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Deposition witness has second thoughts about testimony

Carter's Grove (photo by Melissa MB Wilkins)

We’ve all had the feeling. You wish you could take back something you’ve said.

In most situations, the feeling comes too late.

But, when you want to take back a statement you made under oath in a federal lawsuit, the rules seem to offer some hope. Under the Federal Rules of Civil Procedure, you have a month after a deposition to list changes to the transcript, even if those changes are “substantive.”

It sounds almost like a get-out-of-jail-free card for someone who spoke too freely, but some lawyers say, “Not so fast.” They argue the rule is not meant to allow clever lawyers to rework deposition transcripts to “fix” damaging testimony.

The argument, which has divided federal courts in Virginia, has arisen in a $4-million dispute over allegations of concealed defects at the historic Carter’s Grove plantation near Williamsburg.

In the case, the Colonial Williamsburg Foundation is accused of covering up leaks, water damage, and buried debris at Carter’s Grove, the colonial Georgian mansion in James City County sold by the CWF for $15.3 million in 2008.

The director of planning for the CWF offered what may prove to be damaging concessions when he sat for a deposition in May. Thomas Peck was questioned about efforts to prepare the property for sale. Regarding removal of mildew in the mansion, Peck was asked if the intention was so that prospective buyers would not know the mildew had previously been there. His answer: “Yes.”

Peck later said his answer should include the following: “The goal was to eliminate the condition by cleaning the mildew and restoring the area to its normal condition.”

Similar statements and revisions involved efforts to replaster walls and remove mold. All told, Peck listed 18 changes he wanted to make to his deposition.

Lawyers for the new owner of Carter’s Grove cried foul. “[I]t is obvious that CWF’s proposed changes are nothing more than after-the-fact wordsmithing by CWF’s lawyer to ameliorate damaging testimony,” wrote Sheila deLa Cruz of Richmond in a brief.

deLa Cruz represents a limited liability corporation controlled by dot-com entrepreneur Halsey Minor. The former Charlottesville businessman put Carter’s Grove into Chapter 11 bankruptcy in February after clashing with the CWF over alleged defects at the plantation. CWF claimed Carter’s Grove owed $4 million under the sale agreement.

After taking Peck’s deposition, the Carter’s Grove company filed a lawsuit claiming the CWF actively concealed “pervasive moisture, water damage, and mold” in the historic mansion and also concealed buried debris that was releasing hazardous substances.

Minor complained about a “4-foot hole in the wall” on the second floor of Carter’s Grove from a leak “patched and painted just prior to my purchase,” according to a February essay published in The Virginia Gazette.

Fixing the leak could involve replacing the entire roof, Minor said, at a cost equal to the $3.5 million he still owes under the purchase agreement with the CWF.

In an answer filed with the court, CWF denied its remedial work on water damage was “undertaken for the express purpose of shielding any adverse conditions from prospective purchasers.” It also denied disposing of hazardous substances on the property.

Peck’s deposition could be critical to Minor’s claims of fraudulent concealment. The proposed changes to his testimony were served on opposing counsel just a week after the complaint was filed. “It was only after … Carter’s Grove had filed its claims that CWF realized the effect of its testimony and counsel attempted to change his client’s answers in a way that would materially alter its legal effect,” wrote deLa Cruz.

The Carter’s Grove brief cites authorities from around the country, but two Virginia judges have weighed in on the issue with differing results.

In 2002, Roanoke U.S. District Judge James C. Turk permitted major revisions of deposition answers in a defamation case, but allowed opposing counsel to take a second deposition. Turk’s opinion came in Foutz v. Town of Vinton.

In July of this year, however, Alexandria U.S. District Judge James C. Cacheris cited with approval the proposition that “a deposition is not a take home examination.”

Cacheris refused to reconsider his ruling on a critical standing issue in a patent case. Although he took note of a witness’ errata entries that sought to qualify his deposition testimony, the judge said those entries “strike this Court as a bit too convenient.”

Cacheris found the deposition changes were not a “correction of an inaccuracy,” but rather a “tactical adjustment.”

The case is Touchcom Inc. v. Bereskin & Parr.

The Carter’s Grove dispute is before Norfolk U.S. Bankruptcy Judge Stephen C. St. John, who is scheduled to consider Peck’s deposition changes at a hearing Oct. 21.

Neither deLa Cruz nor counsel for the CWF returned calls for comment.

Carter’s Grove has been closed to the public since January 2003. The CWF said it shut down public access to evaluate what to do with the property. Minor has complained that, when he bought the property, he was forced to accept deed restrictions that prohibit the plantation from ever again being opened to the public.

“From the moment I signed the contract, I have looked for a way to return Carter’s Grove to the public trust, and ironically it is bankruptcy that holds the greatest promise,” Minor wrote in his February essay.

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