07/16 10:16
00:00:00 Court resumes its session.
00:00:02 Please proceed, everyone.
00:00:03 Welcome back.
00:00:06 And we're on record in Kroenke v Treasure chest 3AN20-08622Civil.
00:00:11 Parties and council are present.
00:00:13 Ready to go, Mr. Campion?
00:00:14 Okay.
00:00:16 Madam Clerk, if you want to get the jury.
00:01:30 Thank you folks.
00:01:50 Welcome back.
00:01:51 Please have a seat.
00:02:00 Look at it this way, you'll get your steps in today.
00:02:03 Just camping when you're ready.
00:02:08 Ladies and gentlemen, jury, this is my only chance to talk to you, and I acknowledge from the beginning that we can't go through, neither Mr. Brzezinski or I can go through every statement that was made during testimony or every piece of documentary evidence that you'll take back with you, but what I'm attempting to do, and I'm sure Mr. Brzezinski is as well, is to
00:02:26 summarize what we believe to be the most relevant evidence for you to help you make your decision and ultimately 12 of you are going to go back and deliberate and make a decision regarding this contract Mr. Brzezinski spent some time talking about my opening I want to just remind you because this is my one opportunity about what he told you during his opening statement he told you that this case is about deceit greed and a blatant breach of faith Mr. Brzezinski acknowledged as did other witnesses that
00:02:56 testing and valuing a gold mine is an extremely expensive process he called Mr. Elliott's equipment junk and he talked about how that the triumph of finding gold was short-lived because Mr. Elliott redirected Mr. Kroenke's team
00:03:15 I want to go through the evidence and explain from our perspective why a lot of what he said was not true, especially that he alleged Mr. Elliott systematically redirected Seth's team to improve property and not to mine.
00:03:26 Madam Clerk, if you would.
00:03:37 That's the wrong feed.
00:03:39 Thank you.
00:03:51 So I'm starting with showing you Exhibit C. I'm going to play just a little bit of this.
00:03:55 This will be one of the exhibits that you take back with you.
00:03:59 As you look at Exhibit C, as I'm presenting it to you now, you can see Mr. Elliott's line.
00:04:05 And what you'll see is there's a lot of equipment out there.
00:04:07 Some of it's Mr. Kroenke's equipment, but the majority of it's Mr. Elliott's equipment.
00:04:16 As I play this video for you, you see Mr. Kroenke's dump trucks there.
00:04:24 You see excavators working in the pit.
00:04:31 Okay, so I stopped it at 19 seconds.
00:04:35 From our perspective, this is a critical image.
00:04:38 It's a critical video to show what was happening in the summer of 2020.
00:04:40 There's a disagreement here.
00:04:47 My laser pointer's not showing up on the screen for some reason.
00:04:49 But on the right side of that trench, that's what has been referred to as the Rath Trench or the Frank Trench.
00:04:54 That's the trench that you heard testimony about how Mr. Frank Martin spent some time stripping some of the overburden there and that some of the overburden was moved away and that there was a group effort to build a dike, a berm, a protective measure to prevent Dan Creek from flooding over into both of the trenches.
00:05:14 It's been alleged that Mr.
00:05:17 prevented Mr. Kroenke's team from mining in that right trench, but the evidence before you is Ms.
00:05:22 Luna testified that they never dug in that trench in the summer of 2020, that they only spent time in the left trench.
00:05:30 That trench was available and open to Mr. Kroenke and his team throughout the summer.
00:05:36 There's no evidence to support the allegation that Mr. Elliott ever told them they couldn't mine there, and we'll go through some of the documents presented by the plaintiff to explain why that's just not true.
00:05:46 That was a good place for Mr. Kroenke to mine, but Mr. Kroenke failed to provide an adequate crew to take advantage of the opportunity that was provided to him.
00:05:53 He just didn't provide a sufficient crew.
00:06:00 What I told you this case was about is Mr. Elliott's method for mining for gold at Dan Creek.
00:06:06 It's about patience, persistence, and careful planning.
00:06:10 Mr. Elliott admitted
00:06:11 He doesn't have receipts.
00:06:12 He doesn't have invoices.
00:06:13 He doesn't have bills.
00:06:14 There's a lot of time spent talking about that.
00:06:17 Mr. Elliott's method is based on trust and we know that it's based on trust because we heard from Ms.
00:06:21 Luna who testified that she had an agreement with her and her team had an agreement with Mr. Elliott in 2020 and it worked.
00:06:28 Ms.
00:06:29 Luna testified about the amount of gold that they recovered.
00:06:31 She testified about the arrangement that she had with Mr. Elliott in 2020, how that evolved into a contract.
00:06:37 Don't take what I say as the truth.
00:06:41 Don't say what Mr. Brinsky says.
00:06:42 If you have a question about what a witness said, you can refer to your notes.
00:06:45 You can even ask the judge to play back their testimony.
00:06:49 What Ms.
00:06:50 Luna testified to was that they recovered 650 ounces in the summer of 2020, and they subsequently did better as they got better and they were more efficient.
00:07:00 So it's important to consider why FUBAR made it work.
00:07:02 Why did they make it work in 2020, and why did it work in the subsequent years?
00:07:05 Because they worked at it.
00:07:07 They put a crew out there, a crew of 9 to 10, and they work 24 hours a day, 7 days a week from May into the end of the season.
00:07:14 They only took the 4th of July and Labor Day off.
00:07:16 It's a huge commitment to be able to be successful out there.
00:07:18 It's a huge amount of work.
00:07:20 It's more than most people could reasonably consider.
00:07:24 So the method that Mr. Elliott suggested is right.
00:07:27 You've got to have a crew.
00:07:28 You've got to have people willing to work hard, willing to do a very difficult job, and you've got to have mechanics.
00:07:34 Ms.
00:07:34 Luna testified that her and especially her ex-husband Charlie were mechanics by trade, and that was really important and has been a really important skill for them to be successful.
00:07:42 Mr. Kroenke decided not to send a mechanic.
00:07:46 You heard that they sent a crew.
00:07:48 Mr. Elliott is not disputing that Mr. Turnbull is a very talented welder and fabricator.
00:07:53 You heard him say that himself.
00:07:54 He said he's one of the best fabricators he's ever met.
00:07:56 He said Frank Martin was a kindred spirit to him and that he believed Frank to be a very good operator, a very good excavator and had an understanding of gold mining.
00:08:04 There's no dispute about that.
00:08:05 What's in dispute here is whether that was enough to make a successful year for Mr. Kroenke and it wasn't.
00:08:11 So what was Mr. Kroenke's method?
00:08:14 What was going to be his method of success in 2020?
00:08:16 Was it going to be to put a crew of 9 to 10 with a mechanic and have them working 24 hours a day?
00:08:21 Nope.
00:08:22 His method was to mine the miner.
00:08:24 to mine the miner, meaning mine Mr. Elliott for all the gold he could extract from Mr. Elliott and at the end of the year slap a bill on him, treat him like he was a cost-plus customer, and say either you pay me or I'm going to take your property.
00:08:35 That was his method, mine the miner.
00:08:37 Interestingly, Mr. Turnbull denied saying that last Thursday, but yesterday Mr. Widom came in and said it.
00:08:43 Mr. Kroenke had the chance to refute that.
00:08:44 He stood up and testified before you right after Mr. Widom testified, and he didn't say a word, not a whisper about mine the miner.
00:08:51 His silence is an admission.
00:08:53 You can consider that's exactly what their plan was, mine the miner.
00:08:59 What was happening with Mr. Kroenke's business in 2020?
00:09:02 It was April of 2020.
00:09:04 Ultimately, Mr. Kroenke told you that he had a good year, and good for him.
00:09:07 His business was successful.
00:09:09 But in April and in May, it wasn't certain.
00:09:11 No one was certain.
00:09:12 No one in this room can believe that it was certain what was going to happen throughout the course of the year.
00:09:17 So Mr. Kroenke had an opportunity.
00:09:20 to mine with Mr. Elliott.
00:09:21 He took advantage of that opportunity.
00:09:23 But in the facts most favorable to Mr. Kroenke, he had no idea what he was doing because his right-hand man, his vice president said he had, quote, no idea what it might cost to mine out there.
00:09:33 No idea.
00:09:35 Mr. Kroenke said, we never had a budget.
00:09:37 We had no idea.
00:09:38 He now says it might have been $350,000 to $750,000 that he would have to contribute.
00:09:42 But that's not what they were planning for in the spring of 2020.
00:09:45 And why?
00:09:46 Because their plan was to treat Mr.
00:09:49 who Mr. Clark referred to as a simple man.
00:09:51 They were going to treat him like a customer.
00:09:53 They were going to put their tools, their crew out on there.
00:09:55 They were going to send him bills, and they were going to make him pay profit and overhead.
00:09:58 They were going to treat him like a cost-plus customer, and that's what they did.
00:10:02 Mr. Clark told you it was a crazy idea, that it was a curveball, that it wasn't something that RAS had done before.
00:10:08 In my opening, I said, Mr. Kroenke had built a very successful remote construction business.
00:10:12 There's no dispute about that, but what he had no experience in was gold mining.
00:10:15 That's what Mr. Elliott has experience in.
00:10:19 You'll have the exhibits before you, exhibits one and two.
00:10:22 They're very clear about what Mr. Elliott was signing up for.
00:10:25 It's very clear what he signed, but Mr. Clark revealed the intent, which was the spirit of the agreement from the beginning was a T&M contract or a time plus materials contract.
00:10:33 That's how they treated Mr. Elliott.
00:10:37 How do we know that they were mining the miner?
00:10:39 They were recording him without telling him.
00:10:41 They only told him about the recordings.
00:10:43 Mr. Kroenke only told him around July 20th or 24th when he was beginning to demand payment and beginning to demand that Mr. Elliott guarantee payment.
00:10:53 Mr. Elliott was trying to salvage the relationship with Mr. Kroenke.
00:10:57 And how do we know that?
00:10:58 He gave him 43.6 ounces sometime in June.
00:11:01 He gave him nearly $69,000 in gold.
00:11:04 He paid him to keep Mr. Kroenke in the agreement because he needed Mr. Kroenke and his crew to go out there and mine.
00:11:10 He needed that to be successful.
00:11:12 So he acted in good faith.
00:11:14 The spirit of the agreement was, I'm going to give you what I have.
00:11:16 I'll give you the gold that we've recovered.
00:11:18 We've recovered 43.6 ounces.
00:11:20 I'll give it to you to keep you afloat.
00:11:24 Not once, not once, not once did Mr. Kroenke ever ask Mr. Elliott what his expenses were.
00:11:29 Never once did he text him and say, how are you doing?
00:11:31 Are you good?
00:11:32 Can you pay your bills?
00:11:33 He never once asked that because he never intended to create an exit strategy for Mr. Elliott.
00:11:40 In July, in a text message on or about July 20th, Mr. Kroenke, who Mr. Brzezinski just told you, had a very good year, right?
00:11:47 He had a very good year.
00:11:48 I think Mr.
00:11:51 Mr. Brzezinski said that he had a good year and that he could pay for the mining.
00:11:55 He couldn't because we know Mr. Kroenke said to Mr. Elliott in a text message, he said, I can't be the bank any longer.
00:12:01 I have bills to pay that I can't pay.
00:12:03 And he asked Mr. Elliott to pay those bills in July.
00:12:06 And then when Mr. Elliott said, wait, that's not our agreement.
00:12:10 I'm not a cost plus customer.
00:12:11 That's when things really devolved.
00:12:13 That's when the conflict really started.
00:12:17 So let's go back to first, did
00:12:21 Mr. Elliott and his company breached the contract that is exhibit 2.
00:12:25 Did Mr. Elliott and Treasure chest LLC breach its contract with Mr. Kroenke?
00:12:31 The contract required that Mr. Elliott provide full and unrestricted access to the Dan Creek Plaster Mine property.
00:12:38 It also said that it is commonly agreed that this agreement will in no way infringe upon the operation of Charlie and Kelly and crew.
00:12:45 That's the FUBAR crew.
00:12:46 The evidence is
00:12:47 completely clear from what you've heard over the last several days.
00:12:51 Mr. Elliott preserved the right of the FUBAR crew to mine in that left trench.
00:12:56 Ms.
00:12:56 Luna said that's the only place they mined the whole summer, and they never mined anywhere else.
00:13:00 And Mr. Elliott made the entire rest of his property available.
00:13:03 And you'll know that when you look at Exhibit 11, the Daily Logs.
00:13:06 It's several pages.
00:13:07 There's several entries.
00:13:09 If you go through that, you'll see there's never once an entry where Mr. Elliott said you can't go.
00:13:13 Well, let me say it this way.
00:13:14 Never once did Mr. Turnbull or Mr. Clark or anyone else that works for RAS ever write in the Daily Report that Mr. Elliott prevented us from going somewhere.
00:13:22 Never once.
00:13:23 Rather, you'll see lots of entries about how Frank was up the canyon.
00:13:26 Frank went up the canyon to test and explore.
00:13:29 And that's exactly what the intent of the agreement was.
00:13:31 Mr. Elliott had an intent to have an exit strategy.
00:13:34 It's what we thought Mr. Kroenke agreed to, that there was an exit strategy.
00:13:37 And the only way that Mr. Kroenke could potentially buy that property was to allow Mr. Martin to test in various places.
00:13:44 Testing isn't mining.
00:13:45 Testing is to provide information so Mr. Kroenke could go to an investor, which he never had, but if he had an investor, to go to that investor and say,
00:13:52 My guy, Frank Martin, has tested in these locations, and this is what he found.
00:13:56 These are the results that we have proven.
00:13:57 That was the reason that Mr. Martin was up the canyon, and Mr. Elliott never prevented that from happening.
00:14:04 If you go through Exhibit 11, you'll see that in June and into early July, there are several entries where the RASC crew is mining.
00:14:12 And I want to take a moment to go through that.
00:14:16 Don't trust my words, but if you look at Exhibit 11,
00:14:20 You'll see that there were entries between the first date is May 10th of 2020 and the last date of entry is August 26th.
00:14:32 That's, in our estimation, 108 days, 108 calendar days, and there are 76 entries out of those 108 days.
00:14:40 That means there are 32 days where there are missing reports.
00:14:43 There's nothing we can conclude about that because we have no reports.
00:14:46 Not once in those reports is the word interfere.
00:14:50 or direct or manipulate or ultimatum or halt.
00:14:55 Those words are never found in any of those daily reports.
00:14:58 But what is found, there are 32 different days of those 76 in which the RASC crew noted that they were mining or testing.
00:15:11 In particular, you'll see that beginning in the latter part of June,
00:15:16 From early June into mid-June, and especially into late June, you see that the RAS team was starting to recover gold.
00:15:23 June 26, the RAS report, Exhibit 11, said we recovered 4.25 ounces.
00:15:31 June 28, we recovered a decent amount of gold.
00:15:34 There's a lot of entries at the end of June, and in the beginning part of July, the plant doesn't run.
00:15:40 The plant is breaking down.
00:15:41 So there aren't entries.
00:15:42 And then what you'll see is the plant starts running again.
00:15:45 There are some problems with the plant, but there are gold recoveries.
00:15:50 And then what you see very suddenly is there's no more entries between July 23rd and August 2nd.
00:15:55 And there's no more mining after July 23rd.
00:15:57 And why is that?
00:16:04 Because after July 23rd, beginning of July 24th, you'll recall Frank Martin said that he had a job in Valdez.
00:16:10 He was gone, and you'll see the payroll records.
00:16:12 He was gone at the latter part of July.
00:16:14 He didn't come back until mid-August.
00:16:16 In fact, Frank came back on August 17th.
00:16:19 Mr. Turnbull was the only RAS employee out there in late July.
00:16:22 So right when Mr. Kroenke's team is starting to get the plant running, starting to mine gold, he pulls his crew out.
00:16:28 And why does he pull his crew out?
00:16:29 Because the concerns that he had at the beginning of the season about not having jobs was incorrect, right?
00:16:34 We know he had a job in Valdez.
00:16:36 We had a job for MTA in Willow.
00:16:38 So now he's got to redirect his crew back to jobs that are paying.
00:16:41 And on July 24th, the very same day that Mr. Kroenke pulls his crew out, what does he do?
00:16:45 He starts demanding payment for Mr. Elliott.
00:16:48 And you'll see that back and forth.
00:16:49 And what happens in there is when Mr. Elliott refuses to pay, Mr. Kroenke gives him options.
00:16:54 And the options are, give us full unrestricted access, which of course Mr. Elliott had been doing, but full and unrestricted access for a crew that wasn't there.
00:17:03 And the other option was you can guarantee payment of $225,000 by sometime in mid-October and you have to pledge your entire deed for the entire Dan Creek property.
00:17:13 So that's the option.
00:17:15 And then the last option Mr. Kroenke says is I have a team of lawyers and I'm going to sue you and ultimately that's what he does.
00:17:25 Was Mr. Elliott discouraging or interfering or stopping
00:17:30 MR. KRENKE FROM EXPLORING, TESTING, MINING?
00:17:32 NO.
00:17:33 ON EXHIBIT 16, PAGE 57, AS LATE AS AUGUST 17TH, RANDY TELLS SETH TO CONSULT WITH MR. MARTIN ABOUT WHERE THEY WANT TO TEST.
00:17:41 AT THAT MOMENT IS CONVEYING TO MR. KRENKE THAT HE STILL WANTS HIM TO TEST BECAUSE HE STILL WANTS TO TRY TO HAVE AN EXIT STRATEGY.
00:17:47 But by August 17th, we know that Travis Turnbull and Frank Martin flew out.
00:17:51 You heard Mr. Whittem's testimony that it was his distinct impression that when they left and they flew out, that they weren't coming back.
00:17:58 That's what Mr. Whittem told you yesterday.
00:18:00 And if you recall, Mr. Kroenke had the chance to get up before you and rebut what Mr. Whittem said.
00:18:05 He could have said, that wasn't our intent.
00:18:07 We did intend to bring a crew back.
00:18:08 He had the opportunity.
00:18:09 He knew exactly what Mr. Whittem said, and he didn't refute it.
00:18:12 You must therefore conclude
00:18:14 That Mr. Kroenke's intention was not to put a crew back in there because he didn't put a crew back there and he never said he intended to.
00:18:24 There is no breach of contract by Mr. Elliott.
00:18:25 He mobilized Mr. Kroenke's crew.
00:18:28 He mobilized Mr. Kroenke's equipment.
00:18:31 He made his property available.
00:18:32 He gave his time.
00:18:33 He gave his equipment.
00:18:35 admittedly by him it's junk it was junk when he bought it it's junk now but as Mr. Clark admitted it's good enough for gold mining and as Mr. Elliott said the gold doesn't care what your equipment looks like it only matters if you're dug out of the ground he did what he said now if there's a question in your mind about the quality of Mr. Elliott's equipment which he admits is junk he's not saying it's state of the art Mr. Kroenke had himself Mr. Clark Mr. Turnbull and Mr. Martin had a whole day out there in April Mr. Turnbull said I had three or four hours I could have looked at equipment he said Mr. Kroenke could have done the same
00:19:05 For whatever reason, they decided not to, or they decided not to make a big fuss about it, and they agreed that the equipment that Mr. Elliott had on site, those excavators found in Exhibits 1 and 2, was sufficient to meet Mr. Elliott's side of the bargain.
00:19:18 Admittedly, it needs repair.
00:19:19 It wasn't in great shape, but it's good enough for gold mining.
00:19:22 Mr. Elliott fulfilled his end of the bargain there.
00:19:27 agreed he would provide any tools and equipment on Dan Creek.
00:19:30 He would make that available to Mr. Kroenke and his crew.
00:19:33 The evidence is clear that he did that as well.
00:19:35 Mr. Elliott did not breach his obligations.
00:19:38 He fulfilled his obligations.
00:19:39 He was out there all summer.
00:19:41 He made his equipment available.
00:19:42 He made his property available.
00:19:43 He made his time available.
00:19:44 He did everything he could to give Mr. Kroenke and his team an opportunity to be successful.
00:19:48 The daily logs in Exhibit 11 reveal that there was success when Mr. Kroenke had a crew out there.
00:19:54 And when he didn't have a crew, they couldn't mine and they couldn't recover any gold.
00:20:01 So the question is, did Mr. Kroenke breach his obligations to Mr. Elliott?
00:20:06 This is a small minor point, but remember that in Exhibit 2 Mr. Kroenke said that he was going to provide Frank's trommel as part of the things that he was going to provide.
00:20:13 And you have the testimony from Mr. Elliott and from Mr. Martin that Mr. Elliott bought that trommel sometime in June.
00:20:20 He gave money to Mr. Martin so that Mr. Martin had money for whatever reason he wanted it.
00:20:25 And then Mr. Martin was allowed to continue to use that.
00:20:27 So that's a small breach, but that's one of the things that Mr. Kroenke was required to do.
00:20:31 Mr. Elliott picked that up and paid for that himself.
00:20:34 The most important thing that Mr. Kroenke failed, I've already begun to address this, is that Mr. Kroenke was obligated by the agreement to provide, quote, other qualified persons needed for the testing which will be expensed to the common expenses.
00:20:47 He was supposed to provide a crew.
00:20:49 There's no dispute in anyone's mind that in order to be successful mining, you have to have people doing it.
00:20:54 Ms.
00:20:54 Luna testified yesterday about what it takes.
00:20:56 She said it's three if not four people running all day long, 12 hours a day.
00:21:00 That's what it takes to be successful.
00:21:02 You've seen exhibits B and C. You see the amount of work that needs to be done to dig out of the ground, to run it through the plant, and all the things that go into it.
00:21:11 A conservative estimate of a season is from mid-May to mid-October.
00:21:15 You could play with those numbers, and that's roughly five months, and that's roughly 150 days.
00:21:20 So if Mr. Kroenke really knew what he was doing, he would have said, okay, to be successful, Mr. Elliott, what do I need?
00:21:26 Well, he'd say, well, the mining season is about five months long.
00:21:28 That's about 150 days.
00:21:30 Not every day is mining.
00:21:31 There's mobilization.
00:21:32 There's repair.
00:21:33 There's downtime and all that.
00:21:34 But you need about 150 days to be successful, which is essentially what Ms.
00:21:37 Luna told you yesterday.
00:21:39 So how many days did Mr. Kroenke have employees out there?
00:21:43 These aren't Mr. Elliott's numbers.
00:21:45 These are directly from Mr. Kroenke's records, which are Exhibit 8.
00:21:48 So here we go.
00:21:49 Mr. Turnbull was out there from April 29th to August 27th.
00:21:53 That's 120 days.
00:21:54 He was there for 100 of 120 days.
00:21:57 That's not a bad season.
00:21:58 If Mr. Turnbull had a full crew with him, he might have been successful with 100 or 120 days.
00:22:03 Frank Martin was there from April 29th to August 17th.
00:22:06 That's only 68 out of 110 days.
00:22:09 The first and second guys, Travis was there 100 days, Frank was there 68 days out of, again, a conservative estimate that a season is about 150 days.
00:22:18 You'll see an entry for John Weldon.
00:22:20 John Weldon, he never went out to site.
00:22:22 He spent three days working, this is all from Exhibit 8, three days working on equipment back in Wasilla.
00:22:29 You got a gentleman named Nate Patterson.
00:22:31 He was there for 18 days of the summer from May 20th to June 6 Jacob DeGry was there for 27 days from June 7th to July 5th Brandon DeVore was there from June for 13 or 14 days from June 21st to July 4th And then Sean Kenerson was there for 15 days from June 21st to July 5th I'm not expecting to retain all this but what I'm saying is
00:22:52 Travis was out there most of the summer frank was out there for a lot of the summer in the latter part of june you had brandon and sean out there you had two guys that could operate equipment two laborers in late june and early july they started to recover gold things were going the way it was supposed to go and then brandon and sean were gone and they never came back they left it right after the fourth of july and they never came back mr cranky never sent them back there no explanation for that he didn't fulfill his end of the bargain he did not provide other qualified persons necessary for the testing and mining
00:23:21 So what Mr. Kroenke is going to explain what he wants and what they want is they want you to award Mr. Kroenke an award for his expenses.
00:23:32 They want you to order Mr. Elliott to pay Mr. Kroenke's expenses.
00:23:37 Before we talk about what Mr. Kroenke's expenses are, let's talk about Mr. Elliott's expenses.
00:23:42 Admittedly, no receipts.
00:23:44 We're not disputing that there are no receipts, but Mr. Elliott described that that's not how he's done business for 40 plus years out at Dan Creek.
00:23:51 But Mr. Kroenke admitted, as did all the witnesses, that all of the fuel provided to run the equipment, all of the fuel provided was provided by Mr. Elliott.
00:24:00 There's a value with that.
00:24:02 What exactly is it?
00:24:02 No one knows.
00:24:03 Even Mr. Kroenke, who claims to be a sophisticated businessman, testified, I have no idea how much fuel they burned.
00:24:08 No idea.
00:24:10 So there is a number.
00:24:11 It's not clear.
00:24:12 It's not clear.
00:24:13 But there's definitely fuel that was provided by Mr. Elliott.
00:24:16 There's no dispute that Mr. Elliott was on site for the 2020 season.
00:24:19 He was out there mining.
00:24:20 Look at Exhibit 16.
00:24:21 As late as late October and early November, Mr. Elliott is saying, we're still out here mining.
00:24:27 It hasn't frozen up here.
00:24:27 We're still mining.
00:24:29 Mr. Elliott was on the ground ready to pull his end of the bargain.
00:24:32 Again, Mr. Elliott, his time is worth something.
00:24:35 Is it worth $235 an hour or $200 an hour?
00:24:38 Who knows?
00:24:39 But it's worth something.
00:24:40 Note, for example, that Mr. Clark said he billed Mr. Elliott for the time he spent thinking about Dan Creek.
00:24:46 and you should have no doubt in your mind that Mr. Elliott spends 12 months a year thinking about his operations at Dan Creek.
00:24:51 There's no other way to run that.
00:24:54 There's no dispute that Mr. Elliott mobilized and freighted Mr. Kroenke's equipment out to Dan Creek.
00:25:00 There's expenses associated with that.
00:25:01 He provided the opportunity to Mr. Kroenke to test, explore, value, and mine.
00:25:06 That opportunity was provided all year.
00:25:08 You heard Ms.
00:25:09 Luna testify what it cost them.
00:25:10 It cost them 250 ounces a year for them to be able to mine.
00:25:14 So there's a value in being able to be on Mr. Elliott's property and mine there.
00:25:19 Mr. Elliott made his parts and pieces available.
00:25:21 There's no way he can account for what that was.
00:25:24 Everything was available to Mr. Kroenke and his crew, and there's value to that.
00:25:27 And he offered his expertise to the RASC crew.
00:25:29 Now, Mr. Turnbull said it would have been better if he was never out there.
00:25:33 He's entitled to that opinion.
00:25:35 But it's hard to imagine that there's anyone that could provide more knowledge or insight about how to be successful at Dan Creek than Mr. Elliott.
00:25:40 And all of that is worth something.
00:25:43 So let's talk about Mr. Kroenke's expenses.
00:25:45 Mr. Clark testified and agreed that details matter.
00:25:49 So if details matter, you should look very carefully and scrutinize what Mr. Kroenke's claiming.
00:25:54 First question is, who is responsible for Mr. Kroenke's expenses before May 5, 2020?
00:26:00 Mr. Kroenke would have you believe that Mr. Elliott's supposed to pay for his labor and transaction expenses before May 5, before he had signed an agreement.
00:26:08 That's when Mr. Kroenke is asking you to order Mr. Elliott to pay.
00:26:12 Look at page, I'm sorry, Exhibit 6.
00:26:14 Exhibit 6 is a list of transactions presented by Mr. Kroenke and his attorneys.
00:26:19 It's a five-page document.
00:26:22 that has all of the transactions.
00:26:23 Page 1 of Exhibit 6, a full page lists transactions incurred before May 5, 2020.
00:26:30 Mr. Kroenke wants you to order Mr. Elliott to pay those expenses.
00:26:33 Exhibit 10, the Seth and Kevin time.
00:26:36 Mr. Kroenke wants you to order Mr. Elliott to pay for Seth and Kevin time in April before the May 5, 2020 agreement was signed.
00:26:46 Mr. Clark, on the stand, I asked him to count the number of entries that he had entered in before May 5th.
00:26:51 He counted 16 entries.
00:26:53 You can look at it at Exhibit 10.
00:26:55 That's 44 of his 217 hours.
00:26:57 Mr. Kroenke has four entries before May 5th, 2020.
00:26:59 Details matter.
00:27:03 Mr. Kroenke is asking you to apply profit and overhead to his time and Kevin's time, because you'll see a 20% entry on Exhibit 10.
00:27:11 Then the number, whatever the number, nobody really understands what the Seth and Kevin time is, but the number is transferred over to Exhibit 5, and the profit and overhead is charged again.
00:27:22 From the beginning, Mr. Elliott understood this was not a T&M contract or a cost-plus contract, but that's the way Mr. Kroenke and his team treated it.
00:27:30 And if it was the spirit of the agreement, if it was the intent to treat Mr. Elliott like a cost-plus customer, why didn't they tell him that until after they started demanding payment?
00:27:39 Details matter.
00:27:40 Mr. Kroenke charged his time for the time he spent flying back and forth support flights on Exhibit 10.
00:27:46 Then there's again an entry for support flights on Exhibit 5.
00:27:49 Details matter.
00:27:49 Who knows exactly what Mr. Kroenke is asking you to order Mr. Elliott to pay when it comes to flights?
00:27:56 You heard in Exhibit I, you heard that there was a discussion on June 6th, and Mr. Kroenke very clearly tells Mr. Elliott, I'm not going to charge you for the time that Travis spent building the blue plant and the parts and materials associated with it.
00:28:08 That's what he told Mr. Elliott.
00:28:10 Yet, that's exactly what he wants you to order Mr. Elliott to pay.
00:28:17 He wants you to pay for capital improvements to his property.
00:28:20 This is one of the critical factual disputes between the parties.
00:28:23 Mr. Kroenke believes that his team provided capital improvements.
00:28:26 You don't have a definition of that, but what you should understand is what you saw in Exhibits B and C. You heard Mr. Elliott's testimony.
00:28:32 You heard Ms.
00:28:33 Luna's testimony, which is nobody could safely mine down in that trench, whether it's Frank's Trench or the Fubar Trench, down along the creek unless there was a sufficient berm to prevent a flood.
00:28:42 Now, is Mr. Elliott, is he a little concerned about a flood?
00:28:47 Is he overly concerned?
00:28:48 It seems like a reasonable
00:28:50 expectation that everybody that's going to be mining down there is going to contribute to making sure they're safe.
00:28:54 If that's a capital improvement, well, that's a capital improvement that benefited Mr. Elliott.
00:28:58 It also kept Mr. Kroenke's guys safe for the time that they were down there in June and July.
00:29:02 The road access, again, the agreement between the parties was to allow Mr. Kroenke's team to evaluate, test, and explore for buying the whole mine.
00:29:12 There's no way you can test, there's no way you can take that trommel up the canyon unless you have road access.
00:29:17 Now, the unconverted, the testimony here is very clear that, and it's not contradicted,
00:29:26 that those roads wash out and that every year there's a certain amount of maintenance that's necessary just to get access because you're in a valley.
00:29:35 So while there's a possibility that it provided a capital improvement for Mr. Elliott at least in the 2020 season, there's no way that Mr. Kroenke could fulfill and receive the benefit of the agreement unless Frank had the opportunity to go test in different locations and that's the benefit that really was provided to Mr. Kroenke.
00:29:56 Okay, so it's pretty clear that Mr. Elliott fulfilled his end of the bargain.
00:30:02 Mr. Kroenke didn't because he didn't provide an adequate crew.
00:30:05 And so even if in your mind you think, well, maybe they didn't both provide everything they were supposed to provide, the question is what do you do about that?
00:30:12 And what Mr. Elliott's asking you to do is not to award him a dollar.
00:30:16 If you go into Exhibit 16 and all those text messages, never once does Mr. Elliott say, hey, Seth, you know, you owe me some money.
00:30:22 You're like, hey, I got expenses here.
00:30:24 You need to pay me.
00:30:25 Mr. Elliott's not asking you today.
00:30:27 He's never asked anyone to have Mr. Kroenke pay Mr. Elliott for his costs associated with the 2020 mining season, even though there was a huge lost opportunity.
00:30:35 All he's asking you to do is to find that Mr. Kroenke breached the contract and that he's entitled to nominal damages of $1.
00:30:42 He just wants it to be known that Mr. Kroenke did not provide a qualified crew and that Mr. Kroenke breached the contract, entitling him to $1.
00:30:54 The other thing that Mr. Elliott is asking you to do, and I'm asking you to do, is to find the Mr. Kroenke abused process.
00:31:01 And the elements of that, which the judge will give you shortly, there's four elements, meaning there's four pieces of it that you have to find in order to find the Mr. Kroenke abused process.
00:31:11 First, you have to find that Mr. Kroenke committed a willful act that was not proper and regular conduct.
00:31:16 Number two, that he had an ulterior motive.
00:31:19 Number three, that Mr. Elliott and Treasure chest LLC were harmed.
00:31:22 And number four, that Mr. Kroenke's conduct was a substantial factor in causing the harm.
00:31:29 Mr. Kroenke and Mr. Elliott had an agreement to mine and explore for the entire 2020 mining season.
00:31:35 The agreement specifically mentions November roughly as the time that they would divide expenses and the goal to figure out who was owed what.
00:31:42 But on July 20th, 2020, Mr. Kroenke asks for
00:31:47 bringing his balance to 100 ounces, which means about 56, 57 ounces of gold, roughly $90,000.
00:31:52 So Mr. Elliott receives a demand for a payment of another $90,000.
00:31:57 And in response, Mr. Elliott says, I'm not a cost plus customer, you can't do that.
00:32:03 Mr. Kroenke's response is, you know you are, you admitted to it, you are exactly that, you are a cost plus customer, changing the dynamic.
00:32:10 So right at that moment, Mr. Elliott is aware that he's being treated as a cost plus customer, and Mr. Kroenke then presses his advantage at that point.
00:32:19 Because he's an experienced, successful businessman doing these kinds of contracts.
00:32:25 Randy then says well what what about selling you want to buy the property or not right okay now I'm a cost plus customer you got me on my heels I don't know what that means I'm out there mr. Cranky's threatening that he's got a team of lawyers on call and mr. Elliott says do you want to buy the property or not and he gives him a price mr. Cranky doesn't like that price and he says I'm gonna make an offer and if you read that it's on page 47 of exhibit 16 mr. Cranky's offer says I
00:32:49 I'm going to pay you $1.5 million down and then 10% of the goal for five years.
00:32:53 But in parentheses he says, pending me securing a successful investor.
00:32:58 Now think about what that must have meant to Mr. Elliott.
00:33:00 He meets Mr. Kroenke.
00:33:02 He meets Mr. Kroenke in April.
00:33:03 Mr. Kroenke represents to him that he has money, represents that he may have investors.
00:33:08 And in July when they're really in the heat of potentially negotiating or disputing about what the terms of the contract are, Mr. Kroenke reveals he doesn't have an investor.
00:33:15 And we know in the same text message thread, he doesn't have enough money to pay his own bills.
00:33:20 So how in the world is he going to buy Mr. Elliott's mind when he doesn't have any money even to pay his $90,000 bill?
00:33:25 So it's not a legitimate offer, but it keeps Mr. Elliott negotiating and they can't reach a price, which is fine.
00:33:32 Nobody has to reach a price, right?
00:33:34 All they have to do is fairly negotiate.
00:33:35 Mr. Elliott made an offer, Mr. Kroenke made an offer, and they didn't have a meeting in the mines.
00:33:40 that Mr. Elliott doesn't accept Mr. Kroenke's offer and then Mr. Kroenke really presses his advantage and he really pounds on Mr. Elliott and he says, I want a guarantee.
00:33:49 You're going to pay me and you're going to guarantee payment by pledging the entire deed to your Dan Creek property and you're going to do that by October 15th.
00:33:56 Now consider the position that put Mr. Elliott in.
00:33:59 This is on the latter part of July.
00:34:02 Mr. Kroenke has pulled his crew off the site.
00:34:04 There's no one to use the blue plant.
00:34:06 There's no one to mine in that right trench.
00:34:08 There's no way that he's going to recover his expenses.
00:34:09 And he's entirely dependent on a group of people that have no mining experience.
00:34:13 And at that moment, Mr. Kroenke is pressing his advantage.
00:34:15 And if Mr. Elliott had signed that note and he wasn't able to pay, then Mr. Kroenke would have gotten the property for next to nothing.
00:34:22 Mr. Elliott wrote to Mr. Kroenke and said, I'm not a weak man.
00:34:25 I'm not going to do this.
00:34:30 There's a lot of back and forth, but when you read that back and forth from July 20th on, never once does Mr. Kroenke ever ask Mr. Elliott what his expenses are.
00:34:38 Rather, he's threatening to take his property.
00:34:41 He's threatening to file a lien.
00:34:43 When you're considering the abusive process, you've got to say, what were his willful acts?
00:34:46 Well, his willful acts were to say, I don't care what the agreement says.
00:34:49 We have a cost plus customer contract.
00:34:51 That's the spirit of our agreement, as Mr. Clark told you, and we're going to press our advantage.
00:34:55 We're going to do that to get payment on Mr. Elliott, which they got $69 thousand dollars.
00:34:58 They want to get more gold.
00:35:00 When Mr. Elliott says, I'm not going to do that, he tries to get the property.
00:35:03 This is while the mining season is supposed to be going.
00:35:05 This is right after Mr. Kroenke pulled his crew.
00:35:10 Mr. Elliott was in a vulnerable position, but he didn't sign the note.
00:35:16 So we know what his will for acts are.
00:35:18 What is Mr. Kroenke's motive?
00:35:20 His motive is to get a gold mine for not much, right?
00:35:22 For whatever it costs for him to send some guys out there for a part of the summer and to have some equipment out there that he was going to recover anyway.
00:35:29 That's what he wanted.
00:35:31 And also when you look at those text messages, never once do you see Mr. Kroenke say after July, there's no discussion of an exit strategy because the only exit strategy was a fleecing strategy.
00:35:40 Mr. Kroenke wanted to fleece Mr. Elliott out of his life's work, out of that mine.
00:35:46 on August 12th, 2020, which is Exhibit 16, page 56.
00:35:53 Mr. Kroenke threatens Mr. Elliott again and says, quote, if we cannot find a new written path, meaning a new written agreement, probably signing a deed and guaranteeing the property, Mr. Kroenke says this will end badly.
00:36:05 This will end badly.
00:36:06 That's what he writes to Mr. Elliott on August 12th when he doesn't have anybody out there mining and Mr. Elliott's completely vulnerable.
00:36:16 Mr. Elliott reveals what his intent is.
00:36:19 On August 17, page 57 of Exhibit 16, Mr. Elliott writes to Mr. Kroenke, I'm worried about Travis.
00:36:26 I think Travis needs a medical assessment.
00:36:28 And Mr. Kroenke's response is, quote, Travis is fully capable of his own medical assessment.
00:36:32 Well, that medical assessment involved Mr. Martin getting Mr. Widom to fly them out of the site, and that's it.
00:36:39 They never really come back.
00:36:43 What is Mr. Kroenke's ulterior motive on pages 58 to 60?
00:36:47 This is in late August.
00:36:50 Mr. Kroenke says, you have options.
00:36:52 Your final option is, I will file a lien.
00:36:54 I will serve a lawsuit in the next week.
00:36:56 That is in August.
00:36:58 They're supposed to mine through October.
00:36:59 They're supposed to divvy up expenses in gold in November.
00:37:01 He's threatening to file a lien and a lawsuit.
00:37:04 And on September 16, 2020, look at Exhibit 3, their exhibit.
00:37:07 He filed a lien against Mr. Elliott's property.
00:37:11 He filed a lien while they're still supposed to be mining, while the FUBAR crew is still mining.
00:37:16 On October 9th, Exhibit 16, pages 63 to 64, Mr. Kroenke writes, the complaint's drafted.
00:37:22 Here's a copy of it.
00:37:23 It's going to be filed in a week if you don't pay us.
00:37:25 So while he's supposed to be mining, providing a crew, Mr. Kroenke is threatening to file liens.
00:37:30 He files a lien.
00:37:31 He threatens to file a lawsuit.
00:37:32 He files a lawsuit before Mr. Elliott even has a chance to finish the mining season.
00:37:35 And never again does Mr. Kroenke send out a qualified crew to run that blue plant and to mine in that right trench.
00:37:41 Not again in 2020.
00:37:42 And I asked Mr. Kroenke this, and I said, where is it in Exhibit 2 that Mr. Elliott's required to pay as he goes?
00:37:51 Where is he required to pay your expenses?
00:37:52 It's not in the agreement.
00:37:53 It wasn't something Mr. Elliott agreed to.
00:37:57 And you can look through all the evidence.
00:37:58 You can listen to all the testimony.
00:37:59 There's no, never once has Mr. Elliott ever write to anyone, nor does anyone from RAS ever write to itself in its internal daily reports that Mr. Elliott ever told them they had to stop mining or that they weren't allowed to mine.
00:38:13 So what Mr. Kroenke did, he filed a lien in September, he filed a lawsuit in October, and then he amended his lien, which is Exhibit 3, November 13th.
00:38:21 And this also shows his ulterior motive and his willfulness and why it is that he abused process.
00:38:26 He filed a lien, which is Exhibit 3, which you'll have in your exhibits, that he filed a lien for $513,644.
00:38:33 He filed a lien for the full amount of what he claims to be his expenses.
00:38:36 Even though he knows exhibit 2, his agreement required him only to recover half of his expenses.
00:38:41 But he tied up Mr. Elliott's property since 2020, since November 13th, for all of the expenses he claims, which he was never entitled to.
00:38:55 The last part I want to address with you are punitive damages.
00:38:57 You'll have an instruction, and you're going to have a copy of these instructions.
00:39:00 There's a punitive damage instruction, which is Instruction 20.
00:39:09 What you have to find is whether or not, by clear and convincing evidence, and that standard is evidence that is highly probable but not beyond a reasonable doubt, so you have to find that it's highly probable that Mr. Kroenke
00:39:24 acted outrageously or with reckless indifference to the interests of others or with bad motives.
00:39:29 And the purpose of
00:39:31 of punitive damages is not to put money in Mr. Elliott's pocket, but it's to stop and deter Mr. Kroenke from doing this again, from finding some other simple man, giving him a simple agreement, telling him, hey, we're going to be partners in this, so I want to help you with an exit strategy.
00:39:45 I want to help you with your retirement.
00:39:46 We want to stop Mr. Kroenke from doing that again, telling Mr. Elliott everything he needed to hear so that he could retire, and then when his intent all along was, I'm going to tie up his property, I'm going to get every nickel plus profit and overhead from him, and if he doesn't pay me, I'm going to take his property, and I'm going to leave him with nothing.
00:40:01 Mr. Kroenke should be stopped and deterred from doing that again.
00:40:04 So did he act with reckless indifference to Mr. Elliott's interests?
00:40:08 Well, what were his motives?
00:40:10 He already said this.
00:40:11 He had no idea what it was going to cost at Dan Creek and he didn't really care because he knew what he was going to do.
00:40:16 He was going to say, you pay all my expenses plus profit and overhead or else I'm going to take your property.
00:40:20 He didn't set aside any money.
00:40:22 He admitted he had no idea, he and Mr. Clark had no idea what it was going to cost.
00:40:25 They had no budget.
00:40:26 They weren't worried about cost.
00:40:28 And really what were they doing with Frank Martin and Travis?
00:40:31 If it went really well, then I suppose there was some gold that could be recovered, but things happened.
00:40:37 When Mr. Kroenke decided to pull his crew, he left Travis really in an impossible situation, except Travis and his son got to spend the summer gold mining.
00:40:44 I suppose that was something that Mr. Turnbull may have enjoyed.
00:40:48 Certainly for Mr. Martin, it was a bucket trip.
00:40:49 It was on his bucket list to be able to go out and explore for gold.
00:40:52 As Mr. Elliott said, Mr. Martin had never seen gold like that before, and the Daily Reports
00:40:56 from RAS and Exhibit 11 reveal that Frank was testing and presumably he was enjoying finding gold in a way that he had never found it before.
00:41:06 Mr. Kroenke testified yesterday that, you know, when I asked him about who he had out there for a crew, and he said, well, he didn't know.
00:41:11 First of all, he had no idea who was out there at any given date.
00:41:14 No idea.
00:41:14 Even though he's got the same exhibits I just reviewed with you, but he had no idea yesterday.
00:41:18 But he actually mentioned Blake as one of the people that were out there, which is a little troubling because if you look at their own payroll records, Blake's not an employee, but Mr. Kroenke said yesterday we had Blake out there.
00:41:27 So who knows what Blake's status was, but he really wasn't part of the crew because they weren't paying him.
00:41:33 I've already gone through all this, but what was the reckless indifference to Mr. Elliott?
00:41:37 It is misrepresenting, through Mr. Clark's testimony, misrepresenting that the true spirit of the agreement was a cost-plus contractor, a T&M contract.
00:41:44 They treated him like he was a simple and weak man, and they thought they could hoodwink him, but Mr. Elliott was too strong to fall.
00:41:50 Even when Mr. Kroenke pressed his advantage and pressed his leverage, Mr. Elliott held firm, and here we are today.
00:42:07 Mr. Kroenke's conduct and the conduct of some of his employees, but in particular, Mr. Kroenke's conduct was outrageous.
00:42:13 It was recklessly indifferent to Mr. Elliott's interests, and he acted with bad motives.
00:42:17 I've made that clear.
00:42:19 Mr. Kroenke was never committed to being a successful gold miner.
00:42:23 Ms.
00:42:23 Luna told you what it takes, and it takes a lot, and it takes a lot more than Mr. Kroenke ever prepared for.
00:42:28 So what are we asking for?
00:42:30 You're going to get a verdict form.
00:42:32 In the back of the verdict form, there's a part that says, part two,
00:42:37 regarding the defendant's claims.
00:42:39 Section A, number five, we're asking you to find that Mr. Kroenke breached the contract that he had with Mr. Elliott and Treasure Chest LLC.
00:42:48 Number six, we're asking you to find that Mr. Kroenke engaged in an abusive process when he filed his lien, and what we're talking about is the lien in September 2013 before the season was over.
00:42:58 There's a section on damages.
00:43:00 The judge will instruct you on that.
00:43:02 I want to make it clear, all we're asking you to find is that for breach of contract,
00:43:06 that Mr. Elliott's entitled to $1, and we're asking you to find that he's entitled to punitive damages.
00:43:12 That's all we're asking for.
00:43:13 Mr. Elliott's never asked for any money from Mr. Kroenke.
00:43:16 He's only asking to be out of this relationship.
00:43:18 He wanted an exit strategy.
00:43:20 He was offered that opportunity, so he thought, in 2020, but that was never Mr. Kroenke's intention.
00:43:25 Here we are in 2024, and Mr. Elliott only wants the opportunity to develop an exit strategy for himself.
00:43:33 Thank you.
00:43:35 Thank you, Mr. Campion.
00:43:37 Mr. Brzezinski, do you want a moment to reset?
00:43:39 No, sir.
00:43:40 I can go.
00:43:40 If you'd like to give the jury a break, that's certainly up to you, Judge.
00:43:43 Either way, I'm happy.
00:43:44 Anybody need a comfort break?
00:43:46 I see at least a couple saying let's get to it.
00:43:49 Okay.
00:43:50 All right, Mr. Brzezinski.
00:43:52 Thank you, sir.
00:44:16 ladies and gentlemen we've heard significant amount of testimony reviewed numerous documents spreadsheets and exhibits but there really are only two issues at the heart of this lawsuit and let's focus on those two issues and try to remove all the static that we've heard issue number one did Randy Elliott reimburse Seth
00:44:45 for half of his expenses directly related to the Dan Creek mine project.
00:44:50 That's issue number one.
00:44:52 Issue number two was Seth prevented from mining gold by Randy Elliott.
00:44:59 These are the only two issues before us that you as the jury will need to resolve.
00:45:07 So let's start here.
00:45:09 Let's examine the evidence regarding the first issue.
00:45:14 According to both contracts, for an expense to be reimbursable, to be reimbursed, it must meet two criteria, or it's a two-part test.
00:45:28 One, it has to be directly related to the Dan Creek project.
00:45:33 And two, proof of that expense has to be presented or provided.
00:45:39 That's the two-part test.
00:45:41 So let's look at exhibit one.
00:45:45 And momentarily, I'll appear on the screen.
00:45:53 We have to switch to HDMI 3.
00:46:02 It's on 4.
00:46:05 I can't read that part.
00:46:08 Try that one.
00:46:19 So this is our, can you scroll down to the bottom please?
00:46:22 So we can make sure it's the first contract, it is.
00:46:25 Let's scroll to the higher right there is great.
00:46:33 So we have expenses incurred by Seth in direct relation to the evaluation.
00:46:39 And then we have receipts or proof of expense will need to be provided to be considered legitimate expense.
00:46:46 Those are two.
00:46:47 The only two requirements for an expense to be reimbursable under the first contract.
00:46:54 Now if we go to the second contract, can we go to Exhibit 2 please?
00:46:58 Just to make sure that everything is consistent.
00:47:01 Here, everything stays the same except equipment at fair market value, rental rate that each party is supplying is added, and of course we have the word anecdotal added by Mr. Elliott.
00:47:18 So the test that we just talked about fits both contracts.
00:47:25 So let's look at exhibit number five, which is the expense summary sheet provided.
00:47:32 And I know you've seen this before.
00:47:33 Bear with me.
00:47:34 We'll go through this fairly quickly.
00:47:37 The first category is material and fabrication.
00:47:43 I don't think it's disputed that the material and fabrication expense relate to the Dan Creek mine project.
00:47:49 Mr. Turnbull testified he has spent a month or more working 90-hour work weeks to build the processing plant known as Big Blue.
00:48:03 It's safe to say that material and fabrication is clearly related to building Big Blue and fixing, maintaining and building equipment out there.
00:48:13 so that's really not in dispute second test sorry the second part of our test is did we provide proof of that expense so let me refer you to exhibit 6 for a moment and right here you'll have all this so we're not going to scroll through the whole thing is a spreadsheet that shows you what items were used to make up
00:48:42 the summary on Exhibit 5, which is the total material fabrication cost.
00:48:48 Now, these are not the final number, so let's turn to Exhibit 13.
00:48:51 And those numbers are further backed up by each individual invoice from Alaska IndustrialHardware, and there's 228 pages of those, and I'm not going to make you look at every one of those.
00:49:07 So, we have proven that
00:49:12 Material fabrication was related to Dan Creek and we have proven that an expense proof of expense was provided we have to prove this by the preponderance of the evidence standard and I think we've well exceeded that
00:49:38 And according to the contract, Mr. Elliott is responsible for reimbursing Seth when these two parts of the test are met.
00:49:49 Mr. Elliott's failure to reimburse Seth for a legitimate expense that was related to Dan Creek and proof was provided is a breach of the contract.
00:50:01 Let's move to number two, food and living expenses.
00:50:09 apply our two-part test.
00:50:12 It's undisputed that people who work out there have to eat and live, so there's no dispute from Mr. Elliott or anyone else that that amount, the food and living expense, is directly attributed to Dan Creek Mine.
00:50:31 Was proof of this expense provided?
00:50:33 The second part of our test, let's go to Exhibit 7.
00:50:37 And there it is.
00:50:38 And you'll be able to review it should you wish.
00:50:42 And this is not a part of the requirement, but in the abundance of fairness, an expert witness with 50 years of knowledge, training, and experience in the industry, who has mined himself, stated that these expenses are actually kind of low.
00:51:00 And you'll have his report.
00:51:01 You can look at it.
00:51:02 So not only
00:51:05 Is it related?
00:51:07 Proof is provided.
00:51:08 But on top of that, it's more than reasonable.
00:51:13 And Mr. Elliott has not reimbursed Seth for this expense, and that is another breach of their agreements.
00:51:22 Category 3.
00:51:23 Let's move to labor.
00:51:24 That's exhibit number 8.
00:51:27 Again, and we'll be applying this two-part test to these categories.
00:51:33 Is labor related to dantry?
00:51:37 Mr. Campion made a very big deal that there was some entries prior to the contract being signed and therefore they should be excluded.
00:51:45 Okay.
00:51:47 I disagree, but let's look at it.
00:51:49 We can agree that Frank Martin's, Travis Turnbull, Labor's, all of this is directly related to the entry.
00:52:03 Was proof of this expense provided?
00:52:06 to Mr Elliott?
00:52:08 Certainly.
00:52:10 He was given the backup.
00:52:20 Now, Mr Elliott is being charged a $78 per hour rate.
00:52:27 The expert witness testified that that rate is reasonable for the industry and reasonable for this project.
00:52:34 However, it is
00:52:36 artificially low, as Mr. Kroenke testified.
00:52:40 The labor rate, which is a composite rate, and the way it's derived is that any construction site, you have management, you have middle management, and then you have people who are actually doing the work.
00:52:51 And there's different pay scales.
00:52:53 So in any structure, there is much less at the top and more on the bottom wage scale.
00:53:00 So therefore, that rate represents more labor, less
00:53:05 higher-paid employees.
00:53:07 But in this case, that pyramid is reversed.
00:53:10 Two of the most experienced employees, Frank Martin and Travis Turnbull, represent the vast majority of the work, supported by employees earning a lower wage.
00:53:21 Now, that wage is also based on a 40-hour work week plus 10 hours of overtime.
00:53:28 Mr. Turnbull and Mr. Martin both testified that they're very long weeks and they're working 90 hours plus.
00:53:35 That additional 30-40 hours is not captured in the $78 dollar an hour rate.
00:53:43 And as Mr. Kroenke testified, and this is not in any way was disproven or challenged, that he did compensate Mr. Turnbull and Mr. Martin for the additional labor rate.
00:53:55 Is he charging Mr. Elliott more money?
00:53:57 No.
00:53:58 He produced this document at a time when all the information was back to the office, and he never updated it.
00:54:05 Why?
00:54:05 Because he's trying to be reasonable.
00:54:07 He's trying, as he said, to use his words, conservative in his billing.
00:54:15 So, I don't think there's any discussion that this labor is related to Dane Creek Mine.
00:54:23 And proof of that labor has been given to Mr. Elliott.
00:54:28 Once again, Mr. Elliott's failure to reimburse Mr. Kroenke is a breach of the contract.
00:54:37 Let's move to category four, which is labor and material.
00:54:41 I'm sorry, that's equipment.
00:54:45 No one disputed that all the equipment listed by Seth in this category was used at the Dan Creek mine.
00:54:51 That's not in dispute.
00:54:53 So therefore, we can just assume and believe and find that the equipment meets the first part of our test.
00:55:03 Equipment was used at the mine.
00:55:06 Now, was Mr. Elliott given proof of that expense?
00:55:14 Exhibit 2 shows that he was.
00:55:16 He was given a rental fee, month, totals.
00:55:24 If we go back to contract number two, exhibit two, for a moment.
00:55:31 In the third paragraph in the bottom, equipment at fair market value rental rate that each party is supplying.
00:55:40 The expert witness testified that
00:55:45 The numbers charged are fair market value, based on his experience and his research, calling around to various suppliers of heavy equipment and finding what their rates were back in 2020.
00:56:03 Mr. Campion made a big deal about fuel.
00:56:08 First of all, there was no proof given of how much fuel was purchased, when, for how much
00:56:17 And I think Mr. Campion would like to place the burden on us to figure that out.
00:56:20 That's his job.
00:56:22 He needs to provide proof, not statements.
00:56:27 This is proof.
00:56:29 So there is no doubt that Mr. Elliott provided some fuel.
00:56:35 We just don't know what it cost and how much of it was there, and he never provided any proof of it.
00:56:40 What we do know, which is undisputed, that that fuel was the wrong fuel.
00:56:47 And that fuel ruined a perfectly good top-of-the-line machine, and that fuel cost Mr. Kroenke $50,000 in repair bills.
00:56:59 Mr. Kroenke is not asking to be reimbursed for that.
00:57:03 He's not looking to even be made whole.
00:57:06 He's just looking to get his basic expenses back at the time he presented that document.
00:57:12 updating it monthly and saying, hey, look, here are my bills that came in after I gave you this.
00:57:18 Here's more.
00:57:18 Now you need to pay more and more and more.
00:57:21 He's absorbing those costs in his own pocket.
00:57:24 So two-prong test.
00:57:25 Was the equipment at Dan Creek Mine?
00:57:27 Yes.
00:57:28 It was used at the Dan Creek Mine.
00:57:32 And two, is an expense of it given to Mr. Elliott?
00:57:37 Yes, it was.
00:57:40 So once again, I believe we've met the test and we've proven that it is an expense that is reimbursable and Mr. Elliott's failure to reimburse that expense is yet another breach of the contract.
00:57:55 Now, Mr. Elliott under the contract was supposed to provide two 400-class excavators.
00:58:05 Seth Kroenke said, I called them junk.
00:58:07 Yeah, I did, because those are Mr. Elliott's words.
00:58:11 He called his own equipment junk.
00:58:14 Seth Kroenke says, well, why didn't you, Mr. Kroenke, get under that equipment and start turning wrenches to make sure they're viable?
00:58:24 Somebody tells you they're going to provide a piece of equipment.
00:58:27 It's pretty understood that it needs to be functioning.
00:58:32 Nobody signs a contract to provide stuff that doesn't work.
00:58:36 It doesn't make any sense.
00:58:39 Now, Seth is a handy guy.
00:58:40 He grew up on a farm.
00:58:41 He can turn a wrench.
00:58:43 But he went out there to look at the mine, not start pulling injectors out of a diesel engine to see if they work.
00:58:52 It's not his job.
00:58:54 He just took it on faith.
00:58:57 And faith is a word that Mr. Elliott uses quite often.
00:59:00 Have faith, believe me, I will do these things.
00:59:03 You heard his own voice.
00:59:05 So Seth did take it on faith.
00:59:07 He did believe Mr. Elliott.
00:59:09 And what happened?
00:59:10 He believed to his detriment.
00:59:13 And it cost him money.
00:59:15 He had to go out and buy another piece of equipment for $150,000.
00:59:18 That was not something he was forecasting.
00:59:22 Luckily, he was able to do that.
00:59:24 And by doing that, he wanted to salvage as much as possible this mining season.
00:59:29 He didn't walk away.
00:59:29 He said, look, if you're not giving me equipment, I'm done.
00:59:33 He said, OK, I'll do whatever I can.
00:59:35 I'm going to find an excavator in the area.
00:59:37 Now, this isn't downtown Anchorage.
00:59:39 We know that this is far removed in the bush.
00:59:42 It's not easy to find big equipment for sale out there.
00:59:47 So moving on to the next category, Kevin and Seth's time.
00:59:57 Both Seth and Kevin testified that the time listed in the supporting spreadsheet, which is Exhibit 10, is itemized, the hours are listed, and what was being done on that day is listed.
01:00:14 Now you'll see a lot of blank spaces because the date is chronological, but nothing happened on some date.
01:00:20 So it's not that it's lacking information, there's nothing happened, and therefore nothing was filled in and nothing was charged.
01:00:27 Now here, both Seth and Kevin testified that this time was devoted to projects in connection with Dan Creek Mine.
01:00:38 That wasn't challenged.
01:00:39 But interestingly enough, let's go back to Exhibit 5, please, for just a moment.
01:00:45 And let's look at the number together.
01:00:47 Kevin and Seth's time, 20 plus 35, my math is not good, correct me, I'm coming up with $55,000.
01:00:56 Let's go back to Exhibit 10, please.
01:01:01 To the bottom.
01:01:05 Here we are.
01:01:07 Now, Mr. Campion said that he's being billed profit and overhead, doubling it back in.
01:01:17 Well, no.
01:01:18 That's not what the numbers show.
01:01:21 The total of their hours comes out to $82,000.
01:01:24 Now, this is a separate spreadsheet that automatically populates, which shows 20% overhead in profit and the grant total.
01:01:31 But this document does not relate in its entirety back to Exhibit 5, which is the document that was given to Mr. Elliott.
01:01:42 The total last hours, Remote Alaska Solutions hours, which is Kevin and Seth together, totals $82,000.
01:01:51 $450.
01:01:51 I am not going to embarrass myself in front of you and do the math, but $82,000 is a lot more than $55,000.
01:02:03 He's not billing for all of his time.
01:02:05 He's not billing overhead and profit.
01:02:09 That's just plain wrong.
01:02:10 That is a misrepresentation of basic fact that can be seen and proven easily.
01:02:19 Now, let's scroll up a little bit.
01:02:22 Go back to the beginning of that document, please.
01:02:28 And if you scroll through, please, you'll see that each day there's an entry, there's a time, and there's a note about what is being done.
01:02:39 If there's an issue
01:02:42 that some of the work was done before the contract was signed in anticipation of the contract, and now time is short.
01:02:48 Everybody has testified that there's a small window during these discussions.
01:02:52 If you don't start gearing up, you're not going to get it done in time.
01:02:56 If everybody waited to the very second the contract was inked to say, okay boys, now let's start planning, we'd have a failure in our hands.
01:03:04 But nevertheless, Seth is charging
01:03:14 28 or $27,000 less, and that easily overcomes any discrepancy of time before the contract was signed.
01:03:22 And I would argue that in order to plan properly to prevent performance that's not satisfactory, you've got to do it early, you've got to do it fast, and you've got to do it systematically.
01:03:39 So Seth
01:03:42 And Kevin Time related to the mine project?
01:03:45 Absolutely.
01:03:45 Was proof given?
01:03:47 No doubt.
01:03:48 Therefore, we have met our burden that we have under the two-pronged test.
01:03:54 One related to proof given and Mr. Elliott's failure to reimburse Seth for half that expense is another breach of the contract.
01:04:06 Support flights. 24,000.
01:04:12 Seth testified that those were flights from his location where Modalaska Solutions and his home is to the mine he did this 12 times not in dispute did he provide a receipt for that yes it's in that document the amount
01:04:42 that Seth chose to charge, once again, is less than the fair market value.
01:04:48 He owned an air taxi business.
01:04:50 He was a bush pilot himself.
01:04:52 He knows what the rates are.
01:04:55 He chose the lowest going rate to charge in Australia, trying to be fair.
01:05:03 Was it related?
01:05:04 Yes.
01:05:05 Was it proof given?
01:05:06 Yes.
01:05:07 Is it reimbursable?
01:05:08 Yes.
01:05:09 failure to reimburse yes it's another breach of the contract Cup or Nugget that's a negative so I'm not an accountant but that's a negative it's a subtraction Mr. Elliott I don't think is disputing this one but what does it show it shows that Seth is being abundantly fair if there's something that needs to be credited he gives him the credit
01:05:40 Seth is being fair and reasonable.
01:05:51 Mobilization in and mobilization out.
01:05:54 Well, I don't think anyone's going to argue these are not related to Dan Creed.
01:05:59 Obviously we're getting equipment and manpower in, and we're going to remove men and equipment out.
01:06:05 Clearly related.
01:06:07 Was he given proof of that expense?
01:06:09 Yes.
01:06:10 Now, those numbers are estimates.
01:06:16 Why are they estimates?
01:06:17 Because this was given to Mr. Elliott early on, and it took a year for the rest of the equipment to be brought back.
01:06:26 As you will see in the text messages, Mr. Elliott wouldn't release Seth's equipment for a year.
01:06:34 A year later, Seth hired a local trucker to go through this debacle that you see crossing rivers and doing whatnot to bring this with a huge low-boy trailer to bring back his equipment.
01:06:48 So those invoices, overtime hours came in later, and as Seth testified, those numbers are very conservative and low.
01:07:00 Once again, two-part test.
01:07:03 Is it?
01:07:05 related?
01:07:05 Yes.
01:07:06 Was proof given?
01:07:08 Yes.
01:07:09 Was he reimbursed?
01:07:11 No.
01:07:11 Is that a breach of the contract?
01:07:13 Yes.
01:07:17 An expert witness testified that those are very reasonable numbers given what has to happen.
01:07:24 And without those pictures, it's hard to imagine crossing a river 15 times with trucks, trailers, people,
01:07:34 excavators Mr. Rutherford is familiar with this he's gone through this himself he's been in this business for 50 years he said those are reasonable numbers and the reason why we have Mr. Rutherford we don't have to prove reasonableness of the charges that's not in the contract the reason why he's here is to make sure that everybody understands that no one's being overcharged costs aren't being inflated and Seth is being reasonable
01:08:04 Charging only reasonable rates, in fact, lower than what his actual cost was.
01:08:13 Profit and overhead.
01:08:14 10 and 10.
01:08:20 Well, obviously, that comes from the above category, so it's related.
01:08:25 Proof was given.
01:08:28 And just keep in mind that this is not... We're only asking, perhaps,
01:08:36 Half of each category belongs to Mr. Elliott.
01:08:41 The contract specifies that expenses would be shared equally and any gold recovered or profit would also be shared equally.
01:08:54 So Mr. Elliott is going to, if you award this amount,
01:09:00 Now I think that covers expenses.
01:09:02 What is our obligation?
01:09:04 Our obligation and our burden is to
01:09:26 proved to you by the preponderance of the evidence, more likely than not standard, that Seth followed the contract.
01:09:35 He provided expenses that were directly related to the mining project Dan Creek, and he was never reimbursed for them.
01:09:43 Each one is a violation of the contract, a breach of the contract.
01:09:51 Now let's turn to the second part of this lawsuit, and let's discuss that for a moment.
01:09:56 Was Seth prevented from mining gold by Randy Elliott?
01:10:01 Well, there isn't a nice, neat set of documents.
01:10:08 So what we have to look here is to look at the totality of the evidence, totality of the testimony, text messages, statements that you heard, and then we can derive what really happened.
01:10:27 Let's start with what the parties agreed to.
01:10:30 The first contract clearly states that Seth will have the unrestricted right to evaluate the entire area of the entry.
01:10:38 That's not in dispute.
01:10:40 It's a fact.
01:10:42 To test the ground to see if it was worth mining.
01:10:47 Now, Frank Martin's Trommel, which is a small testing plant,
01:10:57 is fine for testing.
01:10:59 It can test all day long.
01:11:01 It's exactly what it does.
01:11:02 It's not processing, it's testing.
01:11:04 It's sampling to determine if there's value in the soil.
01:11:09 Is there gold in the dirt?
01:11:12 And how much of it is in there?
01:11:13 Because the concentration of gold per either cubic yard, cubic ton, whatever amount you want to use, that ratio is what determines the value of what Seth wants to purchase.
01:11:27 If Mr. Elliott wanted to make this simple, like any transaction, you would have said, hi, I'm looking for X amount of million dollars for my mine.
01:11:36 Here are the test logs, which prove this up.
01:11:38 The test logs were done by an independent third party over the course of four or five years.
01:11:43 Here's the concentration.
01:11:44 Here's what my mine is worth.
01:11:46 Pay this price or not.
01:11:48 Gosh, that would have been easy.
01:11:49 And that would have been perfect for Seth.
01:11:52 But Mr. Elliott didn't have any of this.
01:11:54 He had stories.
01:11:56 He bought the mine for someplace between 1.5 and 2.4 million.
01:12:00 He didn't even know.
01:12:01 It's someplace in that range.
01:12:03 Now, he's been exploiting that mine, which is what you do in a mine.
01:12:07 You take the material out, the gold out, in this case.
01:12:12 And now the mine's worth 50 million.
01:12:15 Well, it's 50 million in 2023, 11 million in 2020.
01:12:22 It keeps skyrocketing numbers.
01:12:24 There's no...
01:12:27 There's no way to justify those numbers.
01:12:28 The price of gold is not going up by an order of magnitude.
01:12:31 The price of gold has gone up, but not by an order of magnitude.
01:12:35 You're not adding a zero to the back of that number.
01:12:40 So Seth had to figure out what the true value is.
01:12:43 You can't buy something if you don't know what it's worth.
01:12:45 Inspect the car, you have a home inspection done, basically.
01:12:50 So if that was the goal,
01:12:52 The trommel, Frank's little yellow trommel, would have been just fine.
01:12:55 You pull it along with the truck, you bring in a little Sandy, you dump some soil in it, you do whatever it does, you get a number.
01:13:05 But the contract says that Seth will provide Travis a top-notch fabricator to build what's now known as Big Blue, the processing plant.
01:13:18 Big Blue is a massive
01:13:21 piece of equipment.
01:13:23 As Seth testified, and I know some of you have experience with heavy equipment, some of you don't, so for those of you who do, please excuse me, I'm going to be a little boring, but a 400-class excavator has a bucket three yards wide, as big as this.
01:13:39 That machine requires two of these excavators to run it, one to dump into the processing plant, which shakes and rattles and expels
01:13:50 waste material and a second excavator that pulls this debris or the rejected material away and dumps it into trucks and is taken to someplace else.
01:14:01 That machine has nothing to do with testing.
01:14:04 That machine only exists for one reason, process material, process dirt and a lot of it.
01:14:13 Why was that contemplated?
01:14:16 Well, because the whole goal was to test
01:14:20 figure out what it's worth and as everybody has agreed testing is expensive so the reason why Big Blue was built was to recover those expenses and make a profit a profit that would be equally shared in this journey the first part of the contract Seth will provide time for Travis to build a processing plant if you're going to test you don't need a processing plant that's just common sense
01:14:50 So mining was always part of the agreement.
01:15:01 Seth has testified that his guys weren't getting the right to mine.
01:15:08 They were testing, there's no doubt.
01:15:10 We're not disputing that Frank and Travis were able to test.
01:15:14 But that's only part of the deal.
01:15:17 The other part is mine.
01:15:19 pay for the expenses, find more gold, split the gold, and then buy the mine.
01:15:28 In the second contract, the word mining is specifically added in there.
01:15:33 So Mr. Elliott agreed that mining is an essential element of the Dane Creek project.
01:15:43 The first contract, and I didn't write these
01:15:49 It wasn't spelled out, but it's implied.
01:15:52 Why would you build a processing plant if you weren't going to mine?
01:15:56 It makes no sense.
01:15:58 Why would you devote four to six weeks of man labor, expensive hours, for a highly skilled individual to build something that had zero value in testing?
01:16:09 It had 100% value in recovery, in mining, in extraction.
01:16:16 Mr. Brzezinski, I hate to interrupt you.
01:16:20 I apologize for interrupting your closing, but folks, let's take five minutes here and make sure everybody's comfortable and we'll finish up.
01:16:57 Okay.
01:16:58 Jury's out.
01:16:59 If anybody else needs one, might as well take it now, and when you get done, we'll try to wrap straight into instructions.