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Default Hearing United States District Court Default Hearing The Court: Court calls the case 97-2498, Magness versus Russian Federation and others. Who represents the plaintiff? Mr Nelson: Dan Nelson for the plaintiff, Your Honor, The Court: And for the defense? Mr Nelson: That is correct, Your Honor. The Court: Have they received notice of this hearing? Mr Nelson: What I did, Your Honor, when I found out of this hearing, James Symington, who is the representative that we had served with regard to the American Russian Cultural Foundation in Washington, D.C., I was unable to get him at his office, so I left a message at his home on his answering machine. In addition to that, there were two lawyers, if you recall, who appeared at the TRO hearing about a year ago in this case. One was from Houston; another one from Washington, D.C., who appeared by telephone. I telefaxed both of those individuals about this hearing today. The Court: And you have had no response; is that correct? Mr Nelson: That is correct. The Court: Well, proceed. Call your witness. Mr Nelson: Your Honor I would call Lee Magnes. The Court:Come forward, please. Raise your right hand and take the oath The Clerk: Do you solemnly swear that the testimony you are about to give in the case now before the Court will be the truth, the whole truth and nothing but the truth? The Witness: Yes, ma'am. I do. The Court: Please have a seat. Lee A. Magness was called as a witness by the Plaintiff and, having been first duly sworn, testified as follows: DIRECT EXAMINATION By Mr Nelson: Q Mr. Magness, let me first hand you Exhibits 1 through 8 and have you identify those for the record, if you would. Mr Nelson: May I approach, Your Honor? The Court: Yes. You just have free reign of the courtroom. Mr Nelson: Thank you. The Court: In other words, all you have to do -- this is an contested matter -- just get on what you need to get on. Mr Nelson: Okay. By Mr Nelson: Q Describe generally what Exhibits I through 8 are for the Court, Mr. Magness. A Exhibits 1 through 8 are items dealing with service of process. Specifically, Exhibit 1 is from the Secretary of State of Texas showing that the Russian Federation was served, Boris Yeltsin at the Kremlin. This is a return of service from the Secretary of State dated September 15th. Exhibit No. 2, the Deputy Minister of Culture served in the Russian Federation September 17th, 1998, Exhibit No. 3, Fed-Ex return receipt showing that the Director of Special Consular Affairs in Washington, D.C., which is the appropriate method of service under the Foreign Sovereign Immunities Act, was served on September 1st, 1998. Exhibit 4, Fed-Ex response showing that service was, process was served on September 4th to James W. Symington, American Russian Cultural cooperation in Washington, D.C., and a signature attached there. Exhibit No. 5, Fed-Ex showing Service on Tim Dickinson, who is the Russian Federation attorney, which appeared by telephone in a TRO hearing a year ago. This was served on September Ist, 1958 in Washington, D.C. Exhibit No. 6, return of service from Verner Liipfert; Brandon Cook, who was the other attorney that appeared on behalf of Russian Federation a year ago in the TRO hearing. That's dated September 1st Exhibit No. 7, another return of service from Tim Dickinson, stating that notice of today's hearing. Actually, this is a notice of a scheduling conference for October the 19th, signed by Judge Hittner, stating that We were going to have on October 23rd, have a hearing concerning this case. No appearance. Exhibit No. 8 is notification to Brandon Cook, the other attorney for the Russian Federation,as well, notifying of a hearing on October 23rd, 9:30 a.m., which they failed to appear for. Q Let me hand you now Exhibit 29 and have you identify that real quick for the record. A Exhibit No. 29 is a fax return and confirmation to Tim Dickinson from Dan Nelson, and to Brandon Cook, showing that we gave notice by fax of this hearing on November 19th, yesterday, and stating that we were having a hearing on motion for default today at 11:00 a.m. No response. Q Mr. Magness if you would, describe for the Court just generally and quickly the background facts that lead to the filing of this lawsuit. A The facts. Specifically, the case is dealing with expropriation of property in the Soviet Union, or former Soviet Union now, the Russian Federation. The plaintiff, Nina Schroder Magness, happens to be my mother, is one of the main named plaintiffs. Her father owned a piano factory in Russia back in 1917. It was expropriated at that point in time, was valued at $162.5 million at that date. We traveled to Russia when the laws were in place in - Q Let me back you up a second so we can get all the players. The Court: How do we get that valuation? The Witness: Two questions. The Court: Pardon me? Two questions? My question. The Witness: Yes, Sir. The Court: Off the record. (At this time a recess was taken) The Court: Are you ready to proceed? Mr Nelson: We are, Your Honor. The Court: Go on. By the way, how long this will take, ballpark? Mr Nelson: I don't believe it will be more 30 minutes, Judge. The Court: Okay, fine. That's no problem. Don't worry. By Mr Nelson: Q Mr. Magness, if you would, describe your educational background for the Court. A Yes, sir. I have got a Bachelor's degree, BBA in accounting from Harden Simmons University; I have got an MBA in international Finance from Texas A&M University, and I have got a JD law degree from the Thurgood Marshall School of Law at Texas Southern University. Q If you would, describe your work experience with regard to the accounting and financing. A Upon gradation from Texas A&M with my MBA in international finance, I worked for Panhandle Eastern Corporation as an economist, a senior economist in the Rates and Regulatory Affairs Division, was promoted to a senior analyst; worked there for three years. I was transferred over to Transco Energy Company, where I worked for two years and in the Rates and Regulatory Affairs Division as a Senior Economist or senior Rate Analyst. Since that time I have invested in real estate and rental property in the United States, both in Texas and in various states around the U.S., Iowa; and I have purchased international real estate in several countries in Central and South America, and am familiar with international real estate markets around the world. I spent six weeks in Japan studying various commercial entities there. I have got specific experience in analyzing best use for properties, commercial properties especially, meaning site locations and what those sites can be used for economically speaking. The Court: When were you licensed in the State of Texas? The Witness: Licensed to practice law in 19 - The Court: You are an attorney in the State of Texas, also; is that correct? The Witness: Yes, sir. I am licensed to practice law in the state of Texas. The Court: Go on. By Mr Nelson: Q Mr. Magness, if we could, describe who each of the plaintiffs are and what their relationship is to the various properties that we allege were expropriated. A Yes. Nina Schroder Magness is the daughter of the last owner of the piano factory and real estate in question. We have a birth certificate, an exhibit that shows that, as well as a marriage certificate establishing my right as her son. We have a signature on her report cards; that was a requirement in Germany in the 30s and 40s, which is where they were living at the time, for the father to sign the children's report cards. so we have a signature of John Schroder at the time, various times from 1938 through 1945 and later. We have the death certificate of John Schroder that shows his occupation as being the factory owner of the piano factory, that death certificate dated 1950. The other plaintiff in the case would be Agnes Schroder, which is the youngest daughter of John Schroder. The Court: All these individuals as plaintiffs, they're all lives in being; is that correct? The Witness: They're all lives in being, and they're all U.S. citizens, and they were all U.S. citizens at the time of the expropriation in 1994. The Court: Okay. Thank you. By Mr Nelson: Q Mr. Magness, let me hand you Exhibits 9, 10, 11, 12, 13, and 22, and advise the Court as to what those documents, and if they're the ones you had mentioned in your most recent testimony. A Yes. Exhibit 9 is, briefly, a translation hospital certification, birth certificate establishing dates of birth of Nina Schroder Magness being September 8th, 1936, and showing the parent's names. Exhibit No. 10 is a registration showing that John Schroder is the father -- this is from a German translation, certified German translation -- and that John Schroder was the son of Carl, the other, previous owner of the piano factory in Russia. The Court: Mr. Nelson, just for the record, you are also moving now orally for a motion for entry of default; is that correct, together with a default judgment; is that right? Mr Nelson: That is correct, Your Honor. The Court: Go on. A Exhibit No. 11 is the signed document of John Schroder, dated 1946 A report card, Exhibit 12. Exhibit 13, translations of marriage certificates establishing Nina Schroder Magness being married to Walter Lee Magness. Q Who is Walter Lee Magness? A Walter Lee Magness is my father. Q Continue, please. A Exhibit 22 is the death certificate and the translation into English from German, establishing that a man died the 1st of January, 1950, Johann Schroder, and describing his last possessions and that he was an owner of a factory. Q If you would, describe for the Court what properties you are claiming were expropriated. A Two expropriations, mainly commercial real estate and residential real estate in St. Petersburg. No. 1 would be a piano factory, approximately four stories, 80,000 square meters of space, believed to be used right now as a furniture manufacturing facility, a shopping center, retail shopping center on the Nevsky Prospekt in downtown St. Petersburg, approximately 20,000 square meters, standing four to five stories, if you include the basement, with retail space being leased out currently. The third property would be a house located in downtown St. Petersburg, probably over a hundred years old, antique house, square meters - The Court: Hold it one second. Go right ahead, By Mr Nelson: Q Mr. Magness, let me hand you Exhibits 17, 18, 19 and 20 and have you describe to the Court what those exhibits are. A Yes, Sir. Exhibit 17 is a view of the retail shopping space on the Nevsky Prospekt in 1900 as it appeared, taken from a book, and basically marked -- i believe the book is dated 1994. The property that I visited while I was in St. Petersburg, Exhibit No, 18, is a picture of the piano factory. Exhibit No. 19 picture of the residential real estate house that has approximately 30 rooms in it. Q The factory and the home, when were those photographs taken? A These photographs were taken in 1994 when I visited the properties. Q Okay. A Exhibit 20 is a copy of a Schroder piano that was built by my grandfather, that resides in my mom's house in Texas. The Court: 17, 18 and 19. 17 is an old photo, correct? The Witness: That's correct. The Court: And 18 and 19 are current photos of the same property? The Witness: Different properties. This is the piano factory. This is residential, and this is the commercial property on the Nevsky Prospekt. The Court: Is it still there? The Witness: Yes. It has a Gap in it. The Court: Does it look just like that? The Witness: Yes, Sir. The Court: What is that? The Witness: This is a copy of one of the pianos, a Schroder piano, CM Schroder, that my mom has in Texas. By Mr Nelson: Q If you would, describe now for the Court what efforts you and your mother and your aunt undertook to reclaim your property in 1994? A Okay. Basically I will try and get through this
as quick as I can. Q Let me stop you first. A Well, No. 1, "the wall" fall down, so to speak, and the iron curtain came open, and democracy was somewhat introduced into that environment. Boris Yeltsin in 1991 signed an edict basically saying, or a law saying that private individuals could own property in Russia. In 1994, another law was issued, a property law basically stating that foreigners and descendants of owners of past property in Russia could own property. Q How were you advised of this? A We were advised of that through one of the relatives that we found out that we had that was still alive in Russia that sent us a letter stating were we aware of the fact that they were trying to privatize property and that we could make a claim to our property back in Russia, and that specifically they thought of my mom because my grandfather was the last known owner. Q If you would then now describe your efforts you had in 1994. A Yes, Sir. My uncle had written three times -- he lives in Germany -- letters to the mayor of St. Petersburg, which is Mr. Sobchak. Mr. Sobchak refused to answer any of his letters, so we had no response in that. Those letters were written between '91 and 1994. We visited the mayor's office specifically four to six times in 1994. We met with the officials of the mayor's office. We filled out the papers, were given the documents required by law at that time to fill out to be adjudicated as the owners of the property. We established through birth certificates and other testimony that we were the actual heirs of Johann Schroder, the last known owner of these various properties. We met with the Kugi, which is a city property committee, an agency of the Russian Federation that had to sit and establish that, yes, indeed we were the owners of the property; and we paid the requested fees. Specifically, I paid the requested fees that I was told to by the Russian representatives. At that point, agents of the Russian government, meaning the city property agency, told myself and my uncle that the properties would be titled in our names. Also, while I was there -- we kind of left this out -- two pianos I happened to find, I purchased; had money wired to me from the United States, Western Union, to purchase these two pianos, which I have a receipt for that's an exhibit, and will mark as an exhibit, specifically a piano built in 1910 -- and the number's on it -- and another piano built in 1889; went to specific agencies to get permission to ship these pianos back to Houston, specifically the Ministry of Culture. I was told that under current regulations I would not be able to ship these pianos out of the Soviet Union because they were national treasures or historic treasures or antiquities because they were built before 1960, and that I would have to go and talk to several layers of people to get an exception. I went to visit four or five different offices of the Ministry of Culture, and each layer satisfied whatever it was that they required me to do. Q If you would, Mr. Magness, continue on with the efforts you had undertaken in 1994 to reclaim your property. A Yes, sir. After visiting the different offices and meeting with the representatives of Ministry of Culture, the last person in line I talked to specifically stated that no exceptions would be made; that I owned the pianos but I could never take them out of the Russian country or through the Russian borders. I kind of left it at that. I met with the mayor's economic development representative, which we have a card or a copy of a card -- I can't pronounce his name -- and met with the Kugi once again. At that point in time we left it such that as soon as a final approval was given by the Kugi, properties would, we would receive notice by the mail that we had been titled, the properties had been titled in our names. We left Russia, came back to Houston. In an attempt to get my pianos back, I hired Bracewell & Patterson to represent me in the matter because they had some special expertise in Russia. They had offices in Russia, and they had experience in getting antiquities out of Russia. I have as an exhibit copies of the bills that I paid in which they state that they had
numerous phone conversations with the Ministry of Culture; paid legal fees to Bracewell
& Patterson, got the documents, and they received an exception through the Ministry of
culture, and a representative of Bracewell & Patterson, the lawyer that was working on
my case, Greg Vojack, delivered the documents in St. Petersburg to the location, last
known location of the pianos to receive the pianos; was told that they were gone; didn't
know where they were; no one knows where they're at, the property being confiscated by
either the Ministry of Culture or the Russian Federation or thereabouts, are simply lost,
and no one knows where they're at. The Court: How much is it worth, approximately? The Witness: I would say it's worth at least two million dollars or more. It was a gift from Czar Nicholas to Alexandra, and it is hand-carved with paintings on it and hand-painted. I assume that it would have to be auctioned off at Sotheby's or someplace. I can't give an estimate as to the value, but it's in the millions of dollars. The Court: All right. By Mr Nelson: Q Mr. Magness, let me hand you Exhibit 16. That may help the Court a little bit as far as what that particular one in Wilmington, Delaware looks like. A Exhibit 16 is an internet document showing the exhibit Nicholas and Alexandra, appearing between August the 1st and December 31st, 1998, and specifically showing on Page 2, a picture of the piano with the description stating that it is manufactured by Schroder at or around 1898, was a gift from Alexandra to Nicholas. The piano is decorated with scenes and various pictures, The Court: Let me see it. A The document also states that the exhibit is charging funds and registration for individuals, U.S. citizens, to view the exhibit, at various pricings. Q Let me now hand you Exhibits 14, 15, 21, 23, 24, 25, 26, 27 and 28, have you describe what those are to the Court, and if they're some of the documents you had previously testified to? A Okay. If I might finish on Exhibit 16, Specifically, the exhibit is expected to have 1.5 million visitors; and they're charging approximately $12 a person. Exhibit No. 14 is a Russian-typed receipt for the piano that I purchased, Piano No. 32,746, built around 1910 in St. Petersburg by Schroder, that I purchased. Exhibit 15 is various stages from a book called Pianos And Their Makers by Alfred Dolge, with publication and copyright notice specifically - The Court: By the way, what are dates that exhibit is going to be in town? The Witness: The exhibit is in Wilmington, Delaware started August 1st, so it's currently there; and it's leaving December 31st, 1998. Specifically, pages 262 and 263, which are excerpts, or copies from this book Pianos And Their Makers, establish the history and ownership of the Schroder piano factory, starting with Johann Friedrich Schroder in the 1700s and carrying on to Carl Nicolai Schroder, or Carl Michael Schroder, which is C.M. Schroder, and then - Q How are you related to c.m. Schroder? A C.M. Schroder would be my great grandfather. And then it further goes through the company history, stating various things about the pianos; that they were honored by the emperors of Russia and Austria, et cetera; and basically stating that Johann Schroder, the establishment and management of the piano factory passed to his son John Schroder, who is my grandfather. Exhibit No. 21 is a letter from my attorney Greg Vojack, at Bracewell & Patterson, stating -- well, the document speaks for itself -- but basically the work that he had done to ship the two pianos out of Russia; that he did receive a permission from the Ministry of Culture; they completed the forms; the forms were tendered to the Ministry of Culture. Shortly after they were submitted, they went to the location of the factory, and they were told that pianos were no longer there. It was relayed to them by an official at the Ministry of Culture. Exhibit 23 is a copy of the letter from Viktor -- I can't pronounce the last name, basically a Russian relative, stating that the law came out for return of private property which was confiscated in 1917 and that he was specifically thinking about my grandfather, and that there might be some compensation or monetary settlement for confiscated property, not only for Russian citizens, but also for foreign citizens. Q Let me ask you quickly on that. Did you verify with any attorneys who practice international law or any attorneys in the European community with regard to this particular law and the change in the law? A Yes, I did. Q Who did you talk with? A Various attorneys. Including, I had Bracewell
& Patterson look into that, as one thing, because they had special experience in
Soviet law; and specifically, Greg Vojack helped write the property code that was newly
being established in Russia at the time. Q If you would continue an with those exhibits quickly, if you could. A Sure. Exhibit No. 24 is a Russian and English translation of a copy from a Russian property
record that shows the Schroder factory, where it was located, who founded it, who the
present-day owners were, and how many people they employed and et cetera. This is various
descriptions. Exhibit 26 is the card from the gentleman that I met with, specifically walked us through all the requirements, Office of the Mayor, St. Petersburg Committee for Economic Development, Andrei Brusov, B-r-u-s-o-v, Ph.D. He is the Deputy Head of the External Economic Relations Department. Exhibit No. 27 is Mr. Brusov's handwritten notes which establish the different agencies that we had to talk to concerning both the property and the pianos in order to get an exception, specifically, a committee for city property, management, or the Kugi, which was the property fund, the Committee for External Relations which - The Court: Slow down a little bit. The Witness: Okay. A The Committee for External Relations, which would help us get antiquities out that were built before 1960. And then finally, Committee for Culture and tourism, with various phone numbers ancd names of the representatives and each that we were to meet with. Q Did you meet with all those individuals? A Yes, we did, myself and my uncle. Item 28 is a Russian copy with no English translation of the requirements for establishing property through the Kugi or the city property management. Basically, the law was signed, or the regulations are signed and dated March 15th, 1994, and I believe that Mayor Sobchak's signature is on the document. It details the various procedures for property in the city Kugi and how to retain title or purchase property. Q Okay. In addition to the commercial activity being undertaken in Wilmington, Delaware with regard to that exhibit, are you aware of any other commercial activities that are being undertaken either by the Russian Federation or the American Russian Cultural Cooperation or any of the other defendants in this case in the United States? A The Russian Federation has another exhibit in Las Vegas right now. The Court: Wait a second. Where, in Las Vegas? The Witness: Yes, Your Honor. The Court: And what's going on there? The Witness: I believe it's another show of antiquities or various items where they charge people to view the objects. A lot of these objects are touring around the U. S. and around the world. I have got notification that there is one exhibit in Japan, there is another exhibit in Germany, specifically pianos that did have Schroder pianos in it, as well, that my uncle was able to visit, and that they are charging people to see. It seems to be a practice to create one of two things: Either economic interest in getting money back to the Russian government by touring these items or peaking U.S. and tourists' interest around the world to come visit some of the other items and see more of the antiquities in palaces and museums and such in Russia. The Court: Go on. By Mr Nelson: Q What I would like to do now is, with regard to each of the various items we are claiming were expropriated, and I have them broken down into four areas, that being the pianos that you had purchased while you were there in 1994, the -- The Court: How much did you pay for them? The Witness: I paid approximately $2,000. One piano was $1,200; the other one was $800. The Court: Go on. By Mr Nelson: Q I have also got the factory, the home, and then I
refer to it as a rental property. A Yes. I am. Q What is the value of each of those pianos? What are the values of the two pianos that you attempted to take out of Russia that were confiscated, expropriated? A A low estimate that I received from a refurbisher of antique pianos in Chicago, with new strings in it and as such, would be about $200,000 to get a similar piano, Q What information did you give him to base that opinion? A I gave him the model number of the piano, the dates tha each of the pianos were manufactured, and a description of the wood and the type of carving and the style of each of the pianos. They basically have a catalog that states every piano that was ever manufactured or numbers that were manufactured; and based on the ability similar pianos, the statement specifically was, "we can't get an exact one of these because they're unique items. In St. Petersburg, specifically, a lot of the pianos were burned when the Germans attempted to take over the city during World War 11, so it's extremely unlikely to find these types of Russian pianos anywhere but in Russia, except for the ones that were out." The total value that he gave me, low estimate, would be 200,000 a piece, or $400,000 total. Q With regard to the factory, the home and the resale property, in addition to your knowledge and experience and education with regard to commercial real estate and real estate internationally, did you undertake any other efforts to determine what the rental rates, current rental rates were in Russia or at or near those, where those properties are located? A Yes Q I have handed you Exhibit 30. Explain what that is to the Court, please. A Exhibit 30 is a request from -- it's a letter from my attorneys, Bracewell & Patterson, in the Soviet Union, specifically Almaty, Kazakhstan, which I requested them to get the current rental rates for downtown retail properties, specifically on the Nevsky Prospekt, downtown residence property in the neighborhood of each of the locations of the properties, and the downtown factory. In addition to these amounts -- and I will tell you what the amounts are -- specifically, monthly rental rates in St. Petersburg stated in per square meter, downtown retail properties, $40 per month per square meter; $25 per month per square meter for the residential; and the downtown factory, anywhere between 6 and 10 dollars per square meter per month. In addition -- this is dated November 16th -- property values have dropped substantially anywhere from 30 to 50 percent in the last three months in the Soviet Union, or former Soviet union, the Russian Federation; but I would state specifically that I also looked up rates for residential and commercial property in the Moscow Times and the St. Petersburg Times. The Court: Do you read Russian? The Witness: No, sir. I don't. The Court: Okay, go on. A Read translated copies of these. They're both found on the internet, and I have copies of those. And the numbers that I got from my attorneys are much lower than the stated rates that
are properties that are offered for sale in these various classified ads and publications. Q With regard to the factory, if you could, determine or tell us what, based on your knowledge, experience and the information you have, what the monthly rental rate would be for that factory that you claim was expropriated? A Yes. Based on the size of the factory, the best estimate, using $10 per square meter per month, square meters would be roughly $800,000 per month times 12 months would be an annual amount of $9.6 million. The property was expropriated in 1994. We have lost rent. Plaintiffs have lost rent for four years. on a simple basis without any interest being accrued four years at 9.6 million would be $38.4 million in lost revenues. To arrive at a best estimate -- and obviously, nobody can predict what's going to happen in the Russian Federation, but to arrive at a best estimate, assuming that the property could be operated for even 10 years, continuing on, we would put in a value of $96 million without any increases in rates and without any interest being added in. The Court: All right. In simple language, plain language, how are you entitled to all that? The Witness: Entitled to the total value of the peroperty? The Court: That's correct. The Witness: The properties were expropriated. We went to get title. The properties were subsequently sold to someone else. We are the last known owners of the property and have proved that up. The Court: They sold it when? The Witness: They told them in 1994. The Court: '94? The Witness: That's correct. The Court: And you were -- your family had legal title up to that point; is that correct? The Witness: Our family had legal title in 1917, at the time of the first expropriation; and then we would be, yes, the new, entitled to as the inheritors of the last known owner, who had died in 1950. The Court: Under that law? The Witness: That's correct, The Court: Under the law, you were back in position; is that correct The Witness: That's correct. The Court: Okay. The Witness: Yes, sir. in 1994, we never got the documents in the mail. Upon
calling, we were told that the properties had been sold. The Court: Go on. By Mr Nelson: Q With regard to the home, what would be the lost monthly rental for that home? A Based on the rate per downtown residential property and the size, 720 square meters at 25 - The Court: By the way, let me interrupt again. The Witness: I have no idea. I assume it was an extremely under-valued price. The Court: Okay. A The residence real estate, 720 square meters at $25 a square meter per month, comes out to about $216,000 per year. Lost revenue for four years, from 1994 until today being $864,000. And a simple property value calculation, based on 10 years of owning the property, would return an amount of 2.160 million, $2,160,000. The third item would be the shop or the retail shopping center on the Nevsky Prospekt, which happens to be the most valuable in cost. We are looking at 14,400 square meters rented out at a rate of $40 a square meter, comes to approximately $576,000 on a monthly basis, and on an annual basis, $6.912 million or $6,912,000. Lost rental calculated at four years would be $27,648,000. And once again, if we used a simple calculation without interest and an accounting for inflation, carried that out, it would be $69,120,000. Those amounts, couple with the $400,000 amount, amount to $167,680,000 on a very simplistic calculation basis. And going back to - Q Does that include both rentals, lost rentals that you claim, as well as the values of the property? A Yes. That includes the -- The Court: What's the total again? The Witness: $167,680,000. By Mr Nelson: Q Let me ask you this. And you have actually been to Russia and seen these various properties, correct? A Yes, Sir. Q The retail property that you described, what is that being used for right now? A It's being rented out for various shops, and I
believe there is a Gap store, U.S. store that's renting out space in there; and
interestingly enough, accountants, PriceWaterhouse, are leasing out space -- not in the
building, but very close to the building, on the Nevsky Prospekt. Mr Nelson: I wil pass the witness, Your Honor. The Court: Anything further? Mr Nelson: Yes, Your Honor. specifically, with regard to the Foreign Sovereigns Immunity Act -- The Court: We have got plenty of time, by the way. Mr. Nelson: With regard to the Foreign Sovereigns Immunity Act, basically it's my understanding, for purposes of a default judgment and for the Court to enter a default judgment in this case, our burden is to prove that we've established the claimant's right or claim to relief by evidence satisfactory to the Court. To fall within immunity under the Foreign Sovereigns Immunity Act, or one of the exceptions to immunity, we would claim, under basically four different sections of Section 1605, specifically Section 1605(a)(1), which deals with waiver; and it would be our position, possibly, that the appearance that was made by both Mr. Dickinson and Mr. Cook at the hearing possibly could have been a waiver to their immunity. In addition to that, we would also claim exception to immunity under Section 1605(a)(2) which deals with commercial activities conducted by foreign governments in the United States and elsewhere. Additionally, we would claim an exception to immunity under Section 1605(a)(3), which
deals specifically with expropriation and property taken in violation of international
law. We would claim an exception to immunity under those sections. The Court: What are the exhibit numbers that are n evidence? Mr Nelson: Exhibits 1 through 30. And at this time we would ask the Court to receive those. The Court: All right, They're admitted into evidence, 1 through 30. Mr Nelson: Nothing further at this time, Your Honor. The Court: All right. Give me about 10 minutes, and I will be back out. (At this time a recess was taken) The Court: An order of default will be entered immediately in this case. It will be done today. Relative to the motion for default judgment, I am going to request something a little unusual in this case; but if you are going to get a judgment out of this Court, I am going to need it. I am going to need findings of fact and conclusions of law based upon what we heard this morning, including -- and you can refer to exhibits, but I want just as if it was a non-jury case which, in effect, it is -- tracking, in effect, exactly what went on today, make it in plain language, including tracking of title. In other words, you say it was owned in 1917. You need to remind me of the evidence that we heard today, tracking initial title that was, in effect, divested in 1917, and what the proof of that is. Track it through. Also discuss the Sovereign immunities Act. As soon as you get that in, I will consider it, together with your request. Include, as you would, just as if it was a non-jury matter, your calculations of damages. It's not that I can't order a record. I want it in -- and also, if you would, dependi ng upon the length of it, you might attach your computer disk and send it in. That way, if we go ahead and adopt it or modify it, we don't have to go back and type it from square one. Word Perfect 6.0, if you have it. As soon as you get that in -- in fact, if you would, because you are going to have a disk, call Ellen, she can file it. You can bring it up, she can file it, and then I will get right on it. But today, as soon as we get back, an entry of default will be granted in this case;
and the default judgment, I will wait on receiving the further documentation. (conclusion of Hearing) CERTIFICATION I, FRED WARNER, Official Court Reporter for the United States District Court for the Southern District of Texas, Houston Division, do hereby certify that the foregoing pages 1 through 36 are a true and correct transcript of the proceedings had in the above-styled and numbered cause before the Honorable DAVID HITTNER, United States District Judge, on the 20th day of November, 1998. WITNESS MY OFFICIAL HAND at my office in Houston, Harris County, Texas on this 25th day of November, A.D., 1998. (signature) |
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Created: Sunday, August 22, 1999. Last Updated: Sunday, August 22, 1999. |
