Ridge Chrysler Jeep, et al v. Daimlerchrysler Svc

Filing 348

MOTION by Counter Claimant Daimlerchrysler Services North America, L.L.C. for judgment, MOTION by Counter Claimant Daimlerchrysler Services North America, L.L.C.Turnover Order (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit Group Ex. 6 - Part A, # 7 Exhibit Group Ex. 6 - Part B, # 8 Exhibit Group Ex. 6 - Part C, # 9 Exhibit 7, # 10 Exhibit 8)(Keysor, Glen)

Page 1708
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3

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

4

RIDGE CHRYSLER JEEP LLC, d/b/a
5

)

MARQUETTE CHRYSLER JEEP, et al.,
Plaintiffs,

)

6

vs.

)

03 C 760

DAIMLER CHRYSLER SERVICES NORTH
7

AMERICA, L1LC,

Defendant/Counterclaim Plaintiff
8

vs.

RIDGE CHRYSLER PLYMOUTH, LLC, d/b/a )
9

MARQUETTE CHRYSLER JEEP, SALES, INC., d/b/a DODGE OF MIDLOTHIAN,

)

)

10

GERALD W. GORMAN, and ELIZABETH A.
GORMAN,

)

li
12 13

The continued deposition of GERALD GORMAN,

called for examination pursuant to the Rules of Civil Procedure for the United States District
Courts pertaining to the taking of depositions,

14

15
16

taken before Sheily S. Rubas, a notary public within and for the County of Cook and State of
Illinois, at 190 South LaSalle, Chicago, Illinois,

17
18

19

on the 7th day of October, 2004, at the hour of
9:30 o'clock a.m.

20
21
22 23 24

15
Reported by:
License No. :

EXHIBIT

Shelly S. Rubas, CSR
084-004298
09 : 08 : 05

Page 1709
1

APPEARANCES:

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2 3

Page 1711

APPEARANCES (Continued):

2

3

4
5 6 7
8 9 10

HAGENS BERMAN, LLP, by MR. CHRISTOPHER A. O'HARA

4
5

DAIMLER CHRYSLER SERVICES NORTh AMERICA,

1301 Fifth Avenue, Suite 2900 Seattle, Washington 98101 [phone] Representing dealerships in the Ridge case and plaintiffs in the Coburn
case;

LIC, by
MR. MATTHEW E. ROY

6 7

8
9
10
11

27777 Inkster Road Farmington HiHs, Michigan 48334-5326 [phone] Representing Daimler Chrysler.

11 12 13 14 15 16 17 18 19 20 21 22 23 24

12

THE WEXLER FIRM, by MR. EDWARD ANTHONY WALLACE One North LaSalle Street, Suite 2000

13 14 15 16 17 18 19

ALSO PRESENT: Mr. Theriot Shawn Temple

Chicago, Illinois 60602 [phone] Representing the class plaintiffs in the Coburn case;

20 21 22 23 24
Page 1710
Page 2
1

i
'3

APPEARANCES (Continued):

INDEX
GERALD GORMAN

2
3

By Mr. Bay

EXHIBITS

1,715

Gomian othIbt No.

4
5 6 7
8 9 10 11 12 13

JAMES 3. ROCHE & ASSOCIATES, by MR. JAMES J. ROCHE

642 North Dearborn Street Chicago, Illinois 60610 [phone] Representing plaintiffs;

6

24 (pi9vIOUSIy niarked)

1,735

8

76

1,799

10
11

80
81

82
83

1,809 1,812 1,814 1,817

14
15 16 17

ThOMPSON COBURN, LLP, by MR. WILUAM BAY MR. JEFFREY FINK One US Bank Plaza

12
13 85 87

1213,823
1,827

14

18
1,877 1,879

18 19

St. Louis, Missouri 63101 [phone] Representing Defendants;

90
16 17 18 19

91

93 95 96 97 98 99
100 101 102 103 104 105 106 107

,886
1,891 1,912 1,920 1,928 1,940 1,943 1,959 1,971 1,986 1,994 2,003 2,009 2,023

20 21 22 z.,
-

20
21

n
23 24

2 (Pages 1709 to 2)

Page 1713

Page 1715
1

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3

(Whereupon, the witness was

MR. TEMPLE: Of course.

10:03:13

duly sworn.)

10:01:23
10:01:24
10:01:27

2 3

MR. BAY: Mr. Gorman?

MR. BAY: We are prepared to go forward in the
deposition and the lawyers have had some

THE WiTNESS: Yes, sir.
GERALD GORMAN,

4
5 6 7

4
5

discussions out in the hallway because Mr. Gorman's 10:01:28 company wants to have an additional corporate representative in addition to himself which is
10:0 1:33

called as a witness herein, having been first duly sworn, was examined and testified as follows;
D(AMINATION
BY MR. BAY:
Q.

6 7 8
9
10
11

10:01:36
10:01:37 10:01:42

8 9
10 11 12 13

Mr. Shawn Temple. It's our position thats not
our side and it hasn't been done in the deposition

appropriate, it's Improper. It hasn't been done by 10:01:40
earlier taken of Mr. Strickland - Mr. Gorman. The -- what we are prepared to do, having
dIscussed it with counsel, Just to get the thing 10:01:44
10:01 :51

You are still under oath today?
Yes, sir.

A.
Q.

I want to continue on with the deposition

10:03:15 10:03:18

12
13

in the dealer case which we took for about a ago as you recall I think in June, July?
A.
Q.

10:01:54 10:01:56
10:02:00

day-and-a-half or whatever the hours were some time 10:03:20
10:03:23
Yes, sir.

14
15

going so we don't have to go to Judge Keys about another item, is to go ahead and allow Mr. Temple

14
15

10:03:26 10:03:26 10:03:28

16
17

to be here for the next hour. If we find -- the
attorneys have said that if we find Mr. Gorman

10:02:03

16
17

In connection with your purchase of

10:02:07

Suburban Dodge, did you do an application to
Chrysler Motors?
A.

18 19

looking over to Mr. Temple or there is motioning or 10:02:10

18
19

10:03:31

gesturing or things like that, that that's going to 10:02:13
stop.

Yes, sir.

10:03:32

20
21

10:02:16

20

(Whereupon, Gorman Deposition

We are agreeing without prejudice to our

10:02:16

21

Exhibit No. 69 was marked for

22
23

right to make an oection timely to Judge Keys.
And in addition, Mr. O'Hara is going to represent

10:02:18
10:02:21

22
23

identification.)
BYMR.BAY:
Q.

10:04:07 10:04:07 10:04:07

24

that Mr. Temple is not going to talk to Mr. Gorman 10:02:23
Page 1714

24

Mr. Gorman, let me hand you what's been

Page 1716

i
2

during the breaks except to say hi or how are you

10:02:28

i
2 3

marked as Exhibit 69 and ask you if you can tell me 10:04:08 what that Is.
A.
Q.

doing, but no questions or discussions about any of 10:02:31

10:04:10
10:04: 12

3

the substantive facts. I think that is the right
represent that.

10:02:32

It's the application for Suburban Dodge. This is an application that you fIlled
Yes, sir.

4
5 6 7

way to proceed, and I think Mr. O'Hara is going to 10:02:35
10:02:37 10:02:39 10:02:40

4
5

10:04:14

out?
A.
Q.

10:04:15
10:04: 15

Under those circumstances, we are prepared 10:02:38

6 7

togoforward.

This is your handwriting on each of the
Yes, sir.

10:04:16

8 9

MR. O'HARA: That's fine. I would just state

8 9
10
11

four pages?
A.

10:04:18 10:04:19

10
11

for the record that it's our position that we don't 10:02:43 10:02:45 think that there is anything wrong with having 10:02:47 Mr. Temple here as a corporate representative
despite the fact that Mr. Gorman is here and he is
the owner.

10:04:19 Q. You signed it on February 12th, 1990? 10:04:22 A. Yes, sir.

12 13 14 15 16 17 18 19 20
21

10:02:50

12 13

Q. As part of the signing, I assume that you 10:04:23
have read It and answered these questions fully and 10:04:27 10:04:29 completely?
A.

That being said, I understand your
concerns and we are willing to play under the

10:02:55 10:02:56 10:02:59

14
15

Yes, sir.

10:04:30

ground rules we just discussed, that you just 10:03:02 stated.
MR. BAY: And you are going to represent that Mr. Temple is not going to talk to Mr. Gorman during the breaks about anything involved in the
case?

16
17 18

Q. And that's why on Page 4 in the middle of 10:04:30
the paragraph, it says for the purpose of securing 10:04:32 10:04:37 credit and other considerations, the undersigned furnishes the above information which fully and truthfully sets forth my personal financial
10:04:40 10:04:42

10:03:04
10:03:05

19

20
21

10:03:07 10:03:08

condition, education, and business background? Is 10:04:46
10:04:51 that right, sir? A. What am I supposed to read, number four?
Q.

22
23 24

MR. O'l-IARA: That is correct.

22
23
24

10:03:10 MR. BAY: And that is acceptable to you, 10:03:12 Mr. Temple?

10:04:55

I was looking at Page 4 which is SD

10:04:57

3 (Pages 1713 to 1716)

Page 1861
1

capital, they knew then we put in the 1.9 million.
So they really weren't concerned about it. Okay?
Q.

12:41:02

i
2 3

which was on October, November, 2001, something in
that range?
A.
Q.

Page 1863 13:51: 15

2

12:41:02

13:51:17 13:51:18
13:51:19

3

Yeah. I'm

12:41:02 12:41:02 12:41:04
12:41:08

Right.

4
5

A.

Let's take a break here. I am getting

4
5 6

What I have handed you here is ExhIbit

confused and I want to go to lunch.
MR. O'HARA: Can you finish this up quickly?

89 which is documents from your dealership, May 2002 bank information and particularly on Page

13:51:22
13:51:28

6
7

MR. BAY: Ijustwantedtokindof--Iwantto 12:41:11
move to strike the answer as not responsive. BYMR.BAY:
Q.

7 8 9

M-437266 A.

13:51:35

8 9
10
11

12:41:14 12:41:17
12:41:21

Okay.

13:51:37
13:51:37 13:51:41

Q. - through M-437278, the Dodge of
Midlothlan May 2002 operatIng accounts
reconcIliation.
Agree?
A.
Q.
A.

But let me get back. I just wanted to

10
11

know I thought you said you had a conversation with 12:41:18
someone in which you said I'm going to give some money to my wife's political campaign out of these 12:41:24
12:41:31

13:51:44 13:51:46
13:51:46

12 13 14 15 16 17 18
19

12
13
14 15
1.6

Yes, sIr.

proceeds. I just want to follow that piece. I
know we had other questions, but if I could just
follow that one to ground here.
A.

12:41:28
12:41:31
12:4 1:35

And I am looking at Page M-437266.
Okay.

13:51:48
13:51:53

13:51:53

Q.

Youve seen documents like this before?
Yes.

I told you that I had a conversation where 12:41:33

17
18
19

A.
Q.

13:51:55 13:51:56
13:52:00 13:52:02 13:52:06

they knew that my wife was running for office and
to her campaign. other in response to that?
A.

This Is what Kathy Mannheim and Judy

that some of the money I had gotten was going to go 12:41:37
12:41:39
12:41:41

Gilmartln work with?
A.

20 21
22 23

20 21

Right.

Q. They didn't say anything one way or the
No.

Q. They use this to reconcile what is on the 13:52:03
bank statement with what's on the company books?
A.

12:41:43 12:41:44 12:41:44

22
23

Correct.

13:52:09
13:52: 10

24

Q. You took their silence as approval?

24

Q.

As I understand it, as I am looking down

Page 1862

i
2

A.

Correct.

12:41:47

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2 3

Page 1864

on the entry on Page M-437266, there is listed under the adjustments, the EFT from Falcon Flnandal to Manufacturer's Bank, correct?
A.
Q.

13:52: 12

Q.

But just so wé are clear, you specifically 12:41:47
12:41:54
12:41:57

13:52:16
13:52:20 13:52:24 13:52:26

3

told Falcon that you were going to take some of the 12:41:50
proceeds of this loan and use them as a

4
5 6 7

4
5
6

Yes, sir.

13:52:23

contribution from your dealership to your wife's
political campaign?
A.
Q.
A.

It's still being carried on the books in

12:42:00 12:42:02
12:42:03

May of 2002, but it was deposited sometime before
that?
A.

Correct. Correct.

7 8 9

13:52:29

8 9
10 11

But you didn't tell them the amount?
12:42:05

Yes,sir.

13:52:30

MR. BAY: Do you want to take a break for a
couple of minutes?

12:42:08

10
11

13:52:30 Q. I'm sorry. Strike that. It's not carried on the books. That's why 13:52:32

12:42:10

on this item. It's a reconciliation Item. It's
deposited in the bank account?
A.

13:52:34
13:52:38

12
13

ThE WiTNESS: I'd like to go to lunch.
(Whereupon, lunch recess taken.) 13:14:40
(Whereupon, Gorman Deposition

12 13

Not being an accountant, I don't

13:52:40
13:52:42
13:52:46

14
15

14
15 16 17

understand this. But yes, it was deposited and
yes, it's still here.

Exhibit No. 89 was marked for identification.)
BY MR. BAY:

16 17
18 19

13:50:56 13:50:57 13:50:57
13:51:01
13:51:03

Q. And that's why it's - and just like you
told me, the 1.98 number, it's 1.9, it's almost
2 million just as you told me?
A.

13:52:49
13:52:49 13:52:53

Q.

Mr. Gorman, what I wanted to do was take

18
19

20 21 22 23 24

up where we left off. You indicated that the $1.9 million,

Right.

13:52:55
13:52: 56

20 21

Q. And it was deposited sometime back in

instead of 1 million, 1.9 million was deposited

13:51:06

intoSalesinc.?
A.

13:51:10

22
23

Manufacturer's Bank - I'm sorry. It was deposited 13:52:57 13:53:02 in manufacturer's Bank sometime in the fall of
2001 after the Falcon loan closed?
A.

Approximately.

13:51:12 13:51:13

13:53:03

Q. And it's about the time the Falcon close

24

Yes,sir.

13:53:06

f
40 (Pages 1861 to 1864)

Page 1865
1

Q.

And whats happening here is that it

13:53:06

1

bank account-A.

13:55:08
13:55:09 13:55:09
13:55:11

2 3

hasn't been booked yet on the company books which

13:53:08

2

Right.

is why its on this reconciliation?
A.

13:53:10 13:53:13
13:53:13

3

Q. - but not yet accounted for In the
company books.
A. Q.

4
5

Correct.

4
5

Q. Doyouknowwhy--andyoumaynot. Do
company yet? 13:53:19

Correct.

13:55:12
13:55: 12

6

you know why it hasn't been put on the books of the 13:53:15

6
7 8

And this one looked like money taken out

7
8

of the bank account, but not yet accounted for In
the company books.
A.

13:55:14
13:55:21

A. To the best of my recollection, it had
had to make entries for it.

13:53:20
13:53:22 13:53:25 13:53:28

13:55: 17

9
10
11

something to do with the accountants and how they

9
10
11

I know where your question - but I don't

know if that's what that is.

13:55:24 13:55:26

Q. The Mulcahy firm?
A.

Q. Do you know what not booked in the
company's books means?
A.

12 13

Yes, sir, right.

13:53:33 13:53:35

12
13 14 15 16 17 18
19

13:55:28
13:55:31

Q. And then right underneath this, its -there's an entry wire transfers and checks
A.

No, sir.

14
15 16 17 18 19

Q. That Is Just something you would rely on
tell you or the accountants?
A.
Q.

13:55:31

Manufacturer's Bank not booked at 5/31/02, correct? 13:53:37
Yes, sir.

Shawn Temple, Judy Gilmartin, or Kathy Mannheim to 13:55:33
13:55:37

13:53:42 13:53:46
13:53:49 13:53:58

Q. And thats In an amount very much similar 13:53 :42
to the amount that was deposited from Falcon

Right, more the accountants.

13:55:39

Now, if you could turn to the next page of 13:55:42
13:55:49
13:55:51

Financial. They are just 7 grand apart it looks
like.
A.

thIs document which is M-437267. At the top, there 13:55:43
is something called adjustments to books. Do you see that?
A.

20
21

13:53:53

20
21

You are talking about the 1.981 and then
Right. I think one of them is a

22
23

the 1.988?
Q.

22

Right.

13:55:52 13:55:52 13:55:55

13:54:04
13:54:04

23

Q. Do you know whose handwriting this is by
the way?

24

$1,981 million deposit --

24

Page 1866
1

A.
Q.

Right.

1

A.

I think it's Judy's.

13:55:56

2
3

-- to Manufacturer's Bank.
Right.

13:54:07

2
3

Q. And that would be appropriate as far as

13:55:58

A.

4 5 6 7 8
9

Q. And then this next item is wire transfers 13:54:09
and checks that are not booked that Isa
1.988 negative or was taken out of the bank
13:54:11

4
5 6 7 8

13:56:00 you understand from her job description to do 13:56:03 something like this?
A.

Yes,sir.

13:56:04 13:56:04

13:54:14

Q. And then on line 11 of this document, it
Bank 5/31/02. Do you see that particular line?
A.

account, but isn't on the books yet, right?
A.

13:54:17 13:54:25 13:54:28
13:54:37

says checks and wire transfer dollars Manufacture's 13:56:07
13:56:13
13:56: 15

I don't know what that means, but

1,988 was not taken out like that, so if that is

9
10
11

10
11

your question-Q.

13:54:34 13:54:40 13:54:40
13:54:41 13:54:43

Right.
Correct.

13:56:17 13:56:17 13:56:21 13:56:24 13:56:25

I was just trying to get that the entry
Right, yes.

Q. Anditsaysl.98828832?
A.
Q.
A.

12
13

was there.
A.
Q.

12 13 14 15
16

Which is the same line as the page before, 13:56:21
Yes, sir.

14

First of all, we know the entry is there,
Correct.

correct?

15
16 17

correct?
A.

13:54:44
13:54:44

Q.

And this would appear to be the detail of 13:56:26
13:56:30

Q. And then it reflects items that total
account, but aren't yet accounted for in the
company books?
A.

17
18

what is encompassed in the 1.988 million, correct?
A.

18
19

1.988 million that have been taken out of the bank 13:54:56
13:54:56
13:54:56
13:54: 57

Again, not knowing accounting, I don't

13:56:38
13:56:41

19

know if it is or it isn't. It would be something
like there's - for some accounting, right.

20
21

20 21 22 23 24

that they would have to explain, but this does look 13:56:44
13:56:50

I don't know if that Is what that means.

22
23

Q. Because it looked like there was a reverse 13:54:59 item. It looked like it was the mirror image of 13:55:00

13:56:54 Q. Either Judy Gilmartin or Mulcahy could explain this, correct? 13:56:58
A.

24

the item above it which was money deposited in the

13:55:04

Probably Mulcahy, but yes.

13:57:00

41 (Pages 1865 to 1868)

Page 1869

Page 1871
1

i
2 3 4 5

Q.

But at least It looks like the detail of

13:57:03

A.
Q.

I believe Manuftcture's Bank. And that would have been in the full

13:58:46
13:58:49 13:58:51 13:58:52

the'1.988 is - I mean, I was looking at the

13:57:05

2

numbers kind of adding them up. That is what it
looks like?
A.
Q.

13:57:08

3

amount of the 232,000?
A.

13:57:09

4
5 6

I think I actually mortgaged it for

Right.

13:57:11

300 and put that back in.
Q.

13:58:54
13:58:59

6
7

And I was just going to try to make sure I 13:57:11

So somewhere else we could see an entry -- 13:58:56

understood some of these entries. And if you don't 13:57:13

7 8 9

A.
Q.

Yeah, I can get that for you.

8 9
10
11
12 13

know, I understand. Let me just run through them. 13:57:15
The entries from 2001 start November
5th, '01, $15,000 to SPT.
A.
Q.

-- that would show -- okay. But let me -- 13:59:00
13:59:00
13:59:03
Right.

13:57: 17

somewhere else we'd see an entry -A.

13:57:22

10
11

Do you know who that is or what that is?
No, sir.

13:57:28
13:57:30 13:57:33 13:57:35

Q. - showing a deposit of $300,000 after
this date?
A.
Q.

13:57:29

12 13

13:59:04

That wouldn't be Shawn Temple?

Yes, sir.

13:59:05

14
15 16 17 18 19

A.

I don't know if that would be Shawn or
13:57:35

14
15

Into the company's accounts?
Yes, sir.

13:59:06
13:59:08

not.

A.

Q. Then 11/20/1 MC) 300,000. Is that
Marquette Chrysler Plymouth?
A.

16
17

Q. The next entry December 3rd, '01, says MC). At least it looks like it does to me. Does

13:59:08
13:59:11

13:57:41

If that says MC), I would say that

13:57:44 13:57:48 13:57:54
13:57:56 13:57:58
13:57:51

18 19

ittoyou?
A.

13:59:15
13:59: 16

probably it ¡s, but -- on mine it's hard to read,
Bill. It's almost blacked out.
Q.

Yes, sir.

20
21

20
21

Q. And that is a transfer to Marquette
Chrysler Plymouth, Chrysler Jeep?
A.
Q.

13:59:16

It's not easy to read. I acknowledge
If it says MC), ¡t probably stands for

13:59:18
13:59:20
13 :59:21

22 23

that.
A.

22 23

Right.

And then the next entry December

24

Marquette chrysler Jeep, yes, sir.

24

26th, '01, It says to ERV Florida

13:59:23
Page 1872

Page 1870
1

Q. The next one is November 27th, '01, and
says GG DR memo with the word lot. And that says -- first of all, that is what it says, right?
A.
Q.

13:58:01

1

150,000?
A.
Q.

13:59:29

2
3

13:58:02

2
3

Yes, sir.

13:59:29

13:58:08
13:58: 10

Is that the condominium down payment you
13:59:32

13:59:30

4
5

Right, correct.

13:58:09

4
5 6

told me about?
A.

And then it has 232,000 and sorne odd 13:58:12
13:58:13
Correct.

Right. Yes, sir. I would assume that s, 13:59:33
13:59:35

6 7 8
9

dollars In that line?
A.
Q.

7
13:58:14

13:59:35 yes,slr. Q. And then December 7th, '01, I see KZ and
13:59:40

Does that mean anything to you?

8 U 23,500.
9
10
11

A.

Yeah. That was a lot I bought and then

13:58:15 13:58:18
13:58:21

Do you know what that is?
A.
Q.
is?

13:59:43

10
11

right after that, I put a mortgage on it and put
the money back in the company.
Q.

No, sir.

13:59:44 13:59:44
13:59:47

Do you know who Kevin Zarimba (phonetic)
Yes, sir.

12
13

When you say a lot, you mean like a piece 13:58:23
13:58:25 13:58:25
13:58:27

12
13

of property?
A. Q. A.

A.

13:59:48

14
15 16 17 18 19

Right, right. In Orland.

14

Q. Who is Kevin Zarimba?
A.

13:59:48
13:59:59

So then where was that piece of property?
13:58:29

15 16 17 18
19

He's a neighbor of mine. He's a

contractor.
pay him?
A.

13:59:59
13:59:59

Q.

So you bought -- did it have a house on it 13:58:31
13:58:33
13:58:34
13:58:34
Vacant.

Q. And did he do some work to require you to
13:59:59

or was it a vacant lot?
A.
Q.

I don't recall if he did or didn't. I

13:59:59
14:00:00

20
21

And so you bought a piece of vacant

20

mean, he's done work for me, built the house I live 13:59:59
in. He works on houses.
item if you know?
A.

property for 232,000 and then mortgaged it?
A.

13:58:37

21 22
23

22
23

Mortgaged it and put the money right back 13:58:39
13:58:41

Q, Would this be a personal Item or a company 14:00:01
14:00:04 14:00:06

into the store.
Q.

24

And who was the mortgage with?

13:58:42

24

I don't know.

42 (Pages 1869 to 1872)

i
2 3

Page 1873

Page 1875
1

Q. Then December 14th, 2001 -- and the LG, is 14:00:08
that Liz Gorman or is that somebody else?
A.

A.

Yes,sir.
Do you see those?

14:01:55
14:0 1:56

14:00:11 14:00:13

2 3

Q. There are a variety of BNY entries here.
A.

That would probably be Liz Gorman. What was the payment to Liz Gorman? It says $10,000.

14:02:00 14:02:02
14:02:03 14:02:05

4
5

Q.

14:00:17

4
5 6

Yes, sir.

A.

14:00:20 14:00:25 14:00:32 14:00:33 14:00:34 14:00:37 14:00:43 14:00:44
14:00: 47

Q. WhatisBNY?
A.

6
7 8

Q. Do you know what it was for? Is that some 14:00:22
salary she earns, is it a bonus, or is it a you know.
A.

That's Falcon.

7
8 9 10
11

Q. So there are six payments to Falcon of

14:02:06

political contribution? I am just trying to -- if 14: 00:28
I don't know if -- I don't think it would

105,000 -

9
10

A.Yes.
Q. --$424.50 each?
A.

ii

14:02:07 14:02:12 14:02:16 14:02:20 14:02:27
14:02:29 14:02:33 14:02:35

be a political contribution because her campaign

Yes, sir.

12

wasn't really up and gearing at that time.
Q.

12
13

Q. And that I assume is why Ms. Gilmartin has 14:02:12
written over on the side 105,000, 424.50 times six
equals January through May '02 to June '02?
A.

13 14
15

So as you sit here today, you are just not 14:00:39
No, sIr.

sure what that is?
A.

14
15 16

Yes,sir.

14:02:22

16
17

Q. Then the December 14th, 2001, shows SP and 14:00:44
JK in separate amounts.

Q. There are two entries I see here with no
Info received, January 18th and February 22nd.

17 18
19

18 19

Do you know what that is?
A.

14:00:53
14: 00:56

Do you know what those are?
A.

It could be, and, again, I'm not sure if

No, sir.

20

it is, but it could be Steve Phillipos and John
Kaye.

14:01:00

20
21

Q. And then I see a Gorman Good Government February 7th, '02, for $50,000 --

14:02:36

21 22
23

14:01:04

14:02:40
14:02:44 14:02:47

Q. Would that be Christmas bonuses, something 14:01:04
like that? Do you something like that to your key
people?

22
23

A. That would be - I'm sorry. I know you
didn't stop asking a question.
Q.

14:01:06

24

14:01:08

24

That's okay.

14:02:48

i
2
3 4 5 6 7 8
g

Page 1874

Page 1876

A.

Yes, sir.

14:01:09 14:01:09 14:01:12

i
2
3

Just do you see that entry?
A.
Q.
Yes.

14:02:48 14:02:50 14:02:50
14:02:55

Q. Do you think that's what it is? A. It could be. I don't want to say for

Is that the political campaign of your
Yes.

sure, but I might have given it to them ahead of

4
5

spouse?

time so they'd have it, but I don't want to say for 14:01:14 sure that's what it is, but it could be Steve 14:01:16 14:01:19 Phillipos and John Kaye, yes, sir. Q. And it looks like those payments in
December -- Fm sorry - in 2001 total
938,827.57 at least according to what
Ms. Gilmartin has wrItten?
A.

A.

14:02:56 14:02:56 14:02:58

6 7 8
9

Q.

Is that also true of the entries March

4th, '02, for 15,000 and March 8th, '02, for
125,000?
A.

14:01:21 14:01:23 14:01:24
14:01:30

14:03:02 14:03:04

Yes,sir.
Yes, sir.

10

10
11

Q. And April 22nd, '02, for 40,000?
A.

14:03:04
14:03:09 14:03:21 14:03:22 14:03:24

11 12 13 14 15 16 17 18
19

14:01:32 Yes, sir. Q. Then there's entries In January '02. The 14:01:32 14:01:34 first one is to Malinson Law Office for 96,000. 14:01:39 Do you see that? 14:01:40
A.

12
13

Q.

So all of those entries were contributions 14:03:10
Were they loans or contributions?

- I'm sorry.
A.
Q.

14
15

Loans.

16 17 18
19

So they were loans by the company Sales,

14:03:25 14:03:27
14:03:31

Yes, sir. I don't know what --14:01:41
14:01:41

Inc., to your wife's political campaign which was
called Gorman Good Government?
A.

Q. What is that about? A. I don't know.
Q.

14:01:42
14:01:43

Correct.

14:03:34 14:03:35

20 21

Are those lawyers that you've ever either
14:01:49

20 21
Q.

Are we done with this?
Yeah.

you or your companies have ever retained for
anything?
A.

14:01:46

22 23

22
23

And at some point in time then -- at some 14:03:45
point later than this, these disbursements out of
14:03:46

24

No, I don't think we have retained them. 14:01:50 14:01:52 Q. Sothatisasurprisetoyou?

24

the Manufactur&s Bank account and the cash coming 14:03:49

43 (Pages 1873 to 1876)

Page 2070
i.

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

2
3

4

RIDGE CHRYSLER JEEP LLC, d/b/a
5

)

MARQUETTE CHRYSLER JEEP, et al.,
Plaintiffs,

6

vs.

)

03 C 760

DAIMLER CHRYSLER SERVICES NORTH
7

AMERICA, LLC,

Defendant/Counterclaim Plaintiff
8

)

vs.

RIDGE CHRYSLER PLYMOUTH, LLCI d/b/a )
9

MARQUETTE CHRYSLER JEEP, SALES, INC., d/b/a DODGE OF MIDLOTHIAN,

)

)

10

GERALD W. GORMAN, and ELIZABETH A.
GORMAN,

)

il
12 13 14 15 16

The continued deposition of GERALD GORMAN,

called for examination pursuant to the Rules of Civil Procedure for the United States District
Courts pertaining to the taking of depositions,

taken before Shelly S. Rubas, a notary public within and for the County of Cook and State of
Illinois, at 190 South LaSalle, Chicago, Illinois,

17 18
19

on the 8th day of October, 2004, at the hour of
9:30 o!clock a.m.

20 21 22 23
24

Reported by: License No.:

Shelly S. Rubas, CSR
084-004298
09:08;05

i
2 3

Page 2071

APPEARANCES:

i
2 3

Page 2073

APPEARANCES (Continued):

4
5

HAGENS BERMAN, LLP, by MR. CHRISTOPHER A. O'HARA

6

7 8 9
10
11 12 13 14

1301 Fifth Avenue, Suite 2900 Seattle, Washington 98101 [phone] Representing dealerships in the Ridge case and plaintiffs in the Coburn
case;

4 5 6

DAIMLER CHRYSLER SERVICES NORTh AMERICA,

LLC, by MR. MA1THEW E. ROY

7
8 9
10 11 12

27777 Inkster Road Farmington Hills, Michigan 48334-5326 [phone] Representing Daimler Chrysler.

15 16 17 18 19

THE WEXLER FIRM, by MR. EDWARD ANTHONY WALLACE One North LaSalle Street, Suite 2000

13

14
15 16

ALSO PRESENT: Mr. Theriot Mr. Shawn Temple

Chicago, Illinois 60602 [phone] Representing the class plaintiffs in the Coburn case;

17 18

20 21 22 23 24
Page 2072

19 20 21 22 23

24
Page 2074

1

APPEARANCES (Continued):
By Mr. Bay

INDEX
2 GORAW GORMAN
2,075

2 3 4
5

JAMES J. ROCHE & ASSOCIATES, by
MR. 3AM ES 3. ROCHE

4
Numbs
5 6

EXHIBITS
Gorman Exhibit No. 109

IdtIflei
2,075 o8

6 7
8

642 North Dearborn Street Chicago, Illinois 60610 [phone] Representing plaintiffs;

8 9
10
116 117 118

9
10 11

2,094 2,098 2,102

12 13 14 15 16 17

THOMPSON COBURN, LLP, by MR. WILLIAM BAY MR. JEFFREY FINK One US Bank Plaza

11 12
13 14

122 124

216

24
Z32o

St. Louis, Missouri 63101 [phone] Representing Defendants;

16 17

in

LO
18

130 131 132

I33
134 135 136 137 138 139 140
14

20 21 22
23 ¿-t

19

20
21

2,326 2,332 2,334 2,338 2,345 2,347 2,359 2,362 2,366 2,371 2,394 2,396

22 24

2 (Pages 2071 to 2074)

Page 2075
1

(Whereupon, the witness was

i
2

Page 2077

that Sales was in default of certain obligations,
correct?
A.
Q.

09:46:40

2
3

duly sworn.)

09:44:07 09:44:07

09:46:43

MR. BAY: We, for the record, still object to

3

Yes, sir.

09:46:44
09:46:49 09:46:51

4
5

having Mr. Temple here, but I assume that you want 09:44:10
to have him here pursuant to the same agreement and 09:44:13 based on the same representations you are making on 09:44:17
behalf of Mr. Temple and Mr. Gorman?
MR. O'I-IARA: Correct.

4
5

And at this point, Chrysler Financial was 09:46:45
Chrysler Financial was demanding that

asking -- strike that.

6 7 8 9

6 7

09:44:20 09:44:24

there be an additional investment of $2.1 million, 09:46:53
correct?
A.

8
9
10 11

09:46:58
09:46: 59

(Whereupon, Gorman Deposition

Yes, sir.

lo
11

Exhibit No. 109 was marked for Identification.)
GERALD GORMAN,

Q. And also provide an accurate consolidated
financial statement? A. Yes, sir.

09:47:01

09:47:04 09:47:05

12 13

12
13 14
15

called as a witness herein, having been first duly sworn, was examined and testified as follows:
EXAMINATION
BY MR. BAY:
Q.

Q. And was an accurate consolidated financial 09:47:06
statement ever provided as requested in this
letter?
A.

14
15 16 17

09:47:08

09:47:12 I don't believe it was.
09:47:14
09:47: 16

09:45:19

16

Mr. Gorman, let me hand you whaes been

09:45:19 09:45:22

17 18 19

Q. Was $2.1 million in the form of a true
the company as a result of this letter?

18 19

marked as Exhibit 109 and ask you If know -- can

capital investment or a subordinated loan put into 09:47:2 1 09:47:25

tell me what that is.
A.

09:45:27 09:45:28 09:45:32

20
21

It's a letter from Mr. Buckley to Sales,

20
21

A. The 2 point million that I don't agree
Q. That was the 925,000 was put in?
A.

09:47:28
09:47:35 09:47:44
Page 2078

Inc., and myself and my wife.

needed was not put in, but there was money put in. 09:47:32

22 23

Q. A letter you received personally and as
president of the company?
A.

09:45:33
09:45:35

22 23 24

Yeah, and subsequent money after that from 09:47:40

24

Yes, sir.

09:45:36

the proceeds of the sale of Marquette.

Page 2076
1

Q. This was dated September 20, 2002?
A. Q.

09:45:36
09 :45:39

i
2

Q.

Proceeds from the sale of - I didn't

09:47:45

2 3

Yes, sir.

09:45:38 09:45:42

hear.

And Mr. Buckley was writing on behalf of

3

4
5

Chrysler Financial about certain things that are contained in the letter?
A.
Q.

4
5 6 7
8

09:47:47 Of Marquette. 09:47:49 Q. So during the calendar year 2002 at the
A.

09:45:45 09:45:47 09:45:48
09:45:5 1 09 :45:53

end of the year, another $925,000 was put in?
A.

09 :47:51

6 7

Pardon me? Yes, sir.

Yes, sir. Pardon me?

09:47:56 09:47:56 09:47:57 09:48:00 09:48:03

I'm sorry?
Yes, sir, I said.

8
g
10
11 12

A.
Q.

Q.

By the end of the calendar year 2002, an

I didn't hear the word before that.
I said pardon me and then I said, yes,
This letter indicates that Sales had cash

9

additional $925,000 was -

A.

09:45:55 09:45:57
09:46:01

10
11

A. Yes
capital?
A.

sir, because you were like -Q.

Q. - placed in the dealership as paid in
Yes, sir.

09:48:04

12

09:48:06 09:48:07
09:48:08

13 14
15

needs of $2.1 million, correct?
A. Yes, sir.
Q.
A.

09:46:04 09:46:07 09:46:07 09:46:08

13
14
15

Q. And then your testimony is that sometime
in 2003 after Marquette was sold, there was additional proceeds put over into Midlothian?
A.

Did you agree with that?
No, sir.

09:48:10
09:48: 13

16 17 18 19

16 17

Q.

It also indicates that there were certain 09:46:12

Yes, sir.

09:48:16 09:48:25 09:48:28
09:48:30 09:48:31

monies due under the loan documents as of September 09:46:15
18th; is that correct?

18
19

Q.

Have you ever been a shareholder of the
Yes, sir.

09:46:18
09:46:29

First Suburban Bancorp?
A.

20
21

A. That might have been correct, yes.

20 21

22 23

Q. You are not for sure, but it seems correct 09:46:31 09:46:34 to you?

Q. When did you become a shareholder of the
First Suburban Bancorp?
A.

22
23

09:48:34 09:48:35
09:48:41

A.
Q.

Yes, sir.

09:46:35

I bought some stock in the company

-

24

And, of course, this letter gave notice

09:46:36

24

sometime in 2000 or 2001.

3 (Pages 2075 to 2078)

i
2

Page 2299

Page 2301

club bIll.

14:45:06

i
2
3

made on behalf of Mr, Temple?
A.

14:52:22 14:52:25 14:52:26

Again, is that a personal item attributable to you and your spouse or Is lt a
company expense?

14:45:06 14:45:09
14:45:12 14:45:13

I don't know.

3

Q. They should have, correct?
A.

4
5

4
5 6 7 8 9

I don't know. That would be -- I don't
Did your business withhold taxes on all

14:52:28
14:52:31

A. To me and my spouse.
Q.

know.
Q.

14:52:30

6

Lake Effect Marina?

14:45:15 14:45:17 14:45:20 14:45:25 14:45:26

7 8

A.

Me and my spouse.

the payments that were made on Mr. Temple's behalf? 14:52:34
A.
Q.

Q. The MEPIA Gorman property insurance in
Michigan?
A.

I don't know.

14:52:38 14:52:40
14:52:41 14:52:43

9
10

Again, that is something they should have, 14:52:38

li
12
13

Me and my spouse. Me and my spouse. University of Chicago? Me and my spouse.

10 11 12 13

shouldn't they?
A.
Q.

Q. The Orland Open MRI?
A.
Q.

14:45:28
14:45:31

I don't know. I am not an accountant.
You have been a business owner for

14:45:35 14:45:38
14:45:43

14 years. I would assume you know you withhold

14:52:44

14
15

A.
Q.

14
15

taxes and pay payroll taxes on compensation paid to 14:52:48
your employees.
A.

Verizon North, Gorman Michigan phone?

14:52:51

16
17 18

A. Me and my spouse.
Q.

14:45:45

16 17 18
19

I know you do payroll taxes. I dont know 14:52:52
14:52:57

And the last one to Shawn Temple, again, a 14:45:48
14:45:55
No, sir.

the other part of what you are talking about. You 14:52:54

$1,683, you don't know what that is as you sit here 14:45:5 1
today?
A.

would have to talk - you know, I dont know.
(Whereupon, Gorman Deposition

19 20 21 22 23 24

14:45:56
14:46:02 14:46:07

20
21

ExhibIt No. 125 was marked for

Q. Go to October. The first entry is Barry
Landscaping.

identification.)
BY MR. BAY:
Q.

14:53:33
14:53:33

22
23 24

Is that one attributable to you and your
spouse personally or to the company?

14:46:07 14:46:10

Mr. Gorman, let me hand you Exhibit

14:53:34 14:53:37

125 and ask you If you can tell me what that is.

Page 2300
1

Page 2302

A.

Myself and my spouse.

14:46:12

i
2 3

A.

It's a form D2 for the Gorman Good

14:53:40 14:53:43 14:53:45

2

Q. The November statement. There is only one 14:46:30
new one I see there which is towards the bottom of 14:46:32
November, tax collector Gordon Hammer or Hamer
(phonetic) Real Estate tax. Do you see that, sir?
A.

Government Group.
Q.

3

This Is the one that was as of or filed 14:53:44
Yes.

4
5

14:46:35

4
5

March 12, 2003, correct?
A.
Q.

14:46:42
14:46:43

14:53:51

6 7 8

6
7 8 9
10
11

So that was after the lawsuit was filed,
Correct.

14:53:53

Yes, that's got to be some tax bill on
So that is a personal item?
Right.

14:46:45
14:46:48

correct? A.
Q.

14:53:55

some property we own.
Q.
A.

14:53:56
14:53:56

9
10
11 12 13

14:46:50 14:46:51 14:46:52 14:46:54

I would ask you to turn towards the back.
Do you see that, sir?

I think that Is the second to last page, CF-58889. 14:54:00
14:54: 07
A.
Q.

Q.

So all of these personal items, if your

accountants were here, all of these items that

12

Yes, sir.

14:54:11
14:54: 12 14:54: 18

appear on Exhibit 124, which you've told me about, 14:46:57 or any other place they appear on the records, you 14:46:59

13

Does this set out $395,000 in loans from

14
15 16 17

14
15

Sales, Inc., and Dodge of Midlothlan to the Gorman
Good Government Group?
A.
Q.

would tell your accountants, Mr. Mulcahy, these are 14:47:02
personal items not chargeable to the company, please fix the records in that regard, correct?
A.

14:54:21 14:54:23
14:54: 26

14:47:04 14:47:07

16
17

Does this what?

Does this set out loans In the amount of

18 19

Correct.

14:47:09 14:47:10
14:47:12

18
19 20
21

$395,000 that were made by Sales, Inc., and Dodge
of Midlothian to the Gorman Good Government Group?
A.

14:54:29 14:54:33

Q. Thank you.
MR. BAY: Take a break for a second? (Whereupon, recess taken.)
BY MR. BAY:
Q.

20 21

Yes, it does.

14:54:36
14:54:37

14:52:14
14:52: 14

Q.

And this accurately sets out those loans,

22 23 24

22

correct?
A. Q.

14:54:40
14:54:41 14:54:41

Mr. Gorman, did your business, Midlothian, 14:52:15
14:52:20

23
24

Yes.

pay payroll taxes ori all of the payments that were

And they were made by your company,

59 (Pages 2299 to 2302)

Page 2303

i
2
3

correct?
A.
Q.

14:54:43 14:54:43

i
2
3

Page 2305

telling me that the Gorman Good Government Group did not repay the dealership, correct?
A.

14:56:42

Yes.

14:56:44 14:56:47

Have they been -. have they been repaid?
No.

14:54:44
14:54:53

Correct. They haven't repaid anybody.

4
5

A.
Q.

14:54:49

4
5

Q. And as I understand It, you are now sayIng 14:56:50
that the loans are not from the dealership, they
are from you?
A.

I thought earlier you told me something

14: 56:53

6
7

had happened with regard to these. Let me go back. 14:54:56
The Gorman For Good Government Group has 14:55:01

6 7

14: 56:56

Correct.

14:56:56
14:56:57 14:57:02 14:57:06

8
9

never repaid these loans to Dodge of Midlothian or
to Sales, Inc., correct?
A.

14:55:03

8
9
10 11 12 13 14

Q. And how did - did you acquire the loans,
the right to payback. you personally as opposed to
the company?
A.

14:55:07 14:55:08 14:55:12
14:55:14 14:55:17

10
11

No. The loans are still outstanding.

14:57:05

Q. That is what I meant, the loans are still
outstanding. In other words, the Gorman Good

Because it was money I got from Falcon

12
13

that I borrowed, that Gorman Family Holdings

14:57:08
14:57:11

Government Group still owes $395,000 to Dodge of
Midlothian or Sales, Inc., correct?
A.

borrowed from Falcon. It was my money.

14
15

14:55:21

Q. Was there -- I thought originally the
dealershIp?
A.

14:57:16
14:57:19

No. Actually, it owes it to me. It was

14:55:23
14:55:32

15 16 17 18 19

Falcon money, the 1.9 million was plad Into the
14:57:23

16 17 18
19

my money.

14:55:32 14:55:32
14:55:32 14:55:35

Q. How does it owe it to you since the
statement says It was a loan from the company?
A.

It was put into Sales, Inc., but lt was
Well, wasn't one of the purposes of the

14:57:24 14:57:26 14:57:29 14:57:32
14:57:35

never lent to Sales, Inc.
Q.

Because it's been amended I believe

20
21 22

because the money came out of the store which was my money from Falcon. 14:55:38

20
21

loan to provide working capital for Sales, Inc.,
according to the Falcon documents?
A.

Q. So did you pay the store $395,000?
A.

14:55:40 14:55:42 14:55:46

22 23 24

If-- that is one of the purposes of it,

14:57:37
14:57:40
14:57:43

23 24

No. Falcon gave me the money that I put

but -- that is one of the purposes, but according
to Ralph Miller and Vernon Schwartz, we were

in, so we rearranged it that the money was owed to

Page 2304
1

me. Q.

14:55:50

i
2

Page 2306

allowed to take money out of it ourselves. The

14:57:47

2
3

Could you explain that for me, how it was 14:55:51
14:55:53

money was actually lent to Gorman Family Holdings, 14:57:49

rearranged after March of 2003?
A.

3

nottoSales,Inc.
Q.

14:57:53

4
5

You Just go in and you make changes in the 14:55:57
14:56:05

4
5

I think I understand that from reading the 14:57:54
14:57:56

-- there is a way to go about it. I don't know how 14:56:02 you do it, but It's been done.
Q.

documents, but there were only very circumscribed we talk about that yesterday?
A.

6

6 7
8 9 10
11

purposes for the cash, weren't there, sir? Didn't 14:58:00 Yeah, we talked about it yesterday and you 14:58:03
14:58:04
14:58:07 14:58:09 14:58:12

7 8
9
10
11

Well, to begin with, and I don't want to

14:56:07

dig all these out because I kind of skipped over

14:56:09
14:56:11

this because I thought we agreed on that, but the
business, Sales, Inc., had written checks to the
Gorman Good Government Group, correct?
A.
Q.

asked me who told me, you know, that I could take the money out personally, and I remembered that I
spoke to both Vernon Schwartz and Ralph Miller.

14:56:15
14:56:18

12 13 14 15 16 17

Correct.

14:56:20

12
13

And I could take that money out as long as I met

In the amount of $395,000, several checks, 14:56:21
14:56:24
Correct.

their ratios. So the money technically should have 14:58:16

right?
A.

14 15 16
17 18 19

never even went into the Sales, Inc., account It 14:58:19
should have went into a separate account for Gorman 14:58:22
Family Holdings.
Q.

14:56:24
14:56:25

Q. And it's accurately reported on this
ExhibIt 125, correct?
A.
Q.

14:58:25

14:56:27
14:56:29 14:56:30

And your testimony was that the people

14:58:26
14:58:27

18
19

Correct.

from Falcon, Vernon and Ralph, specifically agreed

As of March 2003?
Correct.

that you could take their proceeds and use t to
give to your wife's political campaign?
A.

14:58:32
14:58:35

20 21 22 23 24

A.

14:56:32
14:56:34
14:56 :37

20
21

Q. And I can get all the checks out, but I
don't think you disagree with me on that, right?
A.
Q.

No. What I said is that Vernon and Ralph 14:58:3ß
14:58:44

22
23

were aware that some of the money we got from them 14:58:42
were to go to certain personal things such as my
wife's campaign. 14:58:47

No.

14:56:39

Now, I think at this point, you are

14:56:40

24

60 (Pages 2303 to 2306)

i
2 3

Page 2307
Q.

So they were aware of that, that it was
Ralph -

14:58:49

i
2 3

Page 2309

we walked with a million 9. They paid out -- they
gave us an additional 1.9 more than we would need

15:00:32 15:00:36

going to go -A.
Q.

14:58:51 14:58:52
14:58:53

after we paid off LaSalle and everybody else. That 15:00:40
1.9 was if we wanted to use it for whatever
guidelines, and we could use it for personal
15:00:42

4
5

I'm sorry. Let me finish. My apologies.

4
5

The Falcon people were aware that you were 14:58:55

purposes we wanted as long as we stayed within our 15:00:45
15:00:49 15:00:52 15:00:54 15:00:58
15:00:57

6
7
8

going to take some of their proceeds and contribute 14:58:58
it to your wife's political campaign?
A.

6 7

14:59:02

reasons. That is why we ended up with the

I don't know If they were specIfically

14:59:05 14:59:06
14:59:09

8
9
10
11

addItional money. We were free to do what we

9

aware of the campaign. Ralph told us we can do whatever we want with the money as long as we met
the requirements.
14:59:13

wanted to do with it.
guidelines.
A,

10
11

Q. Your company was never within their
15:01:00
Pardon me?

12
13

Q. And I really dont - I am not trying to

14:59: 14

12 13

15:01:02 15:01:02
15:01:03

argue. I Just want to know whether they knew the
money was going to your wife's political campaign

14:59:15
14:59:17

Q. Your company was never within the
guidelines, were they? did a Deloitte and Touche check.
Q.

14
15

14
15

or they didn't. Tell me one way or the other.
A.

14:59:20

A. Was in the beginning. They came in and
Weren't you almost immediately out of

15:01:05 15:01:12

16

14:59:21
14: 59:22

16 17
18
19

15:01:08 15:01:15

17 18
19

I don't know specifically if they knew or

not, but they knew that we -- I could do whatever 1 14:59:24
want with the money personally as long as I met the 14:59:26
requirements.
Q.

compliance with their covenants?
A.
Q.

I don't know if we are or we weren't.

20
21

14:59:29
14:59:29

20
21

15:01:17 I thought we went through that letter and 15:0 1:20 15:01:22
15:01:23

Well, weren't there specific limited

did thatyesterday?
A.
Q.

22
23

purposes? I thought the lImited purposes we talked 14:59:32
about were that it was used to buy the real estate for $4 million, correct?
14:59:34 14:59:38

22 23 24

Wasthatfor'Oi?

Well, the payment was in November of

15:01:25 15:01:26

24

'01, correct? And the money was sull sitting In

Page 2308
1

i
2

Page 2310

Midlothian's account in May of 2002 because you and 15:01:30

2 3

I looked at that, correct?
A.

15:01:33 15:01:35

3

Right.

4
5 6

4
5
6 7

Q. And by that time, you were already out of 15:01:36 compliance with their covenants, weren't you, sir? 15:01:38
A.

I don't know what time it was. I mean,

15:01:43

7

that is questions you got to ask to the accountants 15:01:44
because there wasn't a problem right away with the
account.
Q.

8

8
9

15:01:47

9
10
11

15:01:50 15:01:51
15:01:55

10

li

Well, I guess I'm -. I think I understand

what you are telling me, but the $1.9 million was

12
13

12
13

supposed to go to - strike that.
There was no purpose listed ¡n the

15:02:02 15:02:05
15:02:07
15:02: 10 15:02: 12

14 15
16 17 18

14 15

documents that they were loaning money personally

to you, were they?
A.

16

I don't believe so, but I can tell you

17
18
19

whattheytoldus.
Q.

15:02:14
15:02:15

It was a prohibited purpose actually. It

19

20
21

20
21

was a prohibited purpose to use the money. We can 15:02:18 dig out the documents. 15:02:21
A.

You know what, Mr. Bay? You don't see

15:02:22
15:02: 24

22 23

22
23

them suing me, do you, like you are? They knew

what went on. Now, I told you Vernon Schwar

and

15:02:27

24

24

Ralph Miller knew. Now, thars my answer. It was 15:02:31

61 (Pages 2307 to 2310)

Page 2311

Page 2313
1

i
2 3

my money, came from them, was Gorman Family

15:02:32

the Gorman Family Holdings would pay the debt to
Falcon?
A.

15:05:38

Holdings. Let's not make an issue here about what 15:02:35

2
3

15:05:42
15:05:45

Is prohibited, what isn't. They knew. Now, If

15:02:38

I don't - I didn't understand all the

4
5

they have a problem with it like you, they will sue 15:02:40
me, but they have chosen not to. They have chosen 15:02:42

4
5

intricacies of this loan. Shawn handled this loan 15:05:49

and worked it out with Falcon. So if that is what 15:05:53
you are telling me it is, then that is what it is.
15:05:56
Q. I am just showing you a document that was 15:05:58

6
7 8 9
10
11 12 13

to work with us. So I don't know what to tell you. 15:02:45
My money to do what I want with. They
knew it. There is no surprises here. They had
people come in. They knew everything that was
Falcon saying I am a bad person, let them do it in
aIl due respect. Thank you.
Q.

6

15:02:47 15:02:50
15:02:53

7
8

produced by your lawyer, Mr. Roche, and asking you 15:06:00
15:06:11 questionsaboutit. 15:06:11 A. And I have not had time to read the

9
10
11

going on. So if you are trying to make a case for 15:02:56
15:02:59

document or get familiar with it.

15:06:11
15:06:11

15:03:04 15:03:06 15:03:08
15:03:09

12
13

Q. lam happy to take a break and have you
read the document, but I think it's a guarantee by
Sales, Inc., of the indebtedness of Gorman Family
Holdings to Falcon.

15:06:11

14
15

Anything else you want to say?
No.

14 15

15:06:15

A.
Q.
A.

15:06:20 15:06:27
15:06:34

16 17

You seem very agitated at this point. Well, I am, Bill, because you are trying

15:03:10 15:03:12 15:03:16
15:03: 18

16 17
18 19

Let's go off the record I guess.
A.

It says in the back, guarantor Sales d/b/a 15:06:29
15:06:45
15:06:51

18 19

to twist everything. I tell you something and you 15:03:14
don't want to hear what I have to tell you.
Falcon money was sent to Gorman Family

Dodge of Midlothian.

Q. So can we agree, sir, that document

20
21

20
21

Exhibit 126 is the guarantee by Sales, Inc., of the 15:06:47
indebtedness of Gorman Family Holdings to Falcon
Financial? A.

Holdings. It was deposited In that bank it should do with It.
Q.

15:03:22

22 23

have been. It was my money to do what I wanted to

15:03:24

22
23

15:06:55 15:06:56

15:03:26 15:03:30

Is the guarantor, correct.

24

Because I thought Midlothian guaranteed

24

Q. And it's your testimony that on Exhibit

15:07:08

i
2 3

Page 2312

Page 2314

that loan, Sales Inc., guaranteed that loan?
A.

15:03:32

i
2
3

125, that the money owed by the Gorman For Good

15:07:12

I'd have to look at that. I don't know

15:03:36 15:03:38

Government Group is now owed to you personally, not 15:07:20
to Dodge of Midlothian?
A.
Q.

Sales, Inc., guaranteed that loan. I think that

15:07:23 15:07:24
15:07:25 15:07:27 15:07:31
15 :07 :35

4
5 6

loan -- I think they guaranteed the lease, but the 15:03:41
loan was meant to Gorman -- they have a real weird 15:03:43

4
5

Correct.

Is there any documentation or pieces of

way of doing their loan. It's a real - Shawn
Falcon deal than I would be.
(Whereupon, Gorman Deposition

15:03:46 15:03:52
15:03:55

6
7 8

paper that eviden that, sir?
A.

7

would be much more better at explaining this whole

Not that I know of.

8
9

Q. And did you do some oral agreement with
somebody to do it this way?
A,
Q.

9

15:07:37
15: 07 :41

10
11

Exhibit No. 126 was marked for Identification.)
BY MR. BAY:

10
11

No.

15:04:29 15:04:29 15:04:30
15:04:33

You just did it because Midlothiari is your 15:07:43 15:07:49

12 13 14 15 16 17 18 19

12 13

company and it's your money and you can do what you 15:07:46

Q.

Let me hand you, Mr. Gorman, what's been 15:04:35

want, right?
A.

marked as Exhibit 126 and ask you if you can tell

14

No, sir. I did it because the extra money 15:07:50

me what that is.
A.

15

that came in from Falcon was the money that I lent 15:07:55

It's the guarantee from Gorman Family
Actually, this is a guarantee by Sales

15:04:36 15:04:39
15:04:43 15:05:23

16
17 18 19

my wife, I went to tour (sic), and that is who lent 15:07:57
the money to her.

holdings, LLC. Borrower, Gorman Family Holdings.
Q.

15:08:04
15:08:05

Q. The company books, which we have gone

Inc., isn't it, sIr?
A.

15:04:46
15:05:26
15:05:31

through, and we can go through in more detail, all 15:08:07
show that Dodge Midlothian loaned the money to the 15:08:10 Gorman For Good Government Group, correct? We have 15:08:13
checks and ledgers that show that.
15:08: 17

20
21

The borrower is Gorman Family Holdings.

20
21

Q.

First of all, we know that Gorman Family
Correct.

22 23 24

Holdings was the borrower from Falcon, correct?
A.
Q.

22 23 24

15:05:33

A. And I own Dodge of Midlothian.

15:08:19 15:08:21

Isn't it true that Sales, Inc., guaranteed 15:05:34

Q. So you can do whatever you wish with the

62 (Pages 2311 to 2314)