IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

EASTERN DIVISION

VFS LEASING CO. )

)

Plaintiff, )

) CIVIL ACTION NO.

vs. ) 3:06cv638-SRW

)

G.F. KELLY, INC. d/b/a KELLY )

TRUCKING; and GUY KELLY, )

)

Defendants )

PLAINTIFF’S MOTION TO STRIKE

COMES NOW Plaintiff VFS Leasing Co. (“VFS” or “Plaintiff’), by and through

its undersigned counsel, and respectfully moves this Court to Strike the Affidavits of Charles

David Lance and Guy F. Kelly in their entirety, attached as Exhibits to Defendants’ Response in

Opposition to Plaintiffs Motion for Summary Judgment. In support thereof, Plaintiff states as

follows:

INTRODUCTION

This is a breach of contract case arising from Defendants’ G.F. Kelly, Inc. (“Kelly

Trucking”) and personal guarantor, Guy F. Kelly (“Kelly”) default on a lease of commercial

tractors from VFS (“Leased Tractors”). On or about November 28, 2006, Plaintiff filed its

Motion for Summary Judgment in this matter. On or about February 13, 2007, Defendants filed

their Response in Opposition to Plaintiffs Motion for Summary Judgment. In conjunction with

their Response, Defendants submitted the Affidavits of Kelly, president of Kelly Trucking and

Charles David Lance (“Lance”), an employee of Kelly Trucking, wherein both Kelly and Lance

claim to be experts in the sale of commercial over-the-road trucks in the wholesale market and

opine on the manner in which Plaintiff repossessed and resold the Leased Tractors. Specifically,

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Kelly claims Plaintiff charged Kelly Trucking excessive amounts for repossession expense,

inspection fees and detailing fees. In addition, Kelly claims that Plaintiff did not resell the trucks

following repossession in a “commercially reasonable manner.” Lance claims that Plaintiff

performed excessive and unnecessary repairs when reconditioning the trucks following

repossession and further inflated the reconditioning costs.

Neither Kelly nor Lance are experts in the sale of used commercial tractors in the

wholesale market after repossession. Neither has demonstrated expert knowledge by education,

training, experience or otherwise that would establish them as experts in this field.

Consequently, Kelly’s and Lance’s opinion testimony in their affidavits is nothing more than

speculation and conjecture and both and incompetent. For these reasons, Plaintiffs Motion to

Strike is due to be granted.

ARGUMENT

Plaintiff moves to strike the purported I~expertuopinions of Kelly and Lance in their

entirety because both lack the qualifications, education or experience necessary to opine

concerning the accepted industry practices regarding repossession, reconditioning and resale of

repossessed commercial over-the-road tractors by finance companies, leasing companies and

banks. The admissibility of expert testimony--whether based on “scientific,” “technical,” or

“other specialized” knowledge--is governed by Fed. R. Evid. 702 and the principles announced

in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 5 89-92, 113 S. Ct. 2786, 125 L.

Ed. 2d 469 (1993). Rule 702 provides:

Ifscientific, technical or other specialized knowledge will assist the trier offact to

understand the evidence or to determine a fact in issue, a witness qualified as an

expert by knowledge, skill, experience, training, or education, may testify thereto

in the form ofan opinion or otherwise, if(1) the testimony is based upon

sufficient facts or data, (2) the testimony is the product ofreliable principles and

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methods, and (3) the witness has applied the principles and methods reliably to

the facts ofthe case.

See also McDowell v. Brown, 392 F.3d 1283, 1298 (11th Cir. 2004).

The Supreme Court in Daubert and more recently in Kumho Tire Co. Ltd. v. Cannichael,

526 U.S. 137, 119 5. Ct. 1167, 143 L. Ed. 2d 238 (1999), provided further guidance on the

court’s task under Fed. R. Evid. 702, emphasizing the district court’s “gatekeeping” function to

ensure that expert testimony, be it traditional scientific principles or other technical or

specialized knowledge, is both reliable and relevant. Kumho, 526 U.S. at 141, 119 S. Ct. at 1171

and 1176. The fundamental purpose ofthis gatekeeping requirement “is to make certain that an

expert, whether basing testimony on professional studies or personal experience, employs in the

courtroom the same level ofintellectual rigor that characterizes the practice of an expert in the

relevant field.” Kumho, 526 U.S. at 152, 119 S.Ct. at 1176. See also Corwin v. Walt Disney Co.

475 F.3d 1239, 1250 (11th Cir. 2007) (“The court serves as a gatekeeper, charged with screening

out experts whose methods are untrustworthy or whose expertise is irrelevant to the issue at

hand.”). Indeed, the gatekeeping role is designed “to keep experts within their proper scope, lest

apparently scientific testimony carry more weight with the jury than it deserves.” DePaepe v.

General Motors, 141 F.3d 715, 720 (

7

th Cir. 1998). In other words, Defendants bear the burden

of establishing that Kelly and Lance are ciualified, that their opinions are relevant, and that their

opinions are based upon reliable information. See, ~ Quiet Technology DC-8, Inc. v. HurelDubois UK Ltd., 326 F.3d 1333, 1341 (11th Cir. 2003). Opinions that are based upon

insufficient facts or data must be struck. ~, ~ Home Design Services, Inc. v. Hibiscus

Homes of Florida Inc., 2005 WL 2465020, *6 (M.D. Fla. Oct. 6, 2005) (striking an expert’s

opinion as unreliable because it was based on insufficient facts and data.).

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1. Plaintiff Complied With The Relevant Industry Standards Regarding The

Repossession And Resale Of Used Heavy Trucking Equipment By Finance

Companies, Leasing Companies And Banks.

The tractors in question were reclaimed after a default under the terms of the lease

agreement between Plaintiff and Kelly Trucking (“Lease Agreement”). Plaintiff then inspected,

detailed and remarketed the tractors based on accepted national industry practices. ~

Declaration ofMichael Cox, pgs. 5-6, ¶ 27, attached hereto as Exhibit A.

Plaintiff contracted with a national repossession company, Alternative Collection

Solutions, Inc. (“ACS”), to reclaim the tractors from Kelly Trucking. See Declaration of Keith

Weachter, pg. 1, ¶ 4, attached hereto as Exhibit B. ACS’ services are utilized by a host of

finance and leasing clients who are required to repossess over-the-road tractors due to their

customers defaults. In general, ACS charges a flat, pre-approved standard rate to its clients for

repossessions. ~. at pg. 1, ¶ 3. Included in this charge are the costs of coordinating the

repossession, paying the local agents their fees for the actual repossession and the costs incurred

to locate the tractors. Id. Ifthe cost exceedsthe flat fee, ACS does not charge extra. Charging a

pre-approved flat fee per tractor is a generally accepted practice in the industry. j4. In 2005,

ACS charged Plaintiff $1,000 repossession fee per tractor. This was a reasonable and

competitive rate within the repossession industry and was, in fact, lower than the average rate.

Id. However, because Plaintiffwas contracting to have more than 10 tractors repossessed on this

occasion, ACS charged Plaintiff an even lower rate -- $700/tractor. Id. at pg. 1, ¶ 4. As is the

standard practice in the industry, and in accord with the terms and conditions of the contract,

Plaintiff deducted these charges from the sales price ofeach tractor at Plaintiffs cost.

As is a standard accepted practice in the industry, Plaintiff also had the Leased Tractors

inspected. $ç~Exhibit A, pg. 4, ¶ 21. Plaintiffincurred a $300 charge for each inspection. The

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amount ofthis charge was a reasonable and competitive rate in the industry and in the mid-range

of what other customers were being charged for inspections during the same time period. j~.

The Leased Tractors were also detailed as necessary to prepare them for resale. Plaintiff was

charged a $500.00 fee for each truck that received the standard detailing. Detailing a

repossessed tractor is an accepted practice in the industry. Id. at pg. 5, ¶ 27. The fee Plaintiff

was charged, which was passed on at cost to Defendants was reasonable and competitive in the

marketplace at the time. Id. at pg. 3, ¶ 16.

After repossession, inspection and detailing, Plaintiff remarketed and sold the tractors at

auction. The method that Plaintiff utilized to sell the tractors was an accepted industry practice

for selling repossessed over-the-road tractors. Id. at pgs. 2-3, ¶~9-14. In addition to the method

chosen by Plaintiff, other acceptable methods ofselling the equipment were available, though

not preferred to the method chosen by Plaintiff. . at pg. 3, ¶ 15. Plaintiff chose the accepted

practice of marketing the Leased Tractors to the relevant marketplace and consigning them in a

reserve auction. Specifically, this was done at the Adessa Heavy Truck Sale in Atlanta, Georgia,

one ofthe largest fixed location auctions in the U.S. Id. at pg. 3, ¶ 11. The sale prices that

Plaintiff received for the Lease Tractors was consistent with the market values for similar

tractors under the then existing market conditions. Id. The method and manner ofsale were in

accordance with accepted industry practices. j~.at pg. 5, ¶ 27.

2. Kelly Is Not An Expert Regarding the Relevant Industry Standards And His

AffidavitIs Due To Be Struck In Its Entirety.

Kelly’s testimony and affidavit does not include ~p~ydefinitive knowledge of the

Equipment Finance industry or the resale ofrepossessed equipment. Id. at pg. 5, ¶ 25. Kelly

lacks direct, expert knowledge of either the wholesale or retail equipment sales market. Id.

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Moreover, he lacks any knowledge of auction theory or vehicle remarketing. Id, His affidavit

does not purport to qualify Kelly in any manner as someone with expertise regarding auction

theory or heavy trucking equipment remarketing. Kelly has demonstrated no specialized or

expert knowledge of the accepted sales practices for the remarketing of used over-the-road

tractors in the wholesale market. Thus, Kelly is not qualified to give his expert opinion in this

matter.

Kelly readily admits in his deposition testimony that the majority of his experience with

the sale of used trucking equipment derives solely from his time at Kelly Trucking. $~Kelly

Depo., pgs. 18:14 — 19:2, attached hereto as Exhibit C. Moreover, Kelly’s experience selling

used tractors at auction is limited to the last six months in which he sold approximately five

tractors through a single auction in Newnan, Georgia. Id. at pg. 20:5-9. He has never purchased

a tractor at auction. Id. at pg. 26:9-12. He has no demonstrated knowledge ofthe subject of

auctions or auction theory or what is an accepted practice in the industry for the resale of

repossessed over-the-road tractors. He simply has failed to demonstrate that he is an expert.

In addition to his allegations that Plaintiff mishandled the resale of the repossessed

tractors, it is Kelly’s alleged “expert” opinion that Plaintiff charged excessive fees when it

repossessed the specific trucks at issue in this matter. However, Kelly admits in his deposition

that his repossession experience is limited to one occasion within the last month in which he had

to repossess a truck from one of his own drivers. j~.at pg. 55:5-16. Importantly, Kelly has

never hired a repossession company and does not even know the standard charges utilized by

repossession companies for repossessing trucks. j~.at pg. 55:17-22. Moreover, Kelly admits

that he knows nothing about the company who repossessed the trucks:

Q: Do you know who the company was that handled the turn-in or repossession

ofthe tractors?

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A: No.

Q: Do you know what they base their charges on?

A: No.

Q: Do you know whether they charge other customers that they have a same or

similar fee?

A: No.

Q: Are you aware of any other repossession companies in this same line of work

as the company that did this one?

A: No.

Q: Obviously, then, you don’t know what they charge either?

A: No.

• at pgs. 63:11 ~— 64:6. Instead, Kelly bases his purported “expert opinion” entirely on the

mileage that Kelly Trucking would have had to pay a driver to drive to the Plaintiff’s location.

Id. at pgs. 54:19 — 55:4. The basis for his opinion is insufficient to qualify him as an expert.

Kelly also disputes the inspection fees that Plaintiff charged after repossession.

However, Kelly again admits that he has no idea what an inspection company bases its fees on:

Q: Do you know what company did the inspection on the Volvo tractors?

A: No.

Q: Do you know what they base their $300 charge on?

A: No.

Q: Do you know what they charge their other customers?

A: No.

Q: Do you know ofany other companies in the industry that do inspections in

connection with repossessions and sales?

A: No.

Q: What is your knowledge ofwhat a reasonable inspection fee is in the industry

based upon?

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A: No documented knowledge.

Q: What experience do you have with inspection fees in connection with

repossession and sales?

A: None with actual repossession.

j~.at pgs. 65:4 — 66:5.

And in the same manner, Kelly has little to no experience with the detailing of trucks

being sold at auction. In fact, Kelly’s only detailing exposure comes from an outside service

who washes his trucks:

Q: What all is involved in detailing?

A: When we detail a truck, it’s basically a complete cleaning ofthe inside and

outside.

Q: Okay. Do you know who detailed these Volvo trucks for Volvo?

A: No.

Q: Have you used any outside vendors to detail yourtractors?

A: I use an outside service to, you know, wash and clean my trucks, correct.

Q: Does that include cleaning the interior?

A: No.

Q: Do you know what all was involved in the detailing that was done on these

eight trucks?

A: No.

Q: You don’t?

A: No.

~. atpgs. 72:17—74:17.

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In summary, Kelly’s affidavit and deposition testimony fail to offer ~y foundation for

his alleged industry “expertise” in the repossession, inspection, detailing and sale of over-theroad tractors by finance companies, leasing companies or banks after repossession. Kelly is

simply not an expert. For this reason, Kelly’s affidavit and testimony are due to be stricken it its

entirety.

3. Lance Is Not An Expert In The Relevant Areas And His Affidavit Is Due To

Be Struck In Its Entirety.

Much like Kelly, Lance’s experience with the reconditioning of used heavy trucking

equipment is limited to performing repairs inside a locally owned and controlled trucking

company. ~ Exhibit A, pg. 5, ¶ 26. He has no knowledge ofwhat is accepted in the industry.

Id.

Lance’s purported “expert” opinion alleges that the estimates forreconditioning given to

Plaintiff by its contractors were excessive and unnecessary. However, Lance readily admits in

his deposition, that he based his opinions exclusively on the rates that would by charged by Kelly

Trucking:

Q: Now, there are some handwritten notes out to the side. What does that mean?

A: That was what I figured I could do the work for.

Q: Those are your notes?

A: Yes, sir.

Q: And that’s what you figured you could do that work for —

A: Yes, sir.

-- based upon your rates at Kelly Trucking?

A: Yes, sir.

Q: All right. In 2005?

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A: Yes, sir.

Q: So that would be $50 an hour —

A: Yes, sir.

-- and whatever Kelly Trucking could buy the parts for?

A: Yes, sir.

See Charles David Lance Depo., pgs. 22:14 — 23:11, attached hereto as Exhibit D.

In fact, Lance admits that his opinion is not based on knowledge ofwhat is acceptable in

the industry but is, in fact, only based on his limited experience working at Kelly Trucking in

Wadley, Alabama:

Q: Okay. Just so I’m clear, I want to make sure you and I are on the same page,

looking at paragraph 5 of your affidavit, the last sentence says, the repairs shown

on these appraisal reports would result in the trucks being in more than wholesale

condition, which is not keeping with the standard. Are those the appraisal reports

that you are talking about?

A: Yes, sir.

Q: What is the standard that you are referring to?

A: Explain.

Q: That’s what I’m asking you to do.

A: Okay.

Q: You make reference to a standard in paragraph 5.

A: I guess it would be repaired to what we would do it for if we had it at the

shop. I mean, we would bring it in and ifit needed, you know, a crack fixed here

or a fender fixed there, then we would do that necessary repair to ourstandards.

Q: To Kelly Trucking standards?

A: Right.

Q: In paragraph 6 you say, I have evaluated the cost ofthese repairs based upon

knowledge and experience, and have determined the actual cost of the same

repairs. Attached is the chart comparing the reconditioning expense contained in

the appraisal report with my opinion ofthe actual cost ofthese repairs.

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Case 3:06-cv-00638-SRW Document 29 Filed 04/30/2007 Page 10 of 12
A: Yes, sir.

Q: When you say based upon your experience and knowledge, are you talking

about what would have been done at Kelly Trucking?

A: Yes, sir.

hi. atpgs. 39:20—41:17,

Much like Kelly’s testimony, Lance’s affidavit and deposition testimony fail to offer any

foundation for his alleged industry “expertise” in the reconditioning of used trucking equipment

or what finance companies, leasing companies or banks are charged for this service after

repossession. He does not even pretend to base his opinion on any knowledge of what the

industry finds acceptable. Rather, he clearly admits that the only practice he knows about is

what is done at Kelly Trucking in Wadley, Alabama. Lance has not demonstrable knowledge of

what is acceptable in the industry. Thus, his affidavit and testimony is due to be stricken in its

entirety.

CONCLUSION

The affidavits of both Guy F. Kelly and Charles David Lance are unreliable and are due

to be stricken in their entirety. The opinions offered therein are nothing more than rank

speculation and conjecture and are wholly unsubstantiated. Based on the principles set forth in

Daubert and Kumho Tire, this Court cannot admit conclusions based on data with the

aforementioned deficiencies and should, therefore, grant Plaintiff’s Motion to Strike.

Respectfully submitted this 30th day ofApril, 2007.

s/ David B. Hall

DAVID B. HALL (HALOS2)

JULIE A. COTTINGHAM (COTO17)

Attorneys for Plaintiff VFS Leasing Co.

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Case 3:06-cv-00638-SRW Document 29 Filed 04/30/2007 Page 11 of 12
OF COUNSEL:

BAKER DONELSON, BEARMAN

CALDWELL & BERKOWITZ

A Professional Corporation

420 North 20th Street

Suite 1600 Wachovia Tower

Birmingham, Alabama 35203-5202

(205) 328-0480

CERTIFICATE OF SERVICE

I hereby certify that on this the 30th day of April, 2007, the foregoing has been

electronically filed with the Clerk of Court using the CM/ECF system, which will send

notification ofsuch filing, to the following counsel ofrecord:

James H. Starnes

Attorney for Defendants

P0 Box 590003

Birmingham, AL 35259

(205) 320-0800

S. SanfordHolliday

Attorney for Defendants

P0 Box 727

Roanoke, AL 36274

(334) 863-2717

s/ David B. Hall

OF COUNSEL

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Case 3:06-cv-00638-SRW Document 29 Filed 04/30/2007 Page 12 of 12
EXHIBIT A

Case 3:06-cv-00638-SRW Document 29-2 Filed 04/30/2007 Page 1 of 10
I1~TEE UNITED STATES DISTRICT COURT 1~ORTHE MIDDLE DISTRICT

OF ALABAMA, EASTERN DIVISION

VFS LE~AS1N43CO+ )

)

Plaintiff,

) CIVIL ACTION NO,

) 3:06cv638-SRW

)

CLF. KEiiX,~INC. dfbla KELLY )

TRUCKING; arid (uIJY KELLY, )

)

Defendants )

DECLARATION OF MICHAEL COX

I, My name is Michael Cox. The statcnieti1~contained herein are based on

my personal knowledge, and I am competent to testify about all matters on which I am

offering evidence herein.

LIuft~rrnationReviewed and Ou~litieatious

2, The opinions derived herein are madt~up ol a review ofthe information

made available to me in regardsto this case, and my pen~onulknowledge ofthe heavy

transportation equipment industry. I have been involved with the transportation industiy

since 1991. specializing in medium/heavy trucks and trailers.

A. Informntkin Revi~w~d

3~ The information I have reviewed to form my opinions on this matter

includes:

• Affidavit ofGuy K Kelly.

• Deposition ofKevin Mi1ler~VFS I.easiug Co., employee And all documents

contained therein

• Inspection Reports completed by Asset Appraisal Services

AtThlav it ofCharles David Lanee

l)eposition olGuy F. Kelly

Deposition ofcharles Davis Lance

• Asset Appraisal Services Internal database ofauctio~isales results

H. Expert Experience

4. Resume attached as Exhibit A

C. Pithli,thed Ww’ks

I ~ 1 -~j~ ~ , / f~’i~~~~‘:,•.fJ ;

1: (~

) 1

Case 3:06-cv-00638-SRW Document 29-2 Filed 04/30/2007 Page 2 of 10
5. 1 have had no published papers in the last 10 years.

1). Cou rtroam nnd Depositkui T~stiinony

6. List attached as ExhibitIi

E. Expert Witness Charges

7. Asset Appraisal Services charges $100 per hour Ibr test~mony plus

expenses, and $100 per hour for research and documentation fees.

II. ODIUIOILS

& On behalf of Baker, Donaldson, l3earman caidwell & Rerlcowit; P.C. I

have been asked to provide an export opinion for six issues:

Did VFS I.easing Co. act in a commercially reasonable manner when they

liquidated units leased by the defendant; specifically units: (last three of yIN)

013, 014, 015. 016, 017, 018, 019, 020, 021, 738, 739, 763~ 764~762, 584, 989,

954, 953, 952, 959.

• Were the charges accrued to the defendant’s account For Reconditioning services,

speeifkally the detailing charged to several ofthe units reasonable for the market?

• Were the charges accrued to the defeiidant’s account for Repossession expenses

reasonable for the market?

• Weit the charges accrued to the defendant’s accounts for Inspection services

reasonable for the market?

• Is Guy F, Kelly qualified to he an expert witness on arty or ~llofthese issues?

• Is charles Davis Lance qualified to be an expert witness on any or all ofthese

issues?

A. VII’S LkluicthtiDn

9. It is my experience, observing V~1v~Conimercial Finance and VFS

Leasing Co. for over s~xyears, that its practicesin this area are commercially reasonable.

10. It is my opinion that VFS Leasing Co. acted in a commercially reasonable

manner in the selling ofeach ofthe units at issue forthe following reasons:

• VI’S Leasing Co. marketed these units to the marketplace that would he

interested in prirebasing this equipment.

• VF’S Leasing Co. insured redundancy in their sales process by con~~igningthe

units ill a reserved auction at the Adessa Heavy Truck Sale in Atla~ita,GA,

one ofthe largest tixed k,catiou auctions in the United States

• The prices that VFS Leasing Co. received for the units are consistent with the

market values forsimilar units under the market conditions present during the

time frame: October2005 to January 2006.

~ ‘~/ ‘~lJL~ I ~ ~ ,/ 1’ ~ /

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Case 3:06-cv-00638-SRW Document 29-2 Filed 04/30/2007 Page 3 of 10
11. VFS Leasing Co. used their standard sales process to make these units

available forsale. This processincluded:

‘Ihe units were sent to Adessa in Atlanta, GA for storage and rcconc{ilioning.

During this time the units were consigned to a reserved price public auction,

They did not meet the reserve and did not sell,

• The units were listed on the limited access wholesale website open to

quali lied wholesale buyers who wish to purchase equipment li’om YPS

Leasing Co. During the time of listing, the national wholesale equipment

community was actively utilizing this site.

• ‘Ihe equipment was listed and marketed by VFS Leasing Co. for sale to the

buyer who placesthe highest offer on the web site during a set period of time.

VFS Leasing en, n~ceivedmultiple bids and sold the units to the highest

bidder for fair market value.

12. The method that \TFS Leasing Co. utilized to sell the said equipment is

consistent with acceptable industry practices.

13. The t~’ieesVFS Leasing Co. received 1~rthe units were at or above fair

market value lbr similar equipment in sped flcat~t,ii and condition.

14. The method VFS Leasing Co. used is not unique and is considered an

acceptable industry practice for disposing of equipment. VFS Leasng (~o,would have

employed this method no matter the situation with the equipment, whether that

equipment was oft~leuseand owned by Volvo, a repossessed unit or a lease default

similar to the Kelly wills.

15. VFS Leasing Co. could have pursued other sales avenues or methods

accepted in the industiy, hut doing so would have meant marketing the equipment l~wa

longer period oftime, at additional cost thus decreasing the overall value ofsale,

B Opinion of Reconditioning Fees

16. Volvo was charged $500.00 for a standard detail on select units. Based eu

my knowledge of the Used Truck marketplace and my experience in the industry;

$500.00 is a reasonable fee to pay to detail a tractor such as those in question.

C. O~ininn ci Repossession F’ees

17. Volvo was charged $700~00per unit kr each unit repossessed from G.F.

Kelly. Based on my experience in the industry arid based on my experience working

directly with Banks and Finance Companies for over seven years; $700.00 is riot an

unreasonable fcc for this service as it was described in Mi~Miller’s deposition.

1), i~pe~ticrn8e~’i~es

I I \ ( I%,~I ( ~ 1 I~I /~-I/~.1 i~~ ~ ~

Fl JAC2 745301 ~l

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Case 3:06-cv-00638-SRW Document 29-2 Filed 04/30/2007 Page 4 of 10
18. Asset Appraisal services has been in business since 1999. We provide

inspections and aid in remariceting for heavy transportation equipment. Since 1999 we

have inspected over 40~000pieces ol’ heavy tran.sportathm equipment. We provide our

services to VFS I .easing Co.

19. Our customer list includes many ofVFS Leasing Co. ~speers:

DaimlcrChryslei’ Tnick Financiat PACCAR Financial

Navistar Financial Wells Fargo Eq Finance

US Rank Eq Finance Batik of America

20. We provide services ihr these customers ranging horn inspections to

complete liquidation solutions.

21. We charge VFS Leasing Co. $300.00 for each inspection. This cost is in

line with what we charge other customers for similar services. We charge between

$200.00 and $400.00 per similar inspection l~,iall uf our customers. The price is directly

related to the amount of units we do l~reach individual oustom~r, Asset Appraisal does

have market competition and their charges are competitive in the marketplace.

22, Asset Appraisal Services utilizes a standard method for completing all of

our appraisals and condition reports:

The unit is assigned to us by the !inaiice company or owner

• We assign one ofour inspectorsto do the inspection.

• When the inspection is complete it is sentto our Omaha facility where it is

inputted into one of our proprietary software systems that we u.s to

communicate the hi Ihimation to our customer,

• A1~erthe unit goes through data entry, our Quality Control Staff looks the

inspection over for errors. They price each reconditioning item using

industry standard pricing for parts and job time.

• After Quality Control has signed off on the unit, a communication is sent

to the customer to nod ly them that the unit is ready for viewing.

23. Our quality control stall has a combined thirty years ofworking on trucks

and trailers arid running shops. They are in regular contact with service centers around

the country and all ofthe original equipment manufacturers.

24. ‘Ilic prices that we list for reconditioning are meant to be used as a

guideline. Each reconditioning item is normally photographed. Publishing the prices

wilh the photographs allows our customers to fairly represent the units to prospective

buyers.

E. Guy F. K~JIvu~sun Exnvrt Witness

7 l~ ~ ( / 1~ /~ (I:~ ii I

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10.2F~5~0O0O44412712&F7

Case 3:06-cv-00638-SRW Document 29-2 Filed 04/30/2007 Page 5 of 10
2S. Mr. Kelly is listed as an expert witness for (i.F, Kelly, Mr. Keily~s

te~dinwnydues ont include any dehiniti ye knowledge of the Equipment Finance industry.

H~demonstrates no direct knowledge of either the wholesale or retail equipment sales

market. lie is deficient of any knowledge ofauction theory or any knowledge ofvehicle

rernurketing as it pertains to finance companies. it is my opinion that Mr. Kelly lacks

sufficient experience, knowledge or education to render an expert opinion on the

commercially reasonableness ofthe sale ofthese tractors in any respect.

K Chaties Davis Lance as an Expert Witness

26, Mr. Lance is listed us an espert witness lbr G.F. Kelly. Mr. Lance said

several times during his deposition on 12 April 2007 that his experience was limited to

doing repairs inside a locally owned and controlled trucking company. Mr. Lance does

not have experienceworking for a finance company. He does not have experience selling

equipment in either a wholesale or a retail environment. He does not have experience

makhig repair decisions on repossessed heavy transportation equipmeiit. It is my opinion

that Mr. Lance lacks the education, training, knowledge and/or experience to render an

expert opinion on any aspect ofthe comniercially reasonableness ofthe sale of these

tractors.

ILL Conclusion

27. 1 was asked to form an expert opinion on six issues:

• Did VFS Leasing Co. act in a commercially reasonable manner when they

liquidated units leased by the defendant; sped licaihy units : (last three of

VIN) 013, 014, 015, 016, 017, 018, 019, 020, 021, 73~,739, 763, 764,

762, 584, 989, 958, 954, 953, 952, 959.

Opinion: VIS Leasing Co. sold the collateral in question in a

commercially reasonable mamier that is consistent with industry

standards and hest practices,

• Are the charges accrued to the defendant’s account for Reconditioning

services, specifically the detailing charged to several of the units

reasonable in the market?

Opinian~The reconditioning fees are reasonable and were et~rtsistent

with charges for similar actionsin the market.

• Are the charges accrued to the defendant’s account h~rrepossession

expenses reasonable in the market?

Opiiiiom The repossession fees are reasonable and were consisteat

with fees for similar actionsin tine market.

<~ I ~ • ~ /~~k.Ii~I~7/ /~~

~ JAe2 74~tl4

)26~vJ~444/2712(?4)7

Case 3:06-cv-00638-SRW Document 29-2 Filed 04/30/2007 Page 6 of 10
• Arc the charges accrued to the defendant’s accounts for Inspection

seivices reasonable in the market?

Opinion: The fees for inspection services wcrc reasonable for charges

for siniilar servicesin the market,

• Is Guy 1!. Kelly quali lied In render an expert opinion on the eonin~ercial

reasonableness ofthe sale ofthese tractors?

Opiniwi: Guy F. Kelly is not qualilied to render an expert opinion on

the commercial reasoinableness oftine sale ofthese tractors~

Is Charles Davis Lance quahilied to tender an expert opinion on the

commercial reasonableness ofthe sale ofthese tractors?

Opinion: Charles David Lance is uot qualified to render an expert

opinion on the commercial reasonableness ofthe sale ofthese tractors.

I declare under penalty ofpei~Jwy thatthe foregoing is true

~Z~7AL~2~1

Date

/ \ / ;\i:;.~~ I •\/i •/ ~ I~i~t/~~,

President

Asset Appraisal Services, Inc.

5710 South 771h Street

Ralston, Nebraska 68127

~iJAC2~453Nvl

rn3ck2~S4)flOO444127)20117

Case 3:06-cv-00638-SRW Document 29-2 Filed 04/30/2007 Page 7 of 10
Michael J, Cox

Asset Appraisal Services

5710 South 77°~St. Ralston, Nebraska 68127

Phone: 402-390-0505 • Fax: 402-390-0489

Experience

Asset Appraisal Services Inc. Omaha, Nebraska

President January 1999 to Present

Job Responsibilities

• Complete detailed appraisals and valuations of transportation and construction

equipment.

• Consultation of clients on equipment dispersal and liquidation.

• Manage day to day operations of business.

Midwest Truck and Bus Sales Inc. Omaha, Nebraska

President October 1998 to December 1999

Job Responsibilities

• Manage day-to-day operation of an independent used truck dealership.

• Buying transportation equipment at wholesale prices and reselling equipment to

retail buyers.

• Responsible for all areas of dealership, including accounting, sales, marketing, and

parts and service.

CornhuskerTrux Omaha, Nebraska

Used Truck Manager July 1997 to October 1998

Job Responsibilities

• Managed used truck operations for Navistar franchised new and used truck

dealership.

• Responsible for placing valuations on stock and future trades.

• Responsible for all reconditioning on trades and used truck purchases.

Nebraska Used Truck Sales Omaha, Nebraska

Used Truck Sales June 1995 to July 1997

Job Responsibilities

• Used truck wholesale and retail sales.

• Responsible for wholesale purchasing of used transportation equipment.

Midlands International Trucks Omaha, Nebraska

New and UsedTruck Sales May 1991 to June 1995

Job Responsibilities

• Prospecting new and used truck buyers.

• Sales of new International Trucks to fleets and owner operators

Professional Groups: Equipment Leasing Organization Used Truck Association

OM.~24I 13-2

Case 3:06-cv-00638-SRW Document 29-2 Filed 04/30/2007 Page 8 of 10
Michael J. Cox

Asset Appraisal Services

5710 South 77th St. Ralston, Nebraska

68127

Phone: 402-390-0505 • Fax: 402-390-0489

Experience

Asset Appraisal Services Inc. Omaha, Nebraska

President January 1999 to Present

Job Responsibilities

• Complete detailed appraisals and valuations of transportation and construction

equipment.

• Consultation of clients on equipment dispersal and liquidation.

• Manage day to day operations of business.

Midwest Truck and Bus Sales Inc. Omaha, Nebraska

President October 1998 to December 1999

Job Responsibilities

• Manage day-to-day operation of an independent used truck dealership.

• Buying transportation equipment at wholesale prices and reselling equipment to

retail buyers.

• Responsible for all areas of dealership, including accounting, sales, marketing, and

parts and service.

CornhuskerTrux Omaha, Nebraska

Used Truck Manager July 1997 to October 1998

Job Responsibilities

• Managed used truck operations for Navistar franchised new and used truck

dealership.

• Responsible for placing valuations on stock and future trades.

• Responsible for all reconditioning on trades and used truck purchases.

Nebraska Used Truck Sales Omaha, Nebraska

Used Truck Sales June 1995 to July 1997

Job Responsibilities

• Used truck wholesale and retail sales.

• Responsible for wholesale purchasing of used transportation equipment.

Midlands International Trucks Omaha, Nebraska

New and Used Truck Sales May 1991 to June 1995

Job Responsibilities

• Prospecting new and used truck buyers.

• Sales of new International Trucks to fleets and owner operators.

Professional Groups

Equipment Leasing Organization

Used Truck Association

Case 3:06-cv-00638-SRW Document 29-2 Filed 04/30/2007 Page 9 of 10
Rule 26(a) Disclosure

This expert witness expectsto be compensated as follows: $1000.00 per day, plus travel

expenses, and $100.00 per hourfor documentation.

This expert has testified in the following actions:

Ronnie Dowdy Trucking (Little Rock, AR):

Case: 1:02-BK-14313 Date 7/31/02

Jordan Carriers (Jackson, MS):

Case: BK 01-01140 Chapter 11 Date 6/6/02

Dick Simon (Salt Lake City, UT)

Case: BK 02-22906GEC Date: 2/10/03

Greg Derry (Omaha, NE) Date: 12/18/00

Case: Douglas County District Court Page 978 Page 893

OM-241113-2

Case 3:06-cv-00638-SRW Document 29-2 Filed 04/30/2007 Page 10 of 10
EXHIBIT B

Case 3:06-cv-00638-SRW Document 29-3 Filed 04/30/2007 Page 1 of 2
IN THE UNITED STATES DISTRICT COURT FORTHE MIDDLE DISTRICTOF ALABAMA,

EASTERN DIVISION

VFS LEASING CO. )

)

Plaintiff, )

) CIVIL ACTION NO.

vs. ) 3:06cv638-SRW

)

G.F. KELLY, INC. d/b/a KELLY )

TRUCKiNG; and GUY KELLY, )

)

Defendants )

DECLARATION OF KEITH WEACHTER

1. My name is Keith Weachter. The statements contained herein are based on my personal

knowledge, and I am competent to testifS’ about all matters on which I am offering evidence herein.

2. I am the Repossession Coordinator for Alternative Collection Solutions, Inc. (“ACS”), I

have held this position for four (4) years. As part of my responsibilities, I am in charge of locating

equipment in need of repossession, hiring agents to handle the repossession and coordinating delivery of

the equipment once it has been repossessed. I am familiar with the standard rates for repossession for

ACS as well as our competitors in the same industry. The average repossession fee in the heavy trucking

equipment industry is $1200 - $1500 per unit.

3. ACS charges a standard rate of $1,000/unit. This fee includes the coordinator fee, the

agent fees and the costs generated to locate the unit. This charge is a reasonable and competitive rate

within the repossession industry. Generally, when our client needs more than ten (10) units repossessed,

we offer the client a discount per unit.

3. In or about August, 2005, I coordinated the repossession of twenty-one (21) tractors from

G.F. Kelly, Inc. (“Kelly Trucking”) for VFS Leasing Co. (“VFS”). Because VFS needed more than ten

(10) units repossessed, we charged a discountedrate forthe repossession of $700/unit.

4. Based on my knowledge of the repossession industry and of the rates of ACS’s

competitors, the $700.00 fee that VFS charged back to Kelly Trucking for repossession of each of the

twenty-one (21) tractors was a competitive and reasonable fee.

I declare under penalty of perjury that the foregoing is true and correct.

~ 2 ~-o7 ________________

Date Keith Weachter

Repossession Coordinator

Alternative Collection Solutions, Inc.

B JAC2 745239 vi

I O39265~0000444/27/2007

Case 3:06-cv-00638-SRW Document 29-3 Filed 04/30/2007 Page 2 of 2
EXHIBIT C

Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 1 of 16
FREEDOM COURT REPORTING

Page 1

IN THE UNITED STATES

DISTRICT COURT FOR THE

MIDDLE DISTRICT OF ALABAMA

ORIGINAL

6 CIVIL ACTION NUMBER: 3:06CV638-SRW

7

8 VFS LEASING CO.,

Plaintiff,

10 vs.

11 G.F. KELLY, INC., d/b/a KELLY TRUCKING;

12 and GUY KELLY,

13 Defendants.

14

1.5

16 DEPOSITION TESTIMONY OF

17 GUY F. KELLY

18

19 April 12, 2007

20 10:45 a.m.

21

22 COURT REPORTER:

MELANIE L. PETIX, CSR, CLR

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Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 2 of 16
FREEDOM COURT REPORTING

Page 18

1 Trucking?

2 A. No.

Q. On what other occasions have

you had an opportunity to sell

tractors?

6 A. I have done one in the last

six months.

8 Okay. That was with K-Diesel?

A. Correct.

10 Q. You worked at several trucking

11 companies before you started, I’m going

12 to call it, Kelly Trucking.

13 A. Correct.

14 Q. At any of those jobs, was it

ever your job responsibility to sell

16 tractors after the company decided not

17 to use them anymore?

18 A. No.

19 Q. Was anybody at Kelly Trucking

20 or anyone employed with Kelly Trucking

21 whose responsibility it was to sell

22 Kelly Trucking equipment after Kelly

23 Trucking decided it was not going to

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Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 3 of 16
FREEDOM COURT REPORTING

Page 19

use it anymore?

2 A. That was my responsibility.

Q. Okay. At any time, did you

sell any tractors to any dealers?

A. Yes.

6 Q. When was that?

A. I know it’s within the last

8 year’s time frame, David. I don’t know

the exact date.

10 Q. Which dealer did you sell it

to?

12 A. Gulf Coast Mack, Montgomery.

13 Q. How many tractors did you sell

14 to them?

15 A. I think two. I’m not

16 positive. I know one for sure. It may

17 have been two. I’m not sure.

18 Q. One or two?

19 A. Yeah, one or two. Yeah.

20 Q. And I apologize if you have

21 said this. I don’t remember the time

22 frame you told me when you did this.

23 A. It’s been within the last

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Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 4 of 16
FREEDOM COURT REPORTING

Page 20

1 year.

2 Q. This would have been with

K—Diesel?

A. Correct.

Q. Have you ever sold any

6 tractors at auction?

A. Yes.

8 When?

A. Within the last six months.

10 Q Tell me the circumstances of

11 the auction sale.

12 A. It was the R.B. Auction,

13 Newnan, Georgia.

14 Q. N-e-u, is that how you spell

15 Newnan?

16 A. N-e—w—n-a—n.

17 Q. These are tractors that were

18 owned by you or one of the companies

19 that you own?

20 A. Correct. And they were paid

21 off.

22 Q. They were paid off? Why did

23 you sell them through an auction?

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Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 5 of 16
FREEDOM COURT REPORTING

Page 26

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most of

A.

Q.

about t

done on

A.

Q.

that.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

the repairs?

Correct.

Would he be more knowledgeable

he repairs that were actually

these tractors than you?

Correct.

Are you —— well, I will get to

Have you ever purchased any

at auction, any type of

Not tractors, no.

MR. STARNES: Off the record.

(Discussion off the record.)

Do you

by unit number?

Kelly truck

king about.

Correct.

I’ve got a sheet

with that, if I

tractors

auction?

A.

Q. (BY MR. HALL:)

remember these tractors

MR. STARNES:

number is what he’s tal

THE WITNESS:

MR. STARNES:

that might help y’all

Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 6 of 16
MR. STARNES:

the affidavit. It’s in

Do you still have your

front of you?

took it.

THE WITNESS:

MR. STARNES:

in paragraph 6, down at

the first page and over

THE WITNESS:

in repo fees; is that

MR. HALL: Co

THE WITNESS:

Q. (BY MR. HALL:)

opinion of what should

charged?

You can look at

your affidavit.

affidavit in

You have it, you

I believe it’s

the bottom of

on to number 2.

They charged 700

correct?

rrect.

Okay.

What was your

have been

FREEDOM COURT REPORTING

Page 54

A. Correct.

Q. And I think in here, you give

an opinion as to what the charge should

have been. Do you remember what it

was?

2

j

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

A.

Q.

Maximum cost, $200 per truck.

All right. What do you base

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Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 7 of 16
FREEDOM COURT REPORTING

Page 55

1 that on?

2 A. The mileage that I would have

had to pay a driver to deliver the

trucks to their location.

Q. Have you ever been in the

6 repossession business?

A. Yeah. Yes.

8 Q. When was that?

A. I had to -- I had to repo a

10 truck within the last month.

11 Q. From whom?

12 A. From a driver that I had

13 financed the truck.

14 Q. Did you repossess that

15 yourself?

16 A. Correct.

17 Q. Have you ever had to hire a

18 repossession company?

19 A. No.

20 Q. Do you know what a standard

21 charge from a repossession company is?

22 A. No.

23 Q. I will show you what has been

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Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 8 of 16
FREEDOM COURT REPORTING

Page 63

I reconditioning costs.

2 Q. And you don’t know which of

these tractors on this list necessarily

matches up with which?

A. I couldn’t, David, no, not

6 just looking at them.

Q. Do you know how many tractors

8 were repossessed off of this list,

Plaintiff’s Exhibit 10?

10 A. No.

11 Q. Do you know who the company

12 was that handled the turn—in or

13 repossession of the tractors?

14 A. No.

15 Q. Do you know what they base

16 their charges on?

17 A. No.

18 Q. Do you know whether they

19 charge other customers that they have a

20 same or similar fee?

21 A. No.

22 Q. Are you aware of any other

23 repossession companies in this same

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Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 9 of 16
FREEDOM COURT REPORTING

Page 64

I line of work as the company that did

2 this one?

A. No.

Q. Obviously, then, you don’t

know what they charge either?

6 A. No.

Q. I asked about a detailing fee

8 and I think I was thinking of an

inspection fee. I thought I did or

10 maybe I didn’t.

11 A. No. You asked me about --

12 Q. I did ask about detailing,

13 didn’t I?

14 A. No. You asked me about a

15 repossession fee.

16 Q. Yeah. Do you know whether any

17 of these other companies: Navistar,

18 Daimler/Chrysler, Omni Bank, G.E.

19 Finance, First Continental Leasing, and

20 Wells Fargo charged you an inspection

21 fee in connection with repossessing the

22 equipment?

23 A. No.

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Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 10 of 16
FREEDOM COURT REPORTING

Page 65

1 Q. Same answer, you didn’t

2 receive any information to that effect?

A. Correct.

Q. Do you know what company did

the inspection on the Volvo tractors?

6 A. No.

Q. Do you know what they base

8 their $300 charge on?

A. No.

10 Q. Do you know what they charge

11 their other customers?

12 A. No.

13 Q. Do you know of any other

14 companies in the industry that do

15 inspections in connection with

16 repossessions and sales?

17 A. No.

18 Q. What is your knowledge of what

19 a reasonable inspection fee is in the

20 industry based upon?

21 A. Ask me that again. I probably

22 can’t --

23 MR. HALL: Would you read it

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Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 11 of 16
FREEDOM COURT REPORTING

Page 66

I back?

2

(Record read.)

4

5 A. No documented knowledge.

6 Q. (BY MR. HALL:) What

experience do you have with inspection

8 fees in connection with repossessions

and sales?

10 A. None with actual repossession.

11 Q. Let me ask you this: In the

12 middle of paragraph 7, there is a

13 sentence that says, the charge of $300

14 is unreasonable and excessive based

15 upon my experience and the standard in

16 the industry.

17 A. Okay.

18 Q. What is your experience that

19 you base that statement on?

20 A. We have to do a DOT inspection

21 of every truck that we lease on to our

22 company.

23 Q. Who does that inspection?

.a ~pfl~

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Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 12 of 16
FREEDOM COURT REPORTING

Page 72

MR. STARNES:

to something different,

because I need to take a

and make a telephone call

go ahead and finish this

stuff, if you want to.

MR. HALL: Go ahead.

Q. (BY MR.

detailing fee?

paragraph 8.

detailing?

A. When we detail a truck,

basically a complete cleaning of

inside and outside.

Q. Okay. Do you know

detailed these Volvo trucks

it’s

the

When you move on

let me know,

quick break

But you can

inspection

(Short recess.)

I

2

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

HALL:) What is the

I’m looking at

I’m

are

A. I don’t know. You tell me.

just kidding. Yeah. What exactly

you asking me there, David?

Q. What all is involved in

who

for Volvo?

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Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 13 of 16
FREEDOM COURT REPORTING

Page 73

I A. No.

2 Q. Have you used any outside

vendors to detail your tractors?

A. I use an outside service to,

you know, wash and clean my trucks,

6 correct.

Q. Does that include cleaning the

8 interior?

A. No.

10 Q. The outside service that does

11 the washing and cleaning, what do they

12 charge?

13 A. What, now?

14 Q. What do they charge?

15 A. They charge us $50.

16 Q. What’s the name of the

17 company?

18 A. H & H Truck Wash.

19 MR. STARNES: Sandy said if he

20 knew you could get 500 bucks a truck,

21 he was going to go into the truck

22 washing business. Be Guy, Fred and

23 Sandy Truck Detailing.

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Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 14 of 16
FREEDOM COURT REPORTING

Page 74

A. I cleaned up a truck myself

Tuesday.

Q. Do you take your trucks to the

truck wash to do that?

A. We actually clean our trucks

at our shop. That’s just an outside

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

service

in that

Q.

the 21 t

A.

Q.

involved

on these

A.

Q.

A.

Q.

-- and i

there.

reconci 1

that we use if the trucks were

particular area.

Do you know why only eight of

rucks were detailed?

No idea.

Do you know what all was

in the detailing that was done

eight trucks?

No.

You don’t?

No.

Do you know which eight trucks

f you need any documents --

MR. STARNES: It’s not shown

You would have to look at the

iation report —-

THE WITNESS: Each truck,

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Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 15 of 16
FREEDOM COURT REPORTING

1 CERTIFICATE

2

3 STATE OF ALABAMA:

4 JEFFERSON COUNTY:

5

6 1 hereby certify that the above and

7 foregoing deposition was taken down by me

8 in stenotype, and the questions and answers

9 thereto were reduced to typewriting under

10 my supervision, and that the foregoing

11 represents a true and correct transcript of

12 the deposition given by said witness upon

13 said hearing.

14 I further certify that I am neither of

15 counsel nor kin to the parties to the

16 action, nor am I in any way interested in

17 the result of said cause.

18

19

20

21

23 i~L ~

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Case 3:06-cv-00638-SRW Document 29-4 Filed 04/30/2007 Page 16 of 16
EXHIBIT D

Case 3:06-cv-00638-SRW Document 29-5 Filed 04/30/2007 Page 1 of 8
FREEDOM COURT REPORTING

Page 1

IN THE UNITED STATES

DISTRICT COURT FOR THE

MIDDLE DISTRICT OF ALABAMA

ORIGINAL

6 CIVIL ACTION NUMBER: 3:06CV638-SRW

7

8 VFS LEASING CO.,

9 Plaintiff,

10 vs.

11 G.F. KELLY, INC., d/b/a KELLY TRUCKING;

12 and GUY KELLY,

13 Defendants.

14

15

16 DEPOSITION TESTIMONY OF

17 CHARLES DAVID LANCE

18

19 April 12, 2007

2:35 p.m.

22 COURT REPORTER:

MELANIE L. PETIX, CSR, CLR

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Case 3:06-cv-00638-SRW Document 29-5 Filed 04/30/2007 Page 2 of 8
FREEDOM COURT REPORTING

Page 22

Oh, here it is.

2 MR. STARNES: There it is

right there. I’ve got an extra one of

those, too, if you want me to give it

to him. It’s right here.

6 Q. (BY MR. HALL:) Looking at

Plaintiff’s Exhibit 6, you reviewed

8 each of these, I guess I don’t know

what to call them other than reports?

10 A. Estimate of repairs, yes, sir.

11 Q. Yeah. So you focused on the

12 second page with the reconditioning?

13 A. Yes, sir.

14 Q. Now, there are some

15 handwritten notes out to the side.

16 What does that mean?

17 A. That was what I figured I

18 could do the work for.

19 Q. Those are your notes?

20 A. Yes, sir.

21 Q. And that’s what you figured

22 you could do that work for

23 A. Yes, sir.

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Case 3:06-cv-00638-SRW Document 29-5 Filed 04/30/2007 Page 3 of 8
FREEDOM COURT REPORTING

Page 23

Kelly

A.

Q.

A.

Q.

based upon your rates at

Trucking?

Yes, sir.

All right. In 2005?

Yes, sir.

So that would be $50 an

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hour --

A. Yes, sir.

Q. -- and whatever Kelly Trucking

could buy the parts for?

A. Yes, sir.

Q. I guess on the second page of

Plaintiff’s Exhibit 6, you make

reference to the unit number. Unit

number last three digits 013, you are

saying that you could clean and detail

it for $125?

A. Yes, sir.

Q. Do you know what cleaning and

detailing goes for in Atlanta in 2005?

A. No, sir.

Q. Do you know what cleaning and

detailing goes for in Birmingham?

367 VALLEY AVENUE

(205) 397-2397 BIRMINGHAM, ALABAMA 1-800-373-3660

Case 3:06-cv-00638-SRW Document 29-5 Filed 04/30/2007 Page 4 of 8
FREEDOM COURT REPORTING

Page 39

1 Q. What I need for you to do is

2 to tell me what things on the

reconditioning were not needed to bring

it up to wholesale condition.

A. Well, most of the parts here

6 are body parts, which would be, you

know, the hood and the fender. That

8 one would probably need -- the ashtray,

I mean, you see that, that wouldn’t

10 need to be done. At least that’s my

11 opinion.

12 MR. STARNES: That’s what this

13 is. He is just asking your opinion.

14 A. Well, all the things on

15 here ——

16 MR. STARNES: Go ahead.

17 A. All the things on here would

18 bring the truck and make the truck more

19 accessible to sell.

20 Q. Okay. Just so I’m clear, I

21 want to make sure you and I are on the

22 same page, looking at paragraph 5 of

23 your affidavit, the last sentence says,

367 VALLEY AVENUE

(205) 397-2397 BIRMINGHAM, ALABAMA 1-800-373-3660

Case 3:06-cv-00638-SRW Document 29-5 Filed 04/30/2007 Page 5 of 8
FREEDOM COURT REPORTING

Page 40

1 the repairs shown on these appraisal

2 reports would result in the trucks

being in more than wholesale condition,

which is not in keeping with the

standard.

6 Are those the appraisal

reports that you are talking about?

8 A. Yes, sir.

Q. What is the standard that you

10 are referring to?

11 A. Explain.

12 Q. That’s what I’m asking you to

13 do.

14 A. Okay.

15 Q. You make reference to a

16 standard in paragraph 5.

17 A. I guess it would be repaired

18 to what we would do it for if we had it

19 at the shop. I mean, we would bring it

20 in and if it needed, you know, a crack

21 fixed here or a fender fixed there,

22 then we would do that necessary repair

23 to our standards.

367 VALLEY AVENUE

(205) 397-2397 BIRMINGHAM, ALABAMA 1-800-373-3660

Case 3:06-cv-00638-SRW Document 29-5 Filed 04/30/2007 Page 6 of 8
FREEDOM COURT REPORTING

Page 41

1 Q. To Kelly Trucking standards?

2 A. Right.

Q. In paragraph 6 you say, I have

evaluated the cost of these repairs

based upon knowledge and experience,

6 and have determined the actual cost of

the same repairs. Attached is the

8 chart comparing the reconditioning

expense contained in the appraisal

10 report with my opinion of the actual

11 cost of these repairs.

12 A. Yes, sir.

13 Q. When you say based upon your

14 experience and knowledge, are you

15 talking about what would have been done

16 at Kelly Trucking?

17 A. Yes, sir.

18 Q. Do you have any experience in

19 actually buying or selling vehicles at

20 auction?

21 A. No, sir, not at auction.

22 Q. Do you have any experience

23 just buying and selling? When I talk

367 VALLEY AVENUE

(205) 397-2397 BIRMINGHAM, ALABAMA 1-800-373-3660

Case 3:06-cv-00638-SRW Document 29-5 Filed 04/30/2007 Page 7 of 8
FREEDOM COURT REPORTING

1 CERTIFICATE

2

3 STATE OF ALABAMA:

4 JEFFERSON COUNTY:

S

6 I hereby certify that the above and

7 foregoing deposition was taken down by me

8 in stenotype, and the questions and answers

9 thereto were reduced to typewriting under

10 my supervision, and that the foregoing

11 represents a true and correct transcript of

12 the deposition given by said witness upon

13 said hearing.

14 I further certify that I am neither of

15 counsel nor kin to the parties to the

16 action, nor am I in any way interested in

17 the result of said cause.

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21

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23

367 VALLEY AVENUE

(877) 373-3660 BIRMINGHAM, ALABAMA (205) 397-2397

Case 3:06-cv-00638-SRW Document 29-5 Filed 04/30/2007 Page 8 of 8