Royall Transcript

HIRAM WALKER ROYALLFebruary 5, 2008

LANDERS REPORTING (713) 521-1117

CAUSE NO. 29996

H. WALKER ROYALL ) IN THE DISTRICT COURT OF

)

VS. ) BRAZORIA COUNTY, TEXAS

)

WRIGHT W. GORE, JR., )

ET AL ) 239TH JUDICIAL DISTRICT

ORAL DEPOSITION OF

HIRAM WALKER ROYALL

February 5, 2008

ORAL DEPOSITION OF H. WALKER ROYALL, produced as a

witness at the instance of the Defendants and duly

sworn, was taken in the above-styled and numbered cause

on the 5th day of February, 2008, from 9:08 a.m. to

5:41 p.m., before PEGGY C. DONNELL, RMR, CSR in and for

the State of Texas, reported by machine shorthand at the

offices of Zummo & Midkiff, L.L.P., Three Allen Center,

333 Clay, Suite 4500, Houston, Texas 77002, pursuant to

the Texas Rules of Civil Procedure and the provisions

stated on the record or attached hereto.



2 (Pages 2 to 5)

1 A-P-P-E-A-R-A-N-C-E-S2 FOR THE PLAINTIFF:3 Mr. Patrick Zummo

ZUMMO & MIDKIFF, L.L.P.4 Three Allen Center

333 Clay, Suite 45005 Houston, Texas 77002

Telephone: (713) 651-0590 - Fax: (713) 651-05976 E-mail: [email protected] FOR DEFENDANTS, WRIGHT W. GORE, JR. AND WESTERN SEAFOOD

CO.:8

Mr. Bruce C. Gaible9 HAYS, MCCONN, RICE & PICKERING

400 Two Allen Center10 1200 Smith Street

Houston, Texas 7700211 Telephone: (713) 654-1111 - Fax: (713) 650-0027

E-mail: [email protected] FOR DEFENDANT WRIGHT W. GORE, III:14 Mr. Matt Childs

TEKELL BOOK MATTHEWS & LIMMER LLP15 4300 One Houston Center

1221 McKinney16 Houston, Texas 77010

Telephone: (713) 222-9542 - Fax: (713) 655-772717 E-mail: [email protected] ALSO PRESENT:19 Mr. Wright W. Gore, III202122232425

Page 31 INDEX2 PAGE3 Appearances 24 Stipulations 45 H. WALKER ROYALL6 Examination by Mr. Gaible ..................... 4

Attorneys' Eyes Only Excerpt .................. 1107 Examination by Mr. Childs ..................... 1178 Changes and Signature 2389 Reporter's Certification 240

10 EXHIBITS11 EXHIBIT DESCRIPTION PAGE12 1 Letter of Intent Dated 13

6/26/200213

2 Copy of 9/22/03 Development 1314 Agreement15 3 Timeline Prepared by the 20

Witness16

4 Another Copy of 9/22/03 3917 Development Agreement18 5 Document Depicting Gore Land 3919 6 Letter of Intent Dated 8/1/02 47

to Seller The Ice Dock, Western20 Seafood, Inc.21 7 Letter of Intent Dated 8/1/02 47

to Seller Western Seafood, Inc.22

8 Letter Dated 10/7/04 to Walker 10323 Royall from A. J. Reixach, Jr.24 9 Documents Bates Stamped 147

Plaintiff00019 through 0003625 and 00086 through 00262

Page 4

1 THE REPORTER: Will you want him to read2 and sign?3 MR. ZUMMO: Yes, please.4 THE REPORTER: By the Rules?5 MR. GAIBLE: That will be fine.6 HIRAM WALKER ROYALL,7 having been first duly sworn, testified as follows:8 EXAMINATION9 BY MR. GAIBLE:

10 Q. Would you state your full name for the record,11 sir?12 A. Hiram Walker Royall.13 Q. Mr. Royall, where do you live? What is your14 residential address?15 A. 5000 Abbott, Dallas, Texas.16 Q. And what's the ZIP Code there?17 A. 75205.18 Q. And how long have you lived there?19 A. Let's see. Eight years.20 MR. CHILDS: What did you say?21 THE WITNESS: Eight years.22 Q. (BY MR. GAIBLE) Is that a23 single-family-dwelling house?24 A. It is.25 Q. Do you live there with anybody?

Page 5

1 A. I do.2 Q. Who do you live there with?3 A. My wife and our son.4 Q. Okay. And what's your wife's name?5 A. Jennifer.6 Q. And what's your son's name?7 THE WITNESS: Is this really relevant?8 MR. ZUMMO: If he wants to ask it, let9 him. Let him ask it.

10 Q. (BY MR. GAIBLE) I am just getting some11 background information.12 A. Davis.13 Q. Okay. Just been married the one time?14 A. Yes.15 Q. How long have you been married?16 A. Three years.17 Q. Where were you born and raised?18 A. New York City.19 Q. How long did you live in New York City?20 A. Until I was 16.21 Q. Then where did you move to?22 A. Texas. Houston.23 Q. Where did you go to high school in Houston?24 A. Lamar High School.25 Q. Is that where you graduated?



3 (Pages 6 to 9)

Page 6

1 A. Yes, sir.2 Q. Where did you go to college?3 A. SMU.4 Q. Any other colleges?5 A. I went to University of Arizona my freshman6 year.7 Q. And what year was that?8 A. I started in the fall of '89.9 Q. And why did you leave the University of

10 Arizona?11 A. Just interested in, in attending a different12 school.13 Q. Okay. No other reason?14 A. No other reason.15 Q. Okay. And in the fall of 1990, did you start16 at SMU?17 A. The -- actually it was the spring of -- January18 of '91, I believe.19 Q. What did you do in the fall of 1990 in terms of20 school?21 A. I was at University of Arizona for three22 semesters; fall of '89, spring of '90, and fall of '90.23 So I started as a sophomore in January of '91 at SMU, I24 believe.25 Q. Did you graduate from SMU?

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1 A. I did.2 Q. When did you graduate?3 A. In December of '93.4 Q. With what degree?5 A. I was a double major, finance and real estate.6 And the degree was a B.B.A.7 Q. Did you start working after you graduated?8 A. Before I, before I graduated.9 Q. Okay. Full time?

10 A. Part time.11 Q. Where did you start working part time?12 A. I started in -- let's see -- fall of -- I13 believe it was the fall of '92, working with the Paragon14 Group, which is a commercial real estate firm -- was.15 It has been sold and is now part of -- was sold to16 Insignia and it is now part of a larger firm.17 Q. Could you spell "Paragram"?18 A. P-a-r-a-g-o-n.19 Q. And what is the, the final successor company,20 then, that owns those assets now?21 A. It is one of the large global real estate22 firms.23 Q. Okay. You can't remember the name of it?24 A. I can't remember the name of it right now.25 Q. When you worked for "Paragram" --

Page 8

1 A. Paragon.2 Q. -- Paragon, that was in Dallas?3 A. Yes.4 Q. And what did you do for them?5 A. Initially I was, when I was part time, I was an6 intern and helped out in -- however they asked me.7 Q. Okay. And then when you graduate, graduated,8 did you start working full time for that same company?9 A. I did. And I was leasing and selling retail

10 properties.11 Q. Repo?12 A. Retail.13 Q. Retail properties. Okay.14 A. Shopping centers.15 Q. And what was your geographical territory that16 you worked?17 A. Mostly the DFW Metroplex, but I did some work18 in Houston and Austin, a few other smaller towns around19 the Metroplex.20 Q. Okay. And how long did you have that position?21 A. I was there until '96. All of '96.22 Q. And then what did you do in terms of23 employment?24 A. I joined my two current partners and started25 Briarwood Capital Corporation.

Page 9

1 Q. Was -- and when was that?2 A. I believe it was the fall of '96.3 Q. And was that a new corporation that the three4 of you established?5 A. It was a new corporation that I established6 with one of my partners as an officer, of which I owned7 a hundred percent.8 Q. Okay. I am just a little bit confused, so bear9 with me. Were there three partners when you started the

10 company, you and two others?11 A. No. Each partner had their own company and we12 would work on deals together, sometimes under the --13 under -- under a newly formed entity that would be to14 purchase or develop a real estate property. And it's, I15 guess you could call it sort of a real estate investment16 co-op. We didn't participate in every deal that one17 another did. But we, we worked -- we shared ideas and18 contacts and thoughts.19 Q. Okay. Is Briarwood Capital Corporation still a20 legal entity?21 A. It is.22 Q. In business?23 A. Yes, sir.24 Q. Okay. Do you own a hundred percent of the25 stock?



4 (Pages 10 to 13)

Page 10

1 A. I do.2 Q. Have you always owned a hundred percent of the3 stock?4 A. I have.5 Q. Are there other legal entities that these two6 other individuals that you do business with on occasion,7 do they have their own --8 A. They do.9 Q. -- companies?

10 A. They do.11 Q. And what are those companies called?12 A. Beckman Investments and Turtle Creek Holdings13 and Brazos River Leasing are the major ones.14 Q. And how is Briarwood Capital Corporation15 affiliated or associated with Beckman Investments,16 Turtle Creek Holdings and Brazos River?17 A. Just through a personal relationship with the18 principals of those entities.19 Q. Okay. And just -- possibly you can help me and20 clear this up, but I think you said in the fall of 1996,21 something to the effect you got together with a couple22 of guys. And who are those two guys?23 A. Dan Beckman and Greg Greene.24 Q. And Dan Beckman is associated with Beckman25 Investments?

Page 11

1 A. Correct.2 Q. And what's the other man's name?3 A. Greg Greene.4 Q. And who is he associated with?5 A. Brazos River Leasing.6 Q. Okay. And are there any employees of Briarwood7 Capital Corporation?8 A. My assistant, Traci.9 Q. And what is Traci's last name?

10 A. Kaindl.11 Q. Could you spell that?12 A. K-a-i-n-d-l.13 Q. Now, and what does she do for the company?14 A. She's my assistant and handles bookkeeping for15 me.16 Q. Okay. Do you have any other companies -- well,17 strike that. Let me back up.18 From the fall of 1996 up until the19 present, have you done business under any other20 corporations?21 A. Briarwood Capital has always been the primary22 entity.23 Q. Okay. And where is the physical office of24 Briarwood Capital?25 A. 2911 Turtle Creek Boulevard, Suite 1240,

Page 12

1 Dallas, Texas.2 Q. Are there any other companies or legal entities3 that operate or do business out of that same address?4 A. Yes.5 Q. Okay. Who are those?6 A. I don't have a list with me.7 Q. Several?8 A. Yes.9 Q. What is the nature of the business of Briarwood

10 Capital Corporation?11 A. Primarily to invest in commercial real estate12 properties.13 Q. Do you limit the nature of that business to any14 particular type of commercial real estate properties?15 A. No.16 Q. You're -- I guess you're the president of17 Briarwood Capital Corporation?18 A. I am.19 Q. Are you an officer with any other corporations?20 A. I cannot think of any right now.21 Q. Do you do business yourself on an individual22 basis, as either a general partner or a limited partner23 as opposed to a corporation?24 A. I am -- yes, as a limited partner.25 Q. Have you ever done business yourself on an

Page 13

1 individual basis as a general partner?2 A. Not that I can think of.3 Q. Let me show you Exhibit No. 1 to your4 deposition.5 (Exhibits Nos. 1 and 2 marked.)6 Q. (BY MR. GAIBLE) This is a letter of intent7 dated 6/26, 2002, correct?8 A. Yes.9 Q. And you have seen this before today, right?

10 A. I have.11 Q. This is your signature -- it is your signature12 on the third page of this document, right?13 A. It is.14 Q. Okay. And you or someone on your behalf15 prepared this letter of intent, right?16 A. I prepared it.17 Q. Okay. Were there any revisions or drafts to18 this before the final product was completed?19 A. I don't know of any.20 Q. All right. Now, you signed this document as21 general partner of Freeport Waterfront Properties, L.P.,22 right?23 A. I did. But it seems that there is a typo here.24 Q. Okay. What's the typo?25 A. The, the signature block should read: H.



5 (Pages 14 to 17)

Page 14

1 Walker Royall, President, Briarwood Capital Corporation;2 General Partner, Freeport Waterfront Properties, L.P.3 MR. GAIBLE: Peggy, could you read that4 answer back?5 (The record was read as requested.)6 Q. (BY MR. GAIBLE) Okay. So back in June of 2002,7 Briarwood Capital Corporation was the general partner8 for Freeport Waterfront Properties, L.P.?9 A. Yes, sir.

10 Q. Okay. Do you know of any reason why your11 signature block was prepared as you, individually, being12 general partner for Freeport Waterfront Properties,13 L.P.?14 A. It looks as though my assistant made an error.15 Q. Did you ever generate any communications to16 Mayor Jim Barnett or anybody with the City of Freeport17 with respect to correcting your capacity as noted in18 that signature block on the third page of Exhibit 1?19 A. I -- this is the first time that I have, I20 have -- no.21 Q. Okay. Have you ever held yourself out in your22 individual capacity as being the general partner for23 Freeport Waterfront Properties, L.P. other than,24 obviously, this third page on Exhibit No. 1?25 A. No.

Page 15

1 Q. If we looked at the corporate documents for2 Freeport Waterfront Properties, L.P., would it identify3 Briarwood Capital Corporation as a general partner?4 A. Yes.5 Q. And then do you occupy any position, or did you6 back in June of '02 occupy any position with respect to,7 or in any capacity with respect to Freeport Waterfront8 Properties, L.P., you, individually?9 A. Yes.

10 Q. And what was that?11 A. Limited partner.12 Q. And back in June of '02, did you own a hundred13 percent of the stock or shares of Briarwood Capital14 Corporation?15 A. Yes.16 Q. Were you the only officer of Briarwood Capital17 Corporation back in June of '02?18 A. No.19 Q. Who were the other officers?20 A. The other officer was Dan Beckman.21 Q. And what was his position as an officer?22 A. Secretary.23 Q. And what were his job duties as secretary back24 in June of '02 for Briarwood Capital Corporation?25 A. He served as secretary for the corporation.

Page 16

1 Q. And what were those duties?2 A. The day-to-day duties?3 Q. If any, yeah.4 A. There were no listed day-to-day duties required5 of him.6 Q. Did he do anything as secretary?7 A. Yes.8 Q. Okay. What did he do as secretary?9 A. He served as officer of the corporation.

10 Q. And in that capacity as officer of the11 corporation, did he do anything?12 A. Yes.13 Q. What did he do?14 A. I am not sure I am understanding your question.15 Q. I am just trying to find out as a practical16 matter how did he function as an officer for Briarwood17 Capital Corporation back in June of '02.18 A. Well, he would sign minutes when we had19 meetings. He would -- you know, I would confer with him20 on the business of the corporation.21 Q. Okay. I am going to kind of walk you through22 some of the items in Exhibit No. 1, the letter of23 intent.24 A. Sure.25 Q. The first sentence says, after Dear Mayor:

Page 17

1 Pursuant to our discussions, our group is ready to2 proceed with the development of a marina and supporting3 retail, hotel and multi-family under the following4 terms. And you have got the term "discussions" in5 plural. Do you recall how many discussions you had had6 with Mayor Jim Barnett prior to the June 26, '02 letter7 of intent?8 A. Several.9 Q. Do you know about when or approximately when

10 the first one was?11 A. Sixty to ninety days prior to this letter of12 intent, possibly.13 Q. Okay. So if the letter of intent is June 26,14 '02, that would be March or April of '02?15 A. Are you asking me -- can you repeat your16 question, please?17 Q. Sure. The first sentence in Exhibit No. 118 says: Pursuant to our discussions. And what I'm19 focusing on is the first -- and obviously discussions is20 plural. So I am focusing on your recollection of the21 first discussion you would have had with Mayor Jim22 Barnett.23 A. To the best of my memory, it was -- it could24 have been as many as six months prior to this. Two to25 six months prior to this letter of intent is the best of



6 (Pages 18 to 21)

Page 18

1 my memory.2 Q. Did you contact him or did he contact you?3 A. The City of Freeport contacted me.4 Q. And when you say "the City," do you recall5 whether it was Jim Barnett or someone else?6 A. I believe it was Lee Cameron.7 Q. And do you recall what Lee Cameron's position8 was back when he first contacted you concerning the9 letter of -- what eventually turned out to be the letter

10 of intent?11 A. I do.12 Q. What was that?13 A. He called me and said that the City had14 commissioned a -- had retained a firm to help them with15 the economic development of the City, and the firm had16 recommended a marina, and would I be interested in, in17 building a marina in Freeport.18 Q. Did he say who the firm was that recommended19 you?20 A. I don't recall.21 Q. And this was a telephone call, I guess --22 A. Yes.23 Q. -- that you received from Jim Cameron?24 A. Lee Cameron.25 Q. Lee Cameron, I'm sorry.

Page 19

1 And what was your response?2 A. I said, "I don't know much about building3 marinas, but I would be happy to come down and talk to4 you."5 Q. And did you do that?6 A. I did.7 Q. Did you have any more discussions with Lee8 Cameron or anyone else with the City of Freeport before9 you came down and talked with them?

10 A. Yes.11 Q. One or more than one?12 A. Don't recall.13 Q. And do you recall generally what the subject14 matter of those conversations were?15 A. Talked about the, the market, the --16 Q. What do you mean by "the market"?17 A. Well, what the, what the overall opportunity18 for a marina might be in Freeport.19 Q. All right. And what else do you recall talking20 about?21 A. I think that's about it.22 Q. Okay. Did you talk with anybody else besides23 Lee Cameron before you came down to Freeport?24 A. Anybody else in Freeport?25 Q. Well, anybody else with the City of Freeport.

Page 20

1 A. I don't recall talking to anybody else.2 Q. Okay. And then you, then you came down to3 Freeport and met with City officials; is that right?4 A. Yes.5 Q. Do you recall about when that was?6 A. Maybe two or three months before this letter of7 intent.8 Q. And who all was at that meeting?9 THE REPORTER: Can I look at my timeline?

10 MR. ZUMMO: He is referring to -- Walker11 made some notes yesterday as a timeline, to try to12 get -- you know, just make sure his dates were straight.13 MR. GAIBLE: Can we just get copies so we14 can follow along with him?15 MR. ZUMMO: Okay. You can. We can do16 that now or --17 MR. GAIBLE: Yeah, if we could, if he is18 going to refer to them.19 (Exhibit No. 3 marked.)20 Q. (BY MR. GAIBLE) Okay. I think you asked your21 attorney if you could take a look at your timeline,22 right?23 A. Yes, sir.24 Q. And your timeline has been marked as Exhibit25 No. 3, right?

Page 21

1 A. It has.2 Q. And does this timeline refresh your3 recollection as to when you would have come down to4 Freeport to meet with the City of Freeport folks?5 A. It does.6 Q. How so?7 A. Well, I put this timeline together yesterday8 just to try to help me with the order of events over the9 last six or seven years now here. And I can't warrant

10 that everything is perfectly accurate, but this is kind11 of the way I remember the events.12 So it looks like, it looks like I13 probably, I probably met with the City several times14 before the letter of intent was signed.15 Q. Okay. Now, Exhibit No. 3 doesn't reference16 specifically any dates when you met with the City of17 Freeport folks before you signed the letter of intent,18 does it?19 A. No. But it references a proposal from Skipper20 Marine that was, I am sure, developed after our meetings21 in Freeport that included City officials and...22 Q. Okay. If I understand your testimony, you had23 several meetings with the City of Freeport officials24 before the 6/26/02 letter of intent was signed, right?25 A. Yes.



7 (Pages 22 to 25)

Page 22

1 Q. And they all -- all these meetings concerned2 the development of a marina? Would that be true?3 A. Yes.4 Q. Were there -- the folks that attended these5 meetings, do you recall generally who was there?6 A. Certainly Lee, Ron --7 Q. Let me interrupt you. Ron Bottoms?8 A. Yes.9 Q. And do you recall what his position was at that

10 time?11 A. City manager. Mayor Barnett was involved.12 Q. And Lee Cameron, was he a City councilman at13 that time or do you recall?14 A. I believe he was the director of economic15 development.16 Q. For the City of Freeport?17 A. Yes.18 Q. Okay. Now, I interrupted you. Who else19 besides Cameron, Bottoms and Barnett?20 A. The guys from Skipper Marine Development.21 Q. Do you recall who with Skipper Marine22 Development?23 A. No.24 Q. But more than one guy?25 A. I believe so.

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1 Q. And how was Skipper Marine Development involved2 in this marina project?3 A. I asked them to come down and help us evaluate4 the, the potential for a marina.5 Q. You were considering utilizing their services6 as a contractor to actually build -- design and build7 the development?8 A. Yes.9 Q. And who did you communicate with Skipper

10 Marine?11 A. I forget the gentleman's name.12 Q. Okay. Had you used Skipper Marine Development13 before June of '02 on any other project?14 A. I had no need to because I had never done a15 marina project.16 Q. How did you find out about Skipper Marine17 Development?18 A. I think I did some research on various marina19 development companies.20 Q. Did you know Lee Cameron before you were asked21 to get involved in this Freeport marina project?22 A. No.23 Q. And you may have mentioned, or maybe you didn't24 mention, but there was a Maritime Trust development25 project. Is that the right term?

Page 24

1 A. I believe it was a Maritime Trust economic2 development report that was commissioned by the City.3 Q. And were you ever furnished a copy of that?4 A. I was.5 Q. And do you recall about when that was that you6 were furnished a copy? Before the letter of intent?7 A. I believe I was given a draft copy before the8 letter of intent that showed that there was a -- that9 the market would support a marina in this location.

10 Q. Have you ever been connected with Maritime11 Trust before June of '02?12 A. No.13 Q. Any of your family members ever been connected14 with Maritime Trust?15 A. No.16 Q. Had you ever even heard of the name Maritime17 Trust --18 A. No.19 Q. -- before this Freeport marina development?20 A. Contrary to your client's position, no.21 MR. ZUMMO: Mr. Royall, you are talking22 over Mr. Gaible. Just take your time. Let him finish23 his questions --24 THE WITNESS: Sure.25 MR. ZUMMO: -- before you answer, or the

Page 25

1 court reporter is going to throw something at you.2 MR. GAIBLE: And for purposes of the3 record, I will object to the responsiveness of the4 answer.5 Q. (BY MR. GAIBLE) I have a tendency to talk slow,6 so bear with me and let me get my question out before7 you start your answer. I should have mentioned that8 before we started the questions. And, also, if you9 don't understand any of the questions that I ask you

10 here today, please tell me so. All right?11 A. (Nodding head.)12 Q. And you need to answer out.13 A. Yes.14 Q. Okay. The land that was to be used for the15 marina, was that discussed at any of these meetings or16 telephone calls before the letter of intent?17 MR. ZUMMO: Objection, form.18 MR. GAIBLE: What's your objection?19 MR. ZUMMO: I believe that assumes facts20 not in evidence and is vague in the use of the term21 "land that was to be used for the marina."22 My objection doesn't mean you don't23 answer. So if you remember his question, go ahead and24 answer.25 A. Please repeat the question.



8 (Pages 26 to 29)

Page 26

1 Q. (BY MR. GAIBLE) Sure. Did you have any2 discussions at either the meetings that you attended in3 person or during any of the telephone communications4 that you had with any of the City of Freeport officials5 with respect to the land that was to be used for the6 marina?7 A. Yes.8 MR. ZUMMO: Same objection.9 Q. (BY MR. GAIBLE) And tell me about the substance

10 of those communications.11 A. We, we spoke of the land that was required to12 build the marina of the size that we have highlighted13 here, 250 to 500 wet slips, 150 to 400 dry slips. And14 the City and the consultants from Maritime Trust said15 that in order to have a large economic impact, to16 improve the lives of the citizens of Freeport, a large17 marina would need to be built. And that's why you see18 the word "large marina" here and the number of slips19 defined. The property that the partners of Freeport20 Waterfront Properties, L.P. owned had, I believe,21 800 feet of waterfront, and to build a marina of this22 scale, we needed more waterfront. And so those other23 waterfront parcels that were owned by third parties were24 identified. And the City said that they had talked to25 all those owners and that there was -- you know, there

Page 27

1 wouldn't be a problem purchasing those parcels.2 Q. And who with the City told you that?3 A. Lee Cameron.4 Q. Anybody else?5 A. Not that I can remember.6 Q. And was that told to you by Lee Cameron before7 your 6/26/02 letter of intent?8 A. Yes.9 Q. You had mentioned in your recent answer that --

10 something with respect to improving the lives of the11 citizens of the City of Freeport. Do you remember12 telling me that?13 A. Yes.14 Q. Okay. And is it your understanding and15 position that this -- one of the purposes of this marina16 was to, in fact, improve the lives of the citizens of17 the City of Freeport?18 A. Yes.19 Q. And were you also told by government officials20 with the City of Freeport that one of the purposes of21 this marina was to improve the lives of the citizens of22 the City of Freeport?23 A. The primary purpose from the City's perspective24 was to aid the city in economic development and25 therefore help lift up the, the economic standing of the

Page 28

1 city and the lives therefore of the citizens.2 Q. And you were aware of that prior to your3 signing the 6/26/02 letter of intent, right?4 A. Yes.5 Q. I mean, you had been told that, right?6 A. Yes.7 Q. And you were in agreement with that, right?8 A. And read it from a third party, yes.9 Q. Now, when you say you read it from a third

10 party, what do you mean by that?11 A. Well, I, I -- from the report.12 Q. From the Maritime Trust report?13 A. Right.14 Q. Okay. And you had no reason to doubt that or15 dispute that, I guess, right?16 A. Correct.17 Q. Now, Exhibit No. 1 identifies as the property18 on the first page 8.82 acres currently owned by the19 Estate of Robert Lee Blaffer, right?20 A. That's what it says.21 Q. And how, how was Freeport Waterfront22 Properties, L.P., as the developer, how did it have any23 control or right of control over that 8.82 acres?24 A. It seems as though the property was in the, in25 the process of being transitioned from the Estate of

Page 29

1 Robert Lee Blaffer to Freeport Waterfront Properties,2 L.P.3 Q. I'm sorry, it was being what?4 A. The property was being transferred.5 Q. Transferred. And how was it being transferred?6 A. I assume here that we have, at this point we7 had set up the partnership and we were in the process of8 transferring by deed the property to the partnership.9 Q. Okay. Did Freeport Waterfront Properties, L.P.

10 exist as a legal entity prior to your being approached11 by City of Freeport officials with respect to this12 marina?13 A. You will have to check the documents.14 Q. You just can't recall one way or the other?15 A. I cannot.16 Q. And the documents that we would have to check17 would be the corporate documents that established18 Freeport Waterfront Properties, L.P. as a legal entity;19 is that right?20 A. Right.21 Q. And you have got those, I guess?22 A. Yes.23 Q. Do you know of any reason why Freeport24 Waterfront Properties, L.P. would have been formed prior25 to you being contacted by the City of Freeport with



9 (Pages 30 to 33)

Page 30

1 respect to this marina?2 A. Yes.3 Q. Okay. What is that?4 A. The Estate of Robert Lee Blaffer was in the5 process of being settled. There were two properties in6 his estate: The Freeport property which is actually7 made up of a couple of different properties, but I will8 call it one property, the Freeport property --9 Q. Is that the 8.82 acres?

10 A. The 8 -- the 8.82 acres, and there is a11 property across the street from it.12 Q. Just so I can -- I will forget to ask you this13 question. But the property across the street, was that14 used for the marina, or was it considered to be used for15 the marina?16 A. Not in this proposal.17 Q. Okay. Well, at any time.18 A. Well, we considered how we might use it in19 conjunction with the whole marina project.20 Q. All right. Okay. Tell us -- tell me, then,21 the other property, then, part of the Blaffer Estate.22 A. The other property was a parcel of land at the23 intersection of Clay and Brittmoore here in Houston.24 And both of these properties, the Freeport properties25 and the Clay and Brittmoore property, were coming out of

Page 31

1 my uncle's estate. And we put each of them into limited2 partnerships in order to manage them and have an entity3 to operate these properties. And whether or not this4 letter of intent ever existed, we were still going to5 put the -- that property, the Freeport property, into6 that limited partnership in order to have an entity by7 which to own and operate the property that allowed for8 some sort of governance.9 Q. Okay.

10 A. And liability protection for the owners.11 Q. And Robert Lee Blaffer, he was your uncle,12 right?13 A. Yes.14 Q. And then the two properties down in Freeport15 that you just referenced for us, were those, in fact,16 transferred to a limited partnership?17 A. Yes.18 Q. And is that the Freeport Waterfront Properties,19 L.P.?20 A. Yes.21 Q. And then the Brittmoore and Clay property was22 transferred to another separate, distinct limited23 partnership?24 A. I believe it was Clay Brittmoore, L. P.25 Q. And you just don't recall off the top of your

Page 32

1 head when the two properties down in Freeport were2 transferred to the Freeport Waterfront Properties, L.P;3 is that --4 A. Correct.5 Q. They were transferred to the Freeport6 Waterfront Properties, L.P. for reasons having nothing7 to do with the marina initially, right?8 A. Absolutely. The properties were coming out of9 the estate. They needed a place to go. We weren't

10 going to have eleven people have undivided interests in11 a property. Obviously that makes for -- it makes it12 very difficult to manage a property, sign leases, sign a13 sales agreement, whatever.14 Q. Okay. And then the, the eleven people, I15 guess, are the heirs of Mr. Blaffer?16 A. My brother and my cousins, yes.17 Q. Okay. And so, the other ten heirs, I guess,18 are the limited partners in the Freeport Waterfront19 Properties, L.P.?20 A. At that time, yes.21 Q. Okay. As of Exhibit No. 1, the 6/26/02 letter22 of intent?23 A. I believe so.24 Q. Okay. Were any of those limited partners25 involved with preparing or formulating the contents of

Page 33

1 the letter of intent?2 A. I am sure I ran it by at least a few of them3 before I sent it to the City.4 Q. Okay. Did they have any input into the5 contents of Exhibit No. 1?6 A. I don't believe so.7 Q. Now, I think you testified earlier today that8 there were third parties' land that was needed to build9 the marina; is that right?

10 A. Correct.11 Q. Did the City of Freeport identify who those12 third parties were?13 A. Yes.14 Q. And who did they identify?15 A. The Gores, Ms. Stanley, the Hendersons, Wanda16 Jones, the District; and the City, itself, owned some17 land that were -- that was in the area that we were --18 had identified for the marina.19 Q. Okay. And did the City -- who was with the20 City that told you this?21 A. Lee Cameron.22 Q. And did he tell you what communications he had23 had, if any, with the Gores with respect to acquiring24 their land?25 A. Yes.



10 (Pages 34 to 37)

Page 34

1 Q. What did he tell you?2 A. He said they were on board and thought this was3 a great idea.4 Q. Did he tell you anything else that you recall?5 A. That Wright Gore, Jr. had told them that6 acquiring that property would not be a problem.7 Q. Anything else that you recall?8 A. No.9 Q. And this was all -- these communications to you

10 from Lee Cameron were done before the 6/26/02 letter of11 intent, right?12 A. Yes.13 Q. Now, if you look under -- on Exhibit No. 114 under the, the category Project on the first page. Are15 you there with me?16 A. I am.17 Q. If you go down about halfway of that paragraph,18 there is a sentence that starts out: The City and the19 developer, in parens, the parties, in parens, are20 working on a plan in which the developer would acquire21 the land necessary for the development and build a22 project based on mutually agreeable specifications.23 Tell us what the plan is that the developer, who was24 Freeport Waterfront Properties, L.P., and the City were25 working on at that time.

Page 35

1 A. I am sure that was to approach the owners and2 make offers and to acquire the property that was needed3 for the project.4 Q. Okay. When it says "working on a plan," is5 that a formal plan that was to be reduced to writing?6 A. No.7 Q. And since it recites the developer8 specifically, which is Freeport Waterfront Properties,9 L.P., what was the plan for the developer to acquire the

10 land necessary for the development and build the11 project -- excuse me -- based on mutually agreeable12 specifications?13 A. As I said, to submit offers and try to acquire14 the properties. And at that point there was -- nobody15 had any idea that there would be any problems in doing16 so, because the City had assured me that they had talked17 to everybody involved and the people were going to be18 receptive to moving the project forward and selling19 property.20 Q. Had either you or anybody else in connection21 with Freeport Waterfront Properties, L.P. done anything22 in an effort to evaluate the value of any of the23 property from third parties that needed to be acquired?24 A. I looked at the tax rolls to see what they were25 currently appraised for.

Page 36

1 Q. And you did that before the 6/26/02 letter of2 intent?3 A. I am sure I had.4 Q. Okay. Do you recall what the tax rolls5 indicated for the Gores' property?6 A. It was $60,000.7 Q. And did you do anything else with respect to8 developing a plan for acquiring the Gores' property as9 reflected in Exhibit No. 1 to your deposition?

10 A. No. No.11 Q. Okay. Did you talk with any of the members of12 the Gore family before you looked at the tax rolls and13 determined what the, what the government had assessed14 the value of the property at?15 A. It's possible.16 Q. Do you have any specific recollection of17 talking with any of the Gores before you looked at the18 tax rolls for their property?19 A. Not right now.20 Q. Did you look at the tax rolls for the other21 third parties who you identified, Ms. Stanley,22 Henderson --23 A. Yes.24 Q. -- Wanda Jones, the District and the City?25 A. Yes.

Page 37

1 Q. And with respect to acquiring these other --2 well, let's just start with the Gores. Does the letter3 of intent identify specifically the Gores' property?4 A. No.5 Q. Okay. If you will go to Exhibit No. 2 -- and I6 think that's the Development Agreement. At least that's7 what it is identified as, right?8 A. Yes.9 Q. Have you looked at that Development Agreement

10 that's marked as Exhibit No. 2 in preparation for your11 deposition?12 MR. ZUMMO: Mr. Gaible, is this a signed13 Development Agreement? Because there were drafts that14 were produced.15 Q. (BY MR. GAIBLE) I would ask the witness to take16 a look at it and see if it is signed. Go to Page 31.17 A. It is executed and -- yes.18 Q. Okay. This was also attached as an exhibit to19 your deposition in the breach of lease case.20 A. Yes.21 Q. You recall that deposition, don't you?22 A. Yes.23 Q. Okay. Look at Exhibit No. 2, if you will, and24 see if that exhibit identifies the Gore property.25 A. Exhibit No. 2.



11 (Pages 38 to 41)

Page 38

1 Q. Okay. Exhibit D, as in David, hyphen, 2?2 A. Okay. It does.3 Q. Okay. Now, I will be honest with you, I am not4 all that familiar with this particular document. But5 Page D, as in David, hyphen, 2, hyphen, 1 states Gore6 land, right?7 A. I don't see a hyphen 1 on that.8 Q. Down here at the bottom.9 A. Oh, okay. Yeah.

10 Q. Right? Just make sure we are talking about the11 same thing. Now, if we go to the next page --12 A. Do I have the same exhibits you do?13 Q. Well, I hope so.14 A. I have -- D-2 does not refer to the --15 Q. Okay. Are you at D, hyphen, 2, Gore land?16 A. I am.17 Q. Okay. Flip the page, then.18 A. (Witness complies.)19 Q. And that is why. We missed a copy.20 Let me show you that (indicating).21 MR. CHILDS: I don't know. If he flips to22 the next page, it may be there.23 Q. (BY MR. GAIBLE) Yeah. Flip to the next page.24 Maybe that's there.25 A. (Witness complies.) No.

Page 39

1 Q. No. Okay.2 A. Yeah.3 MR. GAIBLE: Here, let me do this: Let's4 just mark this as the next exhibit.5 (Exhibit No. 4 marked.)6 Q. (BY MR. GAIBLE) Okay. Let me hand you Exhibit7 No. 4. If you could hand me that piece of paper back.8 There you go.9 Okay. And then flip to D-2 and the page

10 after D-2.11 Okay. Are you there?12 A. (Witness complies.) I am here.13 Q. All right. Does this document indicate the14 Gore land?15 A. No.16 Q. Well, it sure doesn't.17 MR. ZUMMO: Would you like to take a18 break, go off the record?19 MR. GAIBLE: Yes.20 (Off the record briefly.)21 (Exhibit No. 5 marked.)22 MR. GAIBLE: Okay. Ready to go back on23 the record?24 THE WITNESS: Yes.25 Q. (BY MR. GAIBLE) Sir, let me hand you Exhibit

Page 40

1 No. 5, and I will represent to you that I got that2 document out of the Development Agreement. Do you3 recognize that as being a depiction of the Gore land?4 A. I do.5 Q. Okay. Now, in the period of time after the6 letter of intent was signed by you and the Development7 Agreement was executed -- and I believe the Development8 Agreement is executed -- at least it is dated9 September 22nd, '03, right?

10 A. Correct.11 Q. Okay. Did you have any communications with any12 of the Gores with respect to acquiring their property?13 A. Yes.14 Q. Do you recall the first time you had any15 communications with the Gores with respect to acquiring16 the property?17 A. Shortly after the letter of intent was18 signed -- it looks like a month after -- we had a19 meeting here in Houston.20 Q. And who attended that meeting?21 A. Lee Cameron; Ron Bottoms; Wright Gore, Jr.;22 Wright Gore, III; John Smith; and Mayor Barnett; and23 myself.24 Q. And how was John Smith involved in this matter?25 A. City councilman, I believe.

Page 41

1 Q. And where was that meeting attended?2 A. At -- I believe it was at Charlie Leyendecker's3 office at, I think, Richmond and Beltway 8.4 Q. Is Leyendecker a homebuilder?5 A. A commercial builder.6 Q. A commercial builder. All right. And what is7 the name of his business or company, or back then in '028 what was it?9 A. I think it is Leyendecker Construction.

10 Q. And do you know who called this meeting?11 A. The City.12 Q. And was there anything published, an agenda,13 anything of that nature, before the meeting?14 A. Not that I am aware of.15 Q. And what was discussed at the meeting?16 A. The marina.17 Q. Did the Gores say anything with respect to the18 marina or anything else that you recall at that meeting?19 A. Yes.20 Q. What was that?21 A. They said they were excited for the prospects22 of the marina. They wanted to know if they could23 operate the fuel. I said we didn't have a problem with24 that.25 Q. Operate the fuel for their business or for the



12 (Pages 42 to 45)

Page 42

1 marina?2 A. For the marina. They were interested in, in3 how the marina was going to be laid out and all the4 natural points of a marina.5 Q. Did you -- were you the host of this meeting,6 so to speak?7 A. No.8 Q. Who was?9 A. I guess I would say the City was the host. The

10 City organized it, and I was invited to attend and I11 believe the Gores were invited to attend. And, you12 know, they made up the majority, the City made up the13 majority of the people in attendance.14 Q. Was there anything discussed at this meeting15 about acquiring the Gores' land?16 A. Yes.17 Q. Okay. And who discussed that?18 A. It was a very short discussion. It was -- to19 me, I got the impression: Don't worry about that. It's20 not going to be a problem.21 Q. And who gave you that impression?22 A. Wright Gore, Jr.23 Q. Do you recall what he said that gave you that24 impression?25 A. Words to the effect of "We will take care of

Page 43

1 that."2 Q. Well, were there any dollar figures mentioned3 in terms of what he would be offered for his land?4 A. No.5 MR. CHILDS: I don't mean to interrupt you6 all, but are you talking on the timeline, this September7 '02? Is that --8 THE WITNESS: Yes.9 MR. CHILDS: Is that when you are talking

10 about the meeting was?11 THE WITNESS: Yes.12 MR. CHILDS: Okay. I just wanted to make13 sure.14 Q. (BY MR. GAIBLE) Do remember anything else that15 was said by the Gores at that meeting?16 A. I think that covers it.17 Q. If you turn to the third page of Exhibit No. 1,18 the letter of intent, under -- there is a paragraph19 entitled Third-party Property. Do you see that?20 A. Yes.21 Q. And it says: Developer agrees to use his best22 efforts to acquire land owned by third parties deemed23 necessary by the City and developer to the project.24 Now, as of this meeting in September of '02, had you or25 anybody on behalf of Freeport Waterfront Properties,

Page 44

1 L.P. done anything with respect to using best efforts to2 acquire the Gores' land?3 A. I had talked to the City about it. And I was4 under the clear impression that the Gores and the City5 had a good relationship and a close relationship. And6 that that property, I didn't feel was going to be an7 issue because of what the City was telling me and what I8 learned thereafter at that meeting in September. So I9 wasn't going to push very hard on, on anybody. It

10 seemed as though that was just going to work itself out.11 Q. Okay. Well, Exhibit 1 specifically identifies12 Freeport Waterfront Properties, L.P. as the developer13 who agrees to use his best efforts to acquire the land14 owned by third parties deemed necessary by the City and15 developer to the project. Did you have an arrangement16 outside the scope of the letter of intent whereby the17 City was going to act to acquire the land or anything in18 writing, an agreement pertinent to that?19 A. No.20 Q. So, other than checking the, the tax rolls for21 these properties owned by third parties, prior to the22 September '02 meeting, had you done anything with23 respect to using best efforts to acquire that land owned24 by third parties?25 A. Define "that land."

Page 45

1 Q. Well, the land owned by third parties deemed2 necessary by the City and developer to the project as3 reflected in Exhibit No. 1.4 A. I am not sure of the dates, but we sent some5 offers out. I spoke with a real estate broker, Greg6 Flaniken. And we worked on some offers that were7 presented to different landowners that were based on8 values derived from the tax rolls.9 Q. Okay. And who was Greg Flaniken with? Did he

10 have his own real estate brokerage firm?11 A. He had -- yes.12 Q. In Freeport?13 A. Yes.14 Q. Do you know the name of the company?15 A. Flaniken Real Estate.16 Q. And when you spoke with him, what did you all17 discuss? I mean, how did he assist you or Freeport18 Waterfront Properties, L.P. in terms of evaluating or19 acquiring the third-party land?20 A. Well, he had local knowledge of, of the owners21 and the properties. And he assisted me in coming up22 with values that, that -- for the offers that he23 delivered to some or all of the owners.24 Q. Okay. Well, do you know if he made any offers25 to the Gores with respect to their property?



13 (Pages 46 to 49)

Page 46

1 A. I think he did. I believe he, he did.2 Q. Okay. Do you know when he did that?3 A. Don't we have copies of those offers somewhere?4 Q. I don't know.5 A. You have never seen them?6 Q. I don't recall seeing them.7 MR. ZUMMO: I don't know if they are in8 there or not. I remember one contract we looked at.9 THE WITNESS: There was a contract and I

10 thought there were copies of some of the offers.11 MR. GAIBLE: I don't know.12 THE WITNESS: Should we look?13 MR. GAIBLE: Well, if it will just take a14 minute. I don't want you to spend a half an hour.15 THE WITNESS: Okay.16 MR. GAIBLE: But if it will just take a17 minute to see if Flaniken made an offer to the Gores for18 their property.19 THE WITNESS: Has anybody seen a letter of20 intent made to different property owners in --21 MR. CHILDS: Look at Bates number 711,22 Bates number 711 in the documents.23 THE REPORTER: Do you want to go off the24 record while you do this?25 MR. GAIBLE: Yes.

Page 47

1 MR. ZUMMO: Yes.2 (Discussion off the record.)3 (Exhibit Nos. 6 and 7 marked.)4 Q. (BY MR. GAIBLE) Mr. Royall, let me show you5 Exhibit No. 6. Is that an 8/1/02 letter of intent?6 A. Yes.7 Q. Okay. And who is that directed to?8 A. Western Seafood.9 MR. GAIBLE: Okay. I think she copied

10 three of the one to Western Seafood.11 Q. (BY MR. GAIBLE) Is that actually directed to12 Western Seafood, or is that directed to another entity?13 A. The Ice Dock, comma, Western Seafood, Inc.14 Q. Do you mind if I look over your shoulder?15 A. Not at all.16 MR. ZUMMO: There should have been three17 of each.18 MR. GAIBLE: Oh, here we go. We got it.19 We got it. I just handed him three.20 Q. (BY MR. GAIBLE) Okay. In this document -- was21 it actually signed by you?22 A. I am sure it was.23 Q. The copy we have is not signed. But you, you24 are sure that it was signed?25 A. I wouldn't have sent out a letter of intent

Page 48

1 without signing it.2 Q. Okay. And that was going to be my next3 question. You are sure that it went out?4 A. Yes.5 Q. Okay. And how can you be sure that it went6 out?7 A. Well, because we delivered offers to everybody.8 Q. Okay. Did you get a response to the offer?9 A. I, I didn't get one in writing. The response I

10 got was at the meeting shortly hereafter, saying, "Don't11 worry about it. We'll get this worked out." Meaning --12 I took that to mean, "Got your offer. It might not be13 exactly what we're looking for, but I'm not -- I don't14 have huge problems with it."15 Q. And Wright Gore, Jr. told you that?16 A. He did.17 Q. At the meeting in September of '02 at18 Leyendecker's office?19 A. He did.20 Q. And your offer is -- was $50,000, all cash,21 right?22 A. For the smaller parcel, yes.23 Q. For the Ice Dock?24 A. Yes.25 Q. That's how you have identified the parcel,

Page 49

1 right?2 A. That's -- yes.3 Q. Okay. And then, also, you sent out a letter of4 intent, also dated August 1st, '02, which is5 Royall No. 7; is that right?6 A. Yes.7 Q. And although this copy is unsigned, you recall8 that it, it was sent out, right?9 A. Yes.

10 Q. And this is directed to Wright Gore, Jr.?11 A. It is.12 Q. And this is for the Western Seafood, Inc.13 tract?14 A. It is.15 Q. Now, between the Ice Dock tract and the Western16 Seafood, Inc. tract, does that encompass the entire Gore17 land?18 A. It does.19 Q. And for the Western Seafood, Inc. tract, that's20 $75,000 in cash, right?21 A. Correct.22 Q. Did you ever receive a response to this offer?23 A. The same response that I received on the first24 offer.25 Q. Which is a verbal communication that Wright



14 (Pages 50 to 53)

Page 50

1 Gore, Jr. had to you at -- gave to you at the2 Leyendecker meeting?3 A. Yes.4 Q. Subsequent to the Leyendecker meeting, did you5 have any further communications with Wright -- with the6 Gores or Western Seafood with respect to Freeport7 Waterfront Properties, L.P.'s intention to purchase or8 acquire their property?9 A. Yes.

10 Q. Okay. When was the next time?11 A. I would have to really go back and maybe check12 phone records or, or I would need some help in13 identifying the exact times of those discussions. There14 were maybe a few other phone calls or face-to-face15 meetings. Not many.16 Q. The chronology doesn't assist you?17 A. Well, if there was a meeting in September of18 '02 and we -- as we continued to work on this project,19 there were other phone calls and meetings until the20 Gores filed their lawsuit a year later, as we continued21 to, to move forward on the project.22 Q. Let me -- I'm sorry. Are you done?23 A. Yes.24 Q. Now, let me back up to the letter of intents,25 which are Exhibit 6 around 7 to your deposition. How

Page 51

1 did you arrive at the price for 50,000 -- $50,000 for2 the Ice Dock property?3 A. I feel sure that I looked at the tax rolls,4 increased the offer a little bit, and submitted an5 offer. At that time they were somewhat difficult to6 value for me. I am not used to valuing waterfront7 property in Freeport. Most of my work is in -- at that8 time was in retail. So, I talked to Greg Flaniken and9 looked at the tax rolls; submitted an offer; started the

10 process.11 Q. Did you know Greg Flaniken before this Freeport12 Marina project?13 A. Yes.14 Q. How did you know him?15 A. He had done some work for us in Freeport.16 Q. Okay. When you say "us," who are you referring17 to?18 A. Myself and the family.19 Q. In what regard?20 A. He looked after -- I think he was responsible21 for property managing the Alamo Building. And he looked22 after the Intermedics building, which was still standing23 at that time. He was -- he had a set of keys to both24 buildings. He was our guy on the ground in Freeport25 relative to these properties.

Page 52

1 Q. Okay. Those two properties?2 A. Yes.3 Q. And your family owned those two properties at4 that time?5 A. The -- either the R. L. Blaffer Estate or6 Freeport Waterfront Properties owned those properties at7 that time, yes.8 Q. Well, did Flaniken provide any input with9 respect to either of the two settlement offers that you

10 made that are Exhibit 6 and 7?11 MR. ZUMMO: Objection, form.12 A. Well, they are not settlement offers.13 Q. (BY MR. GAIBLE) I'm sorry. Letter of intent14 offers.15 A. They are offers to purchase.16 Q. Right. Let me re-ask the question. Did17 Flaniken provide any input, specific input, with respect18 to the $50,000 offer or a letter of intent, and the19 $75,000 letter of intent?20 A. Yes.21 Q. Okay. In what way?22 A. Well, as you can see, he was the broker of23 record on, on these offers. And we discussed them. And24 I, I am sure that he felt they were reasonable offers at25 the time for, for the properties that we were trying to

Page 53

1 acquire.2 Q. Did he provide you with anything in writing3 with his evaluation of the value of the two properties?4 A. No. That would not be a normal business5 practice.6 Q. Do you recall any specific communications with7 the Gores with respect to offers or letters of intent8 made for these two properties identified in9 Royall 6 and 7, after the September of '02 meeting and

10 before the September of '03 lawsuit that you have11 identified in Exhibit No. 3 on your chronology?12 A. Yes.13 Q. Okay. When was the next time after September14 of '02?15 A. As I said earlier, I don't have exact times for16 you. But there were phone calls and maybe a meeting or17 two in which I said, "Hey, are we going to get a written18 response? Where are we going with this? You know,19 let's move forward."20 Q. And who were you talking to when you had these21 communications?22 A. Wright Gore, Jr.23 Q. Not the Third?24 A. No.25 Q. And what was his response?



15 (Pages 54 to 57)

Page 54

1 A. "We're working on it."2 Q. Did he give you --3 A. "Not going to be a problem."4 Q. Did he give you any response other than, "We're5 working on it; it's not going to be a problem"?6 A. I think we talked more about the, the fuel7 situation that they were interested in.8 Q. In terms of furnishing the fuel for the marina?9 A. Yes. He was interested in operating the fuel

10 dock for the marina and selling fuel at the marina.11 Q. And the offers that you made, would it leave12 his Western Seafood business intact?13 A. Absolutely.14 Q. Did he express any concerns about the15 accessibility of the shrimping vessels --16 A. No.17 Q. -- into his docks?18 A. Not once. Before their lawsuit, not once.19 Q. Did he express any concern?20 A. Excuse me. Let me just clarify that. He, he21 did talk about the navigability of the river and of the22 vessels to go to his facilities. But we -- I felt like23 we had his concerns taken into consideration, and with24 the design that we were working on, that he was going to25 be okay and we were going to be okay. Of course, it was

Page 55

1 our mutual interest and desire to build a marina in2 which the commercial vessels and the recreational3 vessels could operate in harmony and without injury to4 either one. It wouldn't, it wouldn't make any sense for5 us to want to put our customers in harm's way to his,6 his customers, or vice versa.7 Q. Was there any discussion with Wright Gore, Jr.8 with respect to the amount of frontage on the Old River9 that you all were negotiating on with respect to your

10 company acquiring?11 A. Before their lawsuit?12 Q. Yes, sir.13 A. No.14 Q. Did you discuss with Wright Gore, Jr. at all15 specifically the 338 frontage feet on Old River for the16 Western Seafood facility and a hundred and -- 100.2 feet17 frontage on the Old River for the Ice Dock in terms of18 Freeport Waterfront Properties, L.P. acquiring that?19 A. Yes.20 Q. Okay. And what did you all discuss?21 A. Well, that was the whole nature of -- that was22 the primary nature of our discussions, was that we23 needed that property. They owned it. We would like to24 acquire it. And the marina depended on us acquiring25 that property. He understood that. And we, we needed

Page 56

1 to come to, to a, to terms that were acceptable by both2 parties.3 Q. And before the, the Gore lawsuit that you have4 identified on Exhibit No. 3 was filed in September of5 '03, you never had any written communications with6 Gore, Jr. or Gore, III, or anybody on behalf of Western7 Seafood with respect to responding to the two letter of8 intents that are Royall 6 and 7, did you?9 A. I never got anything in writing back from them

10 regarding the purchase of these two properties.11 Q. With respect to the other third-party land you12 have identified for us, Stanley, Henderson, Jones, did13 you have any problems acquiring those tracts?14 A. The Stanley acquisition was certainly15 relatively easy and straightforward. We agreed on a16 price pretty quickly and paid that price. The --17 Q. Let me, let me interrupt you, if I could,18 before you move on to the next one. With respect to the19 Stanley tract, was the letter of intent that you sent --20 is it Ms. Stanley?21 A. Yes.22 Q. Was that accepted or was it modified or revised23 in any way?24 A. I believe it was accepted. I am sure there25 were some terms that were -- I don't recall a protracted

Page 57

1 negotiation with her.2 Q. But you can't -- you are not sure whether the3 letter of intent that was signed or, I'm sorry,4 forwarded by Freeport Waterfront Properties, L.P., was5 accepted in total, can you?6 A. Do we have a copy of that letter of intent7 here?8 Q. I think it's right back there in that stack.9 A. One of you all can probably find it quicker

10 than me.11 Q. The ones you have got here aren't signed.12 MR. ZUMMO: Wasn't there a Stanley deed in13 that stack of stuff?14 THE WITNESS: There is a contract.15 MR. ZUMMO: Yeah. Bruce, you might be16 thinking about -- there was, I think, a contract that's17 in there.18 THE WITNESS: I saw the contract.19 MR. CHILDS: What are you all looking for?20 And I can tell you.21 MR. ZUMMO: Stanley.22 MR. CHILDS: Stanley letter of intent,23 Bates stamped 707.24 THE WITNESS: If the letter of intent is a25 $90,000 offer, then she accepted the price.



16 (Pages 58 to 61)

Page 58

1 MR. CHILDS: It's not.2 THE WITNESS: What is the offer?3 MR. CHILDS: The contract is Bates stamped4 857.5 THE WITNESS: Okay.6 Q. (BY MR. GAIBLE) Here, let me just show you7 this. This is Bates 707 and 708. This is an 8/1/028 letter of intent to Stanley. It is for $50,000, right?9 A. Yes.

10 Q. Okay. And that's not signed by anybody, is it?11 A. This copy is not.12 Q. All right. Do you recall if she accepted the13 letter of intent or not?14 A. It seems to me that she countered at probably15 $90,000, and we agreed, agreed on that, and we purchased16 it for $90,000.17 Q. Okay. And that's reflected in Bates stamp 857,18 right?19 A. Yes. Which is the normal way that people buy20 property, in my experience.21 Q. Do you recall any of the letter of intents for22 any of the other third parties being accepted based upon23 your August 1st letter of intent, in other words, your24 initial offer?25 A. No. We were close with Wanda Jones, but we, we

Page 59

1 didn't quite get there.2 (Discussion off the record.)3 Q. (BY MR. GAIBLE) Sir, let me show you --4 MR. GAIBLE: And, Pat, you may be able to5 enlighten me on this. I have got two copies of the6 Development Agreement from two different sources. And I7 believe --8 MR. ZUMMO: It's different entities. But9 he can explain that to you.

10 Q. (BY MR. GAIBLE) Okay. All right. This is11 Exhibit No. 4. This is one that I marked up out of my12 own file (indicating). The one that is Exhibit No. 4,13 Development Agreement, September 22nd, 2003, from the14 City of Freeport, Texas and Freeport Waterfront15 Properties. All right. And then the one that I marked16 up is between Freeport Marina, L.P. and the City of17 Freeport Economic Development Corporation. Is that the18 difference, one is the City of Freeport, which is19 Exhibit No. 4, and the other is the Freeport Economic20 Development Corporation?21 A. Yes.22 Q. Okay. All right. There is language under23 Paragraph F of this 8/2/07 document involving the24 Freeport Marina, L.P. and the City of Freeport Economic25 Development Corporation under Paragraph F, that: The

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1 development of the adjacent lands and the attraction of2 business and tourism to the city as a result of the3 development of a marina and its accessory uses4 constitutes a public purpose of the EDC under Texas law5 and will be an important factor in the continued6 encouragement, promotion and attraction, stimulation,7 development, growth, and expansion of business,8 commerce, and tourism within the city.9 You were a party -- your company was a

10 party to that agreement, right?11 MR. ZUMMO: Objection, form.12 Q. (BY MR. GAIBLE) Well, Freeport Marina, L.P.,13 was that a company that you owned and operated and14 controlled?15 A. No.16 Q. Who is that?17 A. It is a company that I have an interest in.18 Q. And what is your interest in it?19 A. I am a partner in Freeport -- I might refer you20 to the documents to make sure that my answer is exactly21 correct.22 Q. You have got a financial interest in that23 entity?24 A. Yes.25 Q. Okay. And what is the nature of your financial

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1 interest in that entity?2 A. Well, I would refer you to the documents.3 Q. Okay. And which document would that be?4 A. You can start with the Freeport Marina, L.P.5 partnership documents.6 Q. Okay. And you have got those, I guess, back at7 your office somewhere?8 MR. ZUMMO: Right there. They have been9 produced. They should be here.

10 Q. (BY MR. GAIBLE) Well, you don't know what your11 interest is without referring to that document?12 A. Not exactly.13 Q. Okay. How was Freeport Marina, L.P. involved14 in the Development Agreement for the marina in question?15 MR. ZUMMO: Objection, form.16 And, Bruce, my problem is just you have17 marked one Development Agreement, but the one you have18 been referring to, the Freeport Marina, L.P., is a19 different Development Agreement. So, that's...20 MR. GAIBLE: I understand.21 MR. ZUMMO: My concern is having confusion22 about which Development Agreement is the subject of your23 question.24 Q. (BY MR. GAIBLE) Well, the Development25 Agreement that I am referencing here is the 8 -- I'm



17 (Pages 62 to 65)

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1 sorry, the 2/8/07 Development Agreement between Freeport2 Marina, L.P. and the City of Freeport Economic3 Development Corporation. Do you understand that?4 A. Yes.5 Q. Okay. And what was the role of Freeport6 Marina, L.P. with respect to building the marina in7 Freeport pursuant to that Development Agreement?8 A. I believe it's defined in that document.9 Q. You can't tell us, though, without referencing

10 the document?11 A. Well, you have the document.12 Q. Well, here (tenders document).13 A. I mean, do you want me to read this, all of14 this?15 Q. Well, however you want to answer the question.16 A. Okay. We'll be here for a while.17 MR. CHILDS: You want to take a break18 while we do that?19 MR. GAIBLE: Sure. Yeah. Let's take a20 break.21 (Recess taken.)22 Q. (BY MR. GAIBLE) Okay. Mr. Royall, I'm going23 to withdraw my last question to save you some time.24 A. Great.25 Q. Take a look at Exhibit No. 4. I don't believe

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1 that that Development Agreement that's dated2 September 22nd, '03 has got the plats for the exhibits.3 I think these exhibits start with C and they go through4 F. Certainly for C, D, D-1, D-2 and E, I don't see any5 attachment that would identify the land. Do you?6 A. No.7 Q. Okay. Exhibit E has got documents attached to8 it that does describe the land, right?9 A. It looks like it.

10 Q. Here.11 A. Exhibit F has attachments that describe the12 land.13 Q. All right. Thank you, sir.14 And you satisfied yourself that Exhibit15 No. 5 is a fair and accurate depiction of the Gore land,16 right?17 A. It is a fair and accurate depiction of the18 approximately 330 feet of the Gore land on the west side19 of the property.20 Q. Okay. Thank you, sir. Other than the omission21 of the documents that would describe the land that we22 have just talked about, that are exhibits to the23 Development Agreement of September 22nd, '03, does that24 Development Agreement of September 22nd, '03 look25 complete?

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1 A. Yes.2 Q. Okay. If you will turn to Page 20 of that3 document, under -- you see Paragraph (e)?4 A. I do.5 Q. That states, in part: To the extent not6 already owned by the Project Developer. And the Project7 Developer was Freeport Waterfront Properties, L.P.,8 right?9 A. Excuse me?

10 Q. Okay. Under Paragraph (e) on Page 20 of the11 9/22/03 Development Agreement, it references a project12 developer, right?13 A. Yes.14 Q. And that project developer was Freeport15 Waterfront Properties, L.P., right?16 A. Correct.17 Q. Okay. It says: To the extent not already18 owned by the Project Developer, the Project Developer19 shall have acquired or arranged to acquire to all of the20 Brazos Boulevard Land, the City Land, the District Land,21 the Henderson Land, and the Jones Land, and the Gore22 Land, whether via the City's assistance in negotiating a23 direct purchase of such lands by the Project Developer24 or via the City's exercise of its power of eminent25 domain and conveyance of such lands to the Project

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1 Developer; in this regard, the City agrees to use its2 best efforts to satisfy the foregoing condition3 precedent with regards to the City Land and the District4 Land.5 Did I read that Paragraph (e) correctly?6 A. Yes.7 Q. And you, on behalf of Freeport Waterfront8 Properties, L.P., recognized Freeport Waterfront9 Properties, L.P.'s obligation as reflected in that

10 Paragraph (e) on Page 20 to acquire the Gore land,11 right?12 A. Yes.13 Q. Okay. If you will, turn to Page 32. And the14 top paragraph there is: 13.25 Lawsuits. Do you see15 that?16 A. Yes.17 Q. Now, that says, in part: To the extent the18 City Attorney determines it is legally able to do so,19 the City agrees to cooperate with, assist, in a form and20 manner to be agreed by the City and the Project21 Developer at the time of the filing of a complaint, the22 Project Developer and/or the Project Developer in23 connection with or relating to third-party efforts, by24 legal action, in a lawsuit, on appeal or otherwise,25 which threatens to stop or delay the imposition of the



18 (Pages 66 to 69)

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1 Sales Tax, the acquisition of the Project Site,2 including development rights, the negotiation, execution3 or implementation of this Agreement or any other4 agreement between the City and Project Developer or to5 materially delay completion of the Project or to6 materially increase the cost of completion of the7 Project.8 Did I read that correctly?9 A. Yes.

10 Q. Now, the project site is referenced in this11 document. Do you recall if the project site includes12 the Gore land?13 A. I would refer you to the definition of project14 site within the document.15 Q. If you will, find that definition for me.16 A. Page 6.17 Q. All right. And on Page 6 of the 9/20 -- what18 exhibit number is that document, the first page there?19 A. Exhibit 4.20 Q. Okay. Exhibit No. 4, on Page 6, defines21 project site as meaning, collectively, the Blaffer22 Project Land, the City Land, the District Land, the23 Henderson Land and the Gore Land, with a total of24 approximately 1,500 feet of waterfront frontage. Right?25 A. Correct.

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1 Q. So we know with respect to Paragraph 13.252 Lawsuits, that the project site does include the Gore3 land, right?4 A. Correct.5 Q. Now, did you have any communications with the6 City Attorney or any City of Freeport officials with7 respect to third-party efforts by legal action or8 otherwise with respect to acquiring the Gore land by9 right of eminent domain?

10 A. Can you ask that question again, please?11 Q. Sure.12 MR. GAIBLE: Peggy, could you read it13 back?14 (The record was read as requested.)15 A. At what point in time?16 Q. (BY MR. GAIBLE) At any point in time. At any17 time after the 9/22/03 Development Agreement was signed18 and executed by the parties.19 A. I was updated as to the status of the eminent20 domain proceedings that the City had ongoing with the21 Gores.22 Q. And who updated you with respect to those, the23 status of those matters?24 A. Generally, Lee Cameron or Ron Bottoms.25 Q. And when were you first updated with respect to

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1 the status of the eminent domain proceedings?2 A. I am sure it would have been shortly after they3 were started.4 Q. And when would that have been?5 A. I would refer you to the legal documents that6 reflect those dates.7 Q. Well, I am just asking for your recollection.8 A. Well, I am sure there is somebody here that9 knows when the eminent domain proceedings were started.

10 I would rather be accurate than speculate.11 Q. Okay. Well, if you don't know, you can tell us12 you don't know.13 A. Okay. I don't know.14 Q. Okay. And is that an honest answer?15 A. I -- yes.16 Q. Okay. We're not, we're not here to ask you to17 guess or speculate.18 A. Okay.19 Q. If you don't know, you don't know.20 Did you have communications with the City21 Attorney or any representatives with the City with22 respect to initiating eminent domain proceedings against23 the Gores or their property before the suits were24 initiated?25 A. Can you repeat that question, please?

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1 Q. Sure.2 MR. GAIBLE: Peggy, can you read it back?3 (The record was read as requested.)4 THE WITNESS: One more time, please.5 Sorry.6 (The record was read as requested.)7 A. No.8 Q. (BY MR. GAIBLE) And you signed the 9/22/039 Development Agreement on Page 37, didn't you?

10 A. Yes.11 Q. Okay. That is your signature, right?12 A. It is.13 Q. Did you have any communications with the City14 in terms of the strategy to be utilized in an effort to15 acquire the Gore land?16 A. Yes.17 Q. Okay. And what were those communications?18 A. We discussed how we could most effectively and19 expeditiously acquire their property.20 Q. Okay. And who did you have these21 communications with?22 A. I would say the mayor, Ron Bottoms, Lee23 Cameron.24 Q. And did you have these communications on one,25 or more than one occasions?



19 (Pages 70 to 73)

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1 A. More than one occasions.2 Q. When is the first time you had any such3 communication?4 A. Prior to the submittal of the initial letter of5 intent in June of '02.6 Q. That's Exhibit No. 1?7 A. Exhibit No. 1.8 Q. And --9 A. Just like we talked about the other property

10 that we needed to acquire.11 Q. The other third-party properties?12 A. Yes.13 Q. Okay. And when you had this first14 communication with the City of Freeport folks, was it15 all three? Was it Barnett, Bottoms and Cameron, or was16 it just one or two of them?17 A. I recall Ron Bottoms and Lee Cameron.18 Q. And what did you all discuss?19 A. How we could acquire the property needed for20 the marina.21 Q. Okay. And, specifically, what was the strategy22 or plan to acquire that property?23 A. For me to make offers to the property owners24 and try to consummate a sale.25 Q. Let's go back to Exhibit 6 and 7. Have you got

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1 those there in front of you, hopefully?2 A. Seven. Six.3 Q. All right. You didn't send these certified4 mail, return receipt requested, did you?5 A. No.6 Q. You didn't fax them, did you?7 A. No.8 Q. Do you have any evidence that you can show us,9 either on the exhibits themselves or otherwise, that

10 would indicate that they were actually sent from your11 offices, from the offices of Freeport Waterfront12 Properties, L.P.?13 A. No.14 Q. You don't -- I mean, obviously, we are five and15 a half years post 8/1/02 right now. You don't have an16 independent recollection of these actually being mailed17 out, do you?18 A. No.19 Q. And, I mean, as a practical matter, you would20 not have mailed them. If anybody mailed them, it would21 have been a secretary or clerical person or an22 assistant, right?23 A. Yes.24 Q. And just so I'm clear, you can't point to any25 evidence, sitting here today, to confirm that, in fact,

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1 Royall Exhibits 6 and 7 were forwarded to the Ice Dock2 and Western Seafood, Inc.?3 A. Other than my discussions with the recipient of4 these offers.5 Q. Okay. And that would be Wright Gore, Jr.?6 A. Yes.7 Q. Anybody else other than Wright Gore, Jr.?8 A. Well, I discussed it with members of the City.9 Q. Well -- bad question.

10 A. And Greg Flaniken.11 Q. Okay. When you said "recipient" of the12 letters, I just wanted to pin down that you were13 defining "recipient" as Wright Gore, Jr.14 A. Correct.15 Q. Am I right on that?16 A. Correct.17 Q. Okay. And what did Wright Gore, Jr. tell you18 that you believe confirms that he received Royall19 Exhibit 6 and 7?20 A. That, that there wouldn't be a problem, things21 were moving forward, we were going to get a response,22 et cetera.23 Q. But that doesn't specifically reference these24 two letters of intent, does it?25 A. I am sure the man would not say, "We are going

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1 to move forward on your proposal," without seeing the2 proposal. Are you trying to say that they never got the3 proposals?4 Q. I am trying to find out what you know about5 these letter of intents going out. That is what I am6 trying to find out.7 A. Okay.8 Q. And I want to confirm from you or through you9 that other than the comments that you just made that you

10 heard Wright Gore, Jr. say, you have got no evidence11 other than that to indicate that he received Royall12 Exhibit 6 and 7. Is that true?13 A. I can't think of any other evidence that I have14 right now that proves that -- his receipt of these15 documents.16 Q. And then after the Gore lawsuit was filed, as17 referenced in your Exhibit No. 3 on 9/25/03 --18 A. Uh-huh.19 Q. -- have you had any subsequent conversations20 with them?21 A. Yes.22 Q. With the Gores, with respect to your company23 Freeport Waterfront Properties, L.P. acquiring the Gore24 land?25 A. Yes.



20 (Pages 74 to 77)

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1 Q. Okay. When was the next time? And let, just2 let me stop there. Have we covered all the3 communications you had with the Gores from the meeting4 that occurred in September of '02 until the lawsuit is5 filed in September of '03, with respect to acquiring the6 Gore property?7 A. I believe so. There were, there were several8 phone calls. There was at least one face-to-face9 meeting.

10 Q. When was that face-to-face meeting, if you11 recall?12 A. I think it was in September, shortly after this13 meeting with -- in Houston, on site, on Western14 Seafood's property. I am going to say between September15 and November of 2002.16 Q. And who all was there?17 A. Wright Gore, Jr. and I.18 Q. Okay. And how did this meeting come to be?19 A. I called him, said, "I'm going to be on site.20 Can I get together with you?" We got together on their21 property.22 Q. Okay. And what did you all discuss?23 A. We talked about the marina. We talked about24 improvements to our property that was at that time under25 lease to Western Seafood. We were removing trash,

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1 abandoned fishing property, cables and nets that were on2 the property. We were cleaning up the property.3 Q. And this is the lease property?4 A. This is the property that was leased -- owned5 by Freeport Waterfront Properties. It was leased to6 Western Seafood. I was clearing with him the work that7 we were doing, because, although it was our property, he8 had possession of it through the lease.9 We talked about the lease. We talked

10 about the offers to purchase his property. We talked11 about the fact that the marina construction was going to12 start soon.13 Q. Anything else that you recall discussing?14 A. No.15 Q. Okay. With respect to offers to purchase this16 property, tell me about those communications.17 A. Again, I was told, "We're going to get it18 worked out. Don't worry about it."19 Q. Well, were any offers made by you at that time20 to acquire the Gore property?21 A. Exhibit 6 and 7.22 Q. The terms were discussed or the actual23 documents were discussed?24 A. The, the offers to purchase -- obviously we had25 a, an intent and desire to purchase their property.

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1 There would be very little other major reasons to meet2 with them, other than to acquire the property so we3 could build the marina. And that -- these offers were4 discussed.5 Q. Okay. You didn't actually have the letter of6 intent. It was a verbal communication concerning7 offers. Is that what you're saying?8 A. Yes.9 Q. Okay. And what did Wright Gore, Jr. -- how did

10 he respond or what did he say?11 A. "We're going to get that taken care of. Don't12 worry about it."13 Q. Anything else that you recall him saying with14 respect to the offers to buy the Gore property?15 A. No.16 Q. Okay. From that time until the lawsuit was17 filed in September of '03, did you have any more18 communications with the Gores with respect to acquiring19 the Gore property?20 A. Yes.21 Q. When was the next one?22 A. I would say there were a few phone calls23 between us that winter, spring and into the summer.24 Before the lawsuit was filed, there were, there were25 communications between us.

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1 Q. All on the telephone?2 A. There might have been another meeting, possibly3 two, but I can't confirm that.4 Q. If there had been a meeting -- you are talking5 about a face-to-face meeting?6 A. Yes.7 Q. Do you know where those meetings would have8 been or that meeting would have been?9 A. City offices, possibly.

10 Q. You're not -- you're, you're guessing with11 respect to that --12 A. Yes.13 Q. -- or are you sure?14 Okay. All right.15 A. I am telling you that if I had actual -- if I16 could remember another specific meeting, I would tell17 you.18 Q. Okay. And you can't remember?19 A. No.20 Q. All right. Do you, in fact, recall phone21 calls?22 A. Yes.23 Q. And who would have initiated those phone calls?24 A. I can't tell you.25 Q. Would it have just been you and Wright



21 (Pages 78 to 81)

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1 Gore, Jr. on a call?2 A. Most likely.3 Q. Well, do you have any recollection of anybody4 else being on the calls?5 A. No.6 Q. And what was discussed, if you recall?7 A. "Are we moving this along? You know, we're8 working on this marina, but we still don't own all the9 property. Is there anything we can do to facilitate

10 this?"11 Q. And what was Wright Gore, Jr.'s response?12 A. "Don't worry about it."13 Q. Anything else other than, "Don't worry about14 it?"15 A. Not that I recall.16 Q. Okay. And then any other communications that17 you recall with the Gores concerning acquiring the Gore18 property before the '03 lawsuit?19 A. Any other communication with the Gores20 regarding the marina before they filed their lawsuit?21 Q. No. Concerning acquiring the Gore land --22 A. No.23 Q. -- before the lawsuit was filed.24 Okay. Let me broaden the question, then:25 Any other communications with the Gores concerning the

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1 marina before the lawsuit was filed?2 A. No.3 Q. And how did you learn that the lawsuit was4 filed in September of '03?5 A. I believe the City told me.6 Q. And who with the City would have told you?7 A. Lee Cameron.8 Q. And do you recall what he told you?9 A. That the Gores had filed the lawsuit against

10 the City, the Corps of Engineers, whoever else was named11 in the lawsuit.12 Q. Have you ever had any communications with the13 Gores concerning that lawsuit?14 A. Yeah.15 Q. On several occasions or just one?16 A. One comes to mind, specifically.17 Q. When would that have been, approximately?18 A. October of '04.19 Q. And you are referencing Exhibit 3, your20 chronology?21 A. Yes.22 Q. And, specifically, what are you referencing23 October of '04?24 A. The meeting that Wright Gore, Jr.; Wright25 Gore, III; Johnny Powers and I had at On The River

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1 Restaurant in Freeport.2 Q. Okay. And you got an entry on Exhibit No. 3:3 October of '04 meeting at On The River. Right?4 A. Uh-huh.5 Q. And then you got with Wright Gore, W. R.?6 A. Walker Royall.7 Q. I'm sorry. Walker Royall. And then what's the8 next one?9 A. J. P., John Powers; Wright Gore, Jr.; and

10 Wright Gore, III.11 Q. And who called this meeting, or how did this12 meeting come about?13 A. I believe the Gores called this meeting.14 Q. Okay. And how did you receive a communication15 about the meeting, the fact that it was going to occur?16 A. Probably a phone call.17 Q. You just don't recall right now?18 A. I don't recall.19 Q. You didn't receive anything in writing, did20 you?21 A. I don't believe so.22 Q. And what did you all discuss?23 A. We discussed how we could move the marina24 project forward and, and resolve their issues, and get25 rid of the lawsuits, and take down their Web site, and

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1 try to have everybody be good citizens.2 Q. Who is John Powers?3 A. At the time he was managing director for Sun4 Resorts.5 Q. And how was Sun Resorts involved in this6 matter, in the marina project?7 A. I brought them in as a partner to help me8 develop the marina, because they had extensive marina9 experience in Texas and the Caribbean.

10 Q. And do you recall what the Gores said at this11 meeting?12 A. Yes.13 Q. What did they say?14 A. They said that they would like to get the15 lawsuits resolved. I recall Wright Gore, Jr. as being16 seemingly genuinely interested in coming up with a17 response. I remember his son to be combative and18 arrogant, rude.19 At one point Johnny had to forcefully tell20 him to control his behavior. And I suggested to Wright21 Gore, Jr. that the two of us spend some time together22 that afternoon without his son, so we could try to make23 some progress, which we did.24 Q. You said just a couple of minutes ago that25 Wright Gore, Jr. -- something to the effect that he was



22 (Pages 82 to 85)

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1 interested in developing a response. Is that -- I'm2 trying to recall what you said and what you meant by3 what you said.4 A. Would you like to read it back to me?5 Q. I don't know if its all that significant,6 Mr. Royall.7 Yeah. Okay. You said in your answer, "I8 recall Wright Gore, Jr. as being seemingly genuinely9 interested in coming up with a response." What did you,

10 what did you mean by that statement?11 A. A way to break the deadlock, and move the12 project forward, and address his concerns, and stop the13 madness. And as businessmen, come to a resolution that14 made everybody happy.15 Q. And what was your proposal for resolving this16 matter?17 A. We talked about a number of issues. We talked18 about putting in a buffer between the marina and his19 loading docks. He was, he was concerned about the20 amount of space for his shrimp boats to operate. He21 gave me a tour of his facility, of his docks. He22 explained --23 Q. That day?24 A. That day. He explained to me how the, the25 shrimp boats maneuver, and that they are single-screw

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1 vessels, and they don't have bow thrusters and that they2 need some room to maneuver. I understood that. We3 talked about potentially buying all of their land4 between the Barons' property and our property, which5 would include this whole parcel shown here on Exhibit 5,6 and paying to move the facility to another location on7 the river.8 Q. The Western Seafood facility?9 A. Yes, sir. And that way to, to put a lot of

10 space between their processing facility and the11 recreational vessels. We drove to the other side of the12 river and looked at some property that I believe they13 owned over there. We spent several hours together.14 Q. You and Wright Gore, Jr., only, just the two of15 you?16 A. Just the two of us.17 Q. And where is this other property that the two18 of you looked at?19 A. It was on the other side of the river.20 Q. Just right across the river or...21 A. Yes.22 Q. Okay. And do you know who the owner of that23 property was at that time?24 A. Either they -- either he owned it or it was25 available to be acquired. It was, it was a potential

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1 site.2 Q. And is Wright Gore, Jr. the one who told you3 that it was a potential site --4 A. Yes.5 Q. -- or did you learn that on your own?6 A. He took me there.7 Q. Okay. Any other proposals that the two of you8 or the group discussed?9 A. I think that covers it.

10 Q. Okay. And what do you recall Wright Gore, III11 saying or discussing during this meeting?12 A. Well, there were, I guess you could call them13 two meetings that day. There was a meeting at the, at14 the On The River Restaurant -- I believe that's the name15 of it -- where, as I said before, he was very16 confrontational. And --17 Q. And what did he do or say that made you --18 A. He was --19 Q. -- think he was confrontational?20 A. He was insulting. He was arrogant. He was21 spewing facts that were completely disconnected with the22 truth. And in the, in the spirit of ignoring that, to23 try to move forward with a, with a potential program to,24 to move the project forward, I focused on what his25 father was saying.

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1 And it was really a point at -- towards2 the end that my partner John Powers said something to3 the effect of, "Wright, if I were Walker, I would reach4 across this table and ring your skinny neck, because you5 are being so rude. And if you don't stop it, we're6 going to walk away."7 Q. That's what you recall him saying?8 A. It is.9 Q. Okay. And so, how did the meeting end up,

10 then?11 A. The meeting ended up with us not being able to12 make much progress. And I said, "Look, if you would13 like to -- Wright, Jr., if you would like to spend some14 time this afternoon, we can do so. And I will continue15 to work on this with you. But it's not productive to16 have your son involved."17 Q. Okay. Well, and I guess I'm trying to figure18 out the chronology. You all met, had lunch together,19 and then after lunch --20 A. I don't think there was -- lunch was not21 involved. It was --22 Q. Oh, you just met there?23 A. Yeah.24 Q. I see.25 A. Like an 11:00 o'clock meeting there. It was a



23 (Pages 86 to 89)

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1 place to have a cup of tea.2 Q. Okay. All right. And then, and then after you3 met at the restaurant, then you and Wright Gore, Jr. had4 your own meeting --5 A. A few hours --6 Q. -- that you already told me about?7 A. A few hours later we had our own meeting at8 their facility, in his truck, as we toured the area and9 talked about real solutions.

10 Q. Okay. And you said "a few hours later." So11 during that few-hour interval, were you all together at12 the restaurant or did you all disperse?13 A. No. There was the first meeting. That meeting14 ended. They went their way. We went our way. And then15 I got together individually with Wright Gore, Jr., maybe16 two hours later.17 Q. All right.18 MR. ZUMMO: Mr. Royall, you all are19 talking over each other again. So if you could take20 your time and make sure he is through asking the21 question.22 THE WITNESS: Yes. I'm sorry.23 Q. (BY MR. GAIBLE) All right. Now, after the24 second -- if we call it the second meeting that you and25 Wright Gore, Jr. had just between the two of you, how

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1 did that meeting end?2 A. I thought it ended pretty well.3 Q. Well, I mean, what did you say and what did he4 say?5 A. We shared ideas. We came up with potential6 solutions. We talked about new sites for the processing7 plant. We talked about buffer zones. We talked about,8 we talked about money.9 Q. Okay. And in terms of what did you talk about

10 the money?11 A. That there would need to be -- if we were going12 to move this facility, there would be down costs that13 they would like to be reimbursed. If we were going to14 put in a buffer zone and potentially purchase less than15 the 330 feet, that there would still need to be16 financial consideration to Mr. Gore for that. And that17 was, that was -- all the above was relatively agreeable,18 as far as I was concerned. I mean, we had capital at19 our disposal to make this happen. And we were20 interested in coming up with a resolution that pleased21 everyone, similar to the resolution that we came to with22 Trico.23 Q. All right. Were there any -- at the end of the24 day, between you and Wright Gore, Jr., were there any25 actual offers made either by you or by him in terms of

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1 how to resolve this, your company's desire to acquire2 his property?3 A. Yes.4 Q. Okay. And what offers were made?5 A. The ones I've already described: To6 potentially move the whole processing plant. To put in7 a buffer zone. The -- when we got down to the, to the8 facts of what it would cost to move the processing9 plant, it was quite a bit more expensive than I had

10 originally thought. So, the buffer zone was making the11 most sense.12 Q. Okay. And I am just talking about this, this13 one day when you were down there at Freeport.14 A. Okay.15 Q. Did Gore, Jr. tell you how much it would cost16 to move the plant and acquire a second site for the17 plant?18 A. Well, the Gores -- he already owns 2,000,19 2500 feet of riverfront. And there were some other20 sites along his property that we could move the21 processing plant to. The problem became depth between22 the -- the amount of space between the road and the23 river itself. So, we even went so far as to discuss the24 potential closing the road in one area: So maybe the25 City would be agreeable to closing the road here on your

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1 property. He owned property on, I believe, both sides2 of the road. And that would give you more depth from3 which to have your operation. And he was open to4 discussing that, at least.5 And we had discussions thereafter that got6 into more of the specifics of what that might cost. And7 we ran into some road blocks on, on moving the facility.8 Q. Okay. So, on the day that you were actually9 down at Freeport, he did not say: It is going to cost X

10 amount of dollars to move the plant? Nor did you say:11 We are willing to offer you Y amount of dollars to move12 the plant?13 A. I think he indicated it could cost upwards of a14 million dollars to relocate the plant. And I'm not sure15 if he indicated that to me on that day or a few days16 later.17 Q. The buffer zone proposal, were there any18 specifics made with respect to an offer being made19 either by you in terms of installing or providing for a20 buffer zone, in terms of details of what your company21 was willing to do and what your company was willing to22 pay for on that day?23 A. Yes.24 Q. And how much was it going to cost your company25 to do that?



24 (Pages 90 to 93)

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1 A. Well, it wasn't really a matter of what it was2 going to cost our company, because what we were3 discussing here was reducing the amount of property,4 this property here (indicating). Instead of purchasing5 330 feet, maybe we would purchase 150 feet, and that6 would allow more space between their processing plant7 and our docks. And, therefore, there would not be the8 impediment to navigation that he was discussing on that9 day.

10 Q. Okay. And you are referencing Exhibit 5?11 A. I am.12 Q. Did you ever make a written proposal to13 purchase only a 150 feet of waterfront property, as14 opposed to the 330 feet?15 A. I don't think there was a written proposal.16 But there were some proposals being talked about. And17 there was -- there is a, there is a layout that shows --18 talks about the buffer zone and shows a reduced amount19 of land.20 Q. Okay. Was there ever a written offer proposal21 made to move the plant, the Western Seafood plant?22 A. Don't believe so.23 Q. Okay. All right.24 A. And it was shortly thereafter that we got a25 proposal that said: "We'll sell you this..." -- and it

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1 might have been oral. "We'll sell you this piece of2 land. You put in the buffer zone. And it's going to be3 a million four."4 And we said, "Okay. This is obviously5 going nowhere." Because the appraised property -- the6 tax appraised value of this property was, I think,7 $60,000. Pretty big gap.8 Q. Okay. And when was this discussion?9 A. It followed probably within 60 days of the

10 meeting that we had that afternoon in October of '04.11 (Discussion off the record.)12 Q. (BY MR. GAIBLE) '04. Now, the, the million13 four that you referenced earlier, are you saying Wright14 Gore, Jr. had that communication with you, or who had15 that communication with you?16 A. Yes.17 Q. And you don't recall when it was, do you?18 A. Within 60 days of that meeting.19 Q. Nothing was put in writing about that, was20 there, by either you or Wright Gore, Jr.?21 A. Not that I'm aware of.22 Q. Have you had any other communications with the23 Gores subsequent to this most recent one that you just24 described for us about acquiring their property?25 A. Until today?

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1 Q. Yes, sir. Well, up until, up until today.2 Including today.3 A. Well, we had the mediation.4 Q. Okay. On the case?5 A. We, we have had -- he was here for my6 deposition. I think, I think all the other times7 you're, you are aware of. There were no other meetings.8 After that, we realized we're not going to get anywhere.9 Q. All right.

10 A. And that's when we made a tactical change in11 the whole strategy.12 Q. In terms of developing the marina?13 A. Right.14 Q. Okay. And just so I am clear, after you had15 this October of '04 meeting down in Freeport at the16 On The River Restaurant, and then you recall a17 communication with Wright Gore, Jr. about 60 days after18 that and you --19 A. Within 60 days.20 Q. Yeah, within 60 days. And you described that21 for us, right?22 A. (Nodding head.)23 Q. Yes, sir?24 A. Yes, sir.25 Q. Okay. After, after that discussion with Wright

Page 93

1 Gore, Jr., you haven't had any other discussions with2 the Gores concerning acquiring the Gore property, have3 you?4 A. I don't think so.5 Q. Okay. How did you learn of, of the Web sites6 that are the subject matter of this lawsuit?7 MR. GAIBLE: I tell you, let me -- let's8 just take a break for about five minutes. I have got to9 figure out my schedule.

10 MR. ZUMMO: Okay.11 MR. GAIBLE: So I'm going to withdraw that12 question.13 (Recess taken.)14 Q. (BY MR. GAIBLE) Mr. Royall, my understanding15 from your pleadings is that you are making a claim in16 this lawsuit for damages you're alleging you suffered as17 a result, as a result of not being able to construct a18 building down in Freeport; is that right?19 A. Correct.20 Q. Let me get that stuff here. And you based your21 business model on a Best Buy building that you all22 developed out in Baytown; is that right?23 A. Right.24 Q. I have got your three-ring binder that your25 attorney furnished us for the Baytown Best Buy project.



25 (Pages 94 to 97)

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1 You have got that in front of you, don't you?2 A. Yep.3 Q. The land that was purchased cost $1.8 million,4 right?5 A. Yep.6 Q. And I am looking under Tab No. 1. The entity7 that purchased that land was Briarwood Baytown L.P., a8 Texas Limited Partnership, right?9 A. Correct.

10 Q. How is -- how are you individually related or11 involved in that entity?12 A. I owned it -- own it.13 Q. That's a limited partnership, right?14 A. Yes.15 Q. Are you the general partner?16 A. Briarwood Capital is the general partner.17 Q. Briarwood Capital? Is that the full name of18 the entity?19 A. Briarwood Capital Corporation.20 Q. And you are saying you individually own 10021 percent of the stock of Briar -- is it Briarwood Capital22 Corporation?23 A. Yes.24 Q. And the closing statement, which is under25 Tab No. 3, that's not signed. At least the copy that I

Page 95

1 have is not signed.2 A. Okay.3 Q. Is the copy that you have in your three-ring4 binder, is it signed?5 A. It's signed by me.6 Q. Okay. Yeah, mine is signed by you, H. Walker7 Royall, President. Is that BCC?8 A. Briarwood Capital Corporation.9 Q. General partner, right?

10 A. Correct.11 Q. On behalf of Briarwood Baytown L.P., a Texas12 Limited Partnership, right?13 A. Correct.14 Q. Do you know why the buyer -- the buyer is15 identified as Cole BB Baytown; B as in boy, B as in boy,16 Baytown, Texas, L.P. Do you know why they did not sign17 this document?18 A. No.19 Q. And then the qualified intermediary, Gregory20 Roddy, R-o-d-d-y, P.C. Do you know why he didn't sign21 this document?22 A. No.23 Q. All right. Did Briarwood Baytown, L.P., in24 fact, received -- receive as proceeds from that closing25 statement, $2,843,298.80?

Page 96

1 A. Yes.2 Q. Was the agreement -- I guess there was an3 agreement between Briarwood Baytown L.P. and Best Buy to4 enter into a lease agreement; is that right?5 A. Yes.6 Q. That lease agreement is not in the three-ring7 binder that we have been furnished. Well, let me just8 strike that.9 MR. GAIBLE: Pat, can you tell us whether

10 the three-ring binder that your client has got is11 identical in all respects to ours?12 MR. ZUMMO: I believe it is.13 MR. GAIBLE: Okay. All right.14 MR. ZUMMO: It is my copy of what we15 produced to you.16 Q. (BY MR. GAIBLE) Okay. Mr. Royall, the lease17 agreement between Best Buy and Briarwood Baytown L.P. is18 not in that three-ring binder is it?19 A. I believe you if you say it isn't.20 Q. Well, I'm just asking. I have not seen it.21 A. No.22 Q. Okay. Have you reviewed that lease agreement23 in preparation for your deposition?24 A. No.25 Q. When is the last time you recall reviewing that

Page 97

1 lease agreement? Has it been several years?2 A. Yes.3 Q. Was it a long-term lease agreement between4 Briarwood Baytown, L.P. and Best Buy?5 A. Ten years.6 Q. You have got under -- well, the documents under7 Tab No. 2, you have got a preliminary budget. What I8 need is the second page from Tab 2. Do you see that?9 A. Uh-huh.

10 Q. Is that a "yes"?11 A. Yes.12 Q. Under "return on cost" down there in the lower13 left-hand corner of the document, it has got 0.1017. Do14 you see that?15 A. Yes.16 Q. And then it has got Best Buy, a 2 -- well,17 several lines above that, 30,038, what, square feet?18 A. Yes.19 Q. And you have got a line for total rent of20 $488,117.50, right?21 A. Yes.22 Q. Is that the annual rent that you were23 anticipating from Best Buy, the $488,000?24 A. That's the annual rent that they are paying.25 Q. Okay. And that's pursuant to the lease



26 (Pages 98 to 101)

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1 agreement between Best Buy and Briarwood Baytown, L.P.?2 A. Yes.3 Q. And then after the building was constructed,4 did Briarwood Baytown, L.P. sell the, sell the building5 and the land to Cole BB Baytown Texas, L.P.?6 A. We sold the building and five of the twelve and7 a half acres that we purchased to Cole.8 Q. And does Briarwood Baytown, L.P. still own the9 other seven acres?

10 A. Yes.11 Q. Has there been any development on the other12 seven acres?13 A. Not yet.14 Q. Now, the, the loss of business opportunity15 claim for Freeport, what was the structure to be used16 for -- if it was completed?17 A. Witness and counsel conferring off the record.)18 MR. ZUMMO: My client is concerned about19 the confidentiality of this information. And we did20 produce this under the protective order's highly21 confidential provisions. I don't think he is going to22 have any trouble answering your questions, but I think23 we need to make a note at this point in the deposition24 that the transcript needs to be treated as highly25 confidential if you are going to go into the details

Page 99

1 of -- those kind of details of the project.2 MR. GAIBLE: Well, I think I've got to go3 into the details to explore -- discover the damage4 claim.5 MR. ZUMMO: We're not saying he won't6 answer. I just want to make sure that it is protected7 from disclosure to outside parties, and this is done8 under attorneys' eyes only. So we would have to ask9 Mr. Gore to excuse himself, also.

10 MR. GAIBLE: Yeah.11 MR. CHILDS: That was only with respect to12 this, wasn't it? He is asking about the Freeport deal.13 MR. GAIBLE: Right.14 MR. ZUMMO: Oh, the Freeport?15 MR. GAIBLE: Yeah.16 MR. CHILDS: He's asking about the17 Freeport --18 MR. GAIBLE: I'm just talking about the19 Freeport deal.20 MR. ZUMMO: I'm sorry. I thought -- I21 misunderstood. I thought you were still talking about22 Baytown.23 MR. GAIBLE: No.24 MR. ZUMMO: Okay.25 MR. GAIBLE: Yeah.

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1 Q. (BY MR. GAIBLE) Let me, let me re-ask it. Let2 me re-ask the question.3 THE WITNESS: Would you like to close your4 binder?5 MR. GAIBLE: I'm sorry?6 THE WITNESS: Would you like to close your7 binder?8 MR. ZUMMO: Okay.9 MR. GAIBLE: Sure.

10 MR. ZUMMO: That, I think, is a source of11 the confusion.12 MR. GORE, III: My eyes aren't that good,13 I promise you.14 Q. (BY MR. GAIBLE) Tell us, if the Freeport15 building that's the subject matter of your damage claim16 had been built, what was it going to be used for?17 A. Offices for Port Freeport.18 Q. And who was the contract to be with to build19 that structure?20 A. I would have been the -- I would have handled21 that.22 Q. Okay. So you would have been the owner of the23 building?24 A. The developer and the owner.25 Q. Who was the owner of the land?

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1 A. Southern Pacific.2 Q. Before you -- if you had bought -- you never3 bought the land, did you?4 A. No.5 Q. Okay. If you had bought the land, who would6 you have bought it from?7 A. I believe it was Southern Pacific.8 Q. And what's the, the address? Do you recall?9 A. No.

10 Q. Can you describe -- I mean, if I wanted to go11 down to Freeport and look and see what is physically12 there, how could I get there?13 A. At the end of Park Avenue.14 Q. Now, stupid question. I will ask it anyway.15 Generally there is two ends.16 A. The end that we don't already own.17 Q. Okay. I'm sorry. Park Avenue?18 A. Yes.19 Q. Have you been there recently to see what is20 there now?21 A. Yeah.22 Q. What is there now?23 A. An older building.24 Q. Owned by SP, as far as you know?25 A. Yes.



27 (Pages 102 to 105)

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1 Q. I guess SP has been acquired, is UP now, isn't2 it?3 A. Could be.4 Q. Okay. A railroad company. "Yes"?5 A. Yes.6 Q. Okay. And do you know how it's -- is it empty,7 vacant, or just what's going on with it now?8 A. I don't know.9 Q. At the time that you were interested in

10 developing that property, when was that?11 A. May I have a copy of the letter from Pete?12 MR. ZUMMO: I think he is -- there is a13 letter that we have produced that we will have to find14 for you.15 MR. GAIBLE: Well, let's see here. Let's16 see if I've got it.17 Yeah. I don't think I got that, Pat.18 MR. ZUMMO: It's a real short letter.19 Is this --20 THE WITNESS: That's it.21 MR. ZUMMO: It's Document 490.22 MR. GAIBLE: 490?23 MR. ZUMMO: 490. We can have a copy made24 if you want.25 MR. GAIBLE: Yeah. Thank you.

Page 103

1 (Off the record briefly.)2 (Exhibit No. 8 marked.)3 Q. (BY MR. GAIBLE) Okay. And on Exhibit No. 8,4 this is a letter dated 10/7/04 from the executive port5 director. How do you pronounce his last name?6 "Reixach"?7 A. No.8 Q. Well, we'll just call him executive port9 director. And the letter is directed to you, right?

10 A. Yes.11 Q. And with respect to this possibility of12 Briarwood Capital Corporation offering financing for the13 Port's new administration building, how did that start?14 Did you contact the Port or did they contact you?15 A. Lee Cameron contacted me and asked me if I16 would be interested in doing a build to suit for the17 Port. I told them I would. And then Pete called me.18 Q. And Pete is the executive port director?19 A. Yes.20 Q. A. J.?21 A. Yes.22 Q. He goes by Pete, I guess?23 A. I believe so.24 Q. Okay. I just want to make sure we are talking25 about the same person.

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1 A. Right.2 Q. Okay. And what was Lee Cameron's position or3 job back in October of '04, or thereabouts?4 A. Director of economic development for the City5 of Freeport.6 Q. And do you know why he would he would have been7 interested in a new administration building for the Port8 Freeport?9 A. They needed more space.

10 Q. Okay. I am just curious why he would be11 involved in that position. I mean, the Port Freeport is12 obviously a different legal entity, governmental entity,13 than either the EDC or the City of Freeport. How did14 he -- how did Lee Cameron inject himself into the Port's15 business, if you know?16 A. Don't know.17 Q. And, and after you were contacted by Lee18 Cameron, what happened next with respect to this19 possibility?20 A. Pete called me and we began discussions on21 doing this project for them.22 Q. Okay. What did Pete tell you?23 A. He told me he needed a building approximately24 24 or 26,000 feet; that they had identified a site. Lee25 had told me that they had a belief that the owner of

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1 that site would be a willing seller. Pete said that2 they were interested in entering into a long-term lease3 for the property. And I asked him to forward me their4 financials. He did.5 Q. Pete did?6 A. Yes.7 Q. What sort of -- what do you mean by financials?8 A. Well, obviously, when you are doing a build to9 suit for a tenant, you want to make sure that you get

10 paid for that investment. And one of the things that I11 evaluate is the creditworthiness of the potential tenant12 and the likelihood that the rent will be paid. And so13 that's why I asked him for the financials.14 Q. And what sort of financials -- did he provide15 you with any financials?16 A. Yes.17 Q. And what sort of financials did he provide you18 with?19 A. The current financials of the Port Freeport.20 Q. Now, is this referenced in this October 7th21 letter? He says, "As promised, I am enclosing a copy of22 the latest Economic Impact Study done for Port23 Freeport." Or is that something else?24 A. That and their annual report.25 Q. Okay. But the financials that you just



28 (Pages 106 to 109)

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1 referenced in your testimony is referenced in this2 10/7/04 letter, right?3 A. Yes.4 Q. Okay. He didn't send you the financials or any5 other documents under separate cover of a different6 letter, did he?7 A. No.8 Q. The only letter that you've ever received from9 Pete, the executive port director for Port Freeport, is

10 this 10/7/04 letter, right?11 A. Yes.12 Q. And what are you doing now?13 A. Making a note.14 Q. Okay. Wait a minute. What note are you15 making?16 A. I'm adding to the timeline the receipt of this17 letter.18 Q. Okay. On -- and what exhibit is that that you19 are doing that on?20 A. My notes from yesterday, Exhibit 3.21 Q. Okay. I just want to have a record of what you22 are doing, so we will be able to reconstruct it when we23 read your deposition in another month.24 MR. ZUMMO: Once they put a sticker on an25 exhibit it becomes the court reporter's exhibit for the

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1 deposition.2 THE WITNESS: Oh, okay.3 Q. (BY MR. GAIBLE) That's okay.4 A. I'm sorry. Would you like me to scratch it5 out?6 Q. No, no, no.7 A. I would be happy to.8 Q. Just tell us what you have written there, so9 we've got it on the record.

10 A. I wrote: 10/7/04, letter from Port, on my11 timeline.12 Q. All right. Which is Exhibit 3?13 A. Exhibit 3.14 Q. All right. So, is the timeline, so to speak,15 Lee Cameron called you with respect to this proposal and16 then Pete called you next? Is that the next event17 pertinent to this timeline?18 A. Lee Cameron called me and asked me if I would19 be interested in the project. I said, yes, I would be20 interested in the project. I am not sure if Pete called21 me or I called him, but we got in touch on the phone.22 We had a discussion about the project. He followed up23 that discussion with this letter, the financials that I24 requested. And we -- that's the end of my answer.25 Q. Okay. All right. And the letter is the

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1 October 7th, 2004 letter and the financials are the2 financials as referenced in that same letter, right?3 A. Correct.4 Q. Okay. What happened next with respect to this5 possibility?6 A. I started working on it. Visited the site.7 Reviewed the financials. I'm sure I drew up a budget,8 preliminary budget. You know, all the preliminary items9 that I would do in any new development.

10 Q. Do you have the preliminary budget?11 A. No.12 Q. When you say "no," do you have some question or13 doubt as to whether it was prepared?14 A. I am sure that -- that's what I do when I begin15 to do the analysis on a new project. I am sure I did16 it. I don't, don't have a copy of it.17 Q. Okay.18 A. I might have done it and not saved it. I might19 have deleted it. I might have done it by hand. I'm not20 sure. I thought it would be in the file, and I recall21 when I was asked to produce all this, I didn't, I didn't22 see it.23 Q. Okay. You searched for the preliminary budget,24 but could not find it, right?25 A. Yes.

Page 109

1 Q. And sitting here today, you certainly don't2 have any recollection of the numbers or the figures that3 you put on that preliminary budget, do you?4 A. Yeah.5 Q. Okay. Did the form of the preliminary budget6 for the Freeport Port Administration Building, did it7 track the sort of budget that you used in the Best Buy8 project?9 A. Sure. The, the costs per foot.

10 THE WITNESS: Now, if we're going to get11 into that...12 MR. GAIBLE: All right. Well, we're going13 to get into that, Pat.14 MR. CHILDS: You need to step out. I will15 come get you.16 (Mr. Wright W. Gore, III leaves the room.)17 MR. ZUMMO: The court reporter needs to18 note at this point that this is confidential material19 and that it needs to be transcribed separately from the20 other portion and kept under seal when it's either21 presented to the parties or offered to the Court.22 MR. GAIBLE: Do you just want to do --23 continue with the same pages?24 MR. ZUMMO: Yes. Yeah, right.25 MR. GAIBLE: And then those pages



29 (Pages 110 to 117)

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1 pertinent to the sealed testimony can be sealed.2 MR. ZUMMO: Yes.3 MR. GAIBLE: Okay. Then you can make --4 Peggy, you can make a notation in the non-sealed portion5 that references the other pages that are sealed.6 MR. ZUMMO: Right. And I think keeping7 the same page sequence is a --8 MR. GAIBLE: Yeah.9 MR. ZUMMO: -- is a good idea.

10 MR. GAIBLE: Okay.11 (This portion of the transcript excerpted12 as designated "Attorneys' Eyes Only.")13141516171819202122232425

Page 115

1234 (Confidential excerpted portion5 concluded.)6 Q. (BY MR. GAIBLE) Did you have any communications7 with Pete with respect to who his contact was at SP?8 A. I believe it was Lee Cameron that said that he9 had discussed with the, with SP, or whoever that entity

10 was, that they were potentially willing sellers.11 Q. Okay. And to the extent that we are12 referencing SP in this deposition, we are referencing13 them in their capacity as the owner of this property14 where -- you are telling us the Port Freeport was15 interested in acquiring for new office space, right?16 A. Correct.17 Q. Okay.18 A. As long as that was who the owner was.19 Q. And I understand that. And I think now I will20 just refer to it as "the owner."21 A. Perfect.22 Q. Did you have any communications with anybody23 with Port Freeport with respect to any communications24 that the Port Freeport may have had with the owner of25 the property concerning this transaction?

Page 116

1 A. No.2 Q. So, you have no idea if the owner of the3 property was, number one, willing to sell the property,4 other than what Lee Cameron told you, right?5 A. Correct.6 Q. And you certainly don't have any idea of what7 the owner of the property would consider a fair price to8 sell the property, do you?9 A. No.

10 Q. And why didn't the transaction take place?11 A. I received a call from the Port that said --12 and during which they said, "Look, you're a little too13 hot right now."14 Q. You received a call from the Port?15 A. Yes.16 Q. Okay. And who was that person who called you?17 A. Pete.18 Q. And other than telling you you're a little bit19 too hot right now, did he say anything else with respect20 to this possible transaction?21 A. No.22 Q. Did you ask him what he meant by the phrase:23 You're a little bit too hot right now?24 A. I am not saying he said that exact phrase, but25 that was what he conveyed to me, was that: There's,

Page 117

1 there's a little bit too much controversy surrounding2 you, Walker Royall, and we are going to have to put this3 on hold for now, and we can't move forward.4 Q. Okay. With you or the transaction or both?5 A. With me personally.6 Q. Do you know if the Port Freeport ever did get7 new office space?8 A. To the best of my knowledge, they have not9 today, yet.

10 Q. And have you done some sort of investigation to11 confirm that?12 A. Well, I see their sign at the -- in the City13 Hall building that I go to regularly.14 Q. Okay. Their offices are in the same location15 now as what they have been since prior to October of16 '04; is that right?17 A. Yes.18 MR. GAIBLE: Okay. I got to go. You want19 to take a two-minute break or --20 MR. CHILDS: That's fine.21 (Recess taken. Mr. Gaible leaves and22 Ms. Diana J. Shelby joins the deposition.)23 EXAMINATION24 BY MR. CHILDS:25 Q. All right. Mr. Royall, I am going to ask you



30 (Pages 118 to 121)

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1 some questions now. I am going to follow up where2 Mr. Gaible just ended. With respect to this3 Exhibit No. 8 that's in front of you, the October 7,4 2004 letter, was that the first correspondence that you5 received regarding this issue?6 A. From the Port, yes.7 Q. Okay. It references meeting within the next8 two or three weeks following the October 7, 2004 letter.9 Was there another meeting at some point in time?

10 A. I think there was at the City's office, at the11 Port's office.12 Q. Is that when you were told that there is a13 controversy surrounding you and that maybe they wouldn't14 want to go forward at that time?15 A. No.16 Q. When was that? When was that conversation?17 A. That was maybe not 30 days after I received18 this letter. So, middle of, middle of November of '04.19 Q. Okay. So, as I understand the sequence, then,20 you get this letter, you talk to Pete sometime around21 October 7 of 2004, within a week or so, and then this22 letter comes, right?23 A. Right.24 Q. And then you have a meeting with Pete two to25 three weeks later, face to face?

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1 A. Yes, I believe so.2 Q. Okay. And who else was there at that meeting?3 A. Lee Cameron. And we had a lot of meetings, so4 it is hard to keep them all straight four years later.5 Q. Okay. Other than Mr. Cameron and Pete, can you6 recall anybody else?7 A. No.8 Q. What?9 A. No.

10 Q. Okay. Then you get a call from Pete sometime11 maybe mid November and said, "Hey, we're going to cool12 it for now"?13 A. Yes.14 Q. Okay. And from that point in time forward,15 there has been nothing done on that particular building16 issue; is that my understanding?17 A. Well, you know, Pete and I had the discussion18 about the timing of my involvement regarding the19 controversy surrounding the Web sites, and the20 billboard, and the newspaper articles, and all the21 public -- I mean, some of that caused some public fury.22 I would say that some of the things that they were23 saying caused some people to get quite agitated. The24 e-mails and calls that I got were from people that I25 think probably believed passionately that I was doing

Page 120

1 something wrong in their city. And so, those types of2 people probably influenced Pete to pull the plug on, on3 moving forward with our transaction. And I never, to my4 recollection, heard back from Pete again after that.5 MR. CHILDS: Okay. Objection,6 nonresponsive.7 Q. (BY MR. CHILDS) If I understand what you just8 told me, is that after Pete talked to you in mid9 November of '04, nothing ever happened again with

10 respect to the Port of Freeport building that was being11 considered around this October/November, 2004 time12 frame, is that right, that you can recall?13 A. Yes.14 Q. Okay. This letter, Exhibit No. 8, references15 the -- it says: The latest economic impact study and16 the annual report. Do you know why those weren't17 produced to us?18 A. I -- you know, if you all want to get the19 Port's financial information, and they give me clearance20 to provide that to you, I would be happy to provide it21 to you. I just am sensitive to disclosing other22 people's financial information.23 Q. Okay. So you are telling me you have it, you24 just didn't produce it to us?25 A. I believe that's the case.

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1 Q. Okay. And the annual report, is that something2 that is public information?3 A. I don't, I don't know.4 Q. Okay. And the economic impact study, is that5 something that is public information?6 A. I don't know.7 Q. Okay. But you are telling me that you have8 those things, but you just haven't produced them to us?9 A. I believe so.

10 Q. Looking at Exhibits 6 and 7 that were mentioned11 earlier in the deposition, do you know what exhibits I12 am talking about?13 A. Yes.14 Q. The letter of intent documents?15 A. Yes.16 Q. Each one of those exhibits references -- it17 says: See attached exhibit. Do you see that? It's18 under the description of property?19 A. Yes.20 Q. Do you know why those exhibits weren't produced21 to us?22 A. They were in a different form. I would have23 attached just the surveys that, that we have on these24 properties that were done by Damian/Gallion. And you25 have copies of those surveys. But I can see why you



31 (Pages 122 to 125)

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1 would say that they should be as a part of this2 document. I apologize for that.3 Q. My question is: In the document production4 they are not there, and that's why I was wondering if5 you know why they weren't produced.6 A. I -- no.7 Q. Okay.8 A. Would you like a copy of them?9 Q. I can get with Pat on that.

10 A. Okay.11 Q. Looking at your timeline, which is12 Exhibit No. 3 --13 A. Uh-huh.14 Q. -- under July 31st, 2002, it says: Letter of15 intent and signed. Is that the notation?16 A. Yes.17 Q. Okay. Is there a document that, that you18 referred to, to make that entry?19 A. Yes.20 Q. And the reason I'm asking that -- what's the21 July 20 -- or June 26th, 2002 document? Is that22 Exhibit No. 1? I don't have it.23 A. Yes.24 Q. Okay. And that Exhibit No. 1 is not signed.25 And that's why I was wondering.

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1 A. It is not fully executed.2 Q. Yeah. Do you have a document that you looked3 at yesterday in your stack of documents that would show4 us that it's July 31st, 2002 that the letter of intent5 was signed?6 A. Yes.7 Q. Okay. So I can find that in those documents.8 Regarding your entry on your timeline for September9 2002, it says: Meeting with Lee; Ron; Wright, Jr.;

10 Wright, III; John Smith; and who is that?11 A. Mayor Barnett.12 Q. Mayor Barnett. Is there a document that you13 looked at for that particular meeting?14 A. No.15 Q. Okay. That's just coming out of your head?16 A. Yes.17 Q. Okay. Prior to the June 26th letter of intent,18 is there any correspondence between you or any of your19 entities and the City of Freeport as it relates to the20 marina project?21 A. I don't believe so.22 Q. So the June 26th, 2002 would be the first23 document initiating something in writing?24 A. Yes.25 Q. Okay. You referenced earlier a, a piece of

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1 property at Clay and Brittmoore here in Houston.2 A. Yes.3 Q. Who is that owned by?4 A. We sold that property. I'm going to guess it5 was in '02 or '03. I can't remember the buyer's name.6 Q. And who is "we" that sold it?7 A. The partners in Clay Brittmoore, L.P.8 Q. So it was Clay Brittmoore, L.P.?9 A. I believe that was the name of the partnership,

10 yes.11 Q. Okay.12 A. That has since been dissolved.13 Q. That was my next question: It is no longer in14 existence?15 A. No.16 Q. Was Clay Brittmoore, L.P. created so that it17 would own that property?18 A. Yes.19 Q. So, it was transferred from, I think you said,20 the Estate of -- is it John Blaffer?21 A. Robert.22 Q. Or Robert Blaffer?23 A. Yes.24 Q. Okay. And where is Clay and Brittmoore in25 Houston? Is it downtown?

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1 A. No. It's by I-10 and 290.2 Q. Okay. And what was the amount that it was sold3 for?4 A. It was in excess of a million dollars.5 Q. And did the property have any building on it?6 A. No.7 Q. Just a blank piece of property?8 A. Yes.9 Q. What was the property used for, do you know?

10 A. It was being held for investment.11 Q. You were talking about when these letter of12 intents were going out, somewhere around August the 1st13 of 2002, that before sending those out that you looked14 at tax rolls with all -- with respect to the people15 owning the particular properties.16 A. Correct.17 Q. You know what I am talking about? When you18 were looking at the tax rolls, did you go physically19 look at them down in an office somewhere in Brazoria20 County, or did you look at it off the Internet, or what?21 A. I probably would have pulled it off online.22 Q. Do you have some kind of written agreement with23 Greg Flaniken?24 A. No.25 Q. With respect to Exhibits No. 6 and 7, you did



32 (Pages 126 to 129)

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1 not transfer these documents to Mr. Flaniken to send2 out; is that correct?3 A. I don't believe so.4 Q. Okay. If they would have been sent out, they5 would have been sent out from your office?6 A. Most likely.7 Q. The Development Agreement, is it labeled8 Exhibit 2 to your deposition?9 A. There are a couple of different Development

10 Agreements. So...11 Q. I think the one that you were looking at is12 September '03.13 A. That's -- this one is labeled Exhibit 4. I14 don't see Exhibit 2 here.15 Q. Okay. Well, let's, let's look at Exhibit No. 416 real quick. If you would, just thumb through it.17 That's the Development Agreement that is missing some of18 the exhibits.19 A. Okay.20 Q. Is that right?21 A. Seems to be.22 Q. Okay. But other than that, it is a full copy23 of the Development Agreement?24 A. It seems to be.25 Q. Of September '03, right?

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1 A. Yes.2 Q. Now, was that Development Agreement, was it3 renewed at some point in time?4 A. It was extended.5 Q. Okay. More than once?6 A. Yes.7 Q. And then it expired at some point in time?8 A. Yes.9 Q. Do you remember when it expired?

10 A. No.11 Q. Following the expiration of that exhibit,12 Exhibit No. --13 A. Four.14 Q. Yeah, Exhibit 4. When that expired, was there15 a new Development Agreement created? And I've heard the16 date of 2007.17 A. I believe that this agreement was terminated --18 Q. Okay.19 A. -- and we entered into the new agreement.20 Q. And the old Development Agreement, Exhibit21 No. 4, is with Freeport Waterfront Properties, right?22 A. Correct.23 Q. The new Development Agreement is with Freeport24 Marina; is that right?25 A. Correct.

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1 Q. Okay. And the one with Freeport Marina is2 dated sometime in 2007? Or do you know?3 A. That sounds right.4 Q. Okay. What is the relationship between5 Freeport Waterfront Properties, L.P. and Freeport6 Marina, L.P.?7 A. The only relationship that I can see is that I,8 as president of Briarwood Capital Corporation, serve as9 general partner of Freeport Waterfront Properties, L.P.,

10 and I am also involved with Freeport Marina, L.P.11 Q. And when you say "involved," is that Briarwood12 Capital Corporation again?13 A. I would really prefer if you looked at the14 document, so that we can --15 Q. On the corporate?16 A. -- be clear on the facts.17 Q. Okay. And I have got the formation documents18 for Freeport Marina, L.P. All right? So I can look at19 those documents. What I don't have is the documents,20 the organizational documents, for Freeport Waterfront21 Properties, L.P. Do you know where those are?22 A. In my office.23 Q. Okay. Do you know why those have not been24 produced?25 A. No.

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1 Q. Do you know when -- and maybe Mr. Gaible asked2 you this -- but do you know when Freeport Waterfront3 Properties, L.P. was formed?4 A. I believe around 2002. Now, there are other5 people that are involved with Freeport Waterfront6 Properties that are not a party to this. And, you know,7 they're, they're -- I'm sure that they would not want8 their partnership docs being released to your client who9 is -- who has done things with -- has told me in the

10 past they are going to keep things confidential or to11 themselves and haven't. So...12 MR. CHILDS: All right. Objection,13 nonresponsive.14 Q. (BY MR. CHILDS) My question -- and I'm not15 sure I even remember it now. But I think it was: Do16 you know why the Freeport Waterfront Properties -- or17 when it was formed? Freeport Waterfront Properties,18 L.P., when it was formed?19 A. I answered that question.20 Q. And you said approximately 2002?21 A. Yes.22 Q. Okay. And you are telling me that you haven't23 produced those documents for the formation of Freeport24 Waterfront Properties, L.P., because it contained some25 information about the other partners?



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1 MR. ZUMMO: Objection. I don't think he2 can answer why things haven't been produced if he3 doesn't know that they have been specifically requested.4 And I am not sure those have been specifically5 requested.6 MR. CHILDS: Okay.7 Q. (BY MR. CHILDS) Are some of the partners in8 Freeport Waterfront Properties, L.P. some of the same9 partners in Freeport Marina, L.P.?

10 A. Other than me, no.11 Q. Okay. Why the change from the name Freeport12 Waterfront Properties in the old Development Agreement13 to Freeport Marina, L.P. in the newer Development14 Agreement?15 A. Different entities.16 Q. Okay. The partners in Freeport Waterfront17 Properties, L.P. are your brother and some cousins?18 A. No.19 Q. Who were -- who is the owner of Freeport20 Waterfront Properties, L.P.?21 A. My cousins and I.22 Q. How many cousins?23 A. Seven, I believe.24 Q. Okay. Why the change, then, from other than25 being, quote, unquote, different entities from Freeport

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1 Waterfront Properties, L.P. to Freeport Marina, L.P.?2 A. Different ownership.3 Q. And who is the owner of Freeport Marina, L.P.,4 other than you?5 A. Sun Resorts.6 Q. Okay. Just the two?7 A. Correct.8 Q. Did your cousins no longer want to be involved9 in the deal with the City of Freeport?

10 A. You know, I really can't speak for them.11 Q. Well, there is, there is a different change.12 You understand the difference, right?13 A. Sure.14 Q. Okay. Were they on board with the Development15 Agreement that's marked as Exhibit No. 4?16 A. Yeah.17 Q. Okay. And did you talk to them about: Hey,18 I'm going to go on it on my own, on Freeport19 Marina, L.P., with Sun Resorts and leave you all out of20 it?21 A. Yes.22 Q. Okay. And I guess they were okay with that?23 A. One would presume.24 Q. Okay. Well, is that a "yes" or a "no"?25 A. I think you'd have to ask them, if you want to

Page 132

1 ask them a question on how they feel. I have -- nobody,2 you know, objected to, to the program here.3 Q. Well, I didn't, I didn't have the discussions4 with them. You did. And so, that's why I'm asking:5 Why the difference?6 A. The difference is because they're different7 ownership of each entity. And the ownership of Freeport8 Waterfront Properties is okay with that.9 Q. There was some discussion about your meeting

10 with the City prior to the June 26, 2002 letter of11 intent and how you all were going to acquire the12 property. Do you recall that testimony?13 A. Some discussion here today, yes.14 Q. Yeah. And you told us at that time the initial15 plan was for you to go out and make offers to acquire16 the property, right?17 A. Right.18 Q. What was the next plan in the event that you19 could not acquire the property through the offers that20 you made?21 A. At that point there wasn't a next plan, because22 it was not envisioned that we would have a problem.23 Because the City had already talked to everybody24 involved and felt like everybody was going to go along25 with this program.

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1 Q. Okay. And the "program," you're taking about2 that the owners of the property would sell to you, as3 what was represented to you by Lee Cameron?4 A. To Freeport Waterfront Properties, yes.5 Q. Okay.6 A. That's what I was told.7 Q. And at the time that you had the meeting with8 the Gores in October of '04, at the On The River9 Restaurant, you told us earlier in the deposition that

10 at that point in time there was a tactical change,11 right, because you realized that they weren't going to12 sell?13 A. No. I believe I said it was following that,14 that meeting, there was a tactical change.15 Q. Right. Okay.16 A. After that meeting, yes.17 Q. Okay. What was the tactical change following18 that meeting?19 A. Well, in the months following that meeting,20 maybe as long as a year, maybe 18 months -- I would have21 to look at the time frame -- we realized that the Gores22 were really digging in their heels on this and that they23 were after an amount of money that the project could not24 afford, and, therefore, the project should be redesigned25 to move forward without their property. That was the



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1 tactical change.2 Q. Anything else?3 A. Yes. We also realized that they were going to4 fight the marina, whether or not their property was5 involved. And even though we were going to build the6 marina without their property, we needed to -- "we,"7 being my group of Freeport Waterfront Properties,8 myself, Briarwood Capital, and Sun Resorts -- we needed9 to figure out a structure that was most likely to be

10 able to move forward in response to their tactics of11 creating fear amongst the citizens of Freeport that they12 might lose their homes and property and their tactics of13 challenging everything the City did. So, we went into a14 program with Freeport Marina, L.P. and not Freeport15 Waterfront Properties.16 Q. All right. Anything else?17 A. No.18 Q. As I understand it, from what you have just19 told me, then, is sometime within a few months after20 October of '04, you had a tactical change to redesign21 the project so that it could exist without the Gore22 property, correct?23 A. No.24 Q. Didn't you tell me that you redesigned the25 project to not include their property?

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1 A. Yes.2 Q. All right. And have you, in fact, done that?3 A. Yes.4 Q. Okay. Is the project moving forward so that it5 would not include the Gore property?6 A. Yes.7 Q. When you were discussing "we redesigned the8 project," you mentioned the names of yourself, Briarwood9 Capital, Sun Resorts, and Freeport Waterfront

10 Properties, Inc., Freeport Marina, L.P. When you were11 redesigning this project to move forward without the12 Gore property, did you have discussions with the City of13 Freeport about it?14 A. Yes.15 Q. And who at the City of Freeport did you have16 discussions with? Mr. Cameron?17 A. Lee Cameron, Ron Bottoms, the mayor, John18 Smith.19 Q. And which, which mayor?20 A. I believe it was Mayor Phillips at that time.21 Q. Okay. Were you aware of the pending lawsuits22 between the City of Freeport and Western Seafood, as it23 related to the condemnation proceedings of their24 property?25 A. Yes.

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1 Q. When were you aware of those lawsuits? Before2 they were filed or after?3 A. After they were filed.4 Q. Do you know when they were filed?5 A. No.6 Q. Did you ever have any discussions with anyone7 at the City, either Mr. Cameron, Mr. Bottoms, Mr. Smith,8 Mr. Phillips, or Mr. Barnett, about the progress of the9 condemnation lawsuits against Western Seafood?

10 A. After they were filed, I did.11 Q. Did you initiate those conversations with them12 or did they initiate them with you?13 A. I'm not sure who asked who how things were14 going with that.15 Q. Were you in agreement with the City's maneuvers16 in trying to condemn the Gore or Western Seafood17 property through eminent domain proceedings?18 MR. ZUMMO: Objection, form.19 A. You would have to describe the maneuvers that20 you are referring to. I...21 Q. (BY MR. CHILDS) The lawsuits.22 A. I am not familiar with all those lawsuits.23 Q. But were you in agreement with the City trying24 to acquire the property of Western Seafood through25 eminent domain proceedings?

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1 A. I am not a big fan of eminent domain.2 Q. Okay. Well, my question is: Were you in3 agreement with the City in moving forward in those4 lawsuits against Western Seafood for their property?5 A. It seemed to me that the City had -- were6 within their rights to do what they did.7 Q. Were you in agreement with it or not?8 A. You know, I would have to do a -- I would have9 to review the whole situation to answer that question.

10 I think that there were things that the City did that11 were within their rights and that they did in a fine12 manner. I think they also made some mistakes.13 Q. What were their mistakes?14 A. I can't list for you all their mistakes here.15 Q. The City's?16 A. Yes.17 Q. Can you list a few of them?18 A. I think there should have been more discussion19 between Wright Gore, Jr. and probably the mayor. And I20 think that if, if Wright Gore, III had been removed from21 the process and had not been allowed to run wild, there22 would have been cooler heads prevailing and the damage23 that was done to his family and to this project would24 have been averted.25 Q. So you're saying that the City caused Wright



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1 Gore, III to be running wild?2 A. No. I am saying that Wright Gore, III's3 running wild and interfering with public meetings,4 launching Web sites, misstating the truth on multiple5 occasions, causing fear and intimidation amongst the6 citizens of Freeport, influencing his father to not7 take -- not have an open road to negotiation with the8 City, caused the breakdown of communication between9 cooler heads that could have come to a resolution years

10 ago, and not had the Gore family in really the terrible11 situation that they are in today.12 Q. All right. My question is: What mistakes did13 the City make as it relates to these lawsuits on the14 eminent domain proceedings as to the Western Seafood15 property?16 A. I think it was a mistake for there not to have17 been a stronger effort to communicate with Wright18 Gore, Jr., by probably the mayor at different times, to19 resolve, to resolve the issues that could have kept us20 from being where we are today and allowed the marina21 project to move forward sooner rather than now as it's22 moving forward.23 Q. You were aware at all times that the City was24 moving forward with their lawsuits against Western25 Seafood on the condemnation proceedings, weren't you?

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1 A. Just as I was aware that I was moving forward2 with my lawsuits against them.3 Q. And, by the way, your lawsuit, you served the4 Gores with this lawsuit at that meeting following the5 meeting at On The River Restaurant; is that right?6 A. If they hadn't been dodging service for the7 prior six to eight weeks, I would not have had to have8 served them that way.9 MR. CHILDS: Objection, nonresponsive.

10 Q. (BY MR. CHILDS) Were the Gores served with11 this lawsuit following the meeting at the On The River12 Restaurant?13 A. The Gores were, indeed, served with this14 lawsuit following the meeting at the On The River15 Restaurant, because they were dodging service for four16 to eight weeks prior to that meeting. They knew that17 they were going -- that they were -- that we were trying18 to serve them, and they were purposefully avoiding that19 service.20 MR. CHILDS: Objection, nonresponsive21 after "because."22 Q. (BY MR. CHILDS) Who drafted that Development23 Agreement that's sitting in front of you, Exhibit No. 4?24 A. I believe it came out of Todd Brewer's office.25 Q. Todd Brewer with what firm?

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1 A. It's in the document.2 Q. Is he your lawyer?3 A. No.4 Q. Is he a lawyer?5 A. I don't think he would be drafting this6 document if he wasn't, sir.7 Q. Well, who is Todd Brewer?8 A. You've got the document right there.9 Q. You've got it. I didn't see his name. Who is

10 Todd Brewer? Do you know him?11 A. I know him as an attorney for the City.12 Q. Attorney for the City of Freeport?13 A. Correct.14 Q. And why are you saying that he drafted this15 document?16 A. Because I believe that's where this document17 came from.18 Q. Okay. Did you have any lawyers look over this19 Development Agreement, Exhibit No. 4, before you signed20 off on it?21 A. Yes.22 Q. Who were those lawyers?23 MR. ZUMMO: Mr. Childs, I'm -- you haven't24 asked for advice from lawyers or anything that would be25 protected by privilege. I'm just going to caution

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1 Mr. Royall to answer your specific question and identify2 lawyers, but not go further and go beyond that.3 MR. CHILDS: I'm not asking about the4 substance.5 A. David Montgomery.6 Q. (BY MR. CHILDS) And who is he with?7 A. Locke Liddell.8 Q. Here in Houston or...9 A. Yes.

10 MR. CHILDS: It's about 10 after. You11 want to take a break now?12 MR. ZUMMO: That's fine.13 (Lunch recess taken.)14 Q. (BY MR. CHILDS) All right. Mr. Royall, how15 did you find out about the Web site that's the subject16 of the lawsuit?17 A. I think I got an e-mail from somebody. I can't18 remember who.19 Q. What did you do next? Did you go and look at20 it or what?21 A. Sure. Went and looked at it.22 Q. What Web site was it?23 A. Scandalinfreeport.com.24 Q. Okay.25 A. Called my attorney. Said: We need to stop



36 (Pages 142 to 145)

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1 this from -- we need to shut down this Web site.2 Q. The Web site. And who was the lawyer?3 A. Do you have the letter there?4 Q. I have got a letter that --5 A. Vinson Elkins?6 Q. Well, there is a letter from a guy by the name7 of Walter Herring?8 A. That's it.9 Q. H-e-r-r-i-n-g.

10 A. Fulbright.11 MR. ZUMMO: That was Exhibit D to the12 original petition.13 Q. (BY MR. CHILDS) Did you read the letter before14 it was sent?15 A. I don't think so.16 Q. You have read the letter since?17 A. Yes.18 Q. There are four statements referenced in that19 letter. Do you remember what those statements were that20 were allegedly taken from the Web site?21 A. How about I take a look at the letter?22 Q. Okay. Well, first of all, I am just asking you23 if you remember what those four statements were.24 A. I remember some of them, but not all of them.25 Q. Okay. What were they? What's the one that you

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1 can remember -- the ones?2 A. The one that sticks out in my mind is, is the,3 the one that your client mentioned in one of the4 interviews that he did about the collection of Porsches.5 Q. Okay.6 A. And I believe he said that I was suing him7 because they got my -- the kind of car I drive wrong.8 It was a -- I drive a BMW, not a Porsche. If I remember9 correctly.

10 Q. Okay. Maybe we're not, maybe we're not11 communicating here. You may be talking about an12 interview. I'm talking about statements referred to in13 the letter.14 A. May I see the letter, please?15 Q. Yeah.16 MR. ZUMMO: The petition, at the very end,17 it is the last exhibit, the last two pages.18 MR. CHILDS: You can hold it.19 Q. (BY MR. CHILDS) But before you look at it, I'm20 just trying to figure out if you can remember what the21 statements were that were referred to in the letter22 without looking at the letter. Then I will ask you23 questions about it later.24 A. Yeah. That I'm richer than any person in the25 City of Freeport.

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1 Q. That's one.2 A. I mentioned the car collection.3 Q. Car. Okay.4 A. That I'm going to come down there and take5 people's homes and give them the boot and then give them6 a bill. I'm not sure what the fourth is.7 Q. Okay. And we will come back to it. And I'm8 going to go through those particular statements with9 you. But I am just trying to get it from your memory

10 right now.11 Those statements, and there's four of them12 mentioned in the letter, are also mentioned in the13 lawsuit paper themselves, okay, what I am going to call14 the petition. You understand what a petition is?15 A. Sure.16 Q. Okay. Is there any other statements off the17 top of your head from any of the Web sites that you18 would attribute to being defamatory towards you?19 A. Yes.20 Q. Okay. What I want to do now is, I want to know21 what those statements are. And I'm talking about22 statements that are not in the, not mentioned in the23 lawsuit and not mentioned in the letter of April 8th,24 2004.25 A. I mean, there are so many statements that are

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1 defamatory and incorrect that, you know, I -- I would be2 happy to go through each and every one of them, if you3 would like. I think we provided you with a copy of the4 Web site where they are underlined. You know, that5 would -- should make short work of this.6 Q. Okay. Before I get to that, did you print out7 a copy of the Web site at some point in time?8 A. Yes.9 Q. When was that, approximately?

10 A. I think we printed out --11 Q. The first time, let's say.12 A. I mean, you have a copy of it. So...13 Q. I don't know that I do. That's why I'm asking.14 A. It's right over here.15 MR. CHILDS: What documents is he16 referring to? Do you know, Pat?17 MR. ZUMMO: There is an exhibit to the18 original petition.19 MR. CHILDS: Right.20 MR. ZUMMO: And I think that was printed21 out sometime in 2004. That and the CD that was22 produced.23 MR. CHILDS: Bates-stamp number?24 MR. ZUMMO: It starts with Bates-stamp25 number -- the first thing from the Web site, I think,



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1 starts with Page 19. The pages of the Web site that we2 printed out -- and these are from March 2006. You will3 see there is underlining, and that's what Walker is4 referring to.5 MR. CHILDS: Okay.6 MR. ZUMMO: And I think that was7 referenced in a set of interrogatory answers or Request8 for Production responses that we made to your client.9 MR. CHILDS: Okay.

10 MR. ZUMMO: And so -- and apparently the11 way this was printed out by whichever one of the12 defendants or lawyers printed them out and put the13 numbers on them, and it may be that the CD was mixed up,14 too, but there are pages to the Web site and then15 sometimes there is stuff that looks like it is documents16 that may have been referenced in the Web site. But it17 starts at Page 19. And I think you will find18 underlining on almost all of the pages that are printed19 from the Web site. And you can ask Mr. Royall this, but20 he did that underlining for the purpose, I believe, of21 responding to your client's discovery.22 MR. CHILDS: All right. Let's --23 MR. ZUMMO: And I have another copy. If24 you want to work off of one set, I can go get a copy,25 although it may not have the -- in fact, I don't think

Page 147

1 it has the Bates numbers. But I do have another copy2 that, you know, Walker can follow along with, if, if you3 want to do it that way. And I'm happy if you just want4 to sit next to him and do it that way. That's fine,5 too.6 MR. CHILDS: I don't know if you want that7 in there (indicating). Probably doesn't mean anything.8 Let's go off the record a minute.9 MR. ZUMMO: Okay.

10 (Discussion off the record.)11 (Exhibit No. 9 marked.)12 Q. (BY MR. CHILDS) All right, Mr. Royall. What13 we have marked as Exhibit No. 9 in front of you is14 Plaintiff Bates-stamped documents 00019 through15 Plaintiff Bates-stamped document 00262. Do you see16 that?17 A. I do.18 Q. It is omitted within that document, Plaintiff19 Bates-stamp number 00037 through 00085. Do you see20 that?21 A. I'm sorry? What's omitted?22 Q. Thirty-seven --23 MR. ZUMMO: Breaking the sequence of the24 numbers.25 A. Oh, okay.

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1 Q. (BY MR. CHILDS) Bates stamp 37 through 85.2 You'll see that.3 A. 237?4 Q. No. Just 037.5 A. Yes.6 Q. Through Bates stamp 85.7 A. I do.8 Q. Okay. And it is my understanding that the9 Bates stamp 37 through 85, which we can go look at

10 later, is the Development Agreement, okay?11 A. Okay.12 Q. Now, from what I understand you told me off the13 record, was if we are looking at Exhibit No. 9, there14 are a number of things that you have underlined in this15 exhibit which you contend is defamatory or false towards16 you, correct?17 A. Correct.18 Q. Okay. So if we are looking on Bates stamp 19,19 the things that you underline are in the middle of the20 page, where it starts, "the scandal," and ends with,21 "without your say."22 A. Right.23 Q. And then the next line is that you underline,24 "Walker gets your property. You get the bill. You get25 the boot."

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1 A. Right.2 Q. Is that the only two things on this page that3 are underlined by you?4 A. Yes.5 Q. The first line there says, "The scandal in6 Freeport is a sweetheart deal between Mr. Royall and the7 City government to take your property or a gigantic part8 of your taxes for Mr. Royall's benefit without your9 say." Is that true?

10 A. "And a gigantic part of your taxes without your11 say." Yes.12 Q. Okay. Is that a true statement or not?13 A. That is not a true statement.14 Q. What about it is not true?15 A. Well, it's not a sweetheart deal. It was a, a16 business deal. I object to somebody calling it a17 sweetheart deal, when I have equity in the project and18 am paying a market interest rate. And so, I don't think19 it is sweetheart deal.20 Q. All right. Anything else?21 A. Yeah. It says, "It is a sweetheart deal22 between H. Walker Royall and the City government to take23 your property and a gigantic part of your taxes for24 Mr. Royall's benefit without your say." There is no --25 this leads the reader to believe -- anybody that goes to



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1 this Web site would, would be led to believe, "Jeez,2 Walker is going to take my property and take my taxes,3 all for his benefit, without my say." Well, that's4 wrong. But that's not what is happening.5 First of all, the -- H. Walker Royall6 doesn't have the power to take anybody's property. The7 power of eminent domain rests with the government. And8 what the government does or doesn't do at the local,9 State, or Federal level really has no more to do with

10 what I say than with anybody else in this room or this11 state has to say. Because I don't control any12 government. I don't control the City of Freeport's13 government. And it's -- this has, this has led to --14 this is designed to sway the reader to believe15 otherwise.16 I am not taking anybody's taxes. The,17 the -- you know, first of all, the deal is between18 Freeport Waterfront Properties, or was between Freeport19 Waterfront Properties and the City of Freeport. I am20 not Freeport Waterfront Properties. I am a minority21 owner or partner within that partnership. And I am a22 representative for the partnership, through my capacity23 as president of Briarwood Capital. That statement is24 designed to slander me.25 Q. The deal with the Development Agreement that

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1 was marked as Exhibit No. 4 to your deposition, Freeport2 Waterfront Properties would eventually have title to all3 of the land and the marina, correct?4 A. That's correct.5 Q. And the City of Freeport agreed to pay Freeport6 Waterfront Properties $6 million for the development of7 the marina; is that correct?8 A. No.9 Q. What was the number that was agreed to pay?

10 A. They weren't agreed to pay anything.11 Q. Where does the number $6 million come from?12 A. Well, I mean, you have all the documents I do.13 Would you like to look at the Development Agreement?14 Q. So, so the City of Freeport was going to just15 let you build it and they weren't going to be giving you16 any money?17 A. No.18 Q. Were you giving them any money to build it?19 A. No.20 Q. How was it that you were going to have the land21 to build the marina?22 A. Well, we already owned a good part of the land23 to build the marina.24 Q. That was through your family, right?25 A. Right.

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1 Q. How is it that you were going to get the other2 land to build the marina?3 A. We were going to negotiate for it and try to4 purchase it.5 Q. And if that failed?6 A. The City had the option of, of exerting all the7 rights that a city owns -- has.8 Q. Through eminent domain proceedings, correct?9 A. Correct.

10 Q. And when the City did that, in the end, you11 would get the land, right?12 A. No.13 Q. Who would be the title holder to the land?14 A. Well, if, if the City had done that and the15 City were to have taken title, they could have sold that16 property to anybody they wanted.17 Q. And you weren't contemplated to be a purchaser18 of that property?19 A. No, sir.20 Q. The next statement, "Walker gets your property.21 You get the bill. You get the boot." What's not true22 about that?23 A. Under no circumstances was Walker Royall ever24 envisioned to take anybody's property or get anybody's25 property under this plan. In no circumstances was I

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1 going to give anybody else the bill or the boot. The2 statement is, is defamatory. It is lead -- it is3 designed to mislead people and to have a negative4 impression of me as an individual.5 Q. All right. Let's go to page Bates-stamped6 Page 21. Up at the top of the page it says, "Mr. Hiram7 Walker Royall is a rich man." Did you underline that?8 A. I did.9 Q. And at the time were you 34 years old?

10 A. No.11 Q. Okay. How old were you?12 A. I was 36 years old.13 Q. What's your date of birth?14 A. 8/3/70. So, I was, I was 35 years old.15 Q. At the time that this was printed up?16 A. At the time this was printed, yes.17 Q. Okay. Are you a rich man?18 A. I mean, I, I guess that depends on your19 definition of rich.20 Q. Well, the top ten percent of wage earners in21 the United States?22 A. Yes, I am.23 Q. The top one percent?24 A. I don't know. I imagine your client is in the25 same position.



39 (Pages 154 to 157)

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1 MR. CHILDS: Objection, nonresponsive.2 Q. (BY MR. CHILDS) Are you an heir to the Hiram3 Walker whiskey distilleries?4 A. No.5 Q. Are you an heir to Humble Oil Company?6 A. Yes.7 Q. And how is it that you are an heir to the8 Humble Oil Company?9 A. My great grandfather was one of the founders of

10 Humble Oil.11 Q. And what is his name?12 A. R. L. Blaffer.13 Q. Do you have any family relationship to Hiram14 Walker Royall, the whiskey distillery company guy? Do15 you know who I am talking about?16 A. I know who you are talking about.17 Q. Yeah.18 A. He was my great, great grandfather.19 Q. Okay. Who were some of your friends in high20 school?21 A. You are going to have to be a little more22 specific than that.23 Q. Give me some names of your friends from high24 school, from Lamar High School.25 A. Okay. Harris Lamkin was a friend of mine.

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1 Q. Harris Lamkin?2 A. Uh-huh.3 Q. L-a-m-k-i-n?4 A. Uh-huh. Jason Santa Maria. Chris Vanriet.5 Q. Chris who?6 A. Vanriet. Mary Addicks.7 Q. Mary who?8 A. Addicks. They were all friends of mine.9 Q. Anyone else?

10 A. I had a few other friends.11 Q. Can you give me their names?12 A. Sure. Forrest Runnels. Peyton Ripley.13 Q. Any others?14 A. No.15 Q. How long did you go to Lamar High School?16 A. One year.17 Q. Was that just your senior year?18 A. Uh-huh.19 Q. Is that a "yes"?20 A. Yes.21 Q. Graduated in what year?22 A. '89.23 Q. So you went only from 1988 to 1989?24 A. Correct.25 Q. When you went to Lamar High School during that

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1 one-year period, where did you live?2 A. 2111 -- 2113 Bellmeade.3 Q. Where is that?4 A. In Houston.5 Q. What area of Houston?6 A. River Oaks.7 Q. Is your brother older or younger than you?8 A. Younger.9 Q. Did he go to Lamar High School as well?

10 A. He went to Episcopal.11 Q. Did you ever go to Episcopal High School?12 A. My junior year.13 Q. Before going to Episcopal High School your14 junior year, did you go to any other high school in15 Houston?16 A. No.17 Q. So you moved down here from New York, went to18 Episcopal High School for your junior year, Lamar High19 School for your senior year?20 A. Yes.21 Q. Did your brother graduate from Episcopal High22 School?23 A. He did.24 Q. Why did you stop going to Episcopal High School25 and start going to Lamar High School?

Page 157

1 A. Parents decided it was a better place for me.2 Q. Any other reason?3 A. No.4 Q. Did you inherit a trust fund on your 18th5 birthday?6 A. Yes.7 Q. What's the name of that trust fund?8 A. The Hiram Walker Royall 1988 Asset Management9 Trust Fund.

10 Q. How much was it worth at the time that you11 inherited it?12 THE WITNESS: Is my financial --13 MR. ZUMMO: You don't have to answer that.14 A. I don't think that's relevant here.15 Q. (BY MR. CHILDS) Okay. You understand that if16 or when we have to go to the Judge to get you to answer17 the question, that you might have to come back down here18 and give another deposition. Do you understand that?19 MR. ZUMMO: I don't believe that kind of20 threat is appropriate, especially --21 MR. CHILDS: I am not threatening.22 MR. ZUMMO: -- since our objection to that23 Request for Production interrogatory has been in your24 hands for several months now.25 MR. CHILDS: Okay. Well, we'll see. I am



40 (Pages 158 to 161)

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1 just asking how much the value of the trust fund was.2 MR. ZUMMO: As you know, that has been3 objected to and we are going to object to those4 questions in this deposition.5 MR. CHILDS: Okay.6 MR. ZUMMO: Because I asked you back at7 that time whether you had any authority for that8 request, that such information was discoverable, and you9 declined to respond to that.

10 MR. CHILDS: All right.11 Q. (BY MR. CHILDS) Did you inherit any other12 trust funds on your 18th birthday, other than the Hiram13 Walker Royall 1998 -- or 1988 Asset Management?14 A. No.15 Q. You told us that you live on Abbott Street in16 Dallas.17 A. I do.18 Q. What's the value of that house?19 A. I don't know.20 Q. Did you pay taxes last month on the property21 taxes for the house?22 A. Sure.23 Q. Do you remember what the appraised value was?24 A. I think it was about a million four.25 Q. Did you drive a BMW 850 at some point?

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1 A. Yes.2 Q. Okay. Does Briarwood or did Briarwood Capital3 own a Range Rover?4 A. They used to.5 Q. At the time that this Web site was put out, did6 Briarwood Capital own a Range Rover?7 A. What was the date of the Web site? In March of8 '04?9 Q. Well, this was printed on March of '06, if you

10 look at the print date down at the bottom right.11 A. Well, yes.12 Q. Okay. So at some point in time before March of13 '06, Briarwood Capital owned a Range Rover?14 A. Yes.15 Q. What was the value of that Range Rover?16 A. About $50,000.17 Q. Okay. And so -- and then the BMW 850 that you18 drove, what was value of that?19 A. I don't know.20 Q. Do you take exception to the amount of the BMW21 that's listed there, the 67,500? Do you think it was22 worth less or more?23 A. I think it was worth less.24 Q. And you think that the Range Rover is worth25 less than 72,000?

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1 A. Yes.2 Q. Do you have any evidentiary documents that3 would show us the amount that you paid for your BMW 8504 and for the Range Rover?5 A. Yeah.6 Q. You do, you do have those documents?7 A. Uh-huh. Yes.8 Q. Okay. In October of '02, did you -- is that9 when you inherited the waterfront property in Freeport?

10 A. That's when I inherited a small percentage of11 some waterfront property in Freeport.12 Q. Okay. And it also lists here the former13 Intermedics site. Do you see that?14 A. Yes.15 Q. Did you also inherit a percentage of that?16 A. Yes.17 Q. Let's flip on to page -- it looks like 23, 2418 and 25 of Exhibit No. 9. It appears to be Dallas19 Central Appraisal District records. Do you see that?20 A. Yes.21 Q. And is that for your property in Highland22 Park --23 A. Yes.24 Q. -- in Dallas?25 Did you dispute the market value that's

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1 listed there? It says market value 1.268 million.2 A. I may have.3 Q. You said you may have?4 A. I generally dispute the, the taxes on this5 property.6 Q. Okay. And that's your residential property,7 right?8 A. Yes.9 Q. And the reason that you wanted to dispute it is

10 so that you could pay lower taxes? Isn't that the11 reason that you dispute them?12 A. Yeah.13 Q. All right. Let's go to Page 27 of Exhibit 9.14 Up at the top it says: If you clicked on the15 information about Walker's $1.25-million house in16 Dallas, you may have learned of the separate servant's17 quarters building behind his house. Do you have a18 separate building behind your house?19 A. I have a garage apartment.20 Q. Okay. Who lives there?21 A. Nobody.22 Q. Do you have a maid or a nanny on a regular23 basis?24 A. I have a housekeeper that comes once a week.25 Q. Okay.



41 (Pages 162 to 165)

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1 A. And she has never lived there.2 Q. Okay.3 A. And I certainly don't think of the citizens of4 Freeport as my servants.5 Q. All right. Do you know anybody that lives in6 Freeport that is richer than you?7 A. I have not done any investigation on the8 financial wherewithal of any of the people in Freeport.9 Q. So the answer to my question would be "no"?

10 A. You are correct.11 Q. Do you know what the City of Freeport budget12 is?13 A. No.14 Q. There is a statement here on Page 27 of15 Exhibit No. 9 that says: Maybe that's why he doesn't16 think Freeport taxpayers will mind if he takes $617 million for himself. Why is that not true?18 A. Because in no event was I ever going to take19 $6 million for myself.20 Q. Six million dollars would go to who, Freeport21 Waterfront Properties?22 A. No.23 Q. Who would it go to?24 A. You've got the documents.25 Q. It says down here that: Walker would not have

Page 163

1 to pay any property taxes to the City on his proposed2 yacht basin. Was that part of the Development3 Agreement?4 A. No.5 Q. Was that part of any agreement with the City?6 A. No.7 Q. Looking at Page 28, it says: Walker offers you8 an outrageously low price for your property. Do you see9 that?

10 A. Yes.11 Q. You have underlined that?12 A. Yes.13 Q. We saw in some documents earlier that you had14 offered Ms. Stanley $50,000 for her property; is that15 right?16 A. Correct.17 Q. And you told us that you agreed to a $90,00018 deal for her property?19 A. Correct.20 Q. Do you have something signed from her stating21 that she accepted that?22 A. Yes.23 Q. Okay. Did you actually pay her the $90,000 for24 the property?25 A. I don't think so.

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1 Q. Okay. Did you ever acquire the property?2 A. Yes.3 Q. Okay. How -- was she compensated the $90,0004 that was agreed to?5 A. You would have to ask her.6 Q. Okay. Well, do you remember having a check cut7 for her for that $90,000?8 A. I don't.9 Q. Okay. Because the documents that I have looked

10 at over there are not signed by her. And that's why I11 am wondering whether or not there was any actual12 consummation of the deal that you proposed. And that's13 why I am trying to figure that out. Do you know whether14 or not she actually accepted and that Freeport15 Waterfront Properties or Briarwood Capital or some16 entity that you own or control transmitted that money to17 her and she accepted?18 A. No.19 Q. Okay. Do you have title to the Dorothy Stanley20 property now?21 A. No.22 Q. Okay. Did you reach an agreement with23 J&S Contractors for their property?24 A. No.25 Q. Okay. Do you recall what you offered them for

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1 their property?2 A. No.3 Q. Did you ever reach an agreement with Ms. Wanda4 Jones for her property?5 A. No.6 Q. You know who I am talking about when I say7 J&S Contractors, right?8 A. Yes.9 Q. There is a letter of intent over in your

10 documents showing that you offered them -- again, that11 letter of intent is not signed -- showing that you12 offered them $165,000 for their property. Do you recall13 that at all?14 A. Yes.15 Q. Did you ever pay anything -- I'm talking about16 you or any entity that you own or control -- did you17 ever pay anything to J&S Contractors for their property?18 A. No.19 Q. And the same is true for Ms. Wanda Jones?20 A. Yes.21 Q. What does the term "blighted" mean?22 MR. ZUMMO: Pat, do you have a dictionary?23 Q. (BY MR. GAIBLE) Do what?24 A. Asked him for a dictionary.25 Q. Oh. Do you know what the term "blighted"



42 (Pages 166 to 169)

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1 means?2 A. Yeah.3 Q. What does it mean?4 A. Depressed.5 Q. All right. Anything else?6 A. No.7 Q. This No. 3 down here on Page 28 of8 Exhibit No. 9 says -- it says: Accept Walker's offer or9 go to court. Walker and the City government serve

10 notice to you that they will use a special government11 power called eminent domain against you. Do you see12 that?13 A. Yes.14 Q. What is untrue about that?15 A. I have never threatened to take anybody to16 court on -- if they don't accept my offer. And I have17 never served notice that I will use a special government18 power called eminent domain against anybody.19 Q. Well, in fact, the City took the Gores to Court20 using -- trying to use the powers of eminent domain,21 right?22 A. They sure did.23 Q. Do you know of anyone else that they did that24 with?25 A. No.

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1 Q. Going to Page 31 of Exhibit No. 9, all of the2 underlined information on Page 31 is what you3 underlined?4 A. Yes.5 Q. Down about middle of the page it says: Walker6 wants six million of your tax money. And the City7 government officials want to give it to him. Is that8 true or not?9 A. No.

10 Q. Why is it not true?11 A. Well, again, I am not personally involved in12 the, in the -- in taking and receiving any City money.13 Q. Okay. You or any entity you own or control was14 not going to be receiving any of the money from the City15 of Freeport to build a marina? Is that what you're16 telling me?17 A. Freeport Waterfront Properties was going to be18 lent $6 million.19 Q. Okay.20 A. That's not what your client wrote here. Again,21 it is misleading and meant to tarnish my reputation.22 Q. So you got a loan of $6 million?23 A. No.24 Q. You were going to get a loan for $6 million?25 A. The City agreed to give Freeport Waterfront

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1 Properties a loan for $6 million.2 Q. Okay. And was that loan going to have to be3 paid back?4 A. Of course.5 Q. Okay. In what document? Where would that be6 referenced?7 A. The Development Agreement.8 Q. Okay. So they were going to loan you9 $6 million so you could build the marina, and then you

10 were going to pay that money back to them?11 A. No.12 Q. Well, are you getting hung up on me using the13 word "you" versus "Freeport Waterfront Properties"?14 A. Yes.15 Q. Okay. They were going to loan Freeport16 Waterfront Properties six million, and Freeport17 waterfront properties was going to pay it back?18 A. Correct.19 Q. Okay. Who was going to own the property once20 it was paid back?21 A. Freeport Waterfront Properties.22 Q. Is that the same contemplated deal now with23 Freeport Marina, L.P.?24 A. No.25 Q. All right. Page 32 of Exhibit 9, it says:

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1 Walker refused to pay these -- to have these wrecks2 removed from the docks next to his own property. Did3 you refuse to have those boats removed?4 A. No.5 Q. Did some entity that you own or control refuse6 to have the boats removed?7 A. No.8 Q. It says: Instead, Walker had the City9 government ask the Texas General Land Office for more

10 tax dollars to tow the boats away from his property. Is11 that what you did?12 A. I don't believe so.13 Q. How were the boats removed from your property?14 A. I don't know.15 Q. Well, how do you know that's not true, just16 because you didn't ask the City government to ask the17 General Land Office to do it?18 A. Correct.19 Q. Were you ever notified about these boats being20 on your property?21 A. Yes.22 Q. What did you do about it?23 A. I filed several police reports, because your24 clients' -- either their boats or the boats they25 financed or their customers' boats would illegally tie



43 (Pages 170 to 173)

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1 up my property. And the police had to make several2 trips out there to try to keep them from doing that, and3 they -- people would not stop.4 Q. So you were filing police reports?5 A. Yes, sir.6 Q. Okay.7 A. In fact, I believe these vessels are your8 clients' customers or boats that were financed by your9 client.

10 Q. And what do you base that belief on?11 A. What I was told by the people in Freeport.12 Q. Who was that?13 A. People that spend time down on the waterfront.14 Q. Give me names.15 A. I believe Lee Cameron told me that.16 Q. Who else?17 A. I can't recall.18 Q. Look at Page 33. You didn't underline anything19 on that page, did you?20 A. No.21 Q. Let's go to page 35. What's underlined here22 is: What's in here? The things Walker doesn't want you23 to see. What's untrue about that?24 A. Your client is, I guess, taking some sort of25 liberty in assuming that he knows what I want people to

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1 see and what I don't want people to see. And I have2 no -- and that's not true. This statement is not true.3 Q. All right. At the time this Web site was out,4 you had already signed the Development Agreement, right?5 A. Correct.6 Q. And you all already had a plan for the marina,7 right?8 A. Correct.9 Q. Do you know of anybody else who was asked to

10 bid on the marina project?11 A. Yes.12 Q. Who?13 A. Joe Vaughn.14 Q. Who is he with?15 A. I don't know the name of his company.16 Q. V-a-u-g-h-n?17 A. Believe so.18 Q. Where is he located out of?19 A. I don't know.20 Q. How do you know that Joe Vaughn was asked to21 bid on it?22 A. Because I met with him. And Wright Gore, Jr.23 met with him. And he has a company that does24 municipally financed projects.25 Q. When was that meeting?

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1 A. May of '03.2 Q. That was some eight months -- ten months after3 your letter of intent?4 A. Right.5 Q. Page 36 of Exhibit 9, it says -- what you have6 underlined: He agrees to pay it back after he's7 profitable in Freeport. If Walker decides that his8 yacht basin is unprofitable, he can walk away without9 paying back your six million. Do you see that?

10 A. Yes.11 Q. What's not true about that?12 A. The statement.13 Q. Was it contemplated as to whether or not if the14 marina was not profitable that you would not have to pay15 back the six-million-dollar loan?16 A. Yes.17 Q. So, I don't understand what's not true about18 it?19 A. There was never a six-million-dollar loan that20 was going to be made to me.21 Q. Oh, you're talking about to Freeport Waterfront22 Properties?23 A. Correct.24 Q. Okay. So, if Freeport Waterfront Properties25 decided that it was unprofitable, then Freeport

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1 Waterfront Properties wouldn't have to pay back the2 six-million-dollar loan, right?3 A. Correct.4 Q. Page 86 is the next page. Did you underline5 anything on that?6 A. Yes.7 Q. What is it?8 A. Everything in the box.9 Q. Oh, okay. This looks like it was just printed

10 up, but you're, you're telling me that everything in11 this box is something that's not true?12 A. Correct.13 Q. Is this part of the Development Agreement on14 Page 86?15 A. That's your client's comments on the16 Development Agreement.17 Q. You're talking about on the right-hand side of18 the page where it says: This means?19 A. Correct.20 Q. Okay. I was looking at the wrong box, I guess.21 You're just talking about the very small box that's off22 to the right?23 A. Correct.24 Q. That's the only part that's untrue to you, is25 what you're saying?



44 (Pages 174 to 177)

Page 174

1 A. The rest of it is the Development Agreement.2 Q. Right. Okay. Page 87, again, the part that3 you are claiming is untrue is the part that's on the4 right-hand side of the small box that says: This is5 property inherited by Walker Royall, et al?6 A. That, that actually seems to be correct on the7 face of it.8 Q. Okay. So 87 is true, then, page 87 on the9 exhibit?

10 A. It looks to be.11 Q. Okay. Page 88, there is a little highlighted,12 what I am going to call a highlighted portion off on the13 right-hand side of the bigger box. It says: This means14 that Walker Royall does not have to personally guarantee15 that the loan will be paid back. If the project fails,16 Walker does not have to pay back the $6 million of your17 tax dollars. What's not true about that?18 A. Once again, there was never a loan for19 $6 million envisioned to Walker Royall.20 Q. Okay. You're talking about to Freeport21 Waterfront Properties, where the loan was supposed to22 go?23 A. You're correct.24 Q. And that's the only distinction that you are25 making here?

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1 A. Yes.2 Q. You personally versus somebody at Freeport3 Waterfront Properties; is that the distinction that you4 are trying to make with me?5 A. Yes.6 Q. Okay. Would that be the same thing on -- for7 Page 89 and 90 of Exhibit 9?8 A. No.9 Q. Okay. Well, Page 89 references you, right?

10 A. Yes.11 Q. It says: Can give Walker six million of your12 money on very loose payback terms. You are saying that13 it shouldn't say Walker, it should say Freeport14 Waterfront Properties?15 A. Correct.16 Q. Okay. And 90 would be the same thing where it17 references Walker Royall; you would say it should18 reference Freeport Waterfront Properties and not you19 individually?20 A. Correct.21 Q. Earlier you told me that you were a minority22 owner of Freeport Waterfront Properties, L.P. Who owned23 more of a percentage than you of Freeport Waterfront24 Properties, L.P.?25 A. I was -- nobody.

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1 Q. Nobody. So you owned the most percentage of2 that limited partnership?3 A. I do.4 Q. Still do?5 A. Still do.6 Q. Is Freeport Waterfront Properties, L.P. still7 in existence?8 A. Yes.9 Q. What does it own, if anything?

10 A. It owns the Blaffer tract, as defined in the11 Development Agreement, and a small building across the12 street.13 Q. Okay. Has the percentages of ownership changed14 since the time that Freeport Waterfront Properties, L.P.15 was formed until today?16 A. Yes.17 Q. Okay. Do you own more of a percentage now than18 what you previously did?19 A. Yes.20 Q. What was your percentage that you owned back in21 2002?22 A. Twelve and a half.23 Q. Twelve and a half percent?24 A. Right.25 Q. What do you own today?

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1 A. I think a little more than 30.2 Q. When was the change from twelve and a half3 percent to 30 percent, approximately?4 A. '05.5 Q. Okay. Did you purchase that percentage from6 one of your cousins so that you would own more of a7 percentage?8 A. Yes.9 Q. The property, is it still in Freeport

10 Waterfront Properties, L.P.'s name?11 A. Yes.12 Q. It has not been changed to Freeport13 Marina, L.P.?14 A. No.15 Q. Page 91, again we see where you have -- it16 looks like you cropped out an area. It says: Once17 again the City shows it's willingness to cut Walker a18 sweetheart deal it would not consider for others. Do19 you see that?20 A. Yep.21 Q. And you take exception to the term "sweetheart22 deal"?23 A. Yeah. And also there were other people that24 were looking at this deal besides me. The statement is,25 it's false, misleading.



45 (Pages 178 to 181)

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1 Q. Well, if somebody from the City calls it a2 "sweetheart deal," would you take exception to that?3 A. Yes.4 Q. If somebody is calling it a "sweetheart deal,"5 is that defamatory towards you?6 A. In this context, yes, it is.7 Q. All right. Let's go to Page 103 of Exhibit 9.8 Tell me when you are there.9 A. I am here.

10 Q. Okay. It says: To confirm your home's11 blighted status, please look up your home on this map12 contained in Walker's master plan for Freeport. Did you13 underline that?14 A. I did.15 Q. Okay? What plan is this that's being referred16 to?17 A. Your client put it there. Maybe you should ask18 him.19 Q. Well, down here at the bottom it says: City of20 Freeport Master Plan, October 2002. Do you see that?21 A. Yes.22 Q. Are you telling me that the City of Freeport23 did not have a master plan in October of 2002?24 A. No.25 Q. Did the City of Freeport have a master plan in

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1 October 2002?2 A. I believe so.3 Q. And did it contain a map of homes that had been4 determined to be blighted?5 A. Yes.6 Q. You take exception to that language because it7 says "Walker's master plan"?8 A. Yes.9 Q. Go to Page 104. It says -- the top sentence up

10 there says: My home keeps the water off my head and I'm11 fairly comfortable, even if I don't live in a12 mini-palace like Walker, so my home can't be possibly13 blighted. Who's -- why is that not true?14 A. That, that statement is, is meant to be -- is15 designed to injure my reputation.16 Q. I didn't ask that, what it was designed to do.17 I asked why it wasn't true.18 A. Because I don't live in a mini-palace.19 Q. Okay. If I looked at your house and called it20 a mini-palace, does that somehow damage your reputation?21 A. In this context, yes.22 Q. Do you know who made that statement?23 A. Well, it's on your client's Web site.24 Q. I understand that. But I am asking you: Do25 you know who made the statement?

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1 A. I have to assume it was your client.2 Q. So, the answer is you don't know who made the3 statement; is that true?4 A. Yes.5 Q. Before the City or an economic development6 commission can take property through eminent domain7 proceedings, do you understand what the process is?8 A. No.9 Q. Do you understand whether or not a home or a

10 property has to be labeled as blighted or not?11 A. No.12 Q. Look on Page 105. Is there other stuff that13 you have underlined from the Web site?14 A. Yes.15 Q. All right. Page 109. This is a document, it16 looks like, from CBS News. And what's underlined at the17 top part of the page, it looks like: Mike Wallace18 reports on this story. Did you underline that?19 A. No.20 Q. Do what?21 A. No.22 Q. Okay. Rocky River Condos down towards the23 third, the bottom third of the page, is that something24 that you underlined?25 A. No.

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1 Q. Looking on Page 110, there is some underlined2 language on there. Did you underline any of that?3 A. No.4 Q. Okay. Same for Page 111?5 A. Yes.6 Q. Okay. Looking on Page -- it looks like 116 of7 Exhibit 9, it says: With regard to allegations made by8 Western Seafood and Trico representatives that the City9 of Freeport diverted City funds to Walker Royall or any

10 other individual is false. No member of its governing11 body, administration, or any other individual has agreed12 to provide any money to Walker Royall or any other13 company, corporation or individual. The City has, along14 with the EDC, committed a -- committed to a secured loan15 to Freeport Waterfront Properties for the development of16 the marina project. Do you see that?17 A. Yes.18 Q. What about that sentence is false?19 A. Absolutely nothing.20 Q. Okay. Why is it underlined?21 A. Don't know.22 Q. Did you underline it?23 A. Yes.24 Q. It mentions in this sentence that Western25 Seafood and Trico representatives -- and it talks about



46 (Pages 182 to 185)

Page 182

1 allegations -- diverted City funds to Walker Royall.2 Where is that written anywhere?3 A. Don't know.4 Q. Okay. Do you know where they came up with that5 alleged allegation?6 A. No.7 Q. You certainly haven't seen anybody write8 anything that alleges that any kind of City funds were9 diverted to you or the Freeport Waterfront Properties

10 for this particular project, have you?11 A. Other than your client, no.12 Q. Where did he write that?13 A. All over the place.14 Q. That, that the City of Freeport diverted15 special funds to you?16 A. That either -- maybe not past tense, but17 planned on it and was trying to and -- yes. Would you18 like me to point all those places out to you?19 Q. Do what?20 A. Do you want me to point all those places out to21 you?22 Q. Yeah, where they were saying that the, that the23 City of Freeport diverted City funds to you.24 A. As I said, not -- maybe not in the past tense,25 but that they planned on diverting City funds to me

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1 personally, yes.2 Q. Are you talking about the six-million-dollar3 loan?4 A. Yes.5 Q. Oh, okay. But in terms of any, any other money6 other than the six-million-dollar loan, it wouldn't be7 any other City funds, right?8 A. Well, sometimes it is not really clear if it's9 the six-million-dollar loan or if it's other City funds.

10 But, you know, you can just start at the first page11 here. And -- second page: Walker isn't satisfied with12 what he has. He also wants your property and your13 money, and he's not afraid to use oppressive government14 power to get them.15 Q. Where are you reading from? What page?16 A. Second page.17 Q. Bates-stamp number?18 A. Twenty-one.19 Q. Oh, okay.20 A. So that doesn't specifically reference the loan21 or other government funds. It just says that I want22 their money, meaning -- I take it to mean the taxpayer23 money.24 Q. Right. And people's property?25 A. Right.

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1 Q. Okay. So that, that Freeport Waterfront2 Properties could build a marina?3 A. That's not really what it says here. It4 says -- it doesn't qualify it that way.5 Q. Well, that's what the whole Web site is about,6 is the marina project, right?7 A. Not really. I mean, the, the headline here is:8 Scandal in Freeport, Birth of a Scandal, Walker's Greed.9 It doesn't really say anything about a marina here. And

10 I can't even find anything about a marina on this page.11 It's about Walker being a rich man and how he's greedy12 and has a bunch of expensive cars. Do you see anything13 about the marina on this page?14 Q. What page are you looking at?15 A. Twenty-one, still.16 Q. Well, luckily, I don't have to answer questions17 today.18 MR. ZUMMO: Very luckily.19 Q. (BY MR. CHILDS) All right. Page 122 of20 Exhibit 9, it says: The Facts -- and that's a21 newspaper; is that right?22 A. Yes.23 Q. Okay. Michael Baker reports on the full scope24 of the City of Freeport's attempts to take both25 commercial and residential property from Freeport

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1 property owners and give it to other private interests2 such as Walker Royall. Do you see that?3 A. I do.4 Q. What's not true about that?5 A. Well, let's see. Commercial and residential6 property.7 Q. Uh-huh.8 A. There was never any -- regarding the marina9 project, any attempt to take any residential property.

10 And nobody was ever going to give it to Walker Royall,11 commercial or residential.12 Q. Did Wanda Jones not live on her property?13 A. No.14 Q. What's her name, Ms. Stanley?15 A. No.16 Q. No residential?17 A. No.18 Q. Is there something within Mr. Baker's report19 that's not true?20 A. I would be happy to read it if you would like21 to provide it to me.22 Q. It may be in here.23 The next thing that's underlined down here24 on Page 122 of Exhibit 9 says: Wright Gore spoke about25 how the shrimp industry's jobs in Freeport will be



47 (Pages 186 to 189)

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1 impacted by the taking of private property to enrich2 another property. And it refers to you, the3 multimillionaire-heir Walker Royall. What's not true4 about that?5 A. Again, there was never a plan by the City of6 Freeport or anybody else to take any property and give7 it to me.8 Q. But it would be to give it to Freeport9 Waterfront Properties?

10 A. No.11 Q. How were they going to transfer that property12 to you? Were you going to buy it from them?13 A. They weren't.14 Q. Well, why did the City institute their eminent15 domain proceedings?16 A. You're going to have to ask them.17 Q. Okay. You don't have any idea why?18 A. I have an idea, but I think that if you would19 like to get a statement from the City as to why they20 instituted their eminent domain, I think you would get a21 more accurate answer from them than you will from me.22 Q. Well, you had discussions with the City about23 it, didn't you?24 A. Yes, I did.25 Q. Okay. Why did they do it?

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1 A. Don't know.2 Q. Do what?3 A. Don't know.4 Q. That was never discussed?5 A. I think, yes, it was discussed.6 Q. What was discussed about it?7 A. That they have a property that was on the tax8 rolls for $60,000; that they were interested in, in my9 opinion, extorting $1.4 million from the City of

10 Freeport for.11 Q. And that's what you alleged that the Gores were12 doing, is trying to extort the City of Freeport?13 A. That's my opinion.14 Q. And that's what you have said before, right?15 A. I have.16 Q. Page 128 of Exhibit No. 9, up at the top it17 says: We have had our livelihoods threatened by Walter18 Royall and the City government because we chose not to19 give up our property and we use -- property we use to20 make a living for ourselves and dozens of other local21 residents. It would simply be wrong for us to cave in22 to Walker's demands in order to make way for a few extra23 rich people's yachts. What's not true about that?24 A. I have never threatened anybody's livelihood or25 made demands on anybody. The statement is false.

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1 Q. All right. Anything else about it?2 A. Nope.3 Q. Going further down on Page 128, it says: We4 cannot stay silent about Walker's tactics any longer5 despite the threats to our businesses. What's not true6 about that?7 A. Well, the -- above it says: Faced with the8 prospect of either having to shut down our business and9 force dozens of people out of work "or else," we chose

10 the "or else." This could mean that we are forced out11 of our property and our business anyway, but this is a12 chance we must take. We cannot stay silent about13 Walker's tactics any longer despite the threats to our14 businesses.15 That's -- that last sentence is describing16 the tactics in the above sentence, implying that I,17 Walker Royall, am forcing them to shut down and, and18 fire dozens of people. And those are tactics that I19 never employed, nor could I employ if I had the intent20 to employ, because I am a private individual and I am21 not a City official. The statement is defamatory.22 Q. Okay. Have you ever been involved in any other23 deal, I'm talking real estate deal, that involved the24 taking of property through eminent domain procedures?25 A. No.

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1 Q. Is this the first one?2 A. It is the only one.3 Q. Okay. Look on Page 134. Up at the top it4 says: '60 Minutes' TV show reports on 'Eminent Domain'5 abuse. Is that something that you underlined?6 A. No.7 Q. Okay.8 A. That's a link to that --9 Q. Right. To that particular report?

10 A. Right.11 Q. And then the next thing that is underlined12 says: This article uncovers a similar scheme to13 Walker's, where greedy City administrators and guilty14 developers like Walker plot to take property from15 rightful owners. You see that?16 A. Yes.17 Q. You underlined that?18 A. I did.19 Q. You take exception to that because it's calling20 you greedy?21 A. Yes.22 Q. Anything else?23 A. Yes.24 Q. What?25 A. "This article uncovers a scheme, a similar



48 (Pages 190 to 193)

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1 scheme to Walker's."2 Q. Okay.3 A. Implying that this is Walker's scheme to4 deprive people of their property, take their homes,5 bulldoze their homes, give them a bill. All of which is6 not true.7 Q. The other thing you underlined on this Page 1348 of Exhibit 9 starts off: In Walker's case. In that9 paragraph.

10 A. Yes.11 Q. Okay. Then down towards the bottom where it12 says: Jim Phillips, et cetera.13 A. Uh-huh.14 Q. Is that a "yes"?15 A. Yes.16 Q. And then: City government. That paragraph?17 A. Yes.18 Q. The other things underlined on this page are19 just references to a link, right?20 A. Correct.21 MR. GORE, III: That's the Michael Baker22 article.23 MR. CHILDS: Yeah.24 MR. GORE, III: Okay.25 Q. (BY MR. CHILDS) Page 42, of Exhibit 9 --

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1 A. Uh-huh.2 Q. -- says: The developer of the proposed yacht3 basin project is multimillionaire heir, Hiram Walker4 Royall. He has enlisted the help of the City of5 Freeport through its taxing authority, the Economic6 Development Corporation, and Sun Resorts. Do you see7 that?8 A. Uh-huh.9 Q. Is that a "yes"?

10 A. Yes.11 Q. Why is that not true?12 A. Well, at the time this Web site was produced,13 your client had a copy of the Development Agreement.14 The Development Agreement very clearly in black and15 white says that the developer is Freeport Waterfront16 Properties. I am not Freeport Waterfront Properties.17 Q. Uh-huh. Anything else?18 A. It says that I have enlisted the help of the19 City of Freeport, the EDC and Sun Resorts. The City20 approached me. I had not enlisted the help of either of21 those entities.22 Q. Okay. You had an agreement with the City,23 though, right?24 A. But this is meant -- I did.25 Q. Okay. Did you reach an agreement, also, with

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1 Sun Resorts or did you seek their help?2 A. I did seek the help of Sun Resorts.3 Q. And you're, like, on an advisory board or4 something for them?5 A. I am.6 Q. Did you refuse to allow yourself to be7 identified as the developer of the proposed marina?8 A. No.9 MR. CHILDS: Let's -- we'll take a quick

10 break here for a minute.11 (Recess taken. Ms. Shelby leaves the12 deposition and Mr. Gaible returns.)13 Q. (BY MR. CHILDS) Mr. Royall, to save on time,14 the remainder of Exhibit 9, starting from -- we have15 gone through a lot of the underlined portions, starting16 on Page 143 -- up to 143, I guess. But everywhere that17 I see in here where there are underlined statements,18 excluding some kind of link to some other Web site,19 those would be underlines that are made from you?20 A. I would really have to review them individually21 before I could make a blanket statement like that.22 Q. Well, do you know of anyone else who would have23 underlined --24 A. No.25 Q. -- any of the documents that are in

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1 Exhibit No. 9?2 A. I do not.3 Q. Okay. Is it my understanding that in terms of4 any kind of media requests for interviews related to the5 issue of the marina project, that you were not involved6 in any kind of media interviews?7 A. Are you asking me a question?8 Q. Yeah. Did you participate in any type of media9 interviews with any of the local media people as it

10 relates to the marina project?11 A. Yes.12 Q. That were then subsequently printed in some13 kind of newspaper or put on some kind of news broadcast?14 A. Yes.15 Q. How many of those, or do you know?16 A. A handful.17 Q. Okay. Do you know when that approximately was?18 A. Certainly around the, around the town hall19 meeting we had, I spoke with a number of different20 reporters. Maybe four or five. I have spoken with21 reporters from The Facts, from the Sentinel, the Houston22 Business Journal.23 Q. The town hall meeting that you are referencing24 is -- was that May of '05 --25 A. Yes.



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1 Q. -- according to your timeline?2 A. Yes.3 Q. Looking on the second page of Exhibit 3, of4 your timeline, do you have that there in front of you?5 A. Yep.6 Q. I can't read some of the handwriting on the7 left-hand side. The top thing says: Development8 Agreement identified. Is that right? What does that9 say?

10 A. Signed.11 Q. Okay. What does it say underneath that? May12 2003?13 A. Joe Vaughn with Wright, not me.14 Q. What does that mean?15 A. It means that they, they got together with -- I16 think Lee, Joe Vaughn and Wright got together, but I was17 not in attendance.18 Q. Okay. And that would have been in May 2003?19 A. Correct.20 Q. Then there is something else here that says:21 September 2003, meeting with Wright Gore, Jr. on site.22 A. Correct.23 Q. What is it?24 A. The page that you are referring to has been25 cleaned up on the page in front of it. I did this one,

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1 made some notes here, and then cleaned it up and spread2 it out so it was easier to read on this page.3 Q. Okay. Exhibit -- let's make sure I am4 understanding what you are saying. Exhibit 3 -- the5 second page to Exhibit 3 was the initial scratch notes,6 and the first page to Exhibit 3 is the finalized7 version?8 A. Correct.9 Q. Okay. Let's go back to the second page on the

10 scratch notes. The, the last thing on the bottom11 left-hand column, it says: Meeting on -- oh, that's On12 The River Restaurant; is that what that is referring to?13 A. Yes.14 Q. Okay. Did you ever own any Porsches?15 A. Yes.16 Q. How many?17 A. One.18 Q. When?19 A. I purchased that car in -- I believe it was the20 fall of '92.21 Q. What kind of Porsche was it?22 A. It was a 944 convertible.23 Q. Did your father own a Porsche when you were in24 high school?25 A. No.

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1 Q. Did you drive a Porsche in high school?2 A. No.3 Q. How long did you own the 944 convertible?4 A. A year and a half.5 Q. What's your Texas driver's license number?6 A. I would prefer not to give that information7 out.8 Q. Well, I need to get it. So, what is it?9 A. 08262508.

10 Q. 0826?11 A. 2508.12 Q. And you told me your date of birth, August 1st?13 A. 3rd.14 Q. 3rd? 1970?15 A. (Nodding head.)16 Q. Is that a "yes"?17 A. Yes.18 Q. Have you ever been arrested for anything?19 A. In college.20 Q. Which one? Arizona or SMU?21 A. SMU.22 Q. What for?23 A. I think it was disorderly conduct.24 Q. Would that have been approximately -- when?25 Around '90, '91, '92?

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1 A. Yes.2 Q. Anything else?3 A. I would have to really get back to you on that.4 There was --5 MR. ZUMMO: Let me, let me object to any6 question that isn't limited to the subject matter that's7 provided in the rules of evidence regarding convictions8 of felonies or crimes of moral turpitude that are less9 than ten years old.

10 MR. CHILDS: You can object to it, but my11 question is --12 MR. ZUMMO: I am going to instruct him he13 doesn't have to answer any question about that, because14 otherwise it's an abusive question.15 MR. CHILDS: I don't think -- I don't16 agree with you.17 MR. ZUMMO: I am happy to look at any18 authority that you have that says that you can ask19 about -- that you would be able to possibly lead to the20 discovery of admissible evidence under the Rules of21 Evidence. Specifically say that such evidence is not22 admissible.23 MR. GAIBLE: That's just for impeachment.24 MR. CHILDS: Yeah.25 MR. GAIBLE: This man has made a claim for



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1 damage to his reputation.2 MR. ZUMMO: You are welcome to make the3 argument. I'm making the instruction.4 Q. (BY MR. CHILDS) Do you know what a crime of5 moral turpitude is?6 A. No.7 Q. Okay. So you can't tell me that. So, I need8 to know any arrests that you have been -- that you have9 had, we will say in the last ten years.

10 MR. ZUMMO: He is still -- I am going to11 instruct him not to answer that question because it is12 an abusive question. And you have not asked the13 question properly.14 MR. CHILDS: I just asked the question15 properly.16 MR. ZUMMO: No, you didn't.17 MR. CHILDS: Okay.18 MR. ZUMMO: And perhaps Judge Sebesta is19 in his chambers and you can call him and get a ruling on20 that right now.21 Q. (BY MR. CHILDS) What other entities operate22 out of your office in the -- where you are on Turtle23 Creek in Dallas?24 A. I don't have a list with me.25 Q. Can you give me the name of some of them?

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1 A. Sure.2 Q. What are some of them?3 A. H.W.R. Kennesaw, L.L.C.; Lands End, L.L.C.;4 Briarwood Baytown, L.P.; Briarwood Lancaster, L.P.;5 Briarwood University Hills, L.P.; Briarwood Meadowbrook,6 L.P.; Lands End, L.L.C. There are a number of others.7 Q. Are those entities that you just named off for8 me, are those entities that you have some ownership or9 control over?

10 A. Yes.11 Q. Are they entities that you have full ownership12 or control over?13 A. No, except for Briarwood University Hills, L.P.14 and Lands End, L.L.C.15 Q. Those two you own 100 percent?16 A. Yes.17 Q. Has anyone else, other than this particular Web18 site that you are complaining of in this lawsuit, ever19 said or written anything about you that is not true?20 A. I am sure at some point.21 Q. Did you file a lawsuit against them?22 A. No.23 Q. Why not?24 A. I didn't feel that they were -- it was damaging25 enough to be worthy of a lawsuit.

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1 Q. Tell me how your reputation has been injured as2 a result of the Web site.3 A. There are people that have seen the Web site,4 the billboard, the newspaper ads, the articles, the5 Internet blogs, that think, "Well, here's a wealthy guy.6 This must be how he became wealthy, taking from poor7 people." And that is -- that has certainly injured my8 reputation as a person, as an individual, and as a9 businessman.

10 MR. CHILDS: Objection, nonresponsive.11 Q. (BY MR. CHILDS) My question to you, sir, is:12 How has your reputation been injured as a result of the13 Web sites that you have alleged in this case?14 MR. ZUMMO: Objection. Asked and15 answered.16 A. How has?17 Q. (BY MR. CHILDS) Yes, sir.18 A. My reputation has been injured by the multiple19 releases on the Internet, blogs, radio, TV, fliers,20 billboards that your client has released of untrue21 statements and statements that have been designed to22 lead the reader or the, the person subjected to those23 statements to believe that I am a property-taking,24 tax-dollar stealing, robber baron of some sort. And25 I'll be happy on give you dozens of examples, if you

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1 would like me to.2 Q. I am not sure you are understanding my3 question. But I am going to follow up with you, okay?4 Who are these people that are telling you that, that you5 are some robber, stealing guy who is taking from the6 poor? Who are these people that are telling you this?7 A. Well, I got a phone call from Paul Geyer.8 Q. Who is Paul Geyer?9 A. Paul Geyer is the head of Prudential's Capital

10 Markets Group for North Texas, a man with whom I have11 done business within the past. Maybe two weeks ago.12 And he asked me about the, the scandal in Freeport. And13 I had to defend myself and, and say -- I didn't have the14 time. And then I had to say, "I will get together with15 you and give you the full story." And that's -- and,16 quite honestly, I had sent him an e-mail requesting17 financing on a commercial real estate project, two of18 them, and I haven't heard from him since.19 Q. This was two weeks ago?20 A. Approximately.21 Q. Okay. And how is it that he found out about22 the scandal in Freeport? Do you know?23 A. I think he read an article somewhere.24 Q. Is that what he told you?25 A. Yeah.



51 (Pages 202 to 205)

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1 Q. Okay. Read an article where? Is it in a2 Dallas paper or something?3 A. I believe he read an article in the Wall Street4 Journal.5 Q. Wall Street Journal about what, about the6 scandal in Freeport?7 A. Yes.8 Q. Was it a recent article?9 A. I don't know.

10 Q. Did you go look at the article that he referred11 to?12 A. Yeah.13 Q. Okay.14 A. I had seen the article previous to his...15 Q. Okay. So it was published in the Wall Street16 Journal within the last month or so?17 A. I guess so.18 Q. Okay. What was the article about?19 A. I mean, there's -- I refer you to the Wall20 Street Journal.21 Q. Was it about the Web site or was it about22 something else?23 A. I mean, really, there have been a lot of24 articles. I really would prefer it if you just read the25 article and you would have the facts there, not have to

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1 have me speculating on them.2 Q. You read the article. I didn't. So I am3 wondering what it says.4 A. If you would like to know what the article5 said, I suggest you get a copy of the Wall Street6 Journal and read the article, instead of asking me to7 speculate on what the article may or may not have been8 about.9 Q. Well, Paul Geyer is the one that brought up the

10 article to you, right?11 A. He did.12 Q. Okay. What did he say about the article, if13 anything?14 A. He said, "Jeez, what have you been up to?"15 Something to that effect.16 Q. Did you consider the Wall Street Journal's17 article to be defamatory toward you?18 A. Possibly.19 Q. Have you considered whether or not you are20 going to file a lawsuit against the Wall Street Journal?21 A. I will give it some thought.22 Q. Okay. Let's talk about people -- as far as you23 know, Mr. Geyer has never looked at the Web site, has24 he?25 A. You would have to ask him.

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1 Q. You don't know whether or not he has or not?2 A. I didn't ask him.3 Q. Who -- all right. I want to get back to my4 question, then. How is it that your reputation has been5 injured as a result the Web site?6 A. Well, often when people today do business with7 others, they will do a Google search to see what this8 other person is all about. And if you do a Google9 search on Walker Royall, you will be inundated with

10 articles about what a bad guy I am. And all sorts of11 slanderous statements that have been spread across the12 Internet by your client and by people that continue to13 further that, that position.14 And I have friends and business associates15 that have come across this information by one way or16 another. And I have had to spend a fair amount of time17 over the last few years explaining it and defending18 myself. And I'm sure that there have been other19 business transactions outside of the Port Freeport20 transaction that this has cost me, that I have not had21 the opportunity to even be told that: We are not going22 to do this transaction with you because of -- you know,23 you're too hot because of all the public controversy24 that's been caused by the Web sites, and the billboards,25 and the fliers, and the Internet blogs, and everything

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1 else.2 Q. When you started off your answer there, you3 said that you can do a Google search with your name, and4 it will bring up a lot of bad articles about you. Do5 you remember that?6 A. Yes.7 Q. What articles -- well, are you talking about8 some kind of newspaper articles that are written about9 you?

10 A. I think newspaper articles generally -- the11 reporter will generally do enough research to not just12 take what your client says at face value and will13 generally write a more balanced article before14 publishing it. Because newspapers tend to be a little15 bit more responsible than, say, an Internet blogger.16 But when the bloggers get ahold of it, you know, they17 will say anything because they are not accountable to18 anybody. And it's -- you know, it gets manipulated and19 distorted and, and those links are out there. I'm sure20 you have done a Google search on me and you have seen21 them.22 Q. Okay. When you start talking about these, the23 articles under a Google search, you're talking about two24 different things. One would be newspaper-type articles,25 right? And then the other would be a blog, correct?



52 (Pages 206 to 209)

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1 I'm going to ask you about a blog here in a second. But2 I'm trying to make sure the two things --3 A. I think there is more than just two. But those4 are two of the primary things that you would pull up,5 yes.6 Q. Okay. Other than, then, the newspaper type7 articles and the blog, what else would be pulled up?8 A. Web sites.9 Q. Okay.

10 A. Such as your client's.11 Q. The Web sites are no longer in existence; am I12 understanding that right?13 A. I think as of yesterday. Maybe -- how many14 months since the agreement was made? Yesterday, I15 believe they came down.16 Q. Well, they were taken down some time ago.17 A. That's not true.18 Q. Okay. So, the articles, the blogs, and then19 the Web sites themselves, right?20 A. Those -- yes. Those are the three primary21 media methods that I can think of that have been used22 against me.23 Q. And I'm not a computer guy. And I have heard24 the term "blog" over the last probably year and a half.25 A little bit more and more. You use it, at least in my

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1 understanding of the way you used it towards me awhile2 ago, is that that's something that anybody can go and3 start writing about and publish it on the Internet,4 right?5 A. Correct.6 Q. Okay. So, are you saying that there are some7 blogs out there with respect to you?8 A. Many.9 Q. Okay. Do you know who is writing these blogs?

10 It could be several different people?11 A. Yeah. Sometimes they are anonymous. Sometimes12 they have a ghost writer. Sometimes the author takes13 full credit for them. Often they are associated with14 newspapers, or radio programs, or organizations, such as15 some of the organizations that have been supporting your16 client, et cetera.17 Q. Okay. And you contend that these blogs and18 these newspaper articles also have been defamatory19 towards you in some way?20 A. Many of them, yes.21 Q. Okay. And yet you haven't filed a lawsuit22 against any of those people, have you?23 A. No.24 Q. There was a mention in some of the discovery25 about some guy apparently sending you some kind of

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1 threatening e-mail?2 A. Yes.3 Q. Do you remember that? And you have filed some4 kind of report with the FBI?5 A. I did.6 Q. Did they ever find out who that person was?7 A. Yes.8 Q. What was his or her name?9 A. I can't remember.

10 Q. The person's name that the e-mail came from was11 not the real person's name; is that right?12 A. I, I -- if you say so.13 Q. I mean, I don't know. That's why I am asking14 you.15 A. I don't know either.16 Q. We will just pretend that the e-mail comes from17 John Doe at aol.com?18 A. I think the guy to the right of you knows who19 wrote it. So if you want to ask him.20 Q. Well, I don't know. That's why I am about to21 ask you.22 A. I was told that he was your client's classmate.23 Q. And I see that in some answers to discovery.24 That's why I am trying to find out the guy's name from25 you, because I don't have the name. Here we go. Yeah.

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1 It says from James Quier, Q-u-i-e-r. But I don't know2 if that was his real name. Do you know?3 A. I don't know.4 Q. Because sometimes people use a different name5 whenever they send you an e-mail, right?6 A. Right.7 Q. So you don't know if that was the guy's real8 name or not?9 A. No. But, again, I think your client does.

10 Q. Okay. Well, how did they go and track down11 this guy, the FBI? They tracked him down?12 A. The FBI, through their computer crimes13 division, tracked him down. I think they found him in14 Waco. And they, they had a talk with him.15 Q. Did you ever talk to him personally?16 A. No.17 Q. Who is James Brown? Do you know who James18 Brown is?19 A. If you're referring to James Brown, President20 of the Texas Gulf Bank, I do know.21 Q. He works for you?22 A. No.23 Q. Who does he work for?24 A. Texas Gulf Bank.25 Q. Is that a bank that your family owns?



53 (Pages 210 to 213)

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1 A. My -- yes. My family has a, a large ownership2 position in that bank.3 Q. What is your mother's name? I've got it4 somewhere, but...5 A. Camilla, Camilla Blaffer.6 Q. Okay. Is she still alive?7 A. Yes.8 Q. And your father is still alive?9 A. Yes.

10 Q. Where do they live?11 A. My mother lives here in Houston. My father12 lives in Millbrook, New York.13 Q. Are they still married?14 A. No.15 Q. Okay. Your mothers have -- or your mother has16 some sisters?17 A. Yes.18 Q. And do they live in the Freeport area?19 A. No.20 Q. Do they also have ownership interest in the21 bank?22 A. Yes.23 Q. What are their names?24 A. Joan Johnson; Sarah Hrdy, H-r-d-y; and25 Catherine Taylor.

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1 Q. Anybody else with your family that has an2 ownership interest in that bank?3 A. I think some of my cousins have.4 Q. Can you tell the names to the court reporter,5 please?6 A. Well, I believe Wirt Blaffer, Van Taylor, and7 my brother, John Royall, have ownership positions. I8 don't know of any others.9 Q. Okay. There is a document that's been produced

10 over here. It's a magazine article from Wisconsin11 Trails. Do you know why that was produced to us?12 A. Part of the file.13 Q. What does it have to do with the marina down in14 Freeport?15 A. Well, it was an example that I found of a, of16 another marina that rejuvenated a town.17 Q. Okay. Is the name of that marina, is it18 Breveport Marina? Or do you know?19 A. I didn't think so. But if you have the report20 there, then...21 Q. I don't. Well, I probably got it over here.22 I'm just looking at notes.23 A. It could be. I thought it was something else.24 But that could be it.25 Q. Who is Nicholas Taylor?

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1 A. He is -- he was Catherine Taylor's husband.2 Q. Is he related to you somehow?3 A. He was by marriage.4 Q. He is no longer related to you?5 A. No.6 Q. There is a, a document in the files that you7 produced which is a management agreement between8 Freeport Marina, L.P. and Sun Resorts Management.9 A. Yes.

10 Q. Do you know when that was dated to be11 effective?12 A. No.13 Q. It's signed but it's not dated. That's why I14 am asking if you know off the top of your head.15 A. No.16 Q. Who is Freeport Coastal Development, L.P.?17 A. That was an entity that we had set up at one18 time to manage one part of the project, but we are not19 using it anymore.20 Q. Is that an entity that was created by you?21 A. Yes.22 Q. Or which you have some ownership interest in?23 A. Yes.24 Q. Okay. There is a -- there are some documents25 in your file that reference a meeting at a Pappadeaux

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1 restaurant on December the 4th, here in Houston.2 MR. ZUMMO: December 4 what year, please?3 MR. CHILDS: Doesn't have a date. That's4 what is coming next.5 Q. (BY MR. CHILDS) What year was that?6 A. 2003.7 Q. Did that meeting actually take place?8 A. Yeah.9 MR. GAIBLE: Peggy, be sure you take

10 possession of that when he's done with it finally.11 (Witness writing on the timeline.)12 MR. GORE, III: He has written on the13 exhibit by the year. The deponent wrote on the exhibit14 just then.15 MR. CHILDS: What exhibit?16 MR. GAIBLE: Here it is, the chronology.17 MR. CHILDS: Oh.18 MR. GAIBLE: He made another note.19 Q. (BY MR. CHILDS) Oh, you made another notation20 on Exhibit 3, the Pappadeaux meeting?21 A. I did.22 Q. December 4, '03? Okay. That's what they are23 telling me.24 I was looking -- anyway, I am looking at25 Bates-stamped documents 947, 948 and 949. On Bates



54 (Pages 214 to 217)

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1 stamp document 949, it lists --2 A. Do I have a copy of this?3 Q. It's over here. I can come over here. And I4 don't want to mark it as an exhibit because -- oh, man,5 the buffalo nearly got me.6 Excuse me. I don't want to get too close7 to you here.8 Who is Mabe and Whitney Campbell?9 A. They keep a boat at Bridge Harbor.

10 Q. At where?11 A. Bridge Harbor.12 Q. Where is Bridge Harbor?13 A. It's a marina close to Freeport.14 Q. Okay. Did they come to the meeting?15 A. I believe so.16 Q. Okay. Johnny Powers, did he come to the17 meeting?18 A. Yeah.19 Q. Okay. Ron Rhoades, R-h-o-a-d-e-s, did he come20 to the meeting?21 A. I believe so.22 Q. Who is he with?23 A. Sun Resorts.24 Q. Who?25 A. Sun Resorts.

Page 215

1 Q. Okay. Rick Rodeman, R-o-d-e-m-a-n?2 A. Yes.3 Q. Who is he with?4 A. Ron, Rick, Wesley, and Bryan, and Johnny are5 all with Sun Resorts.6 Q. Okay. And they are all listed on the, the7 Bates stamp 949? Do you see that?8 A. Yes.9 Q. Who else besides Mr. Powers, Mr. Rhoades,

10 Mr. Rodeman, Mr. Roth, this guy by the name of Bryan,11 and yourself, and the two Campbells came to the meeting?12 Did anyone else?13 A. Yeah. There were probably 20, 25 people there.14 Q. And what was the purpose of the meeting?15 A. Well, we were gathering market data on what --16 other than us, all the other attendees were boaters that17 kept boats mostly at Bridge Harbor. And they were18 interested in the new marina and becoming customers.19 And we wanted to talk to them about what they wanted to20 see in a new marina, so that we could design the marina21 to reflect our customers' wants and needs.22 Q. Okay. Was Mr. Bottoms or Cameron or -- were23 those people there? If they're not listed as attending,24 were they there? Or do you recall?25 A. I don't think they were there.

Page 216

1 Q. Okay. How is it that the statement, "Walker2 started his extensive collection of Porsche sports cars3 as a teenager," injures your reputation?4 A. First of all, it's not true. Second of all,5 it's intended to position me as a super wealthy brat6 that doesn't deserve any -- certainly doesn't deserve7 any assistance from the City of Freeport in building a8 marina. And it's intended to put me in a, in a negative9 light, and to encourage people to dislike me.

10 MR. CHILDS: Objection, nonresponsive.11 Q. (BY MR. CHILDS) From what you just told me, I12 understand that that is your interpretations of what it13 is intended to do. Okay? My question to you is: How14 does it injure your reputation?15 MR. ZUMMO: Objection. Asked and16 answered.17 A. It's not true and it's -- you might as well18 say: Walker flies around in his fleet of private jets.19 It's intended to say: Walker Royall lives a life that20 only you could ever dream of and therefore you should21 hate him.22 Q. All right. Anything else as to how it injures23 your reputation?24 A. I think that about covers it.25 Q. Does any company that you own or have an

Page 217

1 interest in own a private jet?2 A. No.3 Q. When you fly down here, do you fly4 commercially?5 A. I drove.6 Q. Drive?7 A. I drove.8 Q. Okay.9 A. And, yes, I fly commercially.

10 Q. Okay. You don't fly private charter flights?11 A. No.12 Q. All right. The statement, "We have established13 that Dallas resident H. Walker Royall is richer than14 anyone who lives in Freeport," how does that injure your15 reputation?16 A. What page, please?17 Q. Do what?18 A. I would like to, to look at it.19 Q. Oh, it is on the letter that what's his name20 wrote. Do you have the letter?21 MR. GAIBLE: The Fulbright lawyer?22 MR. CHILDS: Yeah.23 Q. (BY MR. CHILDS) I'm looking at -- it's down24 there. No. 3.25 A. All right. No. 3.



55 (Pages 218 to 221)

Page 218

1 Q. Yeah. It says: We've established that Dallas2 resident H. Walker Royall is richer than anyone who3 lives in Freeport. And my question to you is: How does4 that injure your reputation?5 A. Well, in the same light as the previous6 statement. It's, it's designed to inflate my financial7 standing and make people think that I'm just a rich8 jerk, and that I certainly don't need or deserve any9 assistance from the City or anyone else in, in doing a

10 real estate project.11 Q. All right. Anything else as to how it injures12 your reputation?13 A. It's false, as far as I know. Certainly your14 client did not do any -- call me and ask me what my15 financial standing was before they went and published16 this on the Internet. And it's slanderous.17 Q. All right. Anything else as to how it injures18 your reputation?19 A. I can't think of anything else.20 Q. The next one, going up to No. 2: Walker takes21 your property. You get the bill. You get the boot.22 How does that injure your reputation?23 A. Well, let's start at the beginning: Walker24 takes your property. That's false. Walker is not25 taking anybody's property. Certainly the people that

Page 219

1 are reading this Web site are not involved in the marina2 project. And it's intended to scare them to think that3 somebody is going to -- that somebody, me, is going to4 come and take their property. And then: You get the5 bill and you get the boot. I mean, it's pretty, it's6 pretty obvious that it's intended to encourage people to7 be afraid of me and dislike me.8 And certainly I was not going to take9 anybody's property. I wasn't going to send anybody a

10 bill. And I wasn't going to evict anybody from a11 property that they owned or rented. And it's certainly12 defamatory.13 Q. All right. Anything else as to how that14 statement injures your reputation?15 A. I think that about covers it.16 Q. Okay. Let's go to No. 1. It says: The17 scandal in Freeport is a scheme invented by18 Mr. H. Walker Royall. How does that statement injure19 your reputation?20 A. Well, the scandal in Freeport was really a21 scheme invented by your client, because there was no22 scam in Freeport. The City was not going to take23 anybody's homes. The City was not going to evict24 anybody. The City was, I think as a very last resort,25 going to employ eminent domain in their efforts to

Page 220

1 improve the life of their citizens only and only when2 the property owner put up every road block so that there3 was no option for the City. And that's the real4 scandal, is that this was, this was a -- the scandal in5 Freeport was a scheme created, in my opinion, by your6 client to extort money from maybe me, maybe the City of7 Freeport, and it was certainly never a scheme created by8 me, which is false and it's, it's defamatory.9 Q. Do you have a personal accountant?

10 A. I have an accountant, yes.11 Q. And do you have a company accountant?12 A. Yes.13 Q. For Briarwood Capital and your related14 entities?15 A. Yes.16 Q. Who is that?17 A. Ken Travis.18 Q. Ken Travis?19 A. Uh-huh.20 Q. Is he in Dallas?21 A. He is.22 Q. You're probably like most of us who you make a23 certain amount of money in one year and then the next24 year you hope you make more, due to inflation and rising25 costs of things, correct?

Page 221

1 A. More or less.2 Q. Okay. In the last, whatever it has been, four3 or five years, have you been making more money every4 year than what you made in the previous year?5 A. No.6 Q. Have you lost money at any point in time in the7 last, we'll say, four years?8 A. Are you talking about for a whole fiscal year?9 Q. Yeah.

10 A. No.11 Q. So if I'm understanding what you've just told12 me right then, is that in the Year 2005 you made more13 money than you made in 2004, correct?14 A. No.15 Q. You did not?16 A. I don't believe so.17 Q. Okay. How much money less did you make in 200518 than you made in 2004?19 A. I'm not sure if it was 2005 or 2006. I think20 it was 2006.21 MR. ZUMMO: I am going to advise the22 client that we have made objection to questions about23 income and net worth which were inappropriate. Under24 the case law he doesn't have to answer these questions25 about specific income or specific net worth. Those are



56 (Pages 222 to 225)

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1 abusive questions. I'm instructing him not to answer2 unless he wants to divulge his private information to3 you gentlemen. But counsel on the other side has not4 done anything to have those objections to the written5 discovery overruled and they have had them for several6 months now.7 MR. CHILDS: Well, I can ask the question.8 MR. ZUMMO: Okay. And I am instructing9 him he doesn't have to answer the question, that it

10 invades his privacy.11 A. I prefer not to answer, thank you.12 Q. (BY MR. CHILDS) So, in terms of how much money13 you made in 2004, you won't tell me?14 A. No.15 Q. You won't tell me how much money you made in16 2005?17 A. No.18 Q. You won't tell me how much money you made in19 2006?20 A. No.21 Q. And you won't tell me how much money you made22 in 2007?23 A. No.24 Q. Can you tell me whether or not you made more25 money in 2006 than what you made in 2004?

Page 223

1 A. No.2 Q. Can you tell me whether or not you made more3 money in 2007 versus 2004?4 A. No.5 Q. Is that because you don't know or because you6 don't want to tell me?7 A. Because I have been instructed by my attorney8 that I don't have to answer your question.9 Q. How is it that you were going to tell a jury

10 that you have been -- that your reputation has been11 injured and that there is some calculated dollar figure12 that you should be awarded some amount of money for that13 injury to your reputation?14 A. I believe we have provided you with a damage15 model.16 Q. That's a damage model on a loss of business17 opportunity. Okay? I am talking about a personal18 injury to your reputation. So I want to know how you19 are going to calculate that and tell it to a jury.20 A. If you would like to know the strategy of our21 lawsuit, I suggest you ask my attorney who is22 responsible for that.23 Q. I'm not asking for a strategy of the lawsuit.24 MR. ZUMMO: Yes, you are. And as you25 know, it is not up to a plaintiff in a personal injury

Page 224

1 suit to provide the calculation method any more than2 pain and suffering would be requested of a plaintiff in3 a personal injury suit. You are inquiring about general4 damages and you are arguing with the client, with my5 client, which is improper and --6 MR. CHILDS: I am not trying to argue.7 MR. ZUMMO: Yes, you are.8 MR. CHILDS: I'm not.9 MR. ZUMMO: The way -- the form of the

10 question was argumentative in the suggestion that he has11 an obligation to provide some method of calculating loss12 of reputation and/or other elements of damage that the13 law does not consider to be special damages.14 Q. (BY MR. CHILDS) Do you have a value in your15 head that you think would compensate you for injury to16 your reputation as a result of these Web sites?17 A. I would have to discuss that with my attorney.18 Q. Okay. What in your life, if anything, has19 changed as a result of the Web sites being out there?20 A. A lot.21 Q. Okay. What?22 A. I am constantly defending myself. I am -- as23 you know, I went to high school here in Houston. This24 has been in the Houston papers. And I went to a Texas25 college. And I have had to answer to my, my friends and

Page 225

1 business associates as to what's going on here. I have2 clearly lost business, specifically in the, the example3 that we provided you with. And I know that there are --4 I am sure there are other examples that I don't even5 know about, because I haven't had the chance to speak6 with the principals involved with those transactions7 after they decided to go with another group to develop8 their project.9 I have had threatening e-mails and phone

10 calls. I have had to improve security at my home. I11 have had to be fearful for the safety of my family. I12 have certainly been damaged.13 Q. Anything else?14 A. That covers most of it.15 Q. Well, that's why I asked the question, anything16 else.17 A. That covers most of it.18 Q. Well, you said that's most of it. Is there19 anything else that you can think of at this time?20 A. Not at this time.21 Q. You mentioned something in your response about22 the loss of other business opportunities and that you23 haven't had time to discover those.24 A. I haven't had the opportunity to discover them.25 Q. What does that mean?



57 (Pages 226 to 229)

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1 A. Well, if three groups are competing to do a2 build to suit for a certain company or entity, and that3 entity reviews the proposals from those three groups and4 picks one of them to do the project, they are not going5 to call the other two and say, "Well, you lost this6 because we didn't like the color of your shirt," or "You7 lost this because, you know, we heard you are a bad guy8 and read about you on some Web sites when we did a9 Google search." So, you know, I haven't had the

10 opportunity to do an in-depth evaluation with every11 potential deal that I didn't get to determine how much12 or any -- if any, impact there was on that transaction13 due to your client's actions.14 Q. When you say you haven't had the opportunity,15 really what you are saying is that you just haven't done16 it?17 A. No. I'm --18 Q. Versus having the opportunity?19 A. I'm saying that there is no real way to do20 that. What am I -- am I supposed to call the entity21 and, and say, "Jeez, you know, I lost out on that deal.22 Can you tell me why?" They are probably going to say,23 "Well, the other proposal was better." They might not24 say, even if it had influence on their decision, "Oh,25 and by the way, we heard you are a real scum bag because

Page 227

1 of all the stuff that you are doing to the poor people2 of Freeport, and taking their homes, and evicting them,3 and bulldozing their houses. And, you know, we think4 you are a jerk."5 Q. Okay. So, you are telling me that even if you6 did check up, you may get a false report --7 A. Yes.8 Q. -- as to why?9 Certainly you being a businessman, even

10 before the Web sites came out, didn't get every deal11 that you proposed to get, correct?12 A. That's correct.13 Q. Okay. So you can't tell me in the proposed14 deals that you -- after the Web site as to whether or15 not you did not get them because or not because of the16 Web site, right?17 A. That's what I am trying to tell you.18 Q. Yeah.19 MR. CHILDS: Let's take a quick break. I20 am just about done, I think.21 (Recess taken.)22 Q. (BY MR. CHILDS) Mr. Royall, just a few more23 questions for you, sir. You said you were born and24 raised in New York until you were 16 years old?25 A. Yes.

Page 228

1 Q. What city in New York?2 A. New York City.3 Q. When you were a sophomore in high school, where4 did you go to high school there?5 A. Salisbury.6 Q. How do you spell that?7 A. Like the steak.8 Q. Oh, okay. Is that a public or private high9 school?

10 A. Private.11 Q. Any other high schools --12 A. No.13 Q. -- that you went to there?14 A. No.15 Q. Do you -- are you related to Johnny Powers in16 any way?17 A. No. You mean as in a familiar -- a familial18 relationship, right?19 Q. Yes. You did say "familial"?20 A. Yes.21 MR. ZUMMO: It's late.22 Q. (BY MR. CHILDS) The meeting at On The River,23 you talked earlier about some actions of24 Wright Gore, III at that meeting. What I want to ask25 you is: Can you recall specifically any of the things

Page 229

1 that he said to you at that meeting? I'm talking about2 the one in October of '04.3 A. Right. I would have to get together with4 Johnny and really kind of brainstorm that one.5 Q. Okay.6 A. Not right now.7 Q. Okay. So you -- in terms of him saying some8 sentence to you, but you can't tell me what those, what9 the specifics seen sentence would be, you did tell us

10 earlier your interpretation of his actions as being11 wild, or whatever the words that you used earlier in the12 deposition?13 A. Wild was not one of the words that I used to14 describe his --15 Q. Whatever it was, we can go back and read it.16 But I am talking about what specifically he said to you.17 You can't recall --18 A. Not right now.19 Q. -- what that was?20 A. Not right now.21 Q. Okay. In terms of the --22 A. I do recall one thing that he said to me that23 day.24 Q. Okay.25 A. He said, "Do you mind if I take a picture of



58 (Pages 230 to 233)

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1 you?" And I said, "If you promise it won't end up on2 your Web site." And he said, "I promise I won't use it3 against you." I said, "Okay." So he took a picture of4 me and it ended up in the newspaper.5 Q. Was the -- when it ended up in the newspaper,6 was it used against you in some way?7 A. Sure was.8 Q. Was it some kind of article written about you?9 A. It was an ad.

10 Q. Oh, an ad. Okay.11 A. I think you have a copy of it here in what we12 produced to you.13 Q. What you produced? Is that a "yes"?14 A. Yes, sir.15 Q. All right. Anything else you can remember him16 saying specifically at that meeting, other than taking17 your picture?18 A. No. But I, I will get together with Johnny and19 we'll, we'll brainstorm it.20 Q. Johnny?21 A. Powers, who was also in attendance with me.22 Q. Okay. Your -- we have gone through all of23 the -- in Exhibit No. 9 or a lot in Exhibit No. 9, the24 statements that you underlined which you claim are25 defamatory or untrue, right?

Page 231

1 A. We went through most of them, yes.2 Q. Is there anything verbally or orally that you3 have heard Wright Gore, III say that you would consider4 to be defamatory or untrue about you, that you claim5 injures your reputation in some way?6 A. Is there anything that I have heard him say7 orally, that I personally have heard him say orally that8 has injured my reputation?9 Q. Yeah, that you claim has injured your

10 reputation in some way.11 MR. ZUMMO: He said "personally." You12 don't mean in a recorded format? Because you produced13 to us the DVD that is, like, 15 minutes long, that's14 called "Questions and Answers," and it was done during15 their election campaign, saying it was Wright, III16 narrating, talking to the audience on this thing. So, I17 don't know if you consider that verbally.18 MR. CHILDS: What do you mean? Are you19 talking about when he was sitting at the end of the20 table during the discussion, when Wright was, or are you21 talking about something else?22 MR. ZUMMO: It's, it's -- he is sitting23 and he has graphics and he cuts away to other stuff. It24 was some sort of presentation that he distributed or was25 available on his Web site.

Page 232

1 MR. CHILDS: No, I am not talking about2 that.3 MR. ZUMMO: Okay. I think when he said4 "personally," you mean person-to-person?5 MR. CHILDS: Yeah.6 MR. ZUMMO: Okay.7 Q. (BY MR. CHILDS) You overheard Wright Gore, III8 say anything that you would consider defamatory or9 untrue about you that somehow injured your reputation.

10 A. Other than at that meeting at On The River.11 Q. Well, you told me about it where he asked you a12 question about taking your picture. But yeah. Okay.13 A. Well, he said some, some things at that meeting14 that were certainly untrue and defamatory to my face15 then.16 Q. That's what I want to know about. What were17 those things that were said, if you can remember? You18 were telling me awhile ago you couldn't remember. So...19 A. It was along the lines of the, of the types of20 statements that he put in print and on his Web site, on21 the fliers, on the video, that Pat described. Those22 types of, of things were said there. Again, to the23 point to which my partner had to say, "Look, you know,24 enough is enough. Why don't you back off of Walker?"25 And I told you the rest of what he said.

Page 233

1 Q. Right. But what -- you're telling me it's2 along the lines of what was in print or...3 A. I'm having a hard time remembering right now4 the specific quotes that your client said to me at that5 meeting.6 Q. Okay. And as we sit here today, you cannot7 recall the specific quote, as we sit here today; is that8 fair?9 A. That's fair.

10 Q. Okay. Other than that meeting in October of11 '04, is there any other time where he is talking and you12 hear him say something that you think is defamatory or13 untrue about you that injures your reputation?14 A. As of right now, I can't think of another time.15 Q. All right. What about Mr. Gore, Jr., his16 father? Do you know of anything that he has said that17 you would contend is defamatory or untrue that somehow18 injures your reputation?19 A. That he said to me personally?20 Q. Yeah.21 A. Or within my ability to hear it --22 Q. Right.23 A. -- first hand?24 Q. Right.25 A. No.



59 (Pages 234 to 237)

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1 Q. Okay. Now, the next question would be: Has2 somebody told you that Wright Gore, III said something3 or that Wright Gore, Jr. said something about you that4 was defamatory or untrue and that somehow injured your5 reputation?6 A. Yes.7 Q. First of all, let's answer that for Wright8 Gore, Jr. Is that a "yes"?9 A. Yes.

10 Q. Okay. And for Wright Gore, III, is that a11 "yes"?12 A. Yes.13 Q. Okay. Who has told you that Wright Gore, Jr.14 has said something about you verbally that you claim was15 defamatory or untrue?16 A. Well, based on your definition of "said," can17 he say something through the Web site?18 Q. No. I'm talking about verbally.19 A. Verbally. Okay.20 Q. Verbally. You know, like I can come to you21 say, "Hey, Walker" --22 A. Seriously --23 Q. -- "Pat said that you're a loser, no good guy."24 You know?25 A. Right.

Page 235

1 Q. Now, you may think that is bad and defamatory2 and untrue.3 A. Okay.4 Q. That's what I am talking about.5 A. I'm sorry. I, I was including everything that6 he has said either verbally or on his Web site or...7 Q. I am just talking about verbally.8 A. Verbal.9 Q. Out of the mouth.

10 A. Now, does something that he said verbally to a11 reporter or to a third party, does that count?12 Q. Well, that would be something that you read or13 somebody told you something.14 A. Or it could be in a, in an interview on15 television or the radio, or --16 Q. Okay.17 A. -- on a blog?18 Q. Well, do we have that documented somewhere?19 A. I believe so.20 Q. Okay. Let's talk about something that is not21 documented somewhere. Okay? I am trying to talk about22 a verbal statement that would come -- that allegedly23 comes from Wright Gore, III's mouth, that somebody24 overhears and tells you about, that is directed towards25 you, that you consider defamatory or untrue, and that

Page 236

1 injures your reputation. And it is something that is2 not documented in any of the documents that have been3 produced. That's what I am trying to find out. Is4 there anything else out there?5 A. Yes.6 Q. Okay. What would that be? And who told it to7 you?8 A. People with the City told me there were, that9 there were times, for instance, during a City Council

10 meeting when he would attack me as part of his, whatever11 you want to call it, tirade. Attack me and the City at12 the same time. I think some of that is recorded13 somewhere either by him or by his people that record14 those things. I am sure that --15 THE WITNESS: Do we have all of the16 recordings that they have done?17 MR. ZUMMO: I don't have any.18 THE WITNESS: Shouldn't that have been19 given to us as part of discovery?20 MR. ZUMMO: That's -- we'll talk about21 that.22 Q. (BY MR. CHILDS) Okay. Go ahead. So somebody23 with the City has told you that he said some stuff24 during a City Council meeting?25 A. Yeah.

Page 237

1 Q. Okay. Who was it with the City?2 A. I can't recall right now.3 Q. What was said during the City Council meeting?4 A. I can't recall right now.5 Q. Okay. Other than Wright Gore, III saying6 something at a City Council meeting that somebody7 supposedly told you about, is there anything other8 verbal?9 A. Not that I can think of right now.

10 Q. Okay. What about Wright Gore Jr.? Again, the11 same type of question: Anything verbal that he has said12 that somebody has told you about that you would consider13 somehow defamatory or untrue and that somehow injures14 your reputation?15 A. As long as you are excluding all the media16 outlets, all the interviews, all of that, I can't think17 of anything else he said.18 Q. And what I am trying to exclude is all of the19 documented things that we have that maybe he said to a20 reporter, that may be on some blog or whatever.21 A. Well, some of it may or may not be documented.22 I mean, I can't tell you that we have every document23 from every interview or every Web site or every,24 everything.25 Q. Right.



60 (Pages 238 to 241)

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1 A. I mean, we, we tried to be as thorough as we2 could, of course. But there is a lot of material out3 there.4 MR. CHILDS: All right. Well, I pass the5 witness.6 MR. GAIBLE: I've got nothing further.7 MR. ZUMMO: I don't know if I have to say8 this or not, but I am going to reserve my questions for9 trial.

10 (Deposition concluded.)111213141516171819202122232425

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1 CHANGES AND SIGNATURE2 PAGE LINE CHANGE REASON3 ______________________________________________________4 ______________________________________________________5 ______________________________________________________6 ______________________________________________________7 ______________________________________________________8 ______________________________________________________9 ______________________________________________________

10 ______________________________________________________11 ______________________________________________________12 ______________________________________________________13 ______________________________________________________14 ______________________________________________________15 ______________________________________________________16 ______________________________________________________17 ______________________________________________________18 ______________________________________________________19 ______________________________________________________20 ______________________________________________________21 ______________________________________________________22 ______________________________________________________23 ______________________________________________________24 ______________________________________________________25 ______________________________________________________

Page 240

1 I, HIRAM WALKER ROYALL, have read the foregoing2 deposition and hereby affix my signature that same is3 true and correct, except as noted above.45 ___________________________

HIRAM WALKER ROYALL67 THE STATE OF ______________)8 COUNTY OF _________________)9

10 Before me, _______________________ , on this day11 personally appeared HIRAM WALKER ROYALL, known to me or12 proved to me on the oath of _________________ or through13 ________________________________ (description of14 identity card or other document) to be the person whose15 name is subscribed to the foregoing instrument and16 acknowledged to me that he/she executed the same for the17 purpose and consideration therein expressed.18 Given under my hand and seal of office on this19 ______ day of _______________________, ________.2021 ___________________________

NOTARY PUBLIC IN AND FOR22 THE STATE OF ______________23 My Commission Expires: ______________2425

Page 241

1 CAUSE NO. 299962 H. WALKER ROYALL ) IN THE DISTRICT COURT OF

)3 VS. ) BRAZORIA COUNTY, TEXAS

)4 WRIGHT W. GORE, JR., )

ET AL ) 239TH JUDICIAL DISTRICT567 REPORTER'S CERTIFICATE8 ORAL DEPOSITION OF HIRAM WALKER ROYALL9 February 5, 2008

1011 I, Peggy C. Donnell, RMR, Certified Shorthand12 Reporter in and for the State of Texas, hereby certify13 to the following:14 That the witness, HIRAM WALKER ROYALL, was duly15 sworn by the officer and that the transcript of the oral16 deposition is a true record of the testimony given by17 the witness;18 That the deposition transcript was submitted on19 ___________________ to the witness or to the attorney20 for the witness for examination, signature and return to21 me by ___________________.22 That the amount of time used by each party at the23 deposition is as follows:24 Mr. Patrick Zummo (none)

Attorney for Plaintiff25



61 (Pages 242 to 244)

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1 Mr. Bruce Gaible (**hm) Attorney for Defendants Wright W. Gore, Jr. and

2 Western Seafood Co. Mr. Matt Childs (h**m)

3 Attorney for Defendant Wright W. Gore, III4 That pursuant to information given to the deposition5 officer at the time said testimony was taken, the6 following includes all parties of record:7 Mr. Patrick Zummo

Attorney for Plaintiff8 Mr. Bruce Gaible

Attorney for Defendants Wright W. Gore, Jr. and9 Western Seafood Co.

Mr. Matt Childs10 Attorney for Defendant Wright W. Gore, III11 I further certify that I am neither counsel for,12 related to, nor employed by any of the parties in the13 action in which this proceeding was taken, and further14 that I am not financially or otherwise interested in the15 outcome of this action.16 Further certification requirements pursuant to17 Rule 203 of the Texas Code of Civil Procedure will be18 complied with after they have occurred.19202122232425

Page 243

1 Certified to by me on this __________ day of2 ___________________, ______.3

Peggy C. Donnell, RMR, CSR4 Texas CSR 558

Expiration: 12/31/085 Landers Reporting

Registration No. 2476 Expiration: 12/31/09

607 Rustic Lane7 Friendswood, Texas 77546

(713) 521-111789

10111213141516171819202122232425

Page 244

1 FURTHER CERTIFICATION UNDER TRCP RULE 20323 The original deposition/signature page was/was not4 returned to the deposition officer on5 __________________.6 If returned, the attached Changes and Signature7 page(s) contain(s) any changes and the reasons therefor.8 If returned, the original deposition was delivered9 to Mr. Bruce Gaible, Custodial Attorney.

10 $___________ is the deposition officer's charges to11 the Defendants Wright W. Gore, Jr. and Western Seafood12 Co. for preparing the original deposition and any copies13 of exhibits;14 The deposition was delivered in accordance with Rule15 203.3, and a copy of this certificate, served on all16 parties shown herein, was filed with the Clerk.17 Certified to by me on this _________ day of18 ____________________, ______.1920

Peggy C. Donnell, RMR, CSR21 Texas CSR 558

Expiration: 12/31/0822 Landers Reporting

Registration No. 24723 Expiration: 12/31/09

607 Rustic Lane24 Friendswood, Texas 77546

(713) 521-111725





Page 245

Aabandoned 75:1Abbott 4:15 158:15ability 233:21able 59:4 65:18

85:11 93:17106:22 134:10197:19

above-styled 1:13Absolutely 32:8

54:13 181:19abuse 189:5abusive 197:14

198:12 222:1accept 166:8,16acceptable 56:1accepted 56:22,24

57:5,25 58:12,22163:21 164:14,17

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87:14 88:7,1089:17,20 90:1891:2

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city 5:18,19 14:1618:3,4,13,15 19:819:25 20:3 21:421:13,16,21,2322:11,12,16 24:226:4,14,24 27:227:11,17,20,22,2428:1 29:11,2533:3,11,16,19,2034:18,24 35:1636:24 40:25 41:1142:9,10,12 43:2344:3,4,7,14,1745:2 59:14,16,1859:24 60:2,8 62:264:20 65:1,3,1865:19,20 66:4,2267:6,6,20 68:2068:21 69:13 70:1472:8 77:9 79:5,679:10 88:25 104:4104:13 117:12

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client's 24:20146:21 173:15179:23 206:10208:22 226:13

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23:3 56:1 74:1880:12 82:13109:15 138:9



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telling 27:12 44:777:15 115:14116:18 120:23121:7 129:22167:16 173:10178:22 201:4,6213:23 227:5232:18 233:1

tells 235:24ten 32:17 97:5

153:20 172:2

197:9 198:9tenant 105:9,11tend 205:14tendency 25:5tenders 62:12tense 182:16,24term 17:4 23:25

25:20 165:21,25177:21 206:24

terminated 127:17terms 6:19 8:22

17:4 43:3 45:1854:8 55:17 56:156:25 69:14 75:2287:9,25 89:19,2092:12 175:12183:5 193:3222:12 229:7,21

terrible 138:10territory 8:15testified 4:7 33:7testimony 21:22

106:1 110:1132:12 241:16242:5

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thereabouts 104:3therefor 244:7thing 38:11 145:25

175:6,16 185:23189:11 190:7194:7 195:10229:22 231:16

things 72:20105:10 119:22

121:8 129:9,10130:2 136:13137:10 148:14,19149:2 170:22190:18 205:24206:2,4 220:25228:25 232:13,17232:22 236:14237:19

think 10:20 12:2013:2 19:21 20:2023:18 33:7 37:641:3,9 43:16 46:147:9 51:20 54:657:8,16 63:373:13 74:12 84:984:19 85:20 89:1390:15 91:6 92:6,693:4 98:21,2299:2 100:10102:12,17 110:6115:19 118:10119:25 124:19126:11 129:15130:1 131:25137:10,12,18,20138:16 140:5141:17 142:15145:3,10,20,25146:6,17,25149:18 157:14158:24 159:21,23159:24 162:3,16163:25 177:1186:18,20 187:5194:16 196:23197:15 200:5201:23 205:10206:3,13,21208:18 209:9,13211:3,19 215:25216:24 218:7,19219:2,15,24221:19 224:15225:19 227:3,20230:11 232:3

233:12,14 235:1236:12 237:9,16

thinking 57:16third 13:12 14:18

14:24 26:23 28:828:9 33:8,1235:23 36:21 43:1743:22 44:14,21,2445:1 53:23 58:22180:23,23 235:11

third-party 43:1945:19 56:11 65:2367:7 70:11

Thirty-seven147:22

thorough 238:1thought 34:2 46:10

87:2 88:10 99:2099:21 108:20203:21 211:23

thoughts 9:18threat 157:20threatened 166:15

187:17,24threatening 157:21

208:1 225:9threatens 65:25threats 188:5,13three 1:17 2:4 5:16

6:21 9:3,9 20:647:10,16,19 70:15118:8,25 206:20226:1,3

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timeline 3:15 20:920:11,21,24 21:221:7 43:6 106:16107:11,14,17122:11 123:8194:1,4 213:11

times 21:13 50:1353:15 92:6 138:18138:23 236:9

timing 119:18tirade 236:11title 151:2 152:13

152:15 164:19today 13:9 25:10

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Page 271

84:2 86:6 103:17104:23,25 116:4118:12 120:8129:9 132:14133:6,9 134:19148:12 158:15163:17 170:11,15175:21 196:12201:24 204:21208:22 216:11221:11 232:11,25234:2,13 235:13236:6,8,23 237:7237:12

top 31:25 65:14144:17 153:6,20153:23 161:14179:9 180:17187:16 189:3194:7 212:14

total 57:5 66:2397:19

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transcribed 109:19

transcript 98:24110:11 241:15,18

transfer 126:1186:11

transferred 29:4,529:5 31:16,2232:2,5 124:19

transferring 29:8transitioned 28:25transmitted 164:16trash 74:25Travis 220:17,18TRCP 244:1treated 98:24trial 238:9Trico 87:22 181:8

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two-minute 117:19type 12:14 193:8

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uncle 31:11uncle's 31:1uncovers 189:12,25underline 148:19

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underlines 192:19underlining 146:3

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25:9 61:20 62:3115:19 118:19120:7 131:12134:18 144:14148:12 157:15,18172:17 179:24180:7,9 216:12

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unquote 130:25unsigned 49:7untrue 166:14

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updated 67:19,2267:25

upwards 89:13use 25:20 30:18

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versa 55:6version 195:7versus 168:13



Page 272

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wants 5:8 167:6183:12 215:21222:2

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Page 273

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written 53:17 56:590:12,15,20 107:8125:22 182:2199:19 205:8213:12 222:4230:8

wrong 120:1 143:7150:4 173:20187:21

wrote 107:10167:20 208:19213:13 217:20

XX 89:9

YY 89:11yacht 163:2 172:8

191:2yachts 187:23yeah 16:3 20:17

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year 6:6,7 50:20133:20 155:16,17155:21 156:12,14156:18,19 196:4206:24 213:2,5,13220:23,24 221:4,4221:8,12

years 4:19,21 5:1621:9 71:15 97:1,5119:4 138:9 153:9153:12,14 197:9198:9 204:17221:3,7 227:24

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yesterday 20:1121:7 106:20 123:3206:13,14

York 5:18,19156:17 210:12227:24 228:1,2

younger 156:7,8

ZZIP 4:16zone 87:14 88:7,10

89:17,20 90:1891:2

zones 87:7Zummo 1:17 2:3,3

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$$1.25-million

161:15$1.4 187:9$1.8 94:3$165,000 165:12$2,843,298.80

95:25$488,000 97:23$488,117.50 97:20$50,000 48:20 51:1

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$60,000 36:6 91:7187:8

$75,000 49:2052:19

$90,000 57:2558:15,16 163:17163:23 164:3,7

00.1017 97:1300019 147:1400036 3:2400037 147:1900085 147:1900086 3:2500262 3:25 147:1502 15:6,12,17,24

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2,000 88:182/8/07 62:120 3:15 64:2,10

65:10 122:21215:13

2002 13:7 14:674:15 122:14,21123:4,9,22 125:13129:4,20 132:10176:21 178:20,23179:1

2003 59:13 194:12194:18,21 213:6

2004 108:1 118:4,8118:21 120:11144:24 145:21221:13,18 222:13222:25 223:3

2005 221:12,17,19222:16

2006 146:2 221:19221:20 222:19,25

2007 127:16 128:2222:22 223:3

2008 1:8,14 241:9203 242:17 244:1203.3 244:1521 153:62111 156:22113 156:222nd 40:9 59:13

63:2,23,24222-9542 2:1623 160:17237 148:3238 3:8239TH 1:4 241:424 104:24 160:17240 3:9247 243:5 244:2225 160:18 215:13250 26:13

2500 88:192508 196:1126 17:6,13 132:1026th 122:21 123:17

123:2226,000 104:2427 161:13 162:1428 163:7 166:7290 125:12911 11:2529996 1:1 241:1

33 3:15 20:19,25

21:15 53:11 56:473:17 79:19 80:294:25 106:20107:12,13 122:12166:7 194:3 195:4195:5,6 213:20217:24,25

3rd 196:13,1430 118:17 177:1,330,038 97:1731 37:16 167:1,231st 122:14 123:432 65:13 168:2533 170:18330 63:18 87:15

90:5,14333 1:18 2:4338 55:1534 153:935 153:14 170:2136 153:12 172:537 69:9 148:1,939 3:16,18

44 3:4,6,16 39:5,7

59:11,12,19 62:2566:19,20 126:13126:15 127:14,21131:15 139:23140:19 151:1213:2,22

4th 213:1400 2:9 26:1342 190:254300 2:154500 1:18 2:447 3:19,21490 102:21,22,23

55 1:8 3:18 39:21

40:1 63:15 83:590:10 241:9

5th 1:145:41 1:1550,000 51:1500 26:135000 4:15521-1117 243:7

244:24558 243:4 244:21

66 3:19 47:3,5 50:25

52:10 53:9 56:866:16,17,20 70:2572:1,19 73:1275:21 121:10125:25

6/26 13:76/26/02 21:24 27:7

28:3 32:21 34:1036:1

6/26/2002 3:1260 91:9,18 92:17,19

92:20 189:4607 243:6 244:23650-0027 2:11651-0590 2:5651-0597 2:5654-1111 2:11655-7727 2:1667,500 159:21

77 3:21 47:3 49:5

50:25 52:10 53:9

56:8 70:25 72:172:19 73:12 75:21118:3,8,21 121:10125:25

7th 105:20 108:1707 57:23 58:7708 58:7711 46:21,22713 2:5,5,11,11,16

2:16 243:7 244:2472,000 159:2575205 4:1777002 1:18 2:5,1077010 2:1677546 243:7 244:24

88 3:22 30:10 41:3

61:25 103:2,3118:3 120:14

8th 144:238.82 28:18,23 30:9

30:108/1/02 3:19,21 47:5

58:7 71:158/2/07 59:238/3/70 153:14800 26:2185 148:1,6,9850 158:25 159:17

160:3857 58:4,1786 173:4,1487 174:2,8,888 174:1189 6:8,22 155:22

175:7,9

99 3:24 147:11,13

148:13 160:18161:13 162:15166:8 167:1168:25 172:5175:7 178:7 181:7184:20 185:24



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9/20 66:179/22/03 3:13,16

64:11 67:17 69:89/25/03 73:179:08 1:1490 6:22,22 175:7,16

196:2591 6:18,23 177:15

196:2592 7:13 195:20

196:2593 7:3944 195:22 196:3947 213:25948 213:25949 213:25 214:1

215:796 8:21,21 9:2

Royall Transcript

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