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Home Court filings Oto Analytics, LLC v. Benworth Capital Partners LLC Exhibit 14 — JAMS Arbitration Transcript (Volume IV) — OTO Analytics v. Benworth (N.D. Cal. No. 3:24-cv-03975)

Court filing

Exhibit 14 — JAMS Arbitration Transcript (Volume IV) — OTO Analytics v. Benworth (N.D. Cal. No. 3:24-cv-03975)

Filed September 10, 2024 in Oto Analytics v. Benworth; one of 111 filings from this case.

Record facts

CourtU.S. District Court for the Northern District of California
Filed2024-09-10

U.S. District Court for the Northern District of California · No. 4:24-cv-03975-AMO · Doc. 54-3 · 2024-09-10 · Docket on CourtListener

Full text

EXHIBIT 14 
Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 1 of 24

1
                  JAMS ARBITRATION
2
                      BEFORE
3
      ALEXANDER L. BRAINERD, ESQ. (ARBITRATOR)
4
                     ---0O0---
5
OTO ANALYTICS INC.,
6
d/b/a WOMPLY,
7
             Claimant,
8
                             Ref. No. 1210038203
9
   vs.
10
BENWORTH CAPITAL PARTNERS LLC,
11
             Respondent.
12
____________________________________________________
13
14
15
16
        REPORTER'S TRANSCRIPT OF PROCEEDINGS
17
                     VOLUME IV
18
              Thursday, March 23, 2023
19
20
21
Stenographically Reported by:  Ashley Soevyn,
22
CSR No. 12019
23
Job No. 5807507
24
25
Pages 747 - 957
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Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 2 of 24

1
                  JAMS ARBITRATION
2
                      BEFORE
3
      ALEXANDER L. BRAINERD, ESQ. (ARBITRATOR)
4
                     ---0O0---
5
OTO ANALYTICS INC.,
6
d/b/a WOMPLY,
7
             Claimant,
8
                             Ref. No. 1210038203
9
   vs.
10
BENWORTH CAPITAL PARTNERS LLC,
11
             Respondent.
12
____________________________________________________
13
14
15
16
17
18
19
           Arbitration proceedings taken on behalf
20
of the parties, located at JAMS, Two Embarcadero
21
Center, Suite 1500, San Francisco, California
22
beginning at 9:32 a.m.  and ending at 4:07 p.m. on
23
Thursday, March 23, 2023, before ASHLEY SOEVYN,
24
Certified Shorthand Reporter No. 12019.
25
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Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 3 of 24

1
APPEARANCES:
2
For the Claimant & Counter-Respondent Oto Analytics
3
Inc. d/b/a Womply:
4
          WILLKIE FARR & GALLAGHER LLP
5
          BY:  STUART LOMBARDI
6
          BY:  DANIEL MORRIS
7
          BY:  VINCENT PALMERI
8
          BY:  ZOE PACKMAN (REMOTE APPEARANCE)
9
          Attorneys at Law
10
          787 Seventh Avenue
11
          New York, New York 10019
12
          slombardi@willkie.com
13
          dmorris@willkie.com
14
          vpalmeri@willkie.com
15
          zpackman@willkie.com
16
          (212) 728-8000
17
-AND-
18
          WILLKIE FARR & GALLAGHER LLP
19
          BY:  ALEX CHENEY
20
          Attorney at Law
21
          One Front Street
22
          San Francisco, California 94111
23
          acheney@willkie.com
24
          (415) 858-7418
25
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Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 4 of 24

1
APPEARANCES:
2
For the Claimant & Counter-Respondent Oto Analytics
3
Inc. d/b/a Womply:
4
          WILLKIE FARR & GALLAGHER LLP
5
          BY:  JOSHUA LEVY
6
          Attorney at Law
7
          1875 K Street, N.W.
8
          Washington, DC 20006
9
          jlevy@willkie.com
10
          (212) 728-8000
11
12
13
14
15
16
17
18
19
20
21
22
Also Present for Claimant/Counter Respondent:
23
Katherine Hanley, Law Clerk, Willkie Farr &
24
Gallaher, New York
25
Toby Scammell
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Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 5 of 24

1
APPEARANCES:
2
For the Respondent & Counter-Claimant Benworth
3
Capital Partners LLC:
4
          KOZYAK TROPIN & THROCKMORTON
5
          BY:  JORGE L. PIED5RA
6
          BY:  DWAYNE A. ROBINSON
7
          BY:  MICHAEL R. LORIGAS
8
          Attorneys at Law
9
          2525 Ponce De Leon Boulevard
10
          Suite 9
11
          Coral Gables, Florida 33134
12
          jpiedra@kttlaw.com
13
          drobinson@kttlaw.com
14
          mlorigas@kttlaw.com
15
          (305) 372-1800
16
17
18
19
20
21
22
Also Present Respondent Representatives:
23
Farola Saint-Remy, Kozyak Tropin & Throckmorton,
24
paralegal
25
Bernardo Navarro
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Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 6 of 24

1
A P P E A R A N C E S :
2
3
A l e x a n d e r  " L e x "  B r a i n e r d ,  M e d i a t o r
4
J A M S
5
T w o  E m b a r c a d e r o  C e n t e r ,  S u i t e  1 5 0 0
6
S a n  F r a n c i s c o ,  C a l i f o r n i a  9 4 1 1 1
7
8
( 4 1 5 )  7 7 4 - 2 6 8 6
9
1 0
1 1
1 2
1 3
1 4
1 5
1 6
1 7
1 8
1 9
2 0
2 1
2 2
2 3
2 4
2 5
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Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 7 of 24

1
             INDEX TO MARKED EXHIBITS
2
              Thursday, March 23, 2023
3
       WOMPLY V. BENWORTH CAPITAL ARBITRATION
4
            Ashley Soevyn, CSR No. 12019
5
EXHIBIT NO.           DESCRIPTION              PAGE
6
7
Exhibit JX374 Letter dated December 8, 2022 to  818
              Toby Scammell from Susan
8
              Streich, Director Office of
              Credit Risk Management
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
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               INDEX OF EXAMINATIONS
2
3
WITNESS: TOBY SCAMMELL (FOR THE CLAIMANT)
4
CROSS-EXAMINATION BY:                    PAGE
5
MR. PIEDRA                                757
6
(CONTINUED)
7
DIRECT EXAMINATION BY:
8
MR. CHENEY                                802
9
(CONTINUED)
10
FURTHER CROSS-EXAMINATION BY:
11
MR. PIEDRA                                811
12
FURTHER DIRECT EXAMINATION BY:
13
MR. CHENEY                                824
14
15
                     ---0O0---
16
WITNESS:  THOM KEYES (FOR THE CLAIMANT)
17
DIRECT EXAMINATION BY:                   PAGE
18
MR. LOMBARDI                              839
19
CROSS-EXAMINATION BY:
20
MR. LORIGAS                               917
21
FURTHER DIRECT EXAMINATION BY:
22
MR. LOMBARDI                              946
23
24
25
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               P R O C E E D I N G S
2
                     ---0O0---
3
           ARBITRATOR BRAINERD:  Let's go back on
4
the record.
5
           Mr. Cheney just advised me that he can
6
fill out the blanks on this, but two or three
7
members of his team have contracted COVID, and
8
apparently none of them, I guess, were in this room.
9
So that's a good thing.  And so the most exposure
10
anybody would have had to them, from your side of
11
the fence, would have been, I guess, you know, a
12
casual walk-by in the hallway or something.
13
           But in view of this, and I didn't do it
14
this time.  As Ashley knows, in the last case I was
15
in, we had tested every day.  So I am going to
16
change my order for everybody to test every day, at
17
least for the next few days, just so we make sure
18
nobody is packing COVID.
19
           And if you want to wear a mask, which I
20
may do, I don't whether I will or not.  I mean, I am
21
in danger group, as they say in the trade.  So feel
22
free to mask up if you want.  I mean, it's your own
23
judgment as to what you want to do.
24
           But I do want everybody to affirm that
25
they will test every day.
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Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 10 of 24

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      A    According to this data, yes.
2
      Q    Do you know whether, in Womply's internal
3
data, Benworth had the lowest average loan amount?
4
      A    I don't know off the top of my head.
5
      Q    If Benworth had the lowest average loan
6
amount, that means they were most likely to have
7
more loans in which the loan processing fee would be
8
less than the amounts due to Womply under the April
9
agreement?
10
      A    Maybe.
11
      Q    So just using common sense, funding
12
35,000 loans in one week, is that something you
13
expect somebody can do with a manual review of
14
loans?
15
      A    If they had sufficient resources, sure.
16
           MR. PIEDRA:  We can take this down.
17
BY MR. PIEDRA:
18
      Q    You agree that Fast Lane was designed to
19
exclude any user applications that did not meet the
20
requirement of the PPP program, correct?
21
      A    No, I don't agree with that.
22
      Q    I will refer you --
23
           MR. PIEDRA:  Do you have his depo there?
24
Is that Volume II?  Does that include Volume II?
25
           THE WITNESS:  It appears to be Volume I.
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BY MR. PIEDRA:
2
      Q    Referring you to page 215 of that
3
deposition.
4
           (Reporter clarification.)
5
BY MR. PIEDRA:
6
      Q    Sure.  You recall your deposition being
7
taken in this case on September 9th, 2022,
8
correct?
9
      A    Yes.
10
      Q    Okay.  And on page 215 of that
11
deposition, on line 5 -- well, on line 1, you were
12
asked:
13
           (As read):
14
               "Womply is saying to Benworth through
15
               this contract," what is written in a I,
16
               Roman numeral II, "how is Womply able
17
               to make that representation to
18
               Benworth?"
19
           Your answer on line 5:
20
           (As read):
21
               "Well, to the extent we're filtering
22
               applications based on information that
23
               users then put into this system, our
24
               system was designed to exclude any user
25
               applications that obviously didn't meet
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               the requirements for the program."
2
           Do you see that?
3
      A    Yes, I do.
4
      Q    And that was your testimony back in
5
September 9th, 2022?
6
      A    Yeah, I'm not sure what that is in
7
relation to the question, but that was my testimony.
8
      Q    You would agree that Womply employed
9
technology to reduce top-of-the-funnel fraud,
10
correct?
11
      A    Not just top of the funnel.  We provided
12
lenders with a ton of technology to try to reduce
13
fraud throughout the entire life cycle of the loan,
14
from the top of the funnel all the way through the
15
moment when loan was funded and in some cases even
16
after the loan was funded.
17
      Q    You did this to increase the quality of
18
the PPP applications that were coming to the lenders
19
through Fast Lane, correct?
20
      A    That was partially why we did it.  We
21
also did it as one of the services that we were
22
providing through our technology to lenders after
23
those referrals were made to lenders.
24
      Q    And you provided that data output from
25
those technologies to the lenders, correct?
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      A    We provided a subset of that data to
2
lenders, that's right.
3
      Q    Let me take you, going back to the --
4
your direct examination exhibit notebook, Tab 3,
5
which is JX 370.
6
      A    Yup, I'm there.
7
      Q    Specifically page 16 of that exhibit.
8
      A    Yup, I'm there.
9
      Q    We talked a little bit about this on your
10
direct examination.
11
           Here, Mr. Capoccia's selfie verification
12
failed, correct?
13
      A    Yes.
14
      Q    And I recall you gave the reasons for the
15
failure.  Mr. Capoccia thinks it's because of his
16
beard, but you think it's because of the pictures in
17
background, something like that, correct?
18
      A    Yeah, I'm simply pointing out the red
19
circle with the line through it that says, "Multiple
20
faces."  And I'm more familiar with the technology
21
than Cory is.
22
      Q    Good.
23
           So at this point in the process, when
24
Mr. Capoccia's selfie fails, that loan has not yet
25
been referred to a lender, correct?
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Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 14 of 24

1
           ARBITRATOR BRAINERD:  Well, let's take
2
these matters one at a time.  What was the first
3
request that you made?
4
           MR. PIEDRA:  The first request was to
5
admit the select subcommittee's report.
6
           ARBITRATOR BRAINERD:  Well, I still
7
maintain that the subcommittee report is hearsay,
8
and therefore, not admissible, I think.
9
           But if you want to brief the issue and
10
submit a brief to me in that regard, you are free to
11
do so as long as Womply's attorneys have a chance to
12
submit a reply brief.
13
           Again, I will say this, I've said it many
14
times, the subcommittee report is clearly hearsay.
15
It's the classic example of hearsay.
16
           First of all, I'm being asked to receive
17
it, I presume, for truth of the content in it, so --
18
and it's been made out of court.  Not only has it
19
been made out of court, there's been an
20
investigation conducted by a group of people who
21
received whatever evidence they received and made
22
whatever judgments they made.
23
           I have no idea what the process was; I
24
don't have no idea of the basis for their decisions;
25
I have no idea whether their decision are based on
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Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 15 of 24

1
any reliable fact or law.
2
           It is hearsay, clearly and unequivocally
3
hearsay, and if you want to tell me otherwise,
4
that's fine.  But if you want to submit a brief to
5
me that suggests that this is a document, even
6
though it's rank hearsay that should come before me
7
for some particular reason, you are free to do so.
8
           But right now, I am not going to receive
9
that document based upon fact, because I have stated
10
many times and I've stated emphatically today, I
11
consider the document to be classic hearsay and I am
12
not going to receive it.
13
           That said, you are free to brief it, and
14
if you want to, fine.  I would suggest if you want
15
to, that you and counsel from Womply discuss a
16
briefing schedule.  I think probably the most
17
efficient way would be to have, you know,
18
simultaneous briefs submitted to me, and I will
19
consider whatever law you submit and whatever
20
argument you want to make and I will make a ruling.
21
But on record before me right now, I will not
22
receive the subcommittee report.
23
           So what is the next issue?
24
           MR. PIEDRA:  The next issue, because you
25
specifically stated -- you basically asked for this
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Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 16 of 24

1
letter, which we didn't have.  And no one mentioned
2
this letter.
3
           You said, "Is the SBA investigating, and
4
when will that investigation be complete?"
5
           I think now we know.
6
           You said you would have continued the
7
proceedings if you had known this information on
8
official SBA letterhead, and it wasn't provided to
9
you.
10
           MR. CHENEY:  May I respond to that?
11
           ARBITRATOR BRAINERD:  I first want -- I
12
want to correct what I -- I mean, I'm not --
13
everybody has a recollection of what I said, but
14
here's the thing.
15
           Ms. Seaborn was presented to me -- this
16
all came up in context of her proffered testimony.
17
Ms. Seaborn was offered to me as a witness who was
18
going to come in and possibly say one of two things:
19
One, that SBA had completed an investigation into
20
the legality of the Womply fees.  Or two, such an
21
investigation was underway.  And then there was some
22
reference to the fact that maybe you didn't exactly
23
know what she was going to say.
24
           So on the basis of that, I asked you
25
specifically, because you were the people that were
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Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 17 of 24

1
offering this information to me, that -- I said if
2
you could provide me with reliable information from
3
the SBA, such as an order, such as some kind of
4
investigative notice or whatever they do over there,
5
I would give consideration to the possibility of
6
continuing the case, because I was not interested,
7
nor should I render what would be an advisory
8
opinion.
9
           In other words, if the SBA had already
10
made a ruling on the legality of the fees, I or any
11
other judge would not want to spend, you know, three
12
weeks or two weeks, or whatever it's going to be, to
13
render an opinion which was essentially advisory.
14
So -- and I know we had sort of a free-falling,
15
sometimes heated discussions, for which I have
16
already apologized, but, regardless of that.
17
           So I don't have your letter in front of
18
me, but you submitted a letter to me late on Friday
19
night, the 10th, in which you -- there was nothing
20
in that letter that told me anything, one way or
21
another, as to whether or not, in fact, the SBA was
22
doing one or the other, namely they had made a
23
determination regarding the legality of Womply's
24
fees or they were investigating.
25
           So on that basis, I, on Friday --
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1
whatever that date was, what is it, the 18th or
2
the 17th, I ordered this matter to go forward.
3
And so here we are.
4
           And so that's all I can say.  So I am not
5
criticizing anybody.  I'm just saying this is the
6
record before me.  So on that record, I said that I
7
would not continue this matter.
8
           Now, referring to this letter, and, you
9
know, I'm seeing this for first time too, I don't
10
see any reference in here that there is any
11
investigation into the matter of the legality of
12
Womply's fees.  So on the basis of this letter
13
alone, I would not continue the case.
14
           But given your concern about timing,
15
we're here in March.  We're going to finish this
16
hearing, I presume sometime next week, so it will be
17
in last week of March.  We're going to have a
18
briefing schedule, right?  I don't know how long it
19
will be; we will have to talk about that.
20
           So this hearing and the briefing
21
surrounding it probably won't get to me before the
22
middle of April or the end of April.  I have two
23
other opinions that I have to get out before I
24
address your opinions.
25
           So as a matter of cold, hard fact, we
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Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 19 of 24

1
will probably be well into June before I'm in a
2
position to provide what would be, as we have
3
discussed before, an interim award.
4
           So I think your concerns about timing
5
are -- I understand what your concerns are, but just
6
on a practical matter, I don't think we're probably
7
going to have to worry about that.  So I think -- I
8
can't remember what the third matter was that you
9
addressed to me, but --
10
           MR. PIEDRA:  No, you've addressed them.
11
I have concerns about the facts.
12
           First of all, I understand what you say,
13
that this doesn't specifically say fees.  However,
14
it says, "compliance with SBA loan program
15
requirements," and it's based on the select
16
subcommittee's report, which specifically made
17
findings with respect to Womply's fees, and this was
18
withheld.
19
           This shouldn't have been withheld, this
20
information shouldn't have been withheld when you
21
put our backs to the wall to come up with the letter
22
that we had no power to get.
23
           ARBITRATOR BRAINERD:  So I guess what I'm
24
asking you, Mr. Piedra, is are you making a motion
25
or what do you want me to do?
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Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 20 of 24

1
           MR. PIEDRA:  I think you've addressed it,
2
is to withhold any ruling until this investigation
3
is completed.
4
           ARBITRATOR BRAINERD:  Well, I haven't
5
ruled on it, yet.  What I've said, as a practical
6
matter, we are going to be into June probably before
7
I get an award out.
8
           At that point in time, if you so choose,
9
you can make a formal motion to me with respect to
10
the timing of anything that happens in this case,
11
and I think that's the best way to proceed.  You can
12
do that whenever you want.  All right?
13
           MR. PIEDRA:  Understood.
14
           ARBITRATOR BRAINERD:  Now, I had a long
15
colloquy with counsel on this side of the room.
16
           What do you want to say?
17
           MR. CHENEY:  All I want to say is that
18
Mr. Piedra has represented a few times, that that --
19
the staff report by the select subcommittee of the
20
coronavirus crisis makes findings about Womply's
21
fees.
22
           That is not accurate.  The house report
23
does not concern Womply's fees in any way.  And so
24
we agree that if the arbitrator is going to hear
25
this, it should be briefed.
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Case 4:24-cv-03975-AMO     Document 54-3     Filed 09/10/24     Page 21 of 24

1
           ARBITRATOR BRAINERD:  Just so I know
2
where we are -- I think we should break for lunch
3
after this.  Just so I know, where are we?  I mean,
4
there is nothing formally before me, so I am not
5
going to rule on this.
6
           This document is in evidence, I have
7
taken it into evidence.  We have all discussed our
8
respective positions as to the import of this
9
document.  And I think I have given you two --
10
Mr. Piedra, I think I've given you two options.
11
           One is with respect to the congressional
12
subcommittee report, if you disagree with my ruling,
13
you are more than welcome, you and your whole team
14
is more than welcome, I don't know who would
15
actually address this by a formal motion, but you
16
are welcome to test my ruling with some kind of
17
motion.  And if you are going to do that, I will
18
just ask you to coordinate with counsel so we get a
19
briefing schedule that makes sense.
20
           The other thing I suggested to you is
21
that, as we proceed with this case, and we haven't
22
even got to the end of evidence so we haven't even
23
talked about a briefing schedule.  But as we proceed
24
through this case, if you find additional
25
information or a matter has come to your attention
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1
which you believe warrant a continuance of this case
2
or a deferral of this decision or whatever the
3
appropriate relief you might want to see, you again
4
are free to present that motion to me, and I will
5
obviously give it full consideration.
6
           MR. PIEDRA:  And what I would ask the
7
Court, because clearly it's lost on them, is that
8
you admonish Womply to do the same if and when they
9
receive any such communication from the SBA or
10
anyone else.
11
           ARBITRATOR BRAINERD:  Well, I will think
12
about that.  I mean, you're the one that's urging
13
this matter to be deferred.  They are not.
14
           So I don't think anybody should hide any
15
relevant information from anybody.  We are all -- so
16
this is a truth and justice seeking procedure.  We
17
all agree with that.  So all information that might
18
assist me or bear upon my decisions, I should have.
19
All right?  That's the best -- I will leave it at
20
that.  And I will trust that the lawyers -- you are
21
all fine lawyers, you have done a great job so far,
22
I will trust the lawyers will act accordingly.
23
           Understood?
24
           MR. CHENEY:  Understood.
25
           MR. ROBINSON:  This is Dwayne Robinson
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talking.  I don't want to belabor this much longer,
2
but you said repeatedly the congressional report is
3
ranked hearsay.  What we are suggesting is it has a
4
non-hearsay purpose, which is to provide context for
5
what the SBA is talking about in that letter, what
6
it is investigating.
7
           Mr. Cheney told you -- it's incorrect
8
what Mr. Piedra told you about what the police
9
report says.  Accept the evidence and read it for
10
yourself.
11
           Thank you.
12
           ARBITRATOR BRAINERD:  I understand what
13
you're saying.
14
           Again, what I suggest is, if that's the
15
basis for you wanting me to review the report, make
16
a motion, give me the law, and they can reply to it.
17
And if I agree with you, I will take the report for
18
that limited purpose.  It's the best I can do.
19
           I am leaving it up to you, initially, to
20
decide what you want to do.  By "you," I'm pointing
21
over to respondent's side of the table, Mr. Piedra
22
and Mr. Robinson and the rest of the team, and you
23
can decide what you want to do.
24
           MR. PIEDRA:  Understood.
25
           ARBITRATOR BRAINERD:  Do we want --
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