersperse things that were happening in the
25 rental which were so grievous to us and to him.
0072
1 Q So there’s actually more to the timeline, but you
2 just didn’t finish it, basically?
3 A I didn’t finish it. I couldn’t write anymore.
4 Q Is there anything you’d like to change about this?
5 A No. It’s correct.
6 MS. LEE: Can we admit Exhibit 49 into evidence?
7 THE COURT: Any objection?
8 MR. LEAR: No objection.
9 THE COURT: All right. There being no objection, 49 is
10 received.
11 (Complainant’s Exhibit 49 was received in
12 evidence by the Court.)
13 MS. LEE: No further questions.
14 THE COURT: All right. Cross-examination?
15 MR. LEAR: Yes.
16
17 CROSS-EXAMINATION
18 BY MR. LEAR:
19 Q Do you have an understanding that the All Seasons
20 Property real estate company did not act as a property
21 manager on behalf of Mr. Heinrich Tahmansian?
22 A Can you please repeat the question?
23 Q Sure. Do you understand that there was no
24 arrangement between Mr. Tahmansian for All Seasons to be the
25 property manager on behalf of Mr. Tahmansian?
0073
1 A No. I don’t I have an understanding to that.
2 Q Do you have an understanding that the only
3 arrangement between them in writing is that All Seasons
4 would act as a tenant locator?
5 A That’s not my understanding at all.
6 Q Do you have an understanding that All Seasons did
7 not make any fee for the services that Milton Hudson was
8 providing to you, other than identifying a property for you
9 to lease?
10 A No. I don’t have that understanding.
11 Q Do you have an understanding that the only fee that
12 All Seasons made was from the tenant relocation fee?
13 A No.
14 Q Do you have an understanding that all the money
15 that you paid to Milton Hudson went to Tahmansian, other
16 than the initial tenant relocation fee?
17 A No.
18 Q Do you have an understanding that Milton Hudson was
19 doing all the things he was doing for you, other than
20 identifying the property for you, for free?
21 A No. I do not have that understanding.
22 Q And you don’t have any proof otherwise, do you?
23 A I have Mr. Tahmansian’s word.
24 Q You have no proof that Milton Hudson or All Seasons
25 was paid a penny, other than the tenant relocation fee;
0074
1 correct?
2 MS. LEE: Objection. She said that she had proof in the
3 sense that the owner told her so.
4 MR. LEAR: Objection. Hearsay. Move to strike.
5 THE COURT: Well, I don’t understand the objection.
6 What’s the legal objection, Counsel?
7 MS. LEE: Asked and answered.
8 THE COURT: Excuse me? All right I’m sorry. What was
9 the question again now? I lost you on that.
10 MR. LEAR: I’ll back it up, Your Honor. We can do a
11 redo.
12 BY MR. LEAR:
13 Q Do you have any understanding that Milton Hudson or
14 All Seasons was paid a penny for property management
15 services?
16 A I understand that he performed property management
17 services.
18 Q And my question is, do you have any understanding
19 that he was paid for what you termed to be property
20 management services?
21 A Yes, I do.
22 Q Okay. Do you have any written proof that Milton
23 Hudson was paid for property management services on behalf
24 of Mr. Tahmansian?
25 A I have a letter from Mr. Tahmansian.
0075
1 Q Okay. Anything other than that?
2 A I have Mr. Tahmansian’s angry declaration.
3 Q Okay. Anything other than that?
4 A I have a text message from Stacey Havener Hudson to
5 Henri Tahmansian.
6 Q And what does that text message purportedly say?
7 THE WITNESS: Do you have that text message?
8 THE COURT: Okay. You’ve got to answer the question.
9 THE WITNESS: Well, then I have to find it here.
10 THE COURT: All right.
11 MR. LEAR: Well I’m going to withdraw my question.
12 BY MR. LEAR:
13 Q So that’s not anything that’s we’ve gone over in
14 evidence, is it, today?
15 A Not so far, no.
16 THE COURT: So the text message hasn’t been referred to
17 before now?
18 THE WITNESS: No.
19 THE COURT: All right. Thank you.
20 BY MR. LEAR:
21 Q Did you know that Mr. Hudson and All Seasons’s only
22 role here was to find you a property?
23 A No. That was not my understanding. He introduced
24 himself as the property manager.
25 Q Okay. When Ms. Havener testifies later today or on
0076
1 another day that the only moneys received for the work that
2 was performed by All Seasons on your behalf and on
3 Mr. Tahmansian’s behalf was a property relocation fee, would
4 she be lying?
5 A Yes, she would.
6 Q And you can prove that?
7 A I have numerous documents here, detailing the
8 service of eviction notices, the negotiations between the
9 owner and Milton and myself for various improvements to the
10 property, typical things that a property manager would do.
11 I called him, Milton, when there were things
12 wrong with the property. I called him, Milton, when there
13 were things that needed to be ironed out between myself and
14 the property manager. These were all things that I felt
15 were typical of a property manager.
16 Q Fair enough. We’re not disputing that. I’m asking
17 you about how the money flowed and your knowledge thereof.
18 And Ms. Havener will testify that the only moneys received
19 by All Seasons in the transaction involving you and your
20 husband and Mr. Tahmansian was pursuant to the tenant
21 relocation agreement, a one-time fee.
22 So my question comes down to, not whether
23 Milton Hudson and/or All Seasons did any property management
24 services. We’ll agree that they did. My question is
25 whether you can prove right now that All Seasons received
0077
1 money from Tahmansian for property management services.
2 MS. LEE: Objection. Asked and answered.
3 THE COURT: Overruled.
4 THE WITNESS: Mr. Tahmansian told me he paid him the
5 entire — or had to pay him the entire amount that was given
6 as the first month’s rent, and that it was the property
7 management, that it was equivalent to 10 percent of every
8 month for a year’s lease.
9 BY MR. LEAR:
10 Q Okay. And are you familiar with the term “tenant
11 relocation agreement”?
12 A I am.
13 Q Okay. Might what you just described have been a
14 tenant relocation fee?
15 A Why would Henri Tahmansian describe it as roughly
16 10 percent of every month’s rent for a year’s lease?
17 Q He’s not here to testify, so we won’t know. Okay.
18 I think I’ve made my point. One final thing here. Take a
19 look at Exhibit 49, page 2. Look at the entry on May 2nd at
20 the bottom. “We are told by the owner the $1,000 cash we
21 paid all went to Milton.” Is that what you were just
22 referring to with respect to Mr. Tahmansian making a
23 statement to you?
24 A Yes. That’s correct.
25 Q And if Stacey Havener testifies that that was the
0078
1 tenant relocation fee, you’re here to tell us that you
2 disagree with that?
3 A I disagree with that.
4 Q Okay. You don’t have any proof that Ms. Havener
5 was not managing Mr. Hudson with respect to the work that he
6 did on your behalf; correct?
7 MS. LEE: Objection. Vague.
8 THE COURT: Did you understand the question?
9 THE WITNESS: Yes, I did.
10 THE COURT: All right. Overruled.
11 THE WITNESS: I would like it repeated, though.
12 BY MR. LEAR:
13 Q You don’t have any proof that Ms. Havener was not
14 managing Mr. Hudson with respect to the work that Mr. Hudson
15 did for you; correct?
16 A I have the letter from All Seasons Property
17 Management that he gave me, indicating the payments that he
18 had received. When I called the phone number, she answered.
19 Q You can’t tell us that Ms. Havener was not managing
20 Mr. Hudson; correct?
21 A I believe she was.
22 Q Okay. And in fact, taking a look at Exhibit 40,
23 page 7, addendum 1, No. 1?
24 A Wait a minute.
25 Q Sure. Last page of 40 — you testified earlier
0079
1 that you believe that this was created by Ms. Havener?
2 A I believe she wrote it.
3 MS. LEE: Objection. Speculation.
4 THE COURT: You’re objecting that the witness is
5 speculating?
6 MS. LEE: I believe it was established before that you
7 had told her to not speculate as far as who typed it.
8 THE COURT: We’re talking about the last page, page 7 of
9 Exhibit 40?
10 MS. LEE: Correct. The addendum.
11 THE COURT: The addendum No. 1?
12 MS. LEE: Correct.
13 THE COURT: Okay. And the question that counsel just
14 asked, you answered it by saying you believed that she wrote
15 it?
16 THE WITNESS: I believe that Milton negotiated it and
17 Stacey wrote it.
18 THE COURT: All right. I’m going to sustain the
19 objection. I do recall that that was speculative testimony.
20 THE WITNESS: Yes, sir.
21 THE COURT: In other words, you don’t know for a fact
22 that the Respondent wrote it?
23 THE WITNESS: No, I do not.
24 THE COURT: Okay. Go ahead. Ask another question.
25 ///
0080
1 BY MR. LEAR:
2 Q But you strongly suspect it that Ms. Havener wrote
3 it?
4 MS. LEE: Objection. She’s already testified. Asked
5 and answered.
6 THE COURT: Overruled. She also testified previously
7 that she suspected it. It’s still speculative, so ask
8 another question.
9 BY MR. LEAR:
10 Q And you see here that Ms. Havener signed that
11 document, the addendum No. 1?
12 A Yes. She signed it. She signed it in my presence.
13 Q And there’s nothing wrong with Ms. Havener signing
14 that; right?
15 A No.
16 MS. LEE: Objection. Legal conclusion.
17 THE COURT: That’s overruled. The answer was no?
18 THE WITNESS: What was the question?
19 THE COURT: There’s nothing wrong with her having signed
20 that page?
21 THE WITNESS: No.
22 THE COURT: All right. You got to remember, if you can,
23 let a few seconds go by at the end of each question because
24 that was one of those examples of what happens when two
25 people are talking at once.
0081
1 THE WITNESS: I’m sorry.
2 THE COURT: That’s all right. Just take your time
3 giving answers. Thank you.
4 BY MR. LEAR:
5 Q What’s your complaint against Ms. Havener?
6 A My complaint?
7 Q Sure.
8 A As with the BRE complaint?
9 Q Yes. What did she do wrong?
10 A She allowed Milton to be her property manager, and
11 he didn’t do a very good job. He did an illegal activity.
12 He performed licensed activity without a license under her
13 direction. The reason I believe that it was under her
14 direction is because the way she directed us to the property
15 and said that he would meet us there, that her property
16 manager would meet us there. And she said that.
17 And if my husband were here, he would agree
18 that she said that. And we did, and we went there, and we
19 met him. He proceeded to negotiate a lease with us that she
20 later signed, and the fact that she signed it presented
21 itself to me as two people working together in a real estate
22 office.
23 We didn’t know that there was anything wrong
24 with them doing that. We didn’t know that there was
25 anything wrong at all. We went purely by faith and became
0082
1 tenants of a property that was a nightmare to us, and they
2 both participated.
3 Q Okay. Now, I want you to assume that a broker like
4 Ms. Havener is allowed to have a non-licensee doing real
5 estate work under her supervision. Does that change your
6 opinion?
7 A No. Because even if he was unlicensed, and it were
8 acceptable, the work that he did was unacceptable.
9 Q Okay. And that’s the work that you you’ve
10 described as the property management work?
11 A Right.
12 Q And we’ve talked about that in great detail today?
13 A Right. And the fact that she would not participate
14 with us. She referred us to him repeatedly.
15 Q And you take issue with that?
16 A I do.
17 Q Okay. Anything else?
18 A That’s it.
19 MR. LEAR: Okay. Nothing further.
20 THE COURT: Redirect?
21
22 REDIRECT EXAMINATION
23 BY MS. LEE:
24 Q Can we go to Exhibit No. 52, please? It appears to
25 be a three-page letter plus a series of texts on the fourth
0083
1 page from — to Terre.
2 THE COURT: All right. That’s marked as 52.
3 (Complainant’s Exhibit 52 was marked for
4 identification by the Court.)
5 THE COURT: Any particular reason that this document
6 wasn’t covered when you did your original direct
7 examination?
8 MS. LEE: I didn’t think it was necessary. I was trying
9 to streamline the process, Your Honor, but it’s come up now.
10 THE COURT: All right. Go ahead.
11 BY MS. LEE:
12 Q Do you recognize this document?
13 A I do.
14 Q The top right-hand corner, it says “Received from
15 H. Tahmansian after trial he lost outside courtroom March
16 14th, 2016.” Is that your writing?
17 A Yes, it is.
18 Q And is it true that you received this from Henri
19 Tahmansian outside the courtroom on March 14, 2016?
20 A Yes. He handed this document and the copy of the
21 text message to me outside the courtroom on that day.
22 Q And can you describe this document?
23 A This was a letter to me that he wrote. It was a
24 letter of complaint against Stacey, against Milton. It was
25 his complaint, I believe — I’m sorry. I took it to be his
0084
1 opportunity to pull me into his version of events and to
2 attempt to persuade me that he was negotiable with me. It
3 was an odd letter.
4 Q Besides this letter, did he seem unhappy with
5 Milton?
6 A Very.
7 Q The second page mentions something about car parts
8 on line Nos. 5, 6, and 7. Can you describe what was that
9 about?
10 A There are approximately 40 dead vehicles in the
11 yard. He was supposed to move those.
12 Q And did he want to move those?
13 A During the original negotiations, he said he would.
14 He said he would consolidate them in the farther-most corner
15 of the yard and work on them there occasionally or at least
16 just store them. He ended up just leaving them scattered
17 all over the yard.
18 Q On page No. 3, on the top, it says “Terre, I’m
19 screwed around $15,000 and counting.” Do you know what he’s
20 referring to there?
21 A Henri believes that he lost a lot of money because
22 of the code enforcement violations. He believes that that
23 resulted in $15,000 in repairs.
24 Q To the property, to cure the property due to the
25 violations?
0085
1 A Right. He also believed that he was out the money
2 that he had given to Milton. He felt he didn’t get any
3 satisfaction from that.
4 Q What do you mean that he gave money to Milton?
5 A He complained to me repeatedly that he shouldn’t
6 have hired a property manager, that we could have probably
7 negotiated between ourselves.
8 Q And then the third line says there’s missing rent
9 of $750. Do you know what that’s about?
10 THE WITNESS: One moment. Can I have a Kleenex, please?
11 THE COURT: Yes.
12 THE WITNESS: Can you repeat that, please?
13 BY MS. LEE:
14 Q Sure. The third line of page No. 3 says there’s
15 missing rent of $750. Do you know what that’s about?
16 A That was the first time that I found out he wasn’t
17 getting his money. And he talked to me outside of that
18 courtroom at great length. He was very angry. He said he
19 hasn’t been paid since July.
20 Q Of 2015?
21 A Of 2015. And I asked him —
22 MR. LEAR: Objection. Move to strike. Hearsay.
23 THE COURT: Sustained.
24 BY MS. LEE:
25 Q It says, the next line, something about eight
0086
1 months and around $8,000. Is that the same thing you’re
2 referring to, the rent?
3 A Yes.
4 MR. LEAR: Your Honor, I’m going to move to strike the
5 entirety of this question concerning Exhibit 52, on the
6 basis of hearsay. Mr. Tahmansian is not here, so we don’t
7 have an opportunity to cross-examine him. And at this
8 point, BRE is trying to get in out-of-court statements.
9 THE COURT: Okay. Would you like to be heard, Counsel?
10 MS. LEE: The questioning of Ms. Ashmore was her
11 understanding, and this is the basis of her understanding of
12 what the arrangement was, not entirely, but partly because
13 of this.
14 THE COURT: Okay. That’s what you would call a state of
15 mind exception, and I don’t know that her state of mind is
16 relevant; so talk to me about hearsay exceptions. I know
17 that offer of proof. Lawyers make it all the time. You’re
18 basically vaguely referring to her state of mind.
19 This is not about state of mind. It is about
20 hearsay. It’s an out-of-court statement. It came from
21 somebody who’s not going to be here to testify, as far as I
22 know. I mean, are either party going call this landowner?
23 MS. LEE: No.
24 THE COURT: Mr. Lear?
25 MR. LEAR: No.
0087
1 THE COURT: Okay. So that’s what I need you to address.
2 MS. LEE: Okay. I want to get into the text that came
3 with this letter.
4 THE COURT: You said get in the text? I’m sorry.
5 MS. LEE: I just want to go over the text with the
6 witness, that came with this letter.
7 THE COURT: You mean the text message?
8 MS. LEE: Correct.
9 THE COURT: Well —
10 MR. LEAR: Objection. Hearsay.
11 MS. LEE: It’s also administrative hearsay, Your Honor,
12 as far as it supports Ms. Ashmore’s testimony here today.
13 THE COURT: What is also administrative hearsay? The
14 letter?
15 MS. LEE: The letter.
16 THE COURT: No. The letter doesn’t explain or
17 supplement. The letter is all of the statements coming from
18 Mr. Tahmansian. They’re hearsay statements. That’s not how
19 administrative hearsay, that exception, works. Otherwise,
20 someone could testify to the effect of something, a witness
21 could, and that testimony may well be based on hearsay.
22 Then the hearsay is offered later to support that testimony,
23 which is based on hearsay.
24 I haven’t heard from this witness. He’s not
25 going to testify in the hearing. These are all his
0088
1 statements, so the letter, I’ll let you address if you like.
2 The text — I haven’t heard anything about it, but the
3 letter is hearsay, and I don’t hear a valid objection so —
4 I’m sorry. A valid offer of proof. The objection then is
5 sustained, and the testimony about the contents of the
6 letter which, by the way, I can read myself. I don’t need
7 the witness to read portions of it or explain what it says.
8 That’s stricken.
9 If you want to bring in a witness, you’ve got
10 the power of the state behind you. Subpoena the witness,
11 and have them come in. Otherwise, this is hearsay.
12 MR. LEAR: Your Honor, the further objection, in the
13 event that Ms. Lee is thinking about that, is that any
14 testimony from Mr. Tahmansian would go beyond the scope of
15 the Accusation. It’s not relevant.
16 THE COURT: Right. That’s another issue, but for right
17 now, as far as the letter goes, it’s hearsay. And it also
18 does not explain or supplement anything this witness has
19 testified to necessarily, except what you’ve said before,
20 which is her understanding.
21 Her understanding isn’t evidence. Okay?
22 These are actual events that you’re having her focus on, and
23 those are being stated by another witness who’s not going to
24 testify, so it’s hearsay. Go ahead. You can continue your
25 question.
0089
1 BY MS. LEE:
2 Q Can we go to page 4 of the same exhibit, the text
3 messages? Was this handed to you by Henri, along with the
4 letter?
5 A Yes, it was.
6 Q And I notice there’s handwriting, indicating the
7 texts on the left are from Stacey Havener Hudson as the
8 writer – Henri Tahmansian. Is that your writing?
9 A Yes, it is.
10 Q And why did you put that in there?
11 A Because Henri told me it was from Stacey Havener
12 and from himself.
13 Q And what was the point of attaching these texts?
14 A The point that he made and that I made — I noted
15 it immediately that she referred continually to “we” when
16 she referred to herself and Milton. “We.”
17 Q Anything else?
18 A You know, she said, “Be sure to let us know where
19 you put the key.” He was angry that the contract — he had
20 not seen the contract before, so he replied that he will.
21 She referred him to Milton, just like she referred me to
22 Milton, and Henri replied angrily again.
23 And she said “We disclosed to the tenants.”
24 That was myself and my husband, that the house is on a well.
25 We did get advice on that. I believe that’s in addendum No.
0090
1 1, that we were to be considerate of water consumption. And
2 then she closed by saying she would speak to Milton about
3 it.
4 MS. LEE: No further questions.
5 THE COURT: Recross?
6 MR. LEAR: Nothing further.
7 THE COURT: Okay. Thank you very much. You’re excused.
8 THE WITNESS: Thank you.
9 MR. LEAR: Your Honor, counsel and I have met and
10 conferred, and Ms. Lee has generously allowed us the
11 opportunity to call Ms. Linda Sheldon out of order. She’s
12 here and only available this morning.
13 THE COURT: All right. Thank you. We’re going to go
14 off the record while you get the witness.
15 (Off the record)
16 THE COURT: Back on the record. And off the record, Mr.
17 Lear mentioned that he had agreed with Ms. Lee to call an
18 expert witness of his. I know, Ms. Lee, you haven’t rested
19 yet, so is it all right with you if Mr. Lear calls this
20 witness out of order?
21 MS. LEE: Yes.
22 THE COURT: Okay. Go ahead and call your witness.
23 MR. LEAR: And just to clarify, Your Honor, this is not
24 an expert witness.
25 THE COURT: Oh, I’m sorry.
0091
1 MR. LEAR: The expert witness is coming in at 1:30.
2 THE COURT: Okay.
3 MR. LEAR: This is a character witness / speaking to
4 rehabilitative efforts by Ms. Havener.
5 THE COURT: Can you give her name?
6 MR. LEAR: Sure. Linda Sheldon.
7 THE COURT: Okay. Ms. Sheldon, you were an expert for
8 about 30 seconds over there. How does it feel?
9 THE WITNESS: Good.
10 THE COURT: Okay. Please raise your right hand.
11
12 LINDA SHELDON,
13 called as a witness, and having been first duly sworn by the
14 Court, was examined and testified as follows:
15
16 THE WITNESS: Yes, I do.
17 THE COURT: Please state and spell your full name for
18 the record.
19 THE WITNESS: My name is Linda D. Sheldon, Linda,
20 L-I-N-D-A, and Sheldon, S-H-E-L-D-O-N.
21 THE COURT: Thank you. Go ahead, Counsel.
22
23 DIRECT EXAMINATION
24 BY MR. LEAR:
25 Q Ms. Sheldon, what do you do for a living?
0092
1 A Accounting and real estate.
2 Q For how long have you been doing that?
3 A For over 40 years.
4 Q Geographically, where do you live?
5 A Frazier Park, California.
6 THE COURT: Can you tell me what you said “in real
7 estate”? I didn’t hear that. Accounting in real estate?
8 THE WITNESS: Accounting and real estate.
9 THE COURT: And real estate. All right. Thank you.
10 BY MR. LEAR:
11 Q And you live in Frazier Park?
12 A Correct.
13 Q And is part of your business focused on the Frazier
14 Park area?
15 A No. I have clients all over the country.
16 Q Okay. I want you to take a look at the documents
17 right in front of you, right over there. I want you to go
18 to the very end, Exhibit X.
19 A Okay.
20 Q What is this?
21 A Trust fund accounting. This is policies and
22 procedures.
23 Q Hold. Hold. We’re at the wrong exhibit.
24 A Oh, I’m sorry. Behind that?
25 Q Yeah.
0093
1 A This is my resume.
2 Q Okay. Could you give the Court a quick summary as
3 to your professional background?
4 THE COURT: I’m going to mark this as Exhibit X. Go
5 ahead.
6 (Respondent’s Exhibit X was marked for
7 identification by the Court.)
8 THE WITNESS: Basically, I’ve been doing accounting and
9 real estate since the 1980s. Actually, accounting since the
10 early ’70s and real estate since the early ’80s. Involving
11 property management is one of the areas, with
12 multi-residential properties and commercial properties and
13 accounting with tax attorneys and CPAs all my professional
14 career.
15 And about five years ago, I went out on my
16 own, doing accounting on the mountain out of my home. I
17 have many clients on the mountain, but I have a lot of
18 clients all over the country.
19 Q And could you give the court a general idea as to
20 the type of clients that you have?
21 A Real estate, newspaper, churches, a lot of
22 churches, manufacturing companies, a lot of different types
23 of companies, rental properties.
24 Q And when you say you do accounting for them, what
25 do you mean?
0094
1 A Set up their general ledgers. Some of the clients,
2 I’ll do just payroll. Other clients, I do their input and
3 output, posting, receipt posting, disbursements, or even
4 actually doing those deposits and cutting checks for them;
5 so the whole accounting realm that I do. Preparing
6 financials at the end of the year. I also give consultation
7 on policies and procedures for the type of industry that
8 they’re in.
9 Q Okay. And your resume is true and accurate, even
10 as you sit here today; correct?
11 A The only thing it doesn’t include is my
12 self-employment.
13 Q Which you’ve just described?
14 A Right.
15 Q So here in the top line or so, when you say
16 “Bookkeeping, accounting, tax preparation, and real estate,”
17 what do you mean when you say real estate?
18 A Well, because of my working with realtors, property
19 management. I did a lot of accounting with property
20 management over the years. Also, I am a licensed realtor,
21 so I just currently started helping people buy and sell
22 homes, and I mainly do that for people that are my
23 accounting clients.
24 Q So is it fair to say that you have a knowledge
25 about the type of accounting that is needed in property
0095
1 management?
2 A Absolutely. Mainly because the trust issues
3 involved, one of the main — when I first started doing
4 accounting for real estate, it happened to be for a large
5 real estate syndicator, where we did single family homes and
6 large apartment complexes; so I’m extremely familiar with
7 what’s required in the policies and procedures and reporting
8 to go the investors, et cetera.
9 Q Do you know Stacey Havener?
10 A Yes, I do.
11 Q How do you know her?
12 A I actually met her through my son. She’s a friend
13 of my son’s. Met her through him, and just recently, she
14 became a client.
15 Q Okay. And how long have you known Stacey Havener?
16 A For about three years, I think. Three or four
17 years.
18 Q Okay. And would you describe the relationship over
19 the last three years as being a social or a friend
20 relationship?
21 A It was mainly social.
22 THE COURT: Here’s what I want to do. I forgot to give
23 you a couple of pointers before you start testifying. And
24 one of the them is we have a court reporter over here, who
25 can only take down one voice at a time.
0096
1 The other thing is there’s an attorney for the
2 agency, and sometimes, the attorneys don’t agree on
3 something, and they make objections to the questions. And
4 so, I don’t want you to be answering really quickly, because
5 first of all, you may not be sure that the attorney is done
6 with the question, and secondly, you want to give a few
7 seconds, like maybe three to five seconds, before you start
8 answering, so that the opposing attorney can pose an
9 objection.
10 They may do that, and if you’re talking and
11 they’re talking at the same time, we have crossfire, and we
12 can’t get down what’s being said; so just take an extra
13 three to five seconds, and make sure the question is
14 completely done and that there’s no objection, and then give
15 your answer.
16 Two other quick points. If you’re asked a
17 question, and you don’t understand it, just ask the attorney
18 to repeat the question or tell him you don’t understand it,
19 or rephrase it. If you get asked a question, and you would
20 have to guess at the answer, that’s called speculation. I
21 don’t want to you do that because that’s not evidence; so
22 the correct answer to a question you don’t know is “I don’t
23 know.”
24 THE WITNESS: Okay.
25 THE COURT: All right? Thank you. Go ahead.
0097
1 BY MR. LEAR:
2 Q Thank you. So you were just testifying that you
3 would consider Ms. Havener a friend?
4 A Correct.
5 Q And you had also mentioned earlier that you now
6 have a professional relationship with Ms. Havener?
7 A Correct.
8 Q Please describe.
9 A She contacted me — I guess it’s about two months
10 ago. She had recently learned about my real estate and
11 accounting background related to real estate and asked me if
12 I could review her records and see if I could help her get
13 things in order so that she could be in compliance. And so,
14 that’s what I have done.
15 Q Okay. And you understood that Ms. Havener has a
16 real estate brokerage?
17 A Yes.
18 Q She was talking about accounting in that context,
19 not her personal stuff?
20 A That’s correct. In relationship to the brokerage.
21 Q Okay. And then from that discussion, did you get
22 hired?
23 A Yes.
24 Q And you are getting paid?
25 A Yes, I am.
0098
1 Q And please describe for the Court what you’ve done
2 for All Seasons.
3 A Well, basically, I’ve gone in, and I’ve reviewed
4 all the documentation, seeing where some of the issues were.
5 You know, I had read the complaint. Then I went and
6 reviewed what I could find in the records, and then I
7 proceeded in putting policies and procedures together so
8 that those could be rectified and so that from this point
9 forward, she could be in full compliance and not just
10 partial compliance.
11 Q Let’s take a look at Exhibit W.
12 A Yes.
13 Q What is that?
14 A Those are the policies and procedures that I
15 recommended for handling of the trust fund accounting.
16 THE COURT: Okay. Those are premarked, and they’re
17 being marked now as Respondent’s Exhibit W. Go ahead.
18 (Respondent’s Exhibit W was marked for
19 identification by the Court.)
20 BY MR. LEAR:
21 Q Okay. And with respect to this policies and
22 procedures memo, were those tailored specifically to All
23 Seasons?
24 A Yes, they are. But they’re also policies and
25 procedures that I’ve used for other real estate clients that
0099
1 have property management and trust accounting. Because it’s
2 extremely important to make sure that they’re keeping the
3 trust accounting funds separate from their own personal
4 funds and their client funds.
5 And so, I wanted to make sure that we had a
6 really good system put in place, and I based this on
7 previous experience in working with realtors and investors
8 before, and based on issue they had come up with and how we
9 resolved those issues, so that those issues would not come
10 up again.
11 Q And do you have an ongoing relationship with All
12 Seasons?
13 A As an accountant, yes.
14 Q Please describe.
15 A Basically, working on their deposits, their
16 disbursements, making sure their trust account is in order.
17 Also, making sure that the different entities’ accountings
18 are totally separated. And some of those steps we haven’t
19 finished because it’s only been a couple of months, and just
20 working on those, getting them in order.
21 Q And do you have a plan with Ms. Havener, on a
22 going-forward basis, as to how many hours per week you’re
23 going to work?
24 A Just depends on what the need is, but as the need
25 increases, then I will be more involved on it. Right now,
0100
1 there’s only nine properties involved.
2 Q With respect to the property management?
3 A With respect to property management, correct.
4 Q Could you describe for the Court your general
5 perception as to All Seasons Realty and the business that
6 they are in?
7 A I’ve actually witnessed Stacey in her office,
8 especially in the last couple of months. She’s extremely
9 professional. She is very much very concerned and caring
10 about her clients, wanting to do the best for her clients so
11 that they can have a successful transaction.
12 And she goes beyond the call of duty, and I
13 believe that’s maybe some of what got her in a little
14 trouble here. Because she was considering her clients
15 first, rather than herself, to try and help them out,
16 especially during our last year, since our recession got
17 really bad.
18 Q Okay. And really, my question was more focused on
19 the type of real estate work that All Seasons does. So
20 you’ve described that there are nine properties on the
21 property management side. Is there also a residential sales
22 side?
23 A Yes. There’s a residential sale side, which is
24 extremely successful, and that’s most of what I’ve witnessed
25 her handling with the clients and things like that. And the
0101
1 property management, like I said, there’s only nine
2 properties currently.
3 Q And there’s a document called an Accusation. Is
4 that the complaint to which you were referring?
5 A I believe so. I would have to see it to see if
6 that was the one I read.
7 Q Okay. But did you read a document that had charges
8 against Ms. Havener by the Bureau of Real Estate?
9 A Correct, yes.
10 Q Okay. And do you recall, with respect to that
11 document, did all the charges more or less deal with the
12 property management side of the business?
13 A Yes, it did. It had to do with the handling of the
14 trust fund.
15 Q And that didn’t cross over into the residential
16 sales?
17 A No, it did not.
18 Q In the three years or so that you’ve known Ms.
19 Havener, have you formed an opinion regarding her character,
20 honesty, and integrity?
21 A Oh, yes. I believe she has very high integrity,
22 very good character. I have always been pleased to call her
23 a friend. She is just a joy to be around, and I just enjoy
24 her performances as well. She’s a very good person.
25 Q So if you thought that Stacey Havener was corrupt,
0102
1 would you be her friend?
2 A Absolutely not.
3 Q If you thought that Stacey Havener was corrupt,
4 would you take on an assignment working closely for her?
5 A No. In fact, I wanted to review all of the
6 documentation first to make sure that there wasn’t anything
7 that was intentional going on, and when I found that there
8 was nothing intentional, going forward, I said, okay. Here
9 is a person that just needed a true accountant to help her
10 get this in order. I agreed to help her get it straightened
11 out.
12 Q Was your understanding generally that prior to you
13 coming in with your accounting expertise, that Ms. Havener
14 did not have an accountant that was involved with the
15 day-to-day business?
16 A I could actually see that in how the accounting
17 records were done, just simple things that a typical,
18 experienced, good bookkeeper would have done, but even that
19 wasn’t done. And the people that she had before that called
20 themselves bookkeepers or accountants. When I looked at
21 their work, I saw they were not true bookkeepers or
22 accountants. And I saw a lot of things that were not done
23 according to what I considered good accounting records and
24 complete accounting records.
25 Q In having done the review that you did, is it
0103
1 generally your view that if somebody with your type of
2 background had been coming into All Seasons in the last five
3 years or so, that the things that are alleged to have been
4 done wrongly in the Accusation wouldn’t have happened?
5 A They definitely would not have happened.
6 Q Please explain.
7 A Well, first of all, there would have been a
8 complete different accounting general ledger for the
9 different entities that she has. Real estate sales is one
10 entity; then the property management is another entity. In
11 fact, I’ve already recommended that, that those two entities
12 have a totally different general ledger, be different
13 completely than the property management.
14 The way they were handling the trust account,
15 even though every penny was accounted for, it wasn’t handled
16 properly. And so, I wanted to make sure that those were
17 handled correctly, that proper recordings or reports were
18 given to the investor.
19 I mean, their general ledger wasn’t even a
20 full general ledger. They were just using a register, per
21 se, for income and disbursements. They didn’t have it using
22 a double entry system. They were using Quicken, but Quicken
23 is good for individuals, small mom-and-pops, but it’s not an
24 accounting program.
25 And so, I converted them to Quick Books
0104
1 accounting program, which is a double entry type of program,
2 which means that it records the debits and credits on both
3 sides of the transaction; therefore, we can better account
4 for everything.
5 Also, it’s recommended to have a separate
6 trust account for each property. Therefore, it eliminates
7 the possibility of accidentally moving monies from one
8 investor to another investor. Just different things that
9 I’ve learned over the years to just make it clean accounting
10 for all parties involved.
11 Q We both agree that it’s Ms. Havener’s fault that
12 she didn’t hire you earlier?
13 A Absolutely.
14 MR. LEAR: I have nothing further.
15 THE COURT: Cross-examination?
16
17 CROSS-EXAMINATION
18 BY MS. LEE:
19 Q You said you first reviewed the books about a
20 couple of months ago, about September?
21 A Correct. Maybe August.
22 Q And when you reviewed her documents, did they
23 include bank statements?
24 A Correct.
25 Q And at the time that you started reviewing, did she
0105
1 have a trust fund?
2 A Correct.
3 Q Okay. What’s the trust fund? Where is the trust
4 fund at?
5 A She had a trust fund and a checking account, and
6 there’s two accounts, I believe.
7 Q What was the name of the trust fund?
8 A It didn’t have a separate name. That was part of
9 the problem.
10 Q Is it actually a trust fund or a bank account?
11 A It was a bank account that she was using as a trust
12 fund.
13 Q But it wasn’t labeled a trust fund?
14 A No, it was not.
15 Q Does it require — you’re both a real estate
16 licensee — you said, a salesperson or a broker?
17 A I’m a salesperson.
18 Q Okay. You’re both a real estate salesperson and an
19 accountant; correct?
20 A Correct.
21 Q And so, you know about both careers and
22 occupations?
23 A Correct.
24 Q Does it require an accounting background to open up
25 a trust fund?
0106
1 A No, it doesn’t.
2 Q Okay. Is it a basic thing for a broker to open up
3 a trust fund?
4 A It depends on the broker. Some brokers — they
5 won’t handle any of the moneys themselves. They only need
6 to if they’re handling the moneys themselves. If they are
7 handing the moneys themselves, then yes, they need to have a
8 trust fund.
9 Q And is it a basic idea that if you have trust
10 funds, that you have to open up a trust account, a
11 designated trust account?
12 A Correct.
13 Q And did Stacey Havener know this?
14 A I don’t know if she knew at the time, but she does
15 know it now.
16 Q When you started looking at her books in August or
17 September, did it look like she had ever had any help from a
18 bookkeeper before?
19 A No. She had told me she did, but I could tell that
20 they weren’t truly bookkeepers.
21 Q And when did she say that she had a bookkeeper, if
22 you know?
23 A I don’t recall. I think it was a few years prior
24 that she could not find a qualified bookkeeper, and then she
25 heard about me through my son.
0107
1 Q And what is your son’s relationship to her?
2 A They both perform.
3 Q What do you mean by “perform”?
4 A They’re actors.
5 Q And are they involved in the Mountain Theater
6 Alliance?
7 THE REPORTER: In the what?
8 THE COURT: Can you slow down a little, please?
9 MS. LEE: The Mountain Theater Alliance.
10 THE COURT: Thank you.
11 THE WITNESS: Yes.
12 BY MS. LEE:
13 Q Is that a pretty tight-knit group?
14 A Is that a what?
15 THE COURT: What?
16 MS. Lee: A tight-knit group.
17 THE WITNESS: I don’t know about that. I know that
18 there’s a number of performing groups on the mountain, and I
19 know my son is involved in a number of them, so I don’t know
20 what you mean by “tight-knit.” It’s a small mountain, so —
21 THE COURT: Okay. Remember I said don’t speculate? If
22 you don’t know, you don’t know.
23 THE WITNESS: Okay. Thank you.
24 THE COURT: Go ahead. And slow down. Your words are
25 coming out so fast, I’m having a hard time understanding
0108
1 them, Counsel.
2 BY MS. LEE:
3 Q And when you say it’s a small mountain, pretty
4 much, I guess everyone knows everyone, sort of?
5 A Yeah. Pretty close.
6 Q And do you know what Base Camp is?
7 A Yes, I do.
8 Q And what is Base Camp?
9 A Base Camp is the restaurant Stacey owns on the
10 mountain.
11 Q And is that near her real estate office?
12 A They actually are occupants of the same building.
13 Q And does Base Camp serve as a location for theater
14 groups?
15 MR. LEAR: Objection. Relevance.
16 THE COURT: Counsel, you want to make an offer of proof
17 as to why we’re discussing the restaurant for other uses
18 than serving food?
19 MS. LEE: It’s a small mountain. Everyone knows —
20 THE COURT: Okay. That’s definitely been established.
21 Go ahead. I don’t want to interrupt you.
22 MS. LEE: Everyone knows everyone. If she’s to say
23 something that’s not so favorable to Respondent — she
24 basically has an incentive to say something positive versus
25 negative, due to the fact that her son may or may not — she
0109
1 didn’t answer the question — performs at the Respondent’s
2 restaurant, basically.
3 THE COURT: Okay. Considering what I perceived was the
4 difficulty of your making that offer of proof, I’m going to
5 sustain the objection. Ask another question, and try to
6 stick to real estate and accounting.
7 BY MS. LEE:
8 Q You say you looked at documentation that was
9 provided to you; right? By Ms. Havener?
10 A I actually — as I was going through the general
11 ledger, so-called general ledger, which wasn’t a true
12 general ledger, as I was going through that, then I would
13 say, okay. I need to see this file and that file, because I
14 wanted to see documentation and backup for all transactions,
15 including the management contract, also the residential
16 contracts for the tenants. I wanted to see everything so I
17 could determine the true nature of each property
18 transaction.
19 Q And how far back does it go?
20 A The documents that I saw — a lot of those
21 properties have been managed for about four years, three to
22 four years.
23 Q You said you read the Accusation, the complaint
24 basically, by the Bureau of Real Estate; correct?
25 A Correct.
0110
1 Q And in there, they noted a significant shortage of
2 $20,000-plus in there. Do you remember seeing that?
3 A I don’t recall that, but I did not see any
4 shortages of funds.
5 Q So when you first started looking at her books, you
6 did not see any shortage?
7 A No, I did not.
8 Q Okay. Does Ms. Havener have a labeled trust fund
9 now?
10 A We were in the process. I’ve given her the
11 procedures to set those up, and she’s in the process of
12 doing that. She was actually going to — I don’t believe
13 she finalized it yet. They were going to be finalizing that
14 this month.
15 Q So she has trust funds in a bank account that’s not
16 designated as a trust account as of today?
17 A Right. She was telling me it’s used as a trust
18 fund, but on the bank statement, it doesn’t say “Trust
19 fund.”
20 MS. LEE: No further questions.
21 THE COURT: Redirect?
22 MR. LEAR: Nothing further, Your Honor.
23 THE COURT: Okay. Thank you, Ms. Sheldon. You’re
24 excused.
25 THE COURT: All right. It’s 11:59, so we’re going to
0111
1 take our afternoon recess, or lunch recess, until 1:30.
2 Before we do, is the agency going to be resting its case?
3 MS. LEE: No. We’re going to call the auditor.
4 THE COURT: Is that the person in the back?
5 MS. LEE: Yes, it is.
6 THE COURT: Hello. What’s your name?
7 MS. BREWSTER: Diana Brewster.
8 THE COURT: Okay. You can be back here at 1:30?
9 MS. BREWSTER: Yes.
10 MR. LEAR: Your Honor, we have Dr. LaRue at 1:30 out of
11 order.
12 MS. LEE: That’s fine with me.
13 THE COURT: Tell you what. Just stay put right now.
14 What’s your expectation for time on the stand?
15 MR. LEAR: Total an hour, about.
16 THE COURT: About an hour. So probably — we’re going
17 to do everything we can to get to both witnesses’ testimony
18 this afternoon. So what I want the attorneys to do is —
19 this is a two-day hearing, and obviously we’re not going to
20 complete the hearing in two days; so I’d like both of you to
21 confer about additional — give me two additional days.
22 I’m hoping we can do the rest of the hearing
23 in one day, but I’m going to try to schedule it for two
24 consecutive days so that we don’t have the problem of
25 running over and having to put the case over again. And
0112
1 what I’d like is really your availability dates within the
2 next, say, not next week, because OAH is heavily calendared.
3 I would venture that it would be sometime
4 within the next 30 days to 90 days, so both of you, if you
5 can confer on what dates that both of you are available two
6 consecutive days would be the best. I’ll take it down the
7 hallway and try to get it scheduled before you leave today.
8 I may not be able to. You may end up getting a notice in
9 the mail from the presiding judge, but I want to at least
10 get that information from you before we break today.
11 MR. LEAR: Thank you, Your Honor. One last thing.
12 THE COURT: Yes.
13 MR. LEAR: I have another three character witnesses
14 driving down from the mountain, and so, if we’re not going
15 to put them on, I’d just as soon tell them not to come.
16 Here’s generally the schedule as I was hoping to play it
17 out. Dr. LaRue at 1:30 to 2:30. Then Ms. Brewster, which I
18 think will be relatively quick, since we’ve stipulated to
19 everything having to do with the audit.
20 THE COURT: That would be nice. I don’t know that it’s
21 going to be relatively quick.
22 MR. LEAR: So then I’ve scheduled for them to start
23 testifying around 3:00, and then Ms. Havener is here anyway;
24 so I suppose what I’m really asking is should I call them
25 off, and then if we have time to go with Ms. Havener, and
0113
1 have them come back the next day?
2 THE COURT: Well, this is my view of it. The estimates
3 so far coming from the agency, and this is not to criticize
4 you, Ms. Lee. The estimates for time have not been stuck
5 to. The witnesses have taken far longer than expected.
6 Even though you’ve made some stipulations, my
7 best guess is that this witness, this last witness for the
8 agency, is likely to take longer to testify than you expect.
9 I would hate to see these people come all the way down here
10 on a Friday and sit and turn around and go home again.
11 I think it’s just better for you to call them
12 off and have them come back on another day when we’re
13 certain that we’re going to take their testimony. I don’t
14 know that we’ll get to that.
15 MR. LEAR: That’s fine.
16 THE COURT: I want to give the attorneys time to make
17 objections, and in this case, there’s been a lot of issues
18 with regard to relevancy. I don’t want to cramp Ms. Lee. I
19 want to give her an opportunity to respond to your
20 objections. And both sides — you have a right to do what
21 you’ve been doing. I’m expecting there might be more of
22 that this afternoon because that’s how it’s gone for a day
23 and half.
24 And so, I think that this is the best way to
25 go. Let’s get another date when we know they can testify,
0114
1 and we’ll take it from there.
2 MR. LEAR: Thank you, Your Honor.
3 THE COURT: All right. Thank you. So we’re off the
4 record. We’ll be back at 1:30.
5 (Noon recess)
6 (Whereupon CLAUDETTE A. HENRY, Hearing Reporter,
7 reported the remainder of the proceedings)
8 THE COURT: We are back on the record. And I think
9 there is an agreement that even though the Agency is
10 still putting on its case in chief, Mr. Lear is going to
11 call a witness out of order?
12 MR. LEAR: Yes.
13 MS. LEE: Yes.
14 THE COURT: All right. Go ahead, Mr. Lear.
15 MR. LEAR: Respondent calls Craig Lareau,
16 L-A-R-E-A-U.
17 THE COURT: Come on up. Right over here. Please
18 raise you right hand.
19
20 CRAIG LAREAU,
21 called as a witness, and having been first duly sworn by
22 the Court, was examined and testified as follows:
23 THE WITNESS: I do.
24 THE COURT: Thank you. Have a seat. And please
25 state and spell your full name for the record.
0115
1 THE WITNESS: My name is Dr. Craig Lareau. That is
2 C-R-A-I-G. Last name is L-A-R-E-A-U.
3 THE COURT: Thank you very much. You said you are
4 Dr. Lareau?
5 THE WITNESS: Yes. I am a forensic psychologist.
6 THE COURT: All right. Doctor, let me just give you
7 a few brief pointers before you start testifying.
8 Keep your voice level up. It sounds good, your speaking
9 voice. Just must make sure you are speaking loudly
10 enough so everybody can hear you. This is a contested
11 proceeding.
12 You have got lawyers on both sides of the case,
13 who can make objections as questions are posed. And so,
14 what I want you to do is just make sure that you hear
15 the entire question asked and you got about — I don’t
16 know, three or four seconds go by before you start
17 giving your answer.
18 Don’t be in a hurry to clip off the end of that
19 question with an answer because often the opposing
20 attorney may pose an objection. And if you are right
21 there answering already, two people are talking at once.
22 And the court reporter can’t possibly get down what is
23 happening.
24 So just — just let a few seconds go by. Make
25 sure the question is complete and then give your answer.
0116
1 All right.
2 THE WITNESS: Okay.
3 THE COURT: If you hear objection, just sit back and
4 let the fun occur in front of you as I deal with the
5 objections. And we will get back to you as to your
6 answer. So there is plenty of time, in other words.
7 If you are asked a question and you do not
8 understand what the question is really asking you for,
9 you don’t know the form of the question, what it means,
10 just say so. And the lawyer will ask another question
11 or rephrase it. If you are asked a question and you
12 really don’t know what an answer would be, I don’t want
13 you to try to come up with an answer anyway.
14 That’s called speculation. And it is not
15 evidence. It is nothing I can rely on and decide in the
16 case. All right.
17 THE WITNESS: Sounds good.
18 THE COURT: Okay. Thanks. Go ahead, Mr. Lear.
19 MR. LEAR: Thank you.
20
21 DIRECT EXAMINATION
22 BY MR. LEAR:
23 Q Dr. Lareau, what do you do for a living?
24 A I’m a board certified forensic psychologist as
25 one of my jobs as — which is my private practice. My
0117
1 full-time job is I am a forensic psychologist for the
2 State of California working for the board of parole
3 hearings in their forensic assessment division where
4 they evaluate people sentenced to live with a
5 possibility of parole to determine if they are too
6 dangerous to be released into the community on parole.
7 My third current job is I am an adjunct
8 professor of criminal behavior at USC.
9 Q Could you please summarize your educational
10 background for the Court?
11 A Yes. I graduated from Yale University in
12 New Haven, Connecticut with a bachelor’s degree in
13 psychology in 1990. In 1992 I’m matriculated into a
14 joint JD-PHD program to get a doctorate in clinical
15 psychology as well as my law degree from the Villanova
16 and what is now Drexel JD-PHD program in law and
17 psychology.
18 That required me to be in Philadelphia for six
19 years attending law school and graduate school
20 simultaneously. I completed those studies in 1998, came
21 to California, took the California bar, fortunately
22 passed. And then began my predoctoral internship in
23 clinical psychology at Patton State Hospital where I
24 ended up spending 18 years.
25 And the predoctoral internship is required to
0118
1 finish ones PHD.
2 THE COURT: Is there a CV as part of your
3 presentation, Mr. Lear?
4 MR. LEAR: No.
5 THE COURT: Let me back you up there. You did the
6 predoctoral internship where?
7 THE WITNESS: At Patton State Hospital in —
8 THE COURT: P-A-T-T-O-N?
9 THE WITNESS: Yes. And it is in San Bernardino
10 County.
11 THE COURT: Patton State Hospital. And what time
12 frame was that?
13 THE WITNESS: That was from 1998 to 1999.
14 THE COURT: All right. Go ahead.
15 MR. LEAR: Your Honor, with respect to the CV, what
16 I’d request to do is to supplement the record —
17 supplement his report, which is Exhibit U, especially
18 since we are going to come back for another day.
19 THE COURT: Right. We had originally planned to be
20 here for two days, and we are not going to get the
21 hearing done in two days. It happens all of the time
22 unfortunately.
23 THE WITNESS: Yes.
24 THE COURT: So Mr. Lear is going to have — would
25 you happen to have a CV?
0119
1 THE WITNESS: I didn’t bring one. It is available
2 online. We can download it.
3 THE COURT: You can get one to Mr. Lear, and he can
4 submit it later. If you would like Mr. Lear could
5 probably have you write something attesting that this is
6 the most up-to-date CV.
7 THE WITNESS: That would be —
8 THE COURT: That would be a cover letter perhaps. I
9 don’t mean to give you a report to do, but people who
10 have been around for years have lots of different types
11 of work, a CV is really helpful. It encapsulates it
12 all.
13 THE WITNESS: Of course.
14 THE COURT: Go ahead.
15 THE WITNESS: I hadn’t finish my answer before about
16 my education though.
17 BY MR. LEAR:
18 Q Please finish.
19 A And then upon completing my predoctoral
20 internship and receiving my PHD, I stayed at
21 Patton State Hospital for their postdoctoral fellowship
22 in forensic psychology, which is one of the few in the
23 country that provides advance training in criminal and
24 civil forensic psychology to people who have recently
25 received their doctorate degree.
0120
1 As far as formal doctoral level education, that
2 completes my education piece.
3 THE COURT: Can you tell me really briefly the time
4 frame for —
5 THE WITNESS: That was 1999 to 2000.
6 THE COURT: ’99 to 2000?
7 THE WITNESS: Yes.
8 THE COURT: Okay. Thank you.
9 BY MR. LEAR:
10 Q Could you briefly summarize your professional
11 employment background?
12 A Sure. Following the postdoctoral fellowship in
13 forensic psychology, I remained at Patton State
14 Hospital. In fact, I just left Patton in January of
15 this year. And initially for the first seven years, I
16 was the hospital’s forensic psychology consultant,
17 working on the most litigious and challenging cases due
18 to my advance training in both law and forensic
19 psychology.
20 So I would do evaluations of people for various
21 issues of violence, risk, competence to stand trial,
22 whether they meet the criteria to be a sexually violent
23 predator, things of that nature. Beginning in late
24 2007, I became the director of our postdoctoral
25 fellowship program, which includes both — not forensic
0121
1 psychology, advance clinical psychology, and
2 neuropsychology.
3 And I was the primary instructor in forensic
4 psychology for our postdoctoral fellows between 2007 and
5 January of 2016, including soliciting applications,
6 interviews. And then once we had our class, I would do
7 individual supervision on their reports and do all of
8 the didactic training for the forensic psychology for
9 the postdoctoral fellows, which included extensive work
10 in areas involving such things as expert testimony and
11 other things that are related to criminal forensic
12 psychology and civil forensic psychology.
13 From 2003 until — actually, 2001 until
14 present, I also have had a private practice in criminal
15 civil forensic psychology doing evaluations for
16 attorneys who is — retain me or in some cases being
17 court appointed to do evaluations of people involved in
18 different legal matters.
19 In 2003, I became board certified in forensic
20 psychology through the American Board of Professional
21 Psychology. And that is a designation that only 300
22 people nationally have had since its inception in the
23 late 1970s. And I’m one of four licensed attorneys who
24 are board certified in forensic psychology in the state
25 of California.
0122
1 The work that I do now is — like I said, I
2 left Patton State Hospital in January of this year. And
3 now I work for the board of parole hearings where I go
4 to prisons and do interviews of inmates and then write
5 violence risk assessment reports to be used by the
6 board of parole hearings to determine if someone is too
7 violent to be released into the community.
8 And also, I mentioned that I — this semester
9 actually was my first semester teaching criminal
10 behavior at USC. That’s my work experience.
11 Q Have you ever been published?
12 A Multiple times, yes.
13 Q Regarding what topics?
14 A A number of different topics, insanity and
15 violence risk. I have book chapters on assessment of
16 posttraumatic stress disorder, on involuntary
17 hospitalization and commitment, on personal injury
18 evaluation and evaluations towards emotional stress. I
19 have been published — during my year that I was the
20 president of California Psychology Association, I was
21 published multiple times in our magazine.
22 And I was published a number of times through
23 that, which was a peer review. But a number of times
24 about different psycho-legal issues because I have been
25 the chair of the forensic psychology section of the
0123
1 California Psychology Association since 2006. So my
2 association work has led to a number of different
3 publications as well.
4 I just had something published last month
5 regarding the history of sexual harassment law in
6 United States for the — a journal that I am editor of
7 called “Personal Injury and Law.” So — but I’m missing
8 a bunch of my publications and presentations. They are
9 quite numerous.
10 Q I was going to get to that. So in the CV that
11 you will be presenting to me that I will be presenting
12 to the Court, the associations with which you were
13 involved and the publications that you have published —
14 or the articles that you have published will be
15 included; is that right?
16 A Yes.
17 Q Do you know the name Stacey Havener?
18 A I do.
19 Q How do you know that name?
20 A You referred her to me to do a potential
21 evaluation regarding the upcoming hearing, which we are
22 going through now in front of the Board of Real Estate.
23 Q And with respect to that, did you meet with
24 Stacey Havener?
25 A I did.
0124
1 Q When did you meet with her?
2 A I believe that I met with her November the 4th
3 of this year. May I glance at my report to verify that?
4 Q I’m taking a look at Exhibit U, in the packet
5 in front of you.
6 THE COURT: Okay. We are going to mark as
7 Exhibit U, what was already premarked. It is a forensic
8 psychological evaluation that is authored by the
9 witness, Dr. Lareau. That’s marked as U.
10 (Respondent’s Exhibit U was marked for
11 identification by the Court.)
12 BY MR. LEAR:
13 Q That’s the report to which you were referring?
14 A Yes.
15 Q Prior to meeting with Ms. Havener, did you
16 review any documents?
17 A I reviewed the Accusation that was filed by —
18 by the Board’s counsel. But those — that’s all that I
19 reviewed prior to meeting with her.
20 Q What was the purpose of the intention of
21 meeting with Ms. Havener?
22 A The purpose was to determine from a
23 psychological and mental health standpoint whether she
24 would be a danger to the public if she were to retain an
25 unrestricted broker’s license through the Board of Real
0125
1 Estate.
2 Q And in order to make that determination, what
3 did you do?
4 A I spent seven and a quarter hours with her
5 doing interviews and psychological testing, gaining
6 information about her entire history as there may be
7 things from her background which could ultimately be
8 relevant to a determination of whether she would pose a
9 risk to the public if she retained her license.
10 So it was a comprehensive interview, getting
11 all issues of background, which are noted in the various
12 headings in the report as well as her version of what
13 had occurred regarding the Accusation and gathering
14 other information about her psychological functioning to
15 determine if there were areas that were of a particular
16 concern regarding her ability to manage information,
17 organizational skills, things like that which could put
18 the public at risk in her work with a broker’s license.
19 Q What did you learn about Ms. Havener’s
20 background in the interview process?
21 A Well, that’s several page of my report,
22 Counsel. But I learned that she came from a background
23 where her parents divorced when she was young. But
24 unlike many children of divorce, she actually benefited
25 from it in so far as both of her biological parents
0126
1 joined up soon with various supportive new stepparents.
2 So rather than having two loving parents, she
3 ended up having four loving parents. She described a
4 childhood that was happy, that was fun, where she felt
5 supported. And she had a brother and sister in the home
6 until she was entering junior high school.
7 But they were a little bit older, and they were
8 off in college. And from seventh grade through her
9 completion of high school, she became an only child
10 receiving all of the attention and all of the love in
11 the home. I learned that she had a very artistic side.
12 And she took a leap after high school of moving
13 to Hollywood but moving with her brother, so that was a
14 supported leap so that she could try her way in acting.
15 She took an acting class and did some plays and some
16 commercials and some low-level things. But like most
17 aspiring actors, she didn’t end up making it big.
18 So she found alternative employment in working
19 in a yogurt shop, working with her brother, who was
20 designing guitars, and then doing some other small
21 part-time jobs. Before — ultimately, in her work she
22 ended up working in a real estate office and found her
23 passion.
24 Within a couple of years, she applied for her
25 license as a salesperson and was successful in obtaining
0127
1 that. And then several years later she obtained her
2 broker’s license. And she’s been working in the real
3 estate field ever since. I learned with respect to
4 relationships that she had normal relationships until
5 the — she met the father of her son.
6 And that was a quite dysfunctional relationship
7 due to his level of instability emotionally. She
8 actually tried to escape from him. She moved with her
9 mother to Florida. From California, she moved to
10 Florida to get away from him. But he sold all his
11 possessions, got on a bus, and followed her to Florida
12 and was persistent in trying to reconcile.
13 And much like someone who cares for a wounded
14 puppy, she let him back in her life. Apparently, from
15 what she learned, he messed with her birth control and
16 got her pregnant to try to rope her into a long-term
17 relationship by having a child together. She did have a
18 child. They moved back out to California in about a
19 year.
20 And he wasn’t able to make it work with their
21 initial plans so they moved in together and his bad
22 behavior kind of came back. Ultimately, she was able to
23 get away from him. And in 1997, she moved to — I
24 forgot the name of — Pine Mountain — Pine Mountain
25 Cliff, I think the name of it is. May I refer to my
0128
1 report?
2 Q Yes.
3 A I’m sorry. Pine Mountain Club, California.
4 And it was there that she ended up meeting her husband,
5 her current husband. And they started a relationship
6 after she had been there for a couple months. And until
7 the Accusations involved in this particular case, they
8 had what she thought was a good, strong, loving
9 relationship.
10 After these accusations came forward their
11 relationship was sorely tested because she felt betrayed
12 by her husband’s lack of care and negligence in his
13 property management dealings under her license. They
14 almost had a — almost went to divorce. In fact, during
15 a trip to Europe, she told him she was done.
16 And over time and through grace and
17 forgiveness, they have strengthened their relationship
18 but with eyes wide open that there can be issues that
19 she needs to be hypervigilant to regarding his following
20 through with things that she should be doing. I learned
21 that she is not a big substance abuser.
22 I think she said she took a puff of marijuana
23 once. Her boyfriend had strongly coerced her to take
24 half base at one time when she was 21. And she drinks
25 some wine with dinner, one or two glasses. But alcohol
0129
1 use and substance use is not an issue for her. She
2 hasn’t had a lot of medical problems.
3 She has no mental health issues. She’s,
4 generally speaking, very high-functioning, very normal.
5 That’s what I learned about her background. And we can
6 talk about the psychological conclusions following
7 another question.
8 Q Okay. We will do that in a moment. Did you
9 conduct any objective psychology test on her?
10 A Yes. I administered what is called a Minnesota
11 Multiphasic Personal Inventory two, restructured form.
12 Q What is that?
13 A That is an objective self-report measure of
14 psychopathology and personality function. It comes from
15 one of the most widely used personality measures called
16 MMPI-2. But this restructured form has benefits to it
17 that the earlier test doesn’t.
18 Q And so, Ms. Havener took that test?
19 A Yes, she did.
20 Q And you then had results from that test,
21 correct?
22 A I did.
23 Q And did you evaluate those results?
24 A I did.
25 Q What did those results show?
0130
1 A Those results showed that her approach to the
2 test was open and honest. That she answered the
3 questions relevantly, and they likely were good
4 representation of her actual functioning.
5 When you looked at the actual clinical scales,
6 they were shocking for their lack of any elevations,
7 which means that she was completely normal and average
8 across the board in all domain assessment with this
9 test. She had no somatic, no cognitive, no behavioral,
10 no thought disorder problems.
11 She is, according to this test, absolutely
12 normal and average.
13 Q You said shocking. Why is that shocking?
14 A Usually you see one elevation on one of the 50
15 scales that are on the test. She had none. She has no
16 areas of concern for mental health professional
17 regarding her — her functioning.
18 Q Did you draw any psychological conclusions?
19 A Yes, I did.
20 Q Please explain.
21 A My psychological conclusions involved generally
22 speaking that while she’s extraordinarily normal and she
23 is someone who is kind of a self-starter, she had
24 misplaced trust in her husband, who had a license long
25 before she did. When he lost his license — and I
0131
1 understand you heard quite a bit of how that occurred,
2 she took over the property management business.
3 Although it should have been in practice, it
4 was largely in name because her husband’s familiarity
5 with the business provided some comfort to her that he
6 would be facile in knowing the ins and outs of these
7 particular cases that she wasn’t paying much attention
8 to prior to his loss of his license.
9 When ultimately the data revealed that she did
10 not supervise him closely enough and reverted back to
11 his negligent ways of managing the properties. It was
12 something which felt a huge betrayal for her because he
13 wasn’t doing this on his license anymore. He was now
14 doing this under her license.
15 And she believed that having been through the
16 process in the first place that would have rectified
17 his behavior, and it didn’t. So she had misplaced
18 trust, which caused her to wonder, am I ever going to
19 trust him. But when one looks at her professional life
20 and the areas outside of her relationship with her
21 husband, we see a strong, confident woman who isn’t
22 afraid to do what’s necessary to do things the right
23 way.
24 So her fault was in trusting her husband. And
25 as she noted in our evaluation, she’s learned a very
0132
1 painful and valuable lesson that when you delegate
2 authority, you run the risk of harm if someone that you
3 delegate it to doesn’t follow through.
4 She is adamant that she will never delegate
5 authority for things that are her personal and
6 professional responsibility to anybody because she knows
7 the high standards that she has. The level that she’s
8 kept her professional work, which she has attended to.
9 And it’s only through this lack of attention
10 and misplaced trust that someone that she cared about
11 and cares about that this occurred in the first place.
12 She feels that she — she doesn’t feel gullible. But
13 feels she — that she should not have been as vigilant
14 and ultimately history tells that she needs to be.
15 And she feels guilty about that because it’s
16 then caused all of the calamity that we are dealing
17 with. But she’s also, as a result, due to her
18 professionalism, she never wants to be in a position
19 where her professionalism and her skills and her ethics
20 can ever come into question again.
21 So she is willing to do anything and everything
22 she needed to do to be personally responsible for all
23 aspects of her professional life so that nothing can —
24 like this can ever happen again.
25 Q So you said she was adamant about not
0133
1 delegating duties that she has in the future. Do you
2 believe her?
3 A Absolutely. This has been a painful experience
4 for her. She has learned a very difficult lesson. I
5 think sometimes it gets lost how difficult the process,
6 accusation coming before the board. I think many
7 prosecutors don’t realize the reparative effects of
8 prosecution on somebody.
9 But with someone who has no history of any bad
10 behavior, when their ethics and their values are brought
11 forth in a challenge, it can go one of two ways. It can
12 either be somebody who says, well, I really don’t care
13 that much, so whatever happens, happens. Or it could be
14 somebody who takes this as an affront to who they are,
15 to their identity.
16 And they will do anything and everything to
17 restore their reputation to the level they believe it
18 deserves to be. She is internally driven to excellence.
19 She feels shameful that she didn’t supervise her husband
20 enough to catch his bad behavior. And that was her
21 main source of shame.
22 Now that she knows that she can’t delegate
23 authority again, she’s been burnt. She learned from
24 that. And she will not let that happen again. And I
25 completely believe her. There is too much pride in her
0134
1 which has been harmed by this process to ever believe
2 that she will ever let something outside of her need to
3 control again.
4 Q Let’s talk about Mr. Hudson for a moment. Do
5 you have an understanding that Ms. Havener and
6 Mr. Hudson are still married?
7 A Yes.
8 Q Why should this court believe that Mr. Hudson
9 won’t be involved in the property management side of
10 All Seasons in the future?
11 A I think there is a couple of reasons for that.
12 The first was that his guilt, his fault of the way that
13 he failed his clients was not out of being a strict
14 by-the-book businessman but out of trying to make
15 everybody happy. He was a people pleaser, always has
16 been.
17 Unfortunately, when you are dealing with
18 adverse parties who can’t come to an agreement, trying
19 to get everybody happy was an insurmountable task. So
20 what he would do was try to make people happy. The
21 owners could keep their deposits, and he would return
22 the deposits to the tenants. Well, that money came from
23 somewhere.
24 And that’s what came from a blended trust
25 account and co-mingled funds because he wanted everybody
0135
1 to be happy. He didn’t want people to be upset.
2 Unfortunately, after he lost his license, because he
3 knew the business so well and his wife trusted him to do
4 the right thing now that he should have learned his
5 lesson, he still had that character flaw that he wanted
6 everybody to be happy.
7 But he didn’t tell his wife that he went back
8 to doing some of the things that he had done out of
9 either shame, guilt, or out of a belief that he could
10 make everything better and not have the problem going
11 forward so that it didn’t need her attention. So
12 working under her nose while she was doing other things,
13 trusting him, he engaged in similar behaviors that he
14 had done before.
15 These are the behaviors that make up the issues
16 in the Accusation. But because she had the
17 responsibility under her license to supervise him, her
18 fault in not supervising him closely enough, allowed him
19 to be able to do these things again. I spoke to him.
20 He came to the interview. I only spoke to him for a
21 brief time.
22 He feels horribly shameful that he has done
23 this to his wife. It almost cost him his marriage. He
24 has assertively said he wants nothing to do with
25 property management. She couldn’t beg him to do it if
0136
1 she wanted to. He’s done. This is not something that
2 he is good at. He knows he’s ineffective at it. He
3 doesn’t want to deal with it.
4 But also, Stacey will not allow him near
5 anything that deals with property management or real
6 estate issues under her license. She has learned an
7 excruciating lesson that she does not want her husband’s
8 fingers on anything because, unfortunately, she can no
9 longer trust him in this regard.
10 Because she doesn’t trust him in this regard —
11 she trusts him as a man, as a husband, as a person that
12 she could have emotional connection with. She doesn’t
13 trust him professionally. And there is a reason for
14 that.
15 And so, the thought that she would then —
16 subsequent to potentially salvaging her license go and
17 do the things which put her at risk in the first place
18 is inconsistent with her psychological function of
19 someone who is confident, of someone who is secure in
20 herself, and isn’t emotionally week, isn’t someone who
21 is dependent on him.
22 If she had, for instance, evidence of what we
23 call dependent personality disorder and that he was
24 running the show and whatever he said, you know, if he
25 said jump, she said, how high, that would be problem. I
0137
1 looked for evidence that he was controlling. He’s not
2 controlling of her.
3 He is actually a very good natured fool, if you
4 will, who thought he could make everybody happy. She’s
5 not like that. She’s much more business oriented. If
6 there is a dispute between a tenant and an owner, that’s
7 between them to figure out.
8 She manages the property at least currently
9 until these accusations happened. If there is an issue
10 with sales, she’s extraordinarily professional. She
11 handles that. But as I understand, because property
12 management was never something of interest to her, it
13 was her husband’s business.
14 She is more than happy to wash her hands of it.
15 And hand off her property management clients to others
16 who can competently handle the business. Although she
17 does feel some sense of responsibility to these people
18 who have been with them for a while. She feels almost
19 like it was an abandonment if she let them go.
20 But she understands that this is something
21 which is an area that is not her passion and that’s not
22 something she wants to spend her career doing. So she’s
23 more than okay in letting that move on to someone else.
24 She did tell me, however, that due to her sense of pride
25 in her work that if she were to continue with property
0138
1 management, hypothetically, she has an accountant that
2 she would be using.
3 They would be — she told me that they would be
4 setting up separate accounts for every single property
5 where there would be not possibility of co-mingling
6 funds because all the moneys would be in the silo, and
7 that she would do it exactly the way the Board would
8 want because that’s her sense of pride, professionalism.
9 That she would show them if I did do this, it
10 would be done perfectly because that is her nature. And
11 that is why it is so shameful that she feels that under
12 her supervision, she allowed something to happen because
13 she didn’t attend to it well enough.
14 Q In the time that you spent with her, did you
15 sense that Ms. Havener felt she was at fault for not
16 supervising Mr. Hudson better?
17 A Yes.
18 Q Please describe.
19 A She felt horribly shameful about that for two
20 reasons. One, she felt that she shouldn’t have to
21 because as her husband who loved her and was — cared
22 about her, he should have taken the initiative to make
23 sure that he didn’t do the same things that he had
24 already done in the past.
25 So she felt that she was too trusting and she
0139
1 misplaced trust in him but also because it harmed
2 clients. Clients were dissatisfied with services.
3 People didn’t get their money. And had she watched him
4 more closely, that wouldn’t have happened.
5 There is evidence that when she did pay more
6 attention to the property management issues, things were
7 handled better. It is only when she was hands-off, let
8 her husband take too much responsibility that not only
9 did he do what she permitted him to do but went over and
10 above doing other things that he didn’t tell her about.
11 He took the initiative to do things that
12 required a license without her knowledge. And because
13 of that she felt betrayed. So she felt both shameful
14 for letting it happen and betrayed because the person
15 she loves most in the world is the person who has done
16 this to her.
17 Q Do you believe that Ms. Havener presents a risk
18 to the people in the state of California by continuing
19 to hold a BRE license as a broker?
20 A Absolutely not, no.
21 Q Why not?
22 A Because her sense of ethics, pride, and
23 professionalism while knowing of the harm that has
24 happened because of her lack of attention to something
25 that she had hoped never would have been a problem, she
0140
1 will hold very close control over everything and
2 anything that has to do with her practice.
3 We know from experience that when she’s in
4 control, she does exceptional work. There is no reason
5 to think that she will not continue to do exceptional
6 work representing clients using her BRE broker’s license
7 going forward because she wouldn’t let anybody else come
8 within ambit of her license in ways that would — in
9 ways that could harm the public.
10 She has learned a very valuable lesson. The
11 colloquial statement, fool me once shame on you. Fool
12 me twice shame on me. She won’t be fooled.
13 MR. LEAR: I have nothing further.
14 THE COURT: Cross-examination?
15
16 CROSS-EXAMINATION
17 BY MS. LEE:
18 Q You said you briefly talked to Milton Hudson.
19 Can you give an estimate about how much time?
20 A He was in my office with his wife next to him
21 for about half hour to 40 minutes.
22 Q And would you — I know you didn’t put that in
23 report; is that correct?
24 A Correct.
25 Q And would you say that that was an accurate
0141
1 amount of time for you to assess his character and
2 personality?
3 A No.
4 Q Did you — were you able to accurately access
5 his personality and character?
6 A No, I based by conclusions about his character
7 on the representations of his wife and the information
8 about his persistent failings in his real estate
9 activities.
10 Q And so, you have no opinion as to what their
11 dynamic as a couple is?
12 A I do have some opinion as to their dynamic as a
13 couple, yes.
14 Q Are you able to accurately assess that without
15 assessing his personality?
16 A Their dynamic as a couple, yes. His overall
17 psychological functioning, no.
18 Q You said — I believe you wrote in here and I
19 believe you said that — wrote, you reviewed the
20 Accusation of the Bureau Real Estate in order to do this
21 report; correct?
22 A Yes.
23 Q And is it your belief that the entirety of this
24 Accusation, all the causes of action — the alleged
25 causes of action are solely based on basically Milton’s
0142
1 wrongdoings?
2 A The way that its worded because it deals with
3 failure to supervise, those are also her wrongdoings
4 because she didn’t supervise. But I believe that the
5 predicate behaviors that were related to the acts, which
6 she should have supervised better were her husband’s
7 doing.
8 Q Were there anything that you believe that did
9 not come or stem from her lack or failure to supervise?
10 A I didn’t understand that question.
11 THE COURT: Can you ask that question again. I
12 didn’t understand it either.
13 BY MS. LEE:
14 Q Is there anything that she did wrong that did
15 not stem from her lack of supervision or failure to
16 supervise?
17 THE COURT: I think what you are asking is, is there
18 anything additional to failure to supervise that the
19 witness believes was a basis for Respondent’s
20 misconduct?
21 MS. LEE: Correct.
22 THE COURT: The problem with that question is there
23 is a double negative.
24 THE WITNESS: Yes. So I will — first of all, I
25 will restate the question, make sure that — so you will
0143
1 know what I’m answering. You are asking me if it’s my
2 understanding, whether or not there was anything
3 included in the Accusation beyond her failure to
4 supervise for which she was ultimately engaging in
5 inappropriate behavior?
6 MS. LEE: Correct.
7 THE WITNESS: My understanding, based on the
8 information that I gathered, was that there wasn’t; that
9 everything that was related to the bad acts that are
10 stated in the Accusation were related to her husband’s
11 negligence in the work and her negligence was failure to
12 supervising him closely enough.
13 BY MS. LEE:
14 Q And I don’t know if you have the Accusation in
15 front of you.
16 A I’m sure you would make sure it is in front of
17 me.
18 THE COURT: I’m going to — you want to assist the
19 witness? You want to show him one or you are making a
20 rhetorical point?
21 MS. LEE: No, I’m not making a rhetorical point.
22 THE COURT: You want him to see a copy of the
23 Accusation?
24 MS. LEE: No, I can paraphrase.
25 THE COURT: I have a — if you would like, I have a
0144
1 copy of the Accusation that I use, that I photocopied —
2 if you would like, I can put the Accusation in front of
3 him so he can follow.
4 MS. LEE: Sure. That will be great. Thank you.
5 THE WITNESS: Please know that — also that I
6 summarized all the different counts of the Accusation in
7 my report. So I am — I think I will be able to follow
8 along well.
9 THE COURT: I think it is a real timesaver if we are
10 all literally on the same page. I have learned that
11 from experience the hard way.
12 THE WITNESS: Thank you, your Honor.
13 THE COURT: Okay. Counsel, go ahead.
14 BY MS. LEE:
15 Q I’m referring to page 4. This is the audit
16 violation specifically. Page 4, paragraph 8,
17 subsection B.
18 A And this is within the first cause of action.
19 Q B as in boy. Simply, basically, that she
20 didn’t have a trust account. Do you believe that is
21 Milton’s responsibility, or was that her responsibility
22 to open a trust account?
23 A I think that it was Milton’s failure to open a
24 trust account because I believe — from my
25 understanding, this account was created prior to his
0145
1 loss of license and she believed that it was his
2 responsibility to set this up and more of an
3 administerial act that he didn’t do.
4 Q If — strike that.
5 Do you understand that in order to open a trust
6 account for yourself, you have to open it yourself, you
7 can’t designate someone else to do that for you?
8 A Yes. Generally, yes. But a business owner, an
9 owner of a business is able to encumber the business
10 with legal documents. And as I understood it, this was
11 an account that was opened prior to his loss of license.
12 And thus, the account was one that he had been
13 responsible for when he was able to encumber the
14 business.
15 Q When she took over the property management
16 business, did it then become her responsibility to open
17 a trust account?
18 A I wasn’t aware whether it was her
19 responsibility to open a separate account other than the
20 one that was already opened for trust purposes.
21 Q And are you aware of whether or not she had
22 rectified or corrected all the alleged violations in the
23 Accusation?
24 A I’m aware from her representation that she said
25 she’s made all parties whole. She didn’t specifically
0146
1 state that. I didn’t specifically ask whether she has
2 rectified all DBA issues, whether she has rectified
3 other things which appeared in the Accusation, for
4 instance, making sure that all of the businesses, the
5 actual locations are registered with the Board of Real
6 Estate, I didn’t ask her those things.
7 While those are simple things that she can do,
8 I don’t know if she’s done these.
9 Q And if the facts were that she indeed did not
10 make that change, would your opinion about her change?
11 A It would not change my opinion about her. It
12 would cause me to ask a follow-up question of who has
13 not yet been made whole and what are your thoughts about
14 that. But I was under the impression that the parties
15 who had issues pending and were dissatisfied with her
16 husband’s handling of the business that they had been
17 made whole.
18 Q You stated that she allowed her husband to work
19 under her license, correct?
20 A Yes.
21 Q Up to when did she allow her husband to use her
22 license?
23 A I believe it was up until the second audit when
24 the bases for these accusations became known. That was
25 my understanding.
0147
1 Q Can you give us an approximate date of when
2 that was?
3 A You have the date for when the audit was. I
4 didn’t look it up. I believe it was — because it was
5 related to the — up through — in your Accusation, I
6 believe it says it is through — yes. The audit was
7 completed in June of 2015.
8 It was my understanding that as of that date,
9 her husband was barred by her from — from dealing with
10 these things anymore because of the — his negligence in
11 the handling of these business issues.
12 Q I just want to make sure that we are clear on
13 the dates. The June 2015 is when the Bureau completed
14 the audit examination?
15 A And — I’m sorry. I understand that to be
16 that’s when these problems became known. My
17 understanding is once these issues became known to them
18 that there were these problems, that is when his
19 relationship ended with doing the work.
20 If there was a difference between the
21 June ’15 — or June 11th, 2015 date and when they became
22 aware of these things, I don’t know about that. But my
23 understanding is that once they became aware, Milton was
24 barred from doing things.
25 Q So basically, the date would be just whenever
0148
1 they became aware of these violations?
2 A Yes.
3 Q So it may not or may not be this June 2015
4 date? It is that date you just described?
5 A Correct.
6 Q Is it your testimony that Stacey did not
7 know — strike that.
8 Did Stacey know about what was going on with
9 the property management business prior to her finding
10 out by the auditor or investigator?
11 THE COURT: I’m going to sustain my own objection.
12 I don’t understand the question.
13 BY MS. LEE:
14 Q Did Stacey know about the property management
15 issues as they were occurring?
16 A I’m not aware that she was knowledgeable of the
17 significant property management issues, which form the
18 bases for these accusations. She may have known about
19 some minor things. And I know that she attended to some
20 things personally when they needed her attention. But I
21 think that was the limit of the things she was aware of
22 or those things that she then jumped in and became more
23 assertive in particular issues.
24 But I don’t think that she was aware of the
25 things which were foundational to this Accusation.
0149
1 Q And do you believe she was aware of bounced
2 checks?
3 A No. No, I think that was something handled by
4 her husband.
5 Q And if she were — if she were aware of the
6 bounced checks as they were occurring, would that make a
7 difference in your opinion?
8 A That would suggest to me that she knew
9 something that her husband wasn’t paying as much
10 attention as she should have, so it would affect me to
11 some degree. It wouldn’t change my opinion because
12 perhaps — well, I don’t want to say that. Let me
13 strike my own — my answer.
14 Perhaps it would indicate that she needed to
15 supervise him more closely because he started to do
16 something down that road that previously had occurred,
17 but not to the extent that they were the problems
18 before. So if she were to have known about something
19 and she got more assertively involved in that particular
20 area, that would be consistent with what I understand
21 has happened.
22 Whereas these things which form the Accusation,
23 which really were on a much larger scale, she remained
24 in the dark about.
25 Q Your final conclusion — or in your conclusion
0150
1 you stated essentially BRE does not need to protect the
2 public from Ms. Havener by disciplining her real estate
3 license; is that correct?
4 A That’s correct.
5 Q Was there at any time that you felt like the
6 BRE did need to protect the public and discipline her
7 license?
8 A Discipline her license, not necessarily because
9 the discipline of the license would be backwards
10 looking. And as I understand the role of the BRE, it’s
11 under the police powers of the state to protect people
12 in the future, it is not to punish for bad prior
13 behavior but to use the information from the bad prior
14 behavior to inform a decision as to whether or not the
15 public needs to be protected in the future.
16 I don’t think that the public ever was in
17 danger from her after she knew what had happened and
18 after she became fully aware because at that point in
19 time her ethics, her professionalism barred her husband
20 from participating. You are out she would say. And I
21 now — I’m going to take care of this. And I’m going to
22 do it the right way.
23 So I don’t think that at any time prospectively
24 once she became aware of all of the things that happened
25 that the public would need to be protected from Stacey.
0151
1 The public absolutely needed to be protected from her
2 husband. And when she was allowing him to do things
3 that continued to be negligent, at that moment the
4 public was suffering.
5 So really the difference for me in answering
6 your question is once she had full knowledge, the public
7 was safe. Until she had full knowledge, which was a
8 betrayal of her trust, the public wasn’t safe. As of
9 now, the public is safe.
10 Q Would it change your opinion that she had full
11 knowledge in March of 2015 and that she continued to
12 allow Milton to work under her license until 2016?
13 A Can you —
14 THE COURT: Counsel, could you clarify full
15 knowledge?
16 THE WITNESS: I don’t know what full knowledge
17 means.
18 BY MS. LEE:
19 Q I believe you stated that once you had full
20 knowledge — that’s your terminology.
21 A The scope of these accusations.
22 Q Yes. So once you had full knowledge, your
23 words, of the scope of the Accusation —
24 A As of April 25th, 2016; correct?
25 THE COURT: I heard — I heard March 2015. Here is
0152
1 what I want you to do. First, full knowledge, I just —
2 if you want to ask him about full knowledge, you got to
3 say what full knowledge means. ‘Cause I don’t know what
4 that means. Full knowledge of the real estate
5 requirements, full knowledge of the results of the
6 audit, full knowledge of what was written in an
7 accusation?
8 So I want you to be specific with regards to
9 that and ask your question again. Thank you.
10 BY MS. LEE:
11 Q You stated before I believe that she — once
12 she became — she did become aware of the violations had
13 been — once the BRE audited her books, correct?
14 A Well, the results of the audit — once the
15 results of the audit became known to her, she had more
16 knowledge of what had happened. I don’t necessarily
17 think she had full knowledge until after receiving the
18 Accusation dated April 25th, 2016 because that’s when
19 things were laid out in excruciating, painful detail
20 for her.
21 That I would say is my understanding is full
22 knowledge. She may have had some substantial knowledge
23 prior to that based on different information that could
24 have come to her through the audit. But I don’t know
25 those dates.
0153
1 Q I don’t understand your answer as far as
2 prospectively your opinion is that there is no need to
3 discipline Ms. Havener’s license. Now looking backwards
4 as to what has happened, at any time was it necessary
5 for the BRE to step in, in the past to discipline her
6 license to protect the public?
7 MR. LEAR: Objection. Relevance. Incomplete
8 hypothetical.
9 THE COURT: What’s the relevance? I think — go
10 ahead.
11 MS. LEE: I want to understand whether he believed
12 that even when Milton Hudson was working under her
13 license was that a time when her license should have
14 been disciplined.
15 THE COURT: Well, we got an Accusation that got
16 filed after that, correct? See, I’m getting lost. I
17 don’t understand what your question is getting at.
18 Because my understanding of the witness’ testimony so
19 far is that he interviewed the Respondent. He learned
20 about her history, background, and etcetera.
21 And according to her, it is obviously relying
22 on many things that she told him. That according to
23 her, she had full knowledge of the scope of the alleged
24 misconduct involving her and by association her husband
25 in April of 2016. He just testified to that. So that’s
0154
1 why I don’t understand your follow-up question right
2 now.
3 Are you asking for a hypothetical as to whether
4 she had full knowledge in the same way of everything
5 listed in the Accusation at some earlier time?
6 MS. LEE: My question is, whether the witness
7 believe at any time knowing what he knows based on his
8 interview with Ms. Havener, based on what he’s seen, was
9 there any time that the BRE need to discipline her
10 license to protect the public at any time based on
11 everything that he knows?
12 THE COURT: Is there any objection to that question?
13 I don’t recall any objection to this.
14 MR. LEAR: Relevance.
15 THE COURT: The relevance of the witness’ opinion of
16 whether the Bureau needed to discipline her earlier?
17 MS. LEE: He offered his opinion that the Bureau
18 doesn’t need to discipline her license. So I want to
19 know whether he ever believe that the Bureau need to
20 discipline her. He’s offering an opinion.
21 THE COURT: Do you understand the question?
22 THE WITNESS: I think I can work with it.
23 THE COURT: I will overrule. You may answer.
24 THE WITNESS: Prior to her knowing what was — she
25 was accused of doing, prior to her having knowledge of
0155
1 what her husband was doing, if you theoretically popped
2 in one day in mid-2014 and said if there is any bad
3 activity going on, we are going to discipline your
4 license, then I think the Board would have well within
5 their rights to do that because at that moment under her
6 supervision, her husband was doing some things which
7 caused problems.
8 So with that very fanciful hypothetical, I
9 think that the Board would have been within its rights
10 to limit her license at that time that she didn’t know
11 what was going on. Subsequent, once she knew exactly
12 what was going on and what had gone on, I think that the
13 Board would not have to do anything to protect the
14 public because it’s her sense of ethics, pride, and
15 professionalism that is going to keep the public safe
16 beyond reproach.
17 MS. LEE: No further questions.
18 THE COURT: Redirect?
19 MR. LEAR: Nothing further.
20 THE COURT: Okay. Doctor, thank you very much.
21 THE WITNESS: This is yours.
22 THE COURT: That’s mine. I can’t get away from
23 that. I’m pretty sure you don’t want to take it with
24 you.
25 THE WITNESS: Well, it is light reading.
0156
1 THE COURT: No, it isn’t. But thank you. You can
2 follow up with Mr. Lear later about providing him your
3 updated CV.
4 THE WITNESS: Of course.
5 MR. LEAR: Your Honor, I do have one question.
6 THE COURT: Go ahead.
7
8 REDIRECT EXAMINATION
9 BY MR. LEAR:
10 Q Dr. Lareau, you mentioned the MMPI. Could you
11 could take a look at Exhibit V like Victor?
12 A Yes.
13 Q Is that the MMPI you conducted on Ms. Havener?
14 A Those are the results of the MMPI that I
15 conducted. The actual thing that I conducted it is the
16 questions and then there is the score sheet. But this
17 happens when you put the score sheet into the scoring
18 program and it produces not only the results which show
19 up on the very back page but also an interpretative
20 report.
21 Yes, that is an accurate representation of the
22 MMPI.
23 MR. LEAR: Before Dr. Lareau leaves, your Honor, I’d
24 like to have entered into evidence Exhibits V —
25 THE COURT: Let me first, while we are on V, I will
0157
1 mark that. We will do them one at a time. My
2 understanding too is these are results because the MMPI
3 is something that is protected by — the MMPI test
4 itself is protected, isn’t it?
5 (Respondent’s Exhibit V was marked for
6 identification by the Court.)
7 THE WITNESS: The MMPI test itself — the test
8 questions are protected.
9 THE COURT: It doesn’t get reproduced for cases such
10 as this because that’s like letting the cat out of the
11 bag?
12 THE WITNESS: Absolutely. Matter of fact, if I was
13 perhaps a little bit more diligent, I would ask that
14 everyone’s copies of it be destroyed after the case
15 because in the interpretative information that is in
16 there is proprietary. But in — normal in forensic
17 cases full discovery — if this is something that I
18 relied upon, it is turned over to the other side.
19 THE COURT: All right. Mr. Lear can bring that up
20 before the end of the hearing if he wants to seal that
21 portion.
22 THE WITNESS: Thank you.
23 THE COURT: Thank you very much. You want to have V
24 moved and received?
25 MR. LEAR: Yes.
0158
1 THE COURT: Is there any objection to V, the MMPI
2 results being received?
3 MS. LEE: No objection. I just want to note that it
4 appears to be two only pages. I had received in
5 discovery a multipage document. That’s all.
6 THE COURT: My Exhibit V is many pages longer.
7 MS. LEE: I have two pages.
8 THE COURT: It looks like it’s got —
9 THE WITNESS: I have got 11 pages.
10 MR. LEAR: I just handed Counsel a full copy.
11 THE COURT: Thank you, Mr. Lear. Does that satisfy,
12 Ms. Lee?
13 MS. LEE: Yes.
14 THE COURT: So there being no objection, V is
15 received.
16 (Respondent’s Exhibit V was received in
17 evidence by the Court.)
18 MR. LEAR: Respondent offers Exhibit U.
19 THE COURT: U is Dr. Lareau’s report. Is there any
20 objection to U being received?
21 MS. LEE: No objection.
22 THE COURT: All right. There being no objection, U
23 is received.
24 (Respondent’s Exhibit U was received in
25 evidence by the Court.)
0159
1 MR. LEAR: Nothing further.
2 THE COURT: Okay. Thank you very much. Doctor, you
3 are free to go.
4 THE WITNESS: LA traffic.
5 THE COURT: There is a side door. That’s the quick
6 exit to LA traffic, side door. Good luck getting home.
7 THE WITNESS: Thank you, very much.
8 THE COURT: We were talking earlier about the
9 traffic hopefully being a little lighter later because
10 people might already be starting vacation really early.
11 THE WITNESS: Or they are heading out of town, which
12 would make it even worse.
13 THE COURT: See what happens when we have a
14 psychological evaluator. He has to look at all sides of
15 it. Thank you very much.
16 THE WITNESS: Thank you very much, your Honor.
17 THE COURT: We are going to take our afternoon
18 recess. We will do fifteen minutes. I will be back
19 here a little bit before 3:00. And you can have your
20 witness just have a seat in the witness stand. That
21 gives us about two hours to deal with this witness. Do
22 you think that you can conform to that?
23 MS. LEE: Yes.
24 THE COURT: Mr. Lear is going to be able to do
25 cross. So I would imagine your direct is going to be
0160
1 perhaps what, 30 to 45 minutes?
2 MS. LEE: Yes.
3 THE COURT: We should be able to finish by 5:00. I
4 am really glad that we did not have people driving down
5 here from far away.
6 MR. LEAR: I agree.
7 THE COURT: We will do that another day. We are off
8 the record.
9 (Recess)
10 THE COURT: And we just took Dr. Lareau out of
11 order. The Agency is still putting on its case in
12 chief. Go ahead, Ms. Lee. You are calling a witness.
13 MS. LEE: I’m calling Diana Brewster to the stand.
14 THE COURT: Please raise your right hand.
15
16 DIANA BREWSTER,
17 called as a witness, and having been first duly sworn by
18 the Court, was examined and testified as follows:
19 THE WITNESS: Yes.
20 THE COURT: Thank you. Please state and spell your
21 full name for the record.
22 THE WITNESS: Diana Brewster, D-I-A-N-A; Brewster,
23 B-R-E-W-S-T-E-R.
24 THE COURT: Okay. Ms. Brewster, were you here
25 yesterday as well as today?
0161
1 THE WITNESS: Yes, I was.
2 THE COURT: So you probably heard what I tell each
3 witness multiple times by now?
4 THE WITNESS: Yes.
5 THE COURT: Did you understand it?
6 THE WITNESS: Yes.
7 THE COURT: Any questions?
8 THE WITNESS: No.
9 THE COURT: Okay. So there is no pressure on you,
10 but can you please recite that, everything I told you?
11 THE WITNESS: Be patient. Be patient.
12 THE COURT: Go ahead, Mr. — no, I’m sorry. We are
13 back to Ms. Lee. It is your witness.
14
15 DIRECT EXAMINATION
16 BY MS. LEE:
17 Q Do you work for Bureau of Real Estate?
18 A Yes, I do.
19 Q What capacity?
20 A I’m a general auditor III.
21 Q How long have you been an auditor for the
22 Bureau of Real Estate?
23 A 16 years.
24 Q And can you go over your educational
25 background?
0162
1 A I have a bachelor’s of science with an emphasis
2 in accounting.
3 Q Were you — can you say some of the duties and
4 functions that you have as an auditor for the Bureau of
5 Real Estate?
6 A My job duties is audit real estate brokers to
7 make sure they are in compliance with the rules and
8 regulations regarding trust fund handling.
9 Q Did you complete the audit of All Seasons —
10 strike that.
11 Did you complete and audit of
12 Stacey Ann Havener with a fictitious business name
13 All Seasons Realty?
14 A Yes.
15 Q So you are the one that completed Exhibit 5,
16 the audit report, transmittal audit report?
17 A Yes.
18 Q In the Accusation there were a few check
19 numbers specifically regarding certain bounced checks.
20 I want to make sure that I allege that correctly. In
21 the Accusation, it is paragraph 14, which is on page 6.
22 On there it lists in paragraph —
23 THE COURT: Do you have a copy yourself of the
24 Accusation?
25 THE WITNESS: It should be in here, correct?
0163
1 THE COURT: No. I will let you use mine.
2 THE WITNESS: Okay. You said page 6, correct?
3 BY MS. LEE:
4 Q Very bottom, there is a list of five check
5 numbers in paragraph 14.
6 A Correct.
7 Q It alleges it was — these checks were drawn
8 from bank account one, which is not a trust account.
9 Can you verify whether that’s true?
10 A I just need to review my audit file to look at
11 the bank statements to make sure they got cleared out of
12 bank one. I will be looking at my audit file.
13 Q These are your working papers that you based
14 the audit report on?
15 A Correct.
16 THE COURT: When you say you are looking at it,
17 which exhibit is it?
18 THE WITNESS: It is a report — I don’t know if it
19 is an exhibit.
20 THE COURT: Well, they are numbered in a book. And
21 that’s what I want you to do if you can. I think they
22 are — let’s see, number five through 11. These are
23 all — well, five is the audit report.
24 THE WITNESS: Correct.
25 THE COURT: And then six through 11 are working
0164
1 papers, worksheet information. What I want you to do
2 is, you might have heard me ask Ms. Lee that when we got
3 to these specifics, I want her to understand — I want
4 you to understand — now, I’m not accountant. And so,
5 if you say, oh, yes, I know and that is correct, I don’t
6 know what you are working from.
7 I’m not going to be able to go back and look
8 through dozens of papers as a non-accountant and know
9 where that information came from. So I would like you,
10 as she questions you and Mr. Lear questions you, to
11 always let us know what you are referring to when you go
12 back and do your checking. All right. Thank you.
13 THE WITNESS: I don’t think it is an exhibit. I
14 think it is — my audit report — my two audit files, I
15 don’t know if they were — are they an exhibit or not?
16 MS. LEE: Only parts of it are.
17 THE COURT: Okay. Ms. Lee, you can direct the
18 witness if — my understanding your question has to do
19 with this allegation in paragraph 14 about the following
20 checks, which were not from a trust account, not drawn
21 from a trust account; correct?
22 MS. LEE: Yes.
23 THE COURT: So ask your question. But I’d like the
24 witness to be specific.
25 ///
0165
1 BY MS. LEE:
2 Q Were you able to determine whether — I believe
3 we talked and I asked you whether you were able to
4 determine whether funds were drawn from bank account
5 one, which is not a trust account. Do you remember
6 that?
7 A Yes, I do.
8 Q Do you recall — and did you look at your
9 working papers to see whether that was true or not?
10 A Yes. I was able to determine that check number
11 1373, check number 1402, check number 1442, and check
12 number 1478 were — cleared bank one — bank one,
13 which is the bank account that trust funds were
14 deposited into.
15 Q So these checks were trust funds?
16 A These checks were checks —
17 THE COURT: I don’t understand the question. These
18 checks were trust funds? I don’t know what that means.
19 Check are negotiable instruments, right?
20 THE WITNESS: Correct.
21 THE COURT: Is that correct?
22 THE WITNESS: Correct.
23 THE COURT: So how are checks funds — how are — if
24 checks are trust funds, I don’t know what you mean.
25 Because trust fund is used as a designation of where
0166
1 moneys held in trust are kept. That’s my understanding
2 of a trust fund. When you say trust fund, do you mean
3 trust moneys? I’m not following you. I think we are —
4 maybe we need a little clarification.
5 MS. LEE: I will strike that, your Honor.
6 THE COURT: Right. This is the problem. I’m not an
7 accountant. But I have heard these terms interchanged
8 many times before. You got to be really specific.
9 BY MS. LEE:
10 Q Should these checks be drawn from a trust
11 account?
12 A In reviewing these checks, these checks were
13 given to the owners. They came out of a bank account
14 that was not set up as a trust account.
15 Q Let’s — let’s go back. Did you meet with
16 Ms. Stacey Havener on or about March 2nd, 2016?
17 A Yes.
18 Q Did you go with anyone on that meeting?
19 A Yeah, I was — Winston Horn, who is our special
20 investigation who is part of the enforcement section of
21 Bureau of Real Estate came along with me.
22 Q What did you do when you met — when you and
23 Winston met with Ms. Havener?
24 A Our — on the first day we met, I did an
25 entrance interview. Basically, we have working papers
0167
1 that we ask lots of questions like who is the owner of
2 the company, kind of get an idea of, like, what
3 activities and services they provide. And then
4 Winston Horn also did an interview with Stacey Havener.
5 Q Were you present for that interview?
6 A Yes.
7 Q Can you turn to Exhibit 12. It is a two-page
8 document dated March 6, 2015 from Winston Horn to the
9 file.
10 A Yes.
11 THE COURT: That’s marked as 12.
12 (Complainant’s Exhibit 12 was marked for
13 identification by the Court.)
14 BY MS. LEE:
15 Q It appears to be a memo of interview of
16 Stacey Havener March 2nd, 2015 at 11:00 a.m. by
17 Winston Horn. Were you present at this interview?
18 A Yes, I was.
19 Q And, in fact, it states in a narrative — the
20 first of the narrative interview states that BRE
21 auditor, Brewster, with the R-E-B Stacey Havener. Is
22 that you auditor Brewster?
23 A Correct.
24 Q And I know this is a while ago, so I want you
25 to testify from your memory. If you don’t remember. I
0168
1 just want you to say you don’t remember. Regarding —
2 you remember the interview occurred, correct, that’s the
3 first paragraph?
4 A Yes.
5 Q Do you recall once — then talking to
6 Ms. Havener regarding the complaint submitted
7 by Ms. DeMascio?
8 A I don’t recall the specific names, but I know
9 he went over several complaint issues with Ms. Havener.
10 Q Do you remember him informing — do you
11 remember that Ms. Havener informed him that she was not
12 aware — she was aware — strike that.
13 Do you remember that Stacey Havener stated that
14 she was aware that her husband, Hudson, had surrendered
15 his license and he was not allowed to conduct real
16 estate activities?
17 A I recall a conversation, yes.
18 Q Do you recall that she stated that?
19 A Excuse me?
20 Q Do you recall that she stated that, that she
21 knew that he didn’t have a license and did not conduct
22 real estate activities?
23 A I recall, not specifically but I recall the
24 conversation explaining why we were there and going over
25 the complaint issues.
0169
1 Q Do you recall the last line in page 1 that
2 Ms. Havener stated that she would consult with Hudson
3 and to take all the supervision of the property
4 management business?
5 A I don’t recall her saying that. But according
6 to the memo, she stated that.
7 THE COURT: Here is the thing, the counsel for the
8 agency I’ve heard her already say if you don’t know, say
9 you don’t know. I don’t want you to have to assume
10 based on something that’s been written by someone else.
11 THE WITNESS: Okay.
12 THE COURT: If you don’t remember, you don’t
13 remember. Go ahead.
14 BY MS. LEE:
15 Q You don’t remember one way or the other,
16 basically?
17 A I do not recall.
18 Q Okay. So going along with what happened that
19 first day when you went out with Winston Horn. On your
20 part of things when you interviewed her, how did that
21 go?
22 A Initially, when I did my interview, Havener
23 stated that she did not have a trust account, that she
24 only primarily did locates. And the way she explained
25 locates was that basically an owner comes to her and
0170
1 says I have a property, I need to get it rented, can you
2 help me get a renter in there.
3 And they pay a certain amount of fee to get
4 someone in there. And so, she stated that that was what
5 she did. And — but during the course — after
6 Winston’s interview, she — you know, came — during the
7 course of the interview and stuff, there was — she
8 mentioned that there was a bank account. And that they
9 were providing property management activities.
10 Q So initially she didn’t mention she was doing
11 property management, she was only doing locates?
12 A She was only doing locates, yeah.
13 Q And then later on that day she said she did do
14 property management?
15 A Correct.
16 Q And you said she eventually said she had a bank
17 account. Did she say initially she didn’t have a bank
18 account?
19 A She initially said she did not maintain a trust
20 account.
21 Q And later on that day, did she say she
22 maintained — she did have a trust account?
23 A Well, she — she said she had a bank account
24 which should have been set up as a trust account where
25 trust funds were deposited but — so it’s a bank
0171
1 account. But it is not designated as a trust account.
2 Q And is that a violation of real estate law?
3 A Yes. When a broker is receiving trust
4 accounts, there is a couple of things they can do with
5 trust funds. And trust funds is basically moneys that
6 belong to others. They can forward them to the owner or
7 they can forward them to a title company or if they are
8 going to put them into a bank account, that bank account
9 has to be a trust account.
10 Q So if you are doing property management, why
11 would you need a trust account?
12 A When you do property management activities,
13 you usually receive a lot of rents and depending on, you
14 know, whether you receive one property or five
15 properties, you are receiving rents. And it is
16 necessary for you to deposit it into a trust account or
17 forward it to the owners.
18 But usually, when property management — when
19 real estate brokers do property management activities,
20 it is just easier to deposit them into a trust account.
21 Q And this trust — I’m sorry. So she did not
22 have a trust account?
23 A Correct.
24 Q She had a bank account?
25 A Yes. That bank account is referred to in my
0172
1 audit report as bank one.
2 Q And I noticed there is also — it is also
3 referred to as Base Camp LLC DBA All Seasons Property
4 Management DBA All Seasons Realty. Where did that come
5 from?
6 A That came from the signatory card.
7 Q What is a signatory card?
8 A A signatory card is something the bank does so
9 that they can get the title of the account. It has the
10 account number, who the signatory is on there. We
11 require — as the Bureau of Real Estate, we require that
12 the account be set up either in the name of the broker
13 or DBA of the broker.
14 And it has to say on there, trust account. We
15 review the signatories to see who is on there because,
16 of course, real estate brokers and/or designated
17 officers has to be on there. And they can a licensed
18 real estate salesperson or broker licensed under the
19 broker on there. Or they can have a person —
20 unlicensed person on there, bonded. That has been to be
21 bonded.
22 Q Can we go over the signatory card?
23 A Sure. I don’t know if it is part of the
24 exhibits. I would have to look at my audit file?
25 THE COURT: Do you want to help her with that,
0173
1 Counsel since you are the one that is asking? It might
2 save some time.
3 MS. LEE: She’s more equipped to look at her file
4 than I am, your Honor.
5 THE COURT: Okay.
6 THE WITNESS: I’m looking at the signatory card.
7 BY MS. LEE:
8 Q And when was the signatory card created?
9 THE COURT: Is that part of the exhibit that are in
10 front of you?
11 THE WITNESS: No. I’m using my audit file.
12 THE COURT: Okay. All right. Go ahead. Not sure
13 why we have all these documents, Exhibits 5 through 11,
14 seven exhibits and we got your accounting expert for
15 the — did the inspection for the Bureau testifying and
16 she is not testifying to the documents that I have. Is
17 there any reason for that?
18 MS. LEE: Something came up during the testimony,
19 and so I want to direct her attention —
20 THE COURT: Well, here is the thing. I’m not an
21 accountant. You might think about that if something is
22 critical or it is important enough to be part of the
23 case, you might show Mr. Lear a copy of what the witness
24 is referring to, I would need a copy myself. I can’t
25 tell you how many times — I can stress I’m a layperson.
0174
1 So I’m giving lots of leeway, of course, to
2 deal with any issues with this witness. But if she’s
3 basically going into other documents that aren’t in
4 front of us or in front of me, then there may be limited
5 take away from me as a non-accountant. Okay. So what
6 do you want to do?
7 See, I keep — the reason I try to reorient the
8 witness — and I talked to her ten minutes ago about
9 this, about referring to what she — what supporting
10 documents she’s looking at because that is how it is
11 done. So it is okay if you want to try to add to that.
12 But you got to do it formally.
13 And defense counsel has to know what it is the
14 witness is relying on as well. Because I don’t know if
15 they have seen it. I know I haven’t seen it. It is
16 not going to be received in evidence unless I’m going to
17 hear somebody talking about it. It is not as effective
18 as if I was in receipt of that document.
19 So you want to go off the record for a few
20 minutes and talk with her?
21 MS. LEE: Sure.
22 THE COURT: Why don’t we do that. I want to give
23 you an opportunity to verify with your witness about
24 what, if any, additional documents she may want to refer
25 to dealing with whatever you think these issues are that
0175
1 came that may not be covered by your documents.
2 ‘Cause I just can’t follow the testimony this
3 way not — and I think you got to in fairness make sure
4 the Respondent knows what your witness is referring to
5 also. We are going to go off the record till 3:30. If
6 you need more time, that’s fine. I will be back at
7 3:30. We are off the record.
8 (Recess)
9 THE COURT: We are back on the record. And we are
10 still doing direct examination with Ms. Brewster. Go
11 ahead, Counsel.
12 BY MS. LEE:
13 Q I believe we were talking about the signatory
14 card, correct?
15 A Correct.
16 Q And can you tell when the signatory — strike
17 that.
18 When the signatory card is issued, is that when
19 the bank account is opened?
20 A Correct.
21 Q And can you —
22 MS. LEE: Can I have marked as Exhibit 63, a
23 four-page document that states Union Bank on the top
24 left and the top right says bank dash depositor
25 agreement.
0176
1 THE COURT: That’s marked as 63.
2 (Complainant’s Exhibit 63 was marked for
3 identification by the Court.)
4 BY MS. LEE:
5 Q Do you have that document in front of you?
6 A Yes, I do.
7 Q Can you describe this document?
8 A It appears to be a signatory card from
9 Union Bank. It is the signature card that was provided
10 to me by Stacey Havener. I need to look at the
11 signature card for the bank account to make — to
12 determine if it was set up as a trust account. And it
13 does not appear to be a trust account.
14 Q And can you tell who open this bank account?
15 A It appears to have been opened by
16 Stacey Havener.
17 Q Why do you say that?
18 A She is the only signatory on the account.
19 Q Is that on page 2?
20 A Yes.
21 Q So there is no other signatory on this bank
22 account?
23 A No.
24 Q Do you know if an ATM card was issued on this
25 bank account?
0177
1 A During the course of the audit, I noted on the
2 bank statements that there were several ATM withdrawals.
3 And when I spoke to Mr. Hudson about it, he said that he
4 had access to the ATM card.
5 Q Let’s back up actually. So we are still on the
6 first meeting with Ms. Havener that you had along with
7 Winston Horn, correct?
8 A Correct.
9 Q And were you able to complete or obtain all
10 documents from that one meeting with Ms. Havener?
11 A The first day of the audit, I initially — like
12 I stated before, she stated she did not have a trust
13 account. And she only did locate during the course —
14 after my interview, she was interviewed by Winston Horn.
15 And Winston Horn asked her several questions regarding
16 Hudson’s activity.
17 We determined that there was a bank account
18 that — that trust funds were deposited into. And that
19 first day initially all Hud — Havener, I’m sorry, could
20 give me was a copy of the signature card and all bank
21 statements for bank one.
22 Q Did you — was she able to give you any
23 documents regarding the properties?
24 A No.
25 Q Did you request that?
0178
1 A Yes, I did. She referred me to Hudson. So
2 I — she referred me to Hudson. And I made arrangements
3 with Hudson to meet up with him so that I could get the
4 records. And I went out there, like, two weeks later.
5 Q So two weeks after this March 2nd, 2016
6 meeting?
7 A I don’t recall the exact date. But it was
8 around two weeks, yes.
9 Q And the second meeting, were you able to meet
10 with Hudson?
11 A Yes, I was.
12 Q Was Havener present?
13 A I think she was in the office off and on. But
14 I primarily dealt with Hudson.
15 Q Hudson have his own office?
16 A It appeared like he had the back office. He
17 had a computer that bought up the check register that
18 was provided, the different — separate records that are
19 part of my audit report, basically all the other
20 documents, other than the signature card and the bank
21 statements was provided by Hudson.
22 Q Like the property information that kind of
23 stuff?
24 A Correct.
25 Q Were you able to ascertain how many — strike
0179
1 that.
2 It is noted in your audit report in Exhibit 4,
3 the audit period from January 1st, 2014 to
4 March 1st, 2015, about a year and two months. Do you
5 know how many bounced checks there was during that audit
6 period?
7 A There was quite a few, probably over 90 bounced
8 checks.
9 Q How did you base that upon?
10 A Reviewing the bank statements and counting the
11 NSF fees from the bank statements provided.
12 THE COURT: You mean non-sufficient funds?
13 THE WITNESS: Yeah. I’m sorry.
14 THE COURT: Fees you said? NSF fees?
15 THE WITNESS: NSF fees, yes.
16 THE COURT: All right. Thank you.
17 BY MS. LEE:
18 Q And were you able to ascertain whether
19 Milton Hudson was ever paid out of this bank account?
20 A During the course of the audit, I reviewed — I
21 had three cut-off dates. And I reviewed the checks,
22 December, January, and February. I did come across a
23 check that was made out to Milton Hudson. And I had
24 print it out. And it’s made out to Milton Hudson for
25 $2,000 and the memo on there says commission.
0180
1 MS. LEE: Can we have marked a two-page document as
2 Exhibit 64. It is described as a two-page document.
3 The first page appears to be a check, front and back.
4 The second page appears to be an e-mail from Milton to
5 Diana Brewster regarding this check.
6 THE COURT: That’s marked as Exhibit 64.
7 (Complainant’s Exhibit 64 was marked for
8 identification by the Court.)
9 BY MS. LEE:
10 Q And is that the check you’re referring to the
11 first page of Exhibit 64?
12 A Yes. Check number 1687.
13 MS. LEE: I’d like to offer Exhibit 63, the
14 four-page document regarding the signature card into
15 evidence.
16 THE COURT: Any objection?
17 MR. LEAR: No objection.
18 THE COURT: There being no objection, 63 is
19 received.
20 (Complainant’s Exhibit 63 was received in
21 evidence by the Court.)
22 MS. LEE: I’d like to offer the first page of 64
23 into evidence and the second page just as administrative
24 hearsay.
25 THE COURT: All right. Any objection?
0181
1 MR. LEAR: Objection. Relevance. Goes beyond the
2 scope of the Accusation.
3 THE COURT: What is the relevance, Ms. Lee?
4 MS. LEE: The relevance is one, Stacey Havener’s
5 signature is on here and that she knew that she was
6 paying Milton Hudson commission. And it was under her
7 employment, therefore, of property management. The memo
8 states commission.
9 THE COURT: All right. I’m going to overrule the
10 objection. And I will receive 64, page 2 as
11 administrative hearsay only.
12 (Complainant’ Exhibit 64 was received in
13 evidence by the Court.)
14 BY MS. LEE:
15 Q Let’s go to your audit working pages, which are
16 Exhibits 6 through 11. Can you go to Exhibit 6 first,
17 which pertains to B-1.
18 A The audit working papers B-1, B-1.1 and B-1.2,
19 which is six, seven, and eight are my working papers
20 that I do a cut off. And I do prepare a bank rec to
21 determine what the adjustment balance is, to determine
22 how much money is in the bank, to determine how much
23 there accountability is, and to see if there is shortage
24 of any kind.
25 THE COURT: What is a bank rec? What do you mean?
0182
1 THE WITNESS: Bank reconciliation. A bank
2 reconciliation is basically where you get your bank
3 balance, you minus your outstanding checks, and you add
4 any outstanding deposits and then you — that determines
5 your adjusted bank balance. That’s how much money you
6 have in the bank.
7 In our working papers, we compare that to the
8 accountability. And accountability is basically the
9 broker’s responsibility to its owners. The broker
10 maintains a number of properties for owners. Sometimes
11 they carry reserves in those accounts or security
12 deposits.
13 And so, if they maintain those in the bank
14 account, that is the broker’s liability to the owner.
15 So that’s how much money they should have in the bank.
16 So we compare it to what they say they should have in
17 the bank compared to what — versus what they actually
18 have in the bank.
19 So six, seven, and eight determined whether
20 there was any — if there were enough money in the
21 accounts to cover what they owed the owners. And I’m
22 going to go ahead and just go straight to B-1 point —
23 I’m sorry. B-1.2, which is Exhibit 8.
24 BY MS. LEE:
25 Q Just to clarify. Exhibit 6 is for the time
0183
1 period ending in December 31st, 2014; correct?
2 A Correct.
3 Q Exhibit 7 is for time period ending on
4 January 31st, 2015; correct?
5 A Correct.
6 Q And so we are going to Exhibit 8, which is a
7 time period ending in February 28, 2015, which is the
8 most recent that you did?
9 A Correct.
10 Q Let’s jump to that. This is Exhibit 8, which
11 is working papers B-1.2.
12 A Exhibit 8. So I’m going to go to the third
13 page, which is 2 of 8. Basically, I got the bank
14 balance of — I got that bank balance off the bank
15 statement provided for bank one. And there was only
16 $1,490.17 in there. There was no outstanding — I
17 determined that there was no outstanding deposit.
18 But there was outstanding checks of $12,669.75,
19 which gave me a calculated bank balance of negative
20 $11,179.58. Basically, saying that if all these checks
21 and if they were to have cleared as of February 28th,
22 the account would have gone negative $11,179.58. I also
23 reviewed their accountability.
24 I determined their accountability to be
25 $13,633. I determined that by reviewing the records
0184
1 provided by Hudson. He did not have adequate separate
2 records. So I had to come up with the accountability by
3 reviewing the separate records and to determine what
4 accounts were current and determined whether they had
5 any funds in there.
6 A majority — I think there was a total of
7 approximately 13 — 14 owners that I reviewed. And they
8 had money in their account. So they should have
9 maintained at least $13,633 in the account that they
10 were holding for — in trust for these listed owners.
11 So not only did the bank account have a
12 negative account balance, they should have had over
13 $13,000 on there. So they had a total shortage of
14 $24,820.58, meaning if they had to shut down the door as
15 of February 28th and had to pay all these outstanding
16 checks and pay all of the owners, they would have been
17 short $24,812.58.
18 Q Does it clarify — Exhibits 6, 7, 8, and 9 they
19 are generated by you; correct?
20 A Correct.
21 Q And they were based upon documents that you
22 obtained — strike that.
23 They were based upon documents obtain by
24 Hudson?
25 A Correct.
0185
1 Q Let’s go to Exhibit 10 — nine, sorry. Which
2 is in your working papers identified as B-1.8. Again,
3 was this document created by you?
4 A This is my Excel spreadsheet.
5 Q Can you describe this document?
6 A Yes, I can. I generated this document based on
7 the documents that has been provided to me. Because
8 they did not have adequate separate records, I reviewed
9 what documents they had. And I determined which
10 properties should have had a balance by reviewing all of
11 the stuff that they gave me.
12 I reviewed — their documents from Exhibits 9
13 and 10 support this Exhibit 8. But basically making
14 sure I went through all the current properties, and I
15 determine whether they should have had a reserve in
16 there or a security deposit. And all these balances
17 noted on my Excel spreadsheet, I went over with Hudson
18 in May of 27, 2015.
19 And, again, this is basically the broker is —
20 should have been holding all these funds for the owners
21 in their account.
22 Q Next exhibit, Exhibit 10, which is B-1.9.
23 A Exhibit 10 supports the information that I have
24 on Exhibit 9. It is basically all the supporting
25 documents. And if there is any handwriting, those are
0186
1 my handwriting in reviewing with Hudson to determine,
2 like, you know, whether they were carrying a balance
3 forward.
4 This was not an adequate separate record. This
5 does not meet the requirement for separate records. But
6 I used them as a tool to determine whether they should
7 have been holding a balance for these particular
8 properties. Each sheet describes the owner’s name, the
9 tenant’s name, and it goes over by months, like, rents
10 collected, if there was a security deposit that was
11 held.
12 So I used these documents to determine — to
13 create this spreadsheet and to determine what the
14 accountability was for the property management company.
15 Q So basically, nine and ten support Exhibit 8?
16 THE COURT: Can you — answer that question and then
17 I have a quick sidebar.
18 BY MS. LEE:
19 Q Basically, Exhibits 9 and 10 help you create
20 Exhibit 8?
21 A I’m sorry.
22 THE COURT: Exhibits 9 and 10. You were just
23 describing ten.
24 THE WITNESS: Actually, I was describing nine, which
25 is the current ones. And ten is all of the separate
0187
1 records they gave me. So ten and 11 support nine.
2 MS. LEE: Okay.
3 THE COURT: I have a quick question for you. For
4 example, I just want you to take a look at page 4 of
5 Exhibit 10.
6 THE WITNESS: Ten.
7 THE COURT: Okay. On the left side about — just
8 above where it says owner’s name, is that a social
9 security number?
10 THE WITNESS: On page 4?
11 THE COURT: On the left, it says owner’s name. Do
12 you see the columns, four lines of information, the top
13 line says owner’s name.
14 THE WITNESS: Yes.
15 THE COURT: If you look to the right, there is a
16 name Jack somebody and above that, is that an S-S
17 number.
18 THE WITNESS: Yes, it appears to be. It should be
19 redacted.
20 THE COURT: Ms. Lee, you are going to have to redact
21 all that information from these documents. That is
22 prime information for identity theft. Go ahead.
23 BY MS. LEE:
24 Q Can you tell whether Stacey Havener or anyone
25 else put in their commission or their own money into
0188
1 this bank account?
2 A During the course of the audit because they did
3 not maintain adequate control records or adequate
4 separate records, it was tough to determine whether too
5 much money was going in there or not enough money was
6 going in there. Their — what they call a check
7 register only detailed the checks that were written and
8 their deposits were not detailed. So it was very
9 difficult.
10 I sat there with Hudson during that second
11 meeting to try to determine some of the deposits. But
12 it was very difficult because they were never detailed.
13 They had money that was transferred from not only bank
14 one, but there was two other bank accounts that money
15 was being transferred into.
16 One of them was a general business account and
17 another they described that as a maintenance account.
18 So money was being transferred back and forth. There
19 was ATM withdrawals, which is — you never see during
20 the course of — with property management because you
21 are supposed to detail how — where — who is pulling
22 out the money, who is it going to.
23 So I couldn’t determine whether too much money
24 was going in there, not enough going in there, but money
25 was being back and forth. So it was difficult to
0189
1 determine if there was any extra money going in.
2 Q Is it course of action to — standard course of
3 action for you to meet with the person or entity you are
4 auditing and explain to them what you found?
5 A Yes. During the course of the audit — I have
6 been doing this for 16 years and so I don’t like to
7 surprise the broker or — you know, what I’m finding.
8 I’m pretty upfront saying this doesn’t look accurate or
9 whatever.
10 Whenever we do finish up the audit, we are
11 required as an auditor to go over what we call a
12 noncompliance summary. And it is basically a checklist.
13 And it goes over the code sections. And I just get it
14 directly from the law book, what it is that I am citing
15 for. And the auditor is required to go over it with the
16 broker at the end of the audit.
17 Q Did you do so with Stacey Havener?
18 A Yes, I did.
19 Q What did you go over with her?
20 A Sometime in May — I need to refresh my memory
21 by looking at my audit file.
22 THE COURT: Go ahead.
23 THE WITNESS: I discussed it with Stacey Havener on
24 May 6th, 2015.
25 ///
0190
1 BY MS. LEE:
2 Q And did you explain everything that was
3 essentially in your audit report?
4 A Correct. I go over the code sections that I’m
5 citing for to let them know what I found that was in
6 violation of our code sections, Commission’s rules and
7 regulation.
8 Q Did she ask you any questions?
9 A No. I just know that during the course I
10 reviewed, but she didn’t sign it. So that was one of
11 those things. We don’t require them to sign it. If
12 they choose not to sign and date it, we just note when
13 we reviewed it with the broker.
14 Q Did you ask her to sign it?
15 A I always ask them to sign it. I kind of
16 describe it as like a speeding ticket. It is not an
17 admission of guilt. It is just basically going over,
18 making sure the audit, going over the code sections with
19 the broker so they are aware of what I found during the
20 course of my audit.
21 Q Did she refuse to sign it?
22 A She didn’t — she never gave me a signed copy,
23 no.
24 Q If a person is trying to reconcile their
25 accounts — strike that.
0191
1 Would it be fair to say that one of the first
2 things a broker should do is open a trust account if
3 they have trust funds?
4 MR. LEAR: Objection. Incomplete hypothetical.
5 Withdraw.
6 THE COURT: Do you understand the question?
7 THE WITNESS: I did.
8 THE COURT: The objection is withdrawn so you may
9 answer.
10 THE WITNESS: The BRE rules and regulations will
11 allow you to deposit money into an account. But it
12 requires you to set a — make sure the bank account is
13 set up correctly as a trust account. And it has to be
14 in the name of the broker or a DBA of the broker.
15 It has — you have to make sure, you know, the
16 signatory — obviously, the real estate broker has to be
17 on there or the designated officer, you can have an
18 unlicensed person if they are bonded. If they have a
19 real estate salesperson or a broker under their
20 brokerage, they can be on there.
21 And then the — you can have a bank account,
22 but they also require you to keep records and one of the
23 records is called control record. We call it a generic
24 term because different software will call it different
25 things. But, basically, a control record is all the in
0192
1 and outs of the trust account.
2 And that — you have to make sure it contains
3 enough information in there to know exactly when you
4 received the funds, who you received it from, what
5 property is referenced, when you deposited the funds, it
6 has to have a chronicle date order, and it has to have
7 an ongoing balance.
8 And so, you are required to keep a control
9 record. And you are also required to keep a separate
10 record, a separate record for each property slash owner
11 and/or owner however the company wants to set it up.
12 And this record has to be in chronicle date order.
13 It has to be all the in and outs of that
14 particular property. And it has to contain enough
15 information to determine who it was received from and
16 why — or disbursed from, the amount. And it has to
17 have an ongoing balance. So — and then the Bureau
18 requires you to do a trust account reconciliation.
19 And what a trust account reconciliation is
20 basically where you compare your control record balance
21 on — at the end of — any date of the month. But most
22 of time, it is usually at the end of the month. And
23 then you compare that control record balance to the
24 total separate records, which is your accountability —
25 the broker’s accountability, which again the
0193
1 accountability is basically the broker’s liability to
2 its owners.
3 So you get that total accountability, you
4 compare the two. So, basically, what you are doing is
5 comparing the control record, which is what your
6 record —
7 THE COURT: I need you to slow down just a little.
8 Just go ahead and say it a little more slowly. You were
9 taking about the broker’s accountability.
10 THE WITNESS: The accountability is basically the
11 broker’s liability to the owners. So you are supposed
12 to compare your control record balance that’s what you
13 say you have in your account. And you are supposed to
14 compare that to your total separate records. And so,
15 those two should match at any given time.
16 And then it’s generally accepted accounting
17 principles that you do a back rec.
18 THE COURT: Reconciliation?
19 THE WITNESS: Yes, a bank reconciliation. I
20 apologize. That’s trust fund handling 101.
21 THE COURT: All right. Thank you.
22 BY MS. LEE:
23 Q So because you had the — is it called
24 noncompliance summary when you review the findings of
25 audit summary, what you review with an auditee? Is that
0194
1 what it is called?
2 A Yes, noncompliance summary. Yes.
3 Q Because you reviewed this noncompliance summary
4 with her — you said May of 2015?
5 A I think that is the date, yes.
6 Q Then would she have known about it before the
7 Accusation was filed later on?
8 A Well, Stacey Havener is a real estate broker.
9 She’s supposed to be aware of all the real estate laws.
10 And she’s supposed to know as a real estate broker, if
11 you want to provide property management services, you
12 have to be licensed.
13 And so, you have to have a real estate license.
14 And they are supposed to be aware of all the rules and
15 regulations. So when she took on the responsibility of
16 doing property management services, she should be aware
17 that, okay, I need to deposit into an account that’s a
18 designated trust account.
19 She should be aware of the control records, the
20 separate records, and the trust account reconciliation
21 that I described.
22 Q Let’s say she wasn’t aware. Did you remind her
23 on May 2015?
24 A Yes, I did.
25 Q And do you know if Milton Hudson had access to
0195
1 the account?
2 A He was not a signatory on the account. But
3 during the course of the audit, in reviewing the bank
4 statements, I noticed several transfers, several ATMs.
5 And in discussing it with him, I asked him, you know,
6 who is doing the ATMs and the transfers. And he said
7 most of the times, he was doing it.
8 Q He did have access to the bank account?
9 A Yes.
10 Q And is he supposed to have access?
11 A He was not part of the signatory card, so he
12 should not have access to account.
13 Q I know that this is not a trust — a designated
14 trust fund, this is a bank account; correct?
15 A Correct.
16 Q If it were a designated trust account,
17 should — can Milton Hudson have access to this account?
18 MR. LEAR: Objection. Assumes facts not in
19 evidence.
20 THE COURT: Yeah. What is the relevance also? It
21 is not what we are dealing with. It is certainly not
22 what’s alleged. I know that much about the case at this
23 point. So I’m going to sustain the objection. Move on.
24 BY MS. LEE:
25 Q Are unlicensed people allowed to have access to
0196
1 trust funds?
2 MR. LEAR: Objection. Relevance.
3 THE COURT: Sustained. Okay. Do you mean trust
4 funds or trust accounts?
5 MS. LEE: Trust funds.
6 THE COURT: Money held in trust, is that what you
7 mean?
8 MS. LEE: Yeah.
9 THE COURT: Overruled.
10 THE WITNESS: Can you ask me the question again.
11 Sorry.
12 BY MS. LEE:
13 Q Are unlicensed people allowed to access trust
14 funds?
15 A If they are on a signatory card and if they are
16 unlicensed, they have to be bonded in order to have
17 access to the trust account.
18 Q Are you aware if Milton Hudson was bonded?
19 A No.
20 Q Do you know whether he was bonded or not?
21 MR. LEAR: Objection, your Honor. Relevance. We
22 have already established there was no trust account.
23 THE COURT: This question has to do with access to
24 trust funds so I allowed the witness to answer. She
25 said, “No.” I have already heard this testimony as well
0197
1 before. The witness has been very thorough. I heard
2 her testify earlier that if you are not a signatory, you
3 have got to be bonded if you are not a realtor. It is
4 cumulative. Go ahead.
5 MS. LEE: No further questions.
6 THE COURT: I want to point out it is 4:14. So if
7 you can be as concise if you can, I want to finish with
8 this witness if we can today.
9 MS. LEE: No further questions.
10 THE COURT: Are you sure? Because I don’t want to
11 make you feel like you are being rushed. But I do want
12 to try to get this witness done today. All right.
13 Ms. Lee is smiling for the record and nodding that, yes,
14 she’s done; is that correct?
15 MS. LEE: Yes.
16 THE COURT: Thank you, Ms. Lee. Cross-examination,
17 please.
18
19 CROSS-EXAMINATION
20 BY MR. LEAR:
21 Q Ms. Brewster, talking a look at Exhibit 64,
22 page 2.
23 A You are talking about the signatory card, the
24 commission check?
25 Q The check that incorrectly indicates
0198
1 commission, yes. Looking at page 2, that’s an e-mail
2 from Milton Hudson to you?
3 A Correct.
4 Q Dated on or around March 24th, 2015?
5 A Correct.
6 Q And then indicates rather than being a
7 commission indicated on page 164 that it was a check
8 paid to —
9 MS. LEE: Objection. Hearsay.
10 THE COURT: Let me make sure I’m following what
11 document you are describing. You are talking about
12 Exhibit 64?
13 MR. LEAR: Exhibit 64, yes.
14 THE COURT: And the objection is?
15 MS. LEE: Hearsay. Milton Hudson is not here to
16 testify as to his words on his e-mail.
17 THE COURT: Can you repeat the question.
18 MR. LEAR: I think the question was, that was an
19 e-mail from Milton Hudson to you on or about
20 March 24th, 2015?
21 THE COURT: So we are talking about the second page.
22 Go ahead. You may answer.
23 THE WITNESS: I’m sorry. What was the question
24 again?
25 THE COURT: The second page of Exhibit 64, have you
0199
1 got that?
2 THE WITNESS: Yes, I do.
3 THE COURT: He just — Mr. Lear just asked you about
4 whether that was an e-mail from Milton Hudson to you.
5 THE WITNESS: Yes, it was.
6 BY MR. LEAR:
7 Q And in light of that e-mail, you agree that the
8 memo line on page 1 of 64 was incorrect?
9 MS. LEE: Objection. Hearsay.
10 THE COURT: Overruled. Do you understand the
11 question?
12 THE WITNESS: Yes. That’s what he stated.
13 BY MR. LEAR:
14 Q And you don’t have any proof to — I’m sorry.
15 I cut you off. Go ahead. I was going to let you
16 finish.
17 A He stated that it was for work provided by — I
18 don’t know whether it was or not.
19 Q Right. Okay. You have looked at the
20 Accusation in this Matter?
21 A Correct.
22 Q I think you have a copy of this somewhere?
23 A Yes, I do.
24 Q How many bounced checks are indicated in the
25 Accusation?
0200
1 MS. LEE: Objection. Documents speaks for itself.
2 And she didn’t draft this.
3 THE COURT: Overruled. She’s basically your expert,
4 who put together the information that’s much of what is
5 in the Accusation.
6 THE WITNESS: I’m sorry. Do I answer the question?
7 THE COURT: Yes.
8 THE WITNESS: Okay. I apologize. Can you ask that
9 question again.
10 BY MR. LEAR:
11 Q How many bounced checks are indicated in the
12 Accusation?
13 A I didn’t write up the Accusation so I’m just
14 reviewing it really quickly.
15 THE COURT: Go ahead. Take your time. This is not
16 a test.
17 BY MR. LEAR:
18 Q Let me ask it a different way.
19 THE COURT: You know what, that is a little bit of a
20 tough question because of the way it is — the way the
21 Accusation is written. I’m noticing they are not
22 identified in any one portion of the Accusation. The
23 allegations are sort of sprinkled throughout. If you
24 want to focus on particular parts of the Accusation, go
25 right ahead.
0201
1 BY MR. LEAR:
2 Q Ms. Brewster, you testified that through your
3 research and audit, you had identified 90 bounced
4 checks; correct?
5 MS. LEE: Objection. Misstates the evidence. She
6 said over 90.
7 THE COURT: I don’t recall exactly what the
8 testimony was. Do you remember?
9 THE WITNESS: I said 90.
10 THE COURT: Overruled. The answer stands.
11 BY MR. LEAR:
12 Q You agree that the BRE is not here prosecuting
13 with respect 90 bounced checks, correct?
14 MS. LEE: Objection. It’s vague. There is a —
15 THE COURT: Let me ask. Do you understand the
16 question?
17 THE WITNESS: I think so. But I think it is all
18 part of the whole Accusation because it is part of, you
19 know, not having proper control records.
20 THE COURT: Thank you. I’m going to sustain the
21 objection. Maybe you can rephrase that, Mr. Lear.
22 BY MR. LEAR:
23 Q There are not 90 bounced checks identified in
24 the Accusation, correct?
25 A No, there is not 90 bounced checks addressed in
0202
1 the Accusation. No.
2 Q Some number significantly lower than 90,
3 correct?
4 A There is some check numbers addressed regarding
5 the complaint, yes.
6 Q And those are the only bounced checks — the
7 only bounced checks that the BRE is prosecuting are the
8 ones indicated in the Accusation?
9 MS. LEE: Objection. Calls for legal conclusion.
10 THE COURT: Well, I think anybody can read the
11 Accusation. I will overrule that objection. The
12 question has to do with what’s alleged in the
13 Accusation.
14 MS. LEE: Objection. The document speaks for itself
15 then. How will she know?
16 THE COURT: The defense has the ability to probe the
17 knowledge that the witness has that much of the
18 Accusation is based on your direct testimony — your
19 direct questioning is based on the findings of your
20 witness, so overruled.
21 THE WITNESS: I’m sorry. Can you ask me the
22 question again.
23 THE COURT: Do you remember the question? We can
24 read it back. Can you read it back, please.
25 (Record read)
0203
1 THE COURT: Can you answer that?
2 THE WITNESS: They are part of the complaint, yes.
3 THE COURT: Ask another question.
4 MR. LEAR: I’m done. Nothing further.
5 THE COURT: Any redirect?
6 MS. LEE: Briefly.
7
8 REDIRECT EXAMINATION
9 BY MS. LEE:
10 Q When you — you testified that there is not a
11 number of 90 bounced checks, those words in the
12 Accusation; correct?
13 A They are not in as part of the Accusation, no.
14 Q But the 90 bounced checks, is that related to the
15 fact there are shortages in the accounts?
16 MR. LEAR: Objection. Relevance. Goes beyond of
17 Accusation as the witness has identified.
18 MS. LEE: Shortage in the Accusation under
19 paragraph 8, 8-A.
20 THE COURT: I’m going to sustain the objection. The
21 thing is, Counsel, you got allegations about specific
22 bounced checks. There is already testimony that was
23 received that there were more checks returned, about 90
24 that were noticed. I don’t know how much further we can
25 go with this line of questioning.
0204
1 Seems to me that Mr. Lear’s cross reached the
2 same dead end a minute ago. You can do redirect but,
3 you know, we really have a finite set of facts here as
4 to what was alleged in terms of how many bounced checks
5 there was that mattered enough to be put in the
6 Accusation specifically and what the findings were of
7 your auditor who said she saw about 90.
8 I heard that testimony, too. So with that in
9 mind, go ahead and continue.
10 BY MS. LEE:
11 Q Is the shortage somehow related to the 90
12 bounced checks?
13 MR. LEAR: Objection. Vague.
14 THE COURT: Sustained. If it will speed things up,
15 I’m not an accountant, but I do understand that a
16 bounced check means that it is a check returned to the
17 bank upon which the check was issued from the account.
18 The check was returned due to insufficient funds. I
19 know that’s the mechanics of it.
20 BY MS. LEE:
21 Q Did you consider the 90 bounced checks in
22 assessing that there was a shortage in the bank account?
23 MR. LEAR: Objection. Relevance.
24 THE COURT: Overruled.
25 THE WITNESS: The shortages, I could not determine
0205
1 where the shortage — the unidentified shortage came
2 from. But the NSF checks probably added to or
3 contributed to the short — the shortage.
4 MS. LEE: No further questions.
5 THE COURT: Recross?
6 MR. LEAR: Nothing further.
7 THE COURT: All right. Thank you very much. You
8 are excused.
9 MS. LEE: Just to verify, your Honor, that
10 Exhibit 64 is admitted with the first page as direct
11 evidence and the second page as administrative hearsay.
12 THE COURT: Correct.
13 MS. LEE: And Exhibit 63 has been entered into
14 evidence.
15 THE COURT: It’s been received. 62 was received as
16 administrative hearsay.
17 MS. LEE: Complainant request — Complainant
18 identifies as Exhibit 60, declaration of cost and
19 attachment. I ask that they be moved into evidence.
20 For the record, it is a 29-page document.
21 THE COURT: Okay. It is 29 pages. You have got
22 page 1 through 27, which apparently came from your
23 client agency. And then page 28 and 29 are Ms. Lee’s
24 own declaration regarding enforcement cost. That is
25 marked as what you premarked it as, which is 60. Okay.
0206
1 Ms. Lee, what is next?
2 (Complainant’s Exhibit 60 was marked for
3 identification by the Court.)
4 MS. LEE: I request that it be admitted into
5 evidence.
6 THE COURT: Exhibit 60. Any objection to Exhibit 60
7 being received?
8 MR. LEAR: We have no objection to foundation. But
9 we reserve the right to contest the dollar figures
10 indicated.
11 THE COURT: Those — certainly you have the right to
12 do that. So with that in mind, 60 is received. That’s
13 still an open issue. Okay.
14 (Complainant’s Exhibit 60 was received in
15 evidence by the Court.)
16 MS. LEE: Complainant request that a four-page
17 document regarding the salesperson change application of
18 Katy, K-A-T-Y, Marie Cruse, C-R-U-S-E, and
19 Carole, C-A-R-O-L-E; Swanson, S-W-A-N-S-O-N as well as
20 two letters from the Bureau of Real Estate to those two
21 individuals be marked and identified as Exhibit 61. It
22 is a four-page document.
23 THE COURT: Okay. This binder is giving me trouble
24 as I turn all of the documents over to get to it. So
25 I’m marking 61, two different salesperson change
0207
1 application that are also corresponding to two different
2 letters from the Bureau of Real Estate to
3 Katy, K-A-T-Y, Cruse. That is marked as 61.
4 (Complainant’s Exhibit 61 was marked for
5 identification by the Court.)
6 MS. LEE: Complainant request that 61 be entered
7 into evidence.
8 THE COURT: Any objection?
9 MR. LEAR: Objection. Relevance.
10 THE COURT: Go ahead, Counsel.
11 MS. LEE: It goes to the sixth cause of action
12 paragraph 2 that was stipulated to.
13 THE COURT: Okay. What page is that on?
14 MS. LEE: 12.
15 THE COURT: Page 12.
16 MS. LEE: Paragraph 42, sixth cause of action.
17 THE COURT: All right. Let me read it. Okay. As
18 to relevance, that objection is overruled. 61 is
19 received.
20 (Complainant’s Exhibit 61 was received
21 in evidence by the Court.)
22 MS. LEE: Complainant rest but reserves the right to
23 call Respondent should she elect not to testify on her
24 own initiative and also to introduce further evidence,
25 including but not limited to Exhibit 17.
0208
1 THE COURT: All right. Mr. Lear, it is 4:32. I
2 don’t know if you want to start, if you want to spend
3 any time right now before we recess to maybe deal with
4 documents or —
5 MR. LEAR: We would like to start with Ms. Havener.
6 THE COURT: You would like to do that.
7 MR. LEAR: Respondent calls Stacey Havener.
8 MS. LEE: For the record, Ms. Brewster, may be
9 allowed to leave?
10 THE COURT: Sure. She was excused. Ms. Brewster
11 has been here for two days. Do I have a choice but to
12 let her go. Thank you.
13 Please raise your right hand.
14
15 STACEY HAVENER,
16 called as a witness, and having been first duly sworn by
17 the Court, was examined and testified as follows:
18 THE WITNESS: I do.
19 THE COURT: Thank you. Please have a seat and state
20 and spell your full name.
21 THE WITNESS: Stacey, S-T-A-C-E-Y; Ann, A-N-N;
22 Havener, H-A, V as in Victor, E, N as in Nancy, E-R.
23 THE COURT: Thank you. I know you have heard me
24 give some tips to the witnesses. So I just want you to
25 follow along especially since you are the Respondent,
0209
1 and you have sat here for two days listening to
2 allegations that are really directed at you. I want you
3 to do your very best to take a deep breath, let a few
4 seconds go by and then give your answers.
5 It’s been my experience that particularly
6 respondents in cases like this are very eager often to
7 answer questions. That one pointer probably is the one
8 you need to keep foremost in your mind. Just wait a few
9 seconds, make sure there is no objections, and then give
10 your answer. Thank you. Go ahead.
11 MR. LEAR: Thank you.
12
13 DIRECT EXAMINATION
14 BY MR. LEAR:
15 Q Ms. Havener, what do you do for a living?
16 A I am a real estate broker.
17 Q And what geographic area do you do your real
18 estate brokerage in?
19 A I typically work in an area known as the
20 Frazier Park area also called the mountain communities
21 area.
22 Q And for how long have you run your business
23 there?
24 A I have been working there for approximately
25 20 years since about 1997.
0210
1 Q What is the name of the business?
2 A Currently, it is All Seasons Real Estate.
3 Q What did you — where did you go to high
4 school?
5 A I went to high school in Exton, Pennsylvania.
6 Q When did you come to California?
7 A In January of 1987.
8 Q And why did you come to California?
9 A I was interested in pursuing an acting career.
10 Q Did you, in fact, pursue an acting career?
11 A Yes.
12 Q Please describe.
13 A I started at a school called the Stellar Harmon
14 Actor Workshop. I went to classes there for many years.
15 I obtained a site card, started doing a few commercials,
16 plays, whatever I could get audition for and get
17 accepted.
18 Q And did you, in fact, get some jobs?
19 A Yes.
20 Q Please describe.
21 A Obviously, not all the jobs are paid. So I got
22 some, you know, parts in plays and things. I did
23 commercial for AM/PM. I did a commercial for
24 New England Bell. I had a spot on a show called
25 “Dark Justice” and — and it is student film for UCLA
0211
1 students.
2 THE COURT: Were there lawyers in Dark Justice, that
3 show?
4 THE WITNESS: Yes.
5 THE COURT: Let me just apologize in retrospect. Go
6 ahead, Mr. Lear.
7 BY MR. LEAR:
8 Q At some point did you become interested in
9 pursuing a career in real estate?
10 A Yes.
11 Q Please describe.
12 A I moved up in to the Frazier Park area, and I
13 was doing some work for a local office. And I just
14 started helping out. And eventually the agents there
15 asked me if I would be their assistant. And I started
16 helping around the office. Then they — after years,
17 they asked me to get my license, which I did.
18 Q Slow down a little bit. What year did you move
19 to Frazier Park?
20 A ’97.
21 Q Why did you move to Frazier Park?
22 A I was interested in leaving the Los Angeles
23 area because I had a small son. And I was in a
24 relationship that was not going well so I — plus I
25 didn’t want to be in the city with a small toddler.
0212
1 Q What was the name of real estate brokerage
2 where you worked?
3 A Called Mountain Properties.
4 Q What year did you start working?
5 A Probably sometime in ’98.
6 Q How long did you work there?
7 A I probably worked there until about 2004.
8 Q And did you work there at any time as a
9 licensee?
10 A Yes.
11 Q When did you become licensed?
12 A Oh, I would say — my first license was
13 probably 2001.
14 Q What kind of license was that?
15 A A real estate salesperson.
16 Q And then did you do real estate salesperson
17 work at that brokerage?
18 A Yes.
19 Q Please describe the type of work that you did.
20 A As an unlicensed assistant, I had assisted the
21 agents. When I become licensed, I predominantly had the
22 same responsibilities except that I dealt far more with
23 the escrow companies, running the files, working on the
24 contract with the clients of the teams that I worked
25 with.
0213
1 Q And at some point you left that brokerage?
2 A Yes.
3 Q Where did you go?
4 A I went off on my own for little bit. I got my
5 broker’s license while I was still at
6 Mountain Properties.
7 Q When was that?
8 A That would have been probably then 2004 because
9 I was not there much longer after obtaining the broker’s
10 license.
11 Q When you said you went out on your own, what
12 does that mean?
13 A Because I had a broker’s license, I could work
14 on my own. I didn’t have to hang my license, as we say,
15 with a broker. So I could go off and do transactions on
16 my own. At the time, I was also very interested in
17 flipping houses.
18 Q What does that mean?
19 A Purchasing homes that need renovation and then
20 fixing them up and then putting them back on the market
21 for sale.
22 Q And when you went out and worked on your own,
23 did you have a brokerage that had a name attached to it?
24 A I had a company, yes. I had a DBA at the time
25 called MNS Investments.
0214
1 Q And MNS stood for what?
2 A Milton and Stacey.
3 Q Who is Milton?
4 A My husband.
5 Q For how long have you known Milton?
6 A We met when I first moved up to Frazier Park in
7 ’97.
8 Q We are talking about Milton Hudson?
9 A Milton Hudson.
10 Q When did you marry Milton Hudson?
11 A In May of 2008.
12 Q And at that time, did Milton Hudson have a
13 license with the Bureau of Real Estate, which was then
14 the Department of Real Estate?
15 A Yes.
16 Q Was kind of license did he have?
17 A A broker’s license.
18 Q Did he have a business?
19 A Yes.
20 Q What was his business?
21 A In 2008, he purchased All Seasons Realty from
22 Norm Barone.
23 Q Who?
24 A Norm Barone.
25 THE COURT: Spell it, please.
0215
1 THE WITNESS: N-O-R-M, last name B-A-R-O-N-E.
2 THE COURT: Thank you.
3 BY MR. LEAR:
4 Q You skipped a little ahead of me. When you
5 first met Mr. Hudson, did he have a business?
6 A Yes. I am sorry. He was a mortgage broker.
7 Q And did he go straight from mortgage brokering
8 to forming MNS with you?
9 A Yes.
10 Q And MNS was in the business of doing what?
11 A Real estate investment.
12 Q That was the flipping you mentioned?
13 A Yes.
14 Q And for long was MNS in business?
15 A Pretty much until the recession started in
16 2008.
17 Q At some point did MNS go out of business?
18 A Yes. We didn’t officially file bankruptcy or
19 ended or anything. But we were no longer able to flip
20 properties in the recession. So we stopped doing that
21 type of activity.
22 Q And did you continue in the real estate
23 business?
24 A Yes.
25 Q Please describe.
0216
1 A In 2008 is when Milton approached me and said
2 with the recession we may want to reconsider having
3 rental properties. I had actually — not to back up,
4 but I had been approached by a few brokers during the
5 recession that weren’t ready for another downturn and
6 asked if I was willing to purchase theirs. They were
7 very expensive, and I declined.
8 But eventually, Norm spoke to Milton and his
9 price was very reasonable. So he brought it to my
10 attention that it might be worth purchasing that
11 company.
12 Q And that was what year?
13 A 2008.
14 Q And what was the business of the new brokerage?
15 A It was All Seasons Realty. And they had both
16 property management department and a sales department.
17 Q What were your roles and responsibilities at
18 All Seasons in the beginning?
19 A My role was broker associate in charge of the
20 sales side transactions.
21 Q Residential sales?
22 A Residential sales, yes.
23 Q And for how long have you been in charge of
24 residential sales on behalf of All Seasons?
25 A Under Milton’s brokerage, the entire time he
0217
1 had his license of the company, the responsible broker.
2 Q At some point did the brokerage transition to
3 your license?
4 A Yes.
5 Q And up to today’s date, are you the one that is
6 responsible for residential sales on behalf of
7 All Seasons?
8 A Yes.
9 Q Going back to when you first acquired
10 All Seasons, you mentioned there was a property
11 management component to it.
12 A Yes.
13 Q Please describe.
14 A At the time it was purchased, they had several
15 properties. And they had two staff members already
16 under Norm’s brokerage that were managing the
17 properties.
18 Q And did you and Mr. Hudson take over the
19 management of those properties?
20 A Yes. We got that part of the business when we
21 purchased it.
22 Q At the time you purchased All Seasons was
23 Mr. Hudson the managing broker of All Seasons?
24 A Yes.
25 Q At the time that you purchased it, was
0218
1 Mr. Hudson the one that was responsible between the two
2 of you for the property management side of the business?
3 A Yes.
4 Q Did you have any involvement in the property
5 management side of the business from the time it was
6 purchased up to and around December of 2013?
7 A As far as formal question — I mean, formal
8 responsibilities or just an awareness of the department?
9 Q Let’s talk about any involvement.
10 A Yes.
11 Q What was your involvement?
12 A He would talk to me about staff members, who he
13 might want to hire at some point or not hire. He would
14 talk to me about occasionally procedures that might be
15 put in place as far as what our property manager — at
16 the time her name was Katy, what she — what they were
17 doing.
18 He might get my opinion about those types of
19 things. He got my opinion about the accounting program.
20 At one point we considered changing accounting programs
21 because Katy had informed us we were exceeding the
22 capacity of the program that she had always been using.
23 Q But up to around December of 2013, the ultimate
24 decision maker with respect to All Seasons was
25 Milton Hudson; correct?
0219
1 A Correct.
2 Q And especially to property management side?
3 A Yes.
4 Q At some point in or around December of 2013,
5 Milton Hudson had surrendered real estate broker’s
6 license?
7 A Yes.
8 Q At the time that he did that, did the brokerage
9 transition to you?
10 A Yes.
11 Q With respect to the transition, did that
12 include the property management side of the business?
13 A Yes.
14 Q Was that a good idea in retrospect?
15 A No.
16 Q Before we get to that, there is also the
17 residential sales side?
18 A Yes.
19 Q You have more or less continuously been in
20 charge of that since 2008?
21 A Yes.
22 Q You read the Accusation in this Matter?
23 A Yes.
24 Q Do any of the charges alleged against you have
25 to do with the residential sales side of the business?
0220
1 A No.
2 Q Fair to say that all the allegations have to do
3 with the property management side of the business?
4 A Yes.
5 Q As of December 2013, you took over all of the
6 responsibilities for the property management side?
7 A Yes.
8 Q And that’s why you are here today?
9 A Correct.
10 Q As of the time that Milton Hudson surrendered
11 his license to the BRE, did he have any involvement with
12 All Seasons Realty?
13 A Yes.
14 Q Please describe.
15 A I’m sorry. Repeat what date.
16 Q In or around December of 2013 — actually,
17 withdraw.
18 As of the time he surrendered his license in or
19 around December of 2013, from there going forward, did
20 Milton Hudson have any involvement with All Seasons
21 Realty?
22 A Yes.
23 Q Please describe.
24 A He was to help me in the transition of
25 acquiring a large number of rentals that I was not
0221
1 familiar with. He had to inform me of any rental — any
2 repairs. We had a handyman at the time. And I needed
3 to know what repairs needed to be done so he would
4 consult me on anything that had been scheduled for
5 repairs.
6 He would pretty much help me on any questions I
7 had regarding rentals, also help me with certain
8 disputes if someone came in and had a question or was
9 angry about deposit or something, I would have to call
10 him to explain to me what was going on, the scenario of
11 the situation.
12 Q So we have heard today that you have roughly
13 seven to nine properties that All Seasons is still
14 managing?
15 A Yes.
16 Q Is that accurate?
17 A Yes.
18 Q In or around December of 2013, how many
19 properties was All Seasons managing?
20 A I’m not sure.
21 Q Over 20?
22 A I would say yes.
23 Q Over 30?
24 A I would say yes.
25 Q Over 40?
0222
1 A I would say yes.
2 Q Over 50?
3 MS. LEE: Objection, only if she’s not speculating,
4 your Honor.
5 THE COURT: You want to ask her to give us her best
6 estimate.
7 BY MR. LEAR:
8 Q Are you estimating?
9 A I am estimating.
10 Q Somewhere over 50?
11 A Yes.
12 THE COURT: This was in what time frame? Just at
13 the time that your husband surrendered in
14 December of 2013?
15 THE WITNESS: Correct.
16 THE COURT: Thank you.
17 BY MR. LEAR:
18 Q So at or around December of 2013, you were
19 still running the residential sales portion of the
20 business, and then you had to run or oversee the
21 management of 50 plus properties; accurate?
22 A May I clarify?
23 Q Sure.
24 A Some of our files may not be active management,
25 but they could be files that I still need to be aware
0223
1 of. As I — as we talked about earlier, there is a
2 tenant locate option. So there could be a variety of
3 files in different states of pre-rental, under contract,
4 closing, tenant locate. So just because — so there may
5 be more files than actual property management
6 properties.
7 Q As of the time of the transition, did you have
8 any communication with Mr. Hudson as to the protocols
9 that would be in place between you and him on a going
10 forward basis?
11 A Yes.
12 Q Please describe.
13 A I told him that I had to take responsibility
14 now for the situation that we had. We needed to change
15 things over, bank account-wise so that I could ensure
16 that there was a trust account and operating account for
17 management repairs, an operating account for All Seasons
18 realtor’s sales commissions.
19 And I had another company at the time as well,
20 a internet cafe that I had started with another partner.
21 And they had to all be separate.
22 Q So at that point, did you delegate
23 responsibility to Mr. Hudson to create those bank
24 accounts you just listed?
25 A I said I would have to open the accounts, but
0224
1 we needed to — but I needed his consultation as to, you
2 know, what properties we were still dealing with that
3 would be we had security deposits in the trust account,
4 rents, different things. My partner on Base Camp was —
5 had left.
6 And I was sort of scrambling on my own with
7 that, so I asked for his assistance to help me with
8 things related to the cafe as well. Obviously, he was
9 still helping me with the repairs and the handyman. So
10 I asked him to oversee any repairs that were scheduled
11 and operating the account.
12 Basically, the account that I would not need
13 any help or consultation which was, of course, my sales
14 commissions.
15 Q So I heard you mentioned trust account. Was a
16 trust account opened on behalf of All Seasons?
17 A I asked the bank to open these four accounts,
18 and I said this is what I needed.
19 Q Which bank?
20 A Union Bank.
21 Q And you made that request approximately when?
22 A I would say it has to be the end of ’13 or
23 early ’14 when I opened those accounts as a result of
24 him notifying me that the result would be him
25 surrendering his license.
0225
1 Q Did Union Bank open a trust account for
2 All Seasons?
3 A Well, at that time I thought that’s what it
4 was, obviously, after the auditor told me it was
5 considered what would be designated as a trust account.
6 Q And so with respect to the account you thought
7 was a trust account, did you treat it as a trust
8 account?
9 A Yes.
10 Q And as you sit here today, do you understand
11 that the BRE has requirements with respect to trust
12 account which you did not comply?
13 A Yes.
14 Q Please explain.
15 A Well, I didn’t know the exact amount that
16 should be in there because I didn’t know the exact
17 amount of file that we had and who was locates and who
18 had been given their holding deposits — I mean, the
19 security deposit, who had tenants with incoming rents,
20 all those things. I didn’t know the exact amount from
21 the shortage from his surrendering.
22 Q My question is little different. Right now,
23 I’m talking about the technicalities of the trust
24 account. So do you agree that the account that you
25 thought was a trust account, did not comply the BRE’s
0226
1 view of what needs to happen of a trust account?
2 A Yes.
3 Q How was the account that you had different from
4 what you now understand the BRE requires as a trust
5 account?
6 A I don’t know the detailed difference. I just
7 know it doesn’t meet the requirements. I don’t know
8 what — I don’t understand the forms I need to get the
9 bank to change the name the way I have asked them to
10 change it. They won’t change it.
11 Q And so you were testifying about the moneys
12 that need to be in what you thought was a trust account?
13 A Yes.
14 Q And you said you didn’t really — you couldn’t
15 really tell how much money needed to be in there?
16 A Correct.
17 Q Did you do anything in order to try to
18 reconcile the property management account to figure out
19 how much money needed to be in there?
20 A Honestly, I didn’t know where to begin. There
21 were so many files. So I had tried to find either Katy
22 or somebody who would have more knowledge as to where
23 that should have been to see if she could assist me. I
24 could not really go to her because she was having
25 health issue. So I had to rely on Milt’s explanation as
0227
1 to what needed to be in there.
2 Q Who is Katy?
3 A Katy was our property manager.
4 Q What is Katy’s last name?
5 A Katy Cruse.
6 Q And so, you relied on Mr. Hudson?
7 A Mmm-hmm.
8 Q Yes?
9 A Yes.
10 Q In retrospect was that a good idea?
11 A No.
12 Q Why not?
13 A Because obviously, his accounting was not
14 accurate enough for me to rely on those numbers. And
15 even though he was giving me an estimate that there was
16 a shortage, I didn’t how much needed to be transferred
17 if necessary from my personal money to cover any
18 shortage that had come up in his audit.
19 Q In or around 2013, how was the other side of
20 the business doing, the residential sales?
21 A Good.
22 Q Why did you even bother with the property
23 management side?
24 A At that time I thought it was the right thing
25 to do.
0228
1 Q Why?
2 A Because he —
3 MR. LEAR: May I have Kleenex, please.
4 THE COURT: Sure. Here you go. When you are done
5 with these property management, why do you — after you
6 answer the question, we are — we are going to conclude.
7 This seems like a good break point. Go ahead and
8 answer.
9 THE WITNESS: Because I knew that he had surrendered
10 his license because the account was short. And I felt
11 if people had been shorted, I had to do whatever it took
12 to find out what the shorted was and put it back in
13 whether I had the money or not.
14 BY MR. LEAR:
15 Q And ultimately, with respect to shortages, did
16 you make things right?
17 A Yes. But it took me a very long time.
18 MR. LEAR: That’s a good place to break, your Honor.
19 THE COURT: All right. Okay. Well, you can go have
20 a seat with your attorney. We will have you testify
21 again at our next hearing date. We are going to keep
22 the record open. And we will be back on
23 February 21st, 2017. Sounds like a long way from now.
24 But it will come up quickly at nine o’clock at the
25 Office of Administrative Hearings.
0229
1 And Mr. Lear, have everybody here and ready to
2 go. If we have to take a shorter lunch break that day,
3 we will do it. I want to do the best I can to try to
4 get the hearing concluded in one day. You can talk to
5 your attorney about scheduling.
6 What I would suggest is that since we started
7 with your testimony, it is always effective to any
8 witness for either party to testify as much, I think,
9 with as much continuity as possible. So my suggestion
10 is that you be the first person to testify, and then
11 maybe the witness could be scheduled to come after
12 unless somebody absolutely has to testify first and, you
13 know, that is Mr. Lear’s call.
14 All right. Okay. Is there anything else?
15 MR. LEAR: Happy New Year.
16 THE COURT: Thank you. You will get a written order
17 for the February 21st, 2017 date. And with that, we are
18 off the record for now. Thank you.
19 (Hearing adjourned at 5:00 p.m.)
20
21
22
23
24
25
0230
1 REPORTER’S CERTIFICATION
2
3 I, the undersigned, a Certified Shorthand
4 Reporter of the State of California, do hereby certify:
5 That the foregoing proceedings were taken before
6 me at the time and place herein set forth; that any
7 witnesses in the foregoing proceedings, prior to
8 testifying, were duly sworn; that a record of the
9 proceedings was made by me using machine shorthand, which
10 was thereafter transcribed under my direction; that the
11 foregoing transcript is a true record of the testimony
12 given.
13 Further, that if the foregoing pertains to the
14 original transcript of a deposition in a federal case,
15 before completion of the proceedings, review of the
16 transcript [] was [X] was not requested.
17 I further certify I am neither financially
18 interested in the action nor a relative or employee of any
19 attorney or party to this action.
20 IN WITNESS WHEREOF, I have this date subscribed
21 my name.
22 Dated: November 18, 2016
23
24
25
0231
1 REPORTER’S CERTIFICATION
2
3 I, the undersigned, a Certified Shorthand
4 Reporter of the State of California, do hereby certify:
5 That the foregoing proceedings were taken before
6 me at the time and place herein set forth; that any
7 witnesses in the foregoing proceedings, prior to
8 testifying, were duly sworn; that a record of the
9 proceedings was made by me using machine shorthand, which
10 was thereafter transcribed under my direction; that the
11 foregoing transcript is a true record of the testimony
12 given.
13 Further, that if the foregoing pertains to the
14 original transcript of a deposition in a federal case,
15 before completion of the proceedings, review of the
16 transcript [] was [X] was not requested.
17 I further certify I am neither financially
18 interested in the action nor a relative or employee of any
19 attorney or party to this action.
20 IN WITNESS WHEREOF, I have this date subscribed
21 my name.
22 Dated: November 18, 2016
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This is part of the September 29, 2017 online edition of The Mountain Enterprise.

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