M&F V Terminix Fraud Trial - Testimony - Annello, Chris

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AMERICAN ARBITRATION ASSOCIATION
CASE NUMBER
01-17-007-7775
ANN MCLAURIN and LYNNE FITZGERALD,
Plaintiff(s),
vs.
TERMINIX INTERNATIONAL COMPANY LP;
TERMINIX INTERNATIONAL, INC., a
corporation, KEN STROH, as the certified
licensed pest control operator,
Defendant(s).
TRANSCRIPT OF PROCEEDINGS
DATE: JANUARY 22, 2019
TIME: 9:01 a.m.
PLACE: Mobile, Alabama
BEFORE: Hon. Eugenia Benedict
REPORTED BY: Nancy W. Pannell, CCR
BIRMINGHAM REPORTING SERVICE

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1 A P P E A R A N C E S
4 APPEARING FOR THE PLAINTIFF(S):
5 MR. THOMAS F. CAMPBELL
6 MR. BRANDON K. FALLS
7 CAMPBELL LAW, P.C.
8 5336 STADIUM TRACE PARKWAY
9 SUITE 206
10 BIRMINGHAM, ALABAMA 35244
11
12 MR. ADAM MILAM
13 MILAM & MILAM, LLC
14 2206 MAIN STREET
15 DAPHNE, ALABAMA 36526
16
17 APPEARING FOR THE DEFENDANT(S):
18 MR. MICHAEL L. BELL
19 MS. HALEY A. COX
20 LIGHTFOOT FRANKLIN & WHITE
21 400 NORTH 20TH STREET
22 THE CLARK BUILDING
23 BIRMINGHAM, ALABAMA, 35203

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2 ALSO PRESENT: Lynne Fitzgerald,
3 Ann McLaurin, Liz Harper, Angie Puckett,
4 Don Stump
10
11
12
13
14
15
16
17
18
19
20
21
22
23

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1 I N D E X
3 OPENING STATEMENT BY MR. CAMPBELL 11
4 OPENING STATEMENT BY MR. BELL 59
5 CERTIFICATE 1432
7 WITNESS: DX CX RDX RCX FDX FCX
8 PAUL BELLO 115 291 350 362
9 RICHARD SKOLNIK 366 498 531 551 555 564
10 WILLIAM PHILLIPS 567 572
11 COREY MOORE 577 601 630 639
12 ROBERT STEELE 642 772 793 795
13 KEN STROH 831 918 976 1006 1021 1026
14 CHRIS ANNELLO 1029
15 LYNNE FITZGERALD 1072 1181 1216
16 ANN MCLAURIN 1219 1249
17 RICKY POPE 1266 1300 1320
18 PHIL WILBOURN 1329 1375 1391 1398 1407
19 LYNNE FITZGERALD 1415 1416 1418
20
21
22
23

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1 PLAINTIFF'S EXHIBITS
3 NUMBER MARKED OFFERED ADMITTED
4 254 117
5 179 123 123
6 59 135
7 217 245
8 219 273 1252
9 220 273 1252
10 221 273 1252
11 33 357
12 158 488 488
13 90 491 491
14 91 491 491
15 105 492 492
16 106 492 492
17 107 492 492
18 108 492 492
19 109 492 492
20 155 492 492
21 157 492 492
22 161 492 492
23 167 492 492

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1 168 492 492
2 236 492 492
3 255 1066 1066
4 13 1252 1252
5 16 1252 1252
6 19 1252 1252
7 26 1252 1252
8 28 1252 1252
9 29 1252 1252
10 34 1252 1252
11 35 1252 1252
12 50 1252 1252
13 52 1252 1252
14 54 1252 1252
15 60 1252 1252
16 61 1252 1252
17 62 1252 1252
18 63 1252 1252
19 64 1252 1252
20 66 1252 1252
21 72 1252 1252
22 78 1252 1252
23 79 1252 1252

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1 90 1252 1252
2 91 1252 1252
3 92 1252 1252
4 93 1252 1252
5 96 1252 1252
6 97 1252 1252
7 103 1252 1252
8 105 1252 1252
9 106 1252 1252
10 107 1252 1252
11 108 1252 1252
12 109 1252 1252
13 110 1252 1252
14 111 1252 1252
15 113 1252 1252
16 114 1252 1252
17 115 1252 1252
18 117 1252 1252
19 118 1252 1252
20 119 1252 1252
21 120 1252 1252
22 121 1252 1252
23 122 1252 1252

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1 123 1252 1252
2 124 1252 1252
3 125 1252 1252
4 126 1252 1252
5 140 1252 1252
6 155 1252 1252
7 156 1252 1252
8 157 1252 1252
9 159 1252 1252
10 160 1252 1252
11 161 1252 1252
12 168 1252 1252
13 170 1252 1252
14 171 1252 1252
15 172 1252 1252
16 174 1252 1252
17 179 1252 1252
18 183 1252 1252
19 186 1252 1252
20 194 1252 1252
21 195 1252 1252
22 196 1252 1252
23 199 1252 1252

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1 256 1252 1252
2 257 1252 1252
4 DEFENDANT'S EXHIBITS
5 NUMBER MARKED OFFERED ADMITTED
6 60 576 576 576
7 61 926 926 926
8 62 975 975
9 63 1206 1206 1207
10 64 1206 1206 1207
11 65 1323 1323 1323
12 66 1414 1414
13 67 1414 1414
14 68 1414 1414
15 69 1414 1414
16 70 1414 1414
17
18
19
20
21
22
23

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1 CHRIS ANNELLO,
2 being first duly sworn, was examined and
3 testified as follows:
4 DIRECT EXAMINATION
5 BY MR. FALLS:
6 A. Brandon, you're going to need to
7 talk a little louder for me, okay?
8 Q. I will.
9 A. Thank you.
10 Q. Would tell us your name please?
11 A. Sir?
12 Q. Am I going to have to be louder
13 than that?
14 A. No, I'm sorry. I was thinking
15 about something. I'm sorry.
16 Q. Tell us your name please.
17 A. Christopher Carmen Annello,
18 A-n-n-e-l-l-o.
19 Q. And what do you do for a living?
20 A. I am an expert witness in the
21 construction industry.
22 Q. And tell us your background for
23 serving as an expert in the construction

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1 industry.
2 A. Well, my CV states that I've been
3 in the construction business for 40 some
4 odd years. I used to do all the
5 Terminix's repair work for eight years in
6 the Birmingham, all the way from
7 Montgomery all the way to the Tennessee
8 line.
9 Was trained by Terminix and also
10 did the first Formosan termite repair in
11 Birmingham. I am a certification -- I
12 still maintain by homebuilders license.
13 I'm no longer holding my general
14 contractor's license. I am a
15 International Code member. I am a home
16 inspector, a certified brick specialist,
17 roofing specialist, Chinese drywall. XRF
18 gun which calibrates strontiums and other
19 chemicals. And, of course, I've done
20 termite repair work for about eight years
21 with Terminix, and also during the Chinese
22 drywall era I renovated over 77 houses.
23 Q. In you're doing work with Terminix

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1 dealing with the repairs for Terminix,
2 about how many repair projects did you do
3 for Terminix?
4 A. Well, we even did the small ones
5 and the large ones. You know, well over
6 200. I mean I never kept an exact amount,
7 but, you know, definitely over the 200
8 mark.
9 Q. And what do you do now to keep a
10 good understanding of the construction
11 industry as far as prices for labor and
12 materials?
13 A. Well, I work so closely with
14 various homebuilders, remodelers. I
15 assist them in writing specifications. I
16 also do mediations between them and the
17 homeowners to alleviate disputes between
18 the two of them. I use ProMax which is a
19 software application.
20 Occasionally I will use Xactimate,
21 and then what I do is I keep in constant
22 contact with my contractors to do various
23 estimated costs with their subcontractors.

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1 Q. How many times have you testified
2 as an expert in either arbitrations or
3 trials?
4 A. I would say somewhere well over
5 100.
6 Q. And does that include depositions?
7 A. Yes, sir.
8 Q. How many times have you been
9 offered and tendered as an expert in those
10 cases?
11 A. For what type of cases?
12 Q. Well, let's say for termite repair
13 and home construction.
14 MS. COX: I'll just say for
15 whatever's worth, do whatever you want,
16 Brandon, but we'll stipulate to his
17 qualifications as an expert witness.
18 MR. FALLS: All right.
19 Q. Chris, how does a contractor come
20 up with an estimate to do a job when
21 they're hired by anyone, by a homeowner,
22 business owner, anyone who owns a building
23 and wants work done on it?

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1 A. Well, for instance, for remodeling
2 or for building a new home?
3 Q. Let's start with remodeling.
4 A. Well, remodeling, you know, is
5 much more in depth and detail with
6 specifications. You know, you have to
7 walk your client hand in hand through a
8 remodeling to give them complete
9 specifications in detail, possibly
10 drawings, you know, break out each
11 individual room as to what you're going to
12 do, linear feet, square feet, and then
13 estimate it out based on the
14 specifications and line items.
15 Q. I would assume that that requires
16 an initial trip to the client's house?
17 A. Oh, definitely.
18 Q. And is that what a contractor
19 normally does?
20 A. Yes, sir. He's going to have to
21 go out. Depending on the type of work it
22 is, he usually gets some kind of in-depth
23 of what they're wanting prior to going out

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1 so that he can be as productive as
2 possible. For instance, he may need to
3 bring an excavator or electrician or
4 plumber, someone of that type also with
5 him or also come back at a later date once
6 he gets the full scope of the work to be
7 done.
8 Q. And when a contractor goes out for
9 that initial meeting, would he or she be
10 able to come up with an estimate at that
11 point, at that initial meeting?
12 A. Well, sir, I wouldn't think so by
13 no means until you worked out all the
14 specifications and to price it out
15 accordingly so that the homeowner would
16 have a good understanding of your
17 specifications and how you broke it out.
18 Q. And what does a contractor
19 normally do to come up with the estimates
20 based on the initial review of the
21 project?
22 A. Well, I mean, I always did some
23 drawings, for instance, or a kitchen

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1 remodel, something of that type, we would,
2 you know, have them select cabinetry from
3 various samples.
4 We would already identify if they
5 were going to use granite or some type of
6 countertop system. We would give them
7 allowance on fixtures so we could speed
8 the process up so that we could move
9 forward and to get them an in-depth
10 specification and proposal contract for
11 them to sign off and then schedule a date
12 for construction.
13 Q. So how do you come up with the
14 pricing for that project?
15 A. Once again, it's just -- it's
16 based on labor and material, of course.
17 And I don't use Xactimate as my number one
18 means of estimating. You know, once
19 you've been doing this as long as I have
20 for 40-some-odd years you have a good idea
21 and understanding of what it's going to
22 take in labor to do some of these type
23 tasks, and then plus if you're doing what

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1 we call an in-house, you know, you're
2 going to have to be able to be a little
3 bit more quicker on your feet for working
4 up estimated costs.
5 Where as, if you're subbing
6 everything out, you would then be making
7 various phone calls to all of your
8 subcontractors for getting quotes and
9 putting your proposal together.
10 Q. And once you make those phone
11 calls and you said the subcontractors, do
12 you also have to check on pricing for
13 materials?
14 A. Yes, sir, you can do a lot of
15 pricing on various materials right by your
16 phone or just off the internet by going to
17 Lowe's on their website and get all of
18 your material costs right there.
19 Q. You said earlier that you have
20 some general idea of those costs when
21 you're there doing that initial, initial
22 meeting, but do you have to go back and
23 make these phone calls and do some

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1 research to come up with the full price?
2 A. Yes, sir. And then sometimes I
3 may have to go back to the job site with
4 various subcontractors so that a lot of
5 times they want to see the project itself
6 also, but the majority of them could
7 understand my specifications and they
8 could price it based on my specifications.
9 Q. And then how do you put together
10 your estimate once you have all of this
11 information?
12 A. Well, you know, the specifications
13 are the most important thing that you need
14 to establish and then pricing would be
15 after that once you got all the
16 specifications.
17 And then it's based on labor,
18 material, my experience in the field and
19 then also my subcontractors, and then I
20 can call up various contractors that I do
21 a lot of work for and they assist me in
22 giving me numbers also.
23 Q. Now, that process that you just

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1 described do you follow the same process
2 when you're putting together an estimate
3 for litigation in a termite damage case?
4 A. Absolutely.
5 Q. Did you use that same process when
6 you worked for Terminix?
7 A. Yes, sir.
8 Q. Now, tell us when you looked at
9 Ms. Fitzgerald and Ms. McLaurin's house
10 for this case.
11 A. Sir, I'm sorry?
12 Q. When did you look at the house?
13 A. On August the 15th, 2018.
14 Q. And what did y'all do when you
15 went there?
16 A. Well, me and Mr. Bello met with
17 the client. And she explained to us that
18 the building inspector told her that she
19 had to move out of the house basically
20 because of the fact that it was unsafe to
21 be occupied and showed me some various
22 pictures that she had taken of a
23 contractor that was there who was

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1 attempting to do various repairs in the
2 ground area where the restroom facilities,
3 laundry room, and a little storage area.
4 Q. All right. Tell us what you did
5 when you went to the house.
6 A. Well, me and Mr. Bello did just a
7 quick view, overview of the house itself,
8 the understructure, the interior, and then
9 immediately we do what we call a
10 split-off.
11 I then start doing a perimeter
12 drawing of the exterior of this house
13 which was in my specifications that I gave
14 to you. And then also I did what we call
15 a column support showing you the various
16 columns and how many there were and what
17 centers they were on, and then also did a
18 small drawing of the ground floor bathroom
19 storage and laundry room area.
20 Q. You said that Mr. Fitzgerald
21 directed you to some of the areas of
22 previous repair that had been done in the
23 house. Tell us what you saw when you

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1 looked at those.
2 A. I seen a lot of devastation. I
3 seen poor workmanship. I seen termite
4 damage to the understructure of the house,
5 the floor joists, the girder system which
6 there are two interior girder systems and
7 all the outside band. The back bedroom
8 facilities that were infested, the outside
9 band or header system, box sill, as you
10 come up the ramping system over on the
11 left-hand side, left-hand side meaning
12 facing the front of the house, and just
13 trying to do an overall of what the damage
14 was and what it consisted of.
15 Q. Did you agree with your -- with
16 the representation that the house was
17 unsafe to be occupied?
18 A. Absolutely.
19 Q. Why? What was unsafe?
20 A. Well, the amount of floor joists
21 and girders that were damaged within the
22 house structure it made it unsafe.
23 Q. And describe for Judge Benedict

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1 the condition of the house.
2 A. Well, the house was empty. It was
3 a few various furnitures within the house,
4 but it was unlivable due to the effect of
5 the amount of damage. Someone had started
6 attempting to do repairs but had not yet
7 done the eight to ten-foot rule based on
8 what I was trained to do by Terminix.
9 There was a lot of exploratory
10 that needed to be done on this house. It
11 was very, very damaged.
12 Q. When you walked through a stocky
13 guy like yourself.
14 A. Thank you.
15 MR. FALLS: Sorry, Judge, he
16 gives that to me every he sees me.
17 Q. Have any concern walking through
18 the house?
19 A. Well, you know, I don't like
20 jumping up and down. I just prefer not to
21 go through a floor joist. You know, it
22 was damaged. I wasn't going to put myself
23 at risk or Mr. Bello.

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1 Q. I want to show you one of the
2 photographs that we've already talked
3 about in litigation this week. And I want
4 to direct your attention to the top
5 plates. What do you recognize --
6 A. Do y'all have a pointer? I like
7 standing anyway to show off my muscles.
8 Thank you, sir.
9 As you can see right here -- tone
10 that down a little bit please. As you can
11 see right here this is the top plate which
12 is a two component. He has spliced the
13 bottom portion of that plate right here
14 and he's spliced it again right here. But
15 it needs to be probed and investigated all
16 this in here and past it to determine if
17 there's any more infestation.
18 Also, this 2-by-4 right here which
19 was not replaced and is just right next to
20 all of the infestation needs to be removed
21 and cut in two. And the purpose of
22 cutting it in two is to see if there is a
23 termite colony going up through it.

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1 As you well know 1/32 of an inch
2 that a termite can come up through. And
3 what happens is the termite eats all of
4 this, so why would you not think they
5 would have eaten this when they haven't
6 eaten this, but what happens is for some
7 reason, this is a true fact and it happens
8 all the time, that the termites will eat
9 all of this and then all of sudden you
10 won't find them and then all of a sudden
11 you come back down here in another area
12 and start probing and there they are
13 again.
14 So it's my theory, that you know,
15 they're traveling down through this 1/32
16 of an inch and they've hit some harder
17 wood. As you well know that this house
18 was built in the '70s.
19 Well, we have an entirely
20 different type of material from the '70s
21 versus what we have today. Wood back then
22 was much harder because they didn't have
23 -- they didn't grow a lot of hybrid trees

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1 to make them grow faster and --
2 MS. COX: Your Honor, at
3 this point, of course, Mr. Annello is
4 qualified and has been disclosed to
5 testify about the damages that he found
6 and about the cost of repairs, but to get
7 into entomology and to get into termite
8 behavior, I think is beyond his disclosure
9 and the inspection techniques that should
10 have been is beyond his disclosure in this
11 case.
12 MR. FALLS: Well, let's --
13 ARBITRATOR: Sustained.
14 Q. (By Mr. Falls) -- let's
15 concentrate on the picture on the left or
16 the repair work that you see.
17 A. Well, in my opinion it's
18 incomplete.
19 Q. And is there -- do you know --
20 between the third --
21 A. That component there?
22 Q. No, no, this area right here.
23 A. What about it? Well, I mean you

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1 can see that there's termite -- something
2 has eaten this up, and as you well know in
3 a foam board termites are traveling
4 through foam because it's a soft access
5 for them to get to the top plate.
6 Q. What I'm talking about is that
7 missing section of the top plate. Is that
8 safe to repair like that --
9 A. Right here? Well, see, this is
10 not resting on top of this. He needed to
11 put another 2-by-4 right here to support
12 that splice, okay. Because this portion
13 of it is not having any support only
14 except for what he has nailed up.
15 Q. And would you say that was
16 repaired in a workmanlike manner?
17 A. No, sir, it's not repaired in a
18 workmanlike manner. Furthermore, the
19 building inspector would not have approved
20 that when they got ready to call for a
21 framing inspection.
22 Q. Okay. I want to ask you another
23 question about in the picture on the

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1 right, what are the 2-by-4s resting on?
2 A. Meaning this bottom plate right
3 here?
4 Q. Yes.
5 A. Well, they're resting on -- this
6 is resting up underneath there would be
7 the floor joist, the outside header or mud
8 sill you would call it. You can see right
9 here nothing is resting on it except for
10 the floor decking.
11 Q. Is that repair done in a
12 workmanlike manner?
13 A. No, sir.
14 Q. Is that dangerous?
15 A. Yes, sir, it doesn't meet
16 structural value. I mean it's not
17 designed to be built that way.
18 Q. Okay. This is your picture number
19 60 in Exhibit 194?
20 A. Yes, sir.
21 Q. Why did you take a picture of
22 that?
23 A. I took a picture of the --

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1 Q. Well, first of all what is it?
2 A. It's a foam insulation board.
3 They used this instead of using sheathing
4 on the outside structure of this house.
5 Q. And is that the --
6 MS. COX: I'm sorry, "they"
7 being?
8 THE WITNESS: The original
9 builders of the house.
10 MS. COX: Thank you.
11 Q. (By Mr. Falls) And then the
12 previous picture we saw the big aluminum
13 foil looking sections, is that a piece of
14 that foam? Is that what you're talking
15 about?
16 A. Yes, sir.
17 Q. And why did you take a picture?
18 A. Well, you can see how the termites
19 have eaten all the way through it. All
20 these areas, tunneling, eating through it
21 to get to the wood.
22 Q. And is that foam used throughout
23 the house?

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1 A. On the outside perimeters.
2 Q. Thank you. I want to talk to you
3 now about your estimate in this case.
4 A. Yes, sir.
5 Q. Were you able to -- well, first of
6 all, what is your understanding or what is
7 your opinion of what needs to be done to
8 this house?
9 A. Well, it's my opinion and it was
10 my opinion prior to leaving that this
11 house needed to be what I call a bag and
12 drop which means tear down. And after my
13 deposition with I think it's Charles, that
14 I then came to find out from you that the
15 building inspector had basically condemned
16 the house which I did not have knowledge
17 of that and said that due to the amount of
18 damage to the house that he was not going
19 to allow it to be repaired.
20 Q. So your opinion was already that
21 it needed to be demolished and rebuilt?
22 A. Yes, sir.
23 Q. Now, were you able to put together

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1 your estimate to rebuild the house?
2 A. Yes, sir. Of course, you know,
3 when you're working up an estimate of this
4 type, homebuilders work off of what we
5 call square footage exclusive of
6 excavation.
7 You know, is it a full basement,
8 is it a slab, full brick, things of this
9 type, and they have what they call a
10 moderate house, upper scale, and then, you
11 know, a much upper scale. Well, this
12 house is a moderate house. It was built
13 in the 70s. It's up on stilts due to the
14 fact it's in a floodplain area.
15 So what I did was to work up an
16 estimated cost to remove this house
17 completely. And due to the fact that
18 there is not a dumpsite on Dauphin Island,
19 I don't know if you know that or not, but
20 there is not a dumpsite due to the fact
21 that it is an island, so everything has to
22 be but in a dump truck scenario.
23 It's going to be too slow to do it

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1 in dump containers because of the amount
2 of the demolition materials, and, then, of
3 course, the support posts have got to come
4 up out of the ground. They can't be
5 reused.
6 You can't build this house in the
7 same exact location. You've got concrete
8 that's got to be torn up. The whole deck
9 system and everything has got to be torn
10 up, busted up, and loaded up on trucks and
11 hauled off.
12 And based on the amount of square
13 footages, it usually runs something of
14 this type and due to the travel time with
15 a minimum of 45 minutes to the nearest
16 landfill and then back, you're talking
17 about an hour and a half so it usually
18 runs somewhere about $9 a square foot to
19 alleviate a house of this type, plus all
20 of the ramping, the extra roof system and
21 all the other decking system, so that was
22 $27,500. Now, the house -- do you want me
23 to continue?

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1 Q. Yes, please.
2 A. The house is 920 square feet. I
3 estimated it at $155 square foot. Now,
4 that was for the main portion of the house
5 and we're going to build it back basically
6 like per like.
7 As you well know, Dauphin Island
8 is a little bit behind on some of the
9 international codes and, you know, Florida
10 area has really started picking up heavily
11 on new codes, and it's just kind of moving
12 into the Alabama area.
13 But we do have new codes since
14 1970 to present and, you know, you got all
15 this new strapping, your roofing has to be
16 installed to meet hurricane forced winds.
17 Also, you've got high impact glass
18 windows. Due to the fact that she hasn't
19 got that many windows and not knowing
20 which area -- I just replaced all the
21 windows in this house with high impact and
22 not with just a plain double insulated
23 window.

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1 And 27,500 to demo the house. To
2 reconstruct the house 920 square feet at
3 155 was 142,600.
4 And then we had a roof system that
5 protrudes out on the front of the house
6 over a deck system which was 192 square
7 feet, and I did that at $50 a square foot
8 so that's $9600.
9 And then we had 1635 square feet
10 of decking system at $35 a square foot
11 which was $57,260. And all this handrail
12 and everything now has to meet code for
13 childproof safety. Also has to be
14 42 inches handrail.
15 And then you've got downstairs
16 area of 216 square feet of bathroom
17 facilities and washer and dryer and then a
18 little storage area at $45 a square foot,
19 which now comes to a total price of
20 $246,680.
21 MS. COX: I'm sorry, could
22 you say the total again?
23 THE WITNESS: Yes, ma'am.

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1 $246,680. Now, as you well know, I
2 excluded the septic tank. It's probably
3 going to have to be re-perked or you're
4 going to have to use some specialty type
5 field lines due to the fact that the water
6 table is probably three to four feet
7 underneath the surface of this house, so
8 I've excluded that because the house is
9 going to have to be moved over to the left
10 or to the right or forward or front in
11 order for reconstruction because I'm not
12 going to build it, and I say me, because
13 when I'm working these specifications I
14 think of myself as actually doing the
15 work, but it's going to have to be put in
16 a different location.
17 Q. (By Mr. Falls) The pad that has
18 to be brought up -- the pad that has to be
19 brought up to code, is that the concrete
20 slab?
21 A. Yes, sir. I'm going to replace
22 the concrete slab that's up underneath it.
23 I'm going back like per like but with

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1 added hurricane forced winds
2 specifications and codes.
3 Q. If you're pulling up the slab why
4 do you have to -- why are you moving the
5 house left or right?
6 A. Well, I don't want to go in the
7 same penetrations where those column
8 supports are because I'm getting rid of
9 them.
10 Q. Are you going to be able to pull
11 all of those out?
12 A. Well, what we're going to do is
13 we're going to bump them back and forth
14 back and forth and then we use a trackhoe
15 that's got a bottom tooth on it to help
16 pick stuff and crush it up as part of our
17 demolition. We then pick it up and try to
18 pull it up or we can hook some type of a
19 chain apparatus to it and pull it up.
20 I don't know how deep they are,
21 but I would assume they're anywhere
22 possibly six to eight feet in depth.
23 Q. And do you expect that you'll be

(205) 326-4444
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1 able to get them out of the ground?
2 A. Yes, sir, I believe I can.
3 Q. Or whoever is doing this?
4 A. Yes, sir. A good operator can get
5 them out as long as they're not concreted
6 in the ground, and I don't think they are.
7 There's three different applications for
8 installing the piling. One is hydric
9 water that you stick a rod down in there
10 that blows water down which makes these
11 poles sink. And there is what we call a
12 pile driver to put them in. And then
13 there's also a core drilling and then
14 concrete.
15 Q. Now, let me ask you this first.
16 We heard from the building inspector, the
17 building official for Dauphin Island
18 yesterday. And he talked about some
19 figures that he sees in permitting to do
20 either construction or repair work.
21 A. Yes, sir.
22 Q. And he talked about a range I
23 believe of 125, $125 to $175 per square

(205) 326-4444
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Page 1056
1 foot of prices that he sees. And you've
2 estimated yours at $155 per square foot?
3 A. That's correct.
4 Q. I believe he said that for a
5 moderate house he would expect 140 to $145
6 a square foot for rebuilding this house.
7 Do you have any opinion of that 140 to
8 145?
9 A. Well, first of all, has that got
10 profit in it? I mean, I don't know of a
11 contractor that would go out there and get
12 a permit with his profit in there because
13 he don't want to pay on his profit and
14 overhead.
15 Q. So you bring up an interesting
16 point. In your experience as a
17 contractor, do you put your profit into
18 the permitting price when you go to a
19 permit office or --
20 A. No, sir. I put in my building
21 cost, what's it going to cost me to
22 construct this house. That's what I'm
23 going to put in there, because if I put my

(205) 326-4444
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1 profit and everything in there, I don't
2 know what I'm going to be able to sell
3 that house for. It may be less, so we
4 never put overhead profit.
5 Q. So I don't believe anyone ever
6 asked that question yesterday, so 140 to
7 145 would you say may or may not include
8 profit?
9 A. I don't think it would.
10 Q. There was also testimony that the
11 decking would be about $60 per square foot
12 and I see that you've listed it as $35 per
13 square foot.
14 A. Yes, sir.
15 Q. Does 60 seem like too high of a
16 price?
17 A. Well, I would like to get 60 if
18 they're giving it, but it is high. You
19 know, it's not anything complicated. As
20 you well know, we've got people that
21 specialize in decking and, you know, they
22 do a good job at it, so they're very
23 productive and very efficient and fast and

(205) 326-4444
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1 that's how they're going to make their
2 money because they're working off the
3 square foot.
4 And as of today this, you know,
5 you've got that ramp system and you've got
6 all this decking and there's nothing
7 complicated about it. You have some steps
8 over on the right-hand side, you know, but
9 $35 a square foot is a fair price in my
10 industry.
11 Q. The demolition cost I believe he
12 said he expected it to be somewhere around
13 $8,000 plus?
14 A. Well, I would like for him to come
15 do the demo then.
16 Q. He's a building inspector --
17 A. You know, I understand. He's not
18 an estimator also and he listens to a lot
19 of contractors out there, demolition
20 people and what have you, but you're not
21 going to haul that house off for no
22 $10,000 especially when you've got to haul
23 it 45 minutes one way and plus to get

(205) 326-4444
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1 back. I mean it's very costly.
2 Q. And I don't know that we talked
3 about yesterday the cost of the square
4 foot for the downstairs area. You said
5 $45 dollars as opposed to $155?
6 A. Yes.
7 Q. Why is that?
8 A. Well, I mean, you've got the
9 concrete pad is there. You know, we're
10 going to tie into the existing drain
11 system, to the septic tank but we don't
12 know what the septic tank is going to
13 require us to do. You've got the main
14 structure already up above you. You don't
15 have no roof system, no rafters, no
16 ceiling joist or anything of that type.
17 This is a system that is built to be
18 economical and then in case of a flood you
19 haven't lost anything dramatic.
20 Q. Now, in the economies of scale
21 when looking at building small houses as
22 opposed to a larger house, is it accurate
23 to say that smaller houses can cost more

(205) 326-4444
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Page 1060
1 per square foot than a larger house?
2 A. Well, you know, you've got the
3 same amount of subcontractors that are
4 involved. You know, I would like to say
5 that it is much -- cost a lot less when
6 you're dealing with more volume. That's
7 why this decking system is a perfect
8 example.
9 If this deck system wasn't as
10 large as it is, yeah, it may cost a little
11 bit more, so it's the same theory behind
12 it.
13 Q. We talked about the slab itself,
14 pouring a four-inch slab at 120 per yard
15 for the concrete for a total of around 10
16 to $12,000.
17 A. Well, as you well know, that pad
18 that was poured was poured strictly for
19 parking facilities. It was never poured
20 for a bathroom and laundry room
21 environment, so, you know, it doesn't have
22 what -- it's just a floating slab out
23 there and so, you know, concrete is going

(205) 326-4444
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1 to cost just a titch more of running
2 probably in the neighborhood of anywhere
3 from 85 to $90 a yard to this island or to
4 this location, and you can only get a
5 minimum, a minimum of four yards.
6 If you want to use two, you're
7 charged for four. Of course, it's going
8 to be much more, and he quoted a price of
9 how much? 150 you said?
10 Q. I think 120.
11 A. Well, I think it's going to be a
12 little bit higher than that. I think it's
13 going to probably be around 130 because
14 you're just going to form it, you're going
15 to come down there and put some wire and
16 what have you and then you're going to
17 float it out and finish it.
18 Q. And you have to include the labor
19 for that as well?
20 A. Yes, sir, that's what I said, 130
21 for labor and materials.
22 Q. Okay. Now, you mentioned that
23 this house was built in the '70s?

(205) 326-4444
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Page 1062
1 A. Yes, sir, that's what the
2 homeowner told me.
3 Q. Did you look at the estimates that
4 was made by Mr. Wilbourn?
5 MS. COX: I may be able to
6 shortcut some of this, Your Honor. In
7 this case we are not going to be offering
8 the cost of repairs or offering that
9 repairs should be done. We'll stipulate
10 that this is a rebuild in this particular
11 case.
12 ARBITRATOR: Thank you.
13 Q. (By Mr. Falls) Did you have an
14 opportunity to take that information that
15 we just discussed from Corey Moore, the
16 building official, did you have an
17 opportunity to look at the numbers of what
18 they would be with his specifications?
19 A. Well, the building inspector
20 quoted $145 a square foot based on
21 920 square feet which his bid would have
22 been $133,400. Mine was $142,660 which
23 left a difference that I would be higher

(205) 326-4444
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Page 1063
1 of $9,260.
2 Now, as far as the decking is
3 concerned, which there's 1636 square feet
4 of decking, at $60 a square foot would
5 have been $98,160 based on the building
6 inspector. My dollar amount based on $35
7 would have been $57,260 which the building
8 inspector would have been $40,900 higher
9 than me.
10 Q. How much?
11 A. $40,900 higher than me.
12 Q. Okay.
13 A. So I mean he didn't give any
14 numbers based on that little roof system
15 of 192 square feet, and I don't know what
16 dollar amount he gave for the downstairs
17 which was 216 square feet of the bathroom,
18 storage, and laundry room. Did he give a
19 dollar amount on that?
20 Q. I don't think he did. I think --
21 A. So in essence I was $9,260 higher
22 on the cost of the house and he was
23 $40,900 higher on the deck system based on

(205) 326-4444
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Page 1064
1 square footage and his $60 a square foot
2 versus my $35 a square foot.
3 Q. And what about the slab?
4 A. Well, the slab I'm going to put
5 the slab in with the house.
6 Q. And you're saying that your price
7 of including the slab in the total of the
8 house also included the labor and the
9 overhead and profit and materials?
10 A. Yes, sir. And then putting in the
11 new hurricane requirements based on the
12 code of all the strapping. As you've seen
13 in some of these pictures the other
14 contractor did not even attempt to put
15 strapping in which he should have, and
16 then also the high impact windows.
17 Q. Okay. And, now, of course, you
18 know, we've sort of put Mr. Moore on the
19 spot yesterday and just asked him for --
20 A. Well, I understand.
21 Q. -- what he generally sees in his
22 experience. We talked about the
23 strapping.

(205) 326-4444
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1 A. Sir?
2 Q. I'm just sort of thinking out
3 loud. There's also testimony yesterday
4 and you may or may not be aware of this,
5 that the code is -- they're currently
6 working under 2012 code but it's changing
7 as of 2019 to a 2018 code. Were you aware
8 of that?
9 A. When is it going to change?
10 Q. I think it's February of this
11 year.
12 A. Well, I thought it was supposed to
13 be in January 1st.
14 Q. So you were aware of that?
15 A. Yes, sir.
16 Q. And were you basing your estimate
17 on the upgrade of the code?
18 A. Yes, sir.
19 MR. FALLS: That's all the
20 questions I have.
21 MS. COX: Nobody is going to
22 believe this, but I don't think I have
23 any, Mr. Annello. Thank you. Just this

(205) 326-4444
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Page 1066
1 once, just this once.
2 (Off the record.)
3 ARBITRATOR: Thank you,
4 Mr. Annello. We're going to take a break
5 for ten minutes. Is that okay? And your
6 next witness, Mr. Campbell is?
7 MR. CAMPBELL: We're going
8 to go ahead and submit testimony of Ricky
9 Pope, the termite treater, as Plaintiff's
10 Exhibit Number 255.
11 (Plaintiff's Exhibit No. 255
12 marked and offered.)
13 ARBITRATOR: And is that
14 from a deposition?
15 MR. CAMPBELL: It's from
16 another case Britt versus Terminix
17 International where he discusses what his
18 practice was in terms of his scope of
19 doing re-treatments after infestation.
20 ARBITRATOR: Mr. Bell.
21 MR. BELL: We need to see
22 what it is.
23 MS. COX: On the exhibit

(205) 326-4444
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Page 1431
1 CERTIFICATE
3 STATE OF ALABAMA )
4 TUSCALOOSA COUNTY )
6 I hereby certify that the above and
7 foregoing proceedings were taken down by
8 me in stenotype, and the questions and
9 answers thereto were reduced in transcript
10 form by computer-aided transcript under my
11 supervision, and that the foregoing
12 represents a true and correct transcript
13 of the proceedings occurring on said date
14 at said time.
15 I further certify that I am neither of
16 counsel nor of kin to the parties to the
17 action, nor am I anywise interested in the
18 results of said cause.
19 Signed the 11th day of February, 2019.
20
21 /s/ Nancy W. Pannell
22 NANCY PANNELL, CCR
23 Alabama CCR #30 - Expires 9/30/19

(205) 326-4444

M&F V Terminix Fraud Trial - Testimony - Annello, Chris

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M&F V Terminix Fraud Trial - Testimony - Annello, Chris

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1/22/2019

AMERICAN ARBITRATION ASSOCIATION

ANN MCLAURIN and LYNNE FITZGERALD,

TERMINIX INTERNATIONAL COMPANY LP;

TERMINIX INTERNATIONAL, INC., a

corporation, KEN STROH, as the certified

licensed pest control operator,

DATE: JANUARY 22, 2019

TIME: 9:01 a.m.

PLACE: Mobile, Alabama

BEFORE: Hon. Eugenia Benedict

REPORTED BY: Nancy W. Pannell, CCR

BIRMINGHAM REPORTING SERVICE

4 APPEARING FOR THE PLAINTIFF(S):

5 MR. THOMAS F. CAMPBELL

6 MR. BRANDON K. FALLS

7 CAMPBELL LAW, P.C.

8 5336 STADIUM TRACE PARKWAY

10 BIRMINGHAM, ALABAMA 35244

12 MR. ADAM MILAM

13 MILAM & MILAM, LLC

14 2206 MAIN STREET

15 DAPHNE, ALABAMA 36526

17 APPEARING FOR THE DEFENDANT(S):

18 MR. MICHAEL L. BELL

19 MS. HALEY A. COX

20 LIGHTFOOT FRANKLIN & WHITE

21 400 NORTH 20TH STREET

22 THE CLARK BUILDING

23 BIRMINGHAM, ALABAMA, 35203

BIRMINGHAM REPORTING SERVICE

2 ALSO PRESENT: Lynne Fitzgerald,

3 Ann McLaurin, Liz Harper, Angie Puckett,

BIRMINGHAM REPORTING SERVICE

3 OPENING STATEMENT BY MR. CAMPBELL 11

4 OPENING STATEMENT BY MR. BELL 59

7 WITNESS: DX CX RDX RCX FDX FCX

8 PAUL BELLO 115 291 350 362

9 RICHARD SKOLNIK 366 498 531 551 555 564

10 WILLIAM PHILLIPS 567 572

11 COREY MOORE 577 601 630 639

12 ROBERT STEELE 642 772 793 795

13 KEN STROH 831 918 976 1006 1021 1026

14 CHRIS ANNELLO 1029

15 LYNNE FITZGERALD 1072 1181 1216

16 ANN MCLAURIN 1219 1249

17 RICKY POPE 1266 1300 1320

18 PHIL WILBOURN 1329 1375 1391 1398 1407

19 LYNNE FITZGERALD 1415 1416 1418

BIRMINGHAM REPORTING SERVICE

3 NUMBER MARKED OFFERED ADMITTED

5 179 123 123

8 219 273 1252

9 220 273 1252

10 221 273 1252

12 158 488 488

15 105 492 492

16 106 492 492

17 107 492 492

18 108 492 492

19 109 492 492

20 155 492 492

21 157 492 492