Professional Documents
Culture Documents
15 DIRECT EXAMINATION
16 BY MR. BAXTER:
17 Q. Good morning, Mr. Nicolaysen. How are you?
18 A. Good.
19 Q. What position do you hold with CCPOA?
20 A. I'm the chief finance officer.
15 A. Yes, sir.
16 Q. All right. And current knowledge of the CCPOA's
17 current assets and liabilities?
18 A. Yes, sir.
19 Q. Why don't we talk about some of those.
20 Did you prepare what was called a Statement of
3 A. No.
4 Q. My fault.
5 (Monitor adjusted.)
6 Have it there?
7 A. Yeah.
8 MR. MASTAGNI, SR.: Your Honor, we'll stipulate the
9 documents can come in should Mr. Baxter desire.
10 MR. BAXTER: Great. Thank you very much.
11 I would like to move Exhibit 1182 into evidence.
12 THE COURT: Received.
13 (WHEREUPON, Plaintiff's Exhibit Number 1182 was
received into evidence.)
14
15 BY MR. BAXTER:
16 Q. Okay. Mr. Nicolaysen, just to acclimate the jury to
17 this document, this is something that reflects your
18 assessment of the financial position of CCPOA as of September
19 30, 2010, right?
20 (Exhibit published.)
21 A. Yes.
22 Q. Okay. And the first half of the document at the top
23 has the indication of "Assets," right?
24 A. Right.
25 Q. Okay. And that data that follows represents your
21 the net of the assets at the top minus the liabilities near
22 the bottom?
23 A. Right.
24 Q. Okay. Thanks.
25 So this exhibit actually consists of two sheets,
15 A. Yes, I do.
16 Q. When was this sheet prepared?
17 A. This was prepared the middle of last week.
18 Q. All right.
19 And then if we could, go to the first sheet, so the
20 prior page we were looking at, and look at the top of that
21 document.
22 (Exhibit published.)
23 It has the same heading, but it says in parentheses
24 "After the date amended."
25 Do you see that?
3 Yes?
4 A. I'd have to -- I'd have to ask you to repeat the
5 first part.
6 Q. So the 1.5 million that's currently owed relative
7 this litigation --
8 A. Uh-huh.
9 Q. -- and whatever previous amount, I don't know what
10 that amount is, that CCPOA has paid to its attorneys in this
11 litigation, that is not going to be a recurring sum over and
12 over, year after year, correct?
13 A. No, it isn't. What I don't know is whether all the
14 bills are in for that.
21 A. Yes, I do.
22 Q. Okay. And that represents the amount of the jury's
23 verdict that was just delivered on Monday as against CCPOA,
24 correct?
25 A. Correct.
3 sidebar?
4 THE COURT: Come to sidebar.
5 (Whereupon, the following discussion was held at
6 sidebar.)
7 THE COURT: Record will reflect we're at sidebar.
8 Yes, Mr. Mastagni.
9 MR. MASTAGNI, SR.: The problem I'm having is he's
10 discussed the attorney fees. There are ongoing cases --
11 there are ongoing other cases. I would ask at this point
12 there be no further mention of the attorneys' fees.
13 Obviously he doesn't know what's due to other firms, how it
14 is apportioned or anything else.
3 financials.
4 Q. Well, I understand.
5 A. Okay.
6 Q. I understand what you are saying. Let me ask you
7 this: The accounts payable, you've already testified that it
8 is your best estimate. I'm not holding you to surgical
9 precision.
10 A. Right.
11 Q. But your best estimate is 1.5 of the 2.5 million in
12 accounts payable currently is attributable to attorneys' fees
13 so I guess I'm asking if one were to -- if the jury were to
14 ignore that sum --
15 A. Uh-huh.
16 Q. -- that would raise the net asset value of CCPOA,
17 right?
18 THE COURT: Do you want to object that it is argument
19 and he ought to take that up if he gets to argument?
20 MR. MASTAGNI, SR.: Thank you, Your Honor.
3 BY MR. BAXTER:
4 Q. I want to talk Mr. Nicolaysen about one other entry
5 in this exhibit. If we could, go to the top of this page.
6 (Exhibit published.)
7 And so there is an entry that says "Current assets."
8 This is the first entry. It says "Cash and cash
9 equivalents," 1.873 million dollars.
10 Do you see that?
11 A. Yes, I do.
12 Q. Isn't it the case that as of August 31, 2010, so one
13 month before what this reflects, CCPOA's cash balance was
14 $3,337,034?
15 A. Yes.
16 Q. Okay.
17 A. Well, approximately. I don't have those numbers, but
18 that's approximately correct.
19 Q. All right. Fair enough.
20 And isn't it the case that for fiscal year 2006,
15 A. We own no motorcycles.
16 Q. Do you own a motorcycle trailer?
17 A. We own a trailer. I don't know if is a motorcycle
18 trailer. We own two or three trailers that we do a lot of
19 events with.
20 Q. Okay. Has CCPOA ever, within the last couple of
15 right?
16 A. Within a thousand.
17 Q. And CCPOA has had roughly that number of members for
18 the last several years, right?
19 A. Right.
20 Q. And CCPOA's primary source of revenue is membership
21 A. Okay.
22 Q. Now, in 2006 CCPOA'S net worth was approximately -- I
23 won't say approximately. It was $16,555,789, correct?
24 A. That sounds right.
25 Q. Okay. All right.
3 $4,704,794?
4 A. Right.
5 Q. Has CCPOA lost membership precipitously between 2006
6 and today?
7 A. A small part, but that's not a large part of that
8 difference.
9 Q. Okay. Well, let's talk about that difference.
10 Let's talk about expenses.
11 CCPOA's largest single expense item is the salaries
12 of its employees, correct?
13 A. Right.
14 Q. And in fact, for CCPOA's 2010-2011 fiscal year, CCPOA
15 Q. Okay.
16 MR. BAXTER: Your Honor, this is a new exhibit that
17 has not previously been listed, but I would like to move it
18 into evidence. It would be Exhibit 1183.
19 MR. MASTAGNI, SR.: Your Honor, may we come to
20 sidebar?
21 A. Yes, it does.
22 Q. All right. And CCPOA's second largest expense item
23 is for -- at least for this year, 2010-2011, is for legal
24 fees; is that right?
25 A. Let me take a look.
15 I got 19,222,000.
16 Q. Okay. Great.
17 And if you look at the last page -- the second to
18 last page of what's been marked as Exhibit 1183, the total
19 amount of budgeted expenditures is $29,948,619, right?
20 A. Right.
21 A. Right.
22 Q. Okay. And besides the legal fees that we talked
23 about before, there's also on page 2, line 27, a $525,000
24 item called Legal Defense.
25 Do you see that?
3 Q. -- of CCPOA.
4 CCPOA owns its headquarters in West Sacramento,
5 correct?
6 A. Yes.
7 Q. How much is that building worth?
8 A. I don't know.
9 Q. Do you know how much CCPOA paid for it?
10 A. That I know. Four million dollars.
11 Q. Okay.
12 A. That includes the land and the building.
13 Q. When was that?
14 A. 1992.
21 headquarters?
22 A. Yes. To be honest, we also own a piece of land in
23 Southern California.
24 Q. Is that in Rancho Cucamonga?
25 A. Yes.
3 that?
4 A. It was a trade. I think the escrow documents would
5 show 700,000.
6 Q. Is that paid off?
7 A. Yes, it is.
8 Q. What's that for?
9 A. We were hoping to build an office in Southern
10 California.
11 Q. Is that still the plan?
12 A. It's been put off for many years.
13 Q. When did you buy that pieces of property?
14 A. Three to four years ago. I'm just estimating -- my
15 best estimate.
16 Q. And then the houses. You mentioned two houses.
17 Where are those located?
18 A. Those are in the Natomas area of Sacramento.
19 Q. Are those paid off?
20 A. Yes, they are.
21 to be honest.
22 Q. Okay. So each year CCPOA purchases about eight
23 vehicles?
24 A. Yeah. Mostly for our field reps.
25 Q. Okay. How much did that cost last year?
3 176,000.
4 Q. That's a yearly expense essentially?
5 A. Sometimes we get six, sometimes we get five,
6 sometimes we get eight. We take a look each year. We
7 analyze how many miles the field reps' cars have on them, and
8 when they're not safe to drive, we change them out.
9 Q. Okay. All right.
10 Now, what about political contributions?
11 I won't get into, you know, who the organization
12 supports or doesn't support or anything like that, but in
13 2008 didn't CCPOA contribute one million dollars relative to
14 a proposition on the California ballot?
21 representation.
22 MR. MASTAGNI, SR.: Thank you.
23 (Sidebar discussion concluded.)
24 BY MR. BAXTER:
25 Q. Let me ask you this, Mr. Nicolaysen --
3 the organization?
4 MR. MASTAGNI, SR.: Objection. Argumentative.
5 THE COURT: No. You may answer that, if you know.
6 THE WITNESS: Well, my belief is it is important to
7 the members because there's a benefit to the members now when
8 you look. So I don't know how to answer that any
9 differently.
10 BY MR. BAXTER:
11 Q. Okay. What about the Sacramento River Cats? Is
12 there a box that's maintained by CCPOA for that?
13 A. Yeah.
14 Q. Okay. How many seats does that encompass?
3 A. Actually, no.
4 Q. Is that right?
5 A. We're trying to check the contract. So the answer to
6 that is maybe, maybe not.
7 Q. So that would be money that at least potentially
8 might be freed up; is that right?
9 A. Maybe.
10 Q. Okay. Does CCPOA also pay for things like Final Four
11 tickets? Has it done that?
12 A. I don't know.
13 Q. What about golf outings?
14 A. We may have done a couple.
15 CCPOA.
16 MR. BAXTER: I'm going to ask him.
17 THE COURT: Why don't you wait and find out whether
18 you've got an objection.
19 Go ahead.
20 BY MR. BAXTER:
21 Q. What is that?
22 A. That's an insurance trust which is a separate entity
23 by ERISA. In fact, ERISA has really, really technical
24 regulations about it, that the money that the trust has is
25 for the benefit participants of the plan.
21 categories of documents?
22 MR. MASTAGNI, SR: Objection, Your Honor. I would
23 like to approach sidebar.
24 THE COURT: Come to sidebar.
25 (Whereupon, the following discussion was held at
3 Yes, sir.
4 MR. MASTAGNI, SR.: This is a Pretrial Order issue.
5 The document designation -- We prepared the single document.
6 We spoke with the Court. We spoke to Mr. Baxter. And
7 whether he's aware of it or not, it is irrelevant because the
8 financials were never subpoenaed previously and it was
9 distinctly ruled that discovery was closed.
10 MR. BAXTER: I think I'm entitled to inquire whether
11 or not he received it, whether they took steps to
12 affirmatively gather documents.
13 THE COURT: The objection is sustained.
14 MR. MASTAGNI, SR.: Thank you.
21 A. Uh-huh.
22 Q. Have you ever seen the memorial's website in relation
23 to thanking CCPOA for its donation?
24 A. No.
25 Q. Are you aware of the -- Whether you have seen the
3 A. No.
4 MR. BAXTER: That's all, Your Honor.
5 Thank you.
6 THE COURT: Ladies and Gentlemen, we'll take our
7 morning recess a little early. Fifteen minutes.
8 Please, remember the admonition the Court has
9 heretofore given to you.
10 (Off the record at 10:25 a.m.)
11 (On the record at 10:42 a.m.)
12 THE CLERK: Please, remain seated.
13 Court is now in session.
14 THE COURT: Record will reflect we're in open court,
15 give me.
16 MR. UMBERG: Your Honor, I think Mr. Baxter early on
17 said he trusted you with respect to an instruction, and we'll
18 trust you to give the appropriate instruction. Now would be
19 best actually.
20 THE COURT: All right. That's what I'm doing to do.
15 cross.
16 MR. UMBERG: Then you were going to call Mr. Baumann,
17 then that is it, right?
18 So after Mr. Baiardi testifies, if I could ask the
19 Court to dismiss the jury for a moment so we can assess?
20 MR. BAXTER: Maybe one possible fix is perhaps we
21 CROSS-EXAMINATION
22 BY MR. MASTAGNI, SR.:
23 Q. Mr. Nicolaysen, can you please tell us your
24 professional qualifications?
25 A. I'm a CPA. I graduated from San Diego State
3 roughly in 1982.
4 I then came up here and worked for a CPA firm for a
5 short while. Then in 1986 I went to work for CCPOA as their
6 CPA, and so I've been in the business for almost 32 years.
7 Q. Thank you.
8 Now, the main reason that the net worth or the net --
9 total net assets of CCPOA went down in the amended financial
10 position is that the --
11 THE COURT: Why did it go down, sir?
12 BY MR. MASTAGNI, SR.:
13 Q. Why did it go down?
14 A. Well, what we had is an unknown. The unknown became
21 Q. Would the same hold true for the four million dollar
22 claim on the UPL, the Unpaid Leave Time lawsuit?
23 A. If that amount ever becomes known, then we would also
24 have to amend any financial statements that were reflected --
25 that reflect that number and the time period that it was
15 (Brief pause.)
16 I thought we were getting you out of here.
17 MR. BAXTER: No questions, sir. Thank you.
18 THE COURT: May the witness be released?
19 MR. MASTAGNI, SR.: Your Honor, we ask that
20 Mr. Nicolaysen remain available in the hall.
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