MEMORANDUM
PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
TO: Priya Anand, Responsible Partner
FROM: Carlos Espinoza, Working Associate
DATE: March 24, 2023
RE: Composite Deposition Summary — Property-Level Witnesses (10 Depositions, January 9 – March 17, 2023)
MATTER: Verimark Hospitality Group Inc. v. Coastal Palms Franchise Holdings LLC et al., Case No. 1021-00006, Circuit Court of the 17th Judicial Circuit, Broward County, Florida
CLIENT: Verimark Hospitality Group Inc. (Nasdaq: VHMK)
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I. Purpose and Scope
This memorandum consolidates the key testimony from all ten property-level depositions taken during the January 9 – March 17, 2023 fact-deposition window established by the Court's Amended Case Management Order dated November 4, 2022. The purpose of this composite summary is to provide the case team with a single reference document that synthesizes the testimony of property-level personnel, identifies recurring themes and key factual findings, highlights impeachment opportunities and internal inconsistencies among defense witnesses, and frames the implications of this testimony for our forthcoming Motion for Partial Summary Judgment and damages presentation.
These depositions supplement the previously summarized depositions of Randall Brecker (Days 1 & 2), Janet Kerrigan, and Nolan Prescott, each of which is covered in separate deposition summary memoranda circulated to the case team. This memorandum should be read in conjunction with those prior summaries, as cross-references to the Brecker and Prescott deposition testimony are made throughout.
The ten deponents who are the subject of this memorandum comprise property general managers, assistant general managers, on-site controllers, and regional accounting staff across the Coastal Palms Franchise Holdings LLC portfolio of 22 franchised hotel properties. That portfolio includes 18 Verimark Suites-branded properties and 4 Verimark Select-branded properties, spanning locations throughout Florida and Georgia. These property-level witnesses are critical to establishing the ground-level mechanics of the revenue-diversion scheme at issue in this litigation, as they were the individuals who implemented the booking directives, maintained the financial records, and prepared the monthly Gross Room Revenue ("GRR") reports submitted to Verimark.
All ten depositions were conducted in Fort Lauderdale at the offices of Calderwood & Harkness LLP, 110 SE 6th Street, Suite 2800, Fort Lauderdale, FL 33301. Court reporting services were provided by Pinnacle Technologies, and all transcripts were processed, coded, and loaded into the review platform by Nexagen Document Solutions LLC. Video recordings of all ten depositions are available through Nexagen's secure portal.
The depositions were noticed by Verimark pursuant to Florida Rule of Civil Procedure 1.310. Defense counsel from Whitfield, Barrow & Crane LLP — principally Gabriela Montes and, for the Georgia property witnesses, Ethan Doyle — represented all deponents. As discussed in further detail below, defense counsel engaged in a pattern of speaking objections throughout the deposition series, particularly during questioning about "corporate" directives, which the team should consider as the basis for a potential motion in limine.
II. Identification of Deponents
A. Table of Witnesses
The following table identifies each of the ten property-level deponents, their titles, entity affiliations, the properties for which they had relevant responsibility, the date and approximate duration of each deposition, and the examining attorney from Calderwood & Harkness.
B. Representation Note
All ten deponents were represented by Whitfield, Barrow & Crane LLP. Gabriela Montes appeared as counsel for the deponents at depositions 1 through 6 (the Florida property witnesses: Ochoa, Felton, Reeves, Pham, Lott, and Wendell) and depositions 9 and 10 (the Jacksonville witnesses: Ingram and Barrios). Ethan Doyle appeared as counsel for the deponents at depositions 7 and 8 (the Georgia property witnesses: Braddock and Morse). No separate individual counsel appeared for any deponent.
A recurring issue throughout the deposition series was defense counsel's frequent use of speaking objections, particularly during lines of questioning concerning "corporate" directives and the relationship between Randall Brecker's instructions and property-level implementation. Ms. Montes, in particular, interjected narrative objections that went beyond stating the legal basis for an objection and appeared designed to coach witnesses during testimony. This pattern was most pronounced during the Pham deposition (January 31, 2023), where Ms. Montes interposed speaking objections on no fewer than fourteen occasions during questioning about the origin of the "Suncoast adjustment" line item in GRR reporting templates, and during the Felton deposition (January 17, 2023), where similar objections were lodged whenever Ms. Felton was asked about communications with Brecker. The team should evaluate this pattern in connection with any potential motion in limine to preclude similar conduct at trial.
III. Recurring Themes and Key Findings
The following subsections identify the principal themes and factual findings that emerged consistently across the ten property-level depositions. These themes are presented in order of significance to Verimark's claims.
A. Direction from "Corporate" to Route Bookings Through Suncoast Room Management Inc.
Central finding: Across all ten depositions, a consistent and remarkably uniform theme emerged that property-level personnel received direction from "corporate" — universally understood by the deponents to mean Randall "Randy" Brecker in his capacity as Managing Member of Coastal Palms Franchise Holdings LLC — to route walk-in bookings, phone reservations, and corporate-direct contract bookings through Suncoast Room Management Inc. rather than through the Verimark central reservation system ("CRS") or the property-level property management system ("PMS") that was integrated with Verimark's brand platform.
Multiple witnesses — specifically Ochoa, Felton, Lott, Braddock, and Ingram — testified that beginning approximately in 2013 or early 2014, they received oral directives, some of which were followed up by email, from Brecker or his office, instructing them to enter walk-in and direct-call guests into the Suncoast booking platform rather than the Verimark PMS. The uniformity of this testimony across properties located in different markets and managed by different operating entities (Gulf Breeze Hospitality LLC, Savannah Lodging Partners LLC, and Coastal Palms itself) is significant, as it demonstrates the centralized, systematic nature of the directive.
Raymond Ochoa, General Manager of the Verimark Suites – Naples Bayfront, testified that Brecker personally visited the Naples property in early 2013 and instructed the front-desk staff to process walk-in guests through a separate Suncoast-branded terminal that had been installed at the front desk. Ochoa testified that Brecker told him this was for "accounting efficiency" and to "streamline our management-company billing." (Ochoa Depo. Tr. 42:8–43:19.) Ochoa described this as a directive, not a suggestion, and testified that he understood it to come from the highest level of the ownership structure. (Ochoa Depo. Tr. 45:2–11.)
Gregory Lott, General Manager of the Verimark Suites – Sarasota Bay, testified to receiving a written memorandum from Brecker's office in approximately the first quarter of 2013 directing all "off-platform" reservations to be processed through gulfcoastrooms.com, the unbranded booking website operated by Suncoast Room Management Inc. (Lott Depo. Tr. 37:14–38:22.) Although Lott could not produce the original memorandum during his deposition, he testified that he maintained handwritten notes from 2013 referencing the "new booking process per Randy," which were introduced as Deposition Exhibit 61. (Lott Depo. Tr. 39:4–40:1.)
Kevin Braddock, General Manager of the Verimark Suites – Savannah Riverfront, testified that the directive applied equally to the Georgia properties operated under Savannah Lodging Partners LLC. Braddock stated that he implemented the Suncoast booking system at the Savannah Riverfront property in approximately February 2013, following an email from Brecker (introduced as Deposition Exhibit 70) instructing him to "set up Suncoast terminal at Savannah properties." (Braddock Depo. Tr. 51:6–52:18.)
Thomas Ingram, General Manager of the Verimark Select – Jacksonville Oceanfront, testified that the Suncoast booking practice was already in place when he joined Coastal Palms in 2016 and that he was trained on the use of the Suncoast booking system as part of his onboarding process. (Ingram Depo. Tr. 28:3–29:14.) This testimony is notable because it demonstrates that by 2016, the Suncoast booking diversion had become institutionalized as standard operating procedure within the Coastal Palms organization.
The consistency of this testimony across all ten depositions — spanning multiple properties, multiple operating entities, and a time period from 2013 through at least 2021 — provides compelling evidence that the Suncoast booking directive was a systematic, top-down policy implemented at Brecker's personal direction.
B. Exclusion of Suncoast-Collected Revenues from GRR Reports to Verimark
Central finding: Property-level controllers and accounting staff consistently testified that they were instructed — either directly by Brecker or through Susan Pham, the Regional Accounting Coordinator for Coastal Palms — to exclude all revenues collected through the Suncoast booking channel from the monthly Gross Room Revenue reports submitted to Verimark. This testimony establishes the reporting mechanism by which the revenue diversion was concealed from Verimark.
Diane Felton, the On-Site Controller for the three Fort Myers Verimark Suites properties, provided among the most detailed testimony on this point. Felton testified that she prepared monthly GRR reports for all three Fort Myers properties and that she was specifically told by Pham to "back out" any Suncoast revenue before submitting the reports to Verimark. (Felton Depo. Tr. 78:11–79:6.) Felton stated clearly that she understood this instruction to mean that revenues collected through the Suncoast booking channel would not be reported to Verimark and would therefore not be included in the calculation of royalties and marketing-fund contributions owed under the franchise agreements. (Felton Depo. Tr. 79:8–20.)
Patricia Wendell, the On-Site Controller for the three Sarasota Verimark Suites properties, gave substantially similar testimony. Wendell described maintaining a two-ledger system at the Sarasota properties: one ledger captured all revenue, including Suncoast-collected revenue, for internal management purposes and for reporting to the property-level LLCs' ownership; a second, reduced-figure ledger was used exclusively for Verimark GRR reporting and excluded all Suncoast revenue. (Wendell Depo. Tr. 62:3–63:19.) Wendell testified that the dual-ledger approach was not her invention but was implemented at Pham's direction pursuant to templates and instructions distributed from "corporate." (Wendell Depo. Tr. 64:1–12.)
Angela Morse, the On-Site Controller for the Savannah and Brunswick, Georgia properties operated under Savannah Lodging Partners LLC, testified that she maintained separate Drayton Health IT files for each property: one file labeled "total property revenue" that captured all revenue from all booking channels, including Suncoast, and a second file labeled "franchise reporting" that excluded Suncoast collections. (Morse Depo. Tr. 55:8–56:22.) Morse confirmed that the "franchise reporting" Drayton Health IT files were the basis for the monthly GRR reports submitted to Verimark. (Morse Depo. Tr. 57:3–11.) The Drayton Health IT file directory listing showing this dual-file structure was introduced as Deposition Exhibit 74.
Cynthia Barrios, the On-Site Controller for the two Verimark Select properties in Jacksonville, confirmed that the same exclusion practice applied at the Select-brand locations and was not limited to the Verimark Suites brand. (Barrios Depo. Tr. 44:9–45:3.) Barrios testified that the exclusion applied to both walk-in and corporate-direct revenues processed through the Suncoast channel. (Barrios Depo. Tr. 45:5–18.)
Susan Pham provided the most comprehensive testimony on this topic during her approximately six-hour deposition. As the Regional Accounting Coordinator, Pham served as the conduit between Brecker's directives and the property-level accounting staff across all 22 franchised properties. Pham confirmed that she prepared template spreadsheets for monthly GRR reporting that contained a specific line item labeled "Suncoast adjustment," which functioned as a deduction from total property revenue before the net figure was submitted to Verimark as reported GRR. (Pham Depo. Tr. 112:4–113:18; Depo. Ex. 55.) Pham acknowledged that this deduction reduced the GRR reported to Verimark below the total room revenue actually collected at each property. (Pham Depo. Tr. 114:2–16.) When asked why she believed this treatment was appropriate, Pham stated that Brecker had told her that Suncoast revenue was "management-company revenue, not franchise revenue" and that it therefore did not need to be included in the GRR reports to Verimark. (Pham Depo. Tr. 115:3–18.)
The uniformity of this testimony across all four controllers and across all geographic regions of the portfolio is highly significant. Every controller who testified — Felton, Wendell, Morse, and Barrios — described the same basic mechanism: total revenue was tracked internally, Suncoast revenue was then excluded pursuant to instructions from Pham (who acted on Brecker's directives), and only the reduced figure was reported to Verimark. This consistency strongly supports the conclusion that the GRR underreporting was systematic and centrally coordinated.
C. Suncoast's 12% Management Fee
Multiple witnesses — specifically Felton, Pham, Morse, and Barrios — confirmed that Suncoast Room Management Inc. retained a 12% "management fee" on all revenues it collected before remitting the balance to the property-level entities. (Felton Depo. Tr. 94:8–95:2; Pham Depo. Tr. 128:14–129:11; Morse Depo. Tr. 67:4–18; Barrios Depo. Tr. 52:7–21.) The remittance flow was from Suncoast to the property-level operating entities — Gulf Breeze Hospitality LLC, Savannah Lodging Partners LLC, or, in some cases, directly to Coastal Palms Franchise Holdings LLC.
Critically, Pham testified that neither the gross Suncoast collections (i.e., the full room revenue collected from guests through the Suncoast booking channel) nor the net-of-fee remittances (i.e., the amounts received by the property entities after Suncoast's 12% deduction) were included in GRR reports to Verimark. (Pham Depo. Tr. 130:2–19.) The entire revenue stream — both the 12% retained by Suncoast and the 88% remitted to the properties — was excluded from reported GRR. This is significant because it demonstrates that the purpose of the Suncoast structure was not merely to compensate a management company for booking services (which might arguably reduce the reportable revenue to a net figure) but rather to remove the entire revenue stream from Verimark's visibility.
Felton's testimony was particularly valuable on this point because she produced during her deposition a sample internal revenue reconciliation for the third quarter of 2020 showing approximately $1.2 million in Suncoast-channel revenue across her three Fort Myers properties for that single quarter alone, none of which appeared in the corresponding Verimark GRR reports for the same period. (Felton Depo. Tr. 98:14–100:8; Depo. Ex. 47.) This document provides concrete, property-level evidence of the magnitude of the revenue exclusion and will be a critical exhibit in dispositive-motion practice and at trial.
D. The gulfcoastrooms.com Website
Several witnesses provided testimony about gulfcoastrooms.com, the unbranded booking website operated by Suncoast Room Management Inc. that served as the consumer-facing portal for the diverted booking channel.
Thomas Ingram, General Manager of the Verimark Select – Jacksonville Oceanfront, testified that gulfcoastrooms.com was presented to property staff as the "direct booking portal" and that corporate-rate clients — including government agencies, group-booking coordinators, and negotiated-rate business travelers — were specifically directed to book through gulfcoastrooms.com rather than through the Verimark reservation system. (Ingram Depo. Tr. 34:8–35:22.) This testimony is significant because corporate-rate clients typically represent a high-volume, recurring revenue stream that, under the Franchise License Agreements, would generate substantial and ongoing royalty and marketing-fund obligations.
Raymond Ochoa and Kevin Braddock each confirmed that front-desk staff at their respective properties were instructed to provide walk-in guests who asked about online booking with gulfcoastrooms.com business cards rather than directing them to the Verimark branded booking website. (Ochoa Depo. Tr. 48:3–49:11; Braddock Depo. Tr. 58:14–59:8.) Ochoa testified that the gulfcoastrooms.com business cards were printed and distributed by Suncoast and that they did not display any Verimark branding. (Ochoa Depo. Tr. 49:13–22; Depo. Ex. 14.) This practice had the dual effect of diverting revenue away from Verimark's reportable channels and undermining Verimark's brand standards by directing guests at Verimark-branded properties to an unbranded booking platform.
Gregory Lott testified that gulfcoastrooms.com rates were typically 5 to 10 percent below Verimark published rates, which he understood was intended to incentivize bookings through the Suncoast channel rather than through Verimark's own booking platform. (Lott Depo. Tr. 44:6–45:3.) Ingram provided corroborating testimony on this point, stating that the rate differential was deliberate and that "the idea was to give guests a reason to book with us directly." (Ingram Depo. Tr. 36:2–14; Depo. Ex. 79, gulfcoastrooms.com rate comparison printout.) The deliberate underpricing of rooms on the Suncoast booking channel below Verimark published rates not only diverted revenue but also potentially undermined Verimark's rate-integrity provisions under the FLAs.
E. OTA Revenue Netting
In addition to the Suncoast revenue exclusion, Felton, Pham, and Barrios testified about a separate but related practice of netting third-party online travel agency ("OTA") revenues in the GRR reports submitted to Verimark.
Pham confirmed that for OTA bookings processed on a "net rate" or "merchant model" basis — where the OTA collects the full room rate from the guest and remits a reduced amount to the hotel after deducting the OTA's commission — Coastal Palms reported only the net amount received from the OTA (after the OTA's commission) rather than the gross room rate charged to the guest. (Pham Depo. Tr. 138:2–139:19.) Pham acknowledged that this treatment reduced reported GRR by the amount of OTA commissions, which typically ranged from 15% to 25% of the gross room rate depending on the OTA and the particular rate agreement. (Pham Depo. Tr. 140:3–18.)
This practice was inconsistent with the plain language of FLA § 4.1, which defines Gross Room Revenue as "all revenues derived from or attributable to the rental of guest rooms at the Hotel, including revenues from any booking channel, direct or indirect, and regardless of the entity collecting such revenue." The FLA definition makes no allowance for netting commissions or other distribution costs; GRR is defined in terms of the full revenue attributable to the room rental, not the net amount received by the franchisee after paying intermediaries.
Pham testified that she was aware of the FLA language defining GRR but stated that Brecker had told her that "commissions are a cost of doing business, not revenue." (Pham Depo. Tr. 142:8–17.) Pham further acknowledged that she had not sought or received any written approval from Verimark for this netting practice and that she was not aware of any communication between Coastal Palms and Verimark in which the OTA-netting methodology was disclosed or discussed. (Pham Depo. Tr. 143:1–15.)
Barrios confirmed that the same OTA-netting practice was applied at the Verimark Select properties in Jacksonville and that she followed the same reporting templates distributed by Pham. (Barrios Depo. Tr. 55:6–56:14.)
F. Knowledge and Awareness of FLA Reporting Obligations
The depositions explored each witness's level of knowledge and awareness of the reporting obligations imposed by the Franchise License Agreements between Verimark and the Coastal Palms property entities.
Most of the general managers — Ochoa, Lott, Braddock, and Ingram — testified that they were generally aware that Coastal Palms owed royalties and marketing-fund contributions to Verimark based on room revenues generated at the franchised properties. (Ochoa Depo. Tr. 55:2–14; Lott Depo. Tr. 50:8–51:3; Braddock Depo. Tr. 63:4–17; Ingram Depo. Tr. 41:6–42:2.) However, none of the general managers testified to having read the FLAs in detail, and all four stated that they relied on "corporate" — meaning Brecker and the accounting function — for compliance with franchise-agreement reporting obligations. This testimony is relevant because it demonstrates that the general managers, while aware of the franchise relationship in general terms, were not independently evaluating whether the Suncoast booking arrangement complied with the FLAs. They deferred to Brecker's direction on all financial-reporting matters.
The controllers — Felton, Wendell, Morse, and Barrios — demonstrated a more detailed understanding of the reporting obligations, as would be expected given their direct involvement in preparing GRR reports. Felton provided the most significant testimony on this point. She acknowledged that she had reviewed FLA § 4.1's GRR definition and that she "had questions" about whether excluding Suncoast revenue was consistent with that definition. (Felton Depo. Tr. 103:8–104:2.) However, Felton testified that when she raised her questions with Pham, she was told that "Randy has it handled." (Felton Depo. Tr. 104:4–11.) Felton did not escalate her concerns beyond Pham or contact Verimark directly. (Felton Depo. Tr. 104:13–22.)
Wendell testified that she had not independently reviewed the FLA provisions and relied entirely on Pham's templates and instructions. (Wendell Depo. Tr. 71:3–15.) Morse and Barrios gave similar testimony. (Morse Depo. Tr. 72:8–73:4; Barrios Depo. Tr. 58:2–18.)
Pham was the most knowledgeable witness on this point. She admitted under examination by Ms. Nakamura that she understood the FLA required reporting of all revenues "from the rental of guest rooms" and that the definition used broad, inclusive language. (Pham Depo. Tr. 148:3–149:8.) Nevertheless, Pham maintained that she followed Brecker's interpretation that Suncoast was a separate entity whose revenue was not subject to the franchise relationship. (Pham Depo. Tr. 149:10–150:4.) When pressed, Pham conceded that she had never sought a legal opinion on this question and had never communicated with Verimark about the proper treatment of Suncoast revenues. (Pham Depo. Tr. 150:6–19.)
Critically, no witness in any of the ten depositions testified that Verimark had ever approved or been informed of the Suncoast exclusion from GRR. This is a significant negative finding that supports Verimark's position that the revenue diversion was concealed from the franchisor throughout the relevant period.
G. Volume and Magnitude of Diverted Revenue
While precise quantification of the diverted revenue is covered in Dr. Sharon Kettlewell's expert report (to be filed by Ridgeline Forensic Advisory LLC), the depositions provided corroborating factual testimony on the magnitude of the scheme that is valuable both for damages purposes and for establishing the materiality of the breach.
Susan Pham testified that Suncoast-channel bookings represented "roughly 20 to 30 percent" of total room nights across the Coastal Palms portfolio, with the percentage varying by property and by season. (Pham Depo. Tr. 155:4–156:11.) Pham stated that the Suncoast channel's share of total bookings was higher in leisure-oriented markets such as Naples, Sarasota, and Savannah — where walk-in traffic and direct-call reservations constitute a larger proportion of bookings — and lower in business-oriented markets such as Jacksonville and the Tampa area, where OTA and corporate-contract bookings through the Verimark system were more prevalent. (Pham Depo. Tr. 156:13–157:8.)
This 20–30% range is consistent with the findings of the independent preliminary audit conducted by Thornbury & Associates, which identified approximately 26% underreporting for the top ten properties during the 2019–2021 period. The range is also consistent with Dr. Kettlewell's portfolio-wide estimate of 22–31% underreporting across all 22 properties over the full 2013–2021 period, as reflected in her preliminary calculations shared with the case team.
Angela Morse provided property-specific corroboration, testifying that for the Savannah and Brunswick, Georgia properties under Savannah Lodging Partners LLC, the Suncoast channel accounted for approximately 25% of all room-night revenue during peak tourist season (March through September). (Morse Depo. Tr. 69:8–70:6.) Patricia Wendell similarly estimated the Suncoast channel's share at the Sarasota properties at approximately 22 to 28 percent of total room revenue. (Wendell Depo. Tr. 68:4–19.)
H. Unreported Room Additions
A separate but related line of testimony concerned the failure to report room additions to Verimark as required for technology-fee calculations under FLA § 4.3. Several deponents testified about room-addition renovation projects at their respective properties that were not separately reported to Verimark.
Thomas Ingram, General Manager of the Verimark Select – Jacksonville Oceanfront, testified that two of the Jacksonville properties underwent room-addition renovations during the relevant period. Approximately 48 rooms were added in 2017, and approximately 36 rooms were added in 2019. (Ingram Depo. Tr. 44:3–45:18; Depo. Ex. 78.) Ingram testified that these additions were not separately reported to Verimark as required for technology-fee calculations. (Ingram Depo. Tr. 45:20–46:8.)
Raymond Ochoa testified that the Naples Bayfront property added 42 rooms in 2016 through a wing-expansion renovation and that he did not believe Verimark was notified of the room addition. (Ochoa Depo. Tr. 58:2–59:11.) Ochoa stated that he assumed "corporate would handle the franchise side of things." (Ochoa Depo. Tr. 59:13–18.)
Kevin Braddock testified that the Savannah Riverfront property added approximately 38 rooms in 2018 as part of a waterfront-expansion project. (Braddock Depo. Tr. 66:4–67:2.) Braddock stated that he was told by Brecker that "corporate would handle the franchise paperwork," but he was unaware of any actual notification to Verimark. (Braddock Depo. Tr. 67:4–14.)
Diane Felton confirmed from Fort Myers property records that approximately 50 rooms were added across the three Fort Myers properties between 2015 and 2019, with no corresponding notification to Verimark. (Felton Depo. Tr. 107:6–108:14.)
In total, the unreported room additions identified through deponent testimony amount to approximately 214 rooms across the portfolio: 48 + 36 (Jacksonville) + 42 (Naples) + 38 (Savannah) + 50 (Fort Myers) = 214 rooms. This figure is consistent with Verimark's technology-fee underpayment claim of approximately $1.26 million, calculated as 214 rooms × $12.50 per room per month × approximately 47 months average (weighted by each property's specific non-reporting period) = $1,257,250 in underpaid technology fees under FLA § 4.3.
IV. Witness-by-Witness Summaries
The following subsections provide individualized summaries of each of the ten depositions, including the key testimony elicited, notable cross-examination exchanges, and the principal exhibits introduced or referenced during each session.
A. Raymond Ochoa — General Manager, Verimark Suites – Naples Bayfront (January 12, 2023)
Raymond Ochoa has been employed by Gulf Breeze Hospitality LLC since 2010 and has served as General Manager of the Verimark Suites – Naples Bayfront property since 2012. His deposition lasted approximately four hours and was conducted by Carlos Espinoza.
Ochoa testified that Randall Brecker personally visited the Naples Bayfront property in early 2013 and directed the front-desk staff to process walk-in guests through a separate Suncoast-branded terminal that had been installed at the front desk. (Ochoa Depo. Tr. 42:8–43:19.) Ochoa described the installation of the Suncoast terminal as occurring within a few days of Brecker's visit, and he recalled that a technician was sent by Brecker's office to set up the equipment. (Ochoa Depo. Tr. 43:21–44:8.) Ochoa testified that Brecker explained the change as being for "accounting efficiency" and to "streamline our management-company billing." (Ochoa Depo. Tr. 44:10–18.)
Ochoa further testified about the distribution of gulfcoastrooms.com business cards to walk-in guests. He confirmed that front-desk staff were instructed to hand walk-in guests who asked about online booking a gulfcoastrooms.com card rather than directing them to the Verimark branded booking website. (Ochoa Depo. Tr. 48:3–49:22.) A sample gulfcoastrooms.com business card was introduced as Deposition Exhibit 14.
With respect to room additions, Ochoa acknowledged that the Naples Bayfront property added 42 rooms in 2016 through a wing expansion and that he did not believe Verimark had been notified of the room addition. (Ochoa Depo. Tr. 58:2–59:18.) He stated that he assumed "corporate would handle the franchise side of things" and that he had no personal involvement in franchise-compliance reporting. (Ochoa Depo. Tr. 59:13–18.)
Ochoa stated that he had no involvement in preparing GRR reports and deferred all questions about financial reporting to the property controllers. (Ochoa Depo. Tr. 60:4–14.) He was generally aware that Coastal Palms owed royalties and marketing-fund contributions to Verimark based on room revenues but had not reviewed the FLA in detail. (Ochoa Depo. Tr. 55:2–14.)
On cross-examination by Gabriela Montes, Ochoa maintained that he believed Brecker's instructions regarding the Suncoast terminal were "standard business practice" and that he had no reason to question them at the time they were given. (Ochoa Depo. Tr. 68:3–17.) Montes also elicited testimony from Ochoa that he was not aware of any specific FLA provision that would have prohibited the use of a separate booking platform. (Ochoa Depo. Tr. 69:2–14.)
Key exhibits referenced: Deposition Exhibit 12 (2013 email from Brecker to Ochoa regarding Suncoast terminal installation at the Naples property); Deposition Exhibit 14 (gulfcoastrooms.com business card provided to walk-in guests).
B. Diane Felton — On-Site Controller, Gulf Breeze Hospitality LLC / Fort Myers Properties (January 17, 2023)
Diane Felton has been employed by Gulf Breeze Hospitality LLC since 2011 and serves as On-Site Controller responsible for financial reporting at three Fort Myers Verimark Suites properties. Her deposition lasted approximately five hours and was conducted by Yuki Nakamura.
Felton provided the most detailed testimony of any property-level controller on the mechanics of the GRR-exclusion process. She described in detail the two-ledger approach that she employed at the Fort Myers properties: one ledger — the "internal" or "management" ledger — captured all revenue from all booking channels, including revenue collected through the Suncoast booking platform; a second ledger — the "franchise" or "Verimark reporting" ledger — excluded all Suncoast revenue and served as the basis for the monthly GRR reports submitted to Verimark. (Felton Depo. Tr. 75:4–77:22.)
Felton testified that she prepared monthly GRR reports for each of the three Fort Myers properties and that she specifically excluded Suncoast revenue from those reports pursuant to instructions she received from Susan Pham, the Regional Accounting Coordinator. (Felton Depo. Tr. 78:11–79:6.) Felton stated that Pham had told her to "back out" any Suncoast revenue before submitting the GRR reports and that Felton understood this to mean the Suncoast revenue would not be reported to Verimark. (Felton Depo. Tr. 79:8–20.)
A critical moment in the deposition occurred when Felton produced an internal revenue reconciliation for the third quarter of 2020 that showed approximately $1.2 million in Suncoast-channel revenue across her three Fort Myers properties for that quarter alone. (Felton Depo. Tr. 98:14–100:8; Depo. Ex. 47.) Felton confirmed that none of this $1.2 million appeared in the corresponding Verimark GRR reports for the same period. (Felton Depo. Tr. 100:10–18.) This document provides direct, property-level evidence of the revenue exclusion and its magnitude.
Felton acknowledged having reviewed FLA § 4.1's definition of Gross Room Revenue. When asked whether she had any concerns about excluding Suncoast revenue from GRR in light of that definition, Felton stated that she "had questions" about the practice but that when she raised those questions with Pham, she was told that "Randy has it handled." (Felton Depo. Tr. 103:8–104:11.) Felton did not escalate her concerns beyond Pham. (Felton Depo. Tr. 104:13–22.)
Felton confirmed that Suncoast retained a 12% management fee on all revenues it collected before remitting the balance to the property-level entities. (Felton Depo. Tr. 94:8–95:2.) She further confirmed that approximately 50 rooms were added across the Fort Myers properties between 2015 and 2019 and that she was not aware of any notification to Verimark regarding those additions. (Felton Depo. Tr. 107:6–108:14.)
On cross-examination by Gabriela Montes, Felton testified that she believed the Suncoast revenue exclusion practice was "authorized by ownership" and that she did not consider it her place to override the instructions she received from her superiors. (Felton Depo. Tr. 114:6–19.)
Key exhibits: Deposition Exhibit 45 (sample monthly GRR report for Fort Myers Verimark Suites property); Deposition Exhibit 47 (Q3 2020 internal revenue reconciliation showing ~$1.2M in excluded Suncoast revenue); Deposition Exhibit 48 (email from Pham to Felton providing "Suncoast adjustment" template and instructions).
C. Marco Reeves — Assistant General Manager, Verimark Suites – Fort Myers Beach (January 24, 2023)
Marco Reeves has been employed by Gulf Breeze Hospitality LLC since 2015 and serves as Assistant General Manager at the Verimark Suites – Fort Myers Beach property. His deposition lasted approximately three and a half hours and was conducted by Carlos Espinoza.
Reeves's testimony was primarily relevant to the operational mechanics of the dual-booking system at the property level. As the assistant general manager with direct oversight of front-desk operations and guest check-in procedures, Reeves was well-positioned to describe how the Suncoast booking system functioned in practice.
Reeves confirmed that walk-in guests and phone reservations were routinely processed through the Suncoast booking system rather than through the Verimark PMS, per what he described as a "corporate directive." (Reeves Depo. Tr. 32:4–33:12.) He testified that front-desk staff were trained to use the Suncoast terminal for walk-in and direct-call bookings and that this training was part of the standard onboarding process for new front-desk employees. (Reeves Depo. Tr. 34:2–35:8.) Reeves identified a front-desk procedure manual that included specific instructions for processing bookings through the Suncoast system, which was introduced as Deposition Exhibit 52. (Reeves Depo. Tr. 35:10–36:4.)
Reeves had limited knowledge of financial reporting matters. He testified that he had no involvement in preparing GRR reports or any other financial statements and deferred all revenue-related questions to Diane Felton, the Fort Myers controller. (Reeves Depo. Tr. 40:2–14.)
On cross-examination by Gabriela Montes, Reeves testified that he assumed the Suncoast booking practice was "normal for how we operate" and that he had no reason to question it. (Reeves Depo. Tr. 44:8–18.)
Key exhibit: Deposition Exhibit 52 (Fort Myers Beach property front-desk procedure manual containing Suncoast booking instructions).
D. Susan Pham — Regional Accounting Coordinator, Coastal Palms Franchise Holdings LLC (January 31, 2023)
Susan Pham has been employed by Coastal Palms Franchise Holdings LLC since 2012 and serves as Regional Accounting Coordinator. Her deposition lasted approximately six hours and was conducted by Yuki Nakamura. This was the most significant property-level deposition in the series, and Pham's testimony provides the most comprehensive account of the financial-reporting mechanics underlying the revenue-diversion scheme.
Pham reported directly to Randall Brecker on all accounting and financial-reporting matters, and she reported to Theresa Brecker (Randall Brecker's spouse) on HR and administrative matters. (Pham Depo. Tr. 18:4–19:2.) In her role as Regional Accounting Coordinator, Pham was responsible for consolidating the financial reports received from all 22 property-level controllers and preparing the monthly GRR submissions transmitted to Verimark. (Pham Depo. Tr. 22:3–23:14.) She was the central figure in the reporting chain between property-level operations and Verimark's franchise-compliance department.
Pham testified at length about the GRR reporting process. She confirmed that she created the template spreadsheets used by all property-level controllers for monthly GRR reporting. (Pham Depo. Tr. 108:6–109:12.) These templates contained a specific line item labeled "Suncoast adjustment," which functioned as a deduction from total property revenue. (Pham Depo. Tr. 112:4–113:18; Depo. Ex. 55.) After the Suncoast adjustment was applied, the resulting net figure was reported to Verimark as the property's Gross Room Revenue for the month. (Pham Depo. Tr. 113:20–114:16.)
Pham confirmed that this practice began in approximately the first quarter of 2013, coinciding with the establishment of Suncoast Room Management Inc. (Pham Depo. Tr. 116:2–18.) She testified that she distributed the GRR reporting templates and accompanying instructions to all property-level controllers and that she served as the point of contact for any questions about the reporting methodology. (Pham Depo. Tr. 118:4–119:8.)
When questioned about the FLA's definition of Gross Room Revenue, Pham acknowledged that she was aware of FLA § 4.1's broad definition, which includes "all revenues derived from or attributable to the rental of guest rooms at the Hotel, including revenues from any booking channel, direct or indirect, and regardless of the entity collecting such revenue." (Pham Depo. Tr. 148:3–149:8.) Despite this awareness, Pham stated that she followed Brecker's instruction that Suncoast revenue was "management-company revenue, not franchise revenue" and therefore did not need to be included in the GRR reports to Verimark. (Pham Depo. Tr. 149:10–150:4.) Pham conceded that she had never sought independent legal advice on this question and had never communicated with Verimark about the treatment of Suncoast revenues. (Pham Depo. Tr. 150:6–19.)
Pham's testimony on the magnitude of the Suncoast booking channel was critical. She testified that Suncoast-channel bookings represented "roughly 20 to 30 percent" of total room nights across the portfolio, with the percentage varying by property and by season. (Pham Depo. Tr. 155:4–156:11.) She stated that the Suncoast channel was particularly active in leisure markets and during peak travel seasons. (Pham Depo. Tr. 156:13–157:8.)
Pham also provided significant testimony regarding the OTA revenue-netting practice. She confirmed that for OTA bookings processed on a "net rate" or "merchant model" basis, Coastal Palms reported only the net amount received from the OTA — after the OTA's commission was deducted — rather than the gross room rate charged to the guest. (Pham Depo. Tr. 138:2–139:19.) Pham acknowledged that this reduced reported GRR by the amount of OTA commissions. (Pham Depo. Tr. 140:3–18.) She stated that Brecker had told her that "commissions are a cost of doing business, not revenue." (Pham Depo. Tr. 142:8–17.) Pham confirmed she had never received approval from Verimark for either the Suncoast exclusion or the OTA-netting practice. (Pham Depo. Tr. 143:1–15.)
On cross-examination by Gabriela Montes, Pham maintained that she was "following directions from ownership" and believed the accounting treatment was "appropriate" based on her understanding of Brecker's instructions. (Pham Depo. Tr. 172:4–173:11.) Ms. Montes's cross-examination was notably brief relative to the length of the direct examination, lasting approximately forty-five minutes.
Key exhibits: Deposition Exhibit 55 (GRR reporting template with "Suncoast adjustment" line item); Deposition Exhibit 56 (email chain between Pham and Brecker regarding GRR reporting methodology, dated April 2014, in which Brecker instructs Pham to "make sure none of the Suncoast numbers show up on the franchise reports"); Deposition Exhibit 57 (consolidated revenue summary for Q4 2021 showing total revenue versus reported GRR across all 22 properties, with the differential attributable to Suncoast exclusions and OTA netting); Deposition Exhibit 58 (OTA reconciliation spreadsheet showing gross versus net OTA revenues for sample properties).
E. Gregory Lott — General Manager, Verimark Suites – Sarasota Bay (February 8, 2023)
Gregory Lott has been employed by Gulf Breeze Hospitality LLC since 2009 and has served as General Manager of the Verimark Suites – Sarasota Bay property since 2011. His deposition lasted approximately four hours and was conducted by Carlos Espinoza.
Lott provided important testimony about the initial implementation of the Suncoast booking directive at the Sarasota properties. He testified to receiving a written memorandum from Brecker's office in approximately the first quarter of 2013 directing all "off-platform" reservations — meaning reservations not originating through the Verimark CRS or OTA channels — to be processed through gulfcoastrooms.com. (Lott Depo. Tr. 37:14–38:22.) Lott described the memorandum as a single-page document on Coastal Palms letterhead, although he was unable to produce the original during his deposition.
When questioned about whether he could authenticate the memorandum, Lott stated that he could not locate the original but that he had maintained handwritten notes from the same time period referencing the "new booking process per Randy." (Lott Depo. Tr. 39:4–40:1.) These handwritten notes were introduced as Deposition Exhibit 61 and provide contemporaneous corroboration of the Suncoast directive's implementation timeline.
Lott confirmed that the Sarasota properties experienced high leisure-traveler volume, particularly during the winter season, and that the Suncoast channel was particularly active during these peak periods. (Lott Depo. Tr. 42:3–43:8.) He estimated that walk-in and direct-call bookings — the categories most affected by the Suncoast directive — could account for 30% or more of total bookings during the peak December-through-April season. (Lott Depo. Tr. 43:10–44:3.)
Lott had a general awareness of the franchise royalty obligations owed to Verimark but deferred all questions about the specifics of financial reporting to Patricia Wendell, the Sarasota on-site controller. (Lott Depo. Tr. 50:8–51:3.) He testified that he understood the Suncoast arrangement to be "a management-company thing" and that he did not question Brecker's authority to implement it. (Lott Depo. Tr. 51:5–14.)
On cross-examination by Gabriela Montes, Lott was unable to produce the original memorandum from Brecker's office but maintained he recalled receiving it. (Lott Depo. Tr. 54:6–18.) Montes attempted to characterize the handwritten notes (Depo. Ex. 61) as ambiguous, but Lott stood by his testimony that the notes referenced the Suncoast booking directive from Brecker. (Lott Depo. Tr. 55:2–16.)
Key exhibit: Deposition Exhibit 61 (Lott's handwritten notes from 2013 referencing "new booking process per Randy").
F. Patricia Wendell — On-Site Controller, Gulf Breeze Hospitality LLC / Sarasota Properties (February 14, 2023)
Patricia Wendell has been employed by Gulf Breeze Hospitality LLC since 2013 and serves as On-Site Controller responsible for financial reporting at three Sarasota Verimark Suites properties. Her deposition lasted approximately five hours and was conducted by Carlos Espinoza.
Wendell's testimony was significant primarily for her detailed description of the dual-ledger system maintained at the Sarasota properties. She described maintaining two separate sets of financial records: one ledger for internal management purposes that captured total property revenue from all booking channels, including Suncoast, and a second ledger for Verimark franchise reporting that excluded all Suncoast-collected revenue. (Wendell Depo. Tr. 62:3–63:19.) Wendell testified that the dual-ledger approach was implemented at the direction of Susan Pham and that she received the GRR reporting templates from Pham. (Wendell Depo. Tr. 64:1–12.)
Wendell confirmed that she had not independently reviewed the FLA provisions governing GRR reporting. (Wendell Depo. Tr. 71:3–15.) She testified that she relied entirely on Pham's templates and instructions for determining what revenue to include in or exclude from the GRR reports. (Wendell Depo. Tr. 71:17–72:4.)
Wendell estimated that the Suncoast channel accounted for approximately 22 to 28 percent of total room revenue at the Sarasota properties, depending on the season. (Wendell Depo. Tr. 68:4–19.) This estimate is consistent with Pham's portfolio-wide estimate of 20–30%.
A printout of the internal dual-ledger records for the Sarasota Bay property for fiscal year 2020 was introduced as Deposition Exhibit 65, and the corresponding Verimark GRR report for the same period was introduced as Deposition Exhibit 66. (Wendell Depo. Tr. 66:2–67:14.) A comparison of these two documents visually demonstrates the revenue gap resulting from the Suncoast exclusion and will be useful as demonstrative evidence.
On cross-examination by Gabriela Montes, Wendell testified that she "trusted that management had this figured out" and that she did not feel it was her responsibility to independently evaluate the propriety of the reporting methodology. (Wendell Depo. Tr. 76:4–14.)
Key exhibits: Deposition Exhibit 65 (internal dual-ledger printout for the Sarasota Bay property, FY 2020, showing total revenue including Suncoast); Deposition Exhibit 66 (corresponding Verimark GRR report for the same period, showing reduced reported figures).
G. Kevin Braddock — General Manager, Verimark Suites – Savannah Riverfront (February 22, 2023)
Kevin Braddock has been employed by Savannah Lodging Partners LLC since 2011 and has served as General Manager of the Verimark Suites – Savannah Riverfront property since 2012. His deposition lasted approximately four hours and was conducted by Carlos Espinoza. This was the first of two depositions involving the Georgia property witnesses, and it was attended by Ethan Doyle of Whitfield, Barrow & Crane LLP rather than Gabriela Montes.
Braddock testified that the Suncoast booking directive was implemented at the Georgia properties in approximately February 2013. (Braddock Depo. Tr. 51:6–52:18.) He identified a March 2013 email from Brecker to Braddock instructing him to "set up Suncoast terminal at Savannah properties," which was introduced as Deposition Exhibit 70. (Braddock Depo. Tr. 53:2–54:8.) This email is significant because it provides written documentation of Brecker's personal involvement in directing the implementation of the Suncoast booking system at properties outside the Florida market.
Braddock testified that corporate-rate clients — including group bookings, government per-diem rates, and negotiated-rate business travelers — were particularly directed to book through gulfcoastrooms.com rather than through the Verimark reservation system. (Braddock Depo. Tr. 58:14–59:8.) He explained that these clients were told that booking through gulfcoastrooms.com would offer them a "better rate" and a more "direct" relationship with the property. (Braddock Depo. Tr. 59:10–22.)
Braddock estimated that the Suncoast channel accounted for approximately 25% of all room-night revenue at the Savannah Riverfront and nearby properties during peak tourist season (March through September). (Braddock Depo. Tr. 61:2–16.) He noted that Savannah's heavy tourism traffic made walk-in and direct-call bookings a significant revenue category.
With respect to room additions, Braddock confirmed that the Savannah Riverfront property added approximately 38 rooms in 2018 as part of a waterfront-expansion project. (Braddock Depo. Tr. 66:4–67:2.) He testified that Brecker told him "corporate would handle the franchise paperwork" related to the room addition. (Braddock Depo. Tr. 67:4–14.) When asked whether he was aware of any notification actually being made to Verimark, Braddock stated that he was not. (Braddock Depo. Tr. 67:16–22.)
Mr. Doyle's cross-examination was relatively brief, focusing primarily on Braddock's understanding that the Suncoast arrangement was implemented at the direction of ownership and that Braddock had no reason to question it. (Braddock Depo. Tr. 72:3–74:8.)
Key exhibit: Deposition Exhibit 70 (email from Brecker to Braddock, March 2013, regarding setup of Suncoast terminal at Savannah properties).
H. Angela Morse — On-Site Controller, Savannah Lodging Partners LLC / Georgia Properties (February 28, 2023)
Angela Morse has been employed by Savannah Lodging Partners LLC since 2014 and serves as On-Site Controller responsible for financial reporting at the four Georgia properties (three in Savannah and one in Brunswick) that comprise all Verimark Suites properties under Savannah Lodging Partners LLC. Her deposition lasted approximately five hours and was conducted by Yuki Nakamura. Ethan Doyle of Whitfield, Barrow & Crane appeared as defense counsel.
Morse provided important testimony about the use of separate Drayton Health IT files to maintain dual financial records for the Georgia properties. She testified that for each property, she maintained a Drayton Health IT file labeled "total property revenue" that captured all revenue from all booking channels, including Suncoast, and a separate Drayton Health IT file labeled "franchise reporting" that excluded all Suncoast-collected revenue. (Morse Depo. Tr. 55:8–56:22.) The "franchise reporting" files were the basis for the monthly GRR reports submitted to Verimark. (Morse Depo. Tr. 57:3–11.)
A printout of the Drayton Health IT file directory listing showing the dual-file structure was introduced as Deposition Exhibit 74. (Morse Depo. Tr. 58:4–14.) This document is valuable because it provides tangible evidence of the systematic separation of reporting records, corroborating the testimony of the Florida controllers who described similar dual-ledger or dual-file systems.
Morse confirmed that she received her reporting templates and instructions from Susan Pham, consistent with the testimony of all other property-level controllers. (Morse Depo. Tr. 60:2–14.) She also confirmed Suncoast's 12% management-fee retention, stating that she tracked the 12% fee as a line item in the "total property revenue" Drayton Health IT files for internal management purposes. (Morse Depo. Tr. 67:4–18.)
A sample "franchise reporting" extract for the Brunswick property for Q2 2021 was introduced as Deposition Exhibit 75. (Morse Depo. Tr. 63:6–18.)
Mr. Doyle's cross-examination focused on establishing that Morse followed the reporting procedures she was given and did not independently deviate from them. (Morse Depo. Tr. 78:2–80:4.)
Key exhibits: Deposition Exhibit 74 (Drayton Health IT file directory listing showing dual-file structure); Deposition Exhibit 75 (sample "franchise reporting" extract for Brunswick property, Q2 2021).
I. Thomas Ingram — General Manager, Verimark Select – Jacksonville Oceanfront (March 8, 2023)
Thomas Ingram has been employed by Coastal Palms Franchise Holdings LLC since 2016 and serves as General Manager of the Verimark Select – Jacksonville Oceanfront property. His deposition lasted approximately four hours and was conducted by Carlos Espinoza.
Ingram's testimony was notable in several respects. First, as a relatively newer employee who joined the organization in 2016, Ingram's testimony demonstrates that the Suncoast booking practice had become fully institutionalized by that time. Ingram testified that the Suncoast booking system was already in place when he joined Coastal Palms and that he was trained on its use during his onboarding process. (Ingram Depo. Tr. 28:3–29:14.) He described the Suncoast terminal as part of the standard front-desk equipment and the gulfcoastrooms.com booking channel as part of the property's standard operating procedures.
Second, Ingram confirmed that corporate-rate clients were specifically directed to book through gulfcoastrooms.com rather than through the Verimark reservation system. (Ingram Depo. Tr. 34:8–35:22.) He testified that the gulfcoastrooms.com website was presented to staff and clients as the "direct booking portal" for the property.
Third, Ingram described the gulfcoastrooms.com rate structure, testifying that gulfcoastrooms.com rates were typically 5 to 10 percent below Verimark published rates. (Ingram Depo. Tr. 36:2–14.) He understood this rate differential to be deliberate and intended to incentivize bookings through the Suncoast channel. A gulfcoastrooms.com rate comparison printout showing the rate differential for sample dates was introduced as Deposition Exhibit 79.
Fourth, Ingram provided significant testimony regarding unreported room additions at the Jacksonville properties. He testified that two of the Jacksonville properties underwent room-addition renovations: approximately 48 rooms were added in 2017 and approximately 36 rooms were added in 2019. (Ingram Depo. Tr. 44:3–45:18; Depo. Ex. 78.) Ingram stated that he did not believe these additions were separately reported to Verimark and that he was not personally involved in any franchise-compliance reporting. (Ingram Depo. Tr. 45:20–46:8.)
On cross-examination by Gabriela Montes, Ingram stated that he "assumed everything was being done properly" and that he had no reason to believe the Suncoast booking arrangement or the room-addition reporting was anything other than standard practice. (Ingram Depo. Tr. 50:4–18.)
Key exhibits: Deposition Exhibit 78 (property renovation records showing room additions at Jacksonville properties, 2017 and 2019); Deposition Exhibit 79 (gulfcoastrooms.com rate comparison printout showing rates 5–10% below Verimark published rates).
J. Cynthia Barrios — On-Site Controller, Coastal Palms / Jacksonville & Select Properties (March 17, 2023)
Cynthia Barrios has been employed by Coastal Palms Franchise Holdings LLC since 2017 and serves as On-Site Controller responsible for financial reporting at two Verimark Select properties in Jacksonville, Florida. Her deposition lasted approximately five hours and was conducted by Yuki Nakamura. This was the final deposition in the property-level series.
Barrios's testimony was significant primarily for confirming that the Suncoast revenue exclusion practice applied equally to the Verimark Select-brand properties and was not limited to the Verimark Suites brand. (Barrios Depo. Tr. 44:9–45:3.) This is relevant because the Select properties operate under separate Franchise License Agreements with their own GRR reporting obligations, and the extension of the Suncoast exclusion to the Select brand demonstrates the breadth of the diversion scheme across the entire Coastal Palms portfolio.
Barrios described the same two-ledger reporting approach used by Felton, Wendell, and Morse: one set of records for internal management purposes reflecting total revenue including Suncoast, and a separate set for Verimark franchise reporting excluding Suncoast revenue. (Barrios Depo. Tr. 46:2–47:14.) She confirmed that she received all reporting instructions and templates from Susan Pham. (Barrios Depo. Tr. 47:16–48:4.)
Barrios also confirmed the OTA net-rate netting practice at the Select properties, testifying that she reported only net OTA amounts (after OTA commissions) in the GRR reports, consistent with the methodology Pham described for the portfolio as a whole. (Barrios Depo. Tr. 55:6–56:14.)
A monthly GRR report for the Jacksonville Select properties for September 2021 was introduced as Deposition Exhibit 82, and the corresponding internal total-revenue ledger for the same period was introduced as Deposition Exhibit 83. (Barrios Depo. Tr. 50:2–51:18.) A comparison of the two documents shows materially higher figures in the internal ledger, reflecting the Suncoast revenue excluded from the franchise report.
On cross-examination by Gabriela Montes, Barrios testified that she followed the procedures she was given and believed them to be appropriate based on Pham's guidance. (Barrios Depo. Tr. 62:3–63:8.)
Key exhibits: Deposition Exhibit 82 (monthly GRR report for Jacksonville Select properties, September 2021); Deposition Exhibit 83 (internal total-revenue ledger for same period, showing higher figures reflecting Suncoast-included revenue).
V. Impeachment Opportunities and Inconsistencies
The following subsections identify the principal impeachment opportunities and internal inconsistencies that emerged from the property-level depositions when compared with prior deposition testimony in this case.
A. Pham's Testimony vs. Brecker's Deposition
Susan Pham's testimony regarding the origin of the Suncoast revenue exclusion methodology is largely consistent with, and directly corroborates, Randall Brecker's own testimony. Pham testified that Brecker directly and personally instructed her on the Suncoast exclusion methodology and that he was the source of the directive to treat Suncoast revenue as non-reportable "management-company revenue." (Pham Depo. Tr. 115:3–18; 149:10–150:4.) This is consistent with Brecker's own admission during Day 1 of his deposition that he "personally directed controllers to exclude Suncoast-collected revenues from monthly GRR reports." (Brecker Depo. Day 1, Tr. 147:3–14.)
However, a significant inconsistency exists between Pham's testimony and Brecker's with respect to the OTA-netting practice. Pham testified that Brecker told her "commissions are a cost of doing business, not revenue" and that the directive to report only net OTA amounts came from Brecker. (Pham Depo. Tr. 142:8–17.) This directly contradicts Brecker's Day 2 testimony, in which Brecker claimed that the OTA netting was an "accounting department decision" in which he was not personally involved. (Brecker Depo. Day 2, Tr. 88:9–22.) This inconsistency can be used to impeach Brecker's claim that he was uninvolved in the OTA-netting practice and to reinforce the inference that Brecker was personally directing all aspects of the revenue-underreporting scheme, not just the Suncoast exclusion.
The team should prepare a side-by-side