Jaime Capelo Deposition Page 1

VIDEO TECHNICIAN: Stand by.
The time is 10:54 a. m. , February 10th of the
year 004. We are recording.
JAIME CAPELO,
having been first duly sworn, testified as follows:
E X A M I N A T I O N
BY
MR. HARRIS:
Q What is your name, sir?
A Jaime Capelo.
Q And where do you live?
A I live at 353 Catalina, Corpus Christi, Texas.
Q Where were you born?
A I was born right here in Corpus Christi.
Q And what's the date of your birth?
A August 17th, 1962.
Q And can you just generally tell us where you went to
school.
A I was raised at 4130 Upriver Road and went to school
at Oak Park Elementary and then on to Driscoll Jr. High and
then Miller High School.
Q And what did your daddy do?
A My dad and my -- my dad's family were in the funeral
business. They operate -- owned and operated Angelus
Funeral Home for decades. My dad is still in the funeral
business at this time.
Q Well, let's talk about Miller High School. When
were you in Miller High School?
A I graduated in 1980. I started going to school
there in 1977.
Q And did you receive any honors while you were at
Miller High School?
A All sorts of academic honors and I graduated number
two in my class. Then I also had, you know, senior class
vice-president and other extra curricular activities that I
was involved in as well as the band.
Q Did you apply for any scholarships out of high
school?
A I did, quite a few. I applied for scholarships at
all the universities that I applied to which included all
the Ivy Leagues except for Harvard and included Rice and
Stanford and UT.
Q Were you admitted to all those schools?
A I was admitted to every single one and received very
nice financial aid and scholarship packages from each of the
universities.
Q Where did you enroll in college?
A I ended up deciding on Yale University because they
were a very good recruiter from Corpus who was an
upperclassman at Yale who convinced me and my parents that
it was a good place for me to go.
Q And what did you take at Yale?
A I started out as an engineering major and after a
couple of years of knocking my head against the wall I
switched to history and absolutely fell in love with history
and ended up majoring in history.
Q And when did you graduate?
A In 1984.
Q And what did you do after you graduated?
A I came back to Corpus Christi and was contemplating
going to history graduate school, contemplating going to law
school and started substitute teaching at some of the
different -- at some of our local schools and absolutely
liked being in the classroom. So I went out to CCSU and
earned my teaching certificate and then I was very fortunate
to get an opportunity to go back to Miller High School and
to teach at Miller High School under my old principal who
had been my principal when I was there as a student.
Q And did you teach at Miller?
A I did. I taught for about three years.
Q And what did you teach?
A I taught math. I taught the remedial math classes.
And that was the first testing that came out by the State
and I taught those students who were having trouble passing
it that -- and they needed to pass it to graduate. I helped
them get through that test.
Q And were you sponsor of any clubs or activities?
A I also was a sponsor of the Key Club and I had been
a member and president of the Key Club when I was a student
which is a service organize that is the student branch of
the Kiawanis Club. And so I got to work with the Key Club
and the Kiawanis Club together.
Q What caused you to decide to leave teaching?
A In -- in the process of -- of teaching and learning
about the bureaucracy of teaching, I was disappointed that I
didn't have the opportunity to do some of the things that I
would like to do with the students, like encouraging them to
go to Ivy League schools and helping them in that process.
And I -- and I wanted to be -- have a little more freedom
and be outside the classroom where more things were going on
in the community. And so that was the decision that I made
to -- to get out of teaching and go to law school.
Q And what law school did you go to?
A I went to UT Law School.
Q And when did you enroll in the University of Texas
Law School?
A I went in September of 1988.
Q And how long did you stay there?
A I graduated in three years, in May of 1991.
Q And after you got your law degree, what did you do?
A I practiced in Austin for about three years at
Scott, Douglass & Luton.
Q And did you work for Mr. McConnico during part of
that time?
A I did.
Q And what caused you to -- well, let me ask this; did
you decide to come back home?
A I did. Things didn't work out at Scott, Douglass &
Luton and Sandra and I made a decision that if we -- we were
talking about having children, that it would be best to have
our children closer to home and closer to our -- both of our
parents so we decided to come back to Corpus Christi.
Q And when did that -- when did that happen?
A In the summer of 1994.
Q And tell us how you started your practice.
A I looked around in Corpus for a while and trying to
figure out what to do and who to do it with and ended up
making the decision to partner with William Whittle, Arnold
Gonzales, Jr. and James Hada.
Q And what type of practice did you engage in?
A A pretty general practice, litigation. Mr. Whittle
did different sorts of transactional work. Mr. Gonzales had
different types of transaction and litigation as well and
Mr. Hada was primarily litigation.
LINDA SMILEY CONDIT, CSR, RPR

Q And when did you start your -- when did you and
Sandra start your family?
A In 1995 our first daughter was born.
Q Was there any medical problems associated with that
birth?
A Yes, there was. When Berkley was born she was -- we
were -- we were already packed and ready to leave the
hospital when -- and we were waiting for the neonatologist,
he was the final doctor to clear -- to give us clearance to
go home, he came in the room with a very distressed look on
his face and he told us that she had a staphylococcus R. S.
infection and that she was going to have to stay in the
hospital. She ended up staying for ten days at Bay Area and
we got to go home for one day and she had seizures and we
had to go right back to Driscoll and spend another ten days
there.
Q Did that cause you to develop any interest in the
medical field for children?
A It -- it -- it created an incredible appreciation
for doctors and nurses who took care of -- of my family and
take care of other people's families, especially in a time
when -- and I know my wife and I were going through it at
the time, where all the problems that -- that our daughter
was having we were blaming ourselves and we felt extremely
troubled by what had happened and why she was going through
this and all the pain that she had to go through as they
were poking her every day and all day long. So those --
those nurses and those doctors were really -- real heroes to
us.
Q And when did you have your next child?
A In December of 1996.
Q Did you have a similar problem with that child?
A We did have a similar problem and we actually got to
go home this time, but we weren't home but five or six hours
before the doctor called us, the neonatologist called us and
said that something had showed on the culture and that we
needed to come right back to the hospital. So by midnight
that day we were back at the hospital and she was -- and
they had hooked her up to some antibiotics and we spent ten
days in the hospital with her.
Q When did you decide to enter public service?
A In January of 1997 I decided to take my first shot
at running for office.
Q Can you tell us the circumstances surrounding that.
A It was something that I had talked about for several
months with different folks around the community. I had
never -- I had always been very interested in politics. My
grandmother had been very involved in politics and I
distinctly remember the election of 1976 when I was still in
junior high when it was the first large number of Hispanics
who were running for state offices, Senator Truan running
for Senate and Hugo Berlanga and Arnold Gonzales, Jr.
running. And it was the first time I'd gone to a political
rally and ever -- after that I'd always been involved
attending rallies or volunteering. And I never ever saw
myself in front of the -- in front of the campaigns as a
candidate, but when I got back to Corpus several folks
thought it would be a good idea and convinced me that it was
-- it would be a good idea. I was very nervous about it,
but once I started the process I knew that it was the right
thing, it felt like the right thing to do. And we had
tremendous success in the City Council campaign and I was
very pleased with the way it turned out.
Q Was that your first campaign, with the City Council?
A That was my first campaign.
Q And when did you take office as a City Councilman?
A I took office in April of 1997. I was the first
Hispanic majority ever on the Corpus Christi City Council.
Q And how long did you serve on that Corpus Christi
City Council?
A I served until December of 1997.
Q And then what happened in reference to your
political career in December of '97?
A December of '97 I resigned from the City Council in
order to run for State Representative. Representative Hugo
Berlanga had decided to retire and had decided not to run
again. He had approached me and asked if I would be
interested in running for his office. At first we were very
worried about it because we had just finished a campaign and
we had two young children and it would require time in
Austin, but after visiting with Representative Berlanga and
his wife, my wife and I both thought it was good idea and
decided to go forward with that.
Q And did you run for that office?
A I ran. There was a special election in May of 1998
in which I was successful.
Q And when did you take office?
A I took office in May of 1998. Within ten days or
two weeks after the election I was sworn in.
Q And have you served in the Legislature ever since
then?
A And I -- I have, yes.
Q Did you have any special interest as a legislator?
A I did. I was very fortunate to -- to land in the
Public Health Committee immediately upon being sworn in and
so I had the opportunity at the very first major legislation
that I worked on started in May of 1998 when the Public
Health Committee, along with the Senate Health Committee,
started working on the children's health insurance program.
We had our first meeting late in May of '98 so it was -- the
very first project had to deal with children's health which
was very dear to my heart.
Q Let's go back to your professional career because
you were also practicing law while you were in the
Legislature, is that not correct?
A That's correct.
Q When did you leave the Whittle firm?
A The Whittle firm dissolved on March 31st of 1997.
Q Well, that was during the campaign, wasn't it?
A That was right in the middle of the campaign, yes.
It was very crazy.
Q And after March of '97 what did you do from a
standpoint of practice, your legal practice?
A I rented some space from Evelyn Gonzales down the
street from where we were set-up and started up my own solo
practice.
Q And how long were you a solo practitioner there in
the offices of Evelyn Gonzales?
A Until about March of 1998.
Q March of '98?
A Right. Almost a full year.
Q And during that year did you have a relationship
with Rene Rodriguez?
A I did. I started a relationship with Rene Rodriguez
probably shortly after I came back to Corpus, I was first
introduced to him.
Q Can you describe that relationship to us.
A It was very friendly. In fact, Mr. Rodriguez was
the first contributor to my City Council campaign, my first
ever political contributor. That was important to me and
was the basis of -- of us starting our relationship was that
someone -- that he believed in me enough to -- to be that
first donor. After I got elected to City Council, trying to
maintain the City Council -- what I needed to do for City
Council as well as maintain a law practice, I had a very
difficult time and I often sought out work from Mr.
Rodriguez.
Q And when people came to you with cases and you
decided not to handle them, what was your practice?
A For the most part I -- the only thing I could handle
and did handle were family law and fender-bender type cases.
Anything else that was anymore complicated than that, I sent
them down do Mr. Rodriguez's office.
Q Well, did you send -- prepare any kind of formal
referral agreement or anything of that nature or did you
just say "Go see Rene Rodriguez"?
A I just referred them to Mr. Rodriguez.
Q Now, when did you start Capelo & Bargas?
A It was, I want to say March, 1998.
Q And how long did you associate with Mr. Bargas?
A Until May of 000 -- May of 000.
Q And during that period of time do you recall
referring any cases on to Rene Rodriguez?
A No. Absolutely not.
Q And Mr. Bargas and yourself engaged in full-time
practice of law during that period of time?
A That's correct.
Q Okay. Can you describe the circumstances
surrounding your firm' break-up.
A Mr. Bargas was arrested for attempted murder of his
former girlfriend. The evening that he was arrested he
called my home. In the early morning hours I went out to
the Sinton jail to visit with him. He made it clear to me
that I needed to get away from him, that we needed to
separate. He thought that it would be obviously in my best
interest to -- to separate and to end the partnership.
Q And did you follow that advice?
A I did follow that advice.
Q Did you buy him out?
A I did buy him out.
Q And was that buy-out evidenced by a written
agreement?
A Yes, it is.
Q What was the arrangement before you joined Capelo &
Bargas in reference to cases that were maybe handled or in
which you had an interest in prior to that firm being
formed?
A Anything that I -- that I had had before that was
mine, but anything that was still being worked on -- there
was a handful of little cases that I brought with me, we put
into the firm.
Q Now, after you left the law firm of Capelo & Bargas
did you go back to practicing by yourself?
A Yes, I did.
Q And about how long was that?
A May, June, July, August of 000.
Q About four months?
A Four months.
Q And where did you -- where did you practice during
that four months?
A At the same location that I'd been with Capelo &
Bargas. I assumed all the liabilities and responsibilities
of that firm when I bought it out.
Q After your visit with Mr. Bargas at the jail in
Sinton, was he able to carry on his practice at that time?
A He chose not to. Whether he was able to or not, I
-- I don't know, but he -- he definitely decided not to.
Q After that four months what -- what happened next?
A I joined the Chaves, Gonzales & Hoblit on September
1st of 000.
Q And what arrangement did you have with them?
A That I came in as a partner and promised to work
hard for them.
Q And what was the understanding that you had in
reference to any prior cases that you might have had prior
to joining that law firm?
A That any of the cases that I had prior to that were
my cases only.
Q And was that understanding with Doug Chaves?
A That's correct, Doug Chaves.
Q And was he the -- "the partner", if I may use that
term, senior partner?
A He was not only the senior partner, but he was the
managing partner at the time.
Q Now, do you recall being appointed an Ad Litem in
the Joseph Huerta case?
A That's correct.
Q Tell us the circumstances surrounding that
appointment, just when -- when were you first contacted in
reference to serving as an Ad Litem?
A I was appointed in August of 000, but I was
contacted months before by Mr. Mikal Watts who asked if I
would agree to be the Ad Litem for Tristan Huerta. I -- I
knew of Tristan Huerta. My daughters and him had attended a
few birthday parties together and I obviously thought it
would be a great idea to be his Ad Litem.
Q And after you agreed with Mr. Watts to be the Ad
Litem, what was the next event that took place in reference
to that particular matter?
A Mr. Watts submitted a motion to appoint an Ad Litem
Q All right.
A To the Judge.
Q And was there a mediation that you attended in
reference to the Ad Litem appointment?
A There was.
Q And was there a discussion with Mr. Watts in
reference to the fees that you would charge on that Ad
Litem?
A There was. In fact, Mr. Watts did the negotiating
of fees with Mr. Barger.
Q Were you present during that negotiation?
A I was present during part of it, yes.
Q Can you relate to us what happened during that part
of the negotiation in which you were present. By the way,
the mediator wasn't there during the negotiation, was he?
A No, the mediator was not present during the
negotiation.
Q Okay. So it was done outside the presence of the
mediator, but just tell us what happened.
A I was approached and asked if $50,000 would be
sufficient and if I would be happy with that and I told them
I would be very happy with that.
Q And did anybody complain?
A Nobody complained to me. No one asked me to see
anything, no.
Q Did Mr. Barger, did he act shocked?
A He did not act shocked.
Q How long ago was that?
A That would have been in November or December of
002.
Q Okay. So at the time that you attended the
negotiations, were you a member of the Chaves-Gonzales law
firm?
A I was.
Q At the time that you received the $50,000, were you
a member of the Chaves-Gonzales law firm?
A I was.
Q In reference to the fee you received, did you have
any discussion with the office manager for the Chaves-
Gonzales law firm?
A Yes, I ---
Q And what was his name by the way, just so we ---
A Ted Dlugosch.
Q All right. In reference to Mr. Dlugosch, would you
tell us what happened.
A It was either Ted Dlugosch or a head bookkeeper that
I gave them a check for the hours that I had spent at the
mediation and the hours at the final hearing, getting ready
for the final hearing.
Q Was that check based upon your hourly fee?
A Yes, it was.
Q And so for the time that you spent outside the firm
you paid the firm for that time?
A That's correct.
Q Was that check cashed?
A Yes, it was.
Q And how many years ago was that check cashed?
A That was in March of 003.
Q Now, did you run for office after March of 003 --
no, not -- the check was cashed in March of 003, the -- no,
the Ad Litem check?
A That's correct.
Q Okay. Okay. I'm -- thank you, I'm straightened
out.
Did anybody at the Chaves-Gonzales firm ever complain
about the arrangements that you made with either the
bookkeeper or the office manager concerning reimbursement of
the hours that you spent to the firm?
A No.
Q Were you ever questioned about any cases that you
had obtained prior to the time that you came with the firm?
A No.
Q Did other partners have the same arrangement when
they joined the firm to your knowledge?
A To my knowledge, yes.
Q Do you recall any of those partners?
A I'm not -- I'm not sure who was -- who was -- which
ones were brought up internally and which ones came from the
outside.
Q Okay. When lawyers set fees do they ever consider
the amount of money involved?
A Absolutely.
Q Was there substantial sums of money involved in this
particular case?
A This was a very substantial settlement.
Q Approximately how much was it?
A Ten million dollars.
Q Do lawyers consider the responsibility that a lawyer
has when he is handling a case such as this?
A Yes, very much so.
Q Did you feel a responsibility in reference to this
particular case?
A Absolutely. I took it very seriously.
Q Did you have a special interest in Tristan?
A Well, because I had known Tristan earlier and
because he had played and spent some time with my daughters,
absolutely.
Q Why is an attorney appointed as an Ad Litem in a
case such as this -- this particular case?
A Well, obviously there -- there stands to be a
natural conflict between the parent and the child, but in
particular in this case because Joseph Huerta had some
diminished capacity and there was concern about his ability
to -- to handle and oversee his own son's financial
considerations.
Q And was there an active participation in reference
to Tristan's and Joseph's activities by their father and
grandfather, Albert Huerta?
A That's exactly right. Mr. Albert Huerta took a
decidedly large role in -- in obviously Joseph's care as
well as Tristan's care.
Q And on -- in your opinion was the $50,000 a
reasonable and necessary fee for the work that you did on
the ---
A Well, not only ---
Q On the case?
A Not only in my opinion, but obviously in Mr. Watts'
opinion and Mr. Barger's opinion and their clients. Not
only did they all agree to it at the time, but -- at the
mediation, but then at the -- in the preparation of the
settlement documents they also agreed to it and then finally
at the final -- at the hearing with regards to approval of
the settlement agreement they agreed to it at that time as
well, never raised an issue with the Judge, never sought to
put that issue before the court.
Q Did you get to be the Ad Litem on all the cases that
were referred Ad Litems in front of Judge Huerta?
A No.
Q How many other cases were you an Ad Litem?
A I had one other Ad Litem from Ms. Huerta -- Judge
Huerta.
Q Was it a much smaller case?
A It was a much smaller case, yes.
Q Do you recall the Ad Litem fee in the small case?
A I recall it being five, $6,000 maybe.
Q Was that a fair and reasonable fee based on the
circumstances of that particular case?
A Yes, it was.
Q Just a second, let me ---
(Off the record discussion).
A Mr. Harris, I think I misspoke on the date on the Ad
Litem fee.
Q (By Mr. Harris)Well, we can -- we can check on it.
A Okay. I think it was '02, not '03.
Q But I'll check on it. And dates are hard for me and
I'm sure they are for anybody.
Did you ever notice a change in your law firm's attitude
towards you during the period of time you worked for Chaves
-- Chaves-Gonzales?
A Yes. During the tort reform issue in the
Legislature there was a decided concern about my
participation and sponsorship of tort reform.

MS. CONNELLY: May I ask you, please, to clarify
which firm you're referencing.

MR. HARRIS: Chaves-Gonzales. Is that sufficient?

MS. CONNELLY: Yes.

MR. HARRIS: Okay. Thank you.

MS. CONNELLY: That's fine.
Q (By Mr. Harris)Did you understand my question was
directed towards your ---
A Yes.
Q Relationship with ---
A I think you did say Chaves-Gonzales.
Q Chaves-Gonzalez. Thank you.
Did you receive any criticism because of your -- well,
let me first ask, what do you mean "tort reform"?Maybe you
better describe that for us.
A I was the joint author of House Bill 4 which is
widely considered one of the leading tort reform bills in
the nation. In particular, it has a very strong medical
malpractice reform section, Articles 10 and Article 11. And
I was very much instrumental in Article 10 and Article 11.
I felt strong that the lawsuit abuse in the medical
malpractice industry, especially in south Texas, was driving
many of our good doctors out of this community and making it
difficult for us to recruit new doctors to our community.
Q Did any of that feeling grow out of your
relationship with your children when they were sick?
A Absolutely. I mean, that's -- that's exactly why I
felt so strong about making sure that we had doctors here is
because I know how critical they were to my family's health
and what we went through, that if we continued down this
path, a day was going to come very shortly that those types
of doctors would not be here for us.
Q And did you receive any letters from lawyers
concerning their dissatisfaction with tort reform?
A I received a mountain of letters from lawyers who
were very upset about tort reform.
Q And any e-mails, did you receive any e-mails from
your partners?
A I received a considerable amount of e-mails from my
partners relaying the anger from the local Bar towards me
and towards the firm from my sponsorship of tort reform.

MS. CONNELLY: Can I clarify that those partners
were in Chaves-Gonzales firm?

MR. HARRIS: Well get through that. I'll be
putting in some documents.

MS. CONNELLY: Jim, can you just have the Witness
verify that verbally, that his response went as it
relates to the partners in the Chaves-Gonzales firm?

MR. HARRIS: Yeah, I'll be happy to do that for
you.
Q (By Mr. Harris)Who were some of the partners in
the Chaves-Gonzales firm that expressed concern about the
position that you were taking in reference to tort reform?
A Rudy Gonzales, Gary Ramirez, Doug Chaves. Many
others passed on their concerns based on what they had been
told by other members of the Bar.
Q Let me show you a letter dated March 18th, 003 that
bears the signature of Rene Rodriguez. Is this a letter
that you received in reference to your support of tort
reform?
A Yes. This is one of many letters that I received.
Q Let me show you a letter dated March 5th, 003
which appears on the letterhead of Hastings & Alfaro that's
addressed to you. Is this another letter that had to do
with tort reform?
A Yes. This is -- I think there's some pages missing.
This is a letter from Mr. Alfaro which was one of the more
angrier letters.

MR. HARRIS: Let me take a break for a minute, if
that's all right.
(Brief recess).

VIDEO TECHNICIAN: The time is 12:10 p. m. We're
back on the record.
Q (By Mr. Harris)Mr. Capelo, we had some concern
about the date of the receipt of the Ad Litem fee. During
the break have you been able to refresh your recollection as
to when that was?
A Yes. The Ad Litem fee in the Tristan Huerta matter
was received in March of 002 and the mediation took place
in November or December of 001, ---
Q Okay. And ---
A As did the -- as did the hearing take place in the
November, December, 001 time period as well.
Q And in reference to March of 002, were you in a
campaign at that time?
A I was. In fact, the March 002 primary, I had two
opponents, Mr. David Berlanga and Mr. Jerry Trevino.

MS. CONNELLY: Objection, nonresponsive.
Q (By Mr. Harris)And in reference to the support
that you were getting, were you -- did you receive support
from the individuals who had arranged the Ad Litem fee for
you?
A I did.

MS. CONNELLY: Objection, form.
A Mr. Barger, Mr. Watts, although towards the end of
the March primary Mr. Watts was no longer supporting my
candidacy.
LINDA SMILEY CONDIT, CSR, RPR


MS. CONNELLY: Objection, form.
Q (By Mr. Harris)And what was your understanding of
why he was no longer supporting your candidacy?
A Because I refused to endorse his mother in her
candidacy for Judge.
Q Now, let me properly identify Exhibit 1, is the Rene
Rodriguez letter to you dated March 18th, 003; is that
correct?
A That's correct.
Q And then you mention in reference to Exhibit ,
which is a letter dated March 5th, 003 to you from the --
from Mr. Dan Alfaro, I think we just had the front page; is
that the total letter that we have?
A Yes, this is the full letter.
Q Now, is there a particular segment of the Bar that
was more concerned about tort reform than other segments or
---
A I -- I think the litigation lawyers obviously were
the most concerned. Plaintiffs lawyers, in particular, but
some defense lawyers were also greatly concerned. In fact,
many of the defense lawyers were also, they just weren't as
visible with their -- with their concerns.

MS. CONNELLY: Objection, nonresponsive.
Q (By Mr. Harris)And what -- how did they express
those concerns?Did they articulate the reason for their
concern?
A The plaintiffs lawyers and some defense lawyers sent
letters, sent e-mails, brought -- came to visit me in my
office. But in addition to that, members of the local
plaintiffs Bar let my former partners know how troubling and
concerned they were and that the firm, as well as I and my
practice, would pay for supporting tort reform.

MS. CONNELLY: Object to form of the question.
Q (By Mr. Harris)Let me hand you what's dated March
7th, 003, a letter on the Watts Law firm. Is this
opposition to your support of the tort reform?

MS. CONNELLY: Jim, after -- after you have the
Witness identify those Exhibits, would you direct him
to pass those this way ---

MR. HARRIS: Sure.

MS. CONNELLY: So we can look them?

MR. HARRIS: Be happy to.

MS. CONNELLY: Thank you.
A Exhibit 3 is a letter from Doug Gwyther of the Watts
Law Firm and Exhibit 4 is a letter from Joseph Huerta of the
Huerta Law Firm ---
Q (By Mr. Harris)Let me -- excuse me.
A Both expressing vehement opposition to House Bill 4.
Q Let me hand you Deposition Exhibit Number 5, a
letter dated March 31st, 003 from the Edwards Law Firm.
Who signed that letter?
A William R. Edwards. Bill Edwards.
Q Let me show you Exhibit Number 6, a letter
purportedly signed by Jerry Guerra. It is addressed to his
colleagues dated January 16th, 004. Did you receive a copy
of that letter?
A Yes, this was -- this was a recent letter ---
Q Uh-huh?
A From Mr. Guerra with regards to the campaign and my
support of Prop 12.
Q Let me show you Exhibit Number 7. This is from
Suzanne Chauvin, if I am pronouncing that correct. Exhibit
7 appears to be dated March 1st, 003. Can you just read
that into the record, the statement from one of your
associates in the law firm.
A "As I was walking out of the settlement event this
evening I ran into Ray Maldonado of the Huerta Law Firm
making a speech against you to claimants as they were
walking in the doors. He was also handing out leaflets as
you know. He was telling the claimants that you were the
author of a Bill to get rid of class actions and to make it
hard for people who are hurt by big companies to recover.
His speech also included the fact that you are one of the
lawyers for Citgo and the flier says that you have made tens
of thousands of dollars from Citgo, but when the people hurt
have received nothing or words to that effect. I suspect
there will be more of this over the weekend".
Q Let me show you Deposition Exhibit Number 8, an
e-mail from Carlos Uresti to you. Did you receive that
e-mail on or about February 1st, 003?
A Yes.
Q Let me show you Exhibit 9, ask you if you received
this e-mail on or about April 3rd, 003?
A Yes.
Q Let me show you an e-mail addressed to Doug Chaves
and Jaime Capelo with copies to all the partners of your law
firm dated April nd, 003. Did you receive that e-mail?
A Yes.
Q Read the last paragraph there on the e-mail, if you
would, please.
A "Craig Sico advised me that you will have an
opponent and hinted that there is already enough money
committed by all of the plaintiffs' lawyers to ensure that
you become a lobbyist, not a representative. I am
paraphrasing, but the message was you continue to piss
everyone off. Don't shoot the messenger. Doug".
Q Now, let me hand you Exhibit Number 11, an e-mail
where you're one of the addresses from Doug Chaves. Did you
receive that e-mail?

MS. CONNELLY: Did you say that was Exhibit 7?
THE WITNESS:11.

MS. CONNELLY: Oh. 11.
A Yes.
Q (By Mr. Harris)Let me show you Deposition Exhibit
Number 12, another e-mail where it appears that you're one
of the addresses dated March 14th, 003. Did you receive
this e-mail?
A Yes.
Q Let me show you Exhibit Number 13, Exhibit dated
March 0th, 003. Did you receive this e-mail?
A Yes.
Q Let me show you Exhibit Number 14, an e-mail which
appears to be dated March 5th, 003. Did you receive this
e-mail, sir?
A Yes.
Q Let me show you Exhibit Number 16, an e-mail sent by
Mikal Watts. Did you receive that e-mail?
A Yes, I did. This was back during the March 002
primary campaign.
Q Could you read that into the record, please?
A Yes. "Montgomery passed along your e-mail to him
where you stated 'I understand that Mikal is moving to
support David Berlanga. I understand that began yesterday.
Is this true?'I have not agreed to support anyone but
Capelo, whom I have always supported. While I am extremely
pissed off at his lack of spine with respect to my mother, I
will refrain from doing anything until March 12th out of
respect for you and our relationship. You have my
commitment on this. I will not do anything for Berlanga or
against Capelo until my mother's election is over. However,
someone is going to have to come over and do some major
fence-mending that night to explain to me why I should keep
resisting Perry's invitation to take his head off. One of
the reasons Capelo is ahead in the polls is the fact that I
have thus far successfully talked Perry into keeping his
anti-Capelo campaign to $2,500. Trust me, but for my
efforts, Capelo would very easily have faced Berlanga with a
$300,000 war chest funded by Perry and myself which was
Perry's original idea. Hugo's people are calling me saying
Capelo's people were down at the radio station telling them
to pull my mother's spot off the air. While I assume it is
just bullshit from them, trying to get into my wallet, I can
assure you the opportunity to support Berlanga has already
presented itself in the last 18 hours and has thus far been
resisted by myself. Just so I can figure out how important
my efforts for Capelo have been, I would like to you to know
just how God-damned important the people who called and
bitched are. Who were they?I'm just curious, so I can
figure out my relative location on the Capelo totem pole.
Because, and only because, Capelo's legislative director is
named Bert Quintanilla, you have my word Berlanga is getting
no help from me through March 12th. However, I do expect to
hear from Capelo that night or the next morning to explain
this complete lack of judgment on his part. I know I will
be hearing from Perry and Berlanga before that time and
would like to have the full picture before I do anything.
Mikal".
Q Let me show you Exhibit 17. You had referred
previously in your deposition that there were pass-outs in
reference to a letter?
A Yes. This was the leaflet that was passed out
during February and March of 003 by the Huerta Law Firm,
not only to the -- some of the Citgo plaintiffs, but to --
in the malls and shopping centers, was placed on vehicles.
Q Now, continuing with Mr. Mikal Watts, let me show
you Exhibit Number 18 which is a -- purports to be an e-mail
to all the Watts Law Firm employees. Have you seen that
before today?
A Yes.
Q How does Mr. Watts characterize you on -- on -- in
that e-mail?
A Very simply as the enemy.
Q And what's the date of that?
A The date is March 9th at 8:53 a. m. which was just a
few hours after House Bill 4 and HJR 3 were passed off the
floor of the House of Representatives.
Q And was that immediately prior to the problems you
ran into in reference to the firm?
A That was just a few days before.
Q And here's an e-mail in Exhibit 15 dated March 18th,
003 that's addressed to you. Did you receive that?
A Yes.
Q Did you ever receive any oral criticism from lawyers
---
A Yes.
Q Concerning your position?
A Absolutely.
Q Now, Mr. Rudy Gonzales, did he ever express to you
that he didn't want the firm associated with tort reform?
A Yes, he did, by e-mail.
Q Can you describe that -- that conversation.
A He sent an e-mail that laid out that he didn't -- he
wanted to make sure that the firm's name was not associated
with sponsoring any type of tort reform.
Q Okay. Let's go back to the Spring of 002. What
was your relationship with Judge Sandra Watts at that point
in time?
A I had refused to endorse her. It was not accepted
very well by the Watts family.
Q What was your relationship with Barbara Black?
A I also refused to endorse Barbara in her race for
Senate and it was not received very well by the Canales
family.
Q Did your wife participate in any activities that
created any resentment?
A She did. She is close friends with Diana Martinez
and had endorsed Diana Martinez.
Q Back in the Spring of 002, what was your
relationship with Rene Rodriguez?
A We were still very close friends.
Q Now, was there a Democratic fundraiser in the Fall
of 002?
A There was.
Q And did Mr. Tony Canales publicly express his
displeasure with that fundraiser?
A He did. He caused quite a stir with chastising
local democrats for having Senator Hinojosa and Senator
Truan and someone else as a sponsor and referred to them as
the "three amigos".
Q Do you know why that resentment appeared?
A It appeared to be the resentment that had started in
the Senate campaign with members of the Corpus Christi
population supporting Chuy Hinojosa over his daughter.
Q And was that event around September 3rd, 002?
A As best as I can recall.
Q Is that the date that you became in possession of a
check signed by Rene Rodriguez?
A It was on or about that date, yes.
Q Tell us the circumstances surrounding your receipt
of that check.
A I was ---
Q And I'm talking about the hundred thousand dollar
check.
A I was at Mr. Rodriguez's office, I'm sure, visiting
about the campaign stuff. At the time my campaign -- we
were dealing with Robert Pate as our republican opponent and
Terry Shamsie, a close friend, was dealing with Joe McComb
as a republican opponent. When I was getting ready to
leave, Mr. Rodriguez said that he had something for me and
-- from an old med-mal case and handed me an envelope and I
---
Q And where did -- when did -- where did this take
place?
A It may have been -- I think it was in his office.
Q And did you open the envelope there?
A No, I did not.
Q What did you do with the envelope?
A I just stuck it in my pocket.
Q Do you recall anybody else being present when he
handed you that -- that envelope?
LINDA SMILEY CONDIT, CSR, RPR

A No, I do not.
Q After you stuck the envelope in your pocket, what
did you do?
A I left.
Q How long after you left did you open the envelope?
A When I got in my car.
Q And what did you see when you opened the envelope?
A I saw a $100,000 check.
Q Let me show you Exhibit Number 19. Is this the
check that you saw?
A Yes, it is.
Q Well, why didn't you open the envelope when you were
in the presence of Mr. Rene Rodriguez?
A As a habit, I never do. I receive contribution
checks from many people all the time and I have gotten in to
the habit of not opening up the envelopes in front of
people.
Q What did you think the check was for?
A Obviously I thought the check was for a case that
hit that -- that he owed me a referral fee.
Q Well, did you have a file on any cases that you have
ever referred to Mr. Capelo -- I mean to Mr. Rodriguez?
A No, I did not keep a file of any kind of referrals.
Q Why didn't you have a file?
A It was not my practice to have a referral file or to
LINDA SMILEY CONDIT, CSR, RPR

2
even have a referral agreement.
Q You didn't have a referral agreement?
A No, I did not.
Q Can you describe for us what a referral agreement
is.
A An agreement that I have sent a case over, a client
over to another attorney to -- for them to handle.
Q Do you understand that to have an enforceable
referral agreement it's supposed to be in writing?
A I understand that now.
Q Well, did you have a client list, some list that you
could check to see who got your referrals?
A No, I did not.
Q Well, what had been the custom and practice between
you and Rene in reference to the referrals?
A There was only a short period of time that I sent
anybody to his office, and that was when I was a solo
practitioner before I joined with Dario Bargas. And as of
-- what would happen is someone would come into my office or
I would talk to someone and if their case was anything more
complicated than a divorce or a fender-bender, I would tell
them to go and see Mr. Rodriguez and to tell them that I
sent them over there.
Q Do you ever even remember meeting William Boudreaux?
A No, I don't have any specific recollection of that.
Q Do you ever recall working on the Boudreaux file?
A I recall working on some files in Mr. Rodriguez's
office, but I couldn't tell you if -- if that was one of the
files.

MS. CONNELLY: Objection, nonresponsive.
Q (By Mr. Harris)Can you -- can you tell us the
circumstances where you worked on some files in Rene
Rodriguez's office.
A Yeah. I had become a solo practitioner right after
I'd -- the firm had -- Whittle law firm had dissolved. I
had just been elected to the City Council and I needed to
generate some income. And I had developed a relationship, a
friendship with Rene Rodriguez and I had asked him for -- to
give me any work that he could -- could afford to give me or
to let me help him on whatever files he could -- I could
help him with.
Q And what was the arrangement in reference to the
work that you did on those files?
A If I did some work on a file that panned out, that
he would send me a check.
Q Did you keep lists of those files you worked on?
A I did not.
Q Did you keep time records?
A I did not.
Q Do you recall the name of any of those files that
you worked on?
A No, I do not.
Q Now, how many years ago did this take place?
A 1997, so six, seven years now.
Q Well, why did you think that -- did you think this
money was for work or did you think this money was for a
referral?
A Well, when I saw a hundred thousand dollars, I
thought it was for a referral.
Q And why?
A Because it was a hundred thousand dollars. I
clearly would have remembered a case that I had put a
hundred thousand dollars' worth of work into.
Q So that was an assumption?
A Very much so, based on my practice with Mr.
Rodriguez.
Q Did anybody ever tell you that it was a mistake in
giving you that check?
A When Mr. Rodriguez and I had a -- our argument about
the check, he mentioned that it was a mistake and he
mentioned that I didn't work that much on the file.
Q Well, tell us -- tell us about the argument. How --
approximately how long was it after you got the check that
you got in this argument with Mr. -- Mr. Rodriguez?
A A week and a half. A week and a half after I had
received the check.
Q And where did the argument take place?
A In Mr. Rodriguez's office.
Q And who was present?
A I think that Judge Terry Shamsie was present and
another campaign worker, but I'm not sure that I recall his
name.
Q And tell us as best you can what Rene Rodriguez said
and what you said during this argument.
A I had gotten a call from Mr. Rodriguez before that
there was an issue about the check so I came over to visit
with him about it. I was extremely upset when I got there.
I was convinced that the issue had to do with the politics
surrounding the County Judge race and it didn't have
anything to do with the check or the case.
Q Well, tell me -- before we get any further, tell us
about why you were convinced it had to do with the issue
surrounding the County Judge's race.
A Some of the folks helping Judge Shamsie get elected
were very concerned that there were democrats that were
supporting Joe McComb. A fall-out from the Senate race in
the primary and the Canales family being some of the
democrats that were supporting McComb. My chief of staff
Bert Quintanilla and his wife, Judge Martha Huerta, Judge
Huerta was on the ballot in November as well against Tom
Greenwell, and some of the folks that were helping Judge
Shamsie believed that because Bert Quintanilla and Judge
Huerta maintained a friendship with the Canales family that
that was indicative of their support for -- of the democrats
for McComb cause. And I think at one point they believed
that if my friends were helping McComb, then I must be
helping McComb also. I was extremely upset that people that
I had been political allies now with my entire political
career were questioning my loyalty, and obviously my
friendship with Judge Shamsie was being questioned as well.

MS. CONNELLY: Objection, nonresponsive.
Q (By Mr. Harris)So you go and go to the office of
Rene Rodriguez, Judge -- well, Terry Shamsie. I'm going to
call him "Terry" because he wasn't Judge yet. Terry Shamsie
was there, there was somebody else you think that might have
been there?
A (Acknowledged affirmatively).
Q And you were there. Can you tell us what you said
and what Mr. Rene Rodriguez said at the point -- at this
time where you had your argument.

MS. CONNELLY: Objection, form.
A The best I can remember is when I told him -- when I
came in he told me that the check was a mistake, that I
didn't do that much work on it. I told him "This is
bullshit. This has nothing to do with the case. This is
all about politics and I can't believe that you're trying to
screw me". And he told me that he couldn't believe I was
trying to screw him. I think we used much stronger language
than that.
Q Uh-huh?
A It was probably the only fight I've ever had as an
adults, quite honestly, and it got ugly very fast and he
then told me to get out of his office and asked his --
somebody on his staff to -- to escort me out.
Q So he kicked you out of the office?
A He kicked me out of the office.
Q Had you cashed the check?
A No, I had not cashed the check at that time.
Q What happened next in reference to the check?
A I was extremely pissed off at Mr. Rodriguez and even
more convinced that it was completely unrelated to the case
and the check and I felt that if he was going to betray me
this way that I was going to make him go the -- go the full
distance and put a stop payment and stop the check. So
after thinking about it for a few days, I went and deposited
the check.
Q Well, do you recall whether Mr. Rodriguez during
this argument said he was going to stop payment?
A I believe he referred -- made a reference to that,
(Acknowledged affirmatively).
Q And at that point in time in your mind was it the
check for work done or was it for a referral fee?
A I thought it was for a referral fee.
Q Did Mr. Rodriguez demonstrate to you through any
kind of writings why it could not be a referral fee?
A No, there -- there -- it was -- the conversation
escalated quickly. There was -- it was not a -- there was
no discussion.
Q Did you believe Mr. Rodriguez when he said it was --
you didn't do that much work on the case?
A No, I didn't believe him.
Q Did you deposit the check?
A I did.
Q Before depositing the check did you talk to your
accountant, Rudy Sturgeon, about the check?
A I did.
Q Can you tell us that conversation.
A I basically asked him to help me figure out my taxes
so that I could take care of that, and I didn't want to
deposit the check until I knew how much I had to take care
of with regards to the I. R. S.
Q Did you owe some taxes at that time?
A I had -- I owed some estimated tax payments.
Q And did you make a calculation as to the tax monies
that -- or I shouldn't say "you", ---
A No.
Q Did Mr. Sturgeon make any calculation as to what he
recommended that you pay?
A That's correct; Mr. Sturgeon did, I did not.
Q And how much did you write a check for to the
I. R. S. ?
A It was approximately $82,000.
Q All right. And that was from the hundred thousand
dollar proceeds?
A That's correct.
Q When you took it to your accountant was there any
discussion as to what account that check should be deposited
in?
A There was. I asked him if he -- if he thought it
was best for me to put it into my PC account and he did.
Q And how was it -- since it was to you and not to
your PC, how ---
A (Acknowledged affirmatively).
Q How did -- how was that accommodated so that it
could go into the PC account?
A Well, he -- he also represents Mr. Rodriguez, or
represented Mr. Rodriguez, and I -- he said he would call
over there and see whether they would issue another check or
not.
Q Did you have any discussion with him later about any
calls that he might have had?
A He had a conversation with Mr. Rodriguez's office
and was told to just have me write in "PC" on the check.
Q And who wrote the word -- the letters "PC"?
A I did.
Q Now, was there a comma placed with all these zeros?
A I put the comma in there, also.
Q At the same time you put "PC" on it?
A At the same time.
Q And that was prior to the time that you endorsed the
check and -- or I don't know if you endorsed it, but
deposited it?
A That's correct.
Q Okay. Now, around October 10th did you get a letter
from Rene asking for the check back?
A I did, the day after I deposited it.
Q Did you think Rene was pulling your chain?
A I thought it was -- I -- I didn't think he really
did issue a stop payment.
Q And why did you think that he hadn't issued a stop
payment?
A You just have to know Rene to know that he's -- has
these types of temper tantrums.
Q Well, did you believe that the fact that the check
cleared that that was some evidence of the fact that he
LINDA SMILEY CONDIT, CSR, RPR

hadn't issued a stop payment?
A Well, it was -- it was probably ---

MR. CARRIGAN: I just object to leading, Jim.

MR. HARRIS: Sure.

MR. CARRIGAN: Thank you.
A It was probably two weeks -- ten days, two weeks
later that I contacted my bank to see whether or not the
check had cleared and it had, which confirmed my belief that
Mr. Rodriguez was pulling my chain on this issue.
Q (By Mr. Harris)Later did you receive a call from
Roland Guerra?
A I did. It was much later. It was after the
Thanksgiving holidays that I received a call from Roland
Guerra who was with LNB, Laredo National Bank.
Q And can you tell me who Roland Guerra was?
A At the time he was -- I understood him to be the
president of the Laredo National Bank.
Q And what did he ask you in that telephone call?
A He asked if we could meet, that he had something he
wanted to discuss with me. And I've known Roland since I
moved to town, so obvious I obviously said sure.
Q And where did you meet?
A We met at Taqueria Garibaldi within a couple of days
for breakfast.
Q And what did he tell you?
LINDA SMILEY CONDIT, CSR, RPR

2
A He told me that Mr. Rodriguez had issued a stop
payment and that the bank had failed to catch the check when
it was deposited and made the mistake of funding the -- the
check when they shouldn't have.
Q And what did you say in response to that statement
from Roland Guerra, the president of the bank?
A I was somewhat surprised and I asked him again "Are
you" -- "Are you sure that he confirmed" -- I mean, "Are you
sure he issued a stop payment", and he said "Yes". And he
also mentioned that Mr. Rodriguez was threatening to sue the
bank and he asked me what I would want -- what I wanted to
do, and I told him that I would return the money.
Q And why?Why did you say you would return the
money?
A I thought it was the right thing to do. I thought
that the bank had made the mistake, that the dispute between
Mr. Rodriguez and I would be resolved.
Q And tell me how you went about reimbursing the bank
for their mistake.
A I had some savings and the bank offered to loan me
the balance. And I want to say I put up 44,000 and the bank
loaned me 56,000.
Q Did you ever get ---

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