in the united states district court citicapital … · case no. cv 03-01587 phx jat ... 2001 benson...

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA CITICAPITAL TECHNOLOGY FINANCE, INC., formerly known as EAB Leasing Corp., a Pennsylvania corporation, and CITICAPITAL COMMERCIAL LEASING CORPORATION, formerly known as Associates Leasing, Inc., an Indiana corporation, Plaintiffs, vs. GRANT H. GOODMAN AND TERI B. GOODMAN, husband and wife, Defendants.

Case No. CV 03-01587 PHX JAT FINAL PRETRIAL ORDER

The following is the lodged joint Draft Proposed Final Pretrial Form of Order to be

considered by the Court.

Case 2:03-cv-01587-JAT Document 65 Filed 03/30/2006 of 44

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A. COUNSEL FOR THE PARTIES

Plaintiffs: David N. Ingrassia (#010936) DAVID N. INGRASSIA, P.C. 1212 East Osborn Road Phoenix, Arizona 85014 Telephone: (602) 604-0099 Facsimile: (602) 604-0110 Defendants: Grant H. Goodman Grant H. Goodman, PLLC 5110 N. 44th Street, Suite L-200 Phoenix, AZ 85018 Telephone: (602) 343-1477 Facsimile: (602) 852-3692

B. STATEMENT OF JURISDICTION

1. The basis for this Court’s jurisdiction is diversity of citizenship pursuant to 28

U.S.C. §1332. Jurisdiction is not disputed.

C. STIPULATIONS AND UNCONTESTED FACTS AND LAW

The following facts are admitted by the parties and require no proof: None.

The following facts, although not admitted, will not be contested at trial by evidence

to the contrary: None.

The following issues of law are uncontested and stipulated to by the parties: None.

D. CONTESTED ISSUES OF FACT AND LAW

1. The following are the issues of fact/law to be tried and decided:

Plaintiffs Summary Overview of the facts and law:

It is the Plaintiffs’ position that the facts listed in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 11,

13, 14, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 28, 29, 31, 33, 34, 36, 37, 38, 39, 40, 41, 42, 43,


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44, 45, 46, 47, 48, 49, 50, 52 and 54 below have been judicially admitted by the Defendants.

(Court record, Docket no.36, Defendants Goodmans’ Statement of Facts in Opposition to

Plaintiffs’ Motion for Summary Judgment and in Support of Cross-Motion for Summary

Judgment dated February 22, 2005). Moreover, by Court Order dated September 27, 2005 this

Court has already ruled that “Defendants were guarantors of certain equipment leases with

Plaintiffs”, “ the lease agreements were breached, that Plaintiffs repossessed the equipment and

sold it”, and that the “only issue centers around the amount, if any, that Plaintiffs have been

damaged” (Court record, Docket no. 52).

Plaintiffs therefore contend that the facts are as follows:

GRANT GOODMAN’S GUARANTY OF CITICAPITAL TECHNOLOGY LEASE

NOS. 121, 122, 468 AND 548:

1. Under an agreement sometimes designated as Lease No. 005-0515121-000

(“Lease No. 121”), executed by GTI Capital Holdings, LLC, dba Rockland Materials (“GTI”),

and thereafter executed by U.S. Bancorp Leasing and Financial (“USB”), USB financed GTI’s

acquisition of certain equipment in exchange for GTI’s promise to make sixty (60) monthly

payments in the amount of $3,503.18.

2. Under an agreement sometimes designated as Lease No. 005-0515122-000

(“Lease No. 122”), executed by GTI, and thereafter executed by USB, USB financed GTI’s

acquisition of certain equipment in exchange for GTI’s promise to make thirty-sixty (36)

monthly payments in the amount of $3,550.14.

3. The equipment that was the subject of Lease No. 121 was delivered to GTI. That

delivery was confirmed by GTI’s execution of a Delivery And Acceptance Certificate (the


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“Lease 121 Acceptance Receipt”).


delivery was confirmed by GTI’s execution of a Delivery And Acceptance Certificate (the

“Lease 122 Acceptance Receipt”).

5. Under Lease Nos. 121 and 122, GTI agreed to lease from USB the following

described personal property:

LEASE NO.

LEASED EQUIPMENT DESCRIPTION

VEHICLE IDENTIFICATION #/ SERIAL NUMBER

005-0515121-000

Four (4) 2001 Benson 27’ Aluminum Dump Trailers

5DMDSABD01M000216 5DMDSABD01M000217 5DMDSABD01M000218 5DMDSABD01M000219

005-0515122-000 Four (4)1996 Kenworth T800 Tractors 1XKDDE9X2TJ723029 1XKDDE9X0TJ723031 1XKDDE9XXTJ723473 1XKDDE9X1TJ723474

(sometimes hereafter collectively the “Lease No. 121 and 122 Equipment”)

6. In order to induce USB to enter into Lease nos. 121 and 122 (the “Grant Goodman

Guaranty of Lease Nos. 121 and 122”), Defendant Grant Goodman, a principal and member of

GTI, guaranteed Lease nos. 121 and 122. By executing said guaranty, Defendant Grant

Goodman guaranteed all payments, charges and obligations due under Lease nos. 121 and 122.

7. USB assigned Lease no. 121, the Lease No. 121 Equipment, and the Grant

Goodman guaranty of Lease no. 121 to CitiCapital Technology. CitiCapital Technology is the

owner and holder of Lease no. 121, the Lease No. 121 Equipment, and the Grant Goodman

guaranty of Lease no. 121.

8. USB assigned Lease no. 122, the Lease No. 122 Equipment, and the Grant


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Goodman guaranty of Lease no. 122 to CitiCapital Technology. CitiCapital Technology is the

owner and holder of Lease no. 122, the Lease No. 122 Equipment, and the Grant Goodman

guaranty of Lease no. 122.

9. Lease Nos. 121 and 122 went into default for the failure to pay the monthly rent

due in April, 2003.

10. Pursuant to the terms of Lease Nos. 121 and 122 upon default, CitiCapital

Technology is entitled to immediate possession of the Lease No. 121 and 122 Equipment and is

entitled to sell or otherwise dispose of it and apply the proceeds of any such disposition to the

indebtedness of GTI to CitiCapital Technology.

11. Following the entry of a bankruptcy Court Order in the case of In re: GTI Capital

Holdings, LLC/G.H. Goodman Investments Companies, L.L.C., pending in the United States

Bankruptcy Court for the District of Arizona, Case Nos. 2-03-07923 through 2-03-7924 (the

“GTI bankruptcy case“) authorizing CitiCapital Technology’s recovery of the Lease No. 121

and 122 Equipment, CitiCapital Technology provided notice to all parties of the sale of the

Lease No. 121 and 122 Equipment.

12. As of the date of its recovery and sale, the fair market value of the Lease No. 121

and 122 Equipment did not exceed $104,750.00.

13. The Lease No. 121 Equipment, One (1) 2001 Benson 27’ Aluminum Dump Trailer

bearing serial #5DMDSABD01M000219 was sold at public auction and the balance of said

equipment was sold by private sale. The date and gross amount received from said sales is set

forth below:

LEASE LEASED EQUIPMENT VEHICLE IDENTIFICATION SALE PRICE


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NO. DESCRIPTION #/ SERIAL NUMBER

AND DATE

005-0515121-000

One (1) 2001 Benson 27’ Aluminum Dump Trailer

5DMDSABD01M000216

$21,000 2/23/04

005-0515121-000


5DMDSABD01M000217 $21,000 2/23/04

005-0515121-000


5DMDSABD01M000218 $21,000 2/23/04

005-515121-000


5DMDSABD01M000219 $12,500 6/22/04

14. The Lease No. 122 Equipment was sold at public auction. The date and gross

amount received from the public auction sale(s) is set forth below:

15. Under the express provisions of Lease nos. 121 and 122 and the Grant Goodman

guaranty of Lease nos. 121 and 122, Defendant Grant Goodman agreed to pay CitiCapital

Technology its reasonable attorney’s fees, as well as all other expenses incurred by Plaintiff in

LEASE NO.


VEHICLE

IDENTIFICATION #/ SERIAL NUMBER

SALE PRICE AND DATE

005-0515122-000

One (1) 1996 Kenworth T800 Tractor

1XKDDE9X2TJ723029

$11,500 2/10/04

005-0515122-000


1XKDDE9X0TJ723031 $5,750 2/10/04

005-0515122-000


1XKDDE9XXTJ723473 $5,500 2/10/04

005-0515122-000


1XKDDE9X1TJ723474 $6,500 2/10/04


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connection with the enforcement of any of its remedies. Defendant Grant Goodman is therefore

liable to CitiCapital Technology for such charges pursuant to the terms of Lease nos. 121 and

122 and the Grant Goodman guaranty of Lease Nos. 121 and 122.

16. CitiCapital Technology is an equipment leasing company, providing financing to

end users of equipment. Under CitiCapital Technology’s typical financing arrangement, it is

contacted by an end user (directly or through an intermediary) who makes application to

CitiCapital Technology to provide financing for the end user’s acquisition of a particular item

(or items) of equipment – that financing typically taking the form of a “lease.

17. If financing is approved, CitiCapital Technology then purchases the equipment

which the end user has specifically designated, purchasing only from a supplier (or suppliers)

also specifically designated by the end user.

18. The end user is informed that: (a) CitiCapital Technology will not consummate its

purchase of the equipment unless and until that equipment is delivered and/or installed to the

end user’s satisfaction; and (b) CitiCapital Technology will rely upon the end user’s written

verification of such satisfactory delivery and/or installation before consummating its purchase of

the equipment.

19. The transactions giving rise to Lease Nos. 005-0515468-000 (“Lease No. 468”)

and Lease no. 005-0515548-000 (“Lease No. 548”) were in keeping with the usual customs and

practices of CitiCapital Technology.

20. Sometime prior to November 13, 2000, GTI formally offered to lease the

equipment that is the subject of Lease No. 468 from CitiCapital Technology. Said offer was

presented in the form of an equipment lease.


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21. Sometime prior to November 13, 2000, GTI formally offered to lease the

equipment that is the subject of Lease No. 548 from CitiCapital Technology. Said offer was

presented in the form of an equipment lease.

22. To induce CitiCapital Technology to enter into Lease Nos. 468 and 548,

Defendant Grant Goodman executed a guaranty (the “Grant Goodman Guaranty of Lease Nos.

468 and 548”), guarantying the obligations of the GTI to make payments pursuant to the terms

of Lease Nos. 468 and 548.

23. Upon receiving the offer embodied in Lease Nos. 468 and 548, CitiCapital

Technology arranged to purchase the subject equipment from a supplier(s) specified by GTI (the

“Supplier(s)”). The equipment was purchased solely for the purpose of leasing it to GTI.


delivery was confirmed by GTI’s execution of a Certificate of Delivery And Acceptance (the

“Lease No. 468 Certificate”).


delivery was confirmed by GTI’s execution of a Certificate of Delivery And Acceptance (the

“Lease No. 548 Certificate”).

26. Upon receipt of GTI’s assurances of satisfactory delivery and/or, installation, and

acceptance of the equipment, and in reliance upon those assurances, CitiCapital Technology

accepted Lease Nos. 468 and 548, and then paid the Supplier(s) for the equipment.

27. After GTI assured CitiCapital Technology that the equipment had been delivered

in good condition and/or satisfactorily installed, and after CitiCapital Technology purchased the

equipment from the Supplier(s) specified by GTI and accepted Lease Nos. 468 and 548, both


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parties then became bound by the express written terms of Lease Nos. 468 and 548.

28. Under Lease Nos. 468 and 548, GTI agreed to lease from CitiCapital Technology

the following described personal property:

LEASE NO.



005-0515468-000

Two (2) 2000 Peterbilt Trucks W/MTM 11 YD Bridgemaster V Mixer

INPAL00X1YD493161 W/58419-15606 INPAL00X3YD493162 W/57170-16029

005-0515548-000

Invoice #020969 One (1) Vince Hagan Model VH-10945P Free Standing Jet Pulse Dust Conveyor with baby-buggy style dust shroud, ducting and dust recycle system fully described in Quote #000921H1.R1 dated 9-29-00 Invoice #020970 One (1) 5” Fill Pipe in lieu of a 4” Fill Pipe as quoted Two (2) additional 5” Fill Pipes Invoice #OR000821C1 One (1) Vince Hagan Model 3200BAL Elevated Silo with VH24SJP and 14” Screw Conveyor One (1) Silo Work Platform Option

(sometimes hereafter collectively the “Lease No. 468 and 548 Equipment”)

29. Lease Nos. 468 and 548 went into default for the failure to pay the monthly rent

due in April, 2003.

30. Pursuant to the terms of Lease Nos. 468 and 548 upon default, CitiCapital

Technology is entitled to immediate possession of the Lease No. 468 and 548 Equipment and is

entitled to sell or otherwise dispose of it and apply the proceeds of any such disposition to the

indebtedness of GTI to CitiCapital Technology.

31. Following the entry of bankruptcy Court Orders in the GTI bankruptcy case


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authorizing CitiCapital Technology’s recovery of the Lease No. 468 and 548 Equipment,

CitiCapital Technology notified all parties of the sale of the Lease No. 468 and 548 Equipment.

32. As of the date of its recovery and sale, the fair market value of the Lease No. 468

and Lease No.548 Equipment did not exceed $148,000.

33. The Lease No. 468 Equipment was sold at public auction. The date and gross

amount received from the public auction sale is set forth below:

LEASE

NO.

LEASED EQUIPMENT

DESCRIPTION

VEHICLE


SALE PRICE AND

DATE

005-0515468-000

One (1) 2000 Peterbilt Truck W/MTM 11 YD Bridgemaster V Mixer

INPAL00X1YD493161 W/58419-15606

$58,500 2/10/04

005-0515468-000

Two (2) 2000 Peterbilt Truck W/MTM 11 YD Bridgemaster V Mixer

INPAL00X3YD493162 W/57170-16029

$60,000 2/10/04

34. The Lease No. 548 Equipment was sold by private sale. The date and gross

amount received from the private sale is set forth below:

LEASE NO. LEASED EQUIPMENT DESCRIPTION

SALE PRICE

AND DATE

005- 0515548-000 CitiCapital Technology Finance, Inc.

Invoice #020969 One (1) Vince Hagan Model VH-10945P Free Standing Jet Pulse Dust Conveyor with baby-buggy style dust shroud, ducting and dust recycle system fully described in Quote #000921H1.R1 dated 9-29-00 Invoice #020970 One (1) 5” Fill Pipe in lieu of a 4” Fill Pipe as quoted Two (2) additional 5” Fill Pipes Invoice #OR000821C1 One (1) Vince Hagan Model 3200BAL Elevated Silo with VH24SJP and 14” Screw Conveyor One (1) Silo Work Platform Option

$29,500 10/20/04


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35. Under the express provisions of Lease Nos. 468 and 548, GTI agreed to pay

CitiCapital Technology its reasonable attorney’s fees, as well as all other expenses incurred by

CitiCapital Technology in connection with the enforcement of any of its remedies. Defendant

Grant Goodman is therefore liable to CitiCapital Technology for such charges, pursuant to the

terms of Lease Nos. 468 and 548 and the Grant Goodman Guaranty of Lease Nos. 468 and 548.

GRANT GOODMAN AND TERI GOODMAN’S GUARANTY OF GENERAL

ELECTRIC LEASE NOS. 451,452,453, AND 7004

36. CitiCapital Commercial is an equipment leasing company, providing financing to

end users of equipment. Under CitiCapital Commercial’s typical financing arrangement, it is

contacted by an end user (directly or through an intermediary) who makes application to

CitiCapital Commercial to provide financing for the end user’s acquisition of a particular item

(or items) of equipment – that financing typically taking the form of a “lease”.

37. If financing is approved, CitiCapital Commercial then purchases the equipment

which the end user has specifically designated, purchasing only from a supplier (or suppliers)

also specifically designated by the end user.

38. The end user is informed that: (a) CitiCapital Commercial will not consummate its

purchase of the equipment unless and until that equipment is delivered and/or installed to the

end user’s satisfaction; and (b) CitiCapital Commercial will rely upon the end user’s written

verification of such satisfactory delivery and/or installation before consummating its purchase of

the equipment.

39. The transactions giving rise to CitiCapital Commercial Lease no. 211-0106451

(“Lease No. 451”), CitiCapital Commercial Lease no. 211-0106453-000 (“Lease No. 453”),


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CitiCapital Commercial Lease no. 211-0106452-000 (“Lease No. 452”), and CitiCapital

Commercial Lease no. 211-0107004-000 (“Lease No. 7004”) were in keeping with the usual

customs and practices of CitiCapital Commercial.

40. Sometime prior to July 20, 2001, GTI formally offered to lease the equipment that

is the subject of Lease No. 451 from CitiCapital Commercial. Said offer was presented in the

form of an equipment lease.

41. Sometime prior to August 13, 2001, GTI formally offered to lease the equipment

that is the subject of Lease No. 453 from CitiCapital Commercial. Said offer was presented in

the form of an equipment lease.

42. Sometime prior to August 13, 2001, GTI formally offered to lease the equipment



43. Sometime prior to October 24, 2001, GTI formally offered to lease the equipment



44. To induce CitiCapital Commercial to enter into Lease Nos. 451, 452, 453, and

7004, Defendants Grant Goodman and Teri Goodman each executed a guaranty (the “G and T

Guarantys”), guarantying the obligations of the GTI to make payments pursuant to the terms of

Lease Nos. 451, 452, 453, and 7004.

45. Upon receiving the offers embodied in Lease Nos. 451, 452, 453, and 7004,

CitiCapital Commercial arranged to purchase the subject equipment from a supplier specified by

GTI (the “Supplier(s)”). The equipment was purchased solely for the purpose of leasing it to


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GTI.

46. The equipment that was the subject of Lease Nos. 451, 452, 453, and 7004 was

delivered to GTI. That delivery was confirmed by GTI’s execution of Delivery And Acceptance

Certificates (the “Lease Nos. 451, 452, 453, and 7004 Acceptance Receipts”).

47. Upon receipt of GTI’s assurances of satisfactory delivery and/or, installation, and

acceptance of the equipment, and in reliance upon those assurances, CitiCapital Commercial

accepted Lease Nos. 451, 452, 453, and 7004, and then paid the Supplier for the equipment.

48. After GTI assured CitiCapital Commercial that the equipment had been delivered

in good condition and/or satisfactorily installed, and after CitiCapital Technology purchased the

equipment from the Supplier(s) specified by GTI and accepted Lease Nos. 451, 452, 453, and

7004, both parties then became bound by the express written terms of Lease Nos. 451, 452, 453,

and 7004.

49. Under Lease Nos. 451, 452, 453, and 7004, GTI agreed to lease from CitiCapital

Commercial the following described personal property:

LEASE NO.



211-0106451-000

Two (2) 2002 Vantage P-41-1000 Pneumatic Tank Trailers

4EPPA41252BBA4130 4EPPA41272BBA4131

11-0106452-000

Two (2) 2002 Peterbilt 357 Conventional Tractors; w/ Gardner Denver Blowers

1XPAD09X32D574711 1XPAD09X52D574712

211-0106453-000

Two (2) 2002 Vantage P-41-1000 Pneumatic Bulk Trailers

4EPPA41292BBA4132 4EPPA41202BBA4133

211-0107004-000

Two (2) 2002 Peterbilt 357 Tractors w/ Gardner Denver Blowers

1XPAD09X52D579196 1XPAD09X72D579197


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(sometimes hereafter collectively the “Lease No. 451, 452, 453, and 7004 Equipment”)

50. Lease Nos. 451, 452, 453, and 7004 went into default for the failure to pay the

monthly rent due in April, 2003.

51. Pursuant to the terms of Lease Nos. 451, 452, 453, and 7004 upon default,

CitiCapital Commercial is entitled to immediate possession of the Lease No. 451, 452, 453, and

7004 Equipment and is entitled to sell or otherwise dispose of it and apply the proceeds of any

such disposition to the indebtedness of GTI to CitiCapital Commercial.

52. Following the entry of a bankruptcy Court Order in the GTI bankruptcy case

authorizing CitiCapital Commercial’s recovery of the Lease No. 451, 452, 453, and 7004

Equipment, CitiCapital Commercial notified all parties of the sale of the Lease No. 451, 452,

453, and 7004 Equipment.

53. As of the date of its recovery and sale, the fair market value of the Lease No. 451,

452, 453, and 7004 Equipment did not exceed $307,250.00.

54. The Lease No. 451, 452, 453, and 7004 Equipment, the Lease No. 451, 452, 453,

and 7004 Equipment was sold at public auction. The date and gross amount received from the

public auction sale(s) is set forth below:

LEASE NO.


VEHICLE


SALE PRICE AND DATE

211- 0106451-000

One (1) 2002 Vantage P-41-1000 Pneumatic Tank Trailer

4EPPA41252BBA4130

$22,000 11/21/03

211- 0106451-000

One (1) 2002 Vantage P-41-1000 Pneumatic Tank Trailer

4EPPA41272BBA4131 $23,500 11/20/03


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211- 0106453-000

One (1) 2002 Vantage P-41-1000 Pneumatic Bulk Trailer

4EPPA41292BBA4132

$24,750 11/21/03

211- 0106453-000

One (1) 2002 Vantage P-41-1000 Pneumatic Bulk Trailer

4EPPA41202BBA4133 $25,500 11/20/03

211-0106452-000

One (1) 2002 Peterbilt 357 Conventional Tractor; w/ Gardner Denver Blower

1XPAD09X32D574711

$58,500 11/21/03

211-0106452-000

One (1) 2002 Peterbilt 357 Conventional Tractor; w/ Gardner Denver Blower

1XPAD09X52D574712 $51,000 11/24/03

211-0107004-000

One (1) 2002 Peterbilt 357 Tractor w/ Gardner Denver Blower

1XPAD09X52D579196

$51,000 11/21/03

211-0107004-000

One (1) 2002 Peterbilt 357 Tractor w/ Gardner Denver Blower

1XPAD09X72D579197 $51,000 11/21/03

55. Pursuant to that certain purchase and sale agreement, dated as of November 22, 2004, and

related ancillary documentation (the “Transaction”), General Electric Capital Corporation (“GE”)

purchased certain assets (the “Assets”) from CitiCapital Commercial. In particular, as part of the

Transaction, the Assets represented by Lease Nos. 451, 452, 453 and 7004 (the “GE Leases”) and the G

and T Guarantees have been transferred to GE.

56. Under the express provisions of the GE Leases, GTI agreed to pay all reasonable

attorney’s fees as well as all other expenses incurred in connection with the enforcement of any of the

remedies under the GE Leases. Defendants Grant Goodman and Teri Goodman are therefore liable to

GE for such charges pursuant to the terms of the GE Leases and the G and T Guarantees.

Defendants’ Summary Introduction of Contested Issues of Fact and Law:

The sureties and/or guarantors entered into secondary contractual obligations with

plaintiffs. The primary obligor, GTI Capital Holdings, dba Rockland Materials, filed for


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reorganization through the United States Federal Bankruptcy Court on or about May 8, 2003.

The various lease contracts, schedules, addendums thereto, and guaranty contracts govern the

proceedings at issue, to the extent the contracts are construed consistently with Article 2A of the

Arizona Uniform Commercial Code.

The defendants/sureties contend in the following numbered paragraphs that the combined

issues of fact and law reflect that CitiCapital/General Electric did not dispose of the equipment

at issue through a “commercially reasonable” sale. The defendants contend that factually the

plaintiffs will be incapable of proving actual damages as required under Article 2A of the

Arizona Uniform Commercial Code. The defendants further contend that as a matter of fact, and

law, the plaintiffs may not obtain extra contractual liquidated damages under Article 2A-504.

The defendants shall prove that plaintiffs will present no evidence related to actual damages it

claims were reasonably anticipated at the inception of the contracts at issue. In fact, the

defendants will prove that the plaintiffs, by contract, expressly defined the parameters of their

damage claims directly related to, only, the monthly lease amounts through expiration of the

contracts at issue, offset by the fair market value of the equipment resold by plaintiffs.

The defendants also contend that the contract documents and applicable Article 2A,

Uniform Commercial Code, provisions control the transactions at issue. As a matter of law,

construction of the contracts and the Uniform Commercial Code must be read in pari materia.

As a matter of fact, and law, the plaintiffs anticipatorily repudiated their own contracts,

by failing to follow contract provisions in disposition and damage calculations based upon

contracts which the plaintiffs had drafted. This includes, but is not limited to, the failure under

various conditions precedent, improper disposition and sale under the contracts and the Uniform


17

Commercial Code. Further, the plaintiffs failed to act in a commercially reasonable manner in

disposition of said equipment through their failure to adequately advertise, market, and

appropriately sell, through either public or private sale, the collateral at issue in these matters.

The defendants further are entitled to legal offsets in the amount of at least $212,000.00

as and for such monetary amounts approved by Federal Court Order November 21, 2005.

Defendants’ Summary and Overview

The issues of fact and law have been combined, in large measure arising out of the

determination of whether the plaintiffs followed their contracts as a matter of fact and/or

breached said contracts as a matter of law, together with whether the transactions were

conducted in good faith and constituted a “commercially reasonable disposition” in fact, and

also as a matter of law. The balance of the defendants’ defined issues, whether of fact and/or

law, has been underwritten by citation to controlling and relevant authority.

Issue No. 1: The amount, if any, that Plaintiffs have been damaged.

Plaintiffs Contend:

Excluding interest, taxes, attorneys’ fees, court costs, and all other charges

provided for by the terms of Lease no. 121, and after giving due credit for all sums previously

paid on or to the account of GTI and Defendant Grant Goodman, the total principal amount due

and owing due under Lease no. 121 as of April 22, 2005 is $51,213.88. Interest accrues at the

rate of fifteen percent (15%) per annum from April 23, 2005 until paid in full.

Excluding interest, taxes, attorneys’ fees, court costs, and all other charges provided for

by the terms of Lease no. 122, and after giving due credit for all sums previously paid on or to

the account of GTI and Defendant Grant Goodman, the total principal amount due and owing


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due under Lease no. 122 as of April 22, 2005 is $5,178.14. Interest accrues at the rate of fifteen

percent (15%) per annum from April 23, 2005 until paid in full.


by the terms of Lease No. 468, and after giving due credit for all sums previously paid on or to

the account of GTI and Grant Goodman, the total principal amount due and owing as of April

22, 2005 was $59,716.73. Interest accrues at the rate of ten percent (10 %) per annum from

April 23, 2005 until paid in full.



the account of GTI and Grant Goodman, the total principal amount due and owing as of April

22, 2005 is $25,801.26. Interest accrues at the rate of ten percent (10%) per annum from April

23, 2005 until paid in full.



the account of GTI, Grant Goodman, and Teri Goodman, the total principal amount due and

owing as of April 22, 2005 was $40,723.94. Interest accrues at the rate of ten percent (10%) per

annum from April 23, 2005 until paid in full.




owing as of April 22, 2005 was $60,834.57. Interest accrues at the rate of ten percent 10%) per



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In short, the total amount due and owing due under Lease no. 121, Lease no. 122, Lease

No. 468, and Lease No. 548 (the “CitiCapital Technology Leases”) as of April 22, 2005 is

$141,909.93, plus interest, costs and attorneys fees, and the total amount due and owing due

under the GE Leases as of April 22, 2005 is $214,920.27, plus interest, costs and attorneys fees.

Additionally, Plaintiffs are entitled to additional damages to the extent Plaintiffs pay

anything in connection with claims asserted against them in the case of In re: GTI Capital

Holdings, LLC/G.H. Goodman Investment Companies, LLC , pending in the United States

Bankruptcy Court For The District Of Arizona, Case no. 2-03-07923 through 2-03-07924.

Additionally, Plaintiffs acknowledge that to the extent Plaintiffs receive any payments in

connection with the case of In re: GTI Capital Holdings, LLC/G.H. Goodman Investment

Companies, LLC , pending in the United States Bankruptcy Court For The District Of Arizona,


20

Case no. 2-03-07923 through 2-03-07924, Defendants are entitled to an appropriate credit for

any such payments received.

Finally, this Court has ruled that the damage provisions in Citicapital Technology Lease

Nos. 121, 122, 468 and 548 set forth the appropriate method by which Citicapital Technology’s

damages are to be calculated. This Court has ruled that the damage provisions in General

Electric Lease Nos. 451, 452, 453, and 7004 set forth the appropriate method by which General

Electric’s damages are to be calculated.

Defendants Contend:

1. The Arizona Uniform Commercial Code controls the contracts, and guaranty

contracts at issue pursuant to A.R.S. §47-2A504; 2A507; 2A524; 2A526; 2A527; 2A528; §47-

1203 (obligation of good faith and fair dealing); §47-1102 (obligation of good faith and fair

dealing, reasonableness and care prescribed by this Title may not be disclaimed by agreement);

§47-1106 (. . . the aggrieved party may be put in as good a position as if the other had fully

performed but neither consequential nor special nor penal damages may be had except as

specifically provided in this Title or by other rule of law); see, also, A.R.S. §47-2A103; 2A102;

47-2A501.

2. The guarantors are entitled to the theory of equitable recoupment. Guarantors may

defeat a deficiency judgment or claim on the theory of equitable recoupment under the Uniform

Commercial Code. Connecticut Bank and Trust Co., N.A. v. Incendy, 207 Conn. 15, 540 A.2d 32

(1988); Midlantic National Bank v. Georgian, Ltd., 233 N.J.Super. 621, 559 A.2d 872 (1989);

Aetna Finance Company v. Pasquali, 128 Ariz. 471, 626 P.2d 1103 (App. 1981); In re Madigan,

270 B.R. 749 (9th Cir. BAP 2001). (Plaintiffs have judicial approval of their lodged


21

administrative claim in the amount of $212,000.00. Please see attached Federal Court Order (96

pages) issued out of Judge Curley’s division, November 21, 2005.)

3. The contracts at issue are subject to the defenses of repudiation, anticipatory

repudiation, and/or material breach. Snow v. Western Savings & Loan Ass’n, 152 Ariz. 27, 730

P.2d 204 (1987); United California Bank v. Prudential Ins. Co. of America, 140 Ariz. 238, 681

P.2d 390 (Ariz.App. 1983) (anticipatory breach may be declared where the plaintiff construes its

own contracts in a light most favorable to itself; even though such conduct may be declared in

“good faith”, such conduct is actually an anticipatory repudiation of the entire contract requiring

no further performance on the part of the defendant.)

4. The contracts at issue (both lease contracts, addendums, and guaranty contracts)

must be performed in good faith and in a commercially reasonable manner. The contracts at

issue, both primary and guaranty contracts, must be performed in good faith and in a

commercially reasonable manner. See, 47-2A527, 2A528; J. White & R. Summers, Uniform

Commercial Code (4th Ed.), §14-3, pg. 38 (1995).

5. Plaintiffs have the burden of proof under every aspect of contract and contract

interpretation, as well as proving every element of its claimed damages, lost profits, cost, and

incidental expense.

6. The plaintiffs must further provide this Court, through a preponderance of the

evidence adduced at trial, that the sales/dispositions were executed in good faith and in a diligent

manner and that the “sale” to private parties were not in collusion, below fair market value, and

that the plaintiffs achieved the highest and best value for the equipment through proper and

adequate marketing, proving the elements of good faith and commercial reasonableness required


22

in every aspect of every sale. The plaintiffs may not resell in a fashion which exaggerates their

damages. Coast Trading Co. v. Cudahy Company, 592 F.2d 1074 (9th Cir. 1979).

7. The plaintiffs must establish every element of its claimed damages under the

contracts at issue as governed by the Uniform Commercial Code (2A527; 2A528; 2A523;

2A507). Plaintiffs must establish every element of their claimed damages under the Uniform

Commercial Code (2A527, 2A528, 2A523) proving actual damages; that the damage sums were

and are commercially reasonable; proof of residual interest, if contractually permitted; loss or

damage proximately resulting from the breach; and that the losses were and are reasonably

certain and not the subject of conjecture or speculation, with proof of lost profits which are

“reasonably certain”. Air Caledonie International v. AAR Parts Trading, Inc., 315 F.Supp.2d

1319 (S.D.Fla. 2004); Sharon Leasing, Inc. v. Phil Terese Transportation, Ltd., 299 Ill.App.3d

348, 701 N.E.2d 1150, 233 Ill.Dec. 876 (1998); AAR International, Inc. v. Vacances Heliades

S.A., 349 F.Supp.2d 1114 (N.D.Ill. 2004) (contracts are necessarily strictly construed against the

drafter/plaintiff).

8. A lessor, through a punitive and/or liquidated damage clause, may not place itself

in a better position than it would have been had the contracts been fully performed. A.R.S. § 47-

2A504; In re Montgomery Ward Holding Corp., 326 F.3d 383 (3rd Cir. 2003); Eplus Group,

Inc. v. Panoramic Communications, LLC, 2003 WL 157200 (S.D.N.Y.); see, also, Plaintiff

General Electric’s Appellate Brief on behalf of defendant/lessee Montgomery Ward Holding

Corp., which resulted in the above-referenced Third Circuit opinion.

9. The defendants, as guarantors and sureties, are entitled to all of the affirmative

defenses which would have been available to the primary obligor pursuant to the Arizona


23

Uniform Commercial Code. Security State Bank v. Burk, 100 Wash.App. 94, 995 P.2d 1272

(Wash.App.Div.2 2000); Wallace Hardware Co., Inc. v. Abrams, 223 F.3d 382 (6th Cir. 2000);

United States v. Willis, 593 F.2d 247 (6th Cir. 1979); Tropical Jewelers, Inc. v. Nationsbank,

N.A., 781 So.2d 392 (Fla.App. 2002) (a debtor cannot waive commercial reasonableness and

anything to the contrary in a guaranty contract is invalid.); AAR Aircraft & Engine Group, Inc. v.

Edwards, 272 F.3d 468 (7th Cir. 2001) (debtor cannot waive right to commercially reasonable

resale or to notice of sale and these defenses survive purported absolute guarantees.); GMAC v.

Johnson, 746 A.2d 122 (R.I. 2000) (secured party bears the burden to prove disposition was

commercially reasonable with respect to method, time, place and terms. Rebuttable presumption

that the fair market value of the asset is the amount of the outstanding debt.)

10. The plaintiffs must prove that their punitive and/or liquidated damages sought

under the contracts are compliant with the Arizona Uniform Commercial Code, and compliant

with Arizona and Ninth Circuit law, which typically exclude penal or liquidated damages,

abiding proof that the damages sought were “reasonable” and that the damages were, at the

inception of the contractual relationships, a reasonable anticipation of actual damages. A.R.S. §§

47-2A503(C); 47-2A504; Siletz Trucking Co., 467 F.2d 961 (9th Cir. 1972); Pima Savings &

Loan Association v. Rampello, 168 Ariz. 297, 812 P.2d 1115 (App. 1991); Larson-Hegstrom &

Associates, Inc. v. Jeffries, 145 Ariz. 329, 701 P.2d 587 (App. 1985).

11. Plaintiffs’ sale in the instant case resulted in unreasonably low valuations,

unnecessarily and unlawfully escalating plaintiffs’ claimed “deficiency” damages and whether,

considering the bankruptcy court-ordered payment to plaintiffs in the amount of approximately


24

$212,000.00, that the plaintiffs have, in fact, been provided a surplus of cash in excess of that

which it would have been lawfully entitled to had the contracts been fully performed.

12. The plaintiffs’ disposition, marketing and sale of the assets, including disposition

to “insiders” or other parties, failed to reflect an “arms-length” transaction, or series of

transactions, detrimental to the guarantors, escalating plaintiffs’ claimed deficiencies. Failure to

give notice, which should have generated competitive bidding, rendered the plaintiff the

opportunity for self dealing. No solicitation of bids and no arrangements for presale inspections,

no advertisements, and only a minimum of public notices are not commercially reasonable.

Kobuk Eng’g and Contracting Services, Inc. v. Superior Tank and Construction Company-

Alaska, Inc., 568 P.2d 1007 (Alaska 1977); Ruden v. Citizen’s Bank & Trust Company of

Maryland, 99 Fed.App. 605, 638 A.2d 1225, 23 U.C.C.2d 623 (1994) (where creditor fails to

sell collateral in a commercially reasonable manner, the court will adopt a rebuttable

presumption that the collateral’s value is equal to the debt and the creditor can recover a

deficiency only if it can show other damages.)

13. The sureties are entitled to invoke various suretyship defenses under the

Restatement (Third) of Suretyship and Guaranty, §§ 32-49.

14. The plaintiffs have capriciously calculated their damages, entitling defendants to

judgment as a matter of law. Hegel v. O’Malley Ins. Co., 122 Ariz. 52, 593 P.2d 275 (1979);

Elson Dev. Co. v. Arizona Savings & Loan, 99 Ariz. 217, 407 P.2d 930 (1965).

15. Under Ninth Circuit law the guarantors may articulate the equitable defense

(equitable subrogation) to impairment of the collateral which provided security for the primary

debt. United States v. H.E. Crain, 589 F.2d 996 (9th Cir. 1979).


25

The plaintiffs were required to account to this Court, or to these defendants, for an

itemization of the legal off-sets referenced herein. D.W. Jaquays & Co. v. First Security Bank,

101 Ariz. 301, 419 P.2d 85 (1966).

16. The Arizona and uniform law provide that the burden is upon plaintiffs to provide

a preponderance of the evidence that the equipment was disposed of in a commercially

reasonable manner. Chapman v. Field, 124 Ariz. 100, 602 P.2d 481 (1979).

17. The plaintiffs did not adequately disclose their equipment valuations, appraisals,

and the method and manner of disposition, through public or private sale and/or auction, which

may relate to the instant proceedings. Norwest Bank (Minnesota) N.A. v. Symington, 197 Ariz.

181, 3 P.3d 1101 (App. 2000); Pfingston v. Ronan Engineering Co., 284 F.3d 999, 1005 (9th

Cir. 1000); Trost v. Trek Bicycle Corp., 162 F.3d 1004 (8th Cir. 1998); Southern Union Co. v.

Southwest Gas Corp., 180 F.2d 1021, 1059-60 (D.Ariz. 2002); Lamarca v. United States, 31

F.Supp.2d 110, 122-23 (E.D.N.Y. 1998); Jacobsen v. Deseret Book Co., 287 F.3d 936, 952-953

(10th Cir. 2002); Commercial Data Servers, Inv. v. IBM Corp., 262 F.Supp.2d 50 (S.D.N.Y.

2003).

18. CitiCapital/General Electric may not modify, amend, or improperly infuse into

these proceedings damage calculations not appropriately disclosed under federal court order, and

the Federal Rules of Civil Procedure applicable to the instant proceedings. Morrison Knudsen

Corp. v. Fireman’s Fund Ins. Co., 175 F.3d 1221 (10th Cir. 1999); Miller v. Pfizer, Inc., 356

F.3d 1326, 1332 (10th Cir. 2004); Klonoski v. Mahlab, 156 F.3d 255, 268 (1st Cir. 1998);

United States v. Boyce, 148 F.Supp.2d 1069 (S.D.Cal. 2001).


26

The plaintiffs may not untimely supplement their prior discovery responses at variance

with prior court orders and the Federal Rules of Civil Procedure. Reid v. Lockheed Martin

Aeronautics Co., 205 F.R.D. 655, 662 (N.D.Ga. 2001); (waiting until 30 days prior to trial for

disclosure by labeling a “supplement” disallowed). The plaintiff’s failures in this regard require

exclusion. W.G. Pettigrew Dist. Co. v. Borden, Inc., 976 F.Supp.1043, 1050, (S.D.Tx. 1996);

U.S. v. Philip Morris USA, Inc., 219 F.R.D. 198, 200-01 (D.D.C. 2004).

The complete failure to disclose here requires mandatory preclusion. Wilson v. Bradlees

of New England, Inc., 250 F.3d 10 (1st Cir. 2001); Southern States Rack and Fixture, Inc. v.

Sherwin-Williams Co., 318 F.3d 592, 595-96 (4th Cir. 2003).

19. Plaintiffs/lessors did not at any time provide defendants with statutorily required

notice, under A.R.S. § 47-2A507, as to the “market” rent value in disposition of the equipment

at issue. In re Montgomery Ward Holding Corp., supra.

20. The plaintiffs are judicially estopped from taking positions before this tribunal

which are at material variance with positions taken before other federal district courts on

substantially identical contractual language, arising out of plaintiffs’ claimed entitlement to

liquidated damages. The plaintiffs, through its ownership by General Electric, have repudiated

its entitlement to liquidated damages in other federal district court cases. Helfand v. Gerson, 105

F.3d 530 (9th Cir. 1997); In re Estate of Cohen, 105 Ariz. 337, 464 P.2d 620 (1970); see, In re

Montgomery Ward Holding Corp., supra.

21. In proof of its claimed damages (liquidated or otherwise) the lessor is required to

prove its substantive damages “and to establish a reasonable basis for the computation of those

damages”. Sharon Leasing, Inc. v. Phil Terese Transportation, Ltd., 299 Ill.App.3d 348, 701


27

N.E.2d 1150, 233 Ill.Dec. 876 (1998). In circumstances as here, where the plaintiff fails to

follow its own contract, the plaintiff may not adequately prove damages. Sharon Leasing, supra,

see, also, AAR International, Inc. v. Vacances Heliades S.A., 349 F.Supp.2d 1114 (N.D.Ill.

2004).

22. Guarantors may not “waive” the right to a commercially reasonable sale. AAR

Aircraft & Engine Group, Inc. v. Edwards, 2001 W.L. 1429378 (7th Cir. November 15, 2001);

Morgan Buildings & Spas, Inc. v. Turn-Key Leasing, Ltd., 97 S.W.2d 871, 49

U.C.C.Rep.Serv.2d 941 (Tex.App.Dallas 2003).

23. The guaranty contracts must be strictly construed to limit guarantor liability.

Consolidated Roofing & Supply Co., Inc. v. Grimm, 140 Ariz. 452, 682 P.2d 457 (App. 1984).

Guaranty contracts are not to be construed any differently than the main contracts. Anderson v.

Preferred Stock Food Markets, Inc., 174 Ariz. 208, 854 P.2d 1194 (App. 1993).

24. The burden is exclusively upon the lessor to prove, as a matter of law, that the

disposition was commercially reasonable. Gulf Homes, Inc. v. Goubeaux, 136 Ariz. 33, 664 P.2d

183 (1983).

E. LIST OF WITNESSES

1. Plaintiffs Witnesses

(a) witnesses who shall be called at trial:

1. Bonnie Schlee: c/o CitiCapital Commercial Corporation, 250 E. Carpenter

Frwy, 4 Decker, Irving, TX 75062, 972-652-1197. Subjects of testimony: Ms. Schlee is

expected to testify regarding the existence of the leases and guarantees at issue in this

case, breach of the leases and guarantees, and damages. Ms. Schlee is also expected to


28

testify regarding the marketing and sale of the leased equipment, and the expenses

associated therewith.

2. Roger Doyle: Roger Doyle, General Electric Capital Corporation,4650 Regent

Blvd, Suite 200, Irving, TX 75063, 972-657-2862. Subjects of testimony: Mr. Doyle is

expected to provide expert testimony regarding the value of the leased equipment and

factual testimony regarding the marketing and the sale of the leased equipment.

(b) witnesses who may be called at trial:

1. Jose J. Martin: c/o Property Damage Appraisers, P.O. Box 529, Redlands,

California, 92373, 909-307-2982. Subjects of testimony: Mr. Martin is expected to

testify regarding the condition of the leased equipment.

2. Grant Goodman

3. Teri Goodman

4. All witnesses listed by the Defendants

(c) witnesses who are unlikely to be called at trial:

2. Defendants Witnesses

Defendants have no objection to Plaintiffs calling Bonnie Schlee, and Roger Doyle.

Defendants object to Plaintiffs calling Jose J. Martin as being undisclosed.

Defendants object to the anticipated plaintiffs’ witness testimony and/or documentary

evidence under Federal Rules of Civil Procedure, Rules 607; 701; 702; 703; 801; 802; 803;


29

803(5); 803(6); 803(25); 804; 901; lack of disclosure; relevance; materiality; foundation; and

hearsay.

(a) witnesses who shall be called at trial:

1. Grant H. Goodman

2. James Carmichael

(b) witnesses who may be called at trial:

(c) witnesses who are unlikely to be called at trial:

Each party understands that it is responsible for ensuring that the witnesses it wishes to

call to testify are subpoenaed. Each party further understands that any witness a party wishes to

call shall be listed on that party’s list of witnesses above and that party cannot rely on that

witness having been listed or subpoenaed by another party.

F. LIST OF EXHIBITS

1. The following exhibits are admissible in evidence and may be marked

in evidence by the Clerk: None

Plaintiffs’ Exhibits:

1. Lease No. 005-0515121-000 documents (including Master Lease Agreement, Trac

Addendum to Lease Agreement, Certificate of Authority, Operating Agreement of GTI Capital

Holdings, LLC, Schedule to Master Lease Agreement, Delivery and Acceptance Certificate,


30

ADOT Lien Holder Records, Notice and Acknowledgment of Assignment, Assignment and

Assumption Agreement).

2. Lease No. 005-0515122-000 (including Master Lease Agreement, Trac Addendum

to Lease Agreement, Certificate of Authority, Operating Agreement of GTI Capital Holdings,

LLC, Schedule to Master Lease Agreement, Delivery and Acceptance Certificate, ADOT Lien

Holder Records, Notice and Acknowledgment of Assignment, Assignment and Assumption

Agreement, National Truck Protection Request For Service Contracts.)

3. Lease No. 005-0515468-000 (including Master Lease Agreement, Lease

Document Amendment, Master Lease Schedule, Trac Rider, ADOT Lien Holder Records, UCC

-1 Financing Statements, First Amendment to the Operating Agreement of GTI Capital

Holdings, LLC.)

4. Lease No. 005-0515548-000 (including Master Lease Agreement, Lease

Amendment, Master Lease Schedule, Purchase Option, UCC -1 Financing Statements,

Operating Agreement of GTI Capital Holdings, LLC.)

5. Lease No. 211-0106451-000 (including Truck Lease Agreement, Schedule “A”,

Schedule “B”, Certificate of Authority - GTI Holdings, Certificate of Authority - GH Goodman

Investments, Delivery and Acceptance Certificates, Lessee Certification, Cross Collateral

Security/Cross Default Agreement, Certificates of Title.)




31











9. The guaranty of Grant Goodman, guarantying Lease Nos. 005-0515121-000, 005-

0515122-000, 005-0515468-000, and 005-0515548-000.

10. The guaranty of Grant Goodman and Teri Goodman, guarantying Lease Nos. 211-

0106451-000, 211-0106452-000, 211-0106453-000 and 211-0107004.

11. PDA Condition Report for the Lease No. 005-0515121-000 equipment.









32

19. Vehicle sale invoice dated February 23, 2004.





24. Bill of Sale dated November 21, 2003.








32. Plaintiffs’ Response To Defendants’ Non-Uniform Interrogatories, Request For

Production, And Requests For Admission dated July 16, 2004 including all of the following

documents attached thereto (Dates of Leases/Guaranties/Manner Of Breach, Pre-Bankruptcy

Damage Breakdown, Post Bankruptcy Taxes, Late Charges (from 6/03 to 7/12/04), and Auction

Fees, And Repossession Fees, and Damage Calculation Sheet (as of 7/12/04)).

33. Plaintiffs’ Supplemental Response To Defendants’ Non-Uniform Interrogatories,

Request For Production, And Requests For Admission dated August 5, 2004 including all of the

documents attached thereto (Exhibit 1, Lease No. 005-0515005-0515121-000-000 : Invoice

from Benson International in the amount of $180,056.00; Trailer Specifications and Price Sheet


33

from Benson; Dolly and Train Specifications; and Memorandum to Mae from Amy Haynes

dated October 17, 2000, Lease No. 005-0515005-0515122-000-000: Invoice from Arrow Truck

Sales in the amount of $132,195.00; Memorandum to Mae from Amy Haynes dated October 17,

2000, Lease No. 005-0515005-0515468-000-000 : Invoice from American Built Equipment

Co., Inc. in the amount of $288,216.00; Invoice from The Vince Hagan Co. in the amount of

$40,401.00; Order from The Vince Hagan Company; Invoice from The Vince Hagan Co. in the

amount of $56,393.50; Change Order #1 from The Vince Hagan Company; Order from The

Vince Hagan Company dated August 21, 2000; Order from The Vince Hagan Company Job #

000824; Bill of Sale in the amount of $2,489.00 dated December 12, 2000; and Invoice from

The Vince Hagan Company in the amount of $56,393.50, CitiCapital Foreclosure Prep List

031118 relating to the November 18, 2003 public auction, Foreclosure Sale high bidder sheets

relating to the November 18, 2003 auction (9 pages), CitiCapital Commercial Leasing

Corporation Invoice no. 211-0106211-0106452-000-000 dated November 19, 2003, Bill of Sale

dated November 20, 2003, Account information for account no. 211-0106211-0106452-000-

000, Arizona Certificate of Title (2 pages), Print out of Nationwide Auction Systems (2 pages)

of 2002 Peterbilt 357, Blank CitiCapital Repossession Report, CitiCapital Drop Off Sheet,

CitiCapital Commercial Leasing Corporation Invoice no. 211-010211-0107004-000-000 dated

November 19, 2003, Bill of Sale dated November 20, 2003, Account information for account

no. 211-010211-0107004-000-000, Arizona Certificate of Title (2 pages), Print out of

Nationwide Auction Systems (2 pages) of 2002 Peterbilt 357, Blank CitiCapital Repossession

Report, CitiCapital Drop Off Sheet, CitiCapital Commercial Leasing Corporation Invoice no.

211-0106211-0106451-000-000 dated November 19, 2003, Bill of Sale dated November 20,


34

2003, Account information for account no. 211-0106211-0106451-000-000, Arizona Certificate

of Title (2 pages), Print out of Nationwide Auction Systems (2 pages) of 2002 Vantage Dump

Trailers P-41-1000, Blank CitiCapital Repossession Report, CitiCapital Drop Off Sheet,




Nationwide Auction Systems (2 pages) of 2002 Vantage Dump Trailers P-41-1000, Blank

CitiCapital Repossession Report, CitiCapital Drop Off Sheet, CitiCapital Commercial Leasing

Corporation Invoice no. 211-010211-0107004-000-000 dated November 18, 2003, Bill of Sale

dated November 18, 2003, Account information for account no. 211-010211-0107004-000-000,

Arizona Certificate of Title (2 pages), Print out of Nationwide Auction Systems (2 pages) of

2002 Peterbilt 357 (2 pages), Blank CitiCapital Repossession Report, CitiCapital Drop Off

Sheet, CitiCapital Commercial Leasing Corporation Invoice no. 211-0106211-0106452-000-000

dated November 18, 2003, Bill of Sale dated November 18, 2003, Account information for

account no. 211-0106211-0106452-000-000, Arizona Certificate of Title (2 pages), Print out of

Nationwide Auction Systems (2 pages) of 2002 Peterbilt 357, Blank CitiCapital Repossession

Report, CitiCapital Drop Off Sheet, CitiCapital Commercial Leasing Corporation Invoice no.

211-0106211-0106451-000-000 dated November 19, 2003, Bill of Sale dated November 20,

2003, Account information for account no. 211-0106211-0106451-000-000, Arizona Certificate

of Title (2 pages), Print out of Nationwide Auction Systems (2 pages) of 2002 Vantage Dump

Trailers P-41-1000, Blank CitiCapital Repossession Report, CitiCapital Drop Off Sheet,



35



Nationwide Auction Systems (2 pages) of 2002 Vantage Dump Trailers, Blank CitiCapital

Repossession Report, CitiCapital Drop Off Sheet, CitiCapital Foreclosure Sale Prep List relating

to the February 10, 2004 auction sale, Foreclosure Sale high bidder sheets relating to the

February 10, 2004 auction sale (2 pages), Public Foreclosure Sale Sign In sheets relating to the

February 10, 2004 auction sale, CitiCapital Commercial Leasing Corporation Invoice dated

February 10, 2004, Bill of Sale dated February 12, 2004, Account information for account no.

005-0515005-0515122-000-000, Arizona Certificate of Title (2 pages), Print out of Nationwide

Auction Systems (2 pages) of 1996 Kenworth T-800 (2 pages), Blank CitiCapital Repossession

Report, CitiCapital Drop Off Sheet, CitiCapital Commercial Leasing Corporation Invoice dated

February 10, 2004, Bill of Sale dated February 10, 2004, Account information for account no.

005-0515005-0515122-000-000, Arizona Certificate of Title (2 pages), Print out of Nationwide


Report, CitiCapital Drop Off Sheet, Bill of Sale dated February 11, 2004 Arizona Certificate of

Title, Print out of Nationwide Auction Systems (2 pages) of 1996 Kenworth T-800 (2 pages)

Blank CitiCapital Repossession Report dated November 5, 2003, CitiCapital Commercial

Leasing Corporation Invoice dated February 10, 2004, Bill of Sale dated February 10, 2004,

Account information for account no. 005-0515005-0515122-000-000, Print out of Nationwide


Report, CitiCapital Drop Off Sheet dated October 24, 2003, CitiCapital Commercial Leasing

Corporation Invoice dated February 10, 2004, Bill of Sale on account no. 005-0515005-


36

0515468-000-000 in the amount of $58,500.00, Print out of Nationwide Auction Systems (2

pages) of 2000 Peterbilt 357 (2 pages), Blank CitiCapital Repossession Report, CitiCapital Drop

Off Sheet dated October 22, 2003, Bill of Sale on account no. 005-0515005-0515468-000-000,

Print out of Nationwide Auction Systems (2 pages) of 2000 Peterbilt 357 (2 pages), Blank

CitiCapital Repossession Report dated October 31, 2003, CitiCapital Commercial Leasing

Corporation Invoice dated February 23, 2004, Bill of Sale on account no. 005-0515005-

0515121-000-000 in the amount of $63,000.00, Arizona Certificate of Title, Print out of

Nationwide Auction Systems (2 pages) of 2001 Benson Truck Bodies End-Dump, Blank

CitiCapital Repossession Report, CitiCapital Drop Off Sheet dated October 27, 2003, Bill of

Sale on account no. 005-0515005-0515121-000-000 in the amount of $21,000.00, Arizona

Certificate of Title, Print out of Nationwide Auction Systems (2 pages) of 2001 Benson Truck

Bodies Dump, Blank CitiCapital Repossession Report, CitiCapital Drop Off Sheet dated

October 28, 2003. Bill of Sale on account no. 005-0515005-0515121-000-000 in the amount of

$21,000.00, Arizona Certificate of Title, Print out of Nationwide Auction Systems of 2001

Benson Truck Bodies Dump (2 pages), Blank CitiCapital Repossession Report, CitiCapital Drop

Off Sheet dated October 24, 2003, CitiCapital Foreclosure Sale Prep Sheet relating to June 22,

2004 public auction, Foreclosure Sale high bid sheets relating to June 22, 2004 public auction.

(2 pages), Public Foreclosure Sale Sign In Sheets relating to June 22, 2004 public auction (3

pages), CitiCapital Commercial Leasing Corporation Invoice dated June 22, 2004 on account

no. 005-0515005-0515121-000-000, Bill of Sale dated June 28, 2004, Arizona Certificate of

Title (2 pages), Print out of Nationwide Auction Systems (2 pages) of 2001 Benson Truck

Bodies Dump, Blank CitiCapital Repossession Report, CitiCapital Drop Off Sheet dated


37

October 28, 2003, Exhibit “1” CitiCapital Technology Leases and CitiCapital Commercial

Leases).

34. Plaintiffs’ Second Supplemental Response To Defendants’ Non-Uniform

Interrogatories, Request For Production, And Requests For Admission dated August 19, 2004

including all of the following documents attached thereto (Invoice No. 010718ROC02 in the

amount of $194,432.00 dated 7/20/01 from American Built Equipment Co. to Associates

Leasing for Lease No. 211-0106451-000 and 211-0106453-000 equipment, Invoice No.

010718ROC01 in the amount of $371,168.00 dated 7/20/01 from American Built Equipment

Co. to Associates Leasing for Lease No. 211-0106452-000 and Lease No. 211-0107004-000

equipment, Duplicate Invoice No. 010718ROC01 in the amount of $185,935.90 dated 10/19/01

from American Built Equipment Co. to Associates Leasing for Lease No. 211-0107004-000

equipment, Notice of sale to GTI for the Lease No. 005-0515121-000, 005-0515122-000, and

005-0515468-000 equipment, Notice of sale to the Goodmans for the Lease No. 005-0515121-

000, 005-0515122-000, and 005-0515468-000 equipment, Notice of sale to GTI for the Lease

No. 211-0106451-000, 211-0106452-000, 211-0106453-000 and Lease No. 211-0107004-000

equipment, Notice of sale to GH Goodman Investments for the Lease No. 211-0106451-000,

211-0106452-000, 211-0106453-000 and Lease No. 211-0107004-000 equipment, Notice of

sale to Grant Goodman for the Lease No. 211-0106451-000, 211-0106452-000, 211-0106453-

000 and Lease No. 211-0107004-000 equipment, Notice of sale to Teri Goodman for the Lease

No. 211-0106451-000, 211-0106452-000, 211-0106453-000 and Lease No. 211-0107004-000

equipment, Notice of sale to GTI, GH Goodman Investments, Grant Goodman and Teri

Goodman for the Lease No. 005-0515548-000 equipment, Copy of photographs of the Lease


38

No. 005-0515548-000 equipment, Arizona Materials offer to purchase the Lease No. 005-

0515548-000 equipment for $29,500, Amended Exhibit “1” CitiCapital Technology Leases and

CitiCapital Commercial Leases)

35. All documents identified and referred to in the October 22, 2004 Affidavit of

Roger Doyle.

36. Plaintiffs’ Third Supplemental Response To Defendants’ Non-Uniform

Interrogatories, Request For Production, And Requests For Admission dated December 21, 2004

including all of the following documents attached thereto (A copy of Citicapital’s Invoice for the

sale of the equipment to Arizona Materials and check no. 1946 for $29,500.00, A copy of

Nationwide’s Truck Paper Western advertisement dated January 16, 2004, A copy of

Nationwide’s Truck Paper Western advertisement dated October 24, 2003, A copy of

Nationwide’s brochure advertising public auction sales in June and July, 2004, A copy of

Nationwide’s brochure advertising public auction sales in November and December, 2003, A

copy of Nationwide’s brochure advertising public auction sales in February and March, 2004, A

copy of Nationwide’s online advertising public auction sale on November 18 and 19, 2003, A

copy of Nationwide’s online advertising public auction sale on November 18, 2003, A copy of

Nationwide’s online advertising public auction sale on February 10, 2004, A copy of

Nationwide’s online advertising public auction sale on June 22, 2004.

37. The April 28, 2005 Supplemental Affidavit of Bonnie Schlee and all documents

attached thereto (Exhibit 1: Citicapital Technology Lease Calculations, Exhibit 2: GE Lease

Calculations, Exhibit 3: Citicapital Technology and GE Leases Net Sale Proceeds Calculations,

and Exhibit 4: Repossession and Auctions Fee documents)


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38. Letter dated October 18, 2005 from Mr. David N. Ingrassia to Mr. Sid Horwitz.

Defendants’ Exhibits:

51. CitiCapital (General Electric) “blow-up” of Montgomery Ward case.

52. General Electric appellate brief re In re Montgomery Ward Holding Corp., 326

F.3d 383 (3rd Cir. 2003).

53. James Carmichael’s curriculum vitae, together with his opinions, affidavits,

calculations, and analyses previously lodged with this Court, together with Mr. Carmichael’s

opinions, conclusions, application of the Uniform Commercial Code, and contract terms to

plaintiffs’ claimed damage calculations, if any, relative to the plaintiffs/lessors in the instant

proceedings.

54. 96-page Memorandum Decision Regarding Surcharge Trial, issued in the case of

GTI Capital Holdings, LLC dba Rockland Materials, Debtor, in the United States Bankruptcy

Court, by Honorable Sarah Curley on November 21, 2005;

55. Interested Parties’ Trial Court Record Supplementation Re: Professional Fee

Applications; and Comerica’s Motion to Alter or Amend Surcharge Decision and Corresponding

Surcharge Order, filed in the U.S. Bankruptcy Court re In re GTI Capital Holdings, LLC, dba

Rockland Materials, Case Nos. 2-03-bk-07923-SSC through 2-03-7924-SSC, Jointly

Administered. (Docket #1258 in Case No. 2-03-bk-07923-SSC)

56. All pleadings, proof of claims, and documents regarding plaintiffs’ administrative

claims in the related bankruptcy proceedings, totaling $212,000.00.


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57. Defendants may introduce demonstrative exhibits relative to any, or all of the

above documents, which shall be tagged for introduction into these proceedings, commencing

with 58a-h.

58. Judicial Scrutiny of Liquidated Damages: Wariness Moves Beyond Texas (July

21, 2003); General Electric counsel repudiates its own liquidated damage clause at issue in these

proceedings. (Article by GE counsel, New York, ReedSmith).

2. As to the following exhibits, the parties, the parties have reached the

following stipulations:

a. Plaintiffs’ Exhibits:

The defendants have stipulated to the admissibility, without objection, of the following

numbered exhibits listed by the plaintiffs: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 19, 20, 21, 22, 23, 24, 25,

26, 27, 28, 29, 30, and 31.

b. Defendants’ Exhibits:

The plaintiffs have stipulated to the admissibility, without objection, of the following

numbered exhibits listed by the defendants: 54

3. As to the following exhibits, the party against whom the exhibit is to be

offered objects to the admission of the exhibit and offers the objection stated below:

a. Plaintiffs’ Exhibits:

Defendants object to the admission of the following numbered exhibits listed by the

plaintiffs on the basis of foundation and hearsay: 11, 12, 13, 14, 15, 16, 17, and 18.


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Defendants object to the admission of the following numbered exhibits listed by the

plaintiffs on the basis of foundation, relevance, and hearsay: 32, 33, 34, 35, 36, 37, and 38.

Defendants foregoing objections to the plaintiffs’ exhibits based upon foundation,

relevancy, materiality and hearsay supported under the Federal Rules of Civil Procedure, Rules

607; 701; 702; 703; 801; 802; 803; 803(5); 803(6); 803(25); 804; and 901.

b. Defendants’ Exhibits:

Plaintiffs have the following specific objections to following numbered exhibits as listed

by Defendants:

51. Objection. These exhibits are irrelevant. This Court has ruled that the damage

provisions in Citicapital Technology Lease Nos. 121, 122, 468 and 548 set forth the appropriate

method by which Citicapital Technology’s damages are to be calculated and that the damage

provisions in General Electric Lease Nos. 451, 452, 453, and 7004 set forth the appropriate

method by which General Electric’s damages are to be calculated.

52. Objection. These exhibits are irrelevant. This Court has ruled that the damage

provisions in Citicapital Technology Lease Nos. 121, 122, 468 and 548 set forth the appropriate

method by which Citicapital Technology’s damages are to be calculated and that the damage

provisions in General Electric Lease Nos. 451, 452, 453, and 7004 set forth the appropriate

method by which General Electric’s damages are to be calculated.

53. Objection. Defendants have failed to specifically identify and disclose this exhibit

to the Plaintiffs. Moreover, to the extent these exhibits offer opinions regarding the value of the

equipment that is the subject matter of the leases at issue in this case, it is the Plaintiffs’ position

that Mr. Carmichael is not qualified to provide an expert opinion on the value of said equipment.


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to the Plaintiffs. Additionally, Defendants failed to produce this exhibit to the Plaintiffs.

56. Objection. Because the Defendants have failed to specifically identify the

“pleadings and claims regarding plaintiff’s administrative claims in bankruptcy totaling

$212,000.00”, Plaintiffs object to the use of these unspecified “pleadings and claims regarding

plaintiff’s administrative claims in bankruptcy totaling $212,000.00”.


to the Plaintiffs. Additionally, Defendants failed to produce this exhibit to the Plaintiffs.

58. Objection. Defendants have not identified an exhibit nor have they disclosed and

produced this so called exhibit to the Plaintiffs.

If there are more than 20 exhibits, the parties shall submit their exhibit lists in writing,

five days before trial, in a format to be designed by the Court at the Final Pretrial Conference

and on an IBM-PC compatible computer disk in WordPerfect 9.0 format.

4. Each party hereby acknowledges by signing this joint Proposed Final

Pretrial Order that any objections not specifically raised herein are waived.

G. DEPOSITIONS TO BE OFFERED

None. Each party hereby acknowledges by signing this joint Proposed Final Pretrial

Order that any deposition not listed as provided herein will not be allowed, absent good cause.

H. MOTIONS IN LIMINE (JURY TRIAL)

This is a bench trial. No motions in limine will be filed.

I. LIST OF PENDING MOTIONS

None.


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J. ESTIMATED LENGTH OF TRIAL

1-3 days.

K. JURY DEMAND

No party has requested a jury. Additionally, the parties have contractually waived

trial by jury.

L. PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW

Proposed Findings of Fact and Conclusions of Law shall be lodged by each party as a

separate pleading by no later than January 9, 2006.

The separately lodged Proposed Findings of Fact and Conclusions of Law are

incorporated by reference into this joint Proposed Final Pretrial Order.

M. CERTIFICATIONS

The undersigned counsel for each of the parties in this action do hereby certify and

acknowledge the following:

1. All discovery has been completed.

2. The identity of each witness has been disclosed to opposing counsel.

3. Each exhibit listed herein: (1) is in existence; (2) is numbered; and (3) has

been disclosed and shown to opposing counsel.

4. The parties have complied in all respects with the mandates of the Court’s

Rule 16 Schedule Order and Order Setting Final Pretrial Conference.

5. The parties have made all of the disclosures required by the Federal Rules

of Civil Procedure.


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6. The parties acknowledge that once this joint Proposed Final Pretrial Order

has been signed and lodged by the parties, no amendments to this Order can be made without

leave of the Court.

APPROVED AS TO FORM AND CONTENT:

/s/ David N. Ingrassia /s/ Grant H. Goodman David N. Ingrassia Grant H. Goodman DAVID N. INGRASSIA, P.C. Grant H. Goodman, PLLC 1212 East Osborn Road 5110 N. 44th Street, Suite L-200 Phoenix, Arizona 85014 Phoenix, AZ 85018 Attorney for Plaintiffs Attorney for Defendants

Based on the foregoing,

IT IS ORDERED that this Proposed Final Pretrial Order jointly submitted by the parties

is hereby APPROVED and ADOPTED as to the official Pretrial Order of this Court.

DATED this 29th day of March, 2006.


in the united states district court citicapital … · case no. cv 03-01587 phx jat ... 2001 benson...

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