Redirect examination of Marvin Goodfriend

📄 Redirect examination of Marvin Goodfriend — Friday, February 7, 1997

Address:

C:\DEPT103\CIVIL\1997\FEB\7\REDIRECT-EXAMINATION-OF-MARVIN.DOC

TRIAL

▲ Day 56 of 57

◀ Cross-examination of Marvin Goodfriend Re-redirect examination of Marvin Goodfriend ▶

Witness: Marvin Goodfriend
Examiner: Robert Baker
Called by: Defense • Date: Friday, February 7, 1997 • Lines: 30

Baker conducted redirect examination of Marvin Goodfriend about why $4.1 million in pension plan assets had initially been excluded and the tax treatment if they were included in a net worth statement. Goodfriend testified that, to his knowledge, Gelblum wanted the assets included, and he explained the accounting reason for reflecting taxes on untaxed assets. Baker then read exemption language from a note Goodfriend identified as Mr. Taft's, and Goodfriend agreed that the exemption was the reason he had wanted the assets excluded for the punitive-damages phase.

# 1 Q:

Well, Mr. Goodfriend, you originally prepared a balance sheet where you didn't include the pension plans because they aren't available for execution, that 4.1 million; isn't that true?

# 2 A:

Correct.

# 3 Q:

And Mr. Gelblum wanted them included in the summary of Mr. Simpson's financial condition, didn't he?

# 4 MR. GELBLUM:

Objection. Your Honor ordered they be excluded.

# 5 THE COURT:

At your request. Overruled.

KEY QUOTE

# 6 Q:

(BY MR. BAKER) He's the one that wanted them included, isn't he?

# 7 A:

To my knowledge, yes.

# 8 Q:

And so you were going to leave them off his financial statement because they're not subject to execution, but once you included the 4.1 million, it was an obligation of yours as a CPA, if they're going to liquidate or attempt to liquidate those assets, to tell them what the taxes are; isn't that correct.

# 9 MR. GELBLUM:

Objection, leading.

# 10 THE COURT:

Overruled.

# 11 Q:

(BY MR. BAKER) You can answer that, Mr. Goodfriend.

# 12 A:

I'm sorry. Can you please repeat the question.

# 13 Q:

Sure. After Mr. Gelblum wanted the 4.1 million in his pension plans, which are not executable on the judgments in this case, or any other case, included in his financial statement, you felt compelled as a CPA to put what the tax consequences would be if they were immediately liquidated; isn't that correct?

# 14 A:

Yes. In the preparation of a net worth statement any asset that is shown that has not yet been taxed, it's only proper to affix taxes to that asset or it would not be a net worth statement, it would be an asset statement.

KEY QUOTE

# 15 Q:

Okay.

# 16 MR. BAKER:

I'm sorry, Steve, could you start on the prior page on No. 4.

# 17 MR. FOSTER:

There this no No. 4.

# 18 MR. BAKER:

There is --

THE COURT REPORTER: Which exhibit number is this, please?

# 19 MR. BAKER:

I think it's 2424. Yes, 2424, Gina. Now, the note under the retirement plan says these assets are Orenthal Productions Inc. Defined Benefit Pension Plan and Trust, and the Orenthal Productions, Inc. Profit Sharing Plan and Trust (hereinafter (sic) "Plans" or "Plan", whichever is applicable). You're referring to the OPA OPI Orenthal Productions Inc. Defined Benefit Pension Plan and the Orenthal Productions Inc. Profit Sharing Plan, right?

# 20 A:

Yes.

# 21 Q:

Okay. And those are the 911,000 and $3.2 million entries on Mr. Simpson's financial condition, correct?

# 22 A:

Yes.

# 23 Q:

Okay.

# 24 MR. BAKER:

Steve, would you be kind enough to it put it back.

# 25 (BY MR. BAKER) This is the note that you put down relative to those two items, correct? (Exhibit 2424 displayed on Elmo)

# 26 A:

This is Mr. Taft's note.

# 27 Q:

Okay. And that is, "Mr. Simpson is a participant in both plans. Both plans are subject to Title I of ERISA and qualified under the Internal Revenue Code. And accordingly, all participants' benefits in both plans are shielded from any and all judgment . . ." That's a U.S. Supreme Court case, right, Guidry versus Sheet Metal Workers?

# 28 A:

I believe so.

# 29 Q:

"In addition, the benefits of any participant in either plan, including payment of retirement benefits, are unavailable to and exempt from creditors pursuant California Code of Civil Procedure Section Code 704.115." That's the reason you wanted to exclude it totally from his balance sheet for purposes of this punitive aspect of the trial; is that correct?

KEY QUOTE

# 30 A:

Yes.

Temperature

procedural

Key Quotes (3)

Marvin Goodfriend

In the preparation of a net worth statement any asset that is shown that has not yet been taxed, it's only proper to affix taxes to that asset or it would not be a net worth statement, it would be an asset statement.

Goodfriend explained that a net-worth statement including untaxed pension assets should also reflect the associated tax consequences.

Robert Baker

"In addition, the benefits of any participant in either plan, including payment of retirement benefits, are unavailable to and exempt from creditors pursuant California Code of Civil Procedure Section Code 704.115." That's the reason you wanted to exclude it totally from his balance sheet for purposes of this punitive aspect of the trial; is that correct?

Baker highlighted the stated basis for exclusion: the pension benefits were described as unavailable to and exempt from creditors, and Goodfriend agreed that this was why he wanted the assets excluded for the punitive-damages phase.

Hiroshi Fujisaki

At your request. Overruled.

Fujisaki responded that the court-ordered exclusion was at Gelblum's request and overruled the objection.

Evidence (1)

Exhibit 2424

Financial condition summary showing pension plan assets — Orenthal Productions Inc. Defined Benefit Pension Plan ($911,000) and Profit Sharing Plan ($3.2 million) — with note citing ERISA and California Code 704.115 exemptions

displayed on Elmo, discussed

Notable Exchanges (2)

Peter Gelblum•Hiroshi Fujisaki

Gelblum objected claiming the court ordered pension assets excluded; Fujisaki corrected him by noting the exclusion was at Gelblum's own request, then overruled.

pointed

Robert Baker•Marvin Goodfriend

Baker walked Goodfriend through Exhibit 2424's footnote citing Guidry v. Sheet Metal Workers and California CCP 704.115 to establish that pension assets are legally exempt from judgment creditors.

strategic

Credibility Attacks (1)

⚔ Peter Gelblum

prior inconsistent position

Baker elicited Goodfriend's qualified testimony that, to his knowledge, Gelblum wanted the pension assets included, following Gelblum's objection that the court had ordered their exclusion.

Objections

2 objections (0 sustained, 2 overruled)

Proceeding 8919 • 30 lines • Defense witness

Civil Trial

Department 103