Robert Sandau
`October 24, 2012
`
`Page 1
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`1
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`(Pages 1 to 4)
`
`TABLE OF CONTENTS
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`L003--5Oi()1ab(A)NW‘
`
`ROBERT SANDAU
`Cross-examinafion by Mr. Cutler
`Crossuexamination iay Mr. Weed
`Recross-examination by M1’. Cutler
`
`EXHIBITS
`EXFIIBIT DESCRWTION
`#1
`Subpoena
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`IN THE UNITED STATES l.')iSTRJCI' COURT
`FOR THE EASTERN ozsmzcr or Micnaom
`
` . LLC.
`?iainbifl',
`
`Case No; ]:12—<:v-02533
`v.
`LKQ OORPORABON.
`Defendant.
`
`I
`"C0?~?FIDlE1l‘J’t'w" VHJEDTAPE DEPOSITION OF ROBET SANDAU
`Taken by the ?Eaimifl‘o:n the 24:11 day ofoszober.
`2012,31 S445 Corporal: Drive. Suite 200, Troy,
`Michigan. oommencing 31 3:07 pm
`
`MATTHEW L. CUTLER
`HARNIES. DICKEY 85 PIERCE. PLC
`7700 Bonhomme Ave, Suite 400
`St. Louis. Miss-otui 63105
`(314) 726-7500
`Attomey for PlainIifi’CEe-arimznp, LDC
`BENIANHN E. WEE.)
`K&.l.. (‘mes LL!’
`70 Wet; Madison Street, Suite 3100
`Chicago, Illinois 60602
`(312) 3‘72—l12i
`Anamcy for Defendant LKQ Corponnioo
`MECHAEL S. HALE
`Michael S. Hale 8: Associates. PLC
`39304 Ro-ciccresfi Carole
`Northville, Michigan was
`(248) 321 -8941
`Attorney for the Deponeut, Robert Sandau
`Present: Rocky Shameek, Video Technician
`REPORTED BY: Elfin Stilmaaa, CSR-3588. RPR-Oi-9261
`31229 Berxyhill sum
`Faxmingtau Hills. Michigan 48331
`
`Page 3
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`Pa g e 4
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`2.4.;
`.. -In -
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`Troy, Michigan
`Wednesday, October 24, 2012
`1:07 p.m.
` n
`(Deposition Exhibit No. 1 marked.)
`VIDEO TECHNICIAN: We are new on the
`record at 1:07 pm. This is the videotape deposition
`of Robert Sandau in the manor ofClcarlamp, LLC,
`versus LKQ Corporation, in the-United States Distfict
`Court, Eastern District ofMichigan. This deposition
`is being held at 5445 Corpotate Dfive, Suite 200, Troy,
`Michigan, 48098, on October 24th, 2012.
`My name is Rocky Shatteek, and I am the
`Videogapher. 1 am present on behalf of Stratus Legal.
`The Court Reporter is Erin Stilmzm. also ptesent on
`behalf of Stratus Legal.
`Counsel will now state their appearance
`and firm afiiiiation for the record.
`MR. CUTLER: This is Matt Cutler from
`Hamess, Dickey and fierce on behalf of Cleariamp, LLC.
`MR. WEED: Ben Weed from K&L Gates on
`behalf of LKQ Corp.
`MR. comm:
`MR. HALE: Miohaei s. Hale of Michael
`8. Halo and Associates, PLC, on behalf ofthc deponent,
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`Robert Sandau.
`n
`VIDEO TECHNICIAN: Wiil the court
`nTn
`reporter please swear in the witness.
`Tn
`ROBERT SANDAU
`was called as a witness and, having been duly sworn to 0=n
`nn
`testify the truth, the whole truth and nothing but the
`truth, was examiner} and tcstified as follows:
`g
`VIDEO TECHNICIAN: Please continue.
`CROSS-EXAMINATION
`'
`BY MR. CUTLER:
`Q. Good afie-moon, Mr. Sandau. Have you had your
`=,
`deposition taken before‘?
`nn
`A. Pzobably 26 years or better.
`‘
`Q. Okay. I'm going to go over a lime bit of backyound
`infonnation just so you understand how the day's going ‘7
`,n
`to go.
`I don‘: think we'ii be here vezy long.
`n
`A. Okay.
`Q. So we don't have to block off much more ofyour time -
`But generaiiy as you just know, jam saw, the Court
`7;
`Reporter swore you in. This proceeding here in this
`oooference mom is intended to ‘oe the same as if you
`were giving testimony in a court oi‘ law.
`A. Okay.
`Q. Do you understand that?
`A. Yes.
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`Stratos Legal Services
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`800-w97'1~13.27
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`Clea-flamp, LLC
`Exliibit 2016
`
`

`
`RobmiSandau
`October 24, 2012
`
`Page 5
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`2
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`(Pages 5 to 8)
`
`?ago 6
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`Q. And is then: any physical condition or siclcness or any
`medication you might be taking today that would hamper
`your ability to, to give truthful testimony today’?
`A. No.
`
`Q.
`
`I'm going to ask you a number of questions today and
`I'm going to be asking for your truthfirl answer.
`i
`Counsel, your attorney, andlor Mr. Weed might have the
`a reason to interpose an objection to one of my
`questions.
`A. Okay.
`Q. The objection doesn’t mean, unless your attorney
`instructs you no: to answer, the objection doesn't mean
`you sbouldnl answer the question. it's just more of a
`fomiality. We'll -~ because we're doing this in a
`conference room and not in front of the gudge, wejust
`have to mark our objections and then let thejudge rule .
`on those at some later date.
`A. Correct.
`
`.Q. So the other thing too is N! be asking you questions,
`and l already talk fast enough, I'm going to try to
`slow down for our Court Reporter, but another thing
`that helps her out a hunch is if you could wait for me
`to finish my question before you answer, and l wiii be
`do my very best to make" sure you've completed your
`answer before I ask my next question.
`
`Page 7
`
`form, just let us know, that‘s fine.
`MR. HALE: Thank you.
`(By Mr. Cutler): Mr. Sandau, Pm going to hand you
`what has been marked as Exhibit No. 1 to this
`
`Q.
`
`deposition and ask you if you recognize that document.
`A. Showing my age.
`This is what. the gentleman glave to me in
`my driveway.
`Q. Okay. Do you recognize lhatto be a subpoena
`compelling your testimony here today?
`A. Yes, I do.
`Q. Okay. And you did receive this docmnent?
`A Yes.
`
`Q. Okay. Great. You can put that aside for now, I just
`wanted to make thus for the record.
`
`I want to briefly. Mr. Sanduu, walk
`through your history, your work history, and I guess
`we'd star‘: with the last year of your schooling. What
`is the last year you attendw school‘?
`I974 Redford Union High School. senior.
`A.
`Q. Okay. And that was 3974‘?
`A. Correct.
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`Q. And what did you do when you gaduated from Redford
`Senior i-ligh?
`A.
`I went to work.
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`MR. CU’l‘I..£3R: And let me, as long as we
`we're raiking about that, lei you know, Mike, we are
`under a protective order in this case, so if anything
`comes out from either side, and you guys want 10
`designate it as confidential in any way, shape, or
`
`Page 8
`
`A.
`
`Q. And tho: should have been more specific; where did you
`go to work?
`I worked in She automobile repair industry spccificalty
`in body shops, mechanical, car dealers.
`Q. What, what was your first, the first company you worked
`for in, aficr you graduated in 1974'?
`Atlas Collision.
`Where is that located‘?
`
`Q?'Q?-Q?~QPQP29>vQ>-Q>
`
`In Detroit, Michigan on Fenkell.
`Okay.
`No ionger in business.
`How long did you work for Atlas?
`Probably three months.
`Okay. Do you recall who you worked for after you let?
`Atlas?
`Yes.
`
`And what was that cornpany?
`Roger Peck Corporation, a Chevy dealer.
`And how long did you work Roger ?eck Corporalion‘?
`Roger Peck, about four months, until I got into Penske.
`How long did you work with Pcraske?
`About a year.
`Okay. So thal takes us to approximately 1976 or so, is
`that right?
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`(Nods head affinnatively.)
`A.
`Q. With that background in mind do you have any questions
`about what we're going to be doing today?
`A Nope.
`I'll do one other thing too, because you were
`Q. Okay.
`kind of shaking your head there, but then you did say
`no, the other thing we need to have you to today if you
`could is make your responses verbal in nature because
`they don't show up on the transcript otherwise.
`A. Okay.
`Q. The video will get the head nods and whatnot, but for
`the written transcript we need those. Okay.
`MR HALE:
`I just want :0 state for the
`record that this deponent is under subpoena to be here,
`although he had previously signed a settlement
`agreement, which included a confidentiality with his
`prior employer, LKQ Corporation, did contain that
`covenant. Hefs obviously here by court order under
`that subpoena, and I just want the record to properiy
`reflect that.
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`Stratus Legal Services
`80D~971—1127
`
`2
`
`

`
`Robert Sandau
`October 24, 2012
`
`3
`
`(Pages 9 to 12)
`
`Page 9
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`Q. Olcay. What did you do afier‘Penslce'?
`3.
`2 A Went to Glassman Olds right across the street.
`
`1
`2
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`I'd ordcwed a 3978 Bronco, a brand new one, I had to
`wait forever for it aufi I hadn't received ‘it when I
`
`
`
`Q. Was oar Olds, 04-4-57
`3
`4 A Oldsmobile, Glassman Oldsmobile.
`5
`Q. How long were you with Glassmxm?
`s
`‘ A.
`ithink about 18 rnonrl1s,in that area.
`‘I
`Q. And do you recall where you went after Glassman‘?
`8
`A l went to Gene I-lamiiton Chevrolet.
`9
`Q. Do you recall how long you were at Gene Hamilton‘?
`1 o
`A. A1 Gene Hamilton, 1 think I was only with Gene Hamilton
`1 1
`about six months.
`1 2.
`i.f‘I‘m doing my math righ: it sounds like we're about
`1 3
`in 1979 or so, does then sound about right?
`14
`A No, it ooulchfl be because '76 Corvettes came out, '77;
`1 5
`it was in '77.
`2 5
`Q. Okay.
`17
`A.
`I can tell you by the year of cars and the cars lwas
`1 B
`repairing.
`1 9
`Q. Okay. Very cool. Very cool. After Gone Hamilton
`20
`Chevy do you know where you were as?
`
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`fames Martin Chevrolet.
`A.
`Q, How iong were you there?
`A.
`James. Manin Chevrolet; probably a year.
`Q. And how about aficr James-—
`A. A year and-a-half. Only reason i can {elf you because
`
` Page 11
`A. Actually it would be 2000.
`1
`Q. Okay. And who did you - where did you go aficr Morris
`1
`Q. 2000?
`2
`Buick?
`' 2
`A.
`It wean on: of business in 2000.
`3
`A. Aftw Morris Buick Iwcnt zo Stolla Buick.
`3
`Q. Okay. Aficr Mel Fan where did you start working?
`4
`Q. And how long were you with Stella Buick?
`4
`A. LKQ.
`5 A Stella Buick was bought out by Bill Cook and it was
`5
`Q. LKQ. And LKQ is the defendant in this litigation
`6
`probably seven or eight years.
`6
`thafs referenced on that subpoena, is that correct?
`“I
`Q. Seven or eight years with that company?
`7
`A. Correct
`8
`A. Yeah.
`8
`3
`Q. How long did you work for LKQ?
`9
`Q. Olcay. So are we in rho 1988 zimefiume-then?
`9
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`A.
`lbelicve it to be seven years.
`1 o
`A.
`'37 or '33, yeah, it would be '38.
`1o
`Q. Until 2907?
`1 1
`Q. Okay. What did you do aflca‘ you lefi Biii Cook?
`3. 1
`3
`A. Around there.
`1 2 A I went anti ran a facility called Auto Housc in Royal
`3. Z
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`Q. And when you um started at LKQ who: was your iob
`13
`Oak, that would be Royal Oak It's right at the border
`1 3
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`title?
`ofRoyal Oak and Clawson.
`1 4
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`I was operations manager.
`A.
`Q. And how long were you with Auto House?
`1 5
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`Q. At what location?
`A Four or five years. Honestly I don't recall.
`1 6
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`A. Bellcville.
`Q. And afier Auto House where did you go?
`1 '7
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`Q. And what were, what were yourjob responsibiiiiics as
`A. Mei Farr.
`1 8
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`operations manager?
`Q.
`Is that M-c—l F-a—r (sic)?
`3
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`In charge of inventory, the delivery, the shuttle
`A. Yeah, Mo! Farr.
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`service which was our inter-company deliveries,
`Q. And what kind of company was that?
`-
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`processing vchicles, the bumper repair facility, scrap
`A. Moi Farr was an automobile dealer.
`2'2
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`metals recovery.
`Q. How long were you with Mel Farr?
`2 3
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`A.
`I was with Mel Farr for I believe seven years.
`2 4
`Q. Anything else?
`
`
`IN.) U%
`Does that take us to the late 1990's?
`Q.
`A.
`I cooid go on for days about the duties of an
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`Q. Gotcha. And how long -- I'm sorry whom did you go
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`after James Martin Chevy?
`E"
`A. At James Martin Chevrolet i wem one business
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`refinishing. commercial aircmfi.
`.
`Q. Was that your own business?
`
`A.
`I was a suboonimczor to a stripping company called Ace is
`'
`Aircrafi.
`Q. How long did you do that?
`A.
`I did thai for probably 18 months to two years.
`Q. Do you know approximaicly what year we're in now‘?
`A. We should be around 1979.
`Q. Okay.
`A. End of'79.
`Q. Afier thaxjob as a suboontmctor refurbishing aircmfi
`what dict you do?
`1 went back into automobile repair because Iwas
`getting manicd and needed to stay home.
`Q. Okay.
`A. The company at that time was Morris Buick Company.
`they're no ionger in business.
`Q. Do you rocall how long you were with Morris Buick‘?
`A. Notlong.
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`
`
`Robert Sandau
`October 24, 2012
`
`4
`
`(Pages 13 to 16)
`
`Page 13
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`Page 14g
`
`Q.
`
`operations manager but in general.
`Is it fair to say that you were the head person at that
`Bollcvillc facility?
`A E answered to Doug Cortelini who was the site manager.
`Q. Would you spell CortoEini's ias: name if you can?
`A. C-o»r~t-e-l-i—n-i, I believe it is. Douglas.
`Q. So Doug Cortelini was the top LKQ employee at the
`Bcllcvillc facility?
`A. Yup.
`Q. And did your job responsibilities at LKQ change at any
`time between the time that you was, you were hired you
`worohiredthenein2000tothetimethatyoustopped
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`your ernployrncnt?
`A. Could you clarify that.
`Q. Sure. Did you have -~ let me ask a different question.
`Did you have any other job titles atLKQ during your
`tenure with LKQ?
`A. No. Operations manager covers a very broad spectrum
`Q. And you were the operations manager the cotire time yo
`worked for L-KQ, correct?
`
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`A. At that time, We were fairly small. We were called a
`sick-pack of our region. We wens brolcc up into
`regions.
`I honestly don't know the exact number in
`nn
`2000. We grew very rapidly as a corporation.
`Q. And when did that rapid growth occur‘?
`4
`
`A.
`l mean from day one we were acquiring other facilities
`1
`before we went public, and afler that we acquired a
`i’
`
`significant amount more.
`P7n
`Q. Whom, if you recall, did LKQ become public?
`
`A. 2002 or '03 would be my guess.
`I
`
`Q. And were you familiar with the strategy of growing that \n
`
`Ll(Qhadatthattirne?
`‘
`MR. WEED: Objection, vague.
`5
`
`n
`A Do you want to rephrase it then?
`Q.
`(By Mr. Cutler): No. Go ahead. Well, do you
`i.
`
`understand, do you unciersumd that question?
`‘i
`
`A. We obtained our growth through acquisitions and the
`§
`need to fill -- we recognized the need ofthe customer
`§
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`to have one-stop shopping. you know. We wmtcd to get ,
`
`-
`the most for out, you lcnow, constituents I guess, our
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`A. Correct.
`Q. How many facilities did LKQ have let's say starting in
`2000?
`
`MR. WEED: Objection, foundation
`(By Mr. Cutler): Go ahead.
`
`O.
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`2 1
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`2 4
`25
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`shareholders, as any business would.
`Q. And what do you mean by "coo-stop shopping"?
`A.
`'§‘ha't ifyou called us for, for a fender, typioalty if
`you need a fender you may nooct other components. You
`may nocd abumpcr. You may need an engine. We didn't
`
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`Page 15
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`Page 16
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`
`
`
`
`company would buy. Our claim was, you know, an I.Q, 1zn
``yn
`not an insurance company so people looking up onwline
`or calling, would know or the sales rep told them
`there's no sense in sending it to a dealership or a car
`body shop if it's not of the quality that will be
`expected or accepted in the industry. It's still at
`‘good part but the expectation is that it would be
`perfect in a used headlight component. its nearly
`impossible to be perfect unless it's a tako~of‘f.
`Q. And what's a "take-off’?
`A. A take-off would be an over-run, you know, where you
`"buy it directly fiom an 0.13. manufacturer, maybe
`they're an obsolctcd material for tho cumcnt model
`year or product line, so you would have good stuff like
`that to soil.
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`Q. How did LKQ obtain automobiles to be, to - let me as E
`you this: Did LKQ obtain automobiles in the
`2960 timcfiame when you first started to harvest parts
`ofi‘ ofthcm?
`A. Yes.
`
`
`
`
`
`
`
`
`
`Q. Okay. And how did they go about obtaining those
`automobilw?
`
`1
`2
`3
`4
`5
`6
`7
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`want to be a one-facettcd auto rocyclor thatjust dealt
`with one thing.
`I mean there's somany things in the
`industry that people have to buy and as a body shop
`manager ifyou can make one call and gel a majority of
`the components you need to put a car, or a truck, or
`wrhatzver the vehicle may he, back together, wail, it
`simplifies things for the consumer obviously. And that
`was LKQ's goal was to be able to provide for their
`customers a one.-stop shopping with a very high quality
`product.
`Q. When you stoned with LKQ ir1 2090, were-headlamps -a
`product that LKQ offered?
`A. No, they wcrelft - well, yes. Let me rephrase that.
`Headlights are one ofthc most highly requested items,
`' along with front bumper covers. Yes, we did, we sold
`
`1
`2
`3
`4
`5
`6
`7
`8
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`1 2
`1 3
`1 4
`1 5
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`1 6
`1 7 1 Q. Headlamps or bumpers‘?
`
`
`
`
`
`
`
`A. Headlamps and bumpers. We soldrecyclod everything.
`Q. Gotcha Now those headlamps that LKQ sold in 2000 .:
`you just rcfercnoed, were they refurbished in any way
`before you resold them‘?
`A. We would polish them, you know, on—sitt-., polish them
`with a boiling wheel ifthey had minor imperfections.
`For the most part everything was invcutoticd
`accurately. If it wash‘: something that an insurance
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`A. Through auction and through contract with 0.E.
`
`24
`manufacturers.
`
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`
`Stratos Legal Services
`800~971—1l27
`
`4
`
`

`
`Robert Sandau
`2012
`Ocfiober 24,
`
`Page 17
`
`5
`
`(Pages 17 to 20)
`
`Page 18;f
`
`A.
`Q.
`
`Q. What were the, roughly the volumes ofthose rypes of
`sales for LKQ?
`MR WEED: Objection, foundation.
`I honestly couldn‘t give you that number.
`(By Mr. Cutler): Okay. How about as compared to
`insurance quality parts that LKQ sold‘?
`MR. WEED: Same objection.
`A The majority ofthe high demand insurmce quality parts i
`that LP-(Q would sell would sell within 30 days --
`(By Mr. Cutler): Okay.
`Q,
`A -- at that time.
`
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`Q.
`
`Is it fair to say that the headlamps that came in that
`
`were not insurance quality could‘ not be sold to the
`insurance companies, isn't that correct?
`A That would be a fair statement, yes.
`Q. Did there come a point in time where you were present
`with a opportunity to take non-insurance quality
`headlamps and have them refurbished for LKQ”?
`MR WEED: Objection, vague.
`(By Mr. Cutler): Go ahead.
`Q.
`A. To answer your question, yes.
`Q. Okay. And can you describe for me the circumstances
`surrotmding that opportunity?
`A We were doing them inuhouse, you know. Minor
`imperfections] would sand down and polish them at my
`
`Page 20 n
`Q. And is that, does that comprise all the steps ofthc
`process that you undertook at that point in time‘?
`A. ¥or'tho most pan, cleaning it, sanding it, polishing
`it, you know, wiping it down and packaging it.
`Q. Okay. Now I think you mentioned that the process you,
`let me confirm, the process you‘n: talking, you were
`just talking about was for headlamps that had minor
`imperfections, correct?
`A. Correct.
`
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`your earlier testimony, is it fair to say that when
`those cars came in if-the headlamp was insurance
`quality on that car, LKQ was able to take it ofi'ofrhc
`car and resell it, is that correct?
`A. That is correct.
`
`Q. And if the headlamp came in and it was not insurance
`quality, LKQ was unable to resell, it is that correct?
`A No.
`Q. Okay. Tell me how we tool; -
`A Everything is sellablc. It truly depends on which
`market that it would be sold in.
`
`i
`
`Q. Gotcha
`A. You know, we cater primarily to the late model market
`which is a very much insurancevdrivcn market.
`insurance-driven meaning that you‘re a consumer, you
`have full coverage insurance on your car, it‘s being
`repaired. The insurance company is dictating as to
`whattypoofparlwill go on your car, whether itbe a
`quality or recycled component, an afiermarkct
`component, or a factory 0.5. component.
`lithe headlamp was not insurance quality where did LK
`sell the headlamp’?
`A. Smaller body shops, people who were repairing the car
`for themselves. you know, someone that, you know, a
`secondary market so to speak
`
`Q.
`
`Page 19
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`location as will as other guys at other locations, you
`know, the stuff that you could take care of and fix
`like taillamps and ltcadlarnps. The non-coated headlamps
`at that time were headlamps being produced that did not
`have -a scratch coating on them. So you could polish
`that out, no different than polishing a scratch out on
`your car at that point in time, and resell it.
`Q. Would those be considered insurance quality headlamps.
`A At that point in time for, fur thm specific model, I
`mean there are so many, so many variations of headlamps
`and manufacturers and processes that one uses versus
`another one. You know, the bare headlamps you could
`that with.
`
`Q. Okay. And describe for me, if you well, the process
`that you undertook fiom start to finish when you're
`talking about this specific type of refurbishing you
`were doing at that point in time?
`A. First up would be to clean the part off, remove any
`foreign matter ‘com the service. Second step would be
`to weosand it, you know, with a fine, very fine sand
`paper, foliowed by buffing compound, usually Rouge and
`Lindy, the, basically jewelers meta: polishing
`compound works the some on plastic. We -would do the
`ones that we could because you had a sale for it}
`mean.
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`Q. For headlamps that had major irnpcrfcctiorts what did LKQ
`do with those headlamps?
`MK WEED: Objection, foundation.
`(By Mr. (hrtler): Ell rephrase. Were there, were
`there ltcadlamps that had major imperfections that you
`would, would be brought into LKQ?
`A. Ves.
`
`Q.
`
`Q. Okay. And with those ~ those were not insurance
`quality, correct?
`lfshey had major imperfections they weren't sellabfo.
`A.
`Q. Okay. And did there some a point in time where you
`were presented with an opporttunity to take headlamps
`with more Inajor imperfections and have them
`refurbished‘?
`A. Yes.
`
`
`
`
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`Stratos Legal Services
`800-971~1127
`
`5
`
`

`
`Robert Sandau
`2012
`October 24,
`
`6
`
`(Pages 21 to 24)
`
`Page 2 2 i:
`
`Q.
`
`(By Mr. Cutler): Okay. And can you describe for me
`
`what that business was‘?
`
`A
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`Page 21
`
`A. When or what?
`
`Q. Let's start with what‘?
`A.
`lhad a visithy a fcllownamed Moe Paperi who was in
`the bumper repair business at the 0Tkn He said he had
`a process that he could repair the izeadiigtts, rccoai
`them, and make them look like new again.
`Q. And when did that occur?
`A.
`I do not recall the year exactly, my guess would be
`maybe 2005.
`Q.Andwmndmhemfimmmmwmmgmymnwwmmgm
`you, to let you understand what his process could do?
`MR. WEED: Objection, leading.
`A. Like anybody in sales will do they'll show you a before
`and after, basically brought in a headlamp where half
`of it was in the original condition and the other half
`looked like brand new.
`
`Q. {By Mr. Cutler): And what was your, what was your
`initial reaction to the orand new portion?
`it was acceptable in the industry.
`A.
`in other words it was DEM quaiity, is that correct?
`Q.
`A. Pretty close.
`Q. Did, at any point in time thereafier did you strike up
`a business relationship with Mr. Paperi?
`MR. WEED.‘ Objection, leading.
`A.Ywuwdmbwmss
`
`Page 23
`
`possibly sell?
`MR. WEED: Objection, leading and
`compound.
`A. That is a vague one as far ‘as defining the highest
`quality. LKQ stands for Like, Kind and Quality, very
`smart trademarking used on every insurance estimate.
`They were of an orignal equipment quality. They did a
`nice job.
`
`Q.
`
`(By Mr. Cutler): So the lamps that Mr. Paperi suppiied
`to LKQ were of original quality, is that correct‘?
`A As close as you could have, yes.
`Q. Okay. And then what would LKQ do with the reftltbish -'
`headlamps?
`MR. WEED: Objection. foundation.
`
`A. Clarify.
`
`Q. {By Mr. 0:11:21): Once the headlamps tiom were returned
`refurbished by Mr. Paperi what would LKQ do with those
`headlamps?
`A. We would nvinventory them - excuse me. We would
`re-inventory them back into the system, box them,
`two~part foam pack them, and resell them. They would
`be on the marltzet.
`
`Q. Were you the only facility that LKQ had that was
`sending headiamp cores to Mr. Pmeri forproeessing‘?
`.1 -.rc:.,An-..-fifl»-5 ..
`Mil WEED: Objection, foundation.
`frwh
`9'! < -.1
`a.
`
`Q. How was the quality oflhe finished product that you
`received fi'om Mr. Paperi?
`MR. WEED: Objection, vague.
`A Overall very good.
`Q.
`(By Mr. Cutler): Did, is it fair to say that
`Mr. Papezi was taking cores of headlamps that were
`otherwise uusalable by LZKQ and tom them into the
`highest quality headlamp, headlamps that you can
`E
`Pa go 2 4 s,n
`Q
`MR. HALE: Areyou talking about
`location as for as faciiity, or are you talking about
`the corngiany‘?
`'
`MR. CUTLER 1'11 rephrase.
`MR. HALE: Okay.
`(By Mr. Cutler): Were you the only facility within
`LKQ -- i’m going to limit this question just to LKQ,
`okay, not any other oompanies.
`A. Okay.
`Q. Was the Beiievilic facility the only facility within
`LKQ that was sending headlamp cores to Mr. Paperi for
`refinbishiug?
`
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`Stratos Legal Services
`800-971M112?
`
`6
`
`

`
`Robert Sandau
`2012
`October 24,
`
`?age 28
`
`7
`
`(Pages 25 to 28)
`
`Page 26 g:
`
`A.
`
`i
`
`suco'es,sfi1l the relationship with Mr. Paperi was to LKQ n)n
`during that timeframc?
`Q
`In-egardlcss (sic) ofwhother it was Mr. Papcd, or
`anyone else, having a relationship with a supplier,
`someone 813: could produce those parts would be viewed
`as good, by anyone.
`Q. Are you familiar with a company called Magni Group?
`A Yes, I m.
`Q. What is Magus’ Group‘?
`A. Magui Group is a group, they're siiii in business, that
`provided corrosion comings for the OE. indusoy on
`fasteners and brackeuy. They were in coatings company.
`Q. Are you familiar with a gcotleman by the some of
`Aiexandcr Krause Horingcr‘?
`A. Yes, I am.
`
`
`
`
`
`
`
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`Q. Does word ofthe factflun headlamps could be turned
`into DEM quality pans spread fast. is tho: correct?
`MR WEED: Ob}oction. mischamcterizéng
`his testimony.
`A. The word that we had a recycled component that we could
`sell as insurance quality, yes.
`(By Mr. Cutler): How did l..KQ View that program ofi“
`by Mr. Paperi?
`MR WEED: Objection, Eeading,
`foundation, and vague.
`(By Mr. Cutler): You can answer, if you understand the
`question
`A. Rephnase it
`Q. Okay. Did LKQ have an opinion — lot Inc ask you, let's
`do something different: Did you have an opinion ofhow
`
`Q.
`
`Q.
`
`-
`
`O}“».O?”.0
`
`Page 27
`
`Okay. bcfs start with -«
`I believe one in my ofiioe at LKQ.
`So three separate meetings. is that corroct‘?
`Yes.
`
`_. Okay. Let's take these one at a time. Do you recall
`which ofthosc meetings come firm?
`A i don‘t know.
`I may havcmet him more than three times
`even.
`
`Q, Sure. To the best ofyour knowledge?
`A lthinklitcfirsttimclactuallymethimwasovcr ata
`repair facility, over in lbelicve it to be Eiomdale.
`Q. Where Mr. Papeai was practicing the process, is that
`correct?
`A. Correct.
`
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`Q.
`
`MR. WEED: Objection, leading.
`(By Mr. Cutler): Is that where Mr. Paperi was
`practicing the process?
`A. They had their, their ooaturg iine and everything, they
`took us through that. There was no product and no one
`working in the faciiity when they took us through so we
`oouldn‘t actually see them showing what they were
`doing.
`Q. Sure.
`
`
`
`Q. And who is Mr. Krausc Plcriogcr?
`A.
`It was my undersumding through meetings and personal
`meetings, you lmow, facewto-face meetings. that he was
`a partner wiih Mr. Paper!’ in the initial venture.
`
`'='~
`
`Q. And do you — you mcrztioocdfaoc-to—facc meetings. C -
`you dcscribc for me what those moctings oompriscd?
`A We met at his ofiicc over at one of their facilities
`where they did the work.
`Q. Okay. Are those two so-panic meetings‘?
`A Yes.
`
`<:
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`Page 28
`
`Q. What was the purpose of that meeiing, if you rocali‘?
`A. The initial meeting was to bring more product from the
`other plants to the Detroit looation to send out. That
`
`was the very early stages ofit afior I had piloted the
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`Q. So is it fair to say LKQ wanted to grow the
`reialiooship with Mr. Paperi?
`MR. WEED: Objection, ieading,
`foundation.
`
`A. We want to roll that market. fire players I don‘t think
`were ever, you know, a key factor in it.
`
`Q.
`
`(By Mr. Cutler): So what was the purpose of meeting
`with Mr. Papcri then?
`
`A. He wanted to show his process, tell us how much he
`could produce, how many could we send. it was more
`for, for growth, for futuro growth for both sides, how
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`
`Stratus Legal Services
`800—971~1127
`
`7
`
`

`
`Robert Sandau
`October 24, 2012
`
`8
`
`(Pages 29 to 32}
`
`
`
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`Page 30
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`Page 29
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`1
`2
`
`much can be done in one area, now much can he handle,
`you know. it's only conjecture on my side as to his
`
`1
`2
`
`Q. Do you know if he's still with E..K'Q?
`A.
`I believe he is.
`
`
`
`Q. Do you know what Doug Corteiinfs current title is‘?
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`view, do] need to hire more employees, do Inecrl
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`MR. WEED: Olfiectlon, foundation.
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`to expand my operation based on, on the product coming
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`A. Honestly I think has the manager ofall the Michigan
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`in.
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`operations, regional or state manager, fro not really
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`Q. Who was present at the tits: meeting at the repair
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`sure.
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`faciiity?
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`(By Mr. Cutler): He's still with LKQ though?
`Q.
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`3 A Myself; Doug Cortelini, and I believe - liere‘s where I
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`9 A To my last conversation with him, yes.
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`stand to be corrected on one ofthcse two dates was Rob
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`1 D
`Q. Okay. So we have the meeting at the repair facility
`1 0
`Wagman or, or Brad Willcn —- or excuse me, Todd Willen,
`1 1
`and that leaves two other meetings, one at Mr. Krause.
`1 1
`and] honestly dou‘t recall the first meeting with who
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`l-leringers oflice and one at your of