SANTA MONICA, CALIFORNIA; THURSDAY, FEBRUARY 6, 1997 8:54 AM.

DEPARTMENT NO. WEQ HON. HIROSHI FUJISAKI, JUDGE

APPEARANCES: (PER COVER PAGE)

(REGINA D. CHAVEZ, OFFICIAL REPORTER)

(The following proceedings were held in open court outside the presence of the jury.)

THE COURT: Okay. Morning.

ALL COUNSEL: Morning, Your Honor.

MR. BAKER: Yesterday Mr. Gelblum mentioned to the Court that in -- In dissolutions, future value of value of future earnings is considered goodwill. He made that representation on the record. That's absolutely contrary to the law, as our research indicated. And the cases on those Witkins on community property section 71 in re the marriage of Fortier F-O-R-T-I-E-R, 34 Cal.Ap.3d, 384 at 388, in re the marriage of Foster 42 Cal.Ap.3d 577, 584, in re the marriage of Almov (phonetic), in re the marriage of Slater, in re the marriage of Reeves, in re the marriage of King. All of those cases hold that future earnings cannot be included in any claim for goodwill. So we would renew our motion that the purported future earnings of Mr. Simpson, which we suspect is speculative, should not be an item that is introduced to this jury.

MR. GELBLUM: Obviously, I haven't seen the cases. We're not arguing the future earnings themselves. It's goodwill measured by the risks and opportunities to obtain future earnings. As Your Honor noted yesterday, it's a well established concept in the law, goodwill. It's usually done in corporate cases, but there are celebrity goodwill cases as well that I cited to the court yesterday, and it's a readily acknowledged and accepted element of net worth. We'll have testimony on that subject.

MR. BAKER: It's not readily acknowledged or accepted. There's not a single California case that allows them to do what they're purporting to do here today.

THE COURT: All right. I stand on my ruling. Okay. We have jury instructions. The defendant submitted four separate instructions based upon Adams versus Muricomi 54 Cal.Ap 3d, 105. The Court looked at the instructions and also reread the Adams case. The language that the defendant seeks to have the Court instruct the jury on, it appears to me that the language is intended by the Supreme Court to describe the function of the reviewing court in terms of how they would view the damages that were awarded to ascertain whether or not it exceeded or failed to meet the various requirements and prongs that the appellate court uses to ascertain whether or not the damages were excessive. They don't speak of these criteria as criteria that the jury must weigh the evidence against, but it is rather an appellate court's function to ascertain whether the amount arrived at by the jury fits or doesn't fit that criteria. The jury instruction, on that basis, I think, is one that ought not to be given to the jury and the court will not give it. The plaintiffs' requested instructions are simply BAJI 50.55 and 14.72.2. That is the criteria that the appellate courts have held sufficient for the jury, so the Court will give that.

MR. BAKER: Your Honor, 14.72.2, paragraph 3, is not the law.

THE COURT: Excuse me.

MR. BAKER: It is not the law.

THE COURT: Oh. Was there some case that said that's no longer the law?

MR. BAKER: If you read what they said in there, paragraph 3, they're talking about injury, harm or damage actually suffered by Ron. That is not the law. It's the actual damage suffered by plaintiffs.

MR. PETROCELLI: This is a survival action.

THE COURT: Can you bring me the other volume that I have on my desk. (Clerk complies.) (Court reviews book.)

THE COURT: In Neal versus Farmers's Insurance Exchange 21 Cal 3d, 910, which is extensively quoted in Adams versus Muricomi at 929, the Supreme Court is talking about the proportionality of the damages to the damages suffered. And in this instance, the damaged party, the plaintiff, was suing the insurance company on the death of Mrs. Neal, and stated, quote, "Although the amount of compensatory damages legally recoverable was limited to a relatively modest amount, (no more than $10,000), by the fortuitous occurrence of Mrs. Neal's death prior to trial, we believe that absent this limitation, plaintiff would have recovered a substantial amount of compensation for emotional distress suffered by Mrs. Neal as a consequence of the insurer's breach of duty in these circumstances which we cannot allow the apparent disproportion between the recoverable compensatory damages and the total award as reduced to lead us to nullify the award." So it appears to me that the appellate court is looking toward the jury in determining the reasonable relationship of the punitive damages to the injured. So I think paragraph 3 is still the law. If that is an objection, the objection is overruled. Okay. Bring the jury in, please.

(Jurors resume their respective seats.)

THE COURT: Ladies and gentlemen, now that you've determined the first portion of the case, it is that stage of the trial where the plaintiff is proceeding by way of offering evidence to support a contention that you should award punitive damages. The Court will invite the counsel to make opening statements, if they wish, at this time.

MR. PETROCELLI: Thank you, Your Honor.

OPENING STATEMENT

MR. PETROCELLI: Good morning, ladies and gentlemen.

JURORS: Good morning.

MR. PETROCELLI: Well, you have now finally determined responsibility for the deaths of Ron and Nicole. And you have concluded that the defendant, Orenthal Simpson, is the man who took their lives away on June 12, 1994. You have concluded and determined that he acted with malice and he acted with oppression when he savagely attacked and killed Ron and Nicole. He did so by clear and convincing evidence. You have concluded that Mr. Simpson must pay compensatory damages to compensate Ron's parents, my client Fred Goldman, and Ronald's mother, Sharon Rufo, for the loss Mr. Simpson caused them by taking away their son forever. Now, you have one final duty to perform before you are all discharged from your seats on this historic jury, before you can get on with the rest of your lives that you all put on hold to do your duty as jurors. And that, as the judge has just said, is to decide whether and how much Mr. Simpson should be punished by paying an award of punitive damages; punitive damages to the estate of Ronald Goldman, and the estate of Nicole Brown Simpson, for the benefit of their heirs. Ronald's heirs are, again, Mr. Goldman and Ronald's mother, Sharon Rufo. Nicole's heirs are her two small children; Sydney and Justin. We are, as you all have come to learn, in a civil courtroom, in a civil case. We are not dealing with the criminal prosecution.

MR. BAKER: I would object, Your Honor. This is not an indication of what he is attempting to prove in this case -- of the case, it's more of a final argument.

THE COURT: Overruled.

MR. PETROCELLI: We don't have the power or liberty to take away a person's freedom or liberty when he violates the rights of another person. All we can do in this courtroom -- all we can do is pay them money. That's all we can do. There's no power to do anything else. And, of course, here, we're not just talking about any violation with you, but we are talking about the most unconscionable violation.

MR. BAKER: I object again, Your Honor, this is argument. This is not opening remarks.

THE COURT: That objection is sustained.

MR. PETROCELLI: We're talking about whether Mr. Simpson should pay and how much he should pay for taking the life -- taking the lives of two people. Now, under California law, ladies and gentlemen, when we talk about punitive damages, whether they should be awarded and how much, we are required to give you information about the defendant's financial condition. And the reason is simple: It takes a lot less to punish a poor man than it does a rich man. The law says we have to know something about the defendant's financial condition to determine the appropriate measurement of financial punishment. Do we know everything and can we know everything? We will not be able to tell you that in any kind of detail. Whatever we were able to get from the defendant we will present to you to try to give you some idea, some picture of this man's worth and his wealth, so that you can decide what is appropriate by way of punishment. Why do we have something called punitive damages; is it just to punish? No, it's also to make an example; make sure something like this never happens again. That is something that you will have to take into account after you hear some of this testimony. I will then come back, talk to you again, and discuss with you some of the evidence that we heard, and talk to you about why I believe in this case severe punitive damages are necessary to punish Mr. Simpson for what he did on June 12. Now, Mr. Gelblum is going to present the witnesses. We have two witnesses. And then Mr. Baker may present some witnesses. We will present evidence that Mr. Simpson has a lot of money, in the neighborhood of many millions of dollars. Mr. Simpson will present some witnesses to say that he is broke. And you will have to determine who is telling the truth. Thank you.

OPENING STATEMENT

MR. KELLY: Morning, ladies and gentlemen.

JURORS: Morning.

MR. KELLY: Thank you. This is going to be your one and only opportunity to act on behalf of Nicole's estate, for the benefit of her two small children, and provide some measure of punishment and deterrence to the man who murdered their mother. The one thing I'm going to urge you people to do is to not let Mr. Simpson hide behind these children. You've heard the testimony.

MR. BAKER: Your Honor, I'm going to object. This is not proper.

THE COURT: Sustained.

MR. KELLY: When I stand before you later on, and you've heard all the testimony at this phase in the trial, I'll ask you to act in such a manner as to ensure that no man, especially a man gifted with fame and fortune, will ever act with such malice, such oppression, and such a reckless disregard for human life, as Mr. Simpson did on June 12, 1994. And it's going to be that measure of punishment that you make a determination of, it will be the only protection these children have as they face the rest of their lives. Thank you.

THE COURT: Defense.

MR. BAKER: Good morning, ladies and gentlemen.

JURORS: Good morning.

OPENING STATEMENT

MR. BAKER: First of all, let me suggest to you that punitive damages is an element of damage that has been authorized by the legislature to punish wrong-doing and have the public be protected from future misconduct. The important question in punitive damages, and the question that you're going to be required to answer, is whether or not the amount you award is an amount that destroys the defendant. In other words, punitive damages are to punish, but they are not to destroy. So although the plaintiffs may assert to you that you should take away all his wealth, and we will present evidence by your award of Tuesday, Mr. Simpson has a negative net worth of over $9 million. And the evidence will be that he is without assets. He owes lawyers, he owes mortgage payments, he owes. If, in fact, they would come in and take all of his assets, he would owe multiple millions in taxes as well. So he is, in effect, without assets. He owes. He has no equity in his home. He has basically no savings. He has a pension plan, two pension plans, that he cannot access. He has basically an automobile and a residence that he gave his mother in 1969 when he was out of college. And that's, basically, his entire -- His entire net worth is made up of mostly bills including $188,000 that the Court has just ordered him to pay in the custody fight.

MR. KELLY: Objection, irrelevant to this action.

THE COURT: Overruled.

MR. BAKER: That the Orange County court has just ordered him to pay in Orange County. So he has assets that are exceeded by his liability to the tune, including the eight and a half million dollars that you awarded on Tuesday, he has a negative net worth of $9,356,000. And hence, since, as I suggested, you can't destroy Mr. Simpson, by basically your verdict of Tuesday, you have ensured that he has a significant net worth from which he can never recover. And hence, punitive damages are totally inappropriate in this case. That would be essentially piling on and attempting to destroy Mr. Simpson, which is not the idea or the rationale or the law relative to punitive damages. Second of all, you will hear that the punitive damages that you awarded have to bear some relation to the compensatory damages.

MR. PETROCELLI: That's not the law, Your Honor. It's the harm involved, which is death in this case.

THE COURT: Overruled.

MR. BAKER: And the compensatory damages for the Brown family of $250, that's for the Brown -- the estate of Nicole Brown Simpson, that was the -- as you know, you didn't fill out any amount in your verdict form. So any punitive damages to be awarded vis-a-vis the estate of Nicole Brown Simpson has to bear a relationship to the $250 that was stipulated to be the amount of damages she sustained as a result -- that is, the estate sustained because of the clothing that she was wearing. So that award --

THE COURT: Excuse me. That is not exactly the law. I will instruct you what the law is as to how you may apply it. Thank you.

MR. BAKER: All of your awards have to take into account the financial condition of the defendant in this case. The next two witnesses that you hear are going to have to do with only his financial condition, and the financial condition relative to whether he has the ability to earn a living. You will hear evidence that because of the criminal trial, and because of this trial, he has no ability to earn a living, he has no ability to -- all of his contracts would be canceled relative to what he did before June 12, 1994. All of his ability to earn a living selling sports memorabilia is gone. He has no ability in that regard. And even though you'll hear evidence that he could earn 2 to 3 million a year selling sports memorabilia, I think that you know, I know, and the evidence will be, that he can make absolutely nothing selling autographs, selling his personality, appearing in movies; that those days are finished for Mr. Simpson forever. And so the plaintiffs will attempt to suggest to you that his future earnings, which they have someone who will testify that he can make 2 to 3 million a year, and then you take that for the next 25 years, which we will suggest to you is total speculation, total speculation. The fact is that he will make nothing. They then want to take that 2 to 3 million a year for the next 25 years, reduce that number to what they call present cash value, and put that on his balance sheet as part of his net worth. And we will suggest to you that that's a totally improper method, that that isn't part of his net worth. To say that he could earn 5 cents over the next 25 years selling memorabilia, or autographs, or anything else, is pure speculation, after the notoriety and the verdict that you rendered on Tuesday. So we will suggest to you that he has no wealth and that you can't simply manufacture, by speculating for 25 years, what the public will buy of Mr. Simpson. For example, you will hear testimony of one expert that he would have to sell 20,000 to 30,000 autographs at $50 a piece for the next 25 years, and that would net him a million to a million and a half a year. The problem, of course, is there are no buyers for any of those autographs, much less 20 to 30,000 a year, for the next 25 years. So I would suggest to you that you cannot, and the law is that you cannot, speculate as to what his wealth will be. I think we have a pretty good idea it's not going to be very significant, and it's not going to be -- his ability to earn is virtually nil. So we will ask you at the conclusion to award zero punitive damages. You've already, by your award, punished Mr. Simpson and have indeed made his net worth negative and made him without any assets, whatsoever. Thank you very much.

MR. GELBLUM: Plaintiffs call Neill Freeman, Your Honor.

THE CLERK: You do solemnly swear that the testimony you may give in the cause now pending before this Court shall be the truth, the whole truth, and nothing but the truth, so help you God.

THE WITNESS: I do. NEILL FREEMAN, was called as a witness on behalf of the Plaintiffs, was duly sworn and testified as follows:

THE CLERK: Please state and spell both your first and your last names for the record.

THE WITNESS: My name is Neill, middle initial W., last name Freeman. Neill is spelled N-e-i-double L. Freeman is spelled F-r-e-e-m-a-n.

MR. GELBLUM: Morning, ladies and gentlemen.

JURORS: Morning.

DIRECT EXAMINATION BY MR. GELBLUM:
Q. Morning, Mr. Freeman.
A. Morning.
Q. What's you're occupation?
A. I'm a business consultant and certified public accountant.
Q. You work at a company?
A. Yes, I do.
Q. What company?
A. I work for Putnam, Hayes & Bartlett, Incorporated here in Los Angeles.
Q. What does that company do?
A. It's a consulting firm that really has three lines of business. We consult with companies in public policy and business strategy matters. We consult with companies in environmental matters, and we do special investigative projects in the financial transactions, both prospective and historic, and present the results to public bodies, to Congress, or to court's of law.
Q. Can you briefly review for the jury your education starting with college.
A. I graduated from the University of Washington in Seattle, Washington in 1966, and I received a Bachelor's of Arts in Business Administration with a major in accounting. I am a licensed and certified public accountant in California, in Washington, and in North Carolina. As a result of that licensure, I'm required each year to maintain continuing professional education, and I've done that virtually for the last 30 years.
Q. Have you testified as an expert witness before in court?
A. Yes, sir, I have.
Q. About how many times?
A. Several hundred times.
Q. Have you acted as a referee?
A. Yes, sir, I have.
Q. In what circumstances?
A. I operated as a referee in the Superior Court in the State of California dealing with the accounting and financial matters partnership dissolutions and disputes between business owners.
Q. Okay. Have you also acted as a Special Master for the courts?
A. Yes, I have.
Q. And what is that about?
A. A Special Master is something very similar to that in the federal court system, where an individual appointed by the Court to step into the shoes of the Court for a very limited purpose to understand the information to assist the Court with its role as a trier of fact.
Q. Okay. That's not what you're here for today?
A. That's not what I'm here for today, no, sir.
Q. Okay. And how long have you be a CPA?
A. I've been a CPA since 1968.

MR. GELBLUM: Next exhibit in order?

THE CLERK: 2409.

(The instrument herein described as Neill Freeman's curriculum vitae was marked Plaintiffs' Exhibit 2409 for identification.)
Q. (BY MR. GELBLUM) I'd like to show you what I'll mark as Exhibit 2409. Is that your curriculum vitae?
A. Yes, sir, it is.
Q. Now, were you asked to perform some services in this case by the plaintiffs?
A. Yes, sir, I was.
Q. What were you asked to do?
A. I was asked to review the financial information presented by defendant's counsel, to review information of a financial nature that was provided, to review deposition testimony, and to provide the Court and this jury with information relating to the financial condition or the net worth of Mr. Simpson.
Q. And did you determine what you believed to be Mr. Simpson's net worth as of December 31, 1996?
A. Yes, sir.
Q. What is that number?

MR. BAKER: Peter, do you have some updated documents?

MR. GELBLUM: Yes, I'm sorry. (Mr. Gelblum hands document to Mr. Baker.)
A. That amount is $15,703,529.
Q. (BY MR. GELBLUM) We'll go through in some detail how you got there. Before we do that, can you tell the jury what documents you reviewed, general categories of documents?
A. I reviewed Mr. Simpson's statements of net worth that were provided that were generally provided starting in December 1993 forward through December 31, 1996, and there were several different versions of the '96 financial statements. I reviewed the report of a Mr. Mark Roesler, financial information relating to O.J. Simpson Enterprises, Orenthal Productions, a company called Pig Skins Behind the Corner Stone Company. I reviewed bank loan applications, a loan and appraisal relating to the Rockingham residence. I've looked at actuarial statements relating to Mr. Simpson's pension plans. I've reviewed contracts. I've looked at miscellaneous documents relating to the combination of Orenthal Productions, and O.J. Simpson Enterprises, and the deposition testimony of Mr. Goodfriend, Mr. Taft.
Q. Who are Mr. Goodfriend and Mr. Taft?
A. His accountant and -- Mr. Simpson's accountant and lawyer, respectively. I've looked at some bank account records as of December 31 and other various dates.
Q. Okay. You said that you looked at -- well, first of all, this is all information, as you understand it, that was provided by the defense in this case?
A. Yes, sir, that's correct.
Q. Do you have any idea whether that information is complete?
A. I have asked for much more information, so at least I viewed it as incomplete.
Q. Okay. You mentioned that you looked at some net worth statements?
A. That's correct.
Q. And those were prepared, as you understand it, by Mr. Taft; is that right?
A. Yes, sir.
Q. You got that from his deposition?
A. Yes, sir.
Q. Okay. And you looked at statements that were prepared quarterly from December, 1993 through December, 1995; is that right?
A. That's correct.
Q. And did you review some deposition testimony by Mr. Taft for the purpose for which those statements were prepared?
A. Yes, sir.
Q. I'll just show to you testimony -- it's Mr. Taft's deposition, page -- the confidential portion, page 9, line 23, through page 10, line 23. Did you review this testimony?
A. Yes, sir, I did.
Q. And did you rely on that in rendering your opinion?
A. Yes, sir.

MR. GELBLUM: Steve, can we just put this on the Elmo so the jury can see.

MR. BAKER: I'm going to object to this, Your Honor. You can't use the deposition in this manner.

THE COURT: Whose deposition?

MR. GELBLUM: It's something relied ask.

THE COURT: Excuse me. Whose deposition?

MR. GELBLUM: Mr. Taft's deposition. It's his testimony relied on --

MR. PETROCELLI: He's a witness in this case.

THE COURT: Show me what it is before you put it up.

(A bench conference was held which was not reported.)

(The Court reviews document.)

(The following proceedings were held in open court, in the presence of the jury.)

THE COURT: Okay. Reporter, you want to come up.

(The following proceedings were held at the bench with the reporter.)

THE COURT: Okay. Now, what is your purpose of offering this?

MR. GELBLUM: Rather than have him parrot back what his understanding of the -- rather than have the witness just parrot back what his understanding is from Mr. Taft's deposition that these were prepared in the ordinary course of business, that they're accurate, get it from the horse's mouth and have the jury see exactly what Mr. Taft said. I can ask the witness what his understanding is, but it's based on his testimony which -- it's just more direct and accurate.

MR. BAKER: It's not a proper way to use a deposition, Your Honor. It's not impeachment and it's not --

MR. GELBLUM: It's what the witness relies on --

THE COURT: Frankly, if that -- what you're intending to do, it appears to me not to be probative to that point at all. Makes absolutely -- doesn't make any sense.

MR. GELBLUM: It describes what the statements were there for, that there -- they were there for his internal use, his financial use.

THE COURT: Who are you impeaching?

MR. GELBLUM: I'm not impeaching anybody. I'm going to compare these to the statements that we got that were prepared for the purpose of litigation.

THE COURT: I'll sustain the objection, 352. I'm reading it and I'm a judge, and if that's the purpose for which you're offering it, this confuses me, it doesn't help me; if it doesn't help me, how's it going to help the jury?

MR. GELBLUM: Maybe my -- let me make a different point. I'm sorry, I didn't make it clear. These statements, December, '93 through December, '95, were prepared for Mr. Simpson's internal business use, his financial planning purposes, as this says.

THE COURT: So?

MR. GELBLUM: So they show a net worth consistently 10 million, 9 million 80.

THE COURT: Fine.

MR. GELBLUM: The next statement, 45 days, which is prepared for purposes of litigation, as this shows, shows a net worth of $500,000. I think that's probative of the reliability of the statements that the defendants are offering.

THE COURT: You may elicit that from -- you may ask your client that or your witness that.

MR. GELBLUM: My point is, all he's going to say is he read Mr. Taft's deposition and he said -- and that's what his understanding is based on, Mr. Taft's deposition, that the earlier ones were prepared for that purpose. I just thought I'd show it to the jury --

THE COURT: Why don't you save it for when you examine Mr. Taft.

(The following proceedings were held in open court in the presence of the jury.)
Q. (BY MR. GELBLUM) Did you cause a chart to be prepared comparing various of the net worth statements that were produced by the defense?
A. Yes, sir, I did. (Counsel displays chart entitled "Orenthal James Simpson Net Worth Reported by Simpson.")
Q. Is this the chart you caused to be prepared?
A. Yes.

MR. GELBLUM: Mark next in order. We have a small copy.

THE CLERK: 2410.

(The instrument herein described as a chart entitled "Orenthal James Simpson Net Worth Reported by Simpson" was marked for identification as Plaintiffs' Exhibit No. 2410.)
Q. (BY MR. GELBLUM) Now, can you explain what's depicted on that chart, sir?
A. Yes, sir. Should I approach the chart?
Q. Sure. There should be a pointer up there. I think we found it.
A. This chart lists the financial statements that were provided by defendant's counsel in this matter at various dates. The first one was provided as of December 31, 1993, and they include financial statements through December 31, 1996. On the left-hand scale, the vertical scale, I've listed numbers which are in millions of dollars, and that's used against -- which you can measure the height of each of the bars representing a financial statement to determine approximately what the net worth reported on that financial statement was. So by way of example, December 31, 1993, the financial statement reported a net worth slightly in excess of $10 million. Another example is in December of 1994, after the murders, the financial statement reported a net worth of almost $11 million. After the acquittal, at December 31, 1995, the reported net worth in excess of $8 million.
Q. Again, it's your understanding that those statements from December, 1993 through December, 1995 were prepared for the internal financial uses of Mr. Simpson?

MR. BAKER: Leading and suggestive, Your Honor.

THE COURT: Overruled.
A. Yes, sir.
Q. (BY MR. GELBLUM) What's the basis of that understanding?
A. The basis is the deposition testimony that I read.
Q. Of who?
A. Of Mr. Taft.
Q. Okay. And then there's a sudden drop off in February, 1996. Is that the first statement that was produced in this litigation, as you understand it?
A. Yes, sir.
Q. And that drop off is to what?
A. That drop off is to about $538,000.
Q. Okay.
A. And that's as of February 15, 1996. So that's indicated by the small bar. And you would have to read across to the left scale to see that it's about $500,000.
Q. It's your understanding that in contrast to the ones from December, 1995 and previously, the ones to the right of that were not produced for Mr. Simpson's personal financial use but for protection from the plaintiffs in this litigation?
A. That's correct.
Q. And the last item on there is December 31, 1996, and what is the number that Mr. Simpson produced for his net worth for that statement?
A. This is the most recent statement, which was as of December 31, 1996, and it reports that he has a negative net worth of over $800,000.
Q. You can resume your seat. Did you also review -- you mentioned Mark Roesler before, and he'll be another expert witness that the ladies and gentlemen will hear from a little later. Did you review a report that Mr. Roesler prepared?
A. Yes, sir, I did.
Q. Okay. And what was the subject matter of that report?
A. The subject matter of that report was the earnings ability of Mr. Simpson into the future, and allowed me -- or gave me a basis for computing the present value in today's dollars of what that earnings capacity was.
Q. Okay. Have you also interviewed Mr. Roesler?
A. Yes, sir, I have.
Q. How many times?
A. On two occasions.
Q. Now, have you prepared summaries of the information shown on the various net worth statements Mr. Simpson has prepared and the other financial documents?
A. Yes, sir, I have.
Q. That's Exhibit 753.

(The instrument herein described as a chart was marked for identification as Plaintiffs' Exhibit No. 753.)
Q. (BY MR. GELBLUM) Mr. Freeman, could you briefly explain for the jury the format of Exhibit 753?
A. Yes, sir. It would be easier if I approached the chart.
Q. I think so. With the pointer, perhaps.
A. This Exhibit 753 reports several different pieces of financial information. It reports Mr. Simpson's assets, which are divided, as is their custom, into current assets, closely held investments, other assets and total assets and then reports liability. There are three columns, and the three columns represent that which was reported by the defendant at December 31, 1996 and the latest revision which was as of January 31, 1997 --
Q. That was one of the net worth statements that you were talking about earlier?
A. Yes, sir, that's correct.
Q. All right.
A. The adjustment column represents adjustments that I have made to the amounts reported in that most recent financial statement. And the last column shows the effect of those adjustments on Mr. Simpson's net worth.
Q. All right. Let's talk about the adjustments that you made, sir. First adjustment, so the jury's clear, because you said earlier it's $15 million, was roughly $15 million?
A. Yes, sir.
Q. And it was 28 -- is there a second page?
A. Yes, there is a second page.
Q. We'll get to that in a minute. First adjustment you made was in the loan receivable from Orenthal Productions, that's an adjustment of $265,726. Can you tell the jury why you made that adjustment?
A. Okay. If you look at financial statements of Orenthal Productions, you'll find that it lists as a debt to Mr. Simpson this amount, $265,000. The financial statements that were provided by the defendant list it as only $1, and the explanation is that Orenthal Productions owes more than it has in assets.
Q. That was the explanation that the defense gave for listing that as $1?
A. Yes, sir.
Q. Did you see Orenthal Productions' balance sheet?
A. Yes, sir, I did.
Q. As of December 31, 1996, did that show an account payable by Orenthal Productions to Mr. Simpson?
A. Yes, sir, it did.
Q. Of how much?
A. Of $265,000.
Q. The defense just wrote that off down to $1?
A. That's correct.
Q. Okay. And continue your explanation as to why you don't think it's appropriate?
A. However, looking at Orenthal Productions, early in the year they owed Mr. Simpson as much as a million dollars and they had been making payments on that, so the million dollars that they owed him in the February 15 financial statements by way of example has --
Q. Can you keep your voice up.
A. Excuse me. -- in the earlier financial statements has been paid down to $265,000. In addition, Orenthal Productions had a purported income of over $800,000 during the year, and since it's a conduit for his professional earnings, it appears that there is every prospect of having that paid in the future.
Q. So based on the information you have seen, that debt should be repaid in time by Orenthal Productions so it should remain as an asset on Mr. Simpson's balance sheet?
A. That's correct.
Q. The next adjustment you made was to the Apollo residence. Again, Mr. Simpson reported that on the most recent balance sheet at $1, and you made an approximately $250,000 adjustment, correct?
A. Yes, sir.
Q. Did Mr. Simpson list that asset at $1 before 1996?
A. Until 1996, on every financial statement produced, it was listed as $250,000. It was also listed at $250,000 on bank loan applications.
Q. Okay. And it's listed on bank loan applications as an asset of Mr. Simpson?
A. Yes, it was.
Q. At $250,000?
A. Yes, sir.
Q. And even on the February 15, 1996 net worth statement that was provided to us in this litigation for purposes of this litigation, was that listed at $250,000?
A. No, sir, it was listed at $1.
Q. Now, have you seen documents showing Mr. Simpson as the owner of that residence?
A. Yes, sir, I have.
Q. Okay. Is there another entry on this chart in another -- in another category that Mr. Simpson considers this to be his asset?
A. Yes, there is. The remaining mortgage on that Apollo residence first trust deed lists it as a liability.
Q. So he's taking a liability for a debt against that property?
A. He's taking a credit for the liability, yes, sir.
Q. Okay. And it would only be fair to include the full amount as an asset?
A. Yes, sir.
Q. Now, the next adjustment that you have is present value of NFL pension for $175,592?
A. Yes, sir.
Q. Can you explain that, please, why you made that adjustment?
A. Mr. Simpson, by virtue of his football career, is entitled to a pension from the NFL Players Association at age 55, and that was not listed on the financial statements in December. I have computed the present value of that based on life expectancy of 25 years -- or, excuse me, 24 years, and that amount is $175,592.
Q. How did you determine that he was entitled to that pension?
A. I called the NFL Players Association and talked to them on a no-name basis. They reported that players are entitled to a pension based upon their years of service in the league and the particular years that they played.
Q. And did you provide the information to them about the years that Mr. Simpson played?
A. Yes, sir, without disclosing his name.
Q. And did they tell you how much money he was to receive as a pension?
A. Yes.
Q. Somebody who played during those years?
A. Yes, sir.
Q. And you said that you raised this to present value --

MR. GELBLUM: Steve, would you put up the -- on the Elmo, put up on -- I had Mr. Foster put on the Elmo. We'll mark next in order, 2411.

(The instrument herein described as table was marked for identification as Plaintiffs' Exhibit No. 2411.)
Q. (BY MR. GELBLUM) Can you tell us what that is, please?
A. Yes. This is a table which lists the years out -- for the next 24 years of Mr. Simpson's life, and starting at his age 55 in the year 2002, it provides for a monthly income of $1,910 or a total for the year of $22,922 for the remainder of his life. What I have done is, utilizing a discount rate of 7 percent, computed what the value is today at the -- as of the end of January, 1997 of these future payments.
Q. Can you first of all explain to the jury what you mean by discount rate and how you arrived at it?
A. Well, it's kind of the opposite of a savings account. If you put a dollar in a savings account today and it earns 5 percent, at the end of a year you would have -- well, let's say $100, at 5 percent you'd have $105, the present value of $105 one year in the future is a dollar today. And so that's what a present value is. It's measuring in today's value something that you expect in the future.
Q. I think you misspoke. I think you said the present value of $105 is $1?
A. A hundred dollars, I'm sorry. Especially an example of a dollar and $100, it's $100.
Q. How do you arrive at the 7 percent rate that you used?
A. 7 percent rate is a rate that's slightly higher than the U.S. treasury rate -- deposit rate for long-term security and slightly less than one would get, for example, in investing in corporate bonds or preferred stocks.
Q. Okay. And the --

MR. GELBLUM: Steve, can you move that up a little bit.
Q. (BY MR. GELBLUM) Again, did you -- you said you used a life expectancy for Mr. Simpson, what, 24 years?
A. 24 years, yes, sir.
Q. How do you determine that?
A. There are a number of life expectancy tables that are available for any particular individual at a given age to estimate what the average life expectancy of that individual will be in the future. And one of those appears at the BAJI table at 14.7, and looking at those, they, for Mr. Simpson, project a life expectancy of anywhere from 24 to 26 years -- 23-1/2 to 26 years, and I used 24.
Q. These are tables commonly used in your business?
A. Yes, sir.
Q. Before we get to the next adjustment, I just want to make sure the jury understands, where you don't have an adjustment, you've just taken the assets that Mr. Simpson listed on the December 31, 1996 statement, the last revision of it, and carried it straight across to the column that you're going to end up using for your total; is that right?
A. Yes, sir, and that's true both of assets and of liabilities.
Q. Okay. Now, let's get to the next adjustment on this page, which is the big one there, the value of name and likeness and trademarks for $24,880,568.
A. Yes, sir.
Q. Can you explain to the jury very briefly what you -- what is meant by the value of name and likeness and trademarks?
A. The value of name and likeness and trademarks is the value measured in today's dollars of the exclusive use and right of exploitation of the name and likeness of Mr. Simpson plus any trademarks that he has of those names and likenesses.
Q. Is it another way of saying what a reasonable person would pay Mr. Simpson today for the exclusive right to exploit his name and likeness for the rest of his life?
A. Well, the actual right extends to life plus 50 years so it would extend beyond that. I've only measured it for his life span of -- estimated life span of 24 years. But that's the amount that a person today would pay to have absolute control over the use and distribution of his name and likeness into the future.
Q. Now, were you the one who figured out what Mr. Simpson would be able to make in the future off of his name and likeness?
A. No, sir, I was not.
Q. Who did that?
A. That was done by Mr. Roesler.
Q. You relied on him to do that?
A. I relied on him for that -- his computation what that was worth.
Q. Did you interview him to determine some of his background?
A. Yes, sir, I did.
Q. And is it your opinion as a forensic accountant that it is proper to include this number on a current net worth statement?
A. Yes, sir.
Q. Why is that?
A. Well, that gives a complete picture of what the prospects or financial condition of Mr. Simpson is. It's the same kind of concept that's used when people, for example, are financing movies or when corporations merge, there are things that under regular accounting principles, under income tax principles, for example, are not listed as -- as either, but people recognize that, in fact, they do exist, and are listed as an asset. So that's what -- good will is another name for this type of concept.
Q. Okay. And again, the concept is this is what the reasonable person would pay Mr. Simpson today?

MR. BAKER: Leading and suggestive.
Q. (BY MR. GELBLUM) For the right to exploit that name and likeness; is that right?

THE COURT: Overruled.
A. Yes, that's correct.
Q. (BY MR. GELBLUM) I want to show the jury how you calculated the present value. Can you put that up, please, Steve, on the Elmo. Document is displayed on Elmo.)

MR. GELBLUM: 2412.

(The instrument herein described as computation of NFL pension was marked for identification as Plaintiffs' Exhibit No. 2412.)
Q. (BY MR. GELBLUM) Can you explain to the jury what appears on 2412, Exhibit 2412?
A. Yes, sir. This is the same type of computation that I did for Mr. Simpson's -- the present value of his NFL pension. I've listed the years and I've listed 24 years here, and because the first year we're measuring, as of January, that it's only 11 -- 11/12ths of a year into the future. I have applied a discount rate of 7 percent, and by way of example, the receipt of income during the remainder of 1997 in the amount of $2,125,000 has a value at the end of January of a million $888,000. Another example, in the year 2000 the receipt of that amount of money, $2,125,000, has a present value of about 1 million, 681. So if -- somebody would pay today $1,681,000 for the right to receive that amount in the future.
Q. Why do the numbers in the far right column go down as the years pass by?
A. Because money more remote, that is the right to receive money further down the line, has less value in today's dollars. I would pay you less to receive $2 million in 2008 than I would pay you to receive $2 million in 2002.
Q. If you flip that around, the pass book example you used before, is that because I would need to invest less today to achieve 2 million 125, two years from now?
A. That's correct.
Q. How do you come up with the $2,125,000 annual number?
A. Mr. Roesler's report and his testimony at deposition, I assume his deposition here at court, will be that the earning powers of Mr. Simpson, on average, for the rest of his life will vary between 2 and $3 million a year. He cautioned me that some years will be extraordinarily high and some years will be low, but on average, year in and year out over the next 24 years it will average between 2 and $3 million. The average of those are the middle point, which would make -- which is used in this presentation, would be $2,500,000. But because of the nature of the exploitation of Mr. Simpson's name and likeness, he would most likely have to pay commissions to someone, and so I've measured commissions in this case -- well, Mr. Roesler told me the commissions could vary between 5 percent of the amount that the celebrity gains, and up to 20 percent. That the range is typically, for a living person, more in the neighborhood of 5 to 10 percent. For 15 percent, there would be extraordinary services for the person helping the individual. So I've allowed for 2 percent commission on two-and-a-half-million dollars' worth of annual earnings.

MR. GELBLUM: Steve, could you put up to the bottom there. (Mr. Foster complies.)
Q. (BY MR. GELBLUM) Now, again, you only went out -- you went out to the year 2021. That's based on, as you discussed before, Mr. Simpson's life expectancy?
A. Yes, sir, a total of 24 years.
Q. You did not include any number there for the value of exploiting that name and likeness after his death?
A. No, sir I did not.
Q. If somebody were to pay Mr. Simpson today for the right and in perpetuity to exploit his name and his likeness, would that most likely include that right to do that after his death?
A. It would continue in the future beyond his life span.
Q. Would you be conservative in cutting it off at the end of Mr. Simpson's life expectancy?
A. Yes, sir.
Q. Now, you have one deduction there, less receivable reinstated. Can you just explain that to the jury?
A. Yes, sir. The total present value of the future extreme of earnings is $25,146,000. The conduit through which Mr. Simpson conducts his business is Orenthal Productions. And that was the receivable that they had written off to one dollar. I have reinstated it on the balance sheet. And a possible source of that would, of course, be about this earning stream. I've deducted it from this double earning stream to avoid double accounting and come up with a net amount of $24,880,000.
Q. Does that tie into the number on the big chart in front of the jury, this number that I used on Exhibit 753? Let's see. On the large chart in front of the jury, which I believe was 2410 --

THE CLERK: 753.

MR. GELBLUM: Oh, 753. I apologize.

(The instrument herein referred to as Summary of Defendant's financial condition by Neill Freeman, with exhibits was marked for identification as Plaintiffs' Exhibit No. 753.)
Q. (BY MR. GELBLUM) There's a large liability, actually, the last one listed there, for accounts payable, criminal/civil defense litigation, for almost $1,600,000. Do you see that?
A. Yes, sir, I do.
Q. All right. And you've reviewed certain documents relating to that liability?
A. Yes, sir, I have.
Q. And is that -- are these primarily for the exclusive liabilities from Mr. Simpson's criminal case?
A. Yes, sir, it is.
Q. And that ended in October 1995; is that right?
A. Yes, sir.
Q. Okay. In your experience, does the fact that that is as old as it is, almost a year and a half old, if not older, and the fact that it is a debt to professionals in large part, indicate anything to you about the probability of that would be paid in full?

MR. BAKER: I object. That calls for speculation on the part of this witness. There's no foundation.

THE COURT: Overruled.
A. Typically, when debts are outstanding for a long time, in accounting, most people consider debts 90 days old or older, 90 days past due or older, to be somewhat questionable. The likelihood of collecting them in full by the person to who they are owed decreases. And so it's likely at some point in time that Mr. Simpson would be able to compromise, that is, to pay those liabilities off for amounts less than are stated in this statement of net worth.
Q. Nevertheless, you've included the entire amount in your calculation?
A. Yes, sir, I have.
Q. Okay. And do you consider that to be a conservative process?
A. That is a conservative professional approach, that it gives Mr. Simpson the benefit of the full amount of the bill, even though he may not pay that in the future.
Q. So if he didn't pay all of that, then the total net worth would be higher; is that right?
A. That's correct.
Q. Okay. So the bottom line on the adjusted portion on this first page of Exhibit 753 is $28,837,236; is that right?
A. Yes, sir, that's correct.
Q. All right.

MR. GELBLUM: Steve, could we get the second page of this, the board for the second page. This is also part of 753. (Mr. Foster complies.)
Q. (BY MR. GELBLUM) We've placed before the jury an enlargement of the second page of Exhibit 753, Mr. Roesler. This also something you prepared?
A. I'm Mr. Freeman.
Q. Mr. Freeman, looking ahead.
A. Now we're even.
Q. Good.
A. Yes. This is a continuation of that exhibit. And the amounts on the first line, assets and in excess of liability, are the same amounts that appeared on the bottom line of the page that we were just looking at. And then in Mr. Simpson's financial statements as of December 31, 1996, he provided for estimated income taxes and arrived, therefore, at the negative value or the negative net worth of $856,157.
Q. Right. Did -- was there any line item at all for these deferred taxes on any of the net worth statements that you saw from Mr. Simpson that were prepared for his own use, as opposed to for use in this litigation?
A. No, sir, there were not.
Q. He never listed those at all as a liability?
A. No, sir, he did not.
Q. And have you -- have you reviewed some documentation provided by Mr. Simpson that calculates that $4 million number?
A. Yes, sir, I have.
Q. Okay. Is there a component there for -- Well, first of all, I ask you, can you explain to the jury this concept of including deferred income taxes as a liability?
A. On the first page of Exhibit 753, there are assets that are listed at their fair market value: For example, the Rockingham estate. And those values are values that are greater than the tax basis or the amounts that Mr. Simpson paid in, invested in there. So if he were to sell that asset today and realize the $3.7 million, he would owe taxes on the difference between his tax basis and that property and the amount of money that he received to save his proceeds. So, in other words, in order -- in order to balance that out, the part of the computations that are made on this line are computations which you compute turns current tax rates, the amount of tax liability, were that $3.7 million to be realized.
Q. Now, is it certain that the taxes that Mr. Simpson listed on the net worth statements, that he's going to have to pay those taxes?
A. Not by any means. No, sir.
Q. For example, on the house, are there provisions in the tax laws that would allow Mr. Simpson not to pay any taxes at all on -- on the sale of that house?
A. Well, there are.

MR. BAKER: I'm going to object. This calls for speculation as to what Mr. Simpson will do in the future, if he has any dollars to do it with.

THE COURT: Overruled.
A. (Continuing.) There are tax provisions that allow homeowners to roll over any gain that they have on a principal residence. So he could, in effect, defer that for the balance of his lifetime, even if he were to sell the property. In addition, both last year and this year in Congress, there has been various proposals by both parties and the president to --

MR. BAKER: I'm going to object to any proposals. This is total speculation, whether any tax laws --

THE COURT: That's sustained.

MR. GELBLUM: Can you put up the page on the adjustments? Mr. Foster complies.)

MR. GELBLUM: Displayed on the Elmo is marked next in order as 2413.

THE CLERK: Correct.

(The instrument herein referred to as Calculation of Adjustment to Deferred Tax was marked for identification as Plaintiffs' Exhibit No. 2413.)
Q. (BY MR. GELBLUM) The page headed, Calculation of Adjustments to Defer Tax, we'll go through this item by item. Is this going to tie into the middle portion of the board that's before the jury now, the second page of 753?
A. Yes, sir. If you go down to the bottom of this page, you will see that the adjustment to the deferred tax computation is $9,012,199, which is the adjustment that I have made to computations provided by Mr. Simpson.
Q. Okay. Let's go back to 2413. And these are now -- these are adjustments to Mr. Simpson's computation of the deferred tax that he included as a liability on the most recent net worth statement; is that right?
A. Yes, sir, that's correct.

MR. GELBLUM: Would you go back to the top of the page, too, Steve. (Document adjusted on the Elmo screen by Mr. Foster.)
Q. (BY MR. GELBLUM) Let's start with the first one. Could you explain that to the jury, please.
A. Yes, sir. There are two pension accounts listed in Mr. Simpson's financial statements, and they have value of about $4.1 million.
Q. That's combined value?
A. Yes, sir.
Q. And that's in addition --
A. And that's in addition to the NFL pension that we discussed earlier.
Q. By the way, before you go on, Mr. Baker said to the jury a few minutes ago, that Mr. Simpson didn't have access to those pension accounts. Is that a true statement?
A. He ultimately will be drawing those out in another five years on a monthly basis. But in the interim, he uses them as collateral for loans, as part of his net worth financial statement. He has borrowed in the past from his pension plans.
Q. Okay. Going ahead with your calculation?
A. In computing the $4,121,000, Mr. Simpson's financial statements of December 31, they computed the task at 62 and a half percent, which includes a penalty rate for early disbursement from a pension account balance.
Q. Let me interrupt you one more time, sir. Just to avoid confusion, the numbers happen to be very similar between the $4,121,479, the balance in the pension accounts, and the 4,121,508 on the deferred taxes that Mr. Simpson listed. That's just coincidental?
A. That's just coincidental; those are completely separate numbers.
Q. Sorry to interrupt. Go ahead.
A. Instead, the actual federal and California rate that Mr. Simpson will pay on that income when he removes it from the pension plan is 45.22 percent, or slightly over 45 percent.
Q. That's if he removes it after age 55?
A. Yes, sir. And if he uses it as collateral as a part of his borrowing package, he would have no tax consequences.
Q. All right.
A. This overstates the tax liability on $4 million by 17.28 percent. And computing that amount, it's $712,000.
Q. That's 17.28 percent of the $4 million?
A. Yes, sir.
Q. So, under your computation, then, Mr. Simpson's representatives overstated this component of the liability by $712,000?
A. Yes, sir, that's correct.
Q. All right. Can we go on to the next one, May Medical.
A. The next one is the May Medical Societies.
Q. What's that?
A. A medical building.
Q. All right.
A. And Mr. Simpson has a negative basis in that property and a very, very low fair market value. The computation includes the fact by Mr. Simpson's representatives that if he were to sell that property now with a large negative tax basis, approximately $1,900,000, that this -- he would incur a large tax penalty. In looking at the K-1, which is a federal tax form related to that building, however, we find that Mr. Simpson purchased his interest in that building many years ago, to the extent of 49 and a half percent, and more recently purchased another 49 and a half percent. So the entire amount of that accrued negative value in the partnership distribution accounts is not Mr. Simpson's, and they overstated it for that reason. We don't know exactly what the dollars are because the information has not been given to us. And we don't know what the prior status of those losses are, if they have been used, or if they're, in fact, available for carryover, to offset any gain that might be recognized in the future. But assuming that indeed he did buy another essentially 50-percent interest, and that the amount of the deficit at the end of 1994 was a million 685, then at the capital gains tax rate, the $4 million in taxes have been overstated by about $295,000.
Q. Now, then, Mr. Simpson's representatives overstate a liability that reduces his net worth; is that right?
A. That's correct.
Q. Okay. So, then, you're adjusting the liability by decreasing the amount of liability, and that would increase the net worth; is that right?
A. That would increase the net worth; yes, sir.
Q. Do you want to go on to the next category called Deferred Tax Benefits?

THE WITNESS: It might help if we slide that up a little bit. (Elmo adjusted)
A. Another offset which was not taken into account in computing this $4 million is the tax effect of the civil defense attorney fees and the civil/criminal defense attorney fees that Mr. Simpson is attempting to deduct for tax purposes.
Q. What's the basis of your understanding for that?
A. That's Mr. Taft's testimony, also.
Q. That they were using those fees as a deduction, tax deduction?
A. Yes, sir.
Q. Okay.
A. The tax rate at 45 percent on the total of those fees, almost $3 million, is $1,310,000.
Q. Can you explain that a little more, how that works, how that tax benefit works?
A. Well, if you have an expense and that reduces your income, you pay taxes on lesser income, lesser net income. In this case, if they deduct these from his income, he'll pay lesser tax because of these deductions. And you measure that at the tax rate in effect, which is slightly in excess of 45 percent, combined state and federal.
Q. So that calculation would give Mr. Simpson a tax benefit of $1,300,000?
A. That's correct.
Q. Okay. That would increase his net worth by that much?
A. Yes, sir.
Q. On the calculations we're presenting here?
A. Yes, sir.
Q. Okay. Now, finally, the last category is taxes on undisclosed assets. Could you explain that calculation, please.
A. Yes, sir. On Exhibit 753, I had two entries for the present value of his NFL pension and the value of his name likeness and trademarks.
Q. Those are assets that you added to the net worth that Mr. Simpson hadn't included?
A. Yes.
Q. Why did you take off the taxes for that?
A. Well, in these particular instances, that's another present value of future income, that's income that Mr. Simpson would receive; and therefore, he would have to pay taxes on that income when he receives it. Because I've measured it at present value, it's appropriate to apply a current tax rate for that amount. And I've done that so that would result in an increase in the tax liability that Mr. Simpson would have, the deferred tax liability of $1,329,694.
Q. That 1 million or 11 million?
A. 11 million.
Q. All right.
A. Did I misstate?
Q. You said 1 million. So, adding these all together, you get to a net adjustment of how much?
A. Well, taking the reductions that I discussed earlier, and this addition, the net increase in taxes, adjusting the 4 million provided for in Mr. Simpson's statements, is $9,012,199.
Q. All right. And that's reflected on the second page of Exhibit 753 that's in front of the jury?
A. Yes, sir.
Q. So you've increased the tax liability by somewhat over $9 million, and that gives you a total tax liability of somewhere over $13 million?
A. Yes, sir, it does.
Q. And you subtracted that tax liability from the number we carried over from the first page, right?
A. Yes, sir. The excess of his assets over his liability of $28 million, reduced by $13 million in taxes, is $15,703,529.
Q. Is that your best opinion today of Mr. Simpson's net worth as of December 31, 1996?
A. Yes, sir, it is.
Q. Okay. Now, you can resume your seat.

MR. GELBLUM: You can take that off the Elmo. (Mr. Foster complies.)
Q. (BY MR. GELBLUM) You did not include in the liability section the $8.5 million after compensatory damage awards that the jury rendered the other day. Why didn't you include that?
A. Because final judgment has not been entered in that amount. It's certainly something that the jury is aware of, but there's no final liability in that amount yet.
Q. Now, from all the documents that you have looked at in connection with Mr. Simpson's finances, do you have any reason to believe that the information that you have been provided with understates his assets?

MR. BAKER: Objection. Calls for speculation.

THE COURT: Overruled?
A. Yes, sir, I do.
Q. (BY MR. GELBLUM) And what reason is that?
A. Well, there was a lot of information about the flow of cash that we asked for that we did not receive. For example, we do understand that Mr. Simpson, during the year, received approximately $1,250,000 on his interest in the Honey Baked Ham investment. And he also received about $1,750,000 in insurance proceeds to cover his insurance claims in this matter. The total of those is about $3 million. Yet, during the year, I don't see a commensurate decline in the liability that he has, although certainly, he used them to pay some liability, and I don't understand where the cash went. So I have no confidence that I've seen everything.
Q. Did you see some bank statements?
A. Yes, sir, I did.
Q. Do you have those in your book?
A. Yes, sir, I do.
Q. Can you determine what the total amount of deposits that were made into those bank accounts in December 1996 alone?
A. I could, yes.
Q. Did you locate them?
A. Well, I've got one for O.J. Simpson Enterprises. And do you have a set of them, because they're spread throughout in my --
Q. Yes. (Counsel hands document to witness.)
A. Do you want the total?
Q. Yes.
A. Between those two accounts, one account had deposits of $68,000; the other one had deposits of $9,341; so it would be $77,341 dollars in deposits.
Q. That's just the month of December?
A. Yes, sir.
Q. Now, moving on to a somewhat different subject regarding Mr. Simpson's --

THE COURT: Ten-minute recess. Ladies and gentlemen, don't talk about the case. Don't form or express any opinions. We're still in session.

THE BAILIFF: Let's keep it quiet in the courtroom. The jury is still in the courtroom. The Judge is still on the bench. Quiet, please. Everybody have a seat, please, if you're going to stay in the room. Let's close those doors. The jury has left the room. The door is closing. (Indicating to back door.)

(The jury exited the courtroom.)

THE BAILIFF: We're in session.

THE COURT: Okay. After hearing Mr. Kelly's opening statement, it appears that the other plaintiff in this action is participating in these proceedings. I don't have the instructions with regards to the other plaintiff of any kind.

MR. KELLY: I understand that, Your Honor. We had just noticed that. We got -- I'm sorry.

THE COURT: And your verdict form has no reference to that, either. Just thought I'd call it to your attention.

MR. KELLY: We're aware of that, Your Honor. Thank you.

THE BAILIFF: Okay. We are in recess.

(Recess.)

(Jurors resume their respective seats.)

THE COURT: Okay. You may resume.

MR. GELBLUM: Thank you, Your Honor.

DIRECT EXAMINATION (continued) BY MR. GELBLUM:
Q. Mr. Freeman, did you also prepare from the documents that were provided by the defense a summary of the profits that Mr. Simpson gained from the murders in this case?
A. Yes, sir, I did.

MR. GELBLUM: Could you put that summary up on the Elmo, Steve. (Document displayed on Elmo.)

MR. GELBLUM: That will be next in order. 2414?

THE CLERK: Correct.

(The instrument herein described as a summary of profit gained by Mr. Simpson marked for identification as Plaintiffs' Exhibit No. 2414.)
Q. (BY MR. GELBLUM) Can you explain this exhibit to the jury, please, Mr. Freeman?
A. Yes, sir. I was provided -- should I approach the screen?
Q. Sure.
A. Defendant provided us with copies of checks for monies received, or copies of ledger pages which recorded monies received, and they were basically in five different categories; the book receipts for "I Want to Tell You" --
Q. That's the name of the book by Mr. Simpson?
A. Yes, sir. Video income.
Q. Was that the video Mr. Simpson distributed regarding his version of the events of the murders?
A. Yes, sir. The Star photos.
Q. The photographs that Mr. Simpson contracted -- had published in Star tabloid upon his release from jail?
A. That's my understanding, yes, sir. Proceeds --
Q. Okay.
A. Proceeds from interviews.
Q. Those are all interviews since his release from jail?
A. Yes, sir. And autographs, memorabilia, and all other categories.
Q. The autographs and memorabilia are all things that were done after Mr. Simpson was arrested for these murders?
A. That's my understanding, yes, sir.
Q. Okay. The dollar amounts listed are taken from where?
A. It's taken from the financial records provided by defendant or from copies of checks.

MR. GELBLUM: Steve, can you put up briefly the other two pages, just so the jury -- they'll get this in the jury room.
Q. (BY MR. GELBLUM) Tell the jury what's on the Elmo now.

MR. GELBLUM: That will be part of 2414.

(The instrument herein referred to as Summary of Defendant profit gained (murders) was marked for identification as Plaintiffs' Exhibit No. 2414.)
A. Whatever's done, the page's attached to Exhibit 2414 which listed the date that appeared on the check, or the date of the entry on the ledger, and the dollar amount that corresponds to that. And then for each category I've totalled that amount. So, for example, for the book, the total is $991,743. That's the amount that appears on the first page of Exhibit 2414. The total for the video as of January 16, 1996, and December 11, 1996, is $303,500. The total for the photographs between October 4, 1995, and December 1995, is $433,693.
Q. Those are dates of receipt of payment by Mr. Simpson?
A. That's correct.
Q. All right. And interviews?
A. The interviews between May 23, 1996, and September 12, 1996, a total amount $75,300.

MR. GELBLUM: The next page, Steve, please. (Document displayed on Elmo.)

MR. GELBLUM: You can just run it up slowly, Steve.
Q. (BY MR. GELBLUM) Again, these are the dates shown and the amount shown; these are all taken directly from information provided by Mr. Simpson?
A. Yes, sir, that's correct.
Q. Do you have any way of verifying whether this information is complete?
A. No, I do not.
Q. All right. Then your grand total is what?
A. The total for autographs, memorabilia, and other items, is $1,013,900. And the total for all categories is $2,818,136.

MR. GELBLUM: Steve, quickly go back to the top of this page. (Elmo adjusted.)
Q. (BY MR. GELBLUM) You said earlier all of these are -- the autographs and memorabilia are all for -- the autographs and memorabilia are all for activities Mr. Simpson engaged in after he was arrested for the murders; is that right?
A. Yes, sir.
Q. The dates reflect that?
A. Yes, sir.
Q. Go ahead down, Steve. July 8, '94 is the first one. And I believe Mr. Simpson was acquitted and released on October 3, 1995; is that your understanding?
A. Yes, sir.
Q. So there's a few after that date. Okay. Thank you very much.

MR. GELBLUM: I have no further questions, Your Honor.

THE COURT: Cross-examine.

MR. BAKER: You want to put that back on the board, please. I want you to go right to the bottom. (Elmo adjusted.) CROSS-EXAMINATION BY MR. BAKER:
Q. Now, in 1996, the total amount for autograph income Mr. Simpson has made is $600, right?
A. That's the only entry we were provided for '96, yes, sir.
Q. And in your calculations, Mr. Simpson would make at least a million to a million and a half a year off autographs alone, not including memorabilia, correct?
A. I don't know one way or the other.
Q. Well, you looked at Mr. Roesler's deposition, and you looked at his report, and you interviewed him twice in order to come to your opinions and conclusions relative to the largest entry on the balance sheet, that is the value of his name and likeness; isn't that true, sir?
A. That's correct. Yes, sir.
Q. And you saw where Mr. Roesler said that Mr. Simpson's name and likeness, and he categorized it in terms of income, that he would earn a million to a million five a year off autographs alone; isn't that true, sir?
A. I understand that's one of the things he took under consideration, yes, sir.
Q. That's totally contrary to what you've seen in terms of Mr. Simpson's autographs, is it not, sir?
A. It's contrary to whatever I've been provided, yes, sir.

MR. BAKER: Can you get the other sheet out now.
Q. (BY MR. BAKER) You reviewed Mr. Simpson's balance sheets, correct?
A. Yes, sir. Taking into account the fact that the word "reviewed" means certain things to accountants, I've not reviewed it in the sense of a particular use of that term. But the way most people use the term "reviewed," I have reviewed it.
Q. All right. And you reviewed his factual balance sheet, that is before balance sheets were ordered, written for his assets relative to this trial, correct?
A. Yes, sir.

MR. BAKER: Okay. You can take that down, Steve. (Elmo adjusted.)
Q. (BY MR. BAKER) Did you see in any balance sheet that Mr. Simpson had prepared whether he was trying to get a loan, whether he was preparing -- having his accountants and business manager prepare a balance sheet, or a statement of financial condition for internal purposes, did you ever see one entry for name, likeness, and trademark?
A. No, sir, I did not.
Q. Not a single one, even when he went to the bank, correct?
A. That's correct.
Q. And that is what you have included in a summary of his financial condition, and that was never in Mr. Simpson's history, as an individual, included in his financial condition, as far as you are aware, true?
A. That's correct. Yes, sir.
Q. And let's take it one step further. The present value of the NFL pension of 175, 5, that was never included at all by condition, was it?
A. That's correct.
Q. And, in fact, if Mr. Simpson doesn't live to be 55 or live out another 24 years, he may never get one cent of that, correct?
A. It depends on when he passes, that's correct.
Q. And although you have included 175, 5 as a present value of his pension that's not a salable asset because it's speculative whether he'll ever collect 5 cents of that; isn't that true, sir?
A. Let me correct --
Q. Can you answer my question?
A. Yes, sir, I can.
Q. Then answer it.
A. It's not speculative in that we do have statistics which tell us what the average life span of a person 50 years old is. And those are used as the basis for financial measurements every day of the year.
Q. That isn't an asset that a bank's going to loan money on because there's no guarantee, of course, that Mr. Simpson will ever collect 5 cents on it; you would agree with that?
A. If he passes before he's age 55 he will collect nothing. If he lives more than 24 years, of course, he'll collect far more.
Q. Maybe you didn't understand the question. Let me ask it again. That is not an asset that a bank would loan money on because it's not -- it's a contingent asset; isn't that true, sir?
A. Depends on the terms of the amortization. They will take into account income and that is a source of income.
Q. All right. In terms of the 24,800 -- $24,880,568, that is basically his entire net worth?
A. It's a substantial part of it.
Q. Well, it's about 90 percent of it, isn't it?
A. Yes, sir.
Q. That is an item that is made up of a contingent income that Mr. Simpson may never see, correct?
A. I don't have an opinion one way or the other.
Q. You know for a fact, Mr. Freeman, that you looked at Mr. Roesler's deposition, you looked at Mr. Roesler's report, and you know what the component parts of that are; isn't that true, sir?
A. Yes, sir, only by way of example.
Q. Well, you know what Mr. Roesler said. He's sitting here in the court room. He said that Mr. Simpson will get a million to a million and a half a year on autographs alone, that he could sell at $50 a piece, 20 to 30,000 autographs, correct?
A. I would review the report to see that. I think that's one of the things he did consider, however.
Q. And that he would have a book deal, that he had an income from movies an endorsements. That's all the component parts of the value of name and likeness, right?
A. I understand those are things he considered, yes, sir.
Q. And did you look at a single piece of paper to determine what Mr. Simpson made in the last six months for selling his name and likeness?
A. I've summarized in the prior exhibit the information that you've given us, so that's all I've looked at.
Q. Did you determine whether or not Mr. Simpson made over $600 for selling his name and likeness in the last six months?
A. I have no way of making any independent determination. I've only summarized what you've given me.
Q. My point is, sir, if your numbers based upon Mr. Roesler's opinions are correct, Mr. Simpson should have made in the last six months at least a million 250 selling his name and likeness, for your numbers to be valid, correct?
A. That's not correct at all, no, sir.
Q. Well, you have taken an amortized -- as I understand your testimony, you have taken as an average that he will make $2.5 million per year selling his name and likeness, correct?
A. That's correct.
Q. And if you have variation of that 2.5 million -- it could certainly be, for example, one year make 3 million, one year make 1 million, et cetera, correct?
A. That's correct.
Q. And you have figured out that in coming to your opinions and conclusion for 90 percent of what Mr. Simpson's financial value is, or financial worth is, you have averaged that he would make 2.5 million, correct?
A. That's correct.
Q. And do you know -- have you looked at any piece of paper to determine whether Mr. Simpson ever, when he was working for Hertz, NBC, and his image was not tarnished at all, had he ever made $2.5 million?
A. I don't know one way or the other.
Q. Well, wouldn't it be important for you, before you come on the witness stand, to tell this jury that he will have a value of $24,880,000 in the next 25 years, wouldn't it be important for you to determine what he had made in any given year, the highest amount that he'd ever made selling his name and likeness?
A. Well --
Q. Would it be important, sir?
A. I asked for that information, to review that, and was never provided it.
Q. You never asked us for any of that information, did you, sir?
A. I asked counsel. You're right.
Q. And you have never looked at one piece of paper relative to what his past earnings have been, have you?
A. No, sir, that's not true. In his loan application he listed his monthly income as $111,000 in '94, I believe. Maybe '93.
Q. Now, did you ever see any document as to how much Mr. Simpson actually made based upon the sale of his name and likeness?
A. Other than what you provided, and which we've summarized here, no, sir.
Q. Let me read your deposition. Page 8, line 16 through 19.

MR. GELBLUM: Can you hold on one second, please.

MR. BAKER: (Reading.) (Mr. Baker read a portion of the transcript of Mr. Neill Freeman's deposition.)
Q. Did you ever see any document as to how much Mr. Simpson actually made based upon the sale of his name and likeness?
A. No, sir, I haven't.
Q. (BY MR. BAKER) Now, that's what you testified to, correct?
A. That's correct.
Q. And you still haven't?
A. That's correct. Other than to the extent that it's included in the income reported to the lending institution and, of course, the information that you most recently gave me.
Q. Mr. Freeman, the information that you saw as income doesn't have any breakdown as to what the income was, whether it was for name and likeness, or anything, isn't that true, sir?
A. That's correct.
Q. So you've never seen a piece of paper as to what Mr. Simpson has ever made based upon the sale of his name or likeness, correct?
A. Other than this most recent stuff that you've given us, correct.
Q. And what he made in the whole calendar year of 1996 was $600, right?
A. And of the two prior years, slightly over a million.
Q. Not on the sale of his name and likeness; is that true?
A. That's what autographs and memorabilia are about.
Q. All right. Let's go back to these numbers. Now, Orenthal Productions has to be able to sell and to pay the loan, has to have income, correct?
A. That's correct.
Q. It's your understanding that Orenthal Productions is, in fact, a solely owned corporation of Mr. Simpson's, correct?
A. Yes, sir. That's what I understand.
Q. And it has no assets?
A. Has very few assets, merely a conduit.
Q. It has no ability, unless Mr. Simpson can sell his name and likeness, it has no ability to pay Mr. Simpson; you would agree with that?
A. I would agree with that.
Q. And so if, in fact, there's is no ability of Mr. Simpson to sell his name and likeness, it would be appropriate to value the loan that Orenthal Productions owes Mr. Simpson at $1; you would agree with that?
A. No, sir, I wouldn't.
Q. All right. Now, under the Apollo residence, you saw the footnote on the Apollo residence, did you not, sir?
A. Yes, sir, I did.
Q. There's the residence of Mr. Simpson's mother since 1969, correct?
A. That's what the footnote says, yes, sir.
Q. And Mr. Simpson has indicated that he does not have a beneficial interest in that property, correct?
A. Other than the footnote, I don't know.
Q. Well, you were advised that that's where his mother has lived for the last almost 30 years?
A. Yes, sir.
Q. And she has the beneficial interest in that house?
A. I'm not prepared to make that legal conclusion.
Q. I see. You're prepared to make the jump of 25 million, but you're not prepared to make a conclusion that Mrs. Simpson has the beneficial interest in a house that she's been living in for 28 years; is that the way you want to leave it with the jury?

MR. GELBLUM: Objection, argumentative.

THE COURT: Sustained.
Q. (BY MR. BAKER) Now, you say a reasonable person would pay $25 million to Mr. Simpson for his name and likeness for the next 25 years, right?
A. That's correct.
Q. And did you try to contact any reasonable person to see if there is a reasonable person alive who would pay $25 million to have sole exclusive rights of Mr. Simpson's name and likeness?
A. That's not the basis of my testimony.
Q. Can you answer my question. Did you contact one person to see if they would pay anything for the name and likeness of Mr. Simpson, much less $25 million?
A. No, sir. That's not the basis of my testimony.
Q. Do you know any banker who would loan $5 million on this purported $25 million value of Mr. Simpson's name and likeness? If so, name one; we'll call him and get him on the witness stand.

MR. GELBLUM: Objection, relevance, whether he knows anybody.

THE COURT: Sustained. It as argumentative. Ask a question.
Q. (BY MR. BAKER) Do you know any banker who would loan $5 million based upon the $25 million value that you have placed on Mr. Simpson's name and likeness; a single banker?

MR. GELBLUM: Relevance, called for speculation.

THE COURT: Overruled.
A. I don't know any bankers.
Q. (BY MR. BAKER) You don't know any bankers, as a CPA?
A. I don't know any bankers that are in that business.
Q. You don't know a single person who would pay a million dollars for what you have based on adjustment in the value of his name and likeness in trademarks of $25 million; you would agree with that?
A. I haven't attempted to find anybody. I don't know whether I do or not.
Q. And when you were retained, sir, you were retained to increase the value of Mr. Simpson's financial condition before this jury, and you understood that to be the goal that you had in being retained for the plaintiffs, correct?

MR. GELBLUM: Objection, argumentative.

THE COURT: Sustained.
Q. (BY MR. BAKER) You were retained and you were instructed to increase the value of Mr. Simpson's financial condition, correct?
A. Absolutely not.
Q. Never happened?
A. No, sir.
Q. No. And let's go to the tax picture. So, as I understand it, based upon your figures, you think that Mr. Simpson has a net worth of 15,703 less 8.5 or 7.2 million, right?
A. It's 15 million 703. I'm not willing, at this point in time, to offer an opinion on the 8.5.
Q. I don't understand. You don't have any problem offering an opinion on $25 million of name and likeness. You don't think --

MR. GELBLUM: Objection, speculative, Your Honor, argumentative.

THE COURT: You may rephrase that.
Q. (BY MR. BAKER) You didn't have any problems basing your opinion on Mr. Roesler's report and your interview of him, that Mr. Simpson would earn 2 to $3 million a year for the next 25 years? You didn't have any problem with that?
A. That's correct.
Q. But you have a problem reducing the 15, 703 by the $8.5 million verdict that this jury rendered on Tuesday; is that correct?
A. Not at all.
Q. Okay.
A. That's not my testimony.
Q. So then, the net adjustment to his net worth under your numbers is 7,203,529?
A. If you give cognizance to the entire $8.5 million, assuming that that is rendered as a just judgment, ultimately, yes, sir.
Q. Now, let's go to taxes, your views of tax law.

MR. BAKER: What's the number of the calculation to adjustment to deferred tax?

THE CLERK: 2413.

MR. BAKER: You want to put that up, Steve.
Q. (BY MR. BAKER) Let me ask you a question before we do that. Let's say that Mr. Simpson earned $50,000 a year for the next 10 years selling memorabilia, autographs. What's the cash value of that?
A. The present cash value of that would be probably -- how much did you say, 50,000?
Q. Yes.
A. Probably something just slightly less than $250,000.
Q. Around 240, 230,000; around that neighborhood?
A. Round numbers, yes, sir.
Q. That would be contrasted to the adjustment that you have placed of $25 million, correct?
A. Yes, sir. That's correct.
Q. And indeed, the $25 million adjustment assumes that Mr. Simpson will, right up to the day he dies, be making 2 to $3 million?
A. That's exploiting his name and likeness, and the trademarks that he owns, for the rest of his life, yes, sir.
Q. Even when most of the people who are in the memorabilia market wouldn't have been alive when he ever played football, correct?
A. That may be true. I don't know.

MR. BAKER: All right. Now, can we put that 2413 up, please. (Exhibit 2413 displayed.)
Q. (BY MR. BAKER) Now, under the vested pension plan of 4,121,479, if that was levied upon and removed from the pension plan itself, there is a 62.50 percent tax, right?
A. That's the tax including penalties, yes, sir.
Q. So that this tax that was indicated in the balance sheet by Mr. Taft and Mr. Goodfriend is, in fact, an accurate indication that if that tax is removed currently, correct?
A. If in fact the pension plans are invaded and the money is distributed to Mr. Simpson, that would be an accurate reflection.
Q. And that would indicate that the 712,307 is not an overstatement of tax liability if the pension plans are eliminated presently, true?
A. If the pension plans are invaded, the money removed, that's correct.
Q. It's your opinion they just flat figured incorrect the May Medical Associates tax. And have you seen any documentation relative to May Medical Associates other than line items?
A. Other than?
Q. The line items that are seen on balance sheets?
A. Yes, sir, I have. We have the K1 for 1994, and that's one of the sources of the inconsistencies in the information.
Q. And you don't believe that Mr. Goodfriend, a CPA, would know more about the tax liability than you, who's been doing Mr. Simpson's taxes?
A. I don't know. He hasn't shared with us that information. I couldn't form a conclusion on that.
Q. You didn't ask him, did you?
A. That's correct.
Q. Now, on the deferred tax benefit offset on the attorney fees -- you want to move that up please, Steve. (Elmo is adjusted.)
Q. (BY MR. BAKER) There has to be an income to take them off as a deduction, correct?
A. That's correct. Although business expenses can be carried over.
Q. And that may or may not be construed as a business expense; you would agree with that?
A. Yes, sir, I would agree with that.
Q. And so you have taken -- in your $1,310,229 deferred tax benefit, you have assumed two things: One, that Mr. Simpson has enough income to write off 2.8 million, and two, that the IRS would conclude that this is a business expense as contrasted to a personal expense, correct?
A. That's correct.
Q. And if, of course, either of those premises that you have used are incorrect, your 1,310,229 is incorrect and invalid?
A. Well, if -- if the basis -- the hypothesis that one would use varies in any number of ways, the number will change, the computation is what it is.
Q. Maybe you didn't understand my question and I'll ask it again. If in fact IRS didn't let you write off attorney fees on this case, that tax benefit is gone, correct?
A. It is gone. I would agree with that.
Q. If there is not enough income to write off, the tax benefit is reduced by the amount of income that doesn't exist to the tune of $2.8 million, correct?
A. To the extent it's not carried over, yes, sir.
Q. Now, you have been -- and, of course, in doing that is, in suggesting that Mr. Simpson has a $1,000,310 -- $1,310,000 deferred tax benefit, that would of course go to increase the value of his financial portfolio, correct?
A. That would increase the net of his assets less his liabilities, if you -- if that's where you're going.
Q. And the same with the pension plan and the same with medical -- May Medical? In other words, all of the figures that you've done on calculation of adjusted deferred tax would go to increase the value of Mr. Simpson's net worth, correct?
A. They would reduce the $4,121,000 shown on the chart and therefore would increase the bottom line.
Q. Now, you were talking -- discussing with Mr. Gelblum this 4,121,508 number, correct?
A. Yes, sir.
Q. Now, that is a number that was a calculation for tax liability on liquidation, true?
A. That's correct.
Q. Now, the number --
A. Excuse me. That's what it purported to be.
Q. Well, that's what you took it as in terms of your opinions and calculations, was it not?
A. Yes, sir, I've used that as a basis for those corrections.
Q. Oh. Now, normally when people have a summary of their financial condition, they don't include tax liability on liquidation; you would agree with that?
A. They would typically if they're assessing their financial condition not assume liquidation as you did in the case of the pension plan but would use the 45 percent as I have used.
Q. The 45 percent is an income tax rate, is it not?
A. That's correct.
Q. And when you were talking about reviewing Mr. Simpson's balance sheets before the balance sheets made for litigation, they did not have the liquidated tax liability on them, did they?
A. They didn't have any tax liability other than perhaps real estate taxes.
Q. And it did list income on there. It listed was that the page -- what assets, what balance on the Rockingham estate, correct?
A. Well, that tax --
Q. No, no. Listen to my question.
A. Well, you have a misunderstanding as to what's on the balance sheet.
Q. Let's go through it and maybe you can help clarify it.
A. Okay.
Q. On the condition of Mr. Simpson's financial summary -- Phil, get out the summary, okay. Blow-up is displayed.)
Q. (BY MR. BAKER) Now, on the summary of financial condition, you have got assets, including what's in the bank, the partnerships and pension plans, personal furnishings, et cetera?
A. That's correct.
Q. And you don't have, for example, what his income is estimated to be in the next year or the next 25 years, correct?
A. I don't have it?
Q. You have it, but on the reports that you reviewed of Mr. Simpson in terms of his summary of financial condition, that existed prior to any report being generated for litigation, it listed what his assets were, correct?
A. That's correct, and his liabilities.
Q. And it didn't list, for example, as I stated, it didn't list 25 years of what his income may or may not be, did it?
A. Or the present value of that, no, sir.
Q. And it also did not include any taxes on liquidation, correct?
A. That's correct, or any taxes at all.
Q. And the only other taxes would be taxes if in fact he made an income, which isn't listed on a summary of financial --
A. No, sir, that's not true at all.
Q. Well, let's go back. You're certainly not in terms of an ongoing financial statement going to list taxes on liquidation; you would agree with that?
A. Well, I don't know what you mean by liquidation, but if by liquidation you mean the disposition of an asset, that's exactly what's listed.
Q. That's what's listed after we were required to disclose his financial condition before litigation because they would -- those would have to be paid if in fact the assets were liquidated, you'd agree with that, you included this in your statements?
A. That's correct. I included it because it's a proper presentation.
Q. And the point is that if, in fact, you have an ongoing enterprise such as Mr. Simpson and Orenthal Productions and you have no intentions to liquidate it at all, you don't put taxes on for that would be incurred in liquidation, correct?
A. That's correct.
Q. So when the change occurred in his statement of financial condition, it included taxes that would be incurred upon liquidation; you would agree with that?
A. That appears to be the basis for some of the computation, yes, sir.
Q. And so you would anticipate that if you're going to have a fire sale of Mr. Simpson's assets and he is going to have to liquidate assets, that his net worth is going to decrease because of the amount of taxes that are going to have to be paid, correct?
A. If even $1 in tax is paid, it would reduce his net worth, yes, sir.
Q. In terms of -- for example, you talked about Rockingham and rollover provisions; remember that?
A. Yes, sir.
Q. If you sell Rockingham, which has a cost of 1 million 4, and you sell it for three seven you're going to incur taxes unless you buy another house that's worth three seven, right?
A. That's correct.
Q. If Mr. Simpson is forced to liquidate his house, he's not going to have any money to buy a house for $3.7 million, he's going to have to pay taxes between the one, four and the three, seven, true?

MR. GELBLUM: Objection, calls for speculation.

THE COURT: Overruled.
A. Depends on what he does with the proceeds.
Q. (BY MR. BAKER) If the proceeds are used to satisfy a judgment, he has no money to -- based upon even your balance answer sheet, he has no cash to spend to buy another house; isn't that true?
A. If he takes the proceeds from the sale and disposed of them other than buying a house, he would incur a tax liability.
Q. In your summary of financial condition, you have included, as we indicated -- in other words, this number of $25 million, you would agree this number isn't available to Mr. Simpson to spend or to satisfy any judgment, is it?
A. If he were to enter into negotiations to sell the complete future value of his name and likeness and all his trademarks, it would be available to him.
Q. If there were a buyer and he could sell it, obviously it's an asset that he could have control over, correct?
A. I agree with you.
Q. The number you've put up there of $25 million, it assumes there is some reasonable person out there who would pay that kind of money for Mr. Simpson's name and likeness now throughout his lifetime, correct?
A. That's correct.
Q. And if there is no such person who would pay $25 million, reasonable or otherwise, you would agree that amount of money is not available to satisfy any punitive damage claim, correct?
A. It depends on whether a person would buy certain portions of the rights, that's all of the rights that -- there could be movie rights, as you well know, and other types of rights, but taken to the extreme, if no rights could be sold at all, that money would go away.
Q. And he would not have any of the 25 million to pay any punitive damage claim in that scenario?
A. That would be -- under that assumption, that would be correct.
Q. And we have certainly not the 175,592 to pay any punitive damage claim if in fact a punitive damage claim is awarded by this jury in the next couple of days, right?
A. Last of that he would start receiving that in the year 2002, so he wouldn't be able to make the payment until 2002.
Q. So that the levy of execution could come and he would have no money, basically $25 million that you've added into his net worth, to make any payment, would you agree with that?
A. If he didn't sell some or all of that, yes.
Q. And as well, sir, if you remove those items and include the $8.5 million award of this jury on Tuesday, Mr. Simpson has a negative net worth, correct?
A. If you remove any large item from that and substitute the $8-1/2 million, it would tend to decrease the net worth, that would result in a negative net worth, yes, sir.
Q. And being that he has more liabilities than he has assets, correct?
A. Has more listed liabilities than he has acknowledged assets, correct.

MR. BAKER: That concludes my cross.

MR. P. BAKER: You want this up (indicating to blow-up entitled "Summary of Orenthal Simpson Financial Condition")?

MR. GELBLUM: Sure.

REDIRECT EXAMINATION BY MR. GELBLUM:
Q. Is your expertise in valuing name and likeness?
A. No, sir.
Q. You relied on Mr. Roesler for that?
A. I did.
Q. Mr. Baker asked you several questions about whether you asked Mr. Goodfriend and Mr. Taft for information. Did you understand you had the ability to call him up on the phone and get information from him?
A. No, sir. I was under the impression that all my requests had to go through you.
Q. Their witnesses for the other side?
A. That's correct.
Q. Now, Mr. Baker asked you some questions about whether you'd seen any documents reflecting receipts by Mr. Simpson of revenues based on his name and likeness. Could you put up, Steve, the summary of the profits gained from the murders, on the Elmo, please. (Document is displayed on Elmo.)
Q. You do understand a significant portion of those revenues to have come as a result of Mr. Simpson's name and likeness?
A. Yes, sir, I do.
Q. Autographs, memorabilia?
A. Photos.
Q. Interviews?
A. Interviews, yes, sir.
Q. And do you understand that Mr. Roesler in fact included in his, what he's calling the name and likeness valuation that ended up in your $25 million number, book sales as well?
A. Yes, sir.

MR. BAKER: I'm going for object to him leading this witness.

THE COURT: This is redirect. I'll allow certain latitude.
Q. (BY MR. GELBLUM) So, in fact, the bulk if not all of the $2.8 million there which we saw on the other sheet as having been earned in about a 15-month period, in fact, is a result of the exploitation of his name and likeness?
A. I would consider all those exploitation of name and likeness.
Q. Okay. Mr. Baker also asked you some questions about Orenthal Productions' loan receivable, the $265,000?
A. Yes, sir, he did.
Q. Right. And you saw a February 15, 1996 financial statement prepared by the defense, correct?
A. Yes, sir, I did.
Q. Okay. And you saw a document of that date for Orenthal Productions as well, correct?
A. Yes, sir, I did.
Q. And did that document, as of February 15, show an amount payable to Mr. Simpson?
A. Yes, sir, it shows --
Q. How much?
A. Shows $1,043,091 due to Mr. Simpson as of February 15.
Q. 1996?
A. 1996.
Q. And on the February 15, 1996 financial statement from Mr. Simpson, what value did the defense put on that receivable, the $1 million receivable?
A. They put $1.
Q. Under the same rationale, that the assets were less than liabilities?
A. Yes, sir.
Q. And in fact, has Orenthal Productions apparently managed to pay over $750,000 to Mr. Simpson in the last ten months?
A. Yes, sir.
Q. Is that why you discredit the $1 valuation?
A. Yes, sir. That's one reason.
Q. Okay. You also referred in your response to questions from Mr. Baker to a loan application?
A. Yes, sir.
Q. Okay. Just like to show you what I'll mark next in order as 2415, a 3-page document.

(The instrument herein described as a loan application was marked for identification as Plaintiffs' Exhibit No. 2415.)
Q. (BY MR. GELBLUM) Is this the loan application you're referring to?
A. Yes, sir, it is.
Q. Is that signed on the last page?
A. Yes, sir.
Q. And can you read the signature to the jury?
A. It says Orenthal J. Simpson by -- looks like Mr. Taft, Attorney in Fact, dated 4/6/95.
Q. You would say you thought it was '93 or '94. That's in fact April '95?
A. Yes, sir, it is.
Q. That's while Mr. Simpson was on trial?

MR. BAKER: I'm going to object to this. That's outside the scope.

THE COURT: Overruled.

MR. GELBLUM: If you move up to the top of the page, please, Steve. (Elmo adjusted.)

MR. GELBLUM: I'm sorry, to the previous page. (Elmo adjusted.)
Q. (BY MR. GELBLUM) There's a monthly income figure shown for Mr. Simpson --
A. Yes, sir.
Q. -- at the top of the page. And the left-hand column, can you read those off for the jury?
A. Yes, sir. The borrower is Mr. Simpson. Base employment income is 33,500, dividends and interest per month is $8,860 net, rental income per month is $7,125 and other income per month is 62,089.58, for a total monthly income of 111,574.60.
Q. In your practice as a CPA, have you seen these kind of loan applications before, these standard forms?
A. Yes, sir.
Q. And are these signed under penalty of perjury?
A. Yes, sir, they are. There's a federal perjury statute that makes it a federal crime to make a false or misleading statement in connection with the granting of credit from a federally insured institution.
Q. And again, the date on this is April, 1995?
A. Yes, sir, it is.
Q. Okay. Finally, sir -- you can take that down, Steve. (Mr. Foster complies.)
Q. (BY MR. GELBLUM) Mr. Baker asked you some questions about the deductibility -- put up the adjust -- calculation of adjustments of deferred tax. I'll go down the deferred tax benefit there on the tax benefit for the attorney fees. You read Mr. Taft's deposition?
A. Yes, sir, I did.
Q. And did you see there that he -- what the basis -- is that where you got the information that they were claiming these fees as deductions?
A. Yes, sir, I did.
Q. And do you see that he said he got an opinion from a tax attorney allowing him to do that?
A. That's correct.
Q. Okay. Now, Mr. Baker asked whether if Mr. Simpson does not have sufficient income that he would not be able to use all of these offsetting losses; is that right?
A. That's correct.
Q. And by the same token, if Mr. Simpson has additional losses, he would not have to pay all of the various taxes that he had listed he would -- that he would have to pay; is that correct?
A. To the extent that he had losses, it would offset the income, it would reduce the amount of taxes payable.
Q. Thank you.

MR. GELBLUM: I have nothing further.

MR. BAKER: Put up 2415 again. (Exhibit 2415 is displayed on Elmo.)

RECROSS-EXAMINATION BY MR. BAKER:
Q. Okay. Now, this was income in 1993, '94, right?
A. At the time I testified to it a few moments ago, I was not sure of the day. That appears that it's in early 1995.
Q. Okay. So it would be 1994 income?
A. No, sir. It's current income.
Q. Now, how much is income at -- what's the monthly income at 2.5 million a year?
A. It's about $200,000 a month.
Q. And the book and the videos where you say Mr. Simpson -- you had it categorized as his profit on the murders.
A. Yes, sir.
Q. Those were both one shot deals, correct?
A. Yes, sir.
Q. You wouldn't use that to assert that he was going to make that kind of income, correct?
A. Well, I think that you have a series of one shot deals that produce income over time.
Q. And there's no one shot deals in 1996 that you were aware of, the last half?
A. I hadn't been provided any information, no, sir.
Q. Well, you got the computer printouts of all the income that Mr. Simpson made in 1996. That's how you did those charts; isn't that correct?
A. Well, I got redacted computer printouts, that's correct, and they were limited to those categories and that's how I summarized it.
Q. Now, what were Mr. Simpson's attorneys' fees for the criminal trial?
A. I can tell you what the balances are.
Q. Do you know what he paid total?
A. No, sir. You haven't given us that information. As of December 31, about 2.8 -- almost $2.9 million for both trials and including --
Q. That's still owed; is that correct?
A. Yes, sir.
Q. And then there's $200,000 roughly for attorney fees for the custody hearings?
A. That's correct. 188,000.
Q. And in addition, Mr. Simpson -- you don't know if he's paid 2, 3, $4 million already in attorney fees to the criminal lawyers?
A. We don't know, no, sir.
Q. Nothing further.

MR. GELBLUM: Nothing further, Your Honor.

THE COURT: Okay. Next --

MR. GELBLUM: Move in Exhibit 753 and 2409 through 2415.

MR. BAKER: Objection, cumulative and argumentative.

THE COURT: Received.

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 753.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2409.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2410.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2411.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2412.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2413.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2414.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2415.)

THE CLERK: I need 2409 and 2415. I need the C.V. and the 3-page loan application.

MR. GELBLUM: Call Mark Roesler, Your Honor.

THE CLERK: Counsel, can I get those two exhibits before we move on. (Mr. Gelblum hands exhibits to the clerk.)

MARK ROESLER, called as a witness on behalf of Plaintiffs, was duly sworn and testified as follows:

THE CLERK: You do solemnly swear that the testimony you may give in the cause now pending before this court shall be the truth, the whole truth and nothing but the truth, so help you God~?

THE WITNESS: I do.

THE CLERK: Please be seated. Sir, would you please state and spell your name for the record.

THE WITNESS: My name is Mark Roesler, R-O-E-S-L-E-R, first name M-A-R-K.

DIRECT EXAMINATION BY MR. GELBLUM:
Q. Morning, Mr. Roesler.
A. Morning.
Q. What's your occupation, sir?
A. I'm chairman and CEO of a company called CMG Worldwide.
Q. And what is the business of CMG Worldwide?
A. We represent various sports and entertainment personalities.
Q. And what do you do for them?
A. We do marketing, licensing, management work for them.
Q. Can you briefly tell the jury about your education since college.
A. I graduated from -- from college in 1974, and then -- I'm sorry, 1978 -- and I went to Indiana University School of Law. And I also went to Indiana University Graduate School of Business, where I received both a masters in business administration and a juris doctorate degree.
Q. What year was that?
A. That was -- I graduated in 1981 from both schools.
Q. And upon graduation, what did you do?
A. Upon graduation, I immediately went to work for a company by the name of Curtis Publishing Company. And they were in the business of -- of publishing a magazine called the Saturday Evening Post. And that magazine owned about 350 copyrighted illustrations of Norman Rockwell. Norman Rockwell had died a few years earlier, and we began working with his estate, and I started representing -- working with his estate in 1981. And shortly thereafter, we started representing outside clients, and I was put in charge of that. And our first client in 1981 was the Elvis Preseley estate.
Q. And did you represent the Elvis Presely estate?
A. I represented the Elvis Presely estate from 1981 through 1987.
Q. And since 1981, have you represented both living celebrities and estates of dead celebrities?
A. Yes, sir I have.
Q. As a general matter, what kinds of things do you do for your clients?
A. Well, like you say, we represent both living and deceased clients. Where we have become the biggest company in the business of representing famous deceased people. And our specialty is really representing the famous personalities of the twentieth century. Obviously, some of those are deceased. In the sports area, we represent mostly Hall-of-Fame-type athletes, and the baseball and some in the football area.
Q. Can you give us some examples?
A. In the baseball area, we represent people like Jim Palmer, Bob Eller (phonetic), Whitey Kilmer (phonetic), all Hall of Famers. Many of the famous deceased baseball players, from Babe Ruth, Lou Gherig, Ty Cobb, people like that. In the football area, we represent people like Vince Lombardi and Jim Thorpe. Other Hall of Fame living clients we represent are people like Johnnie Unitas. And we represent some boxing people, like Floyd Patterson, that are Hall of Fame boxers that are retired; deceased boxers like Jack Dempsey, Joe Lewis, people like that.
Q. Do you also represent celebrities outside the sports field?
A. Yes, yes, we do. We represent a number of entertainment industry clients. We represent James Dean, Marilyn Monroe, Humphrey Bogart, people like that. About probably 40 or 50 entertainment-type clients.
Q. Have you represented the estate of Malcolm X?
A. Yes, sir, I have, and still do.
Q. So, a wide variety of people?
A. Yes.
Q. Is -- the common thread is fame; is that correct?
A. That's correct. Fame in the twentieth century.
Q. What do you do for those clients, as a general matter?
A. As a general matter, we negotiate contracts that utilize their -- their image, their name, or their likeness. And obviously, generally, that's for a fee. And we also secure whatever legal protection is necessary to see that -- to see that that continues into the future.
Q. Okay. And what is the overall goal of the services you render for these clients?
A. Well, typically, the overall goal is to see that the assets are preserved and the asset is made as valuable as possible, and generally, that that value obviously results, in many cases, substantial sums of money. But in order to make it valuable, it's also necessary to do whatever's necessary to protect it, both in terms of --of negotiating specific contracts, narrow parameters, securing trademark production, things of that nature, guarding against unauthorized uses.
Q. Have you negotiated contracts for your clients in the area of appearances and autograph shows?
A. Yes.
Q. Merchandising?
A. Yes, sir.
Q. Book deals?
A. Yes, sir.
Q. Media uses?
A. Yes, sir.
Q. The whole gamut of ways to exploit a celebrity's name and likeness?
A. Yes, sir.
Q. Were you asked oh, do your services just relate to exploiting name and likeness within the United States?
A. No, sir. I mean, typically, the clients we represent typically have international name. Many of our clients -- we do more business outside the United States than we do inside the United States.
Q. Can you give me an example of that?
A. Well, one example in the sports area, we have a very successful chain of Babe Ruth restaurants, and the first one is -- has been opened. It's the largest restaurant in England, seats almost 500 people. That's in London. Another one is scheduled to open in Barcelona, and there's none of those in the United States. Someone like a James Dean or Marilyn Monroe, most of our business is outside the United States.
Q. All right. Now, take this down. (Indicating to blow-up entitled Summary of Orenthal Simpson's Financial Condition as of December 31, 1996, Revised 1-31-97. Were you asked to perform some services in this litigation, sir?
A. Yes, sir, I was.
Q. What were you asked to do?
A. I was asked to value the name and likeness of Mr. Simpson once a liability verdict was rendered in the civil action.
Q. Okay. Did you perform an analysis of that?
A. Yes, I did.
Q. Did you reach a conclusion?
A. Yes, I did.
Q. What was your conclusion?
A. Well, my conclusion was that Mr. Simpson had -- had value; that that could vary from year to year; but in general, the average value would be in the two- to three-million-dollar-per-year range.
Q. And that would be -- would that be for the rest of his life?
A. Yes, sir, it would be.
Q. And you've told us that you represent a number of estates of deceased clients. Would Mr. Simpson's name and likeness also have some value after his death?
A. Yes, it would. The State of California has a special statute called Section 990, and Section 990 specifically provides for the right of publicity as -- as this area's called, the right of someone to protect their name and likeness. It provides for that to extend for 50 years. I might say it -- at this point. That it doesn't necessarily end after 50 years, because we do have clients -- for example, Babe Ruth, who's been dead for 50 years this year, I believe, but because we secured a trademark protection for his name or his likeness, it's able to continue beyond that 50 years.
Q. What kind of sums were you able to obtain for somebody like Babe Ruth, who's been dead for 50 years?

MR. BAKER: Objection. Relevancy.

THE COURT: Overruled.
A. Someone like Babe Ruth brings in over a million dollars a year.
Q. (BY MR. GELBLUM) Now, I think you were sitting here when Mr. Freeman testified?
A. Yes, I was.
Q. He testified that, based on your opinion and reducing your numbers down to the present value, that a reasonable business person or investor today would pay approximately $25 million for the exclusive right to exploit Mr. Simpson's name and likeness for the rest of his life. Do you agree with that?

MR. BAKER: I object to that, Your Honor. It calls for speculation. There's no foundation.

THE COURT: Overruled.
A. It was -- it was my understanding that he said that someone would pay $25 million for the -- for the entire right of publicity, which would include both during his lifetime and after his lifetime.
Q. In fact, I believe you testified just during his lifetime.
A. Okay.
Q. Do you consider that a reasonable number?
A. I consider that a reasonable number.
Q. Okay. And we'll get into a little more detail later, but do you have experience where somebody, in fact, sells on a current basis, the right to use some celebrity's name and likeness in a limited area for a certain time in the future?
A. Yes, I do.
Q. Okay. Did you prepare a report in connection with your services here?
A. Yes, sir, I did.
Q. Do you have a copy of it handy?
A. Yes, in my briefcase.
Q. All right. If you'll get that out.
A. (The witness complies.)

MR. GELBLUM: This is Exhibit 752.

(The instrument herein referred to as Report by Mark Roesler with Exhibits regarding value of defendant's name and likeness was marked for identification as Plaintiffs' Exhibit No. 752.)
Q. (BY MR. GELBLUM) In preparing that report, Mr. Roesler, did you review any documents?
A. Yes, I did.
Q. What did you review?
A. I reviewed basically five different categories of items. The first category was a trademark search of the various trademarks that Mr. Simpson has tried -- is trying to secure for both his name and his likeness. The second segment were the two lawsuits that Mr. Simpson filed against several dozen companies that were using his name or likeness without his authorization. The third area was various current market information on the value of Mr. Simpson's -- both his autograph and his product. The fourth area were 20 contracts that Mr. Simpson has entered into for his name and likeness. Nineteen of them were after June of 1994. And the fifth area was the financial documents that were supplied to us by Mr. Simpson.
Q. Now, in reaching your conclusion that Mr. Simpson's name and likeness, as you described it -- and we'll go through the individual categories that make up that total -- come to about two to three million dollars a year, did you make any assumptions as to how that name and likeness would be exploited?
A. Yes, I did.
Q. What assumptions did you make?
A. Well, I made -- I made assumptions Mr. Simpson would use his reasonable or best efforts to -- to exploit his name and likeness.
Q. Okay. Did you assume anything about whether he would seek to protect his name and likeness?
A. Well, I reviewed the facts that Mr. Simpson had secured --was in the process of securing trademark protection for his name and likeness, and also reviewed the facts that he had filed several lawsuits against various people that were using his -- his name and likeness. So I reached the conclusion that he would continue to -- to proceed in that manner.
Q. Okay. Now, did you -- did you search the public records for information regarding Mr. Simpson's trademarks?
A. Yes, sir, I did.
Q. And do you have a summary of what that search revealed?
A. Yes, I do.

MR. GELBLUM: Mark that next in order as 2416.

(The instrument herein referred to as Roesler Summary of Search was marked for identification as Plaintiffs' Exhibit No. 2416.)
Q. (BY MR. GELBLUM) And what did that search reveal?

MR. BAKER: I object, Your Honor, because that assumes that they were granted.

MR. GELBLUM: He's applying for it; he's seeking to protect it.

THE COURT: It's his application. This is the basis of this witness's opinion. Overruled for that purpose.
Q. (BY MR. GELBLUM) How many different trademarks did Mr. Simpson apply for, according to the public record you found?
A. Well, Mr. Simpson has applied for six different trademarks that involve his name or his likeness. And some of them involve a combination of that. And those six different trademarks were filed in 20 different classes; and those were all filed since 1994 and since -- after June of 1994. Typically, it takes anywhere from two to four years for a trademark application to mature to an actual registration. But the -- in each application, Mr. Simpson -- either there's two different -- there's two different forms that you can use, either what's called an intent to use or an actual use, when you file these applications. For three of the applications, he filed what's called an actual use, saying he's already had use in those categories, and he listed 90 different goods that he had -- that he had actual use on. And on the intent-to-use applications, on the remaining ones, he listed his intention to -- to do as many over 500 different -- 500 goods. Some of those goods were the same. In the different classes, there were over 100 different types of goods that he indicated that he intended to use on that. And those applications are filed under penalty of perjury.
Q. And what are the six -- I think you said there are six different marks applied for?
A. Yes, sir.
Q. What are those marks?
A. The first mark is Team O.J. Justice For All. The second mark is The Juice. The third mark is O.J. Simpson with an image of Mr. Simpson.
Q. An image meaning a picture?
A. A likeness of Mr. Simpson. A fourth mark is just O.J. Simpson. The fifth mark is the -- just Juice. And the sixth mark is O.J.
Q. Okay. And what are some of the categories of goods Mr. Simpson is seeking trademarks on under those names?
A. Well, some of those -- some of those products are -- some of those classes of goods, rather, are metal goods, jewelry, paper goods, and printed matter.
Q. Back up a little from the microphone, Mr. Roesler.
A. Metal goods, jewelry, paper goods and printed matter, clothing, and toys, and sporting goods were the classes in the first mark that he filed for. And within those goods or services, it -- you can list various items. For example, in class 25, his clothing, and it lists various types of clothing items that you can specify.
Q. Okay. How does the scope of these trademark applications compare to the clients that you represent?
A. It's very extensive.
Q. And is 24 -- is this a typical procedure for somebody seeking to exploit their name and likeness, applying for trademarks?
A. Somewhat typical. A trademark -- a trademark will give you additional legal protection. Someone that's famous has a protectable right of publicity.

MR. PETROCELLI: Move back, Mr. Roesler; push the mike down a little. There you go.
A. (Continuing.) So there is a protectable right of publicity that an individual has. A trademark can give you additional protection that allows you to sometimes more easily enforce those rights. The trademarks can be expensive to -- to secure, so often, it's balanced against how much you want to spend to protect your name or your likeness with these trademarks, which is really just additional protection and gives you additional scope. So typically, the clients of ours that secure trademark protection are the ones that generate more significant sums of money on an annual basis.
Q. And how many classes of goods did you say Mr. Simpson had applied for protection on?
A. Twenty different classes of goods.
Q. Covering how many different goods, how many different items?
A. Well, collectively, there were -- he had listed over 500 items, 500 types of goods.
Q. Okay. Now, I think another thing you mentioned that you do for your clients is to seek to protect the value and protect the value of the name and likeness out there by policing the market; is that right?
A. That's correct.
Q. And have you seen evidence that Mr. Simpson has attempted to do that?
A. Yes, I have.
Q. And you mentioned two lawsuits he had filed?
A. Yes.
Q. All right. I'm going to put in front of you what I'll mark as 2417 and 2418.

MR. GELBLUM: 2417 is a lawsuit in the Superior Court of the State of California for the County of Los Angeles: O.J. Simpson, Orenthal Productions, Inc. versus Choi, C-H-O-I and a couple other pages of caption, defendants. And the second is a another lawsuit filed also in the Superior Court of Los Angeles County, O.J. Simpson and Orenthal Productions -- and I apologize, Your Honor: I picked up two copies of the same lawsuit. Do you have the other lawsuit with you, sir?

THE WITNESS: No, no, I don't.

MR. GELBLUM: All right. I'll have to get that after the break. I'll just put the one in front of you, 2417.

(The instrument herein referred to as Copy of complaint in Simpson V. Choi was marked for identification as Plaintiffs' Exhibit No. 2417.)
Q. (BY MR. GELBLUM) Have you reviewed that complaint, as well as the other complaint?
A. Yes, I did.
Q. As a general matter, what -- First of all, when was that complaint filed? You see a file date stamp?
A. The complaint was filed -- it appears to have been filed on September 20 of 1995.
Q. Okay. And you reviewed that complaint?
A. Yes, sir, I did.
Q. And as a general matter, what does it seek? What relief does it seek?
A. Well, it's a complaint for six different causes of action, first being a commercial misappropriation of his likeness; the second being invasion of privacy; the third being false light; the fourth being trademark infringement; the fifth being unfair competition; and the sixth, both interference with prospective economic advantage.
Q. And are there any statements in that complaint, sir, regarding the plaintiff's characterization of the value of his name and likeness?

MR. BAKER: Objection. Irrelevant, Your Honor.

THE COURT: Overruled.
A. Well, in this particular complaint, I have it in my opinion, here -- probably be easier to read it out of my opinion -- but basically, he makes the comments that the statements that he's used, the marks in connection with the variety of goods and services continually for many years, and has exclusively licensed and registered the marks to Orenthal Productions Inc. from any types of goods or services over his career consumers have come to.

THE REPORTER: Can you repeat that please, over his . . .

THE WITNESS: Over his career consumers have come to recognize and identify goods associated with the marks as meaning that these goods and services either originated with O.J. Simpson or were endorsed or sponsored by him.
Q. (BY MR. GELBLUM) Would you read paragraph 46. This is a complaint filed on behalf of Mr. Simpson.

MR. BAKER: I'd object to reading that.

THE COURT: Overruled.
A. Number 46 says that Plaintiff O.J. Simpson is perhaps one of the most famous people in the world today. Mr. Simpson's name and notoriety have created huge, lucrative markets to people such as the defendants herein to sell unauthorized and unlicensed merchandise carrying his name, photograph, and/or likeness, including clothing, posters, cards, toys, souvenirs and other paraphernalia.

MR. GELBLUM: Okay. And I have located the other complaint, which we'll mark as 2418. And that's captioned O.J. Simpson, Orenthal Productions, versus John Doe, et cetera, numerous other defendants.

(The instrument herein referred to as Copy of Complaint filed in State of California, Superior Court for the County of Los Angeles, captioned O.J. Simpson, Orenthal Productions, versus John Doe, et cetera, numerous other defendants, was marked for identification as Plaintiffs' Exhibit No. 2418.)
Q. (BY MR. GELBLUM) Is Exhibit 2418 the other complaint that you reviewed, sir?
A. Yes, sir, it is.
Q. Is that complaint seeking similar relief?
A. Yes, sir, it does.
Q. All right. Now, from the documents that you've reviewed, sir, can you tell whether prior to the murders of June 12, 1994, Mr. Simpson made a practice of licensing his name and likeness?
A. Certainly from the documents, he confirms that he has.
Q. Okay. And from the documents reviewed, after the murders, did he license his name and likeness?
A. Yes, he did.
Q. And did you review a number of contracts that reflect that?
A. Yes, I did.
Q. Did you create a summary of the contracts you reviewed?
A. Yes, I did.

MR. GELBLUM: I'd like to mark that next as 2419.

THE CLERK: 2419.

(The instrument herein referred to as Summary was marked for identification as Plaintiffs' Exhibit No. 2419.)
Q. (BY MR. GELBLUM) Do you have a copy of that with you?
A. Yes, sir, I do.
Q. Let me just put the first page up on the Elmo, just so the jury can see what you're talking about. (Plaintiffs' Exhibit 2419 displayed on the Elmo screen.)
Q. (BY MR. GELBLUM) Briefly describe what that document is.
A. Well, the entire -- the entire document is a summary of the contracts that were provided to us since June of 1994. All 20 of them, with the exception of the first one right there, which was entered into on June 1 of '94, happened after the -- the date of the murders.
Q. Okay. And you have briefly summarized each contract; is that right?
A. Yes, I have.
Q. Okay. Do you know for a fact whether the sums paid -- called for in the contracts were actually paid to Mr. Simpson?
A. I don't know, no. I don't know for certain.
Q. When the jury reviews that, what they're looking at is your summary of the contract terms; is that right?
A. That's correct.
Q. Okay.

MR. GELBLUM: This would be a good time.

THE COURT: Okay, 1:30, ladies and gentlemen. Don't talk about the case. Don't form or express an opinion.

(At 12:00 noon, a luncheon recess was taken until 1:30 p.m. of the same day.)

SANTA MONICA, CALIFORNIA; THURSDAY, FEBRUARY 6, 1997 1:38 PM

DEPARTMENT NO. WEQ HON. HIROSHI FUJISAKI, JUDGE APPEARANCES:

(REGINA D. CHAVEZ, OFFICIAL REPORTER)

(Jurors resume their respective seats.)

THE COURT: You may resume.

MR. GELBLUM: Thank you, Your Honor.

DIRECT EXAMINATION BY MR. GELBLUM: (continued)
Q. The last exhibit we marked and had up on the Elmo before the break was 2419 which was a summary of contracts. I'm not going to mark these because they're voluminous. Are these the contracts that you looked at that you summarized on 2419?
A. Yes, they are.
Q. Okay. Now, let's get into the specific categories that make up your opinion about the total value of Mr. Simpson's name and likeness. How many different areas were there that you looked at?
A. I basically divided them up into seven different areas.
Q. You tell us what those seven areas were, then we'll go through them one at a time.
A. Yes. The first area -- the first area was the autograph area. The second area was the product or merchandise memorabilia area. The third area was the endorsement or advertising area. The fourth were media type uses. The fifth area was book or audiotapes. The sixth area was the movie area. And then last, was items -- actual items that were owned by Mr. Simpson.
Q. Okay. Let's start with the autographs. Is there information that is generally available in the autograph industry as to the value of different celebrities' autographs?
A. Yes, there is.
Q. And are there publications that publish that information on a regular basis?
A. Yes, there is.
Q. Is there a magazine called Tuff Stuff, T-u-f-f S-t-u-f-f, that's one of the leading standard publications?
A. Yes.
Q. How often is that published?
A. That's published on a monthly basis.
Q. You have the most rent edition?
A. Yes, I do.
Q. Can we take a look at it.

MR. BAKER: Objection, 2034.

THE COURT: Overruled. I don't understand that objection.

MR. BAKER: I took his deposition and any information that came in that --

THE COURT: Is that a reference source?

THE WITNESS: Yes, sir, it is.

THE COURT: Overruled.
Q. (BY MR. GELBLUM) All right. If you could display that for the jury so we can see what it is we're talking about. (Witness complies.)
Q. (BY MR. GELBLUM) Is that something available in book stores and news stands?
A. Yes. This was purchased at a news stand here in Santa Monica.
Q. Is that used and relied upon by people in your business?
A. Yes, sir, it is.
Q. Okay. Does that display in a chart form and a monthly basis the going price for different celebrities' autographs?
A. Yes, it does.
Q. Okay. Is Mr. Simpson listed in there?
A. Yes. Basically every sports celebrity of the -- basically of the 20th Century is listed on here, that has some fame.
Q. Is there just one price for each celebrity?
A. No. There's seven, generally, different prices depending upon what the autograph is affixed to.
Q. Is there a standard format for an autograph that's used for comparison purposes for different sports and different celebrities?
A. Basically, an 8 by 10 photograph is kind of the standard of comparing between the different sports, whether it's basketball, baseball, football, boxing, golf, whatever.
Q. Is that because it's easier to compare that than compare a signed football, versus signed basketball, versus a signed baseball?
A. Yes. Because, obviously, in the baseball area a lot of baseball players signed baseballs, and football players would sign footballs.
Q. And they cite different amounts?
A. That's correct.
Q. What does the current edition of Tuff Stuff reflect as the going price for Mr. Simpson's 8 by 10 autograph, 8 by 10 photograph?

MR. BAKER: I object on foundational grounds.

THE COURT: Overruled.
A. It values his current signed photo at $60.
Q. How does that compare with all of the other athletes listed?

MR. BAKER: Object, Your Honor, it's irrelevant.

THE COURT: Overruled.
A. Well, of the several thousand that are listed, there's basically two different categories of autographs. Those are autographs of athletes that are deceased and autographs of athletes that are still alive. The ones that are deceased are -- can be more because they