Free Response to Motion - District Court of Colorado - Colorado

Case 1:03-cv-01291-MSK-CBS

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Filed 12/11/2005

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Case 1:03-cv-01291-MSK-CBS

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Case No. 03-cv-1291-MSK-CBS FRIEDA E. ENSSLE, BURKE E. ENSSLE and HEIDI ENSSLE WILSON Plaintiff(s), v. ILLINOIS TOOL WORKS, INC.; SAMES CORPORATION; BINKS RESEARCH & DEVELOPMENT CORPORATION; and JOHN DOE/JANE DOE (any person receiving value for transfer of Binks R&D assets). Defendant(s). _____________________________________________________________________________ DECLARATION OF DANIEL J. BURKHARDT _____________________________________________________________________________ I, Daniel J. Burkhardt, pursuant to 28 U.S.C. §1746, declare as follows: 1. Beginning in mid-year 2001, I began working on behalf of the Enssle Family to assist them in the planning and preparation for sale of their property at 1791 Range Street. 2. In August 2001, as Burke Enssle was trying to hire a broker to help with the sale of the property, it became clear that the property had environmental issues due to tenant activities which had not been cleaned up as promised. 3. Soon after, Burke Enssle and I met with Mark Van Ark, broker with Caldwell Banker. Burke wanted to hire Mr. Van Ark, who also had ongoing relationship representing ITW with possible scenarios involving the property and possible relocation of ITW. Mr. Van Ark was

quite familiar with the Property. It became clear in the meeting as we discussed environmental disclosures, this contamination would inhibit the sale of the property, unless discounted and sold

Case 1:03-cv-01291-MSK-CBS

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as a "brownfield" site. Mr. Van Ark recommended several environmental attorneys we should consider contacting. 4. In early 2002, we discovered more about the extent of the toxic contamination in the soils and ground water. I began working as agent for the Plaintiffs with power of attorney in anticipation of litigation against those who caused the environmental contamination. I began working closely with the Enssles' attorneys, Peter Rogers and Asimakis Iatridis, on behalf of the Plaintiffs in order to help them to obtain the legal advice and counsel they needed. 5. In the late summer and fall of 2003, the attorneys recommended that Plaintiffs obtain the services of an expert real estate appraiser with expertise in environmental cases. Mr. Iatridis recommended two individuals he had recently worked with. One individual was Wayne L. Hunsperger of Hunsperger & Weston, Ltd. 6. Mr. Hunsperger, Mr. Rogers, Mr. Iatridis and I met together at Mr. Iatridis' office in Denver for about an hour and a half on October 30, 2003. 7. At this first meeting we talked about each other's background experiences, history of the property, the context of the case, Mr. Hunsperger's qualifications as an appraiser and as a testifying expert. We discussed issues of environmental damages to the Enssles, diminution of value, stigma, specifics of the contamination, status of the site investigation, status with the CDPHE, adjacent property developments and general background descriptions of the defendants. 8. We gave Mr. Hunsperger copies of the Bristol Realty Counselors recent appraisal and a market analysis by Mark Van Ark. I do not recall if we gave Mr. Hunsperger copies to keep, or just our copies for him to review.

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9. We also reviewed with him maps of the area and the site, as well as the booklet we prepared to obtain bank financing. We discussed the challenges we had obtaining financing to fund the site investigation and clean up with the contaminated property as security. 10. In essence, we had a full disclosure meeting with Mr. Hunsperger, with the full expectation of hiring his ongoing services, and with the full expectation that the meeting would be held confidential. We discussed his hourly fee rates and the estimated total costs of his services. 11. We discussed many issues of our specific damages, including amounts we had spent to date and our projected costs. We spoke about damage models, diminution of property value, and different approaches we could take to explain and define the damages incurred by the Ensssles. We discussed difficulties of proof and evidentiary matters, and other strategic legal matters. We discussed issues of interest, time value of money, expenses, lost opportunity costs, and difficulty of explaining complex environmental and real estate damages at trial . 12. Mr. Hunsperger spoke of his experience in doing similar projects, historical appraisals, and sales research, the three approaches of commercial property appraisals, and specific implications that may be important to our case. 13. Mr. Hunsperger spoke of his familiarity with Burton Lee of Bristol, and Realty Counselors. He spoke that it may help to team up with Burton Lee and maybe an economist. 14. Mr. Hunsperger spoke with us about the recent drop in general real estate prices, especially lease rates and the impact the toxic chemicals on the property had on liquidity and how to best define and describe these damages to the jury.

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15.

We discussed in detail the position of the property in the middle of the Ball

Aerospace campus. 16. We discussed the difficulty with current true comparable property sales, as well as 1031 exchange issues and their impact on the Enssles. 17. We left the meeting with Mr. Hunsperger in full understanding he would be our expert on this case and that we would be back in touch soon to focus on specific scope and tasks to get started. I said several times the need to focus our limited financial resources to get the site cleaned up. While I was feeling pressure to keep the legal process moving, we needed to get the site cleaned up or we would run out of funding without bank support to extend our line of credit. 18. By late summer 2004 we had the site cleaned up and received a no further action letter from CDPHE, and negotiated a price to sell the Property to Ball Corporation. 19. From 8:00 - 10:00 am on September 8, 2004, Mr. Hunsperger, Mr. Iatridis, Mr. Rogers and I again met together at Mr. Iatridis' office in Boulder. We met to specifically discuss preparation of an expert report describing the environmental and real estate damages the Enssles had suffered, and we discussed timing deadlines for expert reports. We again spoke in detail about the facts of the case, the fact that Plaintiffs had suffered significant damages and how best to clarify and calculate those damages. 20. We specifically spoke with Mr. Hunsperger about the specific details of the case, the theories for recovery of damages that were available, including but not limited to stigma, loss of liquidity, deferred marketability interest and costs to cure the contamination, We also discussed reasons why choosing one method of calculation of damages was preferable over another and the attendant legal issues.
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21. We also talked about financial calculations of the time value of money and its application to the case, including interest rates and dates that should be used for the calculations. Mr. Hunsperger discussed the possible use of an economist to assist in the case, but that he felt comfortable with and often covers that area, too. 22. Again we left the meeting with the same understanding as in paragraph 17 above: we were hiring Mr. Hunsperger as our expert. There were discussions about Mr. Hunsperger's availability to complete the work on a short timeline and his preference to do his own appraisals versus hiring an independent appraiser. 23. On September 30, three weeks after our last meeting, Mr. Hunsperger informed Mr. Iatridis that he could not guarantee he could complete the reports by the required deadlines. Therefore, we needed to hire a different expert and Mr. Hunsperger recommended three persons, one of which was Peter Bowes. We hired Peter Bowes and another MAI appraiser, Brian Goodheim, as our expert team. We believed that Mr. Bowes and Mr. Goodheim could get the reports done by the deadline, and that Mr. Hunsperger would still be a resource to us. 24. It was a complete shock and alarming disappointment when I learned that ITW had hired Mr. Hunsperger's firm as rebuttal experts to discredit our experts, Mr. Bowes and Mr. Goodheim, whom he had recommended. I feel betrayed and have difficulty understanding how this could be allowed as being in any way legally fair. While I understand that Mr. Hunsperger may not have discussed the details of our case or vulnerabilities with Mr. Clayton, an employee of Mr. Hunsperger's firm, it is hard to believe this will not severely damage the Enssles' case.

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