Free Designation of Deposition Testimony - District Court of Colorado - Colorado

Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN

Filed 12/22/2005

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 03-WM-2073 (PAC)

3 ROBERTA PULSE, TONYA HOUSE, 4 Plaintiffs, 5 v. 6 THE LARRY H. MILLER GROUP, 7 8 9 10 11 12 13 14 A P P E A R A N C E S 15 For the Plaintiffs: 16 17 18 19 20 Also Present: 21 22 23 24 25
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Defendant. ________________________________________________________ VIDEOCONFERENCE DEPOSITION OF: JEFFREY B. JENSEN September 2, 2004 ________________________________________________________ PURSUANT TO NOTICE, the videoconference deposition of JEFFREY B. JENSEN was taken on behalf of the Plaintiffs at 1900 Grant Street, Suite 800, Denver, Colorado 80203, on September 2, 2004, at 9:23 a.m., before Marchelle Hartwig, Certified Shorthand Reporter and Notary Public within Colorado.

For the Defendant:

KIMBERLIE K. RYAN, ESQ. The Ryan Law Firm 283 Columbine Street, Suite 157 Denver, Colorado 80206 JUDITH HOLMES, ESQ. Judith Holmes & Associates 7887 East Belleview, Suite 1100 Englewood, Colorado 80111 Roberta Pulse Kellie Ryan

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Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN
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Filed 12/22/2005

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INDEX EXAMINATION OF JEFFREY B. JENSEN: September 2, 2004 By Ms. Ryan 3 INITIAL DEPOSITION EXHIBITS:

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4 5 6 1 Planning Memo 7 8 9 10 4 Cover Sheet To: Kim Ryan 11

REFERENCE 35 35 35 65

2 Denver Toyota Unusual Items Noted in Audit 3 Denver Toyota Unusual Items Noted in Audit

(Attached to original and copy transcripts.) 12 13 14 15 16 17 18 19 20 21 22 23 24 25

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employment from Denver-Toyota. They felt they were wrongfully terminated. That's pretty much it. Q. How did you come to this understanding? A. Through conversations with Judy and with a couple of different people at the Miller organization, primarily Tony Schnurr and Clark Whitworth. Q. Are you represented by legal counsel today? A. I am not. Q. We have a court reporter who is taking down everything that we say, so it's very important for you to listen to my questions. Let me finish my questions before you start your answer so that we can get a clear transcript. Do you understand? A. Yes. Q. If at any time I ask you a question that you do not understand, please ask me to rephrase it and I will do my best to accommodate your request, if possible. Do you understand? A. Yes. Q. Otherwise, I will assume that you have heard my question, you've understood it, and you've answered truthfully. Do you agree? A. I agree. Q. Have you had any alcoholic beverages within the past 24 hours?
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1 2 3 4 5 6 7 EXAMINATION 8 BY MS. RYAN: 9 Q. Could you please state and spell your name for 10 the record. 11 A. My name is Jeffrey B. Jensen, J-e-f-f-r-e-y, 12 middle initial B., J-e-n-s-e-n. 13 Q. Mr. Jensen, have you ever had your deposition 14 taken before? 15 A. Yes. 16 Q. On how many occasions? 17 A. Greater than five. I don't know for sure. 18 Q. My name is Kimberlie Ryan. I'm legal counsel to Roberta Pulse and Tonya House in their employment 19 discrimination lawsuit against the Larry H. Miller Group 20 of Companies. Do you have any understanding of what 21 22 this lawsuit is about? 23 A. I believe so, yes. 24 Q. What is your understanding? A. That Roberta and Tonya were terminated from 25

WHEREUPON, the following proceedings were taken pursuant to the Federal Rules of Civil Procedure. * * * * * JEFFREY B. JENSEN, having been first duly sworn to state the whole truth, testified as follows:

A. No. Q. Have you taken any medications that might impair your ability to either understand my questions or to answer accurately? A. No. Q. If at any time you need a break today, please let me know, and as long as there is not a question pending, we'll break, but if there is a question pending, you'll need to answer it before we take a break. Okay? A. Okay. MS. HOLMES: Kim, if you wanted to give me some rough idea of when you are about within a half an hour of being through, I can call the next deponent and have him available and waiting. MS. RYAN: Okay. Q. (BY MS. RYAN) Mr. Jensen, you said that you've had your deposition taken probably greater than five times. Have any of those depositions been in relation to any kind of employment discrimination or retaliation lawsuits? A. No. Q. Have you ever sued anyone? A. I have not. Q. Have you ever been sued?

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Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN
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A. No. Q. What is your position now, your employment? A. I am the majority shareholder of Jensen & Keddington, CPA firm and the managing shareholder. Q. How long have you held that position? A. On September 7, it will be 25 years. Q. What licenses do you hold? A. I hold a CPA license. Q. What degrees do you have? A. I have a bachelor's degree from the University of Utah. Q. What is your bachelor's degree in? A. Accounting. Q. How many conversations have you had with Judy Holmes about this lawsuit? A. We have met twice in my office, and I believe maybe twice on the telephone. Q. When were the meetings in your office? A. One was yesterday, and I don't remember the dates of the other. Q. Was the other meeting within the past three months? A. It's close to that, yes. Q. How long was your meeting with Judy Holmes yesterday?
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mentioned? A. We went over those items that we previously -you previously listed. We talked about those as to what I knew about the dealership. Q. I see that you have documents in front of you. What documents are those? A. I have three pieces of paper that relate to a planning memo and unusual items that we noted in our audit for the year December 31, 2000 and December 31, 2001. MS. RYAN: Judy, would you please fax those to us. MS. HOLMES: Sure. Go off the record until I can get someone to fax them to you. (Pause in proceedings.) Q. (BY MS. RYAN) We will go ahead and go over the documents when we receive the fax. In the meantime, we will move forward. Did you review the documents that you have in front of you with Judy Holmes yesterday when you met? A. Yes. Q. Did you review any other documents? A. We reviewed a few of the other work papers. I had my billing file for the dealership, but not many. Q. Can you estimate how many documents you
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A. It was about an hour and a half. Q. What did you discuss? A. We discussed the lawsuit. We discussed what my understanding was of the performance of the dealership, the performance of the accounting department, the records that we received when we went in to do the audit and some of the difficulties that we incurred. Q. Did you discuss anything else? A. We discussed the internal audit functions that the Larry H. Miller Group does, the reports that they put out when they do what they refer to as a "mini audit." Q. So you've said that you discussed with Judy Holmes what your understanding was of the performance of the dealership, the accounting department. You discussed the records that you received, some of the difficulties, the internal audit functions, and the mini audits. Did you discuss any other major categories of information? A. No. Q. Did you discuss your deposition? A. Yes. In relationship to what I mentioned to you, yes. Q. What do you mean in relationship to what you

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reviewed? A. Probably 10 or 15. Q. When you mention "work papers," what are you referring to? A. Our audit work papers for the year 2000 and 2001. MS. RYAN: We have our fax. We'll go off the record for one moment, please. (Pause in proceedings.) Q. (BY MS. RYAN) The audit work papers for the years 2000 and 2001 consisted of less than 10 to 15 pages? A. No. Those were the ones that we looked at. Q. How many documents would -- strike that. The audit work papers for the years 2000 and 2001 would consist of how many documents in your estimation? A. The work papers would consist of about a foot and a half high full of work papers, photocopies, other pertinent documents to the audit. Q. Where are those records maintained? A. In my office. Q. How did you make the determination as to which documents you would review with Judy Holmes? A. I was explaining to her some of the processes

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Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN
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Filed 12/22/2005

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that we go through when we are doing an audit and just showing a few of the things that pertain to looking at documents throughout the year versus just at the audit date. Q. You said that you also reviewed your billing file with Ms. Holmes? A. The Denver-Toyota billing file, yes. Q. What kinds of documents are in the billing file? A. I looked at a summary page is all. Q. I'm asking a little different question than that. I'm asking what kinds of documents -- not what you looked at, but what kinds of documents are in the billing file? A. Our work in process, our time summaries. Q. When you say "work in process," what does that mean? A. Where we record the people's time that work on the engagement. Q. In your files, do you have any of the mini audits by the Larry Miller Group that you referred to earlier? A. Yes, I do. Q. Do you have the mini audit file for the year 2001?
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received it and it just wasn't in your file? A. No. Q. Is there more than one location that a mini audit would be stored within your offices so that if it wasn't in the file that you looked in it might be in another file? A. Generally not. Q. Generally those mini audits come to you directly? A. Yes, and then I forward them to our audit staff. Q. When you forward the audits to the -- the mini audits to your audit staff, does the audit staff then also maintain a copy, a separate copy, of the mini audits? A. I do not personally maintain a copy in my office. It's just forwarded to them. It should be put in the audit file when we do the audit. Q. And that's the audit file that you looked at yesterday to determine whether you had the mini audit for 2001? A. Correct. MS. HOLMES: Kim, just so you know, no mini audit was done in 2001. MS. RYAN: I appreciate your attempt to clear
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A. I believe that was -- I'm not sure that they did one in 2001. There were two of them done, I believe, in 2000, but I don't think I found one for 2001. Q. Did you look for one? A. Yes. Q. When did you look for the 2001 mini audit? A. While we were sitting at the table yesterday. Q. Did someone at the Larry Miller Group for the Denver-Toyota location provide you with the mini audits? A. As a normal practice, when the mini audits are performed for the Miller Group for all dealerships, they are normally forwarded to our office. We review those as a normal course of our audit so we know what's going on in the store when they go in and do their mini audits as part of their internal control process, so I have those on a normal course of business. Q. So if you did not have a mini audit that was, in fact, performed in the year 2001, that would be a departure from the normal course of business and would be unusual; is that true? A. That would probably be a true statement, yes. Q. Do you have any way of tracking which mini audits you receive from Larry Miller, such as some kind of a tracking sheet, so that you would know if you had

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that up, Judy, but I need testimony from the witness, and I understand that a mini audit was, in fact, done in March 2001. Q. (BY MS. RYAN) Mr. Jensen, do you have any understanding as to whether a mini audit was performed in March of 2001 for the Larry Miller Denver-Toyota and Used Car Supermarket stores. A. I do not know for sure. Q. What was that? Do you need a break or something? A. Well, I'm just trying to recollect in making sure I've got my dates correct, whether it was the 2000 or the 2001. I could be off on which year those are. There were two mini audits that were performed. One was in March and the other one was in the early fall. Those were the two that I had in my work papers. I'm pretty sure those were 2000 and not 2001. MS. HOLMES: Just to clarify, those are the two that we did go over, 2000. Q. (BY MS. RYAN) Those are the mini audits that have been produced by defendants in this action. A mini audit for 2001 has not been produced. I just wanted to clarify with you, Mr. Jensen, as to whether you know if there would be any other location within your office that you might have a 2001 mini audit if it had been

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Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN
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Filed 12/22/2005

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forwarded to you by Larry Miller as you described was the normal course of business. A. I would assume it would be in the audit file if we had it. Q. How long has your company provided services to the Larry Miller organization? A. 25 years. Q. Have you ever been called upon to have your deposition taken in any action involving the Larry Miller organization? When I refer to the "Larry Miller organization," I'm referring to the Larry H. Miller Group of Companies and the Larry H. Miller Denver, and I'll generally refer to that as the Larry Miller organization. So have you had -- been called upon to have your deposition taken in any matter for the Larry Miller organization in the 25 years? A. Yes, I have. Q. On how many occasions -- sorry. We have a little time delay, so let's try to work with that. On how many occasions have you been called upon to have your deposition taken for the Larry Miller organization? A. I believe it's limited to one. Q. What was that instance?
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A. I don't know the ultimate -- the final disposition of the trial. It was found in favor of the dealership initially. It was overturned on appeal and it went back to appeal and I'm not positive of where we are at on it at this time. Q. So this case is still pending based on your understanding? A. I think so. Q. Where is the lawsuit filed? A. In Utah District Court, I believe. Q. Can you please repeat the name of the case for me. A. Kratz versus Heritage Honda. Again, I'll mention that it was a suit brought from prior to Mr. Miller buying the stock of the corporation. That's the only reason Mr. Miller is involved with that particular suit is he bought the stock of the corporation. Q. So you've represented the Larry Miller organization for 25 years? A. Yes. Q. Is the Larry Miller organization an important client of yours? A. Yes, it is. Q. Is it one of your major clients?
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A. That was a contractual dispute between a general manager and a Honda store, Tony Kratz versus Heritage Honda. Q. Why were you brought in to testify based on your understanding? A. Based on having done the audits of the dealership and some accounting issues that went on regarding the computation of bonuses and income. Q. Do you know whether there were allegations of poor performance against that former employee? A. There were. They also occurred prior to Mr. Miller buying that dealership. Q. Were you questioned about the performance of that individual or the dealership itself? A. No, because that was prior to my dealing with that particular dealership. Q. You were a witness for Larry Miller in that action? A. Yes. Q. Did that action go to trial? A. Yes, it did. Q. Did you testify at the trial? A. I did not. Q. Do you have an understanding as to how the trial resolved?

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A. Yes. Q. Is it fair to say that you wouldn't want to say anything that would damage your relationship with the Larry Miller organization? MS. HOLMES: Object to the form of the question. You can answer it. A. I wouldn't say that I would be afraid to say something negative about the company if that's what the truth is. Q. (BY MS. RYAN) Is it fair to say that all of the information that you have pertaining to this case has been provided to you by the Larry Miller organization or its lawyer? A. I don't understand the question. Q. What do you not understand about the question? A. Well -MS. HOLMES: I will object to the form of that question. It's impossible to answer it. Could you just rephrase it for him. MS. RYAN: I would like to know what it is that he doesn't understand about the question. Q. (BY MS. RYAN) I'll repeat the question. Listen to it again and let me know if there is something that you don't understand about it.

5 (Pages 14 to 17) [email protected] HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN
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Is it fair to say that all of the information 1 that you have been provided with regarding this lawsuit 2 has been provided to you by the Larry Miller 3 organization or its lawyer? 4 A. I'll answer it in two components. One, the 5 information of knowing about the lawsuit was provided by 6 the Miller organization and/or its attorneys. The 7 information that I have to talk to you about the case is 8 from work that my company has done when we performed the 9 examinations of the financial statements. 10 Q. The work that your company has done when it's 11 performed the examinations of the financial statements 12 came from information also provided by the defendant, 13 correct? 14 MS. HOLMES: Object to the form of the 15 question. 16 A. We examined the books and records of the 17 dealership. We go into the dealership. They provide us 18 the records for that dealership. Okay? So it's direct 19 from the dealership that we get the information. 20 Q. (BY MS. RYAN) So the information -- the work 21 that you provide then is only as good as the information 22 that you've been provided by the company; is that true? 23 MS. HOLMES: Object to the form of the 24 question. 25
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floor plans and on the loans. Q. How do you receive outside confirmation of accounts receivable? A. It depends on accounts receivable and what type it is. On a lot of the small receivables, we will look for subsequent receipt and look for checks that have been received after the audit date. If we have large accounts receivable, we'll send them to whomever owes the money, ask them to confirm that this balance is outstanding and return it to us. Q. When you said that you receive outside confirmation of inventories, are you referring to your own auditors' physical observations or are there any other types of outside confirmation that you receive? A. On the vehicles, we go out and touch the cars, see the cars, and with the help of the office staff there is a reconciliation done. We try and put our hands on every car or see a deal jacket to where we can see that the car has been sold. Q. So with regard to the inventories, then, there is no real outside confirmation; that's work that's performed directly by your auditors; is that true? A. If that's the way you want to phrase it, yes. Q. Have we discussed all the types of outside confirmation that you would use?
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A. I would say yes and no. We use outside confirmation when we do an examination. We do physical inventories to where we are looking at those inventories with our own personnel. Q. (BY MS. RYAN) What kind of outside confirmation are you referring to? A. Do you understand how an audit is performed? Q. I'm asking the questions here, sir. I appreciate your attempts here, but I'm asking you what kinds of outside confirmation you are referring to. A. We confirm bank -- we do bank confirmations. We do confirmations of accounts receivable. We confirm inventories by physical observation. We note payables. We send confirmations to the banks. We get third-party verification on everything that's reasonable to get. Q. So when you refer to "outside confirmation," you are talking about bank confirmations. When you say "bank confirmations," you are talking about receiving documents directly from the bank? A. That's correct. Q. Anything else directly from the bank? A. Yes. Q. What? A. If there is an outstanding loan or if there is a floor plan, we get confirmation of the balances on the

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A. We also send letters to attorneys for -attorneys letters to know of pending or threatened litigation. We ask for a representation letter from the company also that they have told us everything that we needed to know, and that has a detailed -- fairly detailed list. Q. Did you send a representation letter to the defendant for the information needed for the 2001 audit? A. Yes, we did. Q. Would that representation letter ask specifically for any and all mini audits that had been prepared? A. Not at all. Q. Is it more of a general document asking them to just confirm that they have produced everything? A. Excuse me. Did you say representation letter -Q. Yes. A. -- or attorney letter? Q. Representation letter. I understand from your testimony that a representation letter is sent directly to your client, correct? A. Correct. And that has not -- I don't believe that specifically mentions mini audits. Q. Based on your understanding, would it -- the

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Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN
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representation letter require production of the mini audits even if it didn't refer to them specifically? A. No. Q. Would you consider it to be inappropriate if you did not receive a mini audit that had, in fact, been prepared for a particular year? A. They do not do every store every year, and some stores will have a mini audit more than once in a year as this store had in 2000. Q. When is the last time that you personally prepared an audit for the defendant, Larry Miller organization? MS. HOLMES: Well, the defendant isn't the Larry Miller organization, and just so we keep the record clear, I am objecting to the defendant being referred to as the "Larry Miller Group." The employer is Larry Miller -- Larry H. Miller Toyota-Denver. And so just to keep from interrupting, I'll just have a running objection to the defendant being referred to as any other entity than that. Q. (BY MS. RYAN) The name of the defendant entity in this lawsuit -- there are two: The Larry H. Miller Group of Companies and Larry H. Miller Toyota Denver. Have you ever personally prepared an audit for the Larry H. Miller Toyota Denver organization or the
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company? A. Greater than five years, and I don't remember the exact period of time he has been with us. Q. What are his qualifications? A. He has a degree in accounting. He has passed the CPA exam. He has worked on car dealerships doing audits for car dealerships the entire time he has worked for us. Q. Has he worked on the Larry Miller -- strike that. Has he worked doing audits for Larry H. Miller Toyota Denver the entire time he has worked for you? A. No, because Larry didn't own that store the entire time he has worked for us. Q. The entire time that Larry Miller owned that store, did Ted Jenkins work on that account? A. I believe so, yes. Q. Do you know whether there are other individuals who also worked on that account from 2000 -A. Yes, there are other individuals that worked on it. Q. Who are those? A. I could not tell you right now who they were. Q. What types of positions would those people hold that worked on the account?
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Larry H. Miller Group of Companies? A. Our company produces an annual audit that is a combined audit of Larry Miller's ownership in various companies, and they are all combined into one audit report. Q. Have you personally prepared any type of audit report for the Larry H. Miller Group of Companies or Larry H. Miller Toyota Denver? A. It is a group project. It's not an individual project. I have not personally been in Denver-Toyota's store while Larry owned that store. Q. Do you know who was personally in the Denver-Toyota store while Larry Miller owned that store from 2000 forward? A. Our primary person or our lead person on the job was Ted Jenkins. Q. Is he still employed with your company? A. He is. Q. Is he based there in Utah? A. Yes, he is. Q. Aside from Ted -- strike that. What is Ted Jenkins' position with your company? A. He is a senior auditor in our firm. Q. How long has he been employed with your

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A. Audit positions. Q. Would other senior auditors work on that account? A. Possibly. I can't tell you for sure who worked on it. I don't know for sure. Q. Does Ted Jenkins supervise other auditors for that account? A. Yes. Q. How many other auditors does Ted Jenkins supervise for the Larry Miller -- Larry H. Miller Toyota Denver and Larry H. Miller Group of Companies account? A. As I told you, I don't remember who-all was on the job, so I can't tell you for sure. Q. I'm not asking you for their names. A. I don't know the number either. I did not review that. Q. Do you know whether Mr. Jenkins supervises more than ten auditors with regard to this account? A. It's less than that. It would probably be two, maybe three. Q. Other than the meetings that we discussed that you've had with Judy Holmes regarding this case, you said that you also had talked about this case with Tony Schnurr and possibly other individuals at Larry Miller; is that true?

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Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

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A. Yes. Q. Who all have you spoken with at the Larry Miller -- Larry H. Miller Group of Companies or Larry H. Miller Toyota Denver regarding this lawsuit? A. I believe Tony and Clark Whitworth are the only two that I have spoken to. Q. On how many occasions have you spoken with Tony Schnurr about this lawsuit? A. Once or twice. Q. When were those discussions? And I'm not asking you for an exact date unless you know for sure. A. I don't know the exact date. One was shortly after the suit had been filed. He just mentioned that it had been filed. And one other time I asked him how it was going. That was about the extent of our conversations. I have not discussed anything in detail with him. Q. What did Tony Schnurr tell you during the first discussion when -- that occurred shortly after the lawsuit was filed? A. That Roberta had filed a lawsuit for wrongful termination. Q. Anything else? A. That's about it. Q. What did you say in response?
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Q. Have you ever met Roberta Pulse? A. I have. Q. On how many occasions? A. Many. Q. In what context have you met Roberta Pulse? A. I've audited dealerships that she has worked for in the past; been there personally in doing the audits. At office manager meetings from time to time since then. Q. Did you have an opinion of Roberta Pulse at that time? MS. HOLMES: At what time? MS. RYAN: You know what, Judy? You can make your objection, but you can't coach the witness. MS. HOLMES: I'm not coaching the witness. That's just an improper question. MS. RYAN: That's not a response. MS. HOLMES: Object to the form of the question. I'm objecting to the form of the question. Q. (BY MS. RYAN) At the time that Tony Schnurr told you that Roberta Pulse had filed a lawsuit, did you have an opinion of her? A. Yes, I did. Q. What was your opinion? A. That I was glad to see that they were trying
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A. It didn't surprise me. Q. Why is that? A. Just my knowledge of Roberta and being not the most happy person. If she got let go, I'm sure she would be upset. Q. Do you think it's fair to say that anyone would be upset if they got let go? MS. HOLMES: Object to the form of the question. A. I don't think I need to answer that. People -- I've fired people before and they have said, Thank you; I was in over my head. Q. (BY MS. RYAN) Just to be clear, you do need to answer my questions today. Okay? A. Okay. Q. What is your knowledge of Roberta? What was your knowledge of Roberta at the time that Tony Schnurr had told you that a lawsuit had been filed? A. My knowledge has been that we have had a hard time auditing the dealership. It's taken more time to audit that dealership than virtually any other dealership that is in the Miller Group; that the records were not very clean; that we had to work to get the information more so than we would like; that things weren't done on a timely basis.

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to get somebody else in the dealership so it would be easier for us to get our audit done. Q. On what did you base that opinion? A. On the condition of the records that we have had for the past period of time that she had been in the store. The extra time it took us to do the examination. Q. When you talk about the condition of the records for the past period of time that she was in the store, are you saying that you thought that there was a problem from the time that she started at the store? A. I'm saying from the time we did our first audit in December of 2000, I believe is the first year we did it, we had problems the first time we went in and also had problems the next time we went in. Q. When you say the next time you went in, is that 2001? A. 2001. Q. Did you blame Roberta Pulse for all the problems that you say you saw? A. No. I didn't say I blamed her entirely, but the person that we worked with and the person that we are dealing with when we do the audits is primarily the person in charge of the books and records. That's what we are there to audit. It was her responsibility to have those ready for us.

8 (Pages 26 to 29) [email protected] HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN
Page 30

Filed 12/22/2005

Page 9 of 18
9/2/2004
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Q. You said you didn't blame her entirely. Who else did you blame? A. Well, if the store is not operating properly in the accounting office, I would put some blame then on the general manager. Q. Do you know if there was ever a time that the books and papers and financial reports within the Larry Miller Toyota Denver store was not a problem for you? MS. HOLMES: Object to the form of the question. A. I believe it took us extra time every year that we did it. Q. (BY MS. RYAN) Starting when? A. The very first year they acquired it. The first audit we did was in December of 2000. Q. So you had problems with the documentation and financial papers from the time that Larry Miller acquired the organization, true? A. Pretty much. Q. Do you know when Roberta Pulse was hired? A. I do not know the exact dates. Q. Do you have an understanding -- if you don't know the exact date, do you have an understanding of when you think she might have been hired? A. I believe it was in the first part of 2000,
Page 31

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may have been in fun, but I don't take it in fun when somebody says that to me. Q. Did you ever tell her you had a problem with what you say she said? A. Probably not. Q. Well, I would like you -- if you are going to make these kinds of allegations against Roberta, you need to go on record with exactly what you say she said. A. She said "fuck you." Q. On how many occasions do you say that she said "fuck you"? A. I didn't keep a ticker on it. Q. Did you ever talk with anybody else at the Larry Miller organization about your allegation that she said that to you? A. I have talked with people in the past about it, yes. Q. Who? A. Oh, Darrell Wells, Richard Dickert, Tom Fitchett, who was an operations manager years ago. That's been a while back. That's been quite a while back that that happened, but I haven't forgotten it. Q. You haven't forgotten it? A. That's correct. Q. Let's talk about the first time she said "fuck
Page 33

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maybe end of the first quarter. Q. What makes you think that? A. Just recollection from our conversation that we had yesterday. Q. Earlier you testified that you weren't surprised that Roberta had filed a lawsuit. What did you mean by that? A. I believe, as I said, that being let go would be a problem for her. You know, that it shouldn't have been her fault that the books and records were not what they should be; that Roberta can have a fairly abrasive -- a little bit of an abrasive personality when things don't go her way. Q. What is that statement based on? A. It's based on my having been with Roberta in other audits and in prior engagements. Q. Do you have any recollection of any specific instance in which you claim that Roberta's personality was abrasive? A. I've had her tell me to -- I'm not going to use the terms that she used -- but to get lost in not so many good -- in so many words. Q. On how many occasions do you say that Roberta told you to get lost in not so many words? A. Enough of them that I remember it. Some of it

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you." What was the context of that conversation? A. Asking for some documents while we were doing an examination. Q. Was anyone else present? A. I'm sure there were. Q. Who? A. I don't remember all of the -- I don't remember the names. Q. You don't remember one witness to that statement you said she made? A. There were several office personnel in the room. I don't remember their names, no. Q. So you are testifying that Roberta Pulse said "fuck you" in front of several other office people to you? A. Yes. Q. Where was that conversation the first time that you say she said that to you? A. It was in the office of the dealership she was working for at that time, probably Boulder-Hyundai. I can't remember if it's Boulder-Hyundai or Boulder-Toyota. Q. Are there any witnesses that you know of to any time that you say that Roberta said "fuck you" to you?

9 (Pages 30 to 33) [email protected] HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN
Page 34

Filed 12/22/2005

Page 10 of 18
9/2/2004
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A. I'm trying to remember who I might have been working with at that time. We had a fair amount of conversation about it at that time amongst our staff. That's been at least 15 years ago. Q. Did you have difficulties with the audit at the other store, Boulder-Toyota? A. No; I did not know. Q. Ever? A. That's been a pretty clean store. MS. RYAN: I would like to take a ten-minute break and we'll come back and resume. MS. HOLMES: Before we take a break, who else is present in the room? Is Roberta there? MS. RYAN: Yes. MS. HOLMES: Who else is present during the deposition just so we have it for the record. MS. RYAN: The court reporter. MS. HOLMES: Anyone else? MS. RYAN: No. Anyone else present in your room? MS. HOLMES: Nope. (Recess taken.) Q. (BY MS. RYAN) I'm going to go ahead and have the documents that you have produced today marked as an exhibit. We'll mark them all as one exhibit and then
Page 35

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Q. Who prepared these three pages? A. The first one was prepared by Ted Jenkins. It looks like Ted prepared all three of them. Q. Is this document typically provided to your client? A. No, not at all. It's an internal audit document. Q. So you don't think that these documents were provided to your client at any time? And by "your client," I mean the Larry H. Miller Group of Companies and Larry Miller Toyota Denver. A. The planning memo would not have been provided to them at all. The "Unusual Items Noted" would have been provided to Brent Barrett and Clark Whitworth of the management company. Q. When are the Unusual Items Noted presented to Brent Barrett and Clark Whitworth? At what stage in the process? A. Generally towards the conclusion of the audit. Maybe totally after the audit is completed in some cases. Q. On this first page, at the very top there are some lines. It says -- can you read the handwritten lines on the top of this page? A. Yes.
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we'll discuss them. A. Okay. (Deposition Exhibit 1 was marked.) Q. Sir, if you can please take a look at the first page. Let's make sure we are all on the same page here. I have a document that says "Denver Toyota Planning Memo 12/31/01." It is about one paragraph. A. Correct. Q. And it starts with that paragraph "During the course of the year 2001." Do you see that document? A. Yes, I do. Q. Is the next page that follows marked with a note at the top that says "3/19/02"? A. We can put it in that order. That's fine. Q. And then the last one would have a handwritten note at the top saying "Items Noted"; is that true? A. Correct. Q. What are these documents? A. These are documents taken from our audit work papers that we write up at the time we're doing the audit. The planning memo is a memo that was put in there to go through and have our understanding of what we are going to do when we go in and do the examination. We talk of different things that our staff may need to be aware of as they start the examination.

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Q. Can you please read them for me. A. "DT Planning Memo 12/31/01. 2/15/02. TJ" is Ted's initials. He has prepared this on February 15 of '02. The "DT" is for Denver-Toyota. That's how we head up our work papers. Q. I also see a scribble mark or an initial next to "Reviewed By." Do you know who that is? A. There were actually two of them on that. One is an initial by Ted Jenkins and another is by Gary Keddington. Q. Gary Kennington? A. Yes. K-e-d-d-i-n-g-t-o-n. Q. Thank you. What is Gary's position? A. He is our audit partner. Q. When you say "audit partner," is that a level above Ted Jenkins? A. Yes. Q. Did Ted Jenkins report to him? A. That's correct. Q. Is this the usual format for a planning memo? A. Yes. Q. Is this copied over something? At the very bottom I can see some lines that look like some kind of a ledger. A. We file our work papers in legal binders.

10 (Pages 34 to 37) [email protected] HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN
Page 38

Filed 12/22/2005

Page 11 of 18
9/2/2004
Page 40

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This paper that's been printed out from a computer has been taped to a legal page and put in the work papers. The references at the bottom are just indexing references for our file. Q. What do they say? A. It has "GF-," I think "17/1," which means that in our index for our audit work papers we will have that on our index planning memo and that will be filed under a general file -17 and this work paper has only one work paper. If there were multiples, it would say 1 of 3 or 1 of 4, that type of thing. Q. So this document, then, is actually separate from the other two documents that you have produced? A. Correct. Q. We'll mark them as separate exhibits so that we can keep the record clear. On these last two pages, are they part of one document or are they also separate documents? A. The second page, which is the one that has the 3/19/02, is a single-page document. It appears to me that the one from 12/31/2000, there may be another page in our work paper file. It shows GF 2/2. I'm not sure what 1 of 1 was. I didn't really pay attention to that when I was pulling these out. (Deposition Exhibit 2 was marked.)
Page 39

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A. I do not. Q. Do you know whether specifically he talked with any of the individuals that you listed before preparing Exhibit 1? A. Firsthand knowledge, no. Q. We have marked as Exhibit 2 the document that is noted as GF-2 -- strike that. We have marked as Exhibit 2 the document that lists -- has a heading of "Cash" under the first line. Do you see that? A. Yes. It's the more complete or the more fully-covering-the-page document. Q. Right. A. It also has the date 3/19/02 at the top. Q. Right. On the bottom of this page it says -does it say GF-2/1? A. Correct. Q. Then at the bottom of the third page, does it also say GF-2/1? A. It's either a 1 or a 2 on the slash. I'm not positive. But, yes, it's the same reference because we use the same index every year. One is for one year and one is for another year. Q. So Exhibit 1 that we looked at is a planning memo. Exhibit 2 is listed as "Unusual Items Noted In
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Q. Do you recognize the handwriting on Exhibit 1, which is the top page that we talked about that has the initials TJ? A. Yes, I do. Q. How many different people wrote notes on this? A. Excuse me? One more time. Q. How many different people wrote notes on this? A. It looks like two. Q. You recognize the writing of Ted Jenkins? A. Yes, and Gary Keddington. Q. Whose writing is at the bottom of the page? A. Ted's. Q. Did you participate in preparing this exhibit? A. I did not. Q. So you don't have any personal knowledge relating to the preparation of this particular exhibit? A. No. Q. Do you know where Ted Jenkins got the information to put on Exhibit 1? A. It will be through talking with the store in preparation for doing the audit. It will be talking to Richard Dickert, Brent Barrett, Clark Whitworth in preparation for doing the audit. Q. Do you know specifically whether Ted Jenkins talked with Richard Dickert?

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Audit"? A. Correct. Q. This is a different type of document? A. This is written up after we have been in and done the audit of the items that we have noted in doing the audit. Q. Do you recognize the handwriting on Exhibit 2? A. Yes. Q. Whose handwriting is it? A. Ted Jenkins. Q. Your recognition of his handwriting is based on other documents that you've seen with his handwriting? A. Yes. Q. Have you seen several documents with Ted Jenkins' handwriting on it so that you would recognize his writing when you see it? A. Yes. (At this time Kellie Ryan entered the room.) Q. Do you know whether there is anyone else's handwriting on Exhibit 2? A. It doesn't appear that there is. Q. Did you participate in the preparation of Exhibit 2 in any way? A. I did not.

11 (Pages 38 to 41) [email protected] HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN
Page 42

Filed 12/22/2005

Page 12 of 18
9/2/2004
Page 44

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Q. Do you have any personal knowledge as to how Exhibit 2 was prepared? A. Yes. Q. What is your knowledge? A. My knowledge is that when Ted was doing the audit, as he goes through item by item to do the audit, when they come upon a problem, they will write it down in the work papers. They will put it on the items for comment that we will then present to the management company. We discuss those with the -- with Gary and Ted and myself prior to giving them to the management company, and then we'll have a meeting to where we sit down with the management company. We generally do that about every two weeks during the audit time to give them any findings that we have. MS. RYAN: I'll note for the record that my legal assistant, Kellie Ryan, just entered the deposition room and that present for the deposition at this point are Roberta Pulse, Kellie Ryan, our court reporter, and myself. Q. (BY MS. RYAN) What you've just testified to is your knowledge of the general process of preparing a document like Exhibit 2, correct? A. Yes. Q. You, in fact, did not prepare Exhibit 2?
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A. With the actual piece of paper, yes. With the problems, no. Q. When you met with Gary Keddington -- strike that. Who did you say was in the meeting regarding Exhibit 2? A. Gary Keddington, Ted Jenkins. Q. When you were in the meeting with Gary Keddington and Ted Jenkins sometime after March 19, 2002, how long was that meeting? A. I don't remember. Q. Would those kinds of meeting typically be half day? Half an hour? A. Half hour to an hour, typically. Q. What did you discuss during that meeting with regard to Exhibit 2? A. We would have discussed the items that are on here, our concern in relationship to doing the audit with them. We probably spent more time on cash than about anything because cash is one of the primary things that we have to have tied down. Q. What else did you discuss during that meeting? A. We would have discussed the accounts receivable, the vehicle inventory, the flooring -vehicle flooring. We would have discussed, you know,
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A. I did not. Q. You do not know who Ted Jenkins spoke with specifically about Exhibit 2, correct? A. I know he spoke with me and he spoke with Gary Keddington. Q. Were you in a meeting with Ted Jenkins and Gary Keddington in which Ted Jenkins spoke with you about Exhibit 2? A. Yes. Q. How many meetings were there about Exhibit 2? A. Probably one, possibly two or three. Q. When was that meeting? A. That meeting would have been sometime after March 19, 2002. Q. When Ted Jenkins spoke with you about Exhibit 2, it had already been prepared, true? A. The first draft of it had been prepared, yes. Q. So there is more than one draft of this? A. There possibly could be, but it's grammatical changes. Q. Do you keep as a practice the old drafts? A. We do not. Q. So the first time that you were involved of Exhibit 2 was after the draft had been prepared, correct?

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what efforts we had to take to get the job done and did we do a good enough job that we feel like we can opine on the financial statements. Q. You personally did not perform any of the background information that was used to prepare Exhibit 2? A. I personally did not. Q. You were relying on what Ted Jenkins was telling you? A. Yes. Q. You don't know specifically firsthand what process Ted Jenkins used specifically with regard to Exhibit 2, do you? A. I spent time with Ted looking at the bank reconciliations and our trying to get cash under control because it was totally out of control. MS. RYAN: Move to strike everything after "reconciliation" as nonresponsive to the question. (Deposition Exhibit 3 was marked.) Q. (BY MS. RYAN) Let's look at Exhibit 3, which is the document that says "UI Items Noted 12/31/00" at the top. Do you see that in handwriting? A. It should be "DT" for Denver-Toyota. The top's been clipped off. Q. Whose handwriting is on this document?

12 (Pages 42 to 45) [email protected] HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN
Page 46

Filed 12/22/2005

Page 13 of 18
9/2/2004
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A. Ted Jenkins. Q. When was this document prepared? A. It's not dated, so I can't tell you specifically. Q. You didn't prepare Exhibit 3? A. Ted prepared Exhibit 3. Q. Like the other two exhibits, you did not personally engage in the activities that were required to put Exhibit 3 together, correct? A. I did not. Q. You were relying on what Ted Jenkins told you with regard to Exhibit 3? A. Yes. Q. Were all three of these documents or exhibits generated on your computer at work? A. They were all generated on a computer, yes, at probably Ted's laptop. Q. None of these documents are dated? A. The first two documents are dated. Q. What is the date of Exhibit 1? A. 2/15/02. Q. What does that date mean to you? A. Well, that means -- sorry for interrupting. That means that was the date that Ted filed that. He may have prepared it on an earlier basis, but on the
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A. Our dating is generally done up in the right-hand corner of the papers. The third document does not have such a date and that is unusual. Q. At the last sentence of Exhibit 1, it says, "As J&K audits each area, we will write memos as we see fit to describe any unusual or unexpected circumstances that we encounter." Is that a standard boilerplate type of sentence or is this something that is unique to this particular exhibit? A. That would be pretty standard boilerplate. Q. Do you know whether there were other memos written with regard to Exhibit 1 or as a follow-up to Exhibit 1? A. As you look at Exhibit 2, you can see that that is our unusual items noted as we referred to in that line. Q. Do you know whether there were any additional memos aside from Exhibit 2? A. I don't recollect. Q. Where would those be located if there were any? A. If there were any, they would be in our audit work papers. Q. Looking at Exhibit 3, do you see on the top line where "J&K's audit procedures performed at Denver
Page 49

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bottom of it here it says, "At present, on 2/14/02." There is no general manager -- or no GM, so I'm guessing he prepared it on 2/14/02. Q. So at the top it says "Denver Toyota Planning Memo 12/31/01," but it looks like to you like it was prepared at a later date, sometime in February of '02? A. The 12/31/01 is the date that the financial statements are being audited as of. We go in after the year end to do most of our work. We do some work before the year end, but we are testing the records as of December 31. Every document would be dated with that date. Then we put the date that they actually do the work or file the work papers for a particular section they are working on on the date they are doing the work. Q. How long does the audit process typically take? A. We will start test work for the Miller Group in October and we'll issue our report sometime towards the 1st of April. Q. Is it a normal practice for your auditors not to date the documents that they prepare for you? A. No. It's a normal practice to date them. Q. So this is unusual, the fact that these documents are not dated?

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Toyota from 2/15" and then there is a strike-through? A. Yes. Q. Do you know what that's about? A. What that would be about is they put the wrong year when they've typed it and corrected it with a pen as opposed to going back and reprinting it. Q. Do you know when the correction was made? A. No, I don't. Q. Do you know who made the correction? A. I do not. Q. Looking at Exhibit 2, underneath the subject heading "Cash," do you see the handwritten note next to that? A. That's correct. Q. What is that? A. That's a reference to a work paper that would be the bank reconciliation work paper. Q. Looking at Exhibit 3, then, are the handwritten notes next to Exhibit 3 also references to bank reconciliation numbers? A. No. The AC-1 is going to be a reference to inventory as it is on Exhibit 2. When you look down under "Vehicle Inventory," it uses the "AC" referencing. Q. If bank reconciliations had not been performed during a particular year, would it be reflected on one

13 (Pages 46 to 49) [email protected] HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN
Page 50

Filed 12/22/2005

Page 14 of 18
9/2/2004
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of these exhibits that you have forwarded to us? A. I believe if you look at Exhibit 2, under "Cash" we note that the bank had not been reconciled properly since January 31, '01. Q. Do you know what that statement is based on? A. It's based on when we go in and do the audit, we look to see -- we test the bank reconciliation to see if it's been done right and to see if the bank has been reconciled throughout the year. That's the number one control in the dealership. Q. So for the year of '01, your company, your auditor, used the bank reconciliations? A. We made adjustments for an estimate to get the bank reconciliation to where we felt like it was as close as we could get it, and we made an adjustment with two entries of over $233,000. Q. You personally don't know whether the cash had been reconciled in 2001? MS. HOLMES: Object to the form of the question. A. Would you restate that for me? Q. (BY MS. RYAN) You personally don't know whether the bank reconciliations had been performed in 2001? MS. HOLMES: Same objection.
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says, "We noted that new car stock numbers," and it gives a list of numbers "booked in 12/00 had 2001 invoice dates. J&K made a re-class entry." Can you explain what that means? A. Yes. Vehicles -- this is for the year ended December 31, 2000. The invoices that we were looking at when we were going through the new car inventory said that those vehicles had been sold to the dealership, purchased by the dealership in 2001. It shouldn't have been booked until 2001 because they didn't own the car at that point in time. Q. What does it mean, "J&K made a re-class entry"? A. We made an entry of where we would remove the cars from vehicle inventory and we would also remove the flooring payable, which is a liability account, to where we take those vehicles off of the financial statements. Q. Do you contend that this was an error? A. Yes. Q. Rather than being booked in 12/2000, what is your position with what should have been done with those? A. If they don't own the car in 2000, you shouldn't put them on the books. It's very simple. You know, you don't put stuff on your accounting records
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A. I was not at the dealership to see the bank reconciliations. I spoke with my auditors and we discussed the bank reconciliations and the problem there was with the bank reconciliations to where I had knowledge that there was a problem. Did I sit down and work on them personally? No. Q. (BY MS. RYAN) What did your auditors tell you about the bank reconciliations for 2001? A. That they were a mess; that they weren't reconciled properly; that it wasn't in balance. You know, you have 120 reconciling items on a bank reconciliation. That's way in excess of normal. Q. Who told you they were a mess? A. Ted Jenkins. Q. Anyone else? A. And other staff that were there. Q. Who else was there? A. I told you before, I don't remember exactly who it was. It was a big area of concern as we did this audit. MS. RYAN: Move to strike everything after "who it was" as nonresponsive to the question. Q. (BY MS. RYAN) Let's look at Exhibit 3. A. Okay. Q. Under "Vehicle Inventory," you see that it

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that isn't yours. Q. Isn't it true that at year end it's very common for the invoices to come after 12 of 2000 when you are doing year-end bookings? A. There are invoices coming in all the time. You have to look at the date on them to see if you should book it in the 2000 year or the 2001 year. Q. Has this kind of entry ever been made in any other audits that you have seen? A. Yes. Q. Is this a completely unique situation here with the first entry that we are talking about? A. Completely unique? No. Q. Let's look at the next item. J&K made another re-class entry, correct? A. Correct. Q. This is regarding dealer trades. This is similar -- this is a similar issue to the first one that we just talked about, true? A. It's a matter of when the accounting records have been posted. Dealer trades had been made but the paperwork had not been processed at year end, so you end up with a credit balance. They are trading from one car to another car with another dealership. Again, it's a misstatement of inventory balances.

14 (Pages 50 to 53) [email protected] HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN
Page 54

Filed 12/22/2005

Page 15 of 18
9/2/2004
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Q. If the paperwork for those particular transactions had not been provided or submitted to the office at that time, then it's possible that this is something that is not attributable to an office error, correct? MS. HOLMES: Object to the form of the question. A. Office managers that reconcile their inventory would get the paperwork and see that it had been balanced, that we don't have credits in the inventory. Q. (BY MS. RYAN) That's a little different from the question I'm asking you. I'm asking -A. No, it's not. Q. Yeah, it was. I'm asking you if they had not received the paperwork, if it had not been submitted to them -A. Then they should have found it. Q. Let's talk about No. 3. "New and used inventory reconciling items totaled 122, which is excessive. Compared to the 212 new and used reconciling items in 1999, year 2000 shows improvement." Is that accurate? A. Yeah. Q. So an unusual item that is marked isn't necessarily by nature a negative problem, true?
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Q. So, again, that reconfirms that the items that show as unusual items noted in audit are not all attributable either to the controller or office manager, right? A. That is correct. Q. I'm curious about the last -- the second-to-the-last sentence. "We also noted that the store paid off stock numbers 1-1004 and 1-1133 more than once, but that the reconciliation process detected these mistakes." What reconciliation process is being referred to there? A. The reconciliation of flooring payable and the bank reconciliation. Q. So there was a bank reconciliation during the year 2000 that detected these mistakes? A. I'm not saying that it was specifically the bank reconciliation that detected it. It may have been the flooring reconciliation that detected it. Q. Is this document inaccurate? A. No. Q. Doesn't it say, "but the reconciliation process detected these mistakes"? A. Does it say "cash"? It says a "reconciliation process." It does not refer to the bank reconciliation. All accounts are reconciled.
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MS. HOLMES: Object to the form of the question. A. No. Q. (BY MS. RYAN) That's not true? A. It is not true. Q. Is there a negative statement here? A. It is. Q. On what do you base that opinion? A. 122 items is still excessive. Q. Let's look at the next one. Another note of improvement, true? A. Yeah. That one would be a true statement. It's still a negative and it reflects more on how the used car manager is doing on buying the cars and how they are on selling the cars. Q. So everything that's listed in these unusual items are not necessarily attributable to the office manager or controller? MS. HOLMES: Object to the form of the question. A. That would be correct. Q. (BY MS. RYAN) Let's look at "Vehicle Flooring." According to Exhibit 3, your auditors note that Comerica made a lot of posting errors, true? A. That's correct.

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Q. So this document, then, is unclear as to what reconciliation process detected it? MS. HOLMES: Object to the form of the question. A. If that's the way you feel, yes. To me -Q. (BY MS. RYAN) Do you know one way or the other? MS. HOLMES: Let him finish. MS. RYAN: I'm trying to finish my question. Q. (BY MS. RYAN) Do you know one way or the other which reconciliation process detected these mistakes? You are the expert, right? A. This would be in Vehicle Flooring. Q. How do you know that? A. Because it's in the Vehicle Flooring category. Q. Where is the cash category here on the unusual items noted in the audit for Exhibit 3? A. It doesn't appear there is any. Q. So that means there were no issues with the cash category, correct? A. It could be that was the case in 2000. Q. Do you know anything about a computer conversion that occurred at Larry Miller Denver-Toyota in the Used Car Supermarket? A. I, in talking yesterday, was made aware that

15 (Pages 54 to 57) [email protected] HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Case 1:03-cv-02073-WDM-KLM
Pulse v. The Larry H. Miller Group

Document 206
JEFFREY B. JENSEN
Page 58

Filed 12/22/2005

Page 16 of 18
9/2/2004
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there was a conversion. That was not something that was brought to my attention as we were doing the audit. Q. Do you think it would be important to know whether there was a computer conversion converting the process from ADP -- from Reynolds and Reynolds to ADP that might affect the accounting? A. Yes, and I'm sure that our staff that was doing the fieldwork and knew the audit was going on took that into consideration. Q. What makes you so sure? A. Because they have to audit the whole year. You don't just audit the year end. You are looking for the records throughout the year. They would have had to work in both sets of books. Q. So you personally, then, can't testify as to anything about the computer conversion? A. No. Q. Does your company do all of Larry Miller -the Larry H. Miller Group of Companies and Larry Miller Toyota Denver's audits? A. No. Q. Do you know what other companies do audits for Larry H. Miller Group of Companies and Larry Miller Toyota Denver? A. Yes, I do.
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Q. You say "not on an audit." What are you referring to? A. I've had many clients have computer failures to where they have had to go back and totally redo their accounting for a year. We just have not done audits on them. Q. You didn't consider those clients to be engaging in any kind of mismanagement, did you? A. Yes. Q. Why? A. Failure to back up records, failure to pay attention to what they were doing to where you had to redo it all. Q. Have you ever had any clients that you know of that went through a computer conversion that messed up the documents? A. No. MS. HOLMES: Can we take about a five-minute break? MS. RYAN: Sure. (Recess taken.) Q. (BY MS. RYAN) Mr. Jensen, I would like to refer you, again, to the three exhibits that you submitted today. There are five items noted on Exhibit 3 for fiscal year 2000, correct?
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Q. Who is that? A. KPMG audits the Utah Jazz and Larry H. Miller Arena Corp. Q. Let me simplify it a little bit. Let's limit the question, then, to whether you know of any other companies that did third-party audits for Larry Miller Denver-Toyota and the Larry Miller Used Car Supermarket in Denver? A. We were the only ones. Q. How many audits does your company provide for the Larry H. Miller Group of Companies and Larry H. Miller Denver-Toyota in a typical year? A. You do one audit per year. We have not issued a separate report on Denver-Toyota. It's all in the combined audit report. Q. Who is your primary contact at the Larry H. Miller Group of Companies? A. Clark Whitworth, CFO, and Larry Miller. Q. Have you discussed this lawsuit with Larry Miller? A. I have not. Q. Have you ever had a client that went through a computer failure and was unable to reconcile or retrieve information essential to your