1 1 no. b-000119-c 2 melinda matthews, ) in the district court ...

1
1 NO. B-000,119-C
2 MELINDA MATTHEWS, ) IN THE DISTRICT COURT
INDIVIDUALLY AND ON )
3 BEHALF OF THE ESTATE OF )
TYLER SHANE MATTHEWS, )
4 DECEASED MINOR; and )
MICHAEL MATTHEWS )
5 )
Plaintiff(s), )
6 VS. ) ORANGE COUNTY, TEXAS
)
7 WESLEY HOWARD, )
INDIVIDUALLY AND D/B/A )
8 DAIRY QUEEN, )
)
9 Defendant(s), ) 163RD JUDICIAL DISTRICT
10
11 *****************************************
12
13 ORAL AND VIDEOTAPED DEPOSITION OF
14 WILLIAM C. ZUCCO
15 May 21st, 2002
16 Volume 1 of 1
17
18 *****************************************
19 ORAL AND VIDEOTAPED DEPOSITION OF WILLIAM C.
20 ZUCCO, produced as a witness at the instance of the
21 Plaintiff(s), and duly sworn, was taken in the
22 above-styled and numbered cause on the 21st of May,
23 2002, from 10:11 a.m. to 3:51 p.m., before Rick
24 Smith, CSR in and for the State of Texas, reported by
25 machine shorthand at the offices of the Ferguson

1 Firm, 1122 Orleans, Beaumont, Texas, pursuant to the
2 Texas Rules of Civil Procedure and the provisions
3 stated on the record or attached hereto.
4 A P P E A R A N C E S
5
FOR THE PLAINTIFF(S):
6 Mr. Rocky Lawdermilk
FERGUSON FIRM
7 1122 Orleans
Beaumont, Texas 77701
8
FOR THE DEFENDANT(S): INTERNATIONAL DAIRY QUEEN AND
9 AMERICAN DAIRY QUEEN
CORPORATION, SRINIVASA MURTHY,
10 WILLIAM ZUCCO, JOLYNN FIELDER,
AND MIKE SULLIVAN
11 Mr. R. Lyn Stevens and Mr. Donald F. Lighty
STEVENS, BALDO & FREEMAN, L.L.P.
12 550 Fannin, 4th Floor
Petroleum Building
13 Beaumont, Texas 77701
14 FOR THE DEFENDANT(S): FIREMAN'S FUND INSURANCE
COMPANY
15 Ms. Danya W. Blair
BEIRNE, MAYNARD & PARSONS, L.L.P.
16 1300 Post Oak Boulevard, Suite 2500
Houston, Texas 77056
17
FOR THE DEFENDANT(S): TEXAS DIARY QUEEN OPERATORS'
18 COUNCIL and LARRY NEWELL
Mr. Craig Hall
19 GERMER, BERNSEN & GERTZ
550 Fannin, Suite 700
20 Beaumont, Texas 77701
21 FOR THE DEFENDANT(S): MIRACLE RECREATION COMPANY and
PLAYPOWER, INC.
22 Mr. Todd Taylor
JOHANSON & FAIRLESS
23 1456 First Colony Blvd.
Sugar Land, Texas 77479
24
25
2

3
1 FOR THE DEFENDANT(S): ROBERT ASHMORE
Mr. Scott Boyd
2 WELLS, PEYTON, GREENBERG & HUNT
550 Fannin
3 Beaumont, Texas 77701
4 FOR THE DEFENDANT(S): DQF
Ms. Michele Yennie Smith
5 MEHAFFY & WEBER
2615 Calder & 10th Street
6 Beaumont, Texas 77701
7 ALSO PRESENT:
Mr. William L. Killion
8 GRAY, PLANT & MOOTY
3400 City Center
9 Minneapolis, Minnesota 55402
10 Ms. Sheila A. Burton
COMPLETE LITIGATION SUPPORT
11 398 Pearl, Suite 1010
Beaumont, Texas 77701
12
13
14
15
16
17
18
19
20
21
22
23
24
25

4
1 INDEX
2 Appearances.................................... 2
3 Stipulations stated in text.................... 5
4 WILLIAM C. ZUCCO
5 Direct by Mr. Lawdermilk.................. 5
6 Cross by Ms. Blair........................ 157
7 Cross by Mr. Taylor....................... 159
8 Cross by Mr. Hall......................... 161
9 Cross by Mr. Lighty....................... 163
10 Redirect by Mr. Lawdermilk................ 165
11 Signature and Changes.......................... 170
12 Reporter's Certificate......................... 166
13 EXHIBITS
14 NO. DESCRIPTION PAGE
15 1 International Dairy Queen, Playground
16 Claims, 4/93-12/95........................ 141
17 2 Shrin Murthy's handwritten notes.......... 144
18 Stipulation Page............................... 172
19
20
21
22
23
24
25

5
1 MR. STEVENS: I want to put some
2 agreements on the record.
3 THE REPORTER: Sure. I'm ready if you
4 want to go ahead.
5 MR. STEVENS: Okay. I told
6 Mr. Lawdermilk that Don Lighty was to present this
7 witness. And he has graciously allowed me to go
8 ahead and begin presenting the witness. And when
9 Mr. Lightly gets here we will substitute out so that
10 the deposition can continue.
11 Also, I presume we'll take it pursuant
12 to the Rules?
13 MR. LAWDERMILK: Yes.
14 MR. STEVENS: Is one objection good
15 for all, or do you want each person --
16 MR. LAWDERMILK: I want each person to
17 make an objection.
18 MR. STEVENS: We will -- We want the
19 witness to sign.
20 THE REPORTER: Thank you.
21 THE VIDEOGRAPHER: Today's date is May
22 21st, 2002. The time is 10:12. This is the
23 beginning of Tape 1. We're on the record.
24
25

6
1 WILLIAM C. ZUCCO,
2 having been duly sworn, testified as follows:
3 DIRECT EXAMINATION
4 BY MR. LAWDERMILK: (10:12 a.m.)
5 Q What is your name?
6 A William C. Zucco.
7 Q And what's your address?
8 A 10358 (sic) -- Do you want the corporate --
9 Q Your home address first.
10 A Okay. 10348 Wildwood Drive.
11 Q And where is that?
12 A Bloomington, Minnesota.
13 Q And --
14 A 55437.
15 Q And what is your corporate address?
16 A 5501 -- 7505 Metro Boulevard --
17 Q Do you --
18 A -- Edina - E-d-i-n-a - Minnesota 55439.
19 Q And what is your Social Security number?
20 A 472-52-8375.
21 Q And do you have a Driver's License?
22 A Yes, I do.
23 Q Is that a Minnesota Driver's License?
24 A Yes, it is.
25 Q What's the number?

7
1 A Excuse me. Z200887115648.
2 Q Have you ever been arrested?
3 A No, I haven't.
4 Q And you currently live in Minnesota?
5 A Yes.
6 Q How long have you lived in Minnesota?
7 A My whole life.
8 Q And did you say you live in Bloomington?
9 A Bloomington, Minnesota.
10 Q How long have you lived in Bloomington?
11 A I've lived in Bloomington since 1972.
12 Q Where did you live before that?
13 A New Ulm, Minnesota.
14 Q And how long did you live in New Ulm?
15 A One year.
16 Q Where did you live before that?
17 A Saint Paul, Minnesota.
18 Q And how long did you live in Saint Paul,
19 Minnesota?
20 A Birth until then.
21 Q And when were you born?
22 A August 19th, 1945.
23 Q And that makes you how old?
24 A 56.
25 Q I want to talk about your education. You

8
1 obviously graduated high school.
2 A Yes, I did.
3 Q From Saint Paul?
4 A Saint Paul.
5 Q Where did you go to college?
6 A University of Minnesota.
7 Q What did you get your degree in?
8 A Political - history, political science.
9 Q And did you go into graduate school?
10 A Yes, I did.
11 Q What school did you go to?
12 A University of Minnesota Law School.
13 Q And did you get your J.D. there?
14 A Yes, I did.
15 Q Do you have any other formal education?
16 A No, I don't.
17 Q When did you graduate from law school?
18 A In 1971.
19 Q Are you currently -- Strike that.
20 Do you have any certifications?
21 A In addition to being an attorney?
22 Q Yes.
23 A No.
24 Q Okay. Do you have any board certifications
25 for being an attorney?

9
1 A I'm not sure of that question.
2 Q Okay. Does Minnesota have any
3 specializations?
4 A I believe they do.
5 Q Okay. Are you certified in any of those
6 specializations in law?
7 A No.
8 Q What is your general area of law?
9 A Franchise, contracts.
10 Q And would franchise, contracts be your
11 specialty?
12 A Well, that's two areas: franchising,
13 contracts. I would say yes.
14 Q Okay. So, franchising is one specialty
15 that you have and contracts is another specialty?
16 A Yes.
17 Q I want to talk about your work history
18 prior to becoming employed with ADQ; okay?
19 A Yes.
20 Q Where did you work when you got out of law
21 school?
22 A The Gislason law firm in New Ulm,
23 Minnesota.
24 Q And what type of law firm is that?
25 A Insurance defense.

10
1 Q How long did you work there?
2 A One year.
3 Q And what year was that?
4 A 1971 to '72.
5 Q Did you take a job after that?
6 A Yes.
7 Q With who?
8 A National Car Rental.
9 Q What did you do for National Car Rental?
10 A I -- The entire history?
11 Q Yes.
12 A Okay. I started as a staff attorney in the
13 properties department, which is the real estate
14 department. I ended up heading that department with
15 four attorneys. And then the last three years I was
16 Vice-president of the franchising division, which was
17 in operations; a nonlegal position.
18 Q What years -- How long were you with
19 National rental car?
20 A 1972 until 1987.
21 Q And what were your job duties as a
22 Vice-president of franchising for National rental
23 car?
24 A I ran the franchise division.
25 Q And what does that mean you did?

11
1 A I was the head person of franchising. I
2 had field - field people that reported to me. I was
3 responsible for the budget; responsible for dealing
4 with the franchisees; dealing with marketing, all
5 kinds of issues.
6 Q Have you ever given a prior deposition?
7 A Yes, I have.
8 Q How many?
9 A One I know of for sure and can recall. And
10 I think I was involved in one other one, but it was a
11 long time ago.
12 Q Tell me about the one you know for sure.
13 A I was an expert in a case in the early
14 1990's - in a franchise case - representing the
15 franchiser.
16 Q Where was that case at?
17 A Seattle, Washington.
18 Q Who was the franchiser?
19 A Dollar Car Rental.
20 Q And do you know the year that was?
21 A The early '90's I - I think, sir.
22 Q Okay. How many depositions have you taken?
23 A Excuse me? Where I've been --
24 Q How many depositions have you - have you
25 taken in your course --

12
1 A Where mine --
2 Q -- in the course of your legal career?
3 A Where mine's been taken, or I've been
4 actually asking questions?
5 Q Yeah. In how many depositions have you
6 been asking questions?
7 A None.
8 Q Even as an insurance defense lawyer you
9 never took any depositions?
10 A No. I was a rookie.
11 Q And you've been a lawyer for 21 years;
12 correct?
13 A No, since 1971.
14 Q Oh, I'm sorry. You've been a lawyer for 31
15 years --
16 A Yes, sir.
17 Q -- correct?
18 A Yes, sir.
19 Q Okay. Beyond giving that one deposition as
20 an expert, you've attended depositions, though;
21 correct?
22 A Some.
23 Q About how many?
24 A Maybe five or six.
25 Q Are you married?

13
1 A Yes.
2 Q How long have you been married?
3 A 32 years.
4 Q Do you have any children?
5 A Two children.
6 Q What are their ages?
7 A 28 and 25.
8 Q Do you have any grandchildren?
9 A No.
10 Q Do you want grandchildren?
11 A Yes. It's out of my control.
12 Q Do you have -- Do you currently have any
13 health problems?
14 A Do I currently have any health problems?
15 Q Yes, sir.
16 A No.
17 Q Did you have any health problems in the
18 years from 1996 to October 23rd of 1999, that would
19 have affected your job performance?
20 A No.
21 Q And you do hope one day to have
22 grandchildren?
23 A Yes.
24 Q And knowing what you did back on October of
25 '99 would you let your grand - future grandchildren

14
1 play on that Dairy Queen if it was in the same
2 condition it was in October of '99? And I'm --
3 MR. STEVENS: Objection, form.
4 Q -- talking about the Strickland Dairy
5 Queen.
6 MS. SMITH: Objection, form.
7 A Yes.
8 Q I want to make sure I did - got the
9 question out.
10 If you had a six-year-old grandchild
11 back on October of 1999, knowing what you did back
12 then, you would let that grandchild play on the
13 Strickland Dairy Queen playground?
14 MR. STEVENS: Objection, form.
15 MS. SMITH: Objection, form.
16 A Yes, if properly supervised I would.
17 Q Knowing what you know today about the
18 condition of that - of the Strickland Drive Dairy
19 Queen playground as it existed in October of 1999,
20 would you still have let one of your grandchildren
21 play on that Dairy Queen playground?
22 MR. STEVENS: Objection, form.
23 MS. SMITH: Objection, form.
24 A Yes, if supervised.
25 Q Who do you work for?

15
1 A International Dairy Queen.
2 Q Have you ever worked for American Dairy
3 Queen?
4 A Yes.
5 Q When?
6 A I've - I've worked with both companies
7 since 1988.
8 Q All right. And in 1988 who did you start
9 with?
10 A In the legal department.
11 Q For?
12 A The attorney that I worked for?
13 Q Were you with American Dairy Queen or --
14 A With both.
15 Q Well, currently are you employed by both
16 ADQ and IDQ?
17 A Yes.
18 Q And you began in the ADQ/IDQ legal
19 department in 1988?
20 A Right.
21 Q What was your position?
22 A Assistant attorney - or I guess it would be
23 just staff attorney.
24 Q Were you ever promoted?
25 A Yes.

16
1 Q When?
2 A Six months later.
3 Q What were you promoted to?
4 A Vice-president of - of law.
5 Q What were your job duties as Vice-president
6 of law?
7 A Basically responsible for the issues
8 dealing with franchising. And mostly to just do what
9 any other law department would do in a - in a
10 corporation as far as any legal matter that would
11 come across my desk that would affect the
12 corporation.
13 Q Did you check paperwork as it went out?
14 A Sometimes.
15 Q Were you then promoted from the
16 Vice-president of law?
17 A I - I think I was promoted to
18 Vice-president and general counsel in -- And I can't
19 recall the date. I think it would be about -
20 probably about seven or eight years ago.
21 Q And did your job duties change then?
22 A Not that much.
23 Q So, you are the general counsel for
24 American Dairy Queen?
25 A Yes.

17
1 Q And that means you're the top lawyer for
2 American Dairy Queen?
3 A Yes, I am.
4 Q All right. Can we have an agreement that
5 if I say ADQ we're talking about American Dairy Queen
6 and International Dairy Queen, unless I tell you
7 otherwise?
8 A I would appreciate it. That will make it a
9 lot easier.
10 Q Okay. So, we have that agreement; right?
11 A Yes. Right.
12 Q Now, you were Srinivasa Murthy's boss back
13 in 1999?
14 A No, I wasn't.
15 Q Okay. Are you Srinivasa Murthy's boss
16 today?
17 A Yes.
18 Q When did you become his boss?
19 A January of 2001.
20 Q And is he now in the legal department?
21 A No. I was given additional
22 responsibilities and a new title.
23 Q What was your new title as of January,
24 2001?
25 A Chief Legal and Administrative Officer.

18
1 Q And what are your additional duties?
2 A I have Mr. Murthy's area, which is
3 administrative services. I have meeting and travel
4 group, and I have HR.
5 Q What do administrative services do?
6 A They do a number of things to help support
7 the staff. They're in charge of the home office
8 building. They're in charge of - of making sure the
9 copy machines work; making sure of just a number of
10 things. New furniture in and out. If - if we were
11 to relocate or have new offices in the field, they're
12 responsible for field offices of - of people and
13 things like that.
14 Q And how long had Mr. Murthy been with the
15 administrative services?
16 A He had been there before I had come with
17 the company.
18 Q What was his title?
19 A Currently?
20 Q Currently.
21 A Vice-president of administrative services.
22 Q What was Mr. Murthy's title in 1999?
23 A The same.
24 Q What was Mr. Murthy's title in 1995?
25 A I believe it would be the same.

19
1 Q Now, Mr. Murthy was in charge of the
2 playground project for ADQ; correct?
3 A He was the administrator of the project,
4 yes.
5 Q And he had been I guess administrator of
6 the playground project since 1992?
7 A Probably '94.
8 Q But ADQ had a playground project ongoing in
9 '92 and '93, didn't they?
10 A But we hadn't put it into -- I hadn't made
11 the decision to put into a project as of that date.
12 Q You're the one that made the decision to
13 have a playground project?
14 A Well, I was the one that made the - made
15 the decision that we ought to look into playgrounds
16 and look how to educate the franchisees.
17 Q And that was in 1994?
18 A '93, '94 is when we were talking about it.
19 Q And, so, the playground project for
20 American Dairy Queen began in 1993 or '94?
21 A Where we formalized taking an approach to
22 how we were going to educate our franchisees, yes.
23 Q So, the playground project began in 1993 or
24 '94; correct?
25 A Discussions. But you say the project.

20
1 Well, we hadn't launched into a formal plan as of
2 then. There were discussions on playgrounds. But
3 the - the thought of how we were going to deal with
4 it and put it in a formal plan didn't really start
5 until probably '93, '94.
6 Q Well, when did AD -- What year did ADQ
7 formalize its playground project plan?
8 A It was never really formalized. It was
9 an - an approach to dealing with an issue like no
10 other. We had -- We were dealing with several other
11 issues in Texas on similar matters at the same time,
12 and we took the same approach.
13 MR. LAWDERMILK: Object as
14 nonresponsive.
15 Q (By Mr. Lawdermilk) What was your role in
16 the playground project?
17 A Well, my role was how do we best approach
18 the situation based on what was at hand in light of
19 what we had been doing historically within the -
20 within the company; and then what we could do based
21 on what our agreements allowed us to do.
22 Q What were your responsibilities as in -
23 regarding the playground project?
24 A I guess I would be the architect of it.
25 Q Were you also the overseer of the

21
1 playground project?
2 A Once we had an approach Shrin was really
3 given the day-to-day administration of it.
4 Q In what year did you feel you-all had an
5 approach?
6 A We talked -- I would say probably '94.
7 Q So, in about 1994 Mr. Murthy became the -
8 the head guy for the American Dairy Queen playground
9 projects; right?
10 A He became the administrator of the project.
11 I would say I was still the head guy.
12 Q You had the final decisions?
13 A Yes.
14 Q But Mr. Murthy ran the day-to-day
15 operations of - of dealing with the playground
16 project; correct?
17 A Yes.
18 Q And do you consider that there were more
19 than one playground project, like a northwest
20 playground project and then a separate Texas
21 playground project; or do you consider them all the
22 same?
23 A I would say it was - they were probably all
24 the same.
25 Q Did American Dairy Queen treat them all the

22
1 same?
2 A No.
3 Q Did all of the documents that Mr. Murthy
4 sent out to operators regarding playgrounds go
5 through the legal department?
6 A Not necessarily.
7 Q And do you know that for a fact?
8 A Yes.
9 Q How do you know that?
10 A Because some of the ones went through
11 outside counsel.
12 Q And even after going through outside
13 counsel the - ADQ's legal department would never have
14 looked at them?
15 A Some we may, and some we didn't.
16 Q Well, let me ask you this. Did all the
17 documents that Mr. Murthy sent out to the operators
18 go through a lawyer's hands?
19 A I would say probably.
20 Q In your opinion when you require someone to
21 do something is that the same as asking them to do
22 it?
23 A It's asking them in a strong way, yes.
24 Q Did you see all the documents sent out by
25 Mr. Murthy regarding the Texas playground project?

23
1 A I saw them - not necessarily all before
2 they went. I probably saw them all at sometime
3 either before or after.
4 Q Well, did you see all the documents sent
5 out by Mr. Murthy regarding the Texas playground
6 project?
7 A Well, I should -- Let me clarify that
8 because you say documents. I did -- If we're talking
9 about bulletins and things like that, I can't say
10 that I saw every - necessarily every letter or memo
11 that went.
12 Q But all the documents sent out by
13 Mr. Murthy regarding the Texas playground project
14 were approved by an attorney; correct?
15 A More than likely.
16 Q Okay. How about all the documents sent out
17 by Mr. Murthy for the northwest playground project;
18 were they also all approved by an attorney?
19 MR. STEVENS: Object to form.
20 A I believe they would be, yes.
21 Q Okay. When did you first learn that the
22 Strickland Dairy Queen playground was so hazardous it
23 should be closed immediately?
24 MR. STEVENS: Object to form.
25 MS. SMITH: Object to form.

24
1 A All I -- After the -- After the accident
2 itself I guess is when I first knew that it had some
3 issues with the CPSC. But I never knew it was so
4 hazardous it should be closed immediately.
5 Q So, after October 23rd of 1999, is the
6 first time that you knew the Strickland Dairy Queen
7 playground had - did not come into compliance with
8 the CPSC guidelines?
9 A No, that wasn't your question. Your
10 question was when --
11 Q But that was a new question.
12 A Well, then, could you start over again,
13 please.
14 Q Sure. Is after October 23rd of 1999, the
15 first time you knew that the Strickland Diary Queen
16 playground was not in compliance with the CPSC
17 guidelines?
18 A No.
19 Q When did you first know that the Strickland
20 Dairy Queen playground was not in compliance with the
21 CPSC guidelines?
22 A I received a - a copy of a letter that -
23 that went to Mr. Allred; but did not have the actual
24 report itself. But to that letter it did indicate
25 that it didn't meet the guidelines.

25
1 MR. LAWDERMILK: Objection,
2 nonresponsive.
3 Q (By Mr. Lawdermilk) When - on what date did
4 you first learn that the Strickland Dairy Queen
5 playground was not in compliance with the CPSC
6 guidelines?
7 A There's a copy of a letter that I received
8 that was dated January 8th, 1998.
9 Q So, in January of 1998 you had specific
10 knowledge that the Strickland Diary Queen playground
11 was not in compliance with the CPSC guidelines;
12 correct?
13 A Yes.
14 Q Okay. But it was not until after October
15 23rd of 1999, that you knew that the Strickland Dairy
16 Queen playground was hazardous; correct?
17 A I knew it didn't meet --
18 MR. STEVENS: Object to form.
19 A I don't know if it was hazardous or not. I
20 knew it didn't meet the - the guidelines.
21 Q But after October 23rd of 1999, did you
22 ever learn that the Strickland Diary Queen playground
23 was hazardous?
24 A I knew it -- Hazardous was a word that I
25 would - I -- I knew it didn't meet guidelines.

26
1 Q Knowing what you know now do you consider
2 that the Strickland Diary Queen playground in October
3 23rd of 1999, was in a hazardous condition?
4 MS. SMITH: Objection, form.
5 MR. STEVENS: Objection, form.
6 A It didn't meet guidelines. And from my
7 perspective if - if it was properly used, it wouldn't
8 be hazardous.
9 MR. LAWDERMILK: Objection,
10 nonresponsive.
11 Q (By Mr. Lawdermilk) Knowing what you know
12 now do you consider that the -- Strike that.
13 Knowing what you know now do you
14 consider the condition of the playground at the
15 Strickland Drive Dairy Queen on October 23rd of 1999,
16 to have been in a hazardous condition?
17 MR. STEVENS: Objection, form.
18 MS. SMITH: Objection, form.
19 A I do not think it was hazardous. I do not
20 think that it -- But I do think it did not meet the
21 guidelines.
22 Q Thank you. When did you first have
23 knowledge that carpet over concrete was a dangerous
24 surfacing for playgrounds?
25 MR. STEVENS: Objection, form.

27
1 MS. SMITH: Objection, form.
2 A I first read highlights of the CPSC along
3 with the bulletins that went out that indicated that
4 hard surfaces was a potential for injury in a - in a
5 large number of playground accidents.
6 MR. LAWDERMILK: Objection,
7 nonresponsive.
8 Q (By Mr. Lawdermilk) When - what date did
9 you first have knowledge that carpet over concrete
10 was a dangerous surfacing for playgrounds with
11 slides?
12 MR. STEVENS: Objection, form.
13 A Probably --
14 MS. SMITH: Objection, form.
15 A -- 1995.
16 Q Thank you. When did you first have
17 knowledge that carpet over concrete is not adequate
18 surfacing for playgrounds?
19 A Again, probably 1995. Possibly '94, but
20 '95 is when I recollect it.
21 Q When did you first have knowledge that
22 carpet over concrete could cause severe injuries to
23 children?
24 MS. SMITH: Objection, form.
25 A Again, it would be in the 1995 range.

28
1 Q Okay. When did you first have knowledge
2 that a carpet over concrete surfacing on a playground
3 could be fatal to children?
4 A October 23rd, 1999.
5 Q You're an attorney -- You're the head
6 attorney for ADQ; correct?
7 A Yes, I am.
8 Q Okay. And you also have I guess two
9 lawyers with you here today?
10 A Three now.
11 Q You have three lawyers with --
12 A Actually four if you count Michele.
13 Q Well, you're the head attorney for American
14 Dairy Queen; correct?
15 A Yes, I am.
16 Q And with you here today you have three or
17 maybe four lawyers with you; correct?
18 A Yes, sir.
19 Q Okay. What have you reviewed in
20 preparation for your deposition today?
21 A I've reviewed numerous memos and documents
22 sent out by Shrin Murthy. I've reviewed our file on
23 the ADA cases in Texas in '92 through '95. I've
24 reviewed the Texas - Texas Attorney General file on
25 the smoking issue - '93, '94 in Texas. I've reviewed

29
1 the deposition of Anita Wilson in the Angelle case.
2 I've reviewed the deposition of Wes Howard. I've
3 reviewed the deposition of Larry Newell.
4 Q Anything else?
5 A Well, there's probably other things; but
6 that - that's the best I can give you at this point.
7 Q Have you reviewed any of the franchise
8 agreements?
9 A Oh, yes, I have. I have looked at the
10 franchise agreements.
11 Q Have you looked at all of Bruce Allred's
12 franchise agreements?
13 A Not all of them, no.
14 Q Which ones have you looked at?
15 A I specifically looked at the one for the
16 Strickland Drive store.
17 Q How much time have you spent getting ready
18 for your sworn testimony?
19 A I guess three days, four days.
20 Q Have you met with people to get ready for
21 your sworn testimony?
22 A Yes, I have.
23 Q Have you meet with people other than your
24 attorney - or your attorneys to get ready for your
25 sworn testimony?

30
1 A Only in conjunction with the preparation.
2 I met with Shrin Murthy last week when he was here.
3 Q Is Shrin Murthy the only person you met
4 with other than your attorneys in preparing for this
5 deposition?
6 A Yes.
7 Q Have you ever been to Orange County?
8 A Yes.
9 Q When?
10 A Last week.
11 Q Last Thursday?
12 A Actually it was - it was Wednesday.
13 Q Had you ever been to Orange County prior to
14 last Wednesday?
15 A I don't believe so.
16 Q What did you go to Orange County for last
17 Wednesday?
18 A I wanted to visit the site where the - the
19 accident occurred.
20 Q Why?
21 A I wanted to see what the lawsuit was about
22 and to get a better idea - if this is going to go to
23 trial, I wanted a better understanding of what's -
24 what - what it looks like and get a better feel.
25 Q So, when you went in there you sort of went

31
1 in as I guess an investigative role?
2 A I'd - I'd guess both investigating -- I
3 also look at every -- I - I went to four or five
4 different Dairy Queens in this area. I also kind of
5 make it a habit to see if the stores are clean and
6 how they're operated. And I - you know, as long as
7 I'm in the area I do both things. So, I was able to
8 do that.
9 Q So, you - you went into the Dairy Queen
10 stores in this area last week not only in an
11 investigative role but to look at their condition and
12 upkeep; correct?
13 A I just -- Just to see how they're doing.
14 Texas is a different style Diary Queen than the rest
15 of the country. So, I wanted to just get a better
16 feel for it. I don't get the chance to spend much
17 time in a Texas - in a Texas Dairy Queen.
18 MR. LAWDERMILK: Objection,
19 nonresponsive.
20 Q (By Mr. Lawdermilk) When you went into the
21 local Dairy Queens around here for the first time
22 last week you went in partly in an investigative role
23 but also to look at the condition and the upkeep of
24 the --
25 A No.

32
1 Q -- stores?
2 MS. SMITH: Objection, form.
3 A I --
4 MR. STEVENS: Objection, form.
5 A I viewed it -- I viewed it -- I went in as
6 a customer. I was looking to see what kind of
7 products they have and serve and the quality of the
8 product.
9 Q So, when you went into the Strickland Dairy
10 Queen store you went in as a customer?
11 A And - and someone who was curious because
12 they had been named in a lawsuit because of that;
13 someone who had been personally named in a lawsuit
14 and wanted to see what it was all about.
15 Q Okay. And your only connection with Orange
16 County is that ADQ make money from its local stores;
17 right?
18 MR. STEVENS: Objection, form.
19 MS. SMITH: Objection, form.
20 A Our only --
21 Q Your --
22 A I - I guess I have a little -- Repeat it
23 again. I'm really not sure where you're going with
24 that.
25 Q Your only connection with Orange County is

33
1 that ADQ, your employer, makes money from the local
2 stores; correct?
3 MR. STEVENS: Objection to form.
4 MS. SMITH: Objection, form.
5 A We get the franchise fees from that store.
6 Q Do you have the ability to hire and fire
7 people?
8 A Yes.
9 Q How many people are under you?
10 A I would have to stop and figure it out with
11 the - with the additional staff. I would guess 30 or
12 40.
13 Q Who is directly under you? Who's your
14 second in command?
15 A Well, I have three Vice-presidents that
16 report to me.
17 Q Who are they?
18 A Shrin Murthy, Cheryl Henry. And then Mike
19 Reinke who is Assistant General Counsel -
20 Vice-president, Assistant General Counsel.
21 Q And I know you answered this, but when did
22 you get your managerial position?
23 A In January of 2001.
24 Q Okay. Who is your boss?
25 A Chuck Mooty.

34
1 Q What's his title?
2 A President/CEO.
3 Q How long has he been the President and
4 CEO?
5 A Since January 1 of 2001.
6 Q In 1999 what were Mr. Murthy's job duties?
7 A He was head of administrative services,
8 which included running the areas I previously
9 mentioned; the things with the building and stuff.
10 And then he would take assignments from other
11 officers as far as projects. He's also responsible
12 for helping with customer service problems, and he
13 also worked with the crisis committee.
14 Q Who's Lon Brew?
15 A Lon Brew is Executive Vice-president of
16 American Diary Queen Corporation.
17 Q And is he your equal or your superior, or
18 is he below you?
19 A Probably below me.
20 Q Different departments?
21 A It's hard to explain. But he's - he's only
22 an officer of American Diary Queen Corporation.
23 Q Well, I guess go ahead and explain it to
24 me.
25 A Do you want me to explain it?

35
1 Q Yeah.
2 A Okay. There's -- The operations group is
3 under American Dairy Queen Corporation because
4 they're mainly responsible for the operations of the
5 American - or the Dairy Queen franchisees that are
6 licensed under the American Dairy Queen Corporation.
7 International - International Dairy
8 Queen is the holding company that has a number of
9 different companies. And I - I serve as an officer
10 on all the companies that IDQ has.
11 And as a result my level is at an
12 Executive Vice-president level but over the overall
13 group as opposed to a smaller group - or a single
14 group.
15 Q And, so, you're saying that the operations
16 is under the American Dairy Queen; correct?
17 A Yes.
18 Q And operations are more the hands-on,
19 day-to-day with the local people; correct?
20 A Yes.
21 Q Who's Jolynn Fielder?
22 A She's a Senior Field Consultant in the
23 Operations Division.
24 Q And what are her job duties?
25 A She would be the lowest level in the - in

36
1 the operations group that would call on the stores
2 periodically.
3 Q And when you say "call on the stores," you
4 mean show up for inspections to make sure that the
5 facilities and the product are meeting American Diary
6 Queen standards; correct?
7 MR. STEVENS: Objection, form.
8 A They can -- She could do a number of
9 things. Doing an evaluation of the store is one of
10 the things she could do.
11 Q Who's Michael Sullivan?
12 A Michael Sullivan is currently Chairman of
13 the Board of International Dairy Queen.
14 Q What was Mr. Sullivan's position back in
15 1999?
16 A He was -- In 1999 he was President and CEO.
17 Q Of?
18 A Of International Diary Queen and I believe
19 American and several of the other companies. But
20 basically it was --
21 Q He was the top guy?
22 A He was the top guy.
23 Q In your opinion is Jolynn Fielder qualified
24 to properly inspect playgrounds?
25 A No.

37
1 Q ADQ has standards that the local Dairy
2 Queen stores are required to follow; correct?
3 A Yes, sir.
4 Q These standards that AD -- Strike that.
5 These are standards that ADQ not only
6 asks the Diary Queen stores to follow but it requires
7 them to follow; correct?
8 A Yes.
9 Q And if the Dairy Queen store isn't living
10 up to ADQ's standards and requirements, ADQ can force
11 them to make changes or they lose their franchise;
12 correct?
13 A Yes.
14 Q Would you agree that a standard - the
15 standard operating procedure for ADQ making changes
16 at Diary Queen stores could be described as follows:
17 That, one, ADQ recommends a change to the operator
18 for the good of the Dairy Queen?
19 MS. SMITH: Objection, form.
20 Q Second --
21 MR. STEVENS: Objection, form.
22 Q -- ADQ tells the operator "Here's a change
23 we want you to make"; the next thing they do is ADQ
24 then requires or demands that the change be made; and
25 then finally ADQ then takes action by starting the

38
1 termination procedure?
2 MR. STEVENS: Objection, form.
3 MS. SMITH: Objection, form.
4 A No, I don't agree that that's our
5 procedure.
6 Q Well, will you at least agree that American
7 Dairy Queen has used those tactics in the past?
8 A Not necessarily in core product standards,
9 no.
10 Q Has American Dairy Queen ever used those
11 tactics in the past?
12 MS. SMITH: Objection, form.
13 A As far as our standards that we've
14 established? If we've -- I - I don't follow - follow
15 where you're going with this.
16 Q I'm asking about the operating procedure,
17 the pattern, the way ADQ goes about making changes at
18 Diary Queen stores. One, they recommend to the
19 operator "This is going to be good for your store";
20 if nothing gets done they'll tell the operator "This
21 is a change we really want you to make"; if nothing
22 gets done they then require or demand that the
23 changes be made; and if that doesn't work ADQ then
24 takes action by starting the default and the
25 termination procedure.

39
1 MR. STEVENS: Objection to form.
2 MS. SMITH: Objection, form.
3 A No, that isn't how it works.
4 Q Okay. Well, describe to me the process of
5 the termination procedure.
6 A People would be terminated or put on
7 default for violating something that - that's in
8 their franchise agreement. And that usually would
9 have to do with requirements determined and standards
10 based on what had been established in the franchise
11 agreement. For instance, if we had a standard as far
12 as a product or a certain kind of product - if we
13 brought in a new product and we said, "This is the
14 new menu product," they would get a system bulletin
15 on it. They are told this is the product. It would
16 be incorporated as an addendum in most of the newer
17 agreements and - that this is something they have to
18 follow.
19 And it's not something we ask them to
20 follow; and if they don't cooperate, we'll come -
21 we'll jump on them later. It's something that we put
22 out and say, "This is your new requirement." And it
23 goes to the core product that we have. And to the
24 extent they don't follow it, the field consultant or
25 whoever visits the store can make note that they're

40
1 not following what they're supposed to do. And
2 they'll ask them nicely to take it out. And if
3 there's not cooperation, then the default letter will
4 probably be sent.
5 MR. LAWDERMILK: I will object as
6 nonresponsive. Part of it was.
7 Q (By Mr. Lawdermilk) But I didn't ask you
8 why the termination procedure would take place. I'm
9 asking you just to describe the process of a
10 termination procedure.
11 A So, you don't want to know about the
12 establishing of a standard that leads to it. You
13 just want to know how the --
14 Q My question right now is describe the
15 process of the termination procedure.
16 A The process of the termination procedure is
17 that the field consultants - in the case of an
18 operational issue with a store; it could also be a
19 person in accounting if it dealt with a financial
20 issue with a store - would send a request to us to
21 review possible default of the store.
22 At that point we would then look at
23 the agreement to see what rights we have. We have
24 over - what was it? - 200 plus different agreements
25 at the Dairy Queen systems starting from one-page

41
1 agreements all the way up to the new modern longer
2 agreements. And, so, one size does not fit all in
3 our system. So, at that point we make a
4 determination on what we're going to do as a law
5 department, whether it's something where we can issue
6 a default. And I send out all default letters.
7 If they don't respond to the default,
8 then we make a determination whether we're going to
9 push to - to - to do the final termination. But
10 again, usually we don't need to get to that point
11 because people - once they've gotten to default -
12 have usually decided that it's something they're
13 going to try to improve upon and not let that be the
14 reason for them to lose their franchise.
15 Q And your experience is that almost always -
16 or a large majority of the local operators when they
17 receive a default make the changes; they get it - get
18 it right and get it within ADQ standards; is that
19 right?
20 A Not if there's a cost issue. I mean
21 there's a lot of different reasons why they would or
22 they wouldn't. But if it's something simple they're
23 going to - they may make the adjustment. But if it's
24 a money issue or a cost issue or something, they just
25 don't feel we have the right to do that. So, they'll

42
1 fight us.
2 Q When you say "they'll fight us," how many
3 people have taken you to court over you issuing a
4 default in Texas in the last year?
5 A No one has taken us to court in Texas,
6 although we've heard from their attorneys.
7 Q Well, by issuing a default - and one of the
8 local operators doesn't agree with it - how many
9 times have the local operators fought you and taken
10 you to court in Texas since 1990?
11 A Probably none that I can recall.
12 Q Are you involved in any way in the training
13 of the Dairy Queen personnel that actually work the
14 stores?
15 A The -- Not our people, but the actual
16 people who come to the training school?
17 Q (Moving head up and down)
18 A No, I'm not.
19 Q Are you involved in any way in the training
20 of the field consultants?
21 A Yes.
22 Q What do you do?
23 A I basically give them a two-hour
24 presentation on what is franchising and what role the
25 legal department plays in the corporation.

43
1 Q And ADQ trains the local operators and
2 managers; correct?
3 A Not necessarily. It depends on the
4 agreement.
5 Q Well, has ADQ ever trained any of the
6 managers from the Strickland Dairy Queen?
7 A In reading material in Anita Wilson's
8 deposition she said she have - she did come to
9 training school.
10 Q Therefore, ADQ has trained a local manager
11 from the Strickland Diary Queen store?
12 A I believe so, yes.
13 Q Okay. Did ADQ ever train any of the local
14 managers regarding playground safety?
15 A Not that I recall.
16 Q Did ADQ ever once educate the managers of
17 the local stores regarding hazards on a playground
18 during the training?
19 A During the training itself?
20 Q (Moving head up and down)
21 A I - I don't believe so; not at training
22 school.
23 Q But ADQ does train the local managers, and
24 some of that training includes safety; correct?
25 A Trains the local managers for --

44
1 Q Some of the training of the local managers
2 includes issues on safety?
3 MR. STEVENS: Objection to form.
4 A I know we educate; we send out bulletins
5 and stuff. I don't know what safety issues are
6 trained by the local manager - by the -- Are you
7 saying our field people go out and train?
8 Q I'm saying when they come to your training
9 program.
10 A I think they train them on anything that
11 has to do with the core business and properly using
12 freezers and other things and - and possibly how to
13 open and close a store. Whatever's in the manual
14 would be, you know, viewed as, you know, the proper
15 running of a store. It could also be viewed as
16 safety. I - I guess there's some areas that they get
17 involved with.
18 Q Okay. In October of 1999 was it ADQ's
19 policy that a child is being supervised on the
20 playground if an adult is watching him through the
21 window?
22 MS. SMITH: Objection, form.
23 MR. STEVENS: Objection, from.
24 A I don't know if that was our policy or not.
25 Q Who would know?

45
1 A Possibly the director of training.
2 Q And who is that?
3 A Debra Hampton.
4 Q Do you know anything about ADQ's policy on
5 child supervision on the playground?
6 A Other than it's - it's good to post a sign
7 that children should be watched.
8 Q But that's the limit of your knowledge
9 about ADQ's policies on - regarding playgrounds?
10 A I - I - I really don't have a lot of
11 knowledge on that.
12 Q Okay. How many employees does American
13 Dairy Queen have?
14 A American? Oh, I'm going to -- I'm going to
15 say 300.
16 Q How many employees does International Dairy
17 Queen have?
18 A Would that be inclusive of the American
19 group or --
20 Q Exclusively.
21 A Exclusive. I -- International maybe only
22 has 50. Again, I'm guessing. I have no idea.
23 It's - it's a smaller number.
24 Q How much money did American Diary Queen
25 gross in 1999?

46
1 A Net profit or - or gross?
2 Q Gross.
3 A You know, I - I - I know the - the net
4 number. I don't know the gross number.
5 Q What was the net number?
6 A I think the - the net number was something
7 like $35 to $40 million.
8 Q So, in 1999 American Diary Queen --
9 A Oh, this is 1999, not current? I'm sorry.
10 I apologize. Did you say 1999 as opposed to
11 current?
12 Q (Moving head up and down)
13 A I will say probably in the $30 million
14 range, but I'm not sure.
15 Q So, probably in 1999 American Dairy Queen
16 netted $30 million?
17 A My best estimate.
18 Q How many other serious Diary Queen
19 playground injuries do you know of that happened
20 prior to October of 1999?
21 A There was two of them --
22 Q Tell me about them.
23 A -- as I recall. I don't know a lot about
24 them. I just know one - one happened with - in -
25 somewhere I think in East Texas with Motel

47
1 Enterprises. And it was a fall case.
2 And another one happened up in the
3 Seattle area. And again, I'm not sure of the
4 circumstances. But - but again, it was -- I don't
5 know if it was a fall case or sliding off a slide and
6 hitting - hitting something that was too close or
7 something like that.
8 Q Now, you sat through Mr. Murthy's
9 deposition last week?
10 A Yes, I did.
11 Q Okay. Would you agree that the playground
12 issues he was talking about was the fact that some of
13 the Diary Queen playgrounds did not meet the CPSC
14 guidelines?
15 A Yes.
16 Q Okay. And that they were unsafe?
17 A Well, they didn't meet the guidelines, yes.
18 Q But also that they were unsafe?
19 MS. SMITH: Objection, form.
20 MR. STEVENS: Objection, form.
21 A Again, they didn't meet the guidelines.
22 And I - I - I view safe as - for their intended
23 purpose, including supervision and everything. I
24 can't make a judgement and say it's safe in general
25 without understanding the circumstances of use.

48
1 MR. LAWDERMILK: Objection,
2 nonresponsive.
3 Q (By Mr. Lawdermilk) Also some of the
4 playground issues were that some children were
5 getting hurt?
6 A There were -- There were some, yes.
7 Q Well, would you call a playground that does
8 not meet the CPSC minimum guidelines safe or unsafe?
9 A It's -- Depending on the use. If it's
10 improperly used it's probably not safe.
11 Q Well, I'm not talking about the use. I'm
12 talking about a playground that doesn't meet the
13 minimum CPSC guidelines. Would you characterize that
14 as safe or unsafe?
15 MR. STEVENS: Objection, form.
16 MS. SMITH: Objection, form.
17 A I would say it is not as safe as one that
18 does.
19 Q And, so, ADQ - and actually you gave the
20 approval for it - implemented the playground
21 project. And that was to correct problems with the
22 Diary Queen playgrounds?
23 A It was to educate the franchisees on an
24 area that they should be aware of that maybe needs to
25 be improved upon.

49
1 MR. LAWDERMILK: Objection,
2 nonresponsive.
3 Q (By Mr. Lawdermilk) Was -- ADQ implemented
4 a playground project to correct the problems with the
5 Diary Queen playgrounds, yes or no?
6 MR. STEVENS: You can answer it
7 whatever way you wish. You don't have to -- You're
8 not limited to a yes or no answer.
9 A Well, we implement -- We implemented a
10 problem (sic) to try to get the playgrounds up to
11 current CPSC standards.
12 Q Okay. So, once again when I reference
13 playground issues, you know what I'm talking about?
14 A Yes, sir.
15 Q The fact that some Diary Queen playgrounds
16 did not meet the CPSC guidelines and that some
17 children had been getting hurt; right?
18 A Yes.
19 Q Okay. When did you first know what the
20 CPSC was?
21 A Probably in '93, '94 when we first started
22 talking about playgrounds.
23 Q And why did you first start talking about
24 playgrounds?
25 A There had been a couple of injuries and -

50
1 and Shrin had talked about it. And he had got
2 customer complaints on one. And then there was I
3 believe the one lawsuit in Seattle - in the Pacific
4 northwest area. I don't know if it was Seattle or
5 not. And we decided well - we were beginning to see
6 more of these, and this was something we should look
7 into.
8 Q So, it's your testimony that in '93 and '94
9 ADQ had experienced a couple of injuries on the - on
10 playgrounds?
11 A Well --
12 MR. STEVENS: Objection, form.
13 A -- I - I would suspect that there's
14 injuries all the time on playgrounds that are never
15 reported. So, I can't say that -- You know, bumps -
16 bumps, bruises, things like that that just - we don't
17 hear about. So, I can say that there is some that
18 came to our attention that made us want to look at it
19 more care - carefully.
20 Q And in 1993 and '94 about how many came to
21 your attention?
22 A I - I can't recall.
23 Q Well, I mean was it two or three?
24 A I can't recall.
25 Q 10, 20?

51
1 A I can't -- I don't have a memory of it. I
2 just know that it was something that we started to
3 look at.
4 Q Okay. You agree that the CPSC guidelines
5 are the absolute minimum safety standard that a
6 playground should meet?
7 MR. STEVENS: Objection to form.
8 MS. SMITH: Objection, form.
9 A It's a guideline. And - and it's - it's
10 for someone - for people to - you know, to try to get
11 to. It's a guideline. It's - it doesn't mean it's
12 an absolute minimum. It doesn't mean it's a
13 maximum. There's probably, you know -- So, I would
14 say that good business sense is you should try to
15 meet the - meet what the standards are.
16 Q How does American Diary Queen make money
17 from Dairy Queen stores?
18 A Through franchise fees.
19 Q Anything else?
20 A We do -- Well, American Diary Queen --
21 Again, are we saying both -- You're talking -- We're
22 back to both now?
23 Q Yes, sir.
24 A Okay. We do get involved in - in the
25 warehousing and distribution of products and

52
1 services.
2 Q Okay. And let's just clear that up. How
3 does ADQ make money?
4 A Okay. ADQ makes money generally - or from
5 the royalty of franchises.
6 Q How else does ADQ make money?
7 A ADQ alone?
8 Q Okay. Once again, let's clear this up.
9 When I say "American Dairy Queen," I'm
10 talking about American Dairy Queen. When I say
11 "International Dairy Queen," I'm talking about
12 International Dairy Queen.
13 A Okay. All right.
14 Q We agreed when I say "ADQ" I'm talking
15 about both ADQ and IDQ.
16 A Okay.
17 Q Is that okay?
18 A Yeah.
19 Q Okay. So, how -- Let's start that whole
20 thing over.
21 How does ADQ make money?
22 A ADQ makes money through royalties; also can
23 make money through transfer fees. And I think
24 that's -- I mean I can't think of anything else.
25 Q Does ADQ make any money off the product?

53
1 MS. SMITH: Objection, form.
2 A Does ADQ?
3 Q (Moving head up and down)
4 A No. You mean the sale of product?
5 Q (Moving head up and down)
6 A No.
7 Q Does ADQ make any money selling product to
8 the local stores?
9 A No.
10 Q Does ADQ make any money selling equipment
11 to the local stores?
12 A No.
13 Q Now, ADQ requires Diary Queen stores to use
14 certain products; correct?
15 A Yes.
16 Q Okay. ADQ actually sells some of those
17 products to the Diary Queens; right?
18 A ADQ?
19 Q (Moving head up and down)
20 A No.
21 Q Who does?
22 A If you're talking -- You -- IDQ does.
23 Q Okay. Once again, I thought we agreed when
24 I say "ADQ" we're talking about both ADQ and IDQ --
25 A Okay.

54
1 Q -- unless I say "American Dairy Queen" --
2 A Okay. It's too confusing for me.
3 MR. STEVENS: Why don't you say --
4 Q I'll just do -- I'll do both.
5 MR. STEVENS: -- ADQ and IDQ.
6 Q I'll just say both of them.
7 A Okay.
8 Q How does ADQ/IDQ make money?
9 A Through royalties, through transfer fees,
10 through the sale of products.
11 Q And the sale of products - of which ADQ/IDQ
12 requires the local Dairy Queens to use those
13 products; right?
14 A What -- They have alternative choices.
15 They don't buy exclusively from us.
16 Q Well, ADQ/IDQ does require the local stores
17 to use products - certain products; right?
18 A Yes.
19 Q ADQ/IDQ also sells equipment to the local
20 stores?
21 A Yes.
22 Q And makes -- And ADQ/IDQ makes money off of
23 the sale of that equipment to the local stores?
24 A Yes.
25 Q And ADQ/IDQ requires the local stores to

55
1 use only approved equipment; correct?
2 A There's - there's many options on equipment
3 that is not -- It depends on which equipment. And it
4 depends on what's - whether it's core product
5 equipment versus other equipment. There's - there's
6 equipment that's optional. There's recommended
7 equipment. There's required equipment. It gets
8 all --
9 Q Okay. Well, tell me, what's core product
10 equipment?
11 A Things that go to the - for instance, the -
12 you know, either for the cooking or the soft serve
13 products. The - the freezer that the Diary Queen
14 comes out (sic) would be a required product.
15 Q And what's some optional equipment?
16 A The type of booth packages they may put
17 in. They have a choice of - of many different
18 things.
19 Q They have a choice, but all of those have
20 to be approved by ADQ/IDQ; correct?
21 A Yeah. Yeah, in that - that - they do have
22 to. That would fall into an optional, but it would
23 be under approved I believe.
24 Q What about recommended equipment?
25 A Well, I'm not sure. I mean I -- It's not

56
1 my area. I don't get into it too much.
2 Q Well, can you think of any equipment that
3 ADQ/IDQ doesn't have to approve to go in the local
4 Dairy Queens as you sit here today?
5 A Well, it doesn't have to approve
6 playgrounds.
7 MR. STEVENS: Can we take a break,
8 Rocky?
9 MR. LAWDERMILK: You bet.
10 THE VIDEOGRAPHER: The time is 11:16.
11 We're off the record.
12 (Recess from 11:16 a.m. to 11:28 a.m.)
13 THE VIDEOGRAPHER: The time is 11:28.
14 We're back on the record.
15 Q (By Mr. Lawdermilk) You said that ADQ/IDQ
16 does not approve playgrounds that are put into the
17 Dairy Queen stores?
18 A It has in the past recommended - had
19 recommended playgrounds I believe. I don't know if
20 it currently does.
21 Q Well, does ADQ/IDQ require that Texas Dairy
22 Queen playgrounds meet the CPSC guidelines?
23 A Can you repeat?
24 Q Does ADQ/IDQ require Texas Dairy Queen
25 playgrounds to meet or be in compliance with the CPSC

57
1 guidelines?
2 A Currently?
3 Q Sure.
4 A No, it doesn't.
5 Q Has it ever?
6 A Not that I'm aware of.
7 Q Does ADQ/IDQ require new playgrounds that
8 are put into Texas Dairy Queen stores to be in
9 compliance with the CPSC guidelines?
10 A It's my understanding - and - and I'm not
11 positive; I haven't looked closely into it - that
12 there's a notation if someone's going to put in a
13 playground that it's their responsibility to see that
14 it meets whatever current guidelines - I don't know
15 if it says CPSC or - but it meets whatever the
16 recommendations other - whoever the manufacturer is
17 or something like that.
18 Q Is that a requirement by ADQ/IDQ?
19 A Currently?
20 Q Yes.
21 A It's just -- It's something we tell them to
22 look into if they're going to buy it. It's an
23 optional item.
24 Q So, it's just a recommendation?
25 A Again, I haven't seen the plans. I just

58
1 know they do something if there is. There are very
2 few playgrounds put in now. So, I don't know
3 what ...
4 Q And I guess my question is does ADQ/IDQ
5 require any new playground put into a Texas Dairy
6 Queen to be in compliance with the CPSC guidelines?
7 MR. LIGHTY: Object to form.
8 A I'm not sure of that. I'm not sure one way
9 or the other.
10 Q Well, who would know that?
11 A The director of engineering.
12 Q Well, whose job is it to decide if ADQ/IDQ
13 has the power or the right to require new playgrounds
14 to meet CPSC guidelines?
15 A Who -- I guess -- I guess who has the power
16 or the right based on their franchise agreement would
17 be me.
18 Q Then my question is does ADQ/IDQ require
19 new playgrounds to be in compliance with the CPSC
20 guidelines?
21 A I can't recall if I made that requirement
22 or not or have - have looked at it.
23 Q Define safety for me. What does it mean to
24 you?
25 A Safety is to put in something that

59
1 minimizes risk.
2 Q Children's business is very important to
3 ADQ; correct?
4 A Yes.
5 Q And do you agree that the Strickland Diary
6 Queen playground was an unsafe place for children in
7 October of 1999?
8 MR. LIGHTY: Object to form.
9 MS. SMITH: Objection, form.
10 A I think you've asked that question before.
11 I said it was - it did not meet the standard. And I
12 said it depended on how it was used whether or not it
13 would be unsafe.
14 MR. LAWDERMILK: Object as
15 nonresponsive.
16 Q (By Mr. Lawdermilk) Now, in 1996 as part of
17 the playground project ADQ decided to look at the
18 Texas Dairy Queen playgrounds to determine exactly
19 their condition; correct?
20 MR. LIGHTY: Object to form.
21 A We decided to survey the playgrounds and
22 make available that information to a consultant.
23 MR. LAWDERMILK: Object as
24 nonresponsive.
25 Q (By Mr. Lawdermilk) Did ADQ/IDQ decide to

60
1 determine the condition of the Texas Diary Queen
2 playgrounds?
3 MR. LIGHTY: Object to form.
4 A Yes.
5 Q Thank you. Now, ADQ had done a similar
6 project in the northwest; right?
7 A Yes.
8 Q Okay. Now, in the northwest ADQ actually
9 paid their expert to go to every Diary Queen store
10 with a playground; right?
11 A Correct.
12 Q In the northwest all the Dairy Queen
13 playgrounds came into compliance with the CPSC and
14 ADQ standards?
15 A They weren't ADQ standards. They came in
16 compliance with the CPSC standards.
17 MR. LIGHTY: Object, nonresponsive.
18 Q So, in the northwest all the Diary Queen
19 playgrounds came into compliance with the CPSC --
20 A Is --
21 Q -- correct?
22 A Over time I believe they did.
23 Q Over what period of time?
24 A Two or three years.
25 Q Were the CPSC standards for playground

61
1 safety adopted by ADQ as its standards?
2 MR. LIGHTY: Object to form.
3 A They're - they're the recommended standard
4 for our - our stores.
5 MR. LAWDERMILK: Object as
6 nonresponsive.
7 Q (By Mr. Lawdermilk) Has ADQ adopted the
8 CPSC guidelines as its requirements or standards for
9 playgrounds?
10 A It is a recommended requirement for our
11 stores. Not a requirement. It's recommended -
12 recommended that that's what our stores should look
13 to for their guideline in how they should conduct and
14 maintain their store - store playgrounds if they have
15 them.
16 Q So, your answer is no?
17 MR. LIGHTY: Object to form.
18 A Why don't you -- Why don't you start -
19 repeat the question.
20 Q Okay. Has ADQ adopted the CPSC guidelines
21 as its standard for playground - for Diary Queen
22 playgrounds?
23 A We've adopted the standard for our stores -
24 our franchisees as recommended. It's - it's not our
25 standards. We did not develop it.

62
1 Q And I understand you didn't develop it, but
2 has -- Are ADQ standards -- Strike that.
3 Has ADQ made the CPSC guidelines the
4 standard for the Diary Queen - for its Diary Queen
5 playgrounds?
6 MR. LIGHTY: Object to the form.
7 A I - I think the problem I have is that -
8 how we use standard in our system is it's more a
9 requirement under the core products. And any other
10 standard - quote "standard" outside of our system are
11 recommended. And there are a number of safety
12 standards we recommend as being important that stores
13 should adopt. And this is just another one of the
14 safety standards that are out there as - as
15 guidelines that we recommend that should be followed.
16 MR. LAWDERMILK: Objection,
17 nonresponsive.
18 Q (By Mr. Lawdermilk) Does ADQ require that
19 all Texas Dairy Queen playgrounds meet the CPSC
20 guidelines?
21 MR. LIGHTY: Object to the form.
22 A I don't think we can require it.
23 Q So, that's a "no"?
24 A No.
25 Q Does ADQ require that any Texas Diary Queen

63
1 playground meet the CPSC guidelines?
2 A I - I - I don't know. I don't -- I don't
3 believe so. But again ...
4 Q Well, who would know that? Who would make
5 that decision?
6 A If -- I'm just saying I - I don't think
7 there is; but I just -- Nothing is absolute. My
8 feeling is I don't know of any situation where we can
9 require it.
10 Q But isn't that your call?
11 A Huh?
12 Q That's your call?
13 A That is my call. But I ...
14 Q To the best of your knowledge does ADQ
15 require any Texas Dairy Queen playground to be in
16 compliance with the CPSC guidelines?
17 MR. LIGHTY: Object to form.
18 A Subject to my comment before about not
19 knowing if any new store by chance has had plans that
20 they've adopted and put in, I don't know. I never
21 knew it.
22 MR. LAWDERMILK: Object as
23 nonresponsive.
24 Q (By Mr. Lawdermilk) My question is --
25 MR. LIGHTY: Well, he's not saying he

64
1 doesn't understand your question, Rocky.
2 Q Do you know of any store which ADQ
3 requires -- Strike that.
4 Do you know of any Texas Diary Queen
5 playground which ADQ requires to be in compliance
6 with the CPSC guidelines?
7 MR. LIGHTY: Objection, form.
8 A I can't recall any.
9 Q I'm asking if you know.
10 A Do I know of any stores?
11 Q Yes.
12 A I don't believe so.
13 Q Okay. I've got to get my question out.
14 Do you know of any Texas Dairy Queen
15 playground which ADQ requires to be in compliance
16 with the CPSC guidelines?
17 MR. LIGHTY: Objection, form.
18 A I don't believe so.
19 Q Prior to Tyler's death did ADQ have their
20 expert go to every Texas Diary Queen playground?
21 A No.
22 Q Prior to Tyler's death did ADQ pay for
23 their expert to go to any Texas Diary Queen
24 playground?
25 A I don't believe so.

65
1 Q ADQ sent their own employees to the Texas
2 Diary Queen playgrounds who took notes and pictures;
3 right?
4 A Yes.
5 Q Okay. The expert then sent a - sent ADQ a
6 report on the condition of the Texas Diary Queen
7 playgrounds; right?
8 A Yes.
9 Q You saw that report?
10 A Yes.
11 Q Srinivasa made changes to those reports,
12 didn't he?
13 A I don't think he made changes to the --
14 Well, I'm not sure. I shouldn't say that. I ...
15 Q Well, did you know that Srinivasa made
16 changes to the store - individual playground reports
17 before sending them to the operators?
18 MR. LIGHTY: Objection, form.
19 A I only know from being in the deposition
20 yesterday that there was one letter - I don't know if
21 it was a report or a letter that he had made a
22 suggested change.
23 Q Well, in your opinion is Srinivasa a
24 playground expert?
25 A No.

66
1 Q And then he allegedly - Mr. Murthy
2 allegedly sent the reports to the Diary Queen
3 franchises?
4 A Yes.
5 Q Why didn't ADQ have an expert go to every
6 Texas Diary Queen playground prior to Tyler's death?
7 A Why didn't they?
8 Q Uh-huh.
9 A There's several reasons. First of all, we
10 had a concern because of the distance in Texas versus
11 the other how much time it would take to do that.
12 We also had a concern because of the -
13 the difficult relationship we had with Texans and
14 the -- And particularly we've had a number of issues
15 with the Texans on matters that once we started the
16 process, that if she started at some stores we would
17 never get it - get it finished.
18 And there's -- And, you know,
19 initially we thought it was going to be a cost
20 situation. But I think by the time we put it all
21 together and figured out that - to getting the people
22 ready to do the surveys and have them travel and
23 their time, it probably wouldn't have made that much
24 of a difference from a cost perspective, although
25 cost was an initial consideration.

67
1 Q Now, when no changes or few changes were
2 being made on the Texas Diary Queen playgrounds,
3 ADQ's expert pointed out to ADQ that you-all had had
4 success in the northwest because she was able to go
5 to every Diary Queen; right?
6 MR. LIGHTY: Objection, form.
7 A She went to every -- I don't know if that
8 was the reason for the success. We had -- We had put
9 in a plan of starting to require in a transfer of
10 upgrading the playgrounds. And we also were dealing
11 with a group of people that were with newer
12 agreements. And let's just say we're not as
13 organized as the Texas group.
14 Q My question, sir, was that when no changes
15 were being made to the Texas Diary Queen playgrounds,
16 ADQ's own expert - Mary Lou Iverson - pointed out to
17 ADQ that you-all had had success in the northwest
18 because she was able to go to every Dairy Queen;
19 right?
20 A That - that was her opinion that -- That
21 was her opinion. That wasn't -- I thought you asked
22 what our opinion was. I -- Her opinion was that's
23 what did it. But -- --
24 Q Okay.
25 A -- not necessarily ours.

68
1 Q So, you did -- So, you and ADQ disagree
2 that success in the northwest was because your expert
3 was able to go to every store?
4 A I'm not sure that was the only reason for
5 success.
6 Q Well, what were some other reasons?
7 A Well, we had started the -- We had started
8 a - a - the transfers up in that area requiring the
9 playgrounds to be brought up to standard as part of
10 the - of the transfer process.
11 Q Brought up to what standard?
12 A Well, to - to use the guidelines of the
13 CPSC; to have someone come out and look at it and say
14 that the playground is now meeting that; that there's
15 a comfort - it's comfortable from -- So, in that
16 regard we - we did put that in on a transfer.
17 Q Okay. Now, after Tyler's death ADQ paid an
18 expert to go to the Texas Diary Queen playgrounds and
19 work with the operators?
20 A I think -- I think I said no, we did not
21 pay for an expert to go to Texas playgrounds. Didn't
22 you just say --
23 Q Okay. We're having a communication problem
24 here.
25 A Okay.

69
1 Q I said after Tyler's death ADQ paid an
2 expert to go to the - every Texas Dairy Queen
3 playground and work with the operators?
4 A I - I don't believe so.
5 Q Okay. As we sit here today all of the
6 Texas Dairy Queen playgrounds are in compliance with
7 the CPSC; correct?
8 A That's what's been reported to me. I have
9 no personal knowledge of that.
10 Q Well, who reported that to you?
11 A Shrin Murthy.
12 Q In your opinion what does ADQ's Strickland
13 Dairy Queen agreement give ADQ the power to do?
14 A Basically make sure they are meeting our
15 core requirements as far as product and sanitation,
16 cleanliness.
17 Q In your opinion does the ADQ Strickland
18 Diary Queen agreement give ADQ the power to set
19 safety standards for the facility?
20 A No.
21 Q You will agree that the playground is part
22 of the facility?
23 A Not really. I - I would say it's part of
24 the premises; but not necessarily part of the
25 facility. Usually the facility is defined as the

70
1 building.
2 Q And who defines it as the building?
3 A I think historically that's how we've
4 viewed the facility in our system.
5 Q When you say "historically," you're talking
6 about American Dairy Queen/International Diary Queen?
7 A Yes.
8 Q So, it's American Diary Queen/International
9 Diary Queen's definition that the playground does
10 not - is not part of the facility --
11 A And I will --
12 Q -- correct?
13 A Yes. And I will also expand because we
14 have - we have a number of agreements. We've bought
15 out territory operators and - and - where we've taken
16 over - whether it's a state or an area - where we've
17 bought them out and we've assumed old agreements.
18 And we've assumed the standards have been in place by
19 those operators.
20 And, so, a lot of how we determine
21 when we - we work with an area such as Texas is going
22 to be based on how their - their person who ran the
23 area who issued their - their older agreements dealt
24 with them. So, that can have a factor, also, because
25 some of the agreements are older and - and it's not,

71
1 you know, something that we necessarily will see
2 that - for purposes -- An example, on the -- I will
3 give you an example. Well, I'm being nonresponsive.
4 I'm going to back off. Repeat the question.
5 MR. LAWDERMILK: Objection,
6 nonresponsive.
7 Q (By Mr. Lawdermilk) It's American Diary
8 Queen/International Diary Queen's opinion or
9 definition that the playground is not part of the
10 facility in Texas?
11 A Of the -- I - I would say under the
12 Close agreement -- Now, we're - we're going back and
13 forth. Are you talking the Close agreement again
14 now?
15 Q I said in Texas.
16 A So, we're dealing -- I would say that I'm
17 not sure of that answer under the newer agreements.
18 Q Well, who decides what - whether the
19 playground is part of the facility or not? It's you,
20 isn't it?
21 A Right. But I don't -- With 200 and
22 something agreements I don't know offhand what -- I'd
23 have to look at the agreement and make a decision
24 whether - whether it was covered or not covered as
25 far as being part of it.

72
1 Q In your opinion does ADQ's Strickland Dairy
2 Queen agreement give ADQ the power to set safety
3 standards for the playground?
4 A No.
5 Q In your opinion does the ADQ Strickland
6 agreement give ADQ the power to set standards for the
7 playground?
8 A No.
9 Q How many ADQ agreements in Texas give ADQ
10 the power to set safety standards for the
11 playground?
12 A I don't believe any.
13 Q How many ADQ agreements in Texas give ADQ
14 the power to set safety standards for the facility?
15 MS. SMITH: Objection, form.
16 A For the facility? None.
17 Q The QVSC and those inspections are not
18 mentioned in ADQ's Strickland Dairy Queen - Dairy
19 Queen agreement; correct?
20 A Correct.
21 Q Okay. Will you at least admit that
22 American Dairy Queen required the appearance of the
23 Texas Diary Queen playgrounds to meet ADQ standards?
24 MR. LIGHTY: Objection, form.
25 A Yes.

73
1 Q So, at least American - or ADQ made sure
2 the Texas Dairy Queen playgrounds appeared to be
3 safe; correct?
4 A Right.
5 MR. STEVENS: Objection, form.
6 MS. SMITH: Objection, form.
7 A I -- We - we had that in our agreement.
8 The - the Texans who hold those agreements would
9 argue whether we had the right to make that
10 inspection.
11 MR. LAWDERMILK: I'll object as
12 nonresponsive.
13 Q (By Mr. Lawdermilk) American -- ADQ made
14 sure the Texas Dairy Queen playgrounds appeared to be
15 safe; correct?
16 MR. LIGHTY: Objection, form.
17 MS. SMITH: Objection, form.
18 A It was -- It was in our QVSC facility
19 maintenance checklist that those are areas we looked
20 at from an appearance perspective.
21 MR. LIGHTY: I'm going to object as
22 nonresponsive.
23 Q Who --
24 MR. LIGHTY: You-all are not
25 communicating.

74
1 Q -- who were the top three people in
2 operations in 1996?
3 A 1996? Ed Watson, George Fougeron. And
4 then there's three V-P's under that. But the person
5 that would have been responsible for Texas would have
6 been Lon Brew.
7 Q Is that the same for '97, '98 and '99?
8 A Yes.
9 Q Okay. And can you -- I'm sorry. Can you
10 give me those names again?
11 A Ed Watson, George Fougeron, Lon Brew.
12 Q For Texas?
13 A Well, not for -- You asked for the top
14 three people in operations. Yeah, Lon was - had
15 Texas under him.
16 Q And what was George Fougeron's title in
17 1999?
18 A Executive Vice-president, American Diary
19 Queen Corporation. And I think he also was a regular
20 officer, not an executive officer, of IDQ.
21 Q What did he do? What was his position?
22 A He was similar to what Lon Brew is now.
23 He's in charge of all U. S. Operations.
24 Q How about Ed Watson in 1999?
25 A He was Executive Vice-president of

75
1 America - International Dairy Queen. And George
2 reported to him. And he in addition to having the
3 U. S. had Canada under him and the rest of the world,
4 and training and a few other things.
5 Q How about Lon Brew?
6 A Lon Brew at that point was Vice-president -
7 Regional Vice-president for the southwest, plus
8 California I think.
9 Q And what were his job duties?
10 A He was responsible -- He had Regional
11 Vice-presidents that reported - or Regional Directors
12 that reported to him who had field consultants. He
13 was the - the second level above the field
14 consultants to see that - that system programs were
15 implemented and followed.
16 Q And operations are more hands-on with the
17 Diary Queen operators than your department; right?
18 A Yes.
19 Q Okay. Did you ever seek operations'
20 involvement in dealing with the Texas Diary Queen
21 playground issues prior to October of 1999?
22 A Yes.
23 Q How did you go about doing that?
24 A Well, we talked to them about being
25 involved and getting their support for surveying the

76
1 stores; and also to carry information to the Council
2 and get the Council to buy in to what we were doing.
3 Q Do you want lunch?
4 A Well, I - I - I assume we're going to be
5 going long.
6 Q We are.
7 A So, then, I'd just assume get some lunch.
8 MR. LIGHTY: Is this a good time for
9 you, Rocky?
10 MR. LAWDERMILK: I'm fine.
11 THE VIDEOGRAPHER: The time is 11:56.
12 We are off the record.
13 (Lunch recess from 11:56 a.m. to 1:15 p.m.)
14 THE VIDEOGRAPHER: This is the
15 beginning of Tape 2. We're back on the record at
16 1:15.
17 MR. LIGHTY: As I said just now,
18 Mr. Lawdermilk, during - before lunch it became
19 apparent to me during the deposition that you and
20 Mr. Zucco were not communicating about a line of
21 questioning. I've confirmed that at lunch. The line
22 of questioning dealt with the appearance of - that
23 ADQ/IDQ might have had to the public concerning
24 safety playground issues.
25 Mr. Zucco was interpreting the word

77
1 "appearance" to talk about the physical appearance
2 of the structures, and I do not believe that's what
3 you meant in your questioning. With that -- If you'd
4 like to delve into it or not, I will do it at the end
5 of your deposition if you choose not to. But it's
6 your deposition. I just wanted to make that clear to
7 you-all.
8 Q (By Mr. Lawdermilk) Was dealing with the
9 Texas Dairy Queen playground issues a top priority
10 for ADQ?
11 A Is --
12 Q Was dealing with the Texas - the Texas
13 Dairy Queen playground issues a top priority for ADQ?
14 A Yes.
15 Q Was dealing with the Texas Dairy Queen
16 playground issues a top priority for you?
17 A It's one of my priorities. It wasn't my
18 top priority.
19 Q Well, for the years 1996 to 1999 - until
20 October 23rd of 1999, was dealing with the Texas
21 Dairy Queen playground issues a top priority for ADQ?
22 A It was -- It was an important priority but
23 wasn't a top priority.
24 Q And is that for you or for ADQ?
25 A For ADQ.

78
1 Q Okay. From the years 1996 to October 23rd
2 of 1999, was dealing with the Texas Dairy Queen
3 playground issues a top priority for you?
4 A No.
5 Q What year did dealing with the Dairy
6 Queen - the Texas Dairy Queen playground issues --
7 A Excuse me. Let me go -- I want to go back
8 again because I don't want any miscommunication.
9 Top meaning it's my No. 1 priority as
10 opposed to top meaning important to me is different.
11 It was -- It was top in a sense of being important
12 but it wasn't the No. 1 thing on my plate that I was
13 dealing with during that time period.
14 Q Okay. Well, was dealing with the Texas
15 Dairy Queen playground issues an important priority
16 for ADQ from the years 1996 to October 23rd of 1999?
17 A Yes, sir.
18 Q Was dealing with the Texas Dairy Queen
19 playground issues an important priority for you from
20 the years 1996 to October 23rd of 1999?
21 A Yes.
22 Q Okay. What year did dealing with the Dairy
23 Queen playground issues first become an important
24 priority for ADQ?
25 A I would say in the '94, '95 area.

79
1 Q Who at ADQ sends out the default notices to
2 the Dairy Queen stores?
3 A I do.
4 Q And default notices are sent when a Dairy
5 Queen store is not in compliance with ADQ standards
6 or requirements; correct?
7 MR. LIGHTY: Object to form.
8 A Correct.
9 Q How many default notices does ADQ or you
10 send out in a month?
11 A It varies by month and time of year and
12 things like that. But I would say that it could be
13 as many as 50 or more.
14 Q On average does -- Do you think ADQ sends
15 out about 50 or so default notices a month?
16 MS. SMITH: Objection, form.
17 A I guess so. Something --
18 Q Do you think maybe?
19 A Yes.
20 Q Okay.
21 A Yes, sir. I'm sorry.
22 Q The Dairy Queen stores have to come into
23 compliance with the ADQ standards when ADQ sends out
24 the default notices to them; correct?
25 A Yes.

80
1 Q And ADQ will terminate the franchise if the
2 Dairy Queen store doesn't correct whatever that
3 deficiency is; correct?
4 A Yes.
5 Q Who at ADQ made the decision that the local
6 Dairy Queen stores could not be defaulted for safety
7 reasons of the playgrounds?
8 A I did.
9 Q Who at ADQ made the decision that the
10 Strickland Dairy Queen store could not be defaulted
11 for safety reasons of its playground?
12 A I did. I shouldn't say who made the
13 decision. I don't think we specifically made a
14 decision on the Strickland - Strickland store.
15 MR. LAWDERMILK: Objection,
16 nonresponsive.
17 Q (By Mr. Lawdermilk) Who at ADQ made the
18 decision that the local Dairy Queen stores could not
19 be terminated for safety reasons of the playgrounds?
20 A You mean for noncompliance --
21 Q Yes.
22 A -- with -- Not safety -- Who made the
23 decision that they could not be terminated?
24 Q Yes.
25 A It would -- It would be me.

81
1 Q Okay. Well, I'll ask it again. Who at ADQ
2 made the decision that the local Dairy Queen stores
3 could not be terminated for safety reasons of the
4 playgrounds?
5 MR. LIGHTY: Objection, form.
6 A Again - again, there were guidelines that
7 weren't being met with the CPSC. And the decision
8 was we could not terminate them based on what their
9 agreement said.
10 MR. LAWDERMILK: Objection,
11 nonresponsive.
12 Q (By Mr. Lawdermilk) Who at ADQ made the
13 decision that the local Dairy Queen stores could not
14 be terminated for failing to comply with the CPSC
15 guidelines?
16 MR. LIGHTY: Objection, form.
17 A Well, I guess we don't get to termination
18 until we go to default. And I said that I made the
19 decisions on whether people could default.
20 Q How many default notices did ADQ send to
21 Dairy Queen stores in Texas for playgrounds - for
22 playground safety reasons prior to October of 1999?
23 A None.
24 Q How many default notices did ADQ send to
25 Dairy Queen stores in Texas for playground - for

82
1 playgrounds that were not in compliance with the CPSC
2 guidelines prior to October, 1999?
3 A As far as I recall none.
4 Q And you were involved in ADQ's dealing with
5 the Texas Dairy Queen playground issues?
6 A Yes, sir.
7 Q Okay. How were you involved?
8 A Well, I was part of the -- Well, I
9 initiated the - the process of the policy for
10 playgrounds. And when we felt we had an
11 understanding of what was going on with playgrounds
12 after the situation and looking at the northwest, we
13 had a meeting on how we were going to tackle Texas.
14 And I led the game plan on Texas.
15 Q Okay. But ultimately whose responsibility
16 at ADQ was it to deal with the Texas Dairy Queen
17 playground issues?
18 A Well, it - it - it really was split in the
19 sense that I probably had the lead role in dealing
20 with the Texas Council. And Shrin Murthy had to deal
21 with the administration of the project. And I would
22 say dealing with the Council in the sense of where
23 we're going to go and - and to try to get - encourage
24 participation and things like that.
25 Q Okay. Who at ADQ was responsible for

83
1 trying to get the playgrounds either changed or
2 closed?
3 A What one person?
4 Q Uh-huh.
5 A It - it was a decision that I - I made as
6 far as educating the franchisees. And the
7 administration - getting it out to the franchisees,
8 educating them of the problem would have been Shrin.
9 Q So, you made the decision to start this;
10 but it was Mr. Murthy's responsibility for trying to
11 actually implement and get the playgrounds changed or
12 closed in Texas; correct?
13 A His - his responsibility was to get the
14 education, gather information, educate the franchisee
15 on what they should be aware of out there; what the
16 current standards are, yes.
17 MR. LAWDERMILK: Object,
18 nonresponsive.
19 Q (By Mr. Lawdermilk) It was Mr. Murthy's --
20 As far as AD -- Strike that.
21 What is the name of the person at ADQ
22 who was responsible for trying to get the Texas Dairy
23 Queen playgrounds either closed or in compliance with
24 the CPSC guidelines?
25 MS. SMITH: Objection, form.

84
1 MR. LIGHTY: Objection, form. Asked
2 and answered.
3 A I would say it would be me.
4 Q Okay. And I understand that all the Texas
5 Dairy Queen playgrounds are in compliance with the
6 ADQ standards and CPSC as we sit here today?
7 A As I indicated that's what has been
8 reported to me.
9 Q So, that's your understanding, also?
10 A Yes.
11 Q How many of the Texas Dairy Queen
12 playgrounds were out of compliance with the CPSC and
13 ADQ -- Strike that.
14 How many of the Texas Dairy Queen
15 playgrounds were out of compliance with the CPSC and
16 ADQ standards in January of 1998?
17 MR. LIGHTY: Object to form.
18 MS. SMITH: Object to form.
19 A Based on what I heard at Mr. Murthy's
20 deposition I believe it was two-thirds.
21 Q Do you have any independent knowledge of
22 that?
23 A Only from what I've seen in reviewing
24 material. I - I was copied on a letter. But I don't
25 believe when I got - that the actual summary was a

85
1 part of it that I - with that letter. At least I
2 never - I don't recall seeing it until this trial.
3 Q So, it's your recollection that you didn't
4 know back in January of 1998 that two-thirds of the
5 Texas Dairy Queen playgrounds were not in compliance
6 with the CPSC and should be closed immediately?
7 A I knew there was a number of them. I
8 didn't know it was two-thirds.
9 Q Okay. How many of the Texas Dairy Queen
10 playgrounds were out of compliance with the CPSC and
11 ADQ standards in October in 1999?
12 MR. LIGHTY: Objection, form.
13 MS. SMITH: Objection, form.
14 A When in October? Before or after the
15 accident?
16 Q How many of the Texas Dairy Queen
17 playgrounds were out of compliance with the CPSC and
18 ADQ standards on October 23rd, 1999?
19 MR. LIGHTY: Object to form.
20 MS. SMITH: Objection, form.
21 A I - I don't know how many had been changed
22 at that point from the previous time period.
23 Q You were supplied with specific knowledge
24 as to hazards on Texas Dairy Queen playgrounds in
25 1997; correct?

86
1 A I was --
2 MR. LIGHTY: Object to form.
3 A We were -- When you say -- Are you saying
4 the company or me personally?
5 Q You. Were you supplied with specific
6 knowledge as to hazards on Texas Dairy Queen
7 playgrounds in 1997?
8 A I knew there were -- I knew there was ones
9 that did not meet the CP - the CP - guidelines. But
10 I don't -- Again, I'm not sure if I got copies of the
11 surveys themselves. I've since seen them. But I'm
12 not sure when I got the -- I know I got copies on
13 letter - copied on letters. But I don't know if I
14 got the surveys themselves with the letter.
15 Q So, you don't remember seeing the surveys
16 until after Tyler's death?
17 A I don't remember one way or the other.
18 Q Okay. ADQ was supplied with specific
19 knowledge as to hazards on the Strickland Dairy Queen
20 playground in 1997 --
21 MR. LIGHTY: Object to form.
22 Q -- correct?
23 MS. SMITH: Objection, form.
24 A We were supplied with the reports from Mary
25 Lou Iverson.

87
1 Q ADQ was advised that a majority of the
2 Texas Dairy Queen playgrounds needed to be closed
3 immediately in 1997; correct?
4 MR. LIGHTY: Object to form.
5 A I believe late '97 is when Mary Lou sent a
6 report, yes.
7 Q And Mary Lou is Mary Lou Iverson --
8 A Yes.
9 Q -- ADQ's hired expert?
10 A Yes.
11 Q If a majority of the Texas Dairy Queen
12 playgrounds were not changed or closed from 1997 to
13 October 23rd, 1999, is anyone at ADQ to blame for
14 that?
15 A I don't believe so.
16 Q Okay. In your opinion should ADQ have done
17 more to have the Texas Dairy Queen playgrounds come
18 into compliance with the CPSC?
19 A I think we did everything we could based on
20 the agreements that we had in hand.
21 Q Did you know that Srinivasa was changing
22 the reports from your expert before he was allegedly
23 sending them out?
24 MR. LIGHTY: Objection, asked and
25 answered.

88
1 MS. SMITH: Objection, form.
2 A I did not recall that being done until I
3 was at the deposition. I did not recall that that
4 was the case.
5 Q And at the deposition last Friday?
6 A Yes. Yes, sir.
7 Q When did you first find out that Srinivasa
8 had sent the expert report for the Strickland Dairy
9 Queen to the wrong address?
10 MR. LIGHTY: Object to form.
11 A I don't know if it was the wrong address.
12 It was -- It was a store owned by the franchisee - or
13 a franchisee store that -- But it wasn't the -- I --
14 The question was -- I first knew about that sometime
15 after the lawsuit started.
16 Q All right.
17 MR. LAWDERMILK: Objection,
18 nonresponsive.
19 Q (By Mr. Lawdermilk) When did you find out
20 that Srinivasa had sent the expert report for the
21 Strickland Dairy Queen to the wrong address?
22 MR. LIGHTY: Objection, form.
23 MS. SMITH: Objection, form.
24 A Yeah. I'm not sure it was the wrong
25 address.

89
1 Q Did you ever wonder why from 1997 to 1999
2 hardly any Texas Dairy Queen playgrounds were being
3 closed or changed?
4 A We were -- We were given assurances they
5 were going to - they were going to work with us. And
6 we had a plan in place. We were working with the
7 Council. And things -- It took us several years to
8 get it done in the Pacific northwest. And I just
9 assumed it would take a little longer in Texas
10 because that's how it is generally down here with the
11 program because of the older agreements and the
12 independence of the operators.
13 Q How many Texas Dairy Queen playgrounds were
14 closed or changed from 1997 to October 23rd of 1999;
15 do you know?
16 A I know there were some. I don't know an
17 exact number.
18 Q When you say "some," more than 20, less
19 than 20, 5?
20 A I would say -- I guess you're asking me to
21 speculate. I'm speculating probably more in the five
22 to ten range.
23 Q How many Dairy Queens did Bruce Allred have
24 with ADQ?
25 A Around 20 I think. Somewhere in there.

90
1 Q Did you ever pick up the phone and call him
2 to find out what was going on with his playgrounds
3 prior to October 23rd of 1999?
4 A I didn't personally.
5 Q Well, do you know of anyone that did pick
6 up the phone and call Mr. Allred to find out what was
7 going on with his playgrounds prior to October 23rd
8 of 1999?
9 A No.
10 Q Have you ever -- Did you ever pick up the
11 phone and call Mr. Allred to find out what was going
12 on with his Dairy Queen playgrounds after October
13 23rd of 1999?
14 A I didn't.
15 Q Do you know of anyone that did call
16 Mr. Allred after October 23rd of 1999, to find out
17 what was going on with his Dairy Queen playgrounds?
18 A Shrin Murthy.
19 Q And it's your understanding that
20 Mister - all of Mr. Allred's Dairy Queen playgrounds
21 are either closed or in compliance with the CPSC as
22 we sit here today; correct?
23 MS. SMITH: Objection, form.
24 A Yeah, the last one closed six months ago.
25 MR. LAWDERMILK: Objection,

91
1 nonresponsive.
2 Q (By Mr. Lawdermilk) It's your understanding
3 as we sit here today that all of Mr. Allred's Dairy
4 Queen playgrounds are either closed or in compliance
5 with the CPSC; correct?
6 MR. LIGHTY: Objection, form.
7 A As --
8 MR. LIGHTY: Asked and answered.
9 MS. SMITH: Objection, form.
10 A As of today, yes.
11 Q Did you ever tell the field consultants who
12 worked hands-on with the local Texas Dairy Queens to
13 find out why nothing was getting done on those
14 playgrounds?
15 A I don't believe so.
16 Q Do you know of anyone that did ever ask the
17 field consultants who worked hands-on with the local
18 Texas Dairy Queens to find out why nothing was
19 getting done on those Texas playgrounds prior to
20 October 23rd of 1999?
21 MS. SMITH: Objection, form.
22 A I don't know of anyone that did or didn't.
23 Q Was the ADQ -- Strike that.
24 In your opinion was the ADQ Texas
25 Dairy Queen project a success or a failure?

92
1 MR. LIGHTY: Object to form.
2 MS. SMITH: Objection, form.
3 A I would say that it wasn't a failure and it
4 didn't go as well as we would have liked it to have
5 gone. And we didn't get as quick a cooperation from
6 the operators as we would have liked.
7 Q In your opinion is anyone at ADQ
8 responsible for more not getting done over those four
9 years since ADQ started its Texas Dairy Queen
10 playground project in 1995?
11 MS. SMITH: Objection, form.
12 A I wouldn't put responsibility on anybody.
13 Q Closing playgrounds costs ADQ money,
14 doesn't it?
15 A Not as much as Mr. Allred.
16 MR. LAWDERMILK: I'm going to object
17 as nonresponsive.
18 Q (By Mr. Lawdermilk) Closing playgrounds
19 costs ADQ money, doesn't it?
20 MS. SMITH: Objection, form.
21 MR. LIGHTY: The same objection.
22 Asked and answered.
23 A Based on reports I've seen I can't say
24 that's necessarily true.
25 Q Well, who does those reports?

93
1 A The accounting group monitors sales
2 monthly. And they're able to give us information on
3 month to month, both before the stores had
4 playgrounds and after they had playgrounds.
5 Q ADQ's accounting group?
6 A Yes.
7 Q Who's in charge of that?
8 A Russ Grundhauser.
9 Q Can you spell that last name for me?
10 A I'll - I'll try. G-r-u-n-d-h-a-u-s-e-r.
11 Q And who is he actually an employee of?
12 A DQF.
13 Q Well, what is it that DQF does?
14 A The - the -- It's the financial side of the
15 company.
16 Q You would consider playgrounds part of
17 marketing, though, wouldn't you?
18 A Market -- Playgrounds is used as something
19 to attract people to the store, yes.
20 Q And playgrounds are used to lure children
21 and their families into Dairy Queens so that they can
22 make more profit; right?
23 MR. LIGHTY: Object to form.
24 MS. SMITH: Objection, form.
25 A They - they are used to attract people to

94
1 come in, yes.
2 Q It is ADQ's policy that parents are to
3 supervise their children while they're on the
4 playground; right?
5 A It's a recommended policy for stores to
6 consider implementing.
7 Q Who came up with the wording for the sign
8 that's on the Strickland playground?
9 A I'm not sure who did.
10 Q Well, who came up with the sign that's on
11 the Strickland playground?
12 A Again, I - I don't know. Or I can't
13 remember.
14 Q You don't know where it comes from?
15 A I'm not sure.
16 Q Did you ever send one single default threat
17 to any Texas Dairy Queen store to let the local
18 operators know how important it was that they change
19 their playgrounds?
20 MR. LIGHTY: Object to form.
21 MS. SMITH: Objection, form.
22 MR. LIGHTY: Asked and answered.
23 A I've never sent a default out to a Texas
24 playground - to a Texas operator concerning a
25 playground.

95
1 Q Okay. Have you ever been told that some of
2 the local people just thought ADQ was trying to sell
3 them something with the - in regards to the Texas
4 Dairy Queen playground --
5 A Yes, I was. I was told that.
6 Q Who told you that?
7 A A number of people. It was specifically
8 passed on to me by Larry Newell, President of the
9 TDQOC. It was also told to me by Bill Hall who was a
10 multiple unit operator in Texas.
11 Q Have you ever heard that the local
12 operators - some of the local operators had the
13 opinion they didn't think the playground surveys were
14 accurate?
15 A Yes, I heard that.
16 Q Have you ever heard that some of the local
17 operators thought ADQ's expert - Mary Lou Iverson -
18 was not independent and had a conflict of interest?
19 A Yes, I heard that.
20 Q Have you ever heard that some of the
21 operators thought that ADQ's expert was just trying
22 to sell them something?
23 A Yes, I heard that.
24 Q Let me ask a better question.
25 Have you ever heard that some of the

96
1 operators may have thought that AD - ADQ's expert was
2 just trying to sell them playground equipment?
3 A Yes.
4 Q Okay. Would you describe ADQ's
5 relationship with the Texas operators as not
6 trusting?
7 A Yes.
8 Q Has anyone ever told you that most of the
9 Texas operators don't trust ADQ?
10 A Yes.
11 Q Does ADQ trust the Texas operators?
12 A No. And I -- And I guess I will -- I would
13 like to -- Our relationship's back and forth. And,
14 so, I'd say that I'm talking about the Council as
15 opposed to all Texas operators when I'm saying that
16 because it - it is not something that I can go and
17 say every store - every store owner in Texas is
18 someone we don't trust; but I'm saying relationships
19 with the Texas Council.
20 MR. HALL: Objection, nonresponsive.
21 MR. LAWDERMILK: And I will object to
22 the nonresponsive portion only.
23 Q (By Mr. Lawdermilk) Who have you talked
24 with about this accident other than your attorneys?
25 A I've talked with Larry Newell. I've talked

97
1 with Michael Dady, counsel to the TDQOC. I've talked
2 with -- I can't recall. I'm sure there's been a
3 couple of Texas operators that I've mentioned I've
4 talked to. I've talked to after -- Are you talking
5 about after the accident or before the accident
6 or --
7 MR. LIGHTY: He's talking about the
8 accident.
9 A Oh, about the accident. It would be Wes
10 Howard.
11 Q Anybody else you can think of?
12 A No.
13 Q What did Larry Newell tell you about the
14 accident?
15 A We -- You said talked about the accident.
16 Now, when you say -- What do you mean about the
17 accident? How it occurred versus just talking about
18 the accident and how tragic it was or --
19 Q Well, first let's - let's talk about how it
20 occurred.
21 A Larry didn't - and I didn't talk about how
22 it occurred as far as I remember.
23 Q Okay. How about you and Michael Dady?
24 A He had no knowledge of how it occurred.
25 So, we didn't discuss that.

98
1 Q How about you and Wes Howard?
2 A We did talk about that.
3 Q What did Wes Howard tell you about how the
4 accident occurred?
5 A He had -- What his report was is that Tyler
6 and his sister were on the slide playing; and that he
7 thought they were walking up the store - the - the
8 slide backwards. And that his sister jumped and
9 Tyler followed and whatever happened. And he ended
10 up hitting his head.
11 Q And did he tell you where he got that
12 information from?
13 A He just indicated someone at the store
14 level. I'm not sure. At the time I don't think he
15 gave me a name. I think he just said "reports are."
16 Q Now, what else have you talked with
17 Mr. Newell about about this accident?
18 A Just the fact that we needed to get the
19 Council behind cajoling and pushing like we were to
20 get the changes that we've been trying to get.
21 Q Have you ever spoken to Tyler's parents -
22 Mike or Melinda - other than saying "hello" in a
23 deposition - in a mediation?
24 A No, I haven't.
25 Q And obviously you've never spoken to any

99
1 witnesses to Tyler falling?
2 A No, I haven't.
3 Q Okay. Have you ever spoken to any Dairy
4 Queen employees about the fall other than Wes
5 Howard?
6 A No.
7 Q When you went to the Dairy Queen on
8 Strickland last Thursday - last Wednesday, if you had
9 seen something you thought was hazardous what would
10 you have done about it?
11 MR. LIGHTY: Object to the form.
12 A I would ask for the - the manager and just
13 let them know that there's something out there they
14 may want to be aware of to take care of.
15 Q And if they said they didn't agree with you
16 what would you have done about it?
17 A It's depending on what area it was.
18 Q Well, what if it was on the playground?
19 A Then I wouldn't have the ability to do
20 anything with it.
21 Q What would you do if a local Dairy Queen
22 say had a poisonous snake pit which kids could easily
23 get into that was stationed on the playground, could
24 you do anything about that?
25 MR. LIGHTY: Object to form.

100
1 MS. SMITH: Objection, form.
2 A Well, I think we're saying something
3 with -- I would let them know they - they shouldn't
4 do that obviously. And as - from a - a general
5 appearance and what's custom in the industry and
6 everything else, I - I think it's - it would be so
7 out of bounds, so unusual that there may be something
8 we could do about it; but I'm not sure what.
9 Q Now, ADQ dictates I guess the signage at
10 the local Dairy Queen stores?
11 MR. LIGHTY: Objection, form.
12 A Yes.
13 Q Okay. And that's true for the --
14 A Well, trademarks, yeah. The -- Wherever
15 our name appears or trademarks appear it has to be
16 done per our requirements.
17 Q Okay. So, any signs at the Strickland
18 Dairy Queen have to meet ADQ approval and be done
19 within their requirements; right?
20 MR. LIGHTY: Objection, form.
21 A Again, I don't know what you mean by any
22 signs. There can be -- There can be smaller signs.
23 There can be advertising signs. They could have the
24 name of their franchise ownership on the building.
25 We wouldn't get into things like that. But if we've

101
1 talking Dairy Queen - neon signs with our trademark
2 across it, then we would - you know, we would be -
3 you know, that would be something we would want to
4 make sure was right.
5 Q I just want to make sure I understand.
6 ADQ only has requirements for signage
7 at a local store with their name on it; correct?
8 MR. LIGHTY: Objection, form.
9 A Yeah. The -- What we're saying what --
10 What we control is our trademarks with - where you
11 have "Dairy Queen" or you have the lips logo with the
12 circle "R." And - and that would be what would be -
13 had been approved as being on the building as part of
14 the building design which they got.
15 Q Can -- Could the local Dairy Queen stores
16 put up any sign they wanted to?
17 A I would say that -- Again, this is
18 something that generally doesn't happen. But I would
19 say that we would probably - if it's a sign that
20 wasn't representative of the building or what - or
21 the business and what we're trying to do, we maybe
22 would talk to them that this isn't within the - you
23 know, the - the agreement as far as core products or
24 trying to do -- Like if someone wanted to put a
25 different business sign up there and start another

102
1 business, we don't let them have another business.
2 And, so, we would tell them you can't do that.
3 Q Can ADQ require Texas Dairy Queens to put
4 up a sign?
5 A We can require them to put up our trade -
6 make sure our trademark's up, yes.
7 Q But that's it? ADQ can't require the local
8 Dairy Queens to do any more than just put up a
9 trademark sign?
10 A Right. We encourage them to put up signs
11 on sexual harassment, our nondiscrimination policy.
12 I'm sure we probably encourage any type of sign
13 that -- For instance, I'm sure the warning sign for
14 the - for the playground is for age or hours or
15 whatever. That's something -- We'd encourage
16 something like that to be put up.
17 Q But you say "encourage." That's different
18 than require; correct?
19 A Correct.
20 Q Okay. Now, ADQ has to approve the transfer
21 of any franchise; correct?
22 A Correct.
23 Q Okay. And a franchisee must obtain prior
24 written consent from ADQ to assign any interest in
25 the franchise agreement; correct?

103
1 A Correct.
2 Q Okay. And that's true for all franchises?
3 A Not -- No. Again, it's - it depends on the
4 franchise agreement. We've got some that are even
5 silent on assignment.
6 Q Okay. Well, a franchisee -- The
7 Strick -- Strike that.
8 The Strickland Dairy Queen agreement
9 must obtain prior written consent from ADQ to assign
10 any interest in that franchise agreement; correct?
11 A Of the franchise agreement; correct.
12 Q Now, facility improvements and upgrading
13 are required as a condition of ADQ's final approval
14 of a transfer; correct?
15 A Yes.
16 Q And that's true for the Strickland store?
17 A We feel it is. We've had other people that
18 say that it may not be with the Close agreement. But
19 it hasn't been challenged yet.
20 Q Well, it's your opinion that facility
21 improvements and upgrading that are required as a
22 condition of ADQ's final approval for transfer does
23 apply to the Strickland Dairy Queen store?
24 A That's how we treated it, yes.
25 Q And facility improvements and upgrading -

104
1 it's a list that ADQ requires a franchise to complete
2 to bring the Dairy Queen store into compliance with
3 ADQ standards before allowing that transfer; right?
4 MR. LIGHTY: Objection, form.
5 A Based on what's in their agreement. The
6 Close - Close agreement has less things we can do to
7 require.
8 Q Well, what can you require with the Close
9 agreement?
10 A Well, basically all we really can require
11 is that the equipment is in good working order and
12 it's painted.
13 Q Do you want a break?
14 A I'm fine.
15 Q Okay. Well, with the Close agreement can
16 ADQ require anything else in your opinion?
17 A Without going down the line of things we -
18 we - we use that time -- Although it's not
19 specifically to require an upgrading of the
20 playground to CPSC standards.
21 MR. LIGHTY: Objection,
22 nonresponsive.
23 A It's not in the agreement that we can do
24 it. If you're saying -- So, the answer is no, I
25 don't know of any other things other than --

105
1 Q But you did it anyway?
2 A We did it anyway.
3 Q Okay. And explain to me how you went about
4 doing that.
5 A We just put it in the requirement; and we
6 felt that - that they want to transfer the store and
7 we had leverage at that time. And even though they
8 didn't think we had the right to do it, they weren't
9 about to slow up - hold up the transfer. And it was
10 easier for them to make the change rather than start
11 a lawsuit. And that -- We had tried that as a - as a
12 policy in - in the Pacific northwest; and we were
13 successful in getting a number of changes that way.
14 And we instituted it in Texas; and we were successful
15 there, too.
16 Q And would that be true for any Texas Dairy
17 Queen franchise that was trying to be transferred?
18 A Any - any franchise in Texas that made a
19 request to transfer the franchise would trigger
20 transfer procedures. And there would be a - a - a
21 form letter and a way we went about it that would
22 require as part of the transfer being completed that
23 the playgrounds met the CPSC guidelines.
24 Q So, it's your testimony that ADQ required
25 any Texas Dairy Queen franchise that wanted to

106
1 transfer their franchise to have their playgrounds in
2 compliance with the CPSC guidelines?
3 MR. LIGHTY: Objection, form.
4 A We required them to show - to give us
5 verification that it was.
6 Q Okay. Now, ADQ can refuse to approve the
7 transfer of the Strickland Dairy Queen if it was
8 deemed by ADQ to be below ADQ standards; correct?
9 MR. LIGHTY: Objection, form.
10 A If - if they didn't meet transfer
11 requirements we could refuse it, yes.
12 Q And one of the transfer requirements was
13 that the playground be in compliance with the CPSC;
14 correct?
15 A Right. But the franchise wasn't in
16 transfer.
17 Q Okay. ADQ knew that Mr. Allred assigned
18 the rights for the operation of the Strickland Dairy
19 Queen several years before Tyler's death to Anita
20 Wilson; correct?
21 A He did not assign the rights to the
22 franchise agreement.
23 Q Did he assign any interest in the franchise
24 agreement?
25 A No.

107
1 Q Okay. ADQ knew that Mr. Allred assigned
2 some of the rights of the operation of the Strickland
3 Dairy Queen to Wes Howard on October 15th of 1999;
4 correct?
5 A He leased his premises.
6 Q But ADQ knew that?
7 A Not until after the date of the accident.
8 At least I didn't.
9 Q Where was Mr. Howard when Tyler fell on
10 October 23rd of 1999?
11 A He was in Minneapolis at meetings.
12 Q And you are the man that actually approves
13 the transfer of the franchises; correct?
14 A That area reports to me. I sign them,
15 yes. I sign the assignments.
16 Q So, you are the man that signs them and
17 approves the transfer of the franchises; correct?
18 A Yes.
19 Q Okay. If the assignment -- Strike that.
20 If the assignment of the Strickland
21 Drive Dairy Queen to Wes Howard were the type of
22 transfer that you considered required ADQ approval,
23 would you have transferred the Strickland Dairy Queen
24 on October 15th, 1999, with the playground in the
25 condition it was?

108
1 MR. LIGHTY: Objection, form.
2 MS. SMITH: Objection, form.
3 A You're going to have to repeat it again --
4 Q Sure.
5 A -- because it --
6 Q It was a bad, bad question.
7 A Yeah.
8 Q My fault. On October 15th of 1999, the
9 Strickland Dairy Queen was leased to Wes Howard;
10 correct?
11 A Correct.
12 Q If it -- If that were an actual transfer of
13 the franchise agreement - if that had been an actual
14 transfer of the franchise agreement, would you have
15 approved the transfer of the Strickland Dairy Queen
16 on October 15th of 1999, with the playground in the
17 condition it was?
18 MR. LIGHTY: Objection, form.
19 A If Bruce Allred had requested a transfer of
20 the franchise along with the lease to Mr. Howard, we
21 would have required that franchise to - or the
22 playground to be brought up to CP - CP - the
23 guidelines as part of that transfer.
24 MR. LAWDERMILK: Can we take a break?
25 MR. LIGHTY: Sure.

109
1 THE VIDEOGRAPHER: The time is 2:01.
2 We're off the record.
3 (Recess from 2:01 p.m. to 2:21 p.m.)
4 THE VIDEOGRAPHER: The time is 2:21.
5 We're back on the record.
6 Q (By Mr. Lawdermilk) Explain to me how ADQ
7 could require the Strickland Dairy Queen to fix a
8 pothole but not require them to make their playground
9 safe.
10 A It talks about maintenance of the - of the
11 facility and - and appearance. And a pothole is
12 unsightly, and it's also maintenance.
13 Q Is it your opinion that ADQ has adopted the
14 CPSC guidelines as its standards?
15 A No.
16 MR. LIGHTY: Object to form. Asked
17 and answered.
18 Q For ADQ to adopt the CPSC as its standards
19 for playgrounds -- Actually strike that.
20 ADQ could require the Strickland Dairy
21 Queen facility to be maintained in a high state of
22 repair; correct?
23 MR. LIGHTY: Objection, form.
24 MS. SMITH: Objection, form.
25 A Yes.

110
1 Q Do you consider the condition of the
2 Strickland Dairy Queen playground as it was on
3 October 23rd, 1999, to be okay?
4 MR. LIGHTY: Objection, form.
5 MS. SMITH: Objection, form.
6 A We can only -- Well, the answer is as far
7 as I know it - it was in a good state of repair.
8 Q ADQ could require the Strickland Dairy
9 Queen premises to maintain the standards of quality
10 ADQ sets; correct?
11 MS. SMITH: Objection, form.
12 MR. LIGHTY: The same objection.
13 A Did you say facility or the business?
14 MR. LIGHTY: He didn't say.
15 Q I will do it again. ADQ could require the
16 Strickland Dairy Queen - Dairy Queen premises to
17 maintain the standards of quality ADQ sets?
18 MR. LIGHTY: Objection, form.
19 MS. SMITH: Objection, form.
20 A In those areas which are core business,
21 yes.
22 MR. LAWDERMILK: I'm going to object
23 as nonresponsive.
24 Q (By Mr. Lawdermilk) I'm using a word here.
25 ADQ could require the Strickland Dairy Queen premises

111
1 to maintain the standards of quality ADQ set?
2 MR. LIGHTY: Objection, form.
3 MS. SMITH: Objection, form.
4 A Yes. If we've set -- Yes.
5 Q ADQ could require the Strickland -
6 Strickland Dairy Queen premises to maintain the
7 standards of quality ADQ set up at the time of the
8 franchise agreement; correct?
9 MR. LIGHTY: The same objection.
10 MS. SMITH: Objection, form.
11 A At the time of the - of the franchise
12 agreement, whatever qualities we - we set?
13 Q Yes.
14 A Or ones we may change?
15 Q I'll get to that. But if -- Just -- If
16 you'll just answer my question.
17 ADQ could require the Strickland Dairy
18 Queen premises to maintain the standards of quality
19 ADQ set up at the time of the franchise agreement;
20 correct?
21 A Yes.
22 MS. SMITH: Objection, form.
23 Q ADQ has the right to change ADQ's standard
24 of quality - standards of quality; correct?
25 A Yes.

112
1 Q Okay. And ADQ has the right to change
2 ADQ's standards of quality for the Strickland Dairy
3 Queen premises?
4 A As they relate to the core business and
5 products.
6 MR. LAWDERMILK: I will object as
7 nonresponsive
8 Q (By Mr. Lawdermilk) Once again, I'm using a
9 word.
10 ADQ has the right to change ADQ's
11 standards of quality for the Strickland Dairy Queen
12 premises?
13 MS. SMITH: Objection, form.
14 MR. LIGHTY: Objection, asked and
15 answered.
16 A If we've set a standard in an area we would
17 have the ability to change it, yes.
18 Q And all of that is true prior to October of
19 1999 and even today; correct?
20 A Yes.
21 Q Do you consider the Strickland Dairy Queen
22 playground as it existed prior to October 23rd, 1999,
23 to have been in a quality condition?
24 MR. LIGHTY: Objection, form.
25 A I have no reason to know it wasn't -- Well,

113
1 I haven't looked at - close at the QVSC. I don't
2 know if it needed painting or anything like that.
3 MR. LAWDERMILK: I will object as
4 nonresponsive.
5 Q (By Mr. Lawdermilk) Do you consider the
6 Strickland Dairy Queen playground as it existed prior
7 to October, 1999, to have been in a quality
8 condition?
9 MR. LIGHTY: Objection, form.
10 A I don't know.
11 Q Okay. Do you consider the Strickland Dairy
12 Queen playground as it existed prior to October 23rd,
13 1999, having been maintained at a high standard of
14 quality?
15 MR. LIGHTY: Objection, form.
16 MS. SMITH: Objection, form.
17 A I'm not sure what a high standard of
18 quality -- You'd have to define that to me. You mean
19 well-maintained?
20 Q Okay. Do you consider the Strickland Dairy
21 Queen playground as it existed prior to October,
22 1999, having been in a high state of repair?
23 MR. LIGHTY: Objection, form.
24 MS. SMITH: Objection, form.
25 A Again, I have no real knowledge, personal

114
1 knowledge.
2 Q Okay. Under ADQ's Strickland Dairy Queen
3 agreement ADQ can terminate if the Dairy Queen is in
4 violation of laws; correct?
5 A Of health and sanitation, yes.
6 Q The agreement with ADQ for the Strickland
7 Dairy Queen was extended for five years in March,
8 1998; correct?
9 A I don't recall. They're automatic -- As
10 far as I know they automatically renew.
11 Q Well, they automatically renew if they're
12 in compliance with ADQ standards; correct?
13 MR. LIGHTY: Objection, form.
14 A They automatically renew if they're not
15 under default.
16 Q Do you feel the Strickland Dairy Queen
17 playground was being maintained up to ADQ standards
18 in 1998?
19 A We didn't have playground standards that we
20 had established.
21 Q Do you know Bruce Allred?
22 A Yes.
23 Q Do you think Mr. Allred is an expert in
24 playground safety and the CPSC guidelines?
25 A I don't know one way or the other.

115
1 Q Prior to October 23rd, 1998, (sic) had you
2 ever talked with Mr. Allred regarding playgrounds or
3 playground safety?
4 A Not that I recall.
5 Q Do you know of anyone who has prior on
6 October 23rd of 1999?
7 A Not that I can recall.
8 Q In your opinion is Mr. Allred qualified and
9 competent to run Dairy Queen stores?
10 A Yes.
11 Q Prior to October 23rd of 1999, do you
12 remember ever talking with Mr. Allred about
13 anything?
14 A Yes.
15 Q What were you talking with him about?
16 MR. LIGHTY: Objection, form.
17 A I spoke to him -- I had a concern how he
18 ran his business from the - the view of what I felt
19 was subfranchising; and that he might - that I was
20 encouraging him to transfer his stores to get the
21 franchise in the appropriate party's hands. We
22 didn't have the ability to do that. I told him that
23 he was at risk being on the franchise. And he
24 indicated that "Well, that's what insurance is for."
25 Q And what year was this?

116
1 A Oh, this was back -- It probably goes back
2 five, six, seven years. There was a period of time
3 where we were looking to buy out his interests, to
4 just take him out. And it was around those times.
5 Q Anything else that you talked with him
6 about prior to October 23rd of 1999?
7 A We've had a -- We've had a lot of
8 contentious issues involving his ex-son - son-in-law
9 and his taking back of stores. I think you will find
10 in the file numerous different things between Bruce
11 and us, generally over money issues or other things
12 like that.
13 Q Okay. Do you know Ms. - Mrs. Anita
14 Wilson?
15 A Only by document.
16 Q Okay. And by document -- Are they
17 documents you've seen after October 23rd of 1999, or
18 prior to October 23rd of 1999?
19 A I probably saw them prior. And - and I've
20 obviously seen a lot since. And I've - I also was a
21 little bit familiar with her lawsuit that she was
22 involved in in the incident at her store in '96, '97,
23 something like that.
24 Q Have you ever talked with - or had you ever
25 talked with Mrs. Wilson regarding playgrounds or

117
1 playground safety prior to October 23rd, 1999?
2 A No, sir.
3 Q Had you ever talked with -- Have you ever
4 talked with her since then?
5 A No, sir.
6 Q And I forgot to ask you. Have you ever
7 talked with Mr. Allred regarding playgrounds after
8 October 23rd of 1999?
9 A You had asked me that earlier I believe;
10 and I - my answer was no.
11 Q Okay. And have you ever talked with
12 Mrs. Wilson regarding playgrounds or playground
13 safety since October 23rd of 1999?
14 A I haven't.
15 Q Do you know of anybody who has?
16 A Shrin -- No. No, Shrin didn't. I think it
17 was -- I think Howard -- For some reason I saw some
18 memo or - or notes either that Shrin and/or Bruce
19 Howard (sic) - one of them had talked to her about
20 the incident after the accident.
21 MR. LIGHTY: You said Howard - Bruce
22 Howard.
23 A No. No. I meant -- I mean Wes Howard
24 and/or Shrin. I believe there was notes to one of
25 those two. So -- And I can't remember if one of them

118
1 talked with Anita about the accident.
2 Q So, you have seen notes where Wes Howard
3 and Shrin Murthy went and talked with Anita Wilson
4 about --
5 A Uh-huh.
6 Q -- the accident that occurred on the
7 Strickland Drive Dairy Queen?
8 A I recall seeing something like that.
9 Q And where would you have seen those?
10 A I - I just -- Just in looking at a bunch of
11 stuff I saw it.
12 Q You know Wes Howard?
13 A Yes.
14 Q Do you think Mr. Howard is an expert in
15 playground safety and the CPSC guidelines?
16 A I don't know if he is or not.
17 Q Had you ever talked with Mr. Howard
18 regarding playgrounds or playground safety prior to
19 October 23rd, 1999?
20 A No.
21 Q Do you know of anyone that had?
22 A No.
23 Q Okay. Obviously you know Larry Newell?
24 A Yes.
25 Q Do you think Mr. Newell is an expert in

119
1 playground safety and the CPSC guidelines?
2 A I don't believe so.
3 Q Do you consider Mr. Newell an honest man?
4 A I really have no way to judge it one way or
5 the other.
6 Q Do you blame Bruce Allred for Tyler's
7 death?
8 A Yes.
9 Q Do you blame Larry Newell for Tyler's
10 death?
11 A I don't believe so.
12 Q Do you blame the Texas Dairy Queen
13 Operators' Council for Tyler's death?
14 A I -- It's hard to say. I - I don't -- You
15 know, I would have -- I -- I'm going to have to say
16 no.
17 Q Do you blame Anita Wilson for Tyler's
18 death?
19 A Yes.
20 Q Do you blame Wes Howard for Tyler's death?
21 A No.
22 Q Do you blame Tyler's dad for his death?
23 A I need more facts before I can make that
24 assessment.
25 Q And what facts would you need?

120
1 A Well, the fact that 40 percent of
2 playground accidents are caused by lack of
3 supervision. I do not know what happened that
4 night. I don't know where he was sitting. I don't
5 know how much attention he paid. But I feel that
6 until we understand supervision we'll really not
7 understand whether or not something could have
8 prevented it.
9 Q You say 40 percent of playground accidents
10 are caused by lack of supervision. Where did you get
11 that number?
12 A From -- There's a form that had been sent
13 out by your law firm.
14 Q So, you also know that 75 percent of
15 playground accidents are caused by unsafe surfaces
16 then?
17 A Yes. And that was -- Yes.
18 Q Did you know that 75 percent of playground
19 accidents are caused by unsafe surfaces back in 1999?
20 A Yes.
21 Q Prior to Tyler's death?
22 A Yes.
23 Q How did you know that?
24 A Material that we had sent out and I had
25 read.

121
1 Q And you knew that carpet over concrete was
2 an unsafe surface back in 1999; correct?
3 A I - I knew that it didn't meet guidelines,
4 yes.
5 Q Well, did you think that meant that it was
6 unsafe?
7 A Again, I said -- I said earlier depending
8 on the - the intended purpose. If it was used
9 properly and with supervision, it probably wasn't
10 unsafe.
11 Q Do you know Ms. Jolynn Fielder?
12 A Yes.
13 Q What's her job title?
14 A I --
15 Q I'm sorry. What was her job title back in
16 October of 1999?
17 A I think she was a senior field consultant
18 then. She is now. I think she was at that point.
19 Q Okay. And she's the ADQ employee who would
20 come out and inspect the local Dairy Queen stores to
21 make sure that they met ADQ standards; correct?
22 A Yes.
23 Q Okay. And you -- And you expect that she
24 knew that Anita Wilson had been transferred interest
25 in the Strickland Dairy Queen for a number of years;

122
1 correct?
2 MR. LIGHTY: Objection, form.
3 A She knew that Anita was working as a lessee
4 in the store for franchisee Bruce Allred.
5 Q Did she know that Anita Wilson was actually
6 the operator of that store?
7 A She knew that she was running it as a
8 control person/manager.
9 Q Did ADQ train Mrs. Fielder to - or
10 Ms. Fielder to recognize safety hazards?
11 A No.
12 Q Did Ms. Fielder attend any playground
13 safety seminars before Tyler's death?
14 A She attended a seminar on measuring out
15 playgrounds to gather information.
16 Q Did you expect Ms. Fielder to be on the
17 lookout for any serious safety violations when she -
18 when she inspected the Dairy Queen stores?
19 A No.
20 Q Has ADQ ever terminated a franchise for
21 safety reasons?
22 MR. LIGHTY: Objection, asked and
23 answered.
24 A There's -- I guess you're going to have to
25 define safety.

123
1 Q Well, you define it.
2 A Well, which - which area? We have -- One
3 would argue that there's food safety. So, you'd have
4 the un - unsafe cooking of hamburgers; you can have
5 rerun, which are two critical areas. And we have --
6 We've put people on default. And again, I think
7 there have been one or two cases where we have
8 terminated people who've continued - who haven't
9 stopped cooking the hamburger improperly.
10 But again, I can't remember. I know
11 in most cases people clean up their act in a hurry
12 when they get that 24-hour letter.
13 Q So, you're saying when Dairy Queen
14 operators get a 24-hour termination notice they get
15 it right; they wake up and they get it changed;
16 right?
17 MR. LIGHTY: Objection, form.
18 MS. SMITH: Objection, form.
19 A If they get the 24-hour letter from me,
20 yes, they do.
21 Q Okay. Has ADQ ever tried to terminate a
22 franchise for safety reasons and not been able to?
23 MR. LIGHTY: Objection, form.
24 A I can't recall one way or the other.
25 Q The playground is part of the facility;

124
1 correct?
2 A The playground is -- You know, again, I
3 said --
4 MR. LIGHTY: Objection, asked and
5 answered.
6 A -- depending on the agreement. I said --
7 Before we kind of got into it, and I was probably
8 confusing. But we're -- Depending on the agreement
9 it's either facility, premises. But I say in general
10 the - the playground would fall under the facility.
11 Q Okay. Can American Dairy Queen or
12 International Dairy Queen require the local Dairy
13 Queen premises be in a safe condition for its
14 customers?
15 MR. LIGHTY: Objection, form.
16 MS. SMITH: Objection, form.
17 A They can require for those things. That
18 have the right to require under the agreement those
19 areas.
20 MR. LAWDERMILK: I will object as
21 nonresponsive.
22 Q (By Mr. Lawdermilk) Once again, I'm using
23 the word "premises."
24 Can American Dairy Queen or
25 International Dairy Queen require the local Dairy

125
1 Queen premises be in a safe condition for its
2 customers?
3 MR. LIGHTY: Object to form.
4 MS. SMITH: Objection, form.
5 A On every possible thing on the premises,
6 no.
7 Q In your opinion what can American Dairy
8 Queen and International Dairy Queen require as a safe
9 condition for the premises?
10 A That items are well-maintained. And -- And
11 you're saying "safe condition." We can't --
12 Generally the safe condition of a store beyond the
13 maintenance is the responsibility of the franchisee.
14 Q And that's my question. Can American Dairy
15 Queen or International Dairy Queen require the local
16 Dairy Queen premises to be in a safe condition for
17 its customers?
18 MS. SMITH: Objection, form. Asked
19 and answered.
20 MR. LIGHTY: The same objection.
21 A I -- All - all we can require - require or
22 enforce is what's in the agreement that gives us the
23 right to inquire - enforce or require. If it's not
24 in the agreement then - then we have no right.
25 Q And do any agreements allow for American

126
1 Dairy Queen to require that the premises be in a safe
2 condition for the customers?
3 MS. SMITH: Objection, form.
4 MR. LIGHTY: Objection, form.
5 A I don't recall off the top of my head, you
6 know. Again, we're - we're speaking generally; and
7 franchise agreements aren't as general quite as - as
8 you're asking the question.
9 Q Well, can American - can American Dairy
10 Queen and International Dairy Queen require the
11 Strickland Dairy Queen premises be in a safe
12 condition for its customers?
13 MR. LIGHTY: Objection, form.
14 MS. SMITH: Objection, form.
15 A No.
16 Q Okay. American Dairy Queen and
17 International Dairy Queen has no responsibility for
18 the safety of the customers who visit a store in the
19 Dairy Queen system as far as the premises are
20 concerned?
21 MR. LIGHTY: Objection --
22 MS. SMITH: Objection, form.
23 Q Is that your testimony?
24 MR. LIGHTY: Objection, form.
25 A That's not my testimony.

127
1 Q Well, does American Dairy Queen have
2 responsibility for the safety of the customers who
3 visit the store in the Dairy Queen system as far as
4 the premises are concerned?
5 A No.
6 Q Okay. Who made the decision to quit
7 inspecting the facility in the QVSC in 1998?
8 MR. LIGHTY: Objection, form. Assumes
9 facts not in evidence.
10 A I don't -- I - I don't know if there was a
11 decision to quit inspecting. And I assume you're -
12 you're talking about the Strickland facility?
13 Q I'm saying under the --
14 MR. LIGHTY: QVSC.
15 Q Well, strike all of that.
16 In 1998 Texas Dairy Queens no longer
17 were inspecting - inspected the facility in the QVSC;
18 correct?
19 MR. LIGHTY: Objection, form.
20 A They were no longer inspecting the facility
21 in the QVSC is correct.
22 Q Okay. Who made the decision to quit
23 inspecting the facility in the QVSC in 1998?
24 A We didn't quit inspecting the facility in
25 1998. I made -- I - I was part of a group involved

128
1 actually with some Texas operators that made the
2 decision to split the QVSC into two forms: the QVSC,
3 and then facility maintenance checklist. And I was
4 involved in that decision along with some people from
5 operation.
6 Q Okay. And that's my question. Who made
7 the decision to quit inspecting the facility in the
8 QVSC in 1998?
9 A There's - there's a group of us:
10 operations, myself, some of the - the franchisees.
11 There was a number of people involved and - who
12 looked at changing it. It was at the operators'
13 request that we did that.
14 Q And who had the final -- Who had to give
15 the final approval of those new forms?
16 A I would say I probably was part of the
17 final approval of the forms, although it wasn't my
18 final decision to go to those forms. It was
19 operations.
20 Q Okay. Did you attend the playground safety
21 training on June 30th, 1996?
22 A Well, it wasn't a safety training. There
23 was a seminar, and I did not attend it.
24 Q Okay. You knew back in January of 1998
25 that the Strickland Dairy Queen did not have an

129
1 adequate surface; correct?
2 A I knew it did not meet CPSC guidelines,
3 yes.
4 Q Well, weren't you told back in January of
5 1998 that the Strickland Dairy Queen playground
6 didn't have an adequate surface?
7 A Yes.
8 MS. SMITH: Objection, form.
9 Q And you knew back in 1998 that the slide
10 needed to be removed from the Strickland Dairy Queen
11 playground; correct?
12 A I actually said in 1998 I didn't realize --
13 I don't believe I saw -- As I indicated before I had
14 seen the letters that went out. But I don't think I
15 saw the surveys themselves until after the accident.
16 Q Okay. Good enough.
17 What's your understanding of what was
18 taught at that playground safety training seminar on
19 June 30th, 1998?
20 MR. LIGHTY: Objection, form.
21 A I've never read the materials in detail.
22 But I do know that they were showing how to measure
23 and how to take pictures was the primary purpose of
24 the - that meeting. They had a form they wanted
25 filled out. And they showed them how to fill out the

130
1 form and what you would have to do to fill it out.
2 Q Did they teach them hazard identification?
3 A I think they let them know in the material
4 what some general hazards were. But beyond that I
5 don't know what - what went on at this - at - at that
6 seminar.
7 Q Did you ever attend any training or meeting
8 regarding playground safety?
9 A No.
10 Q The QVSC checked for, one, the cleanliness
11 of the Dairy Queen store; correct?
12 A Yes.
13 Q The QVSC also inspected the condition of
14 the store; correct?
15 A Yes.
16 Q And the QVSC inspection also checked to
17 make sure the playground was properly and safely
18 maintained; correct?
19 MS. SMITH: Objection, form.
20 MR. LIGHTY: Objection, form.
21 A I don't know if that's the exact words.
22 I'd -- I'd have to look at a QVSC, if you have one
23 with you to show me. But I know it talked about
24 painting and chipping and -- Again, I'd have to -
25 have to see it. And there's been a number of

131
1 different versions of the QVSC over the years.
2 So, I ...
3 Q But ADQ dictates what the QVSC checks;
4 correct?
5 A Yes.
6 Q Okay. Just so the Jury understands, ADQ
7 would not approve a transfer of the Strickland Dairy
8 Queen franchise unless the playground was in
9 compliance with the CPSC?
10 MR. LIGHTY: Objection, form.
11 MS. SMITH: Objection, form.
12 A If there were -- Yes, if there was a
13 transfer of the franchise, we had put in place a
14 procedure that they needed to meet every guidelines
15 of the CPSC, however they - they may change.
16 Q What are systems bulletins?
17 A Those are mailings that go out to - to the
18 system people alerting them to what's going on in the
19 system.
20 Q And also systems bulletins can dictate ADQ
21 standards; correct?
22 A I - I think they can from time to time --
23 Yes. I think they can, yes.
24 Q Does ADQ recognize the Strickland Dairy
25 Queen playground as part of the building?

132
1 A As part of the building?
2 Q (Moving head up and down)
3 A I don't believe so.
4 Q Well, is the Strickland Dairy Queen
5 playground roof part of the building?
6 A Yes.
7 Q But the Strickland Dairy Queen play -- Is
8 the Strickland Dairy Queen playground floor part of
9 the building?
10 A The playground floor?
11 Q Uh-huh.
12 A I -- The - the building per that agreement
13 would not because that was based on the plans that
14 they had in place at the time. And I would -- That
15 building plan I don't think had that floor. Maybe it
16 did. Maybe it didn't. I don't know.
17 MR. LAWDERMILK: I will object as
18 nonresponsive.
19 Q (By Mr. Lawdermilk) Do you know if the
20 Strickland Dairy Queen playground floor is considered
21 by ADQ to be part of the building?
22 A I would not consider it as part of the
23 building.
24 Q ADQ's trademarks are ADQ's most valuable
25 assets; correct?

133
1 A I would say -- I would say that, along with
2 our franchise agreements, are valuable assets.
3 Q ADQ interprets failure to pass a QVSC as a
4 material default under the ADQ Strickland Dairy Queen
5 agreement; correct?
6 A We -- Say that again.
7 Q ADQ interprets failure to pass a QVSC as a
8 material default under the Strickland Dairy Queen
9 agreement?
10 A We can -- I'm going to have to answer
11 this with - with - two ways. One, we consider any
12 failure of the QVSC to be a material default.
13 Whether it's something under the agreement we can
14 enforce with QVSC - I mean under the Strickland-type
15 contract agreement has been challenged by the Texas
16 Council and their - and their attorney.
17 Q And when did they challenge that?
18 A Periodically over the years. We have a
19 number of Texas major operators - when they get a
20 QVSC will write across it "You do not have the right
21 to do these QVSC's."
22 Q And when and where did they - did a court
23 tell you that you didn't have the right to do that?
24 A That hasn't been tested.
25 Q Okay. How is it ADQ can do QVSC

134
1 inspections and enforce the results under the ADQ
2 Strickland Dairy Queen agreement?
3 A We do the QVSC -- Again, like I - I just
4 said, some operators question what we've done. It's
5 our system policy. We do it. It's something that
6 was historical. Close did it. And we feel that the
7 elements of our QVSC make up a lot of the
8 requirements or most of the requirements that are in
9 the Close agreements on what they need to do as far
10 as sanitation, products, appearance and things like
11 that. And, so, we've continued to do it until
12 challenged otherwise.
13 Q Has Bruce Allred ever challenged whether
14 ADQ has the right to do a QVSC?
15 A You know, he - he could have been one of
16 them over the years that has said it because he's
17 challenged a lot of things on his agreement. But I
18 don't recall if that's one of them.
19 MR. LAWDERMILK: Object as
20 nonresponsive.
21 Q (By Mr. Lawdermilk) You don't remember if
22 Bruce Allred has ever challenged the --
23 MS. SMITH: Objection, form.
24 Q -- QVSC?
25 MR. LIGHTY: Objection, form.

135
1 MS. SMITH: Objection, form.
2 MR. LIGHTY: Asked and answered.
3 A I do not remember one way or the other.
4 Q Okay. It's ADQ's and your opinion that ADQ
5 can default and terminate the Strickland Dairy Queen
6 for failing a QVSC; correct?
7 MR. LIGHTY: Object to form.
8 A It's - it's my opinion that it's subject to
9 debate whether we'd be successful if challenged based
10 on conversations with Texas Council.
11 Q Now, you've actually sent Mr. Allred a
12 default notice which gave him 24 hours to correct a
13 safety problem, didn't you?
14 MR. LIGHTY: Objection, from.
15 A I don't know if it was for safety or not.
16 I would assume if it was 24 hours it had to be for
17 rerun or meat.
18 Q And meat would be safety, wouldn't it?
19 MR. LIGHTY: Objection, form.
20 A Well, it would be health.
21 Q Safety of the customers?
22 A I think there's different kinds -- Health
23 doesn't necessarily -- You know, health/safety - I
24 think you can look at -- There's the physical
25 necessity; and then there's a - you know, the health

136
1 meaning, what you consume and the - the effect.
2 Q But he responded by immediately correcting
3 the problem. And you knew that, didn't you?
4 A I don't recall one way or the other.
5 Q Okay.
6 A But I don't remember him not.
7 Q Prior to May 1st of 1996, ADQ held a
8 meeting on the subject of Texas Dairy Queen
9 playgrounds. Did you know about that?
10 A Excuse me?
11 Q Prior to May 1st, 1996, ADQ held a meeting
12 on the subject of Texas Dairy Queen playgrounds.
13 A May 1st -- What was the date?
14 Q 1996.
15 MR. LIGHTY: Objection, form; vague.
16 A I - I may have. I know there were a lot of
17 meetings on it. So, I can't --
18 Q Well, how many meetings did ADQ have on
19 playground safety?
20 A Numerous.
21 Q And in the meeting seven days before May
22 1st, 1996, one thing that came out of there was that
23 carpeting over concrete was not an acceptable
24 surface --
25 MR. LIGHTY: Object --

137
1 Q -- is that correct?
2 MR. LIGHTY: Object to form.
3 A I -- Again, if there's a meeting note or
4 something I'd have to look at it. I don't recall
5 what was at that meeting.
6 Q Okay. ADQ planned to have the Texas Dairy
7 Queen playground surveys completed by October, 1996;
8 correct?
9 A I - I don't remember the dates. I know
10 that we had a much more aggressive time frame than -
11 than we were ever able to pull off.
12 Q Do you remember being offered to produce a
13 video to all the operators to make them knowledgeable
14 about the dangers of playground hazards?
15 A I may have been offered. But I do recall
16 from Mr. Murthy's deposition that that was something
17 that was mentioned.
18 Q But you just don't remember it?
19 A Again, there were a lot of things on it.
20 Q In May, 1998, ADQ implemented a zero
21 tolerance policy; right?
22 MR. LIGHTY: Object to form; vague.
23 A Yes.
24 Q Now, the zero tolerance policy applies to
25 the Strickland Dairy Queen, too, doesn't it?

138
1 A We -- Again, it applied to every store
2 subject to our ability to enforce it. There are
3 stores -- Again, we have to go into the agreement,
4 look at it, and then make a determination if it's
5 something we can enforce.
6 Q But in reality you have enforced it --
7 A Right.
8 Q -- on the Strickland Dairy Queen?
9 A Right. Right.
10 Q Okay.
11 A I'm just saying -- You're saying in -- You
12 made it -- You said did we enforce it in every store
13 I thought you said.
14 MR. LIGHTY: Wait until he finishes
15 asking --
16 THE WITNESS: Okay.
17 MR. LIGHTY: -- his question before
18 you attempt --
19 THE WITNESS: Okay.
20 MR. LIGHTY: -- to answer so you don't
21 speak at the same time.
22 Q So, the zero tolerance policy applies to
23 the Strickland Dairy Queen store; correct?
24 A We - we applied it to them.
25 Q ADQ implemented the zero tolerance policy

139
1 because certain areas of the stores operation are so
2 critical to the health and safety of the customers;
3 correct?
4 A We looked at - to the - to the health, yes.
5 Q And safety of the customer?
6 A Right. And -- Well, actually to the
7 quality of the product more than anything else is
8 really what it comes down to.
9 Q But the zero tolerance policy was put into
10 effect because areas of health and safety of
11 customers must never fall below the ADQ system
12 standard; correct?
13 A They -- The -- They were put in place as
14 one standard - one area that we did not want to fail
15 after what happened with Jack-In-The-Box.
16 Q ADQ required the Dairy Queen playgrounds in
17 Washington to be in compliance with the CPSC
18 guidelines; correct?
19 MR. LIGHTY: Object to form.
20 A We said to them this is recommended; and
21 upon transfers we did - we required it upon transfer,
22 but we could not enforce it otherwise.
23 MR. LAWDERMILK: I will object as
24 nonresponsive.
25 Q (By Mr. Lawdermilk) ADQ required the Dairy

140
1 Queen playgrounds in Washington to be in compliance
2 with the CPSC guidelines?
3 MR. LIGHTY: Object to form.
4 MS. SMITH: Object to form.
5 A Upon transfers, yes.
6 Q Okay. When did ADQ start seeking to
7 enforce the CPSC guidelines as its standards for
8 playgrounds?
9 A It was never --
10 MR. LIGHTY: Objection, form.
11 MS. SMITH: Objection, form.
12 A It was never our standards for -- It was a
13 recommended guideline, and we never established it as
14 our standard.
15 Q Well, when did ADQ require and enforce that
16 Dairy Queen playgrounds met with the CPSC guidelines?
17 MR. LIGHTY: Objection, form.
18 MS. SMITH: Objection, form.
19 A We never required anybody to do that other
20 than in a transfer situation, otherwise we strongly
21 encouraged it as part of the ...
22 Q Good enough.
23 THE VIDEOGRAPHER: The time is 3:04.
24 We're off the record.
25 (Recess from 3:04 p.m. to 3:20 p.m.)

141
1 THE VIDEOGRAPHER: The time is 3:20.
2 We're back on the record.
3 (Exhibit No. 1 was marked)
4 Q (By Mr. Lawdermilk) I'm going to show you
5 what's been marked as Deposition Exhibit No. 1 and
6 ask you what - what is that? (Tendering)
7 A (Reviewing) It's entitled "International
8 Dairy Queen, Playground Claims" 4/93 through 12/95.
9 Q And where did it come from?
10 A I'm not sure.
11 Q Okay. How many playground injuries did IDQ
12 have from March, '93 to December, '95?
13 MR. LIGHTY: This actually says April.
14 You said March. I mean it's no big deal, but I
15 mean --
16 Q How many playground injuries did IDQ have
17 from April of '93 until December of '95?
18 A If I'm reading -- I'm not sure how to read
19 this report.
20 Q Let me try it again.
21 IDQ had 46 playground injuries
22 reported from March - from April of '93 to December
23 of '95; correct?
24 A Yes.
25 Q Okay. 32 of those injuries occurred in

142
1 Texas; correct?
2 A According to this form, yes.
3 Q What percentage of the injuries occurring
4 on Dairy Queen playgrounds were in Texas?
5 A 70 percent, something like that. 70
6 percent.
7 Q IDQ measures the severity of the playground
8 injuries by the amount of money paid; correct?
9 MR. LIGHTY: Objection, form.
10 MS. SMITH: Objection, form.
11 A I - I don't know how we -- I certainly
12 didn't do it based on the money paid. I mean this -
13 this isn't my form. And I'm not sure whose form it
14 is.
15 Q But according to this International Dairy
16 Queen playground claims form the severity of the
17 playground injury is a measure - is measured by the
18 amount of money paid, isn't it?
19 MR. LIGHTY: Object to form.
20 A Right. And - and again, this could be a
21 form that was prepared for us by our - by our
22 insurance company. I don't know who prepared it.
23 MR. LAWDERMILK: I will object to the
24 nonresponsive portion.
25 Q (By Mr. Lawdermilk) From October of 1996 to

143
1 October of 1999 --
2 A Excuse me. Are you done with this form?
3 Q Yes. Yes, I am.
4 From October - from 1996 to October of
5 1999 a majority of the Texas Dairy Queen playgrounds
6 were not being changed or closed; correct?
7 A Yeah. I - I know there were some changes.
8 I don't know the percentage. But I would assume that
9 there was over 50 percent or - which would make it a
10 majority.
11 Q Okay. Did Mr. Murthy ever want to send
12 default letters to the operators?
13 MR. LIGHTY: Object to form.
14 A I don't know. I think he knew it was not
15 an option.
16 Q To your knowledge did Mr. Murthy ever want
17 to sent default letters to the operators?
18 A Again, we - we talked about whether or not
19 it's something - after the accident in question with
20 the Council - whether it's something we could try to
21 come up with something to do on it. But I don't know
22 if there was anything he did independently.
23 Q But you believe that Mr. Murthy knew that
24 ADQ couldn't send default letters for Dairy Queen's
25 playgrounds being in noncompliance with the CPSC

144
1 guidelines; correct?
2 MR. LIGHTY: Object to form.
3 A I believe he knew he - we couldn't send
4 defaults.
5 Q Well, prior to October of 1999 did ADQ ever
6 even look into sending a default notice to Texas
7 Dairy Queens with playgrounds that were not in
8 compliance with the CPSC?
9 A We had looked into it for - not Texas but
10 for the -- As part of the whole project we had looked
11 at that.
12 Q And who made the decision not to send
13 default letters to Texas Dairy Queens where the
14 playgrounds were not in compliance with the CPSC?
15 A Well, they were -- The fact that they were
16 not meeting recommended guidelines would be my
17 decision not to send them.
18 Q Okay.
19 (Exhibit No. 2 was marked)
20 Q (By Mr. Lawdermilk) I'm going to show you
21 what's been marked as Exhibit No. 2. (Tendering)
22 A (Reviewing)
23 Q Now, Exhibit No. 2 is Srinivasa Murthy's
24 list of steps to get the Texas Dairy Queen
25 playgrounds in compliance with the CPSC; correct?

145
1 A Correct.
2 Q And the second thing on his list was that
3 he was going to send letters to all the Texas store
4 operators thanking those who have closed or improved
5 and remand those who have yet to complete; is that
6 accurate?
7 A That's what it says.
8 Q Part of the - Step No. 3 was to follow up
9 with a phone call; is that correct?
10 A Correct.
11 Q And Step No. 4 says, "If no action, then
12 follow termination procedure"; is that correct?
13 A Correct.
14 Q Now, Mr. Murthy was the ADQ man in charge
15 of the Texas Dairy Queen - in - in charge of
16 implementing the Texas Dairy Queen playground
17 project; right?
18 MR. LIGHTY: Objection, form.
19 A He was administering that process, yes.
20 Q Who drafted ADQ's -- I'm done with that.
21 Who drafted ADQ's press release about Tyler's death
22 after falling at the Strickland Dairy Queen?
23 MR. LIGHTY: Object to form.
24 A I believe Dean Peters.
25 Q And who is Dean Peters?

146
1 A Director of - of Public Relations area.
2 Office -- Director of Public Relations or Director of
3 Communications, one of those.
4 Q Did the legal department review ADQ's press
5 release before it was sent out?
6 MS. SMITH: Objection, form.
7 A We may have. I can't remember one way or
8 the other.
9 Q Do you know of anybody that approved the
10 press release before it was sent out?
11 A I can't recall -- Someone would have looked
12 at it, and I can't recall who did.
13 Q I want to talk to you about the May 20th,
14 1998, Texas Dairy Queen Operators' Council meeting
15 you and Mr. Murthy attended.
16 A Yes, sir.
17 Q You requested going to that meeting to
18 discuss the Texas Dairy Queen playground issues;
19 right?
20 A Yes.
21 Q You apologized to the Board and operators
22 for ADQ's poor execution of playground inspections
23 and mishandling of the Texas Dairy Queen playground
24 project?
25 A No, I didn't.

147
1 Q ADQ's poor execution was that ADQ put
2 something in writing; is that right?
3 A No.
4 MS. SMITH: Objection, form.
5 Q The operators told you that they thought
6 ADQ's expert was unprofessional, didn't they?
7 A Yes.
8 Q An operator told you that he did not
9 understand ADQ's expert playground report, didn't he?
10 A Yes.
11 Q When you heard that did you ever consider
12 ADQ's expert report without a thorough explanation of
13 the hazards on the playgrounds would not make sense
14 to the operators?
15 MR. LIGHTY: Object to form.
16 MS. SMITH: Objection, form.
17 A Ask -- Give me that one again, please.
18 Q Okay. Did you ever consider that ADQ's
19 expert report alone without a thorough explanation of
20 hazards and consequences may not make sense to the
21 operators?
22 MR. LIGHTY: Object to form.
23 MS. SMITH: Objection, form.
24 A No, I didn't.
25 Q Okay. An operator told you that they

148
1 thought ADQ's expert had a conflict of interest
2 because she was also on the payroll of a playground
3 supplier?
4 A Yes, someone did tell me that.
5 Q An operator told you that he thought ADQ's
6 expert's evaluation was erroneous, didn't he?
7 A It was wrong in part. I don't know if he
8 said the whole thing was. But he said it was
9 inaccurate in some parts.
10 Q Did you get your feelings hurt at that May
11 20th, 1998, meeting like Mr. Murthy?
12 A No, I didn't.
13 Q Now, she was said to be unprofessional;
14 they didn't understand the report; a conflict of
15 interest; erroneous. Did that clue you in that the
16 operators did not have the proper knowledge to
17 understand the dangerous conditions of their
18 playgrounds?
19 MR. LIGHTY: Object to form.
20 MS. SMITH: Objection, form.
21 A No, because of the things I had heard
22 before the meeting.
23 Q Now, to try and move forward with the
24 project ADQ was going to send an independent
25 playground expert to each Texas Dairy Queen

149
1 playground to do a proper evaluation; is that
2 correct?
3 MR. LIGHTY: Object to form.
4 MS. SMITH: Objection, form.
5 A No, we thought -- Again, these notes were
6 not our notes. These are the Council's recollections
7 of the meeting, which quite frankly are not accurate
8 in part.
9 And we had made the decision -- I - I
10 feel that the reports were - you know, other than
11 maybe a few things here and there were - were
12 accurate reports. And I don't think anyone at the -
13 ever protested the fact that they were that -- A
14 couple of people did. But all in all people knew
15 what they had got and they understood.
16 MR. HALL: Objection, nonresponsive.
17 Q But to try and move forward with the
18 project ADQ was going to send an independent
19 playground expert to each Texas Dairy Queen
20 playground to do a proper evaluation?
21 MS. SMITH: Objection, form.
22 MR. LIGHTY: Object to form.
23 A No. What we said --
24 Q Okay.
25 A That isn't -- What we said is "If you don't

150
1 like this evaluation - and we're not going to get
2 your cooperation - we'd be willing to go ahead and
3 have your" - "an evaluator of your choice do it if
4 you feel ours is not good enough."
5 And I also said that ours was good
6 enough; and I don't think you're going to get
7 different results. "But if that's what it's going to
8 take to get this ball rolling again and get your
9 support, then we are willing to look at it."
10 And then they requested - "Well, you
11 ought to pay for it because you guys didn't do as
12 good a job as your first" - "as you said the first
13 time."
14 I said, "Well, we think we did a good
15 enough job. We think the surveys are good. But if
16 you guys will agree to work with us on a new survey
17 and will abide by that - whatever that survey result
18 is - we would be willing to get approval," which I
19 later did to fund it.
20 MR. LAWDERMILK: Objection,
21 nonresponsive.
22 Q (By Mr. Lawdermilk) At the May 20th, 1998,
23 Texas Dairy Queen Operators' Council meeting did you
24 on behalf of ADQ say that you were going to send an
25 independent playground expert to each Texas Dairy

151
1 Queen playground to do a proper evaluation?
2 MR. LIGHTY: Objection, asked and
3 answered.
4 MS. SMITH: Objection, asked and
5 answered.
6 A I -- The answer is no.
7 Q Okay. But sending an expert into the
8 playgrounds is what ADQ did in the northwest where
9 they got all their playgrounds up to CPSC standards;
10 correct?
11 MR. LIGHTY: Objection, form.
12 MS. SMITH: Objection, form.
13 A We had someone go into each store in the
14 northwest.
15 Q Who paid for the experts to go into the
16 Texas Dairy Queen stores to look at the playgrounds
17 after Tyler's death?
18 MR. LIGHTY: Objection, form.
19 A I don't know if anyone paid anything.
20 Q At the May 20th, 1998, Texas Dairy Queen
21 Operators' Council meeting did you agree to send a
22 trump letter to all of the operators to undo the
23 wrong that had been done?
24 MR. LIGHTY: Objection, form.
25 A No, I didn't.

152
1 MS. SMITH: Objection, form.
2 Q Okay.
3 A You said all of the operators; correct?
4 Q (Moving head up and down)
5 A I only sent it to one operator.
6 Q So, your memory of the - of the May 20th,
7 1998, Texas Dairy Queen Operators' Council meeting is
8 that you agreed to send a trump letter to just one
9 operator to undo what had been done wrong --
10 MS. SMITH: Objection, form.
11 Q -- correct?
12 A I told him if he fixed his playground and -
13 and had it certified, I would send him a letter once
14 it was done.
15 Q Okay. You said -- What did you learn
16 before the meeting?
17 A What did I learn before the meeting?
18 Q (Moving head up and down)
19 A We weren't getting any cooperations from
20 them and - from the Texas Council. And Larry Newell
21 said, "Well, the problem is everyone's mad because
22 they feel that Ms. Iverson isn't professional" and
23 this and that.
24 And as a result I said, "Well, I just
25 don't think they understand it." And then I

153
1 said, "If they're that mad and we're not going
2 forward because they're mad, then maybe Shrin and I
3 got to come down to Texas and talk with them so they
4 have an understanding of what we've got going here;
5 and we can move this thing forward and get the
6 animosity and all the anger out of it and get this
7 thing done."
8 And as a result they put - put us on
9 the agenda to come down. And they sent out a notice
10 to anyone that wanted to come to hear it.
11 Q Is that it?
12 A I - I don't -- I -- I -- There's just a lot
13 of discontented people. And they wanted to, you
14 know -- I figured rather than having this be the
15 reason this thing wasn't moving forward, I needed to
16 get down with the Council and get it straightened out
17 and move forward.
18 Q Okay. Well, in your opinion does the
19 Council have any power to enforce changes at the
20 Dairy Queen stores?
21 A They have --
22 MS. SMITH: Objection, form.
23 A They have a strong power of influence.
24 Q What's a DMA?
25 A It's - it's the marketing area. It's the

154
1 area of dominant -- A dominant marketing area.
2 Q Do they have annual meetings?
3 A Some of them have them jointly. Some of
4 them have them individually. It depends where - or
5 which group. I - I -- And I'm sure -- I'm not sure
6 how the Texans do their - do their meetings.
7 Q Well, would you know if ADQ has
8 representatives and makes presentations at the Texas
9 DMA?
10 A I'm not -- Because they control all their -
11 their own marketing I don't know how much -- We may
12 be in attendance. I don't know how much we make in
13 presentations, at least as far as the marketing side
14 or anything else.
15 Q And when you say "they," you're talking
16 about the Operators' Council?
17 A The Operator Council controls that.
18 Q If on October 1st of 1999, you had a
19 crystal ball and knew that Tyler was going to fall to
20 his death on the Strickland playground in 22 days,
21 what would you have done to get that playground
22 closed?
23 MR. LIGHTY: Object to form.
24 MS. SMITH: Objection, form.
25 A I would've -- You know, if -- Again, if I -

155
1 if I knew it was going to happen I don't know what
2 more I could have done than we had already done. I
3 would have maybe picked up the phone and called Larry
4 and say, "You've got to get supportive because I just
5 saw in a crystal ball this kid is going to die in a
6 playground. And you need to get your operators to
7 take care of that stuff."
8 Q You think that's the only other thing you
9 could have done?
10 A That's - that's what we've been continuing
11 to do was to -- We had a method of working through --
12 We -- There was a standard way we attacked problems
13 in Texas. We had a settlement agreement that dealt
14 with it. And we worked forward under those
15 guidelines as we did with all the other initiatives
16 in Texas.
17 And we looked -- We looked to the
18 Texas leadership what they - which they expected to
19 take in issues like this and to - and to - to deal
20 with it. And we - we - we pounded on those channels
21 as hard as we could. That's all.
22 MR. HALL: Objection, nonresponsive.
23 Q When you said "Texas leadership," you're
24 talking about the Operators' Council?
25 A Yes.

156
1 Q And what's the area of dominant influence?
2 A That's the same as the DMA. That's -
3 that's - that's the old term for it.
4 Q Uh-huh.
5 A Now the modern term is DMA.
6 Q What does the CPSC require for surfacing
7 below the playground equipment?
8 A Actually --
9 MR. LIGHTY: Object to form.
10 MS. SMITH: Objection, form.
11 A -- I don't know.
12 MR. LAWDERMILK: We can go off the
13 record. If somebody else has questions --
14 MR. LIGHTY: Yeah. Why don't you just
15 pass the witness and we'll let you come back.
16 THE VIDEOGRAPHER: I have
17 approximately five minutes left on the tape.
18 MR. LIGHTY: Why don't you go ahead
19 and switch the tape right now because I have a
20 feeling we're going to have more than five minutes.
21 THE VIDEOGRAPHER: The time is 3:40.
22 This is the end of Tape 2. We're off the record
23 (Recess from 3:40 p.m. to 3:42 p.m.)
24 THE VIDEOGRAPHER: This is the
25 beginning of Tape 3. We're back on the record at

157
1 3:42.
2 CROSS-EXAMINATION
3 BY MS. BLAIR: (3:42 p.m.)
4 Q Mr. Zucco, I have a few questions about my
5 client - Fireman's Fund Insurance Company.
6 A Yes.
7 Q You're familiar with Fireman's Fund?
8 A Yes, I am.
9 Q Are you aware that Fireman's Fund insured
10 the premises at Strickland Drive when this accident
11 occurred?
12 A Yes, I am.
13 Q And you're not aware of any policy under
14 which Fireman's Fund insured IDQ or ADQ at the time
15 this accident occurred, are you?
16 A I believe we were an additional insured
17 under the policy.
18 Q Okay. Under the policy that covered the
19 local owners?
20 A I believe so, yes.
21 Q Any other policies that you're aware of?
22 A Not that I'm aware of.
23 Q Are you aware of any relationship between
24 Fireman's Fund Insurance Company and that premises at
25 Strickland Drive other than the relationship of

158
1 insurer and insured?
2 A No.
3 Q To your knowledge did anyone from Fireman's
4 Fund ever visit that premises?
5 A Not that I'm aware of.
6 Q And you testified when you were answering
7 Mr. Lawdermilk's questions that ADQ/IDQ hired an
8 expert - Ms. Mary Lou Iverson - as part of the
9 playground project?
10 A Yes.
11 Q You're not aware that Fireman's Fund ever
12 hired any playground experts, are you?
13 A No, I'm not.
14 Q And Ms. Iverson did not report to Fireman's
15 Fund?
16 A No.
17 Q Ms. Iverson did not take her instructions
18 from Fireman's Fund?
19 A As far as I know.
20 Q Now, you yourself don't have any criticisms
21 of anything that Fireman's Fund did or did not do in
22 relationship to the premises at Strickland Drive?
23 A No.
24 MS. BLAIR: That's all I have.
25 Thanks.

159
1 MR. LIGHTY: Anybody else?
2 BY MR. TAYLOR: (3:44 p.m.)
3 Q Mr. Zucco, my name is Todd Taylor. I
4 represent Playpower and Miracle in this case.
5 A Yes, sir.
6 Q Do you understand that?
7 A Yes.
8 Q Okay. Do you mind if I ask you a few
9 questions today?
10 A Go right ahead.
11 Q All right. Have you seen any of the
12 documentation that accompanied the playground
13 equipment, for example, that was sold to Mr. Allred's
14 outfit - Golden Triangle - that ultimately was
15 installed in the Strickland Dairy Queen?
16 A I don't think so.
17 Q Okay. In the course of this litigation
18 have you reviewed any of that literature?
19 A I can't remember. I've reviewed so many
20 things. I don't recall that.
21 Q Do you -- Do you have any personal
22 knowledge about the transaction or the documentation
23 that was exchanged between Miracle and Golden
24 Triangle at the time of the transaction?
25 A No, I don't.

160
1 Q Do you understand that playground was
2 installed in approximately 1985?
3 A Yes, I do.
4 Q Okay. I know you're saying you haven't
5 reviewed or you're not sure if you've reviewed the
6 Miracle literature that accompanied the playground
7 equipment. Do you have any personal complaints about
8 Miracle, its conduct or any of its playground
9 equipment as it relates to this incident?
10 A No, I don't.
11 Q Okay. Do you have any complaints about the
12 literature that might have accompanied the equipment?
13 A I'm - I'm not aware of any.
14 Q Okay. And as far as your understanding
15 is -- Well, first off, do you know who installed the
16 playground equipment?
17 A I know it was someone who worked for
18 Mr. Allred. And I think -- I'm not sure if that was
19 Ashmore or not. But --
20 Q Okay.
21 A -- someone who worked for --
22 Q Do you know if that installation complied
23 with the recommendations that Miracle made at the
24 time of the sale through their literature?
25 A From my understanding it didn't.

161
1 Q Okay. Did not?
2 A Did not.
3 Q Okay.
4 MR. TAYLOR: I think that's all the
5 questions I have for you, sir. Thanks for your time
6 and your patience.
7 THE WITNESS: Thank you.
8 MR. HALL: I have a couple of
9 questions.
10 MR. LIGHTY: He represents the
11 Operators' Council.
12 BY MR. HALL: (3:46 p.m.)
13 Q My name is Craig Hall. I represent Texas
14 Dairy Queen Operators' Council and Larry Newell.
15 Do you mind if I ask you a couple of
16 questions?
17 A Go right ahead, sir.
18 Q First of all, with -- You are aware that
19 Larry Newell and Texas Dairy Queen Operators' Council
20 do not own or operate the store on 321 Strickland
21 Drive?
22 A Yes, I do.
23 Q And you are aware that Texas Dairy Queen
24 Operators' Council and Larry Newell have never owned
25 any store or operated any store within Texas or any

162
1 other place for that matter?
2 A Yes.
3 Q You are aware also that they did not have
4 any contractual - any type of contract with the store
5 on 321 Strickland; is that --
6 A Yes.
7 Q -- your understanding?
8 A Yes.
9 Q You mentioned a - a document earlier today
10 called a settlement agreement?
11 A Correct.
12 Q Have -- I'm - I'm assuming that you're -
13 you're aware of what the settlement agreement says?
14 A Yes.
15 Q What is -- Well, you - you would agree with
16 me that Texas Dairy Queen Operators' Council and
17 Larry Newell did not have authority to shut down the
18 playground at any of the stores in Texas; is that
19 correct?
20 A Correct.
21 MR. HALL: That's all the questions I
22 have. Thanks.
23 THE WITNESS: Thank you.
24 MR. LIGHTY: I have some questions.
25

163
1 BY MR. LIGHTY: (3:48 p.m.)
2 Q During this last session, Mr. Zucco, we
3 talked about the press release. Do you remember
4 those questions?
5 A Yes.
6 Q Okay. Did IDQ present that release as
7 their release?
8 A No.
9 Q Did ADQ prepare that release to be their
10 release?
11 A No.
12 Q What was the circumstances that that press
13 release was created?
14 A Mr. Howard when he was in the office before
15 he flew back wanted to know what he should do or what
16 he could say. And he asked us to help prepare
17 something for him.
18 Q And that -- So, the press release which
19 was -- Did you get a chance to look at it during
20 Mr. Murthy's deposition?
21 A I didn't look at it, but I do recall parts
22 of it.
23 Q Okay. It's -- It hadn't been presented
24 here today during your deposition. But that was
25 intended for Mr. Howard to present to the local press

164
1 and media of Orange County, was it not?
2 A Correct.
3 Q And did ADQ/IDQ make their own press
4 release or release any information concerning this
5 accident?
6 A I don't believe so.
7 Q Now, before lunch you and Mr. Lawdermilk
8 were talking about appearances of the store. And he
9 was asking you questions concerning the appearance to
10 the public of the safety guidelines of - of the
11 playgrounds. And you may recall that I said that
12 you-all weren't communicating because you were
13 talking about the appearance of the physical plant.
14 Do you recall those questions?
15 A Yes.
16 Q Okay. Can you make clear for the record
17 and Mr. Lawdermilk when you talking - when you were
18 talking about appearance, what do you mean as far as
19 ADQ looking at the appearance of a Dairy Queen
20 facility?
21 A The painting, the maintenance; what would
22 be viewed by the customer as to the - the general
23 appearance to the eye when they walk in the place.
24 Q And does that include the appearance or the
25 holding out to the public that you-all had authority

165
1 over playground safety?
2 A No, it doesn't.
3 MR. LIGHTY: I pass the witness.
4 REDIRECT EXAMINATION
5 BY MR. LAWDERMILK: (3:50 p.m.)
6 Q Who did you go to lunch with?
7 A I went -- I went to lunch with Don, Lyn and
8 Bill.
9 Q Your three lawyers?
10 A Yes, I did.
11 MR. LAWDERMILK: Pass the witness.
12 MR. LIGHTY: Anybody else? Thank you.
13 THE VIDEOGRAPHER: This is the end of
14 Tape 3. We're off the record at 3:51.
15
16 (The deposition was concluded at 3:51 p.m.)
17
18
19
20
21
22
23
24
25

166
1 NO. B-000,119-C
2 MELINDA MATTHEWS, ) IN THE DISTRICT COURT
INDIVIDUALLY AND ON )
3 BEHALF OF THE ESTATE OF )
TYLER SHANE MATTHEWS, )
4 DECEASED MINOR; and )
MICHAEL MATTHEWS )
5 )
Plaintiff(s), )
6 VS. ) ORANGE COUNTY, TEXAS
)
7 WESLEY HOWARD, )
INDIVIDUALLY AND D/B/A )
8 DAIRY QUEEN, )
)
9 Defendant(s), ) 163RD JUDICIAL DISTRICT
10 REPORTER'S CERTIFICATION
11 DEPOSITION OF WILLIAM C. ZUCCO
12 May 21st, 2002
13 I, RICK SMITH, Certified Shorthand Reporter in
14 and for the State of Texas, hereby certify to the
15 following:
16 That the witness, WILLIAM C. ZUCCO, was duly
17 sworn by the Officer and that the transcript of the
18 oral deposition is a true record of the testimony
19 given by the witness;
20 That the deposition transcript was submitted on
21 May 28th, 2002, to the witness or to the attorney for
22 the witness for examination, signature and returned
23 to me by , ;
24 That the amount of time used by each party at
25 the deposition is as follows:

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1 Mr. Rocky Lawdermilk - 3 Hours; 22 Minutes
2 Ms. Danya W. Blair - 2 Minutes
3 Mr. Todd Taylor - 2 Minutes
4 Mr. Craig Hall - 2 Minutes
5 Mr. Don Lighty - 2 Minutes
6 That pursuant to information given to the
7 deposition officer at the time said testimony was
8 taken, the following includes counsel for all parties
9 of record:
10 Mr. Rocky Lawdermilk, Attorney for Plaintiff(s)
11 Mr. R. Lyn Stevens and Mr. Donald F. Lighty,
12 Attorneys for the Defendant(s):
13 INTERNATIONAL DAIRY QUEEN AND
14 AMERICAN DAIRY QUEEN CORPORATION,
15 SRINIVASA MURTHY, WILLIAM ZUCCO,
16 JOLYNN FIELDER, AND MIKE SULLIVAN
17 Ms. Danya W. Blair, Attorney for the
18 Defendant(s): FIREMAN'S FUND INSURANCE COMPANY
19 Mr. Craig Hall, Attorney for the Defendant(s):
20 TEXAS DIARY QUEEN OPERATORS' COUNCIL
21 and LARRY NEWELL
22 Mr. Todd Taylor, Attorney for the Defendant(s):
23 MIRACLE RECREATION COMPANY and
24 PLAYPOWER, INC.
25

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1 Mr. Scott Boyd, Attorney for the Defendant(s):
2 ROBERT ASHMORE
3 Ms. Michele Yennie Smith, Attorney for the
4 Defendant(s): DQF
5 I further certify that I am neither counsel for,
6 related to, nor employed by any of the parties or
7 attorneys in the action in which this proceeding was
8 taken, and further that I am not financially or
9 otherwise interested in the outcome of the action.
10 Further certification requirements pursuant to
11 Rule 203 of TRCP will be certified to after they have
12 occurred.
13 Certified to by me May 28th, 2002.
14
15
16
17 RICK SMITH, Texas CSR 2644
Expiration Date: 12/31/03
18 Charlotte Smith Reporting, Inc.
235 Orleans Street
19 P. O. Box 4049
Beaumont, Texas 77704-4049
20 (409) 839-4407
21
22
23
24
25

1 FURTHER CERTIFICATION UNDER RULE 203 TRCP
169
2 The original deposition was/was not returned to
3 the deposition officer on ;
4 If returned, the attached Changes and Signature
5 page contains any changes and the reasons therefor;
6 If returned, the original deposition was
7 delivered to ,
8 Custodial Attorney;
9 That $ is the deposition officer's
10 charges to Mr. Rocky Lawdermilk for preparing the
11 original deposition transcript and any copies of
12 exhibits;
13 That the deposition was delivered in accordance
14 with Rule 203.3, and that a copy of this certificate
15 was served on all parties shown herein and filed with
16 the Clerk.
17 Certified to by me , .
18
19
20
21
22 RICK SMITH, Texas CSR 2644
Expiration Date: 12/31/03
23 Charlotte Smith Reporting, Inc.
235 Orleans Street
24 P. O. Box 4049
Beaumont, Texas 77704-4049
25 (409) 839-4407

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1 CHANGES AND SIGNATURE
2 PAGE LINE CHANGE REASON
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1 I, WILLIAM C. ZUCCO, have read the foregoing
2 deposition and hereby affix my signature that same is
3 true and correct, except as noted above.
4
5
6 WILLIAM C. ZUCCO
7
8 THE STATE OF )
9 COUNTY OF )
10
11 Before me, , on this day
12 personally appeared WILLIAM C. ZUCCO, known to me (or
13 proved to me under oath or through
14 ) (description of identity card
15 or other document) to be the person whose name is
16 subscribed to the foregoing instrument and
17 acknowledged to me that they executed the same for
18 the purposes and consideration therein expressed.
19 Given under my hand and seal of office this
20 day of , .
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22
23
24 NOTARY PUBLIC IN AND FOR
25 THE STATE OF

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1 DEPOSITION STIPULATIONS
2 NO. B-000,119-C
3 Deposition of: Mr. William C. Zucco
4 Please complete this Stipulation or state your
agreed Stipulations on the record.
5
The Attorneys for all parties present stipulate
6 and agree to the checked items as follows:
7 1. Deposition is being videoed. Yes X No
8 Video Operator: Sheila A. Burton
9 2. Deposition is taken pursuant to:
10 X a. Texas Rules of Civil Procedure
b. Federal Rules of Civil Procedure
11 X c. Notice
d. Subpoena
12 e. Agreement
f. Court Order
13
3. Objections:
14
X a. Reserve all objections, except as
15 to form and responsiveness
b. Reserve all objections to time of
16 trial
c. Make all objections at the time
17 of deposition
d. An objection by one defendant
18 shall be considered an objection
by all defendants
19
4. Signature:
20
a. Signature of Witness is waived
21
X b. Witness to read and sign
22 deposition
X c. If deposition is not signed by
23 time of trial, unsigned copy may
be used as though signed and
24 timely filed
25

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1 5. Custodial Attorney:
2 The deposition original will be sent
to Mr. Rocky Lawdermilk for
3 safekeeping and use at the time of trial.
4
6. Jurisdiction:
5
If necessary, the Court Reporter
6
may swear the Witness in a non-Texas
7 jurisdiction.
8 7. Original deposition cost:
9 X a. Shall be borne by the Attorney
asking the first question.
10 b. Shall be divided equally among:
All Plaintiffs
11 All Defendants.
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