M&F V Terminix Fraud Trial - Testimony - Skolnik, Richard

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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 DAY TWO JANUARY 23, 2019 9:00 A.M.
3 PRESENT: Judge Eugenia
4 Benedict, Mike Bell, Haley Cox, Tom
5 Campbell, Brandon Falls, Adam Milam, Liz
6 Harper, Angie Puckett, Don Stump, Ken
7 Stroh
9 P R O C E E D I N G S
10
11 ARBITRATOR: Mr. Campbell,
12 are you about ready?
13 MR. CAMPBELL: Yes, ma'am.
14 ARBITRATOR: Would you raise
15 your right hand please?
16 RICHARD SKOLNIK,
17 being first duly sworn, was examined and
18 testified as follows:
19 DIRECT EXAMINATION
20 BY MR. CAMPBELL:
21 Q. Please state your name for the
22 record.
23 A. Richard Skolnik.

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1 Q. Mr. Skolnik, you're the manager of
2 termite damage claims at the headquarters
3 for the entire nation; is that correct?
4 A. Correct.
5 Q. Could you take Judge Benedict
6 through a brief description of your
7 experience in the structural pest control
8 trade?
9 A. Sure. Your Honor, I started with
10 Terminix May, this May will be 24 years.
11 Started in a local Terminix office and
12 worked in outside sales for two and a
13 half, three years, and then became a
14 service manager in the termite department,
15 and did that for seven or eight years
16 before moving into my current position.
17 Q. As a service manager you are
18 located in the Memphis area where Terminix
19 is now headquartered; is that correct?
20 A. Yes.
21 Q. In your service manager position
22 at Terminix part of your responsibility of
23 that position in Terminix office is to

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1 handle termite damage claims to respond to
2 complaints by customers of potential
3 termite damage to go back out and verify
4 that, and to set up a claim file where
5 appropriate; correct?
6 A. Correct.
7 Q. So you have had, what, 23 years
8 experience handling claims for Terminix,
9 or 22?
10 A. On average 21.
11 Q. You know how to do termite
12 treatments; correct?
13 A. Yes, sir.
14 Q. You have sold contracts for doing
15 what in your trade is called a
16 conventional post construction termite
17 treatment because that's all that was
18 available to do at the time you started
19 selling termite contracts; correct?
20 A. Up until shortly before I went
21 into being a service manager the baiting
22 system came out, but, yeah, the liquid
23 treatment was what we dealt with most when

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1 I was in sales.
2 Q. Terminix has and uses training
3 materials and service protocols developed
4 by the home office to train people
5 nationwide on how to do liquid termiticide
6 treatments and how to do various types of
7 inspections for termite customers; right?
8 A. Yes.
9 Q. They have written manuals that
10 describe how to do termite treatments and
11 inspections; right?
12 A. It's changed over the years, but
13 written manuals has been a part of it.
14 Q. And they have also had videotape
15 showing how to do treatments and
16 inspections; right?
17 A. Correct.
18 Q. And they have videotapes
19 explaining to technicians how to draw a
20 graph and how to fill out the paperwork
21 associated with initiating a termite bond
22 service for a customer; right?
23 A. Yes.

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1 Q. Recently, within the last decade,
2 Terminix has switched from recording
3 its inspection findings on graph paper,
4 carbon graph paper to doing it
5 electronically; correct?
6 A. I'm not sure when it started, but
7 there are in most cases electronic
8 versions used now.
9 Q. And as a claim manager, one of the
10 things that you often do when evaluating a
11 claim is you review the customer file,
12 including the service history, in order to
13 determine whether or not that claim is due
14 to be paid; correct?
15 A. In special occasions I review the
16 file, not in every case.
17 Q. There is a claims database that is
18 accessible by authorized people of
19 Terminix over what's called an intranet;
20 correct?
21 A. Correct.
22 Q. You could go up to your room, log
23 in to your computer and get into the

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1 Terminix claim database and review the
2 records in that database on the McLaurin
3 and Fitzgerald claim; right?
4 A. Yes.
5 Q. And anybody at the company who's
6 authorized to do that could do so?
7 A. Correct. If they have access to
8 the particular branch that Ms. McLaurin
9 was serviced out of.
10 Q. So, for example, if a termite
11 contract is sold in 2012 and the
12 electronic handheld equipment was used to
13 sell it, that salesperson would load the
14 information about selling that proposed
15 contract and draw a graph on that handheld
16 device and that be stored in the
17 computer somewhere at Terminix; right?
18 A. That's my understanding.
19 Q. And then if somebody, if selling
20 that -- let me start over. If selling
21 that contract was approved, then the
22 computer would generate a work order in
23 the system and that would lead to somebody

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1 going out and performing whatever service
2 was sold; right?
3 A. I would be speculating if I
4 answered that. I have never used the
5 handheld device and I'm not sure what that
6 process is.
7 Q. We'll go over that with others.
8 Let me ask you this, you worked on this
9 claim; right?
10 A. I had some involvement with it,
11 yes.
12 Q. Customer records on a service
13 history on this property were uploaded to
14 that database; correct?
15 A. I've never looked at the file on
16 this case.
17 Q. Do you know what has happened to
18 the original work order, whether it was
19 completed or just blank in the system?
20 A. I do not.
21 Q. Have you done anything to try
22 to find out where the original work order
23 is that would show what the company did or

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1 did not do after a termite bond was sold
2 for $900 and a fungus treatment was sold
3 for $300 in November of 2012?
4 A. Not when I was involved with it.
5 It didn't require that.
6 Q. Now, I want to talk some about the
7 damage claim procedure, but first I would
8 like to go over with you the termite
9 contract in this case. This is page 5 of
10 the plaintiff's document compilation in
11 the green book.
12 A. Would you like me to look at it?
13 Q. You're welcome to look at the one
14 in the record or the one on the screen.
15 This language in this paragraph of a
16 termite protection plan, I want to ask you
17 about it in a minute, but at Terminix
18 y'all call renewable termite warranties
19 that customers can renew on an annual
20 basis, y'all call those termite protection
21 plans; correct?
22 A. We do.
23 Q. And a contract that did not

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1 provide any sort of repair warranty
2 associated with it, y'all would call those
3 internally a termite service plan;
4 correct?
5 A. Correct.
6 Q. When being presented with a claim
7 and having to decide whether you're going
8 to recommend paying some or all of it or
9 not, one of the things that you have had
10 to do for the last 21 years is to look at
11 the customer's contract and see what that
12 contract provides in terms of what the
13 customer and the company have agreed to;
14 right?
15 A. When review of the file is
16 required, if I'm looking at a particular
17 claim, then that is one thing that I do
18 look at.
19 Q. And do you recognize, as the home
20 office manager of termite damage claims,
21 that when a protection plan has been
22 issued, that the company has made a
23 written commitment to the customer about

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1 what the company is agreeing to do if the
2 circumstances described in the limited
3 warranty occur?
4 A. I'm familiar with the terms and
5 conditions if that's what you're asking.
6 Q. And is that something at Terminix
7 that y'all consider -- let me ask this
8 about just you if it's an unfair question
9 to ask about the company as a whole. Do
10 you consider it important for the company
11 to faithfully keep the pledges that it
12 makes in its termite protection plans?
13 A. I think as a rule the company does
14 honor the contracts that it has in place.
15 Q. I'm not asking you what your
16 opinion is as to whether as a general rule
17 or not the company honors its warranties.
18 I'm asking you do you think it's important
19 for the company to understand its warranty
20 and to honor it?
21 A. Yes.
22 Q. This language that is in this
23 agreement, that if new damage occurs

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1 during the term of this agreement Terminix
2 will, upon notification and inspection,
3 arrange for the necessary repairs or
4 replacement by a contractor chosen by
5 Terminix, and will pay the entire cost of
6 labor and materials.
7 Is it fair to say that y'all, over
8 the last couple of decades, have had
9 probably dozens of termite protection
10 plans that may have slightly different
11 language but that that warranty commitment
12 is pretty much a universally standard
13 phrase that's used in those?
14 A. I would say that language for the
15 most part is in most contracts that I've
16 observed.
17 Q. And do you recognize that repairs
18 or replacement that that's talking about
19 two different things? That in this
20 agreement that that's not saying that
21 repairs and replacement is a synonym?
22 A. I think it speaks for itself.
23 It's going to be repaired or replaced.

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1 Q. And so has that always meant to
2 you that if the property needs to be
3 replaced, that it can't be repaired for
4 whatever reason, that the company's
5 commitment to its customer is to replace
6 the property that is subject to the
7 warranty?
8 A. I interpret that to mean that we
9 will replace -- we're going to repair the
10 damage if we can, meaning if it's a stud
11 wall we're going to repair it. If it
12 can't be repaired, then we're going to
13 replace the stud wall. I don't think I
14 see anything in there that says we're
15 going to replace a home. If necessary, I
16 think it indicates we're going to repair
17 it. If not, we're going to replace the
18 damage.
19 Q. So is that the way you interpret
20 that as the home office nationwide claims
21 manager, that the company has not made a
22 commitment to customers that if their home
23 is so badly damaged by termites that it

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1 needs to be replaced that you're going to
2 replace it?
3 A. Well, I think Mr. Campbell, that's
4 a broad brush statement or a question
5 there. Certainly each case is different
6 and has to be weighed differently based on
7 the circumstances. So if I'm involved
8 with a claim, then I look at each case I'm
9 dealing with, and weigh the facts as
10 presented to me.
11 Q. Yes, sir, I'm talking about a
12 hypothetical set of facts and then your
13 standard language in your contract that is
14 often used of repairs and replacement.
15 Factual hypothetical is that the property
16 is so badly damaged with termites that it
17 can't be repaired. In that situation, has
18 the company the way you've been trained to
19 read this contract, committed itself to
20 replace that house or property if
21 necessary?
22 A. Well, I can't speak in
23 hypothetical terms because again each case

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1 is different.
2 Q. You understand as a homeowner,
3 that, for example, you can buy homeowners
4 insurance that will repair your house if
5 things happen, and that you can get
6 replacement coverage, so that if your
7 house burns down for example, the
8 insurance company will pay to replace it?
9 A. My insurance company has that,
10 yes.
11 Q. And what I'm getting at is in this
12 contract, is that the coverage that
13 Terminix is agreeing to provide, that when
14 necessary that they'll replace the
15 structure?
16 A. I can't answer that. I wasn't
17 part of writing this contract up and I'm
18 interpreting it the way I explained to you
19 and I'm not sure what the authors'
20 intentions were when they drafted it up.
21 Q. And I'm asking you as the national
22 director of termite damage claims do you
23 believe that the company in a contract

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1 like that, in this contract, is committed
2 that if necessary they'll replace a home
3 that's covered by the warranty?
4 A. I think that anything will be
5 examined based on a case-by-case basis and
6 the facts that are behind the damage
7 that's presented.
8 Q. And if those facts and those
9 circumstances that you review show that
10 the -- what's necessary is replacement
11 rather than repair of the structure, does
12 this warranty provide that coverage or
13 not?
14 A. That's based on the approvers
15 above me and how they want to handle it.
16 Q. We're going to get to who the
17 approvers are above you in a moment, but I
18 want to go back and talk about termite
19 repair warranties in general, okay? One
20 of the things that is being sold in a
21 termite repair warranty in a state like
22 Alabama where you have to do a treatment
23 at the initiation of the contract, is to

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1 do something to try to prevent termite
2 infestation in the first place; right?
3 A. Right.
4 Q. And another thing that's provided
5 for generally in those contracts is that
6 we're going to periodically inspect the
7 property and we're going to apply any
8 additional treatment that's found
9 necessary; correct?
10 A. Yes.
11 Q. And then the third thing is that
12 if those first two efforts don't result in
13 preventing termite damage, then under the
14 limitations in the repair and replacement
15 warranty the company will repair and
16 replace resulting damage; correct?
17 A. Correct, if it meets certain
18 terms.
19 Q. And it is understood that a reason
20 for issuing termite repair warranties is
21 because homeowners insurance policies
22 usually don't cover wood-decaying damage?
23 A. Correct.

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1 Q. That is a major selling point
2 that's emphasized by Terminix when selling
3 termite repair warranties is you need this
4 as a homeowner to protect yourself from
5 the cost of wood-destroying organism
6 damage because you're not going to be able
7 to get this coverage from your homeowners
8 insurance company?
9 A. Well, I don't know if it's
10 presented that way, but it's explained
11 what the coverage is to a customer based
12 on the contract they qualify for.
13 Q. Let's look at just an example of
14 an advertisement sent to Lynne Fitzgerald
15 in August of 2018 in our document
16 compilation at page 337 and 338.
17 It's on the board and it says
18 termites can cause an estimated $5 million
19 dollars in damages in the US each year.
20 Once termites invade your home they can
21 cause thousands of dollars of damage that
22 usually isn't covered by homeowners
23 insurance. Not on our watch. Qualified

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1 properties can get guaranteed protection
2 today. 100 percent satisfaction
3 guaranteed.
4 Does seeing that advertisement
5 issued by your employer refresh your
6 recollection that a theme of its
7 advertising of termite repair warranties
8 is that customers may want to buy it
9 because it's usually not covered by
10 homeowners insurance?
11 A. I have never seen this before, but
12 based on the language, I mean, it does say
13 that usually it is not covered by
14 homeowners insurance.
15 Q. I understand you agree that it's
16 not used with homeowners insurance. Do
17 you agree as a claims manager and a former
18 salesperson and service manager that one
19 of the marketing tools the company uses to
20 encourage people to buy these policies is
21 that it's a good idea to buy them because
22 it's usually not covered by homeowners
23 insurance?

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1 A. I believe that's what I said.
2 Q. One reason that you buy homeowners
3 insurance is for the peace of mind that if
4 a covered problem happens at your house,
5 your homeowners insurance is going to
6 cover it instead of coming out of your
7 pocket; correct?
8 A. Correct.
9 Q. And likewise with a termite repair
10 warranty, do you recognize that one of the
11 reasons that that is offered to people is
12 to assure them the peace of mind that
13 they're not going to have to pay out of
14 pocket if they have a covered claim?
15 A. Correct.
16 Q. And one of the things that y'all
17 recognize at Terminix is that when selling
18 termite repair warranties, part of what
19 you're selling to that customer is peace
20 of mind; right?
21 A. Yes.
22 Q. And that's been true for your
23 entire 24 years in this trade?

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1 A. Yes.
2 Q. When you were selling these, you
3 would go to people and say you know
4 Mr. and Mrs. Homeowner this would be a
5 good thing to have because then you'll
6 have the peace of mind that if termites
7 damage your home and we find live termite
8 infestation in that area, we're going to
9 arrange for and make the necessary
10 repairs, you don't have to worry about
11 doing that yourself?
12 A. Yes.
13 Q. And part of that peace of mind
14 that's being sold in the termite
15 repair warranty is to help a homeowner or
16 property owner avoid serious adverse
17 financial consequences; right?
18 A. I think that would be fair to say.
19 Q. The flip side of those two things,
20 that Terminix also recognizes, is that if
21 the company doesn't keep its commitment
22 and termite damage occurs, and the company
23 doesn't pay the claim as they're supposed

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1 to, that you expect that the customer is
2 going to suffer potentially serious
3 adverse financial consequences and it's
4 going to interfere with their peace of
5 mind?
6 A. I'm not sure I quite understand
7 what you're asking.
8 Q. In selling these contracts, one of
9 the things you recognize is that if the
10 company doesn't do its job to prevent
11 termites and termites occur and it denies
12 a damage claim that should be paid, that
13 emotional and financial consequences are
14 going to befall that customer; correct?
15 A. That's always entirely possible.
16 I mean there's all kind of factors if a
17 claim is ever denied that involve why the
18 claim was denied.
19 Q. But I mean that's not something
20 you considered for the first day here in
21 response to these questions, you've
22 recognized that in your career at
23 Terminix; right?

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1 A. If the damage qualifies to be
2 repaired under the terms and conditions of
3 the contract, then that's what Terminix
4 does.
5 Q. And it's something that
6 would rattle around in your brain that if
7 we're due to pay a claim and we don't pay
8 it, that we're going to be -- the result
9 of that is that we're going to cause a
10 financial and emotional injury to this
11 customer?
12 A. Well, that's part of my job as a
13 claims manager, if it comes across my desk
14 I have to weigh all the facts, and
15 determining if we have liability or not is
16 part of the facts that I have to weigh.
17 Q. One of my favorite song lyrics --
18 this is what I'm getting at -- one of my
19 favorite song lyrics is from a Merle
20 Haggard song, I'm a big Merle Haggard fan.
21 It says my mind ain't nothing but a total
22 blank, I think I'll just sit here and
23 drink.

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1 What I'm getting at is trying to
2 figure out what's rolling around in your
3 head as the national claims manager.
4 A. Okay.
5 Q. Because we don't know. When it
6 comes to the consequences of not honoring
7 a repair warranty, is your mind a blank or
8 have you appreciated the fact that not
9 honoring a claim that's due to be paid
10 will result in financial and emotional
11 consequences?
12 A. Well, I think Mr. Campbell, a good
13 explanation of what I do on a daily basis
14 on the claims that I'm involved with is I
15 have to be the guy that's down the middle,
16 okay. I can't take the company side, I
17 can't take the customer side. Right now
18 I'm looking at things down the middle.
19 And in my position it's to do whatever I
20 can to get a claim resolved, even if that
21 means, you know, that maybe there was
22 damage marked on the original graph but
23 there's other circumstances why we should

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1 pay for that damage to be replaced.
2 Q. Let me see if I can be clearer
3 because I'm not asking you if it's your
4 job to manage claims and make decisions.
5 What I'm literally trying to get to is
6 when you're doing that job, you're
7 managing claims and you're making
8 decisions, is it in your head that if you
9 deny a claim that should be paid under the
10 contract, that it's going to result in
11 adverse financial injuries and emotional
12 injuries to the customer?
13 A. I've never denied a claim where it
14 should have been paid. I'm pretty
15 successful in resolving cases that I work
16 with.
17 Q. Yes, sir, and again I'm not asking
18 you --
19 A. Well, you asked me --
20 Q. -- if you've ever made a mistake.
21 A. -- you asked me if my head was
22 blank and I'm telling you what goes on in
23 my head.

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1 Q. But as part of what goes on in
2 your own head is that if we wrongfully
3 deny a claim we're going to be causing --
4 the result of that -- a result of that is
5 going to be causing financial and
6 emotional injury?
7 A. On a claim that should have been
8 paid?
9 Q. Yes, sir.
10 A. I guess that's possible, but like
11 I said, I have never been involved with a
12 claim that should have been paid where I
13 denied paying it.
14 Q. Have you appreciated in your
15 career as the national termite damage
16 claims manager that making the wrong
17 decision will cause financial and
18 emotional injuries or not?
19 A. Well, I'm always aware of that
20 fact. That's why I do my best to analyze
21 each case that comes before me and consult
22 with others and make the -- hopefully the
23 right decision, which, like I said, so far

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1 I haven't had any issues with that.
2 Q. Let's talk about how claims are
3 handled under these termite repair
4 warranties. There are -- there's a
5 process in place that Terminix, or that
6 describes who has authority to pay claims
7 depending on the dollar value of the
8 claim; correct?
9 A. Correct.
10 Q. And let's go through this from $1
11 to $3,000 is the branch manager or service
12 manager; correct?
13 A. Correct.
14 Q. And then from $3,001 to $10
15 requires the approval of the region
16 manager or region director; correct?
17 A. 10,000, correct.
18 Q. And then above $10,000 it requires
19 the approval of the division vice
20 president; correct?
21 A. 10,001 to 50,000 requires division
22 approval.
23 Q. And currently in the southeastern

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1 division, that person is Jeff Storck;
2 correct?
3 A. Correct.
4 Q. And prior to Mr. Storck who was
5 it?
6 A. I believe it was Jay Brown.
7 ARBITRATOR: And what is the
8 title of that person?
9 THE WITNESS: Divisional
10 vice president.
11 ARBITRATOR: Thank you.
12 MR. BELL: He's the fellow
13 we met by video in Weatherby, that very
14 first person who testified on video, you
15 remember that?
16 ARBITRATOR: I just needed
17 to get the title.
18 Q. (By Mr. Campbell) And to be clear
19 about it, Mr. Brown, Jay Brown, J-a-y, he
20 would have been the division vice
21 president in 2017; right?
22 A. Yes.
23 Q. And then if the claim is above

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1 $50,000, that requires the approval of
2 three people: You, the national termite
3 damage claims manager Rick Skolnik, the
4 CFO, chief financial officer, and the CEO;
5 correct?
6 A. Correct.
7 Q. So in 2017, who was the CFO?
8 A. CFO was Jim Shields.
9 Q. And let's look in that book at
10 page 285.
11 This is a claims site status tab
12 from your claims database that is a chart
13 that reflects requests for claim payment
14 and who has or has not approved that claim
15 as it goes through the system; correct?
16 A. Correct.
17 Q. What I wanted to make sure we
18 covered here is who these people were.
19 Was Jim Shields the CFO for all of 2017?
20 A. I believe he was, but I don't -- I
21 don't recall exactly when he came on
22 board.
23 Q. And who was the CEO?

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1 A. That would have been Marty Wick,
2 W-i-c-k.
3 Q. And now y'all have a different
4 CEO; correct?
5 A. Correct.
6 Q. Who is your CEO now?
7 A. Matthew Stevenson.
8 Q. And how long has Mr. Stevenson
9 been the CEO?
10 A. I'm guessing since January or
11 February of last year.
12 Q. That would be January or February
13 of 2018 it became Matthew Stevenson;
14 correct?
15 A. I believe that's correct. I don't
16 have the exact date.
17 Q. So on this claim, let's talk about
18 what would have happened on the line that
19 is highlighted there that indicates in the
20 column for by Rick Skolnik and for status
21 administrative approved on July 18, 2017.
22 A. Okay.
23 Q. Does that mean that you as the

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1 damage claim coordinator approved a
2 $43,650 proposed supplement on that claim
3 that was adding that amount of money to a
4 $21,000 approval issued previously?
5 A. Yes. The 21,358.38 was the
6 original estimate, and then once the
7 contractor began work, additional damage
8 was found and submitted a supplemental
9 estimate for the 43,650.00.
10 Q. So by this point in time, if we go
11 through the approval granted by the CFO
12 and CEO, the amount that had been approved
13 is 43,650 plus the 21,000 and change;
14 correct?
15 A. Correct.
16 Q. So that would be a total of about
17 roughly $65,000?
18 A. Correct.
19 Q. And that's why this required
20 approval of yourself, the CFO and the CEO
21 because now the total needed to pay that
22 claim exceeded $50,000?
23 A. Yes.

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1 Q. And I want to talk because
2 this may be important. The mechanics of
3 doing that. Y'all -- you, the CFO, and
4 the CEO would log in to a certain part of
5 your computer, something would pop up I
6 assume telling you what kind of approvals
7 were sitting in the claims queue for you
8 to consider and either approve or decline;
9 correct?
10 A. Yes.
11 Q. And in that section of your
12 computer, it would give you information
13 about that claim; right?
14 A. I can see estimates. I can
15 sometimes see permits that may have been
16 posted online, whatever has been posted
17 for documents I can see it if I choose to
18 look at it.
19 Q. And if the local office did it,
20 you could see service records and
21 contracts from the customer's customer
22 file from a different computer system that
23 may have been uploaded by people in the

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1 local office to the claim file; correct?
2 A. Typically that's not done on a
3 normal claim.
4 Q. What I'm saying is the local
5 office has authority to upload service
6 histories and documents from the customer
7 file to the claims database so upper level
8 people can review that information without
9 having to go to either the paper branch
10 file or look at t he computer system that
11 records customer information; correct?
12 A. Well, they would certainly have
13 the option of sending that information to
14 Fleet Response to upload onto the claim.
15 Q. And these people in the approval
16 process, you also have access to and the
17 CFO and the CEO have access to the
18 customer information database; right?
19 A. I do have access if I need to look
20 at something.
21 Q. And your bosses, the CFO and the
22 CEO, do as well?
23 A. If they so choose, yes.

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1 Q. So in an account that's been set
2 up electronically, whether if you
3 look at those documents in the claims
4 system, they're uploaded or you choose to
5 go look in the customer information
6 database, when deciding whether to approve
7 those claims, you have available the
8 service history on that property that you
9 can look at if you want to; correct?
10 A. If I want to.
11 Q. And sometimes you do and sometimes
12 you don't?
13 A. Really the only time I look at
14 information is if I'm dealing with a
15 claimant's attorney and I'm needing to
16 research the file. I don't do it on --
17 ARBITRATOR: Excuse me would
18 you repeat your answer? I didn't mean to
19 interrupt.
20 THE WITNESS: That's all
21 right. Typically the only time that I
22 will review a file is if it's, you know, a
23 complex claim that I'm dealing with,

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1 especially if the claimant's represented
2 by counsel, and I'm working with the
3 attorney trying to get it resolved.
4 Q. So just to be clear, after this
5 point in August of 2017, if it was
6 determined that the damage was even more
7 extensive or that it was going to take
8 more money to resolve the company's
9 obligation under its protection plan,
10 there would need to be another supplement
11 and you would need to get the same
12 approvals?
13 A. Correct.
14 Q. Say it went up to $230,000 you
15 would have to get those same approvals
16 again; correct?
17 A. Correct.
18 Q. And I want to make sure Judge
19 Benedict understands this, what that would
20 require if you were going up from 65 to
21 250, it would require the branch service
22 manager or branch manager, the region
23 manager, the division vice president or

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1 director, you, the CFO, and the CEO;
2 correct?
3 A. Yes.
4 Q. So if it was determined that it
5 was going to take more money, all of those
6 people would have to put their eyes on it
7 again; right?
8 A. Yes.
9 Q. And what happens, Mr. Skolnik, if
10 you say yes, the CFO says yes, and the CEO
11 says no?
12 A. I have never had that happen. I
13 would be speculating if it did happen.
14 Q. So if, in this file, more than
15 $65,000 was approved, that would mean
16 since there's never been an exception to
17 unanimity, that you, the CFO, and the CEO
18 approved it?
19 A. I don't know -- can you repeat
20 that?
21 Q. Since you've always had unanimity
22 of approvals at the executive level in
23 your experience?

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1 A. Right.
2 Q. That would mean that if more than
3 $65,000 was approved to resolve this
4 claim, that you, the CFO, and the CEO
5 signed off on doing that; right?
6 A. It would come back through us
7 again for review. So there's always
8 potential that somebody would disapprove
9 it, I've just never had it happen in the
10 almost 13 years that I've been doing this
11 job.
12 Q. So let's look at page 281. This
13 November 3, 2017 letter to Lynne
14 Fitzgerald relating to the termite damage
15 claim at her Dauphin Island house on Grant
16 Street by Ken Stroh, the Mobile north
17 manager, offering more than $65,000, here
18 it's $72,700, this means that that same
19 group of people approved the higher
20 amount; right?
21 A. That would have gone through,
22 yeah, somebody above me to get approval to
23 offer that.

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1 Q. There's been some discussion in
2 this case that when offering cash as
3 opposed to arranging for necessary
4 repairs, that it is the company's practice
5 to require a full release of any and all
6 liability and a non-disparagement clause.
7 Is that accurate?
8 A. Yes.
9 Q. And a non-disparagement clause,
10 in lay language, means that the customer
11 to get the money has to agree that they're
12 not going to speak ill of Terminix
13 International or its employees; correct?
14 A. Correct.
15 Q. And a confidentiality provision;
16 is that also normally required?
17 A. Yes.
18 Q. And that requires them not to tell
19 people how much money they got from
20 Terminix; right?
21 A. Correct.
22 Q. And a full and final release,
23 that's language that says you are to agree

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1 to release all claims known and unknown
2 past, present, or future; correct?
3 A. Basically related to this
4 particular claim, yes.
5 Q. That grid that we saw, that
6 spreadsheet with the claim approvals, why
7 is there not one -- well, let me ask this
8 first, do you know whether there's another
9 grid sheet that shows the approvals for
10 the higher amount?
11 A. I believe this was a verbal
12 conversation that I had with certain
13 individuals, including our legal
14 department, based on information that I
15 had gathered.
16 Q. But you gave your approval?
17 A. I would have given the information
18 and made a recommendation.
19 Q. And for this amount to be offered,
20 your recommendation would have had to be
21 that you approved making this offer;
22 right?
23 A. I was part of that.

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1 Q. And the CFO and the CEO were part
2 of that, Mr. Shields and Mr. Wick?
3 A. I don't recall the exact
4 conversation. It could have been taken
5 directly to the CEO, who of course has
6 authority to make that decision on his or
7 her own.
8 Q. Could you tell Judge Benedict what
9 happened in making that decision? Did
10 y'all sit down and have a meeting in
11 somebody's office, a telephone call, an
12 email exchange, a text message exchange?
13 How did y'all communicate with one another
14 in coming to the decision that approval
15 would be given?
16 MS. COX: Let me just object
17 here. I'm not -- I don't know the answer
18 to this question but, to the extent it
19 deals with communication with legal
20 counsel which is what he communicated a
21 moment ago, I just want us to be careful
22 here so I would object on grounds that
23 this calls for any kind of communication

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1 --
2 MR. BELL: Maybe he can
3 answer the question but not talk about any
4 conversations he had with the lawyers in
5 that process. That's probably the way to
6 do it.
7 ARBITRATOR: That's
8 sustained, and, Mr. Campbell, if you'll
9 just be careful not to ask about
10 communication with attorneys.
11 MR. CAMPBELL: I will. I'm
12 not going to ask for conversations
13 protected by the attorney-client
14 privilege. This question doesn't deal
15 with revealing any communication
16 whatsoever. It requires you to explain to
17 Judge Benedict how you communicated and
18 with whom.
19 A. Your Honor, I don't recall the
20 specific conversation that was behind it.
21 I can tell you typically what I will do
22 is in a situation like this, once I have
23 all the information gathered and have come

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1 to what I believe would be a fair offer
2 based on the information that I have, I'll
3 discuss it with in-house counsel, and then
4 if it requires up to the CEO's approval,
5 then I'll discuss it with the CEO that's
6 in place at the time. And if the CFO is
7 available, also include the CFO in the
8 conversation.
9 ARBITRATOR: But the CFO
10 would have to approve it as well, would he
11 not?
12 THE WITNESS: In a case like
13 this, not necessarily, because the CEO
14 would, of course, outweigh any approvals
15 below him or her.
16 Q. (By Mr. Campbell) And is it your
17 understanding, Mr. Skolnik, that the offer
18 was -- to Ms. Fitzgerald was actually made
19 orally by Mr. Stroh in September, and then
20 memorialized in this letter of November
21 3, 2017?
22 A. I don't recall how the initial
23 offer was made, but I do know the offer

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1 was made to Ms. Fitzgerald.
2 Q. And you do know that it was made
3 prior to sending the letter?
4 A. I don't recall -- I mean, that's
5 typically how it's done. It's made
6 verbally and then it's advised that we're
7 going to follow up with a letter.
8 Q. There's no point in me asking
9 you about your conversation with the legal
10 counsel since you don't remember whether
11 you had one or not. Tell us about the
12 conversation that you had with the CEO.
13 Was that in person or by phone?
14 A. I don't recall.
15 Q. Your office, is it close to his
16 office?
17 A. At that time it wasn't that
18 terribly close. We were in a different
19 building.
20 Q. And what kind of paperwork was
21 generated to memorialize that decision
22 because we haven't seen any?
23 A. Basically, it was just a

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1 conversation I have. If they ask to see
2 any information, then I'll provide it, but
3 I don't recall the CEO asking for any
4 information.
5 Q. But I mean, did he write an email,
6 a memo, sign a voucher? What kind of
7 paperwork would exist to support
8 requesting a check or putting a hold on
9 that money in the company's books?
10 A. Well, this was -- this is verbal
11 because if the offer was made and
12 Ms. Fitzgerald or Ms. McLaurin would have
13 accepted it, then we would have entered
14 that cash settlement into Fleet Response
15 and then it would have gone through the
16 the approval process. But up to this
17 point, it was verbal. We're not going to
18 enter a settlement when we don't know that
19 the claimant is going to accept it,
20 because sometimes they come back with a
21 counteroffer and have to go back and
22 re-examine it.
23 ARBITRATOR: I don't know

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1 that that's what Mr. Campbell's question
2 was. I think he asked you if there was
3 anything written about the actual
4 communications and negotiations. That's
5 what I recall that you asked him,
6 Mr. Campbell.
7 MR. CAMPBELL: That's
8 correct.
9 THE WITNESS: No, there
10 wasn't.
11 Q. What kind of information could
12 have been communicated -- what was an
13 acceptable form of acceptance?
14 A. The CEO saying I approve to make
15 this offer.
16 Q. I mean from Ms. Fitzgerald and
17 Ms. McLaurin, what would have been an
18 acceptable form of successful acceptance
19 that would have generated some paperwork?
20 A. Something in writing. It could
21 have been a handwritten letter, a note.
22 Could have been an email. Could have been
23 a typed response. Just some documentation

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1 that was in writing agreeing to accept the
2 offer.
3 Q. Okay. Let's look at page 289.
4 Can you explain to us what this sheet is?
5 A. This is a part of the claim that's
6 claim notes where anybody that's involved
7 with the claim has the ability to type in
8 a note if they so choose.
9 Q. I'm going to put a line there at
10 August 10, 2017, because that's the date
11 on the other form that the CEO gave his
12 approval of the total of $65,000. Down
13 here on September 9, 2017, it says
14 customer CLD, does that mean called, cust,
15 CLD, customer called regarding status of
16 claim, advised pending approval from the
17 corporate R&J?
18 A. I think it's safe to say that
19 means called.
20 Q. What approval at that point on
21 September 9, 2017, a month later, is
22 pending in corporate?
23 A. There was additional damage found

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1 after the first supplement was approved
2 and the building department engineers were
3 involved so that was all being examined.
4 Q. And corporate, could you explain
5 to us who is that -- who is that referring
6 to in Terminix speak?
7 A. Who was involved in that portion
8 of it? Is that what you're asking?
9 Q. The approval from corporate, who
10 would corporate be? Would that be the
11 same three man group, you, and CFO, and
12 the CEO?
13 A. At this time I think it was just
14 me that was involved in the additional
15 damage that was found.
16 Q. Did you obtain or have obtained
17 for you some information as to what the
18 building -- I mean the tax assessor,
19 local tax assessor, said that the house
20 was worth?
21 A. Yes.
22 Q. Why did you do that?
23 A. Because the information that I

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1 received indicated there was some
2 discussion that the damage exceeded
3 50 percent, so in that case I wanted to
4 see, you know, now that we've had an
5 estimate of basically $65,000, what was
6 the value of the house. We had a hard
7 time getting somebody to come out and do
8 an assessment of it, and so I went to the
9 property appraiser's website to see what
10 the value of the property was -- or not
11 the property, but the actual house.
12 Q. What did you find out from the tax
13 assessor?
14 A. I believe it said that the value
15 the county had placed on it was 72,700.
16 Q. So that's the same amount that
17 wound up being in the cash offer that was
18 made to Ms. Fitzgerald; correct?
19 A. Correct.
20 Q. Is that a coincidence?
21 A. No.
22 Q. If we turn to the next page,
23 page 290, we've got a continuation of

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1 information that people input into that
2 notes that they put in the claims
3 database; correct?
4 A. Yes.
5 Q. And this indicates down here, I
6 want to ask you about this. Randall
7 Cowart, was that one of the contractors?
8 A. He's the owner of R&J
9 Construction.
10 Q. And Erika Aultman who was she?
11 A. She's with the outside company
12 that we use, State Permits, that helps
13 secure permits from the building
14 department.
15 Q. And Mark Hala -- I'll let you
16 pronounce that.
17 A. Halaiko. He was with Fleet
18 Response at the time.
19 Q. And Fleet Response is somebody
20 that you use, an outside third party that
21 has like insurance adjusters in it that go
22 and review jobs and review estimates to
23 make sure that the scope of work is

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1 appropriate and fair price?
2 A. No, Fleet Response was basically
3 -- they're a source that we use to -- they
4 furnish claim numbers, they generate claim
5 numbers and we store all of our claim
6 information there, as well as notes.
7 They're simply a data source.
8 Q. And then there's a comment up here
9 September 18th from Randall Cowart waiting
10 to hear from Terminix on property
11 appraisal before picking up supplemental
12 permit; right?
13 A. Correct.
14 Q. So prior to this time, is it fair
15 for Judge Benedict to assume that that's
16 when you were -- what it's referring to is
17 this effort that you undertook to see how
18 much the property was worth so you could
19 make a judgment as to whether or not the
20 cost of repairing it were going to exceed
21 50 percent?
22 A. That's correct. We were still
23 gathering information.

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1 Q. And the conclusion that y'all
2 reached was that it was going to be over
3 50 percent; right?
4 A. That's the information that we got
5 back from the engineer and the building
6 department.
7 Q. Now, let's talk about what the
8 consequence that you understood that to
9 be. Is it fair to say that you understood
10 what the consequence of that was under the
11 local ordinances or building requirements,
12 was that the structure couldn't be
13 repaired, it would have to be rebuilt?
14 A. I don't necessarily believe
15 anybody came back and said it had to be
16 rebuilt, but I believe what they said
17 since the damage exceeded 50 percent then
18 a lot of items in the home would have to
19 be brought up to code.
20 Q. Let's see if we can get at it this
21 way. That since the damage exceeded
22 50 percent, the building couldn't be
23 repaired, you could tear it down, but you

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1 couldn't go back and repair it?
2 A. Again, I don't think anybody ever
3 came out and said it had to be torn down.
4 I believe they said, you know, once it
5 exceeds 50 percent then it has to be
6 brought up to code.
7 Q. And as a practical matter, did you
8 understand that that would require
9 rebuilding the house rather than repairing
10 it to do it most economically?
11 A. At that point I believe the
12 decision was made to offer the customer
13 the value of the house that we found to
14 exist with the property appraiser.
15 Q. Thank you. Now, to the
16 question I asked, let's try that one. As
17 a practical matter did you determine that
18 if the only thing that was required was
19 bringing the entire property up to code,
20 that that would result in it being more
21 economical to tear down and rebuild the
22 house rather than try to bring the entire
23 house up to code?

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1 A. At that point I would say that the
2 decision was made to offer the customer
3 the value of the house to do with the
4 house what they so choose to do with it.
5 It wasn't a decision of economics or
6 anything like that.
7 Q. Where had the additional damage in
8 the house been discovered between
9 August 10th and this time in September, a
10 few weeks later?
11 A. I don't recall the exact location
12 that it was in.
13 Q. What other things or events had
14 happened during that period that were
15 significant?
16 A. I don't recall anything
17 significant other than I was just trying
18 to get it resolved.
19 Q. Are you aware of anybody who made
20 the decision -- I'm not talking about
21 people who had opinions, including
22 lawyers. I'm talking about
23 decision-makers. Are we on the same page?

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1 A. Yes.
2 Q. Are you aware of anybody who was a
3 decision-maker to send a letter saying
4 we'll offer cash rather than repairing --
5 arranging for repairs or replacement other
6 than you and the CFO and the CEO?
7 A. No.
8 Q. So have you talked to either
9 Mr. Shields or Mr. Wick to see what they
10 remember about why they made the decision
11 and what was in their head when they made
12 that decision?
13 A. Well, Mr. Wick hasn't been with
14 the company in a little over a year, and
15 Mr. Shields, I don't believe he was part
16 of the discussion.
17 Q. So is Mr. Wick still on friendly
18 terms?
19 A. I don't know. I haven't had any
20 contact with him.
21 Q. When you made the decision to
22 offer cash and a release and a
23 confidentiality provision and the

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1 non-defamation claim, non-disparagement
2 clause, was it in your head that not
3 honoring the provision in the warranty for
4 arranging for repairs or replacement if
5 necessary, would cause Ms. McLaurin and
6 Ms. Fitzgerald economic and emotional
7 injury?
8 A. No, there was nothing devious or
9 sinister behind the offer that we made.
10 The offer that I made was based on this is
11 the information that I have available so
12 this is a starting point. This is what we
13 need to offer to be fair based on the
14 damage that we have, and I don't recall at
15 any time Ms. Fitzgerald or Ms. McLaurin
16 coming back and saying, you know, we
17 believe our house is valued at more than
18 this and here's why. That would have
19 certainly been reviewed and examined for
20 possibly increasing the settlement amount.
21 Q. Let's look back at this letter.
22 This letter does not inform Ms. Fitzgerald
23 that the company is still willing to abide

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1 by its repair and replacement commitment,
2 does it?
3 A. No, it doesn't.
4 Q. This letter does not say that this
5 is an opening offer by Terminix and that
6 they're willing to pay more, does it?
7 A. It doesn't, but also I do not see
8 that there's been a line drawn in the sand
9 either, meaning that this is the final
10 offer, this is the only offer, language to
11 that effect. There was every opportunity
12 for the customer, the claimants to come
13 back and give their view on it.
14 Q. Did you write this letter? Who
15 wrote it?
16 A. Sometimes -- I don't recall, but
17 sometimes I help draft letters that a
18 branch is going to send out.
19 Q. Was this distributed within the
20 company? I notice there aren't any cc's
21 listed by it.
22 A. No, this wasn't distributed.
23 Q. If we could, could we see that

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1 original customer file again for him to
2 look at?
3 MS. COX: The customer file?
4 We can but I believe he's testified he
5 hasn't ever reviewed it, but I can guess
6 we can look at it. Angie, do you have it
7 handy?
8 MR. CAMPBELL: I would
9 appreciate it, Judge Benedict, if the
10 lawyers on the other side wouldn't suggest
11 facts to the witness while he's on the
12 stand.
13 MS. COX: What I was trying
14 to do is state an objection to asking him
15 to interpret anything from the customer
16 file when he's already testified on the
17 stand that he has not reviewed this before
18 today.
19 ARBITRATOR: He's just asked
20 for the availability of the file. I don't
21 think he's indicated he's going to ask him
22 anything --
23 MS. COX: Sure. I can see

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1 where we're going, so I was just trying to
2 bring the issue out before we go down a
3 rabbit hole.
4 Q. (By Mr. Campbell) That letter
5 we've got up on the screen there, a copy
6 of it is in the customer file; correct?
7 A. Okay, yes.
8 Q. If that was an offer that came
9 through approval of the claim process
10 from that separate database, why wouldn't
11 you have a copy of that letter in your
12 claims database?
13 A. Because it hasn't reached a
14 settlement yet. Had a settlement been
15 reached, then that would have been used as
16 backup along with whatever letter that --
17 or email we received back from the
18 customer stating they accept it.
19 ARBITRATOR: Let me be sure
20 I understand it. Are you saying that it's
21 not in your file because it has not been
22 accepted?
23 THE WITNESS: Correct. It's

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1 not in the Fleet Response database until
2 an offer is accepted along with, you know,
3 the official documentation from the
4 customer saying they accept it. Then what
5 we do we enter what's called a cash
6 settlement into our system versus a
7 contractor assignment and the backup is
8 provided. We call it backup. So it would
9 be this letter and then the customer's
10 letter or email accepting the offer, that
11 would be loaded onto Fleet Response.
12 ARBITRATOR: All right. But
13 you've already testified that there's no
14 written documentation in the claims file
15 about the discussions with the CEO and the
16 CFO, that there's actually nothing written
17 in your file about this offer waiting to
18 see if the customer is going to accept it;
19 is that correct?
20 THE WITNESS: Correct, there
21 would be a letter put in the customer file
22 just like Mr. Stroh or Mr. Steele put the
23 letter in the customer file on their end.

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1 This actually came out of the local
2 office.
3 ARBITRATOR: Okay, but I'm
4 asking about your file of the claims
5 department. Why would there not be a copy
6 of that letter of the offer?
7 THE WITNESS: Generally,
8 unless I'm dealing with an attorney, I
9 wouldn't, you know, keep branch
10 communications in a file.
11 ARBITRATOR: Why not?
12 THE WITNESS: It's just I
13 never made a practice of doing that.
14 ARBITRATOR: Well, how will
15 anybody else reviewing the file know that
16 that offer has been made if there's no
17 notation of it while it was being
18 contemplated and certainly no written
19 offer for the customer?
20 THE WITNESS: Because we
21 could always go back to the branch file
22 and get copies of whatever we needed.
23 ARBITRATOR: That seems like

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1 a lot of a waste of time.
2 THE WITNESS: I guess you
3 could say that.
4 ARBITRATOR: All right.
5 Thank you.
6 Q. (By Mr. Campbell) How would you
7 keep up with it as the termite man if you
8 don't have your outstanding offers that
9 have been approved by you and the CEO in
10 writing in the claims system?
11 A. Well, typically if I'm dealing
12 with the claimant's attorney, then I do
13 have an active file going, and
14 everything's discussed or documented
15 that's in that file.
16 Q. To be clear here, you weren't
17 dealing with an attorney?
18 A. Correct.
19 Q. You were dealing directly with the
20 claimants; correct?
21 A. I was dealing with the local
22 office.
23 Q. And this letter makes it clear

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1 that this additional damage that had been
2 discovered between approving the
3 supplement on August 10th and when this
4 offer is made that you're not processing
5 and making arrangements for repairs and
6 replacement anymore; correct?
7 A. That's right. Once we make an
8 offer, then up until that point things are
9 going to -- things on the construction
10 side are going to cease until we get it
11 figured out how we're going to move
12 forward.
13 Q. And I just want to be clear about
14 this, that what you're telling Judge
15 Benedict is that it never entered your
16 mind that by stopping work and not
17 processing a claim, for not arranging and
18 making arrangements for repairs and
19 replacement anymore but instead of making
20 a cash offer for the tax assessed value of
21 the property, it never entered your mind
22 that that, if accepted, would cause an
23 emotional injury and a financial injury to

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1 Ms. Fitzgerald and Ms. McLaurin?
2 A. When we make an offer like that,
3 then that would be up to the claimants or
4 the homeowners to make a decision for
5 themself based on if it would cause
6 emotional distress, so they would have
7 every opportunity if it felt that it would
8 to come back and make a counteroffer or
9 provide us with additional information on
10 why they felt like we should pay them
11 more.
12 Q. So stopping work on the repairs
13 and replacement that had been arranged, I
14 want to be clear about this, what I'm
15 asking you is what was going on in your
16 head, Mr. Skolnik? Did you appreciate the
17 fact that that was going to cause an
18 emotional injury to two ladies in their
19 70s who were retired?
20 A. Mr. Campbell, when I place an
21 offer out there I don't care if it's with
22 the actual customer or an attorney, it's
23 left for them to decide if they can live

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1 with that. If they can't, then come back
2 and let's talk about it and tell me why
3 and we'll reexamine it.
4 Q. Did you think that stopping work
5 on the repairs of her home, a retired
6 woman's home, would cause an emotional
7 injury?
8 A. No.
9 Q. Okay. If --
10 A. Not when I have an active offer
11 out there.
12 Q. -- if it was not in your head that
13 ceasing work would cause an emotional
14 injury, what was in your head?
15 A. I have an active offer out there
16 and it's up to you if you want to accept
17 it or not and move on. If you don't want
18 to accept it, then come back and please
19 tell me what would make you happy and I'll
20 do everything I can to try and get that
21 for you.
22 Q. Is it more likely than not that
23 you actually ghost wrote this letter?

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1 A. Say that again.
2 Q. Is it more likely than not that
3 you actually ghost wrote this letter for
4 Mr. Stroh?
5 A. It's possible. I help a lot of
6 branch managers write letters because you
7 know they don't teach letter writing in
8 school anymore.
9 Q. I'm asking for your opinion. Is
10 it more likely than not that this
11 well-composed letter that's properly set
12 up was actually drafted by you --
13 A. It's likely that it was.
14 Q. -- rather than Mr. Stroh?
15 A. I can't say positively, but I
16 could have helped write it.
17 Q. Since this letter probably was
18 ghost written by you, when you ghost wrote
19 this letter, if it was intended to open a
20 negotiation or explain that it was a
21 temporary cessation in the arrangements
22 that had been made for repairs, why
23 did you not say so?

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1 A. Because quite honestly, like I
2 stated earlier, there's no line that's
3 been drawn in the sand, and every
4 opportunity was there if they felt like it
5 wasn't an honest offer to come back and
6 give me something different.
7 Q. Now, to be clear, if we go back
8 and look at these notes in your claim
9 system from September, page 290, y'all had
10 closed this up?
11 A. Correct.
12 Q. Y'all had paid your contractor and
13 told him he was done; right?
14 A. Correct.
15 Q. So was it fair for Ms. Fitzgerald
16 to interpret that letter as meaning that
17 efforts to repair or replace her house
18 were closed up and done too?
19 A. Well, I think there were numerous
20 attempts made to get a response as to
21 the decision they had made on the offer,
22 and we had nothing firm to state that they
23 were going to accept the offer, so at some

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1 point, the contractor has to be paid for
2 the work that was performed out there.
3 Q. List those attempts.
4 A. I don't have the dates. They
5 could be an email some place.
6 Q. Where are the emails?
7 A. I haven't had time to review all
8 of those, Mr. Campbell. It could have
9 been phone calls.
10 Q. If it was phone calls by a branch
11 -- are you talking about by a branch
12 official, by Mr. Stroh?
13 A. Mr. Stroh or Mr. Steele.
14 Q. And what they are supposed to do
15 if those are done, is they are supposed to
16 note that in the Mission database. Their
17 customer notes of contacts with customers
18 are input by local offices; correct?
19 A. I'm not sure what that procedure
20 would be as far as documenting that.
21 Q. Have you not seen customer
22 profiles where contacts with offices are
23 listed out where somebody goes in and says

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1 the customer called in or Terminix
2 employee called the customer and did this
3 or that?
4 A. I have seen Mission profiles,
5 yes, sir.
6 Q. Now, let's look at 293 talking
7 about emails.
9 before you get into this next subject
10 matter, about how much longer do you
11 expect with him, and if it's more than
12 about five minutes, I think we'll take a
13 break.
14 MR. CAMPBELL: It will
15 probably be a bit more than five
16 minutes.
17 ARBITRATOR: Okay. We'll
18 have a break for ten minutes.
19 (Recess was taken.)
20 ARBITRATOR: Are we ready to
21 get back on the record?
23 Q. Mr. Skolnik, let's look at one of

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1 the emails after that November 2nd letter.
2 This one is 25 days later to
3 Ms. Fitzgerald from Mr. Cowart. He was
4 the contractor that had been on the
5 property at one point in time making the
6 repairs and moved her belongings to a
7 storage pod; correct?
8 A. Yes.
9 Q. In this letter, Terminix's
10 contractor is informing her that Terminix
11 is not going to pay to store her
12 belongings anymore and that she needs to
13 either start paying for it or have the pod
14 delivered back to the storage facility;
15 correct?
16 A. Yes.
17 Q. Terminix, to be clear, was not
18 even going to pay somebody to go take the
19 stuff out of that storage pod that they
20 had put in there and deliver it to
21 wherever she needed it to go; correct?
22 A. I wasn't involved in that part of
23 it, so I'm not sure what arrangements were

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1 made.
2 Q. Let's look at page 299 of that
3 document compilation. This is another
4 email from Terminix's contractor to
5 Ms. Fitzgerald. Isn't this Terminix's
6 contractor telling a 75 -- 75, 76-year-old
7 woman that she needs to take care of
8 getting that pod unloaded because they're
9 done?
10 A. It looks like -- it looks like she
11 was welcomed to start a contract with the
12 company, but they couldn't -- reading this
13 email, it appears the pod company couldn't
14 just transfer the contract from Mr. Cowart
15 over to Ms. Fitzgerald.
16 Q. And I've highlighted now a
17 paragraph of that email I want to call
18 your attention to. Isn't your contractor
19 indicating to Ms. Fitzgerald that
20 unloading that storage pod with her
21 belongings is on her?
22 A. It does.
23 Q. Excuse me? Excuse me?

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1 A. I said it does.
2 Q. Can you tell us why that would be
3 proper to tell Ms. Fitzgerald and
4 Ms. McLaurin that the lease was up on the
5 storage pod, y'all were off the job, you
6 need to make arrangements to get that
7 stuff unloaded, and not paying for it, why
8 that was appropriate if y'all were leaving
9 the job?
10 A. Well, the contractor was actually
11 paying for this out of his pocket from my
12 understanding and then having to be
13 reimbursed, so once the -- as I understood
14 the building department kind of terminated
15 things, or had the permit on hold after
16 the further damage was found and we put
17 out the offer, you know, we weren't
18 getting any response to the offer, so I
19 mean at that point the contractor can't be
20 expected to pay for the pod until we get
21 an answer after several months.
22 Q. Well, the contractor is your
23 agent? That's who you employed when

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1 making arrangements for the repairs under
2 the termite warranty; correct?
3 A. Correct.
4 Q. So the decision to stop paying for
5 that and to say move your stuff out or
6 they'll be on the street, that's
7 Terminix's decision; isn't it,
8 Mr. Skolnik?
9 A. Yes, sir, you know, if I had to
10 guess, probably what weighed into this
11 was, you know, the question has to be
12 asked, just how long do you give somebody
13 to make an acceptance or a counteroffer on
14 an offer that's made to you before, you
15 know, we start having to look at okay,
16 what expenses do we have out there. And
17 if we're not getting a response or any
18 communication, how long is a legitimate
19 time to have the customer's items in the
20 storage unit when they could be back in a
21 house or some place else.
22 Q. You've dealt with Terminix
23 protection plans on an almost daily basis

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1 for 21 years; correct?
2 A. Yes.
3 Q. Point Judge Benedict to the
4 language in the protection plan in this
5 file, if there is any, that you believe
6 gave you as the claims manager a good
7 faith reason to believe that you could
8 offer cash instead of arranging for and
9 making the necessary repairs and
10 replacement under the company's commitment
11 to the customer?
12 A. That was a decision that was just
13 made.
14 Q. Is there any language that tells
15 the customer that if the repair costs are
16 too burdensome or costly, or the
17 replacement cost too burdensome or costly,
18 that the company reserves the option to
19 pay them cash and let two 70-something
20 year-old retired ladies make the
21 arrangements themselves?
22 A. Well, there's not any specific
23 language to that effect, but on occasion

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1 we do have customers that do ask for a
2 settlement versus us doing the repairs.
3 Q. These two customers never, ever a
4 single time asked for cash instead of your
5 company arranging for the repairs or
6 replacement of their home; is that
7 correct?
8 A. That's correct.
9 Q. What I'm wanting to do is I'm
10 giving you completely free reign, explain
11 to Judge Benedict why you believe, if you
12 do, that it is good faith to say we're
13 stopping our arrangements for repairs and
14 replacements and we're only going to pay
15 you cash. Explain to her every
16 basis that you believe that that is the
17 good faith decision.
18 A. Judge, the decision that, after I
19 examined everything in this matter and,
20 mind you, I got involved with it at the
21 end, towards the very end when it was
22 determined that the amount of damage
23 exceeded 50 percent of the home, okay. I

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1 looked at all the information and I felt
2 like let's go ahead and offer the customer
3 the value of the home, which typically is
4 a very fair offer to pay somebody for the
5 cost of their home. And I had every
6 intention of making a good faith offer,
7 and I've had occasion where, you know, the
8 customer or the claimant has come back and
9 said, you know, I don't believe this is a
10 fair enough offer, I would like Terminix
11 to offer more money or give me a demand
12 about what they were looking for that
13 would satisfy them. Never got this in
14 that situation.
15 ARBITRATOR: But your
16 contract says repair or replacement, does
17 it not?
18 THE WITNESS: Yes.
19 ARBITRATOR: Okay. And did
20 you ever look at the complete customer
21 file to look at the treatment records in
22 this case?
23 THE WITNESS: No.

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1 ARBITRATOR: You said that
2 those were available to you if you wanted
3 to look at them; is that correct?
4 THE WITNESS: Correct.
5 ARBITRATOR: And you didn't
6 look at them?
7 THE WITNESS: No, I don't
8 get involved with the technical part of
9 it, just the claim part of it. We have
10 other people that deal with the technical
11 part.
12 ARBITRATOR: Okay. But if
13 the final decision is with you, the CEO,
14 and the CFO, does it or does it not seem
15 reasonable that in some difficult and
16 unusual cases like this one, where you
17 have a very unusual construction or are
18 very atypical for your contracts, that you
19 would not want to look at everything?
20 THE WITNESS: Well, I think,
21 you know, when you make a determination
22 that we should offer the value of the
23 house, I think at that point you have

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1 pretty much looked at everything.
2 ARBITRATOR: But did you
3 look at everything? I think you've
4 already testified that you did not.
5 THE WITNESS: Uh-huh
6 (affirmative). Well, I looked at, okay,
7 the building department is saying, and the
8 engineer is saying more than 50 percent is
9 damaged. For me, that's -- if you have
10 two experts, in my opinion, that come back
11 and say that, then I consider that okay,
12 that's pretty much justification that we
13 should offer the value of the house.
14 ARBITRATOR: But does it say
15 anywhere in your contract, and I don't
16 know that you've answered this
17 specifically although I believe
18 Mr. Campbell asked it, is there anywhere
19 in your contract that says that you may
20 offer the value of the house, the
21 appraised value of the house rather than
22 to replace the damage?
23 THE WITNESS: Not that I'm

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1 aware of.
2 ARBITRATOR: Okay. Thank
3 you.
4 Q. (By Mr. Campbell) And to be clear,
5 the one thing, the only thing that you did
6 to come up with a value of the house was
7 to get the information from the tax
8 assessor's records in Mobile County,
9 Alabama?
11 Q. At the time in November of 2017,
12 you, Rick Skolnik, knew that your company
13 was routinely using Josh Hall to appraise
14 properties in Mobile, Alabama and the
15 coastal region and presenting him as an
16 expert in the value of properties in this
17 region in arbitration cases; correct?
18 A. What's the name?
19 Q. Josh Hall.
20 A. I do not know him.
21 Q. Outreach Appraisals.
22 A. I do not know Josh Hall.
23 Q. Why didn't you hire a professional

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1 appraiser to determine what the fair
2 market value of the house was?
3 A. Well, there was a little bit of
4 confusion back then because I was asking,
5 it was Ken Stroh I believe or Robert
6 Steele, you know, we need to find a local
7 licensed appraiser to go to the house and
8 give us a value of the home. So I think
9 there was some confusion about what they
10 were calling an appraiser which I believe
11 they were referring to an independent
12 appraiser or maybe an engineer to appraise
13 the damage versus what I was calling a
14 property appraiser.
15 So the information I was getting
16 back was we can't find an appraiser that's
17 willing to come in here because there was
18 fear of litigation to give us a value. So
19 that's when I went to the county's website
20 and pulled that because at the time I felt
21 like that was the only opportunity I had.
22 Q. Mr. Skolnik, I want to be crystal
23 clear about this, in the fall of 2007, you

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1 knew as a matter of fact that there are
2 appraisers that advertise themselves that
3 are willing to give appraisals in
4 litigated situations; correct?
5 MS. COX: I think you mean
6 2017.
7 A. No.
8 Q. (By Mr. Campbell) Excuse me, 2017.
9 You knew in the fall of 2017 that there
10 are appraisers willing to hire themselves
11 out to give appraisals of the fair market
12 value of properties in litigated
13 situations?
14 A. No, I'm not aware of any
15 appraisers.
16 Q. You didn't know there were expert
17 witnesses that provided appraisal services
18 in litigation?
19 A. No, I didn't. No, because once it
20 goes the litigation, our legal department
21 handles it.
22 Q. Did you ever ask Ken Stroh or
23 Robert Steele, hey guys, have there been

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1 any appraisers testify in litigation that
2 we've been in in Mobile and Baldwin County
3 where y'all work in the cases that y'all
4 have been testifying in?
5 A. No.
6 Q. You knew they were testifying on a
7 regular basis in cases brought by my law
8 firm in that period of time; correct?
9 A. Again, there was some confusion on
10 what the meaning of an appraiser was
11 between the local office and myself.
12 Q. Did you know those facts that I
13 just deposited?
14 A. No.
15 Q. Didn't know your service managers
16 in Mobile were testifying routinely in
17 litigation brought by Campbell law?
18 A. I knew that.
19 Q. Didn't know the company was using
20 hired appraisals -- appraisers to give
21 valuations of property in those cases?
22 A. I don't have routine discussions
23 with attorneys on that.

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1 Q. Did you know that one way to
2 appraise property is its replacement
3 value?
4 A. As far as damage goes, there's
5 replacement cost and actual, actual -- you
6 take a depreciated amount and then there's
7 actual cash value.
8 Q. You have homeowners insurance that
9 insures you for the replacement cost of
10 rebuilding your home own; right?
11 A. Right.
12 Q. You knew then in the fall of 2017
13 that one way to do a valuation of
14 properties was what is it going to cost to
15 tear it down and replace it; right?
16 A. That was possible.
17 Q. List for us -- you're welcome to
18 put it on the board if you need to write
19 it down, every single thing you did to
20 come up with the replacement value
21 valuation on the home?
22 A. I looked at the property
23 appraiser's website.

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1 Q. You knew when you did that that
2 the property appraisers don't appraise
3 properties for what it's going to cost to
4 tear it down and rebuild it, didn't you?
5 A. I saw that there was a land value
6 that had a total amount that the home and
7 the land value was at and then just the
8 home value.
9 Q. Are you telling Judge Benedict
10 that you thought when you looked at that
11 value that the tax assessor of Mobile
12 County had gone out there and figured out
13 how much it would cost to tear down and
14 replace each home in Mobile County?
15 A. I don't know how they base their
16 calculations on what a value of a home is.
17 Q. Did you honestly have the belief
18 at that time, Mr. Skolnik, that tax
19 assessors would go out and decide how much
20 it would cost to rebuild the houses in
21 their jurisdictions and that's the way the
22 taxes were --
23 A. I can't answer that, Mr. Campbell.

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1 Q. Sir?
2 A. I can't answer that, Mr. Campbell.
3 Q. Why not? You don't know what you
4 thought?
5 A. I said I don't know what their
6 procedure is for estimating what a home's
7 value is.
8 Q. What did you do to find out?
9 A. I looked at the website.
10 Q. Did the website tell you that it
11 was a replacement value determination by
12 the tax assessor?
13 A. It didn't indicate what it --
14 what the value was --
15 Q. Now, let's talk about a little bit
16 of the information available. I want to
17 show you pages 301 to 303. It's a
18 document. Take a moment to review that to
19 yourself and let us know when you're
20 through.
21 A. Okay.
22 Q. Do you recognize this as a
23 printout from Terminix's online customer

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1 information portal that customers can set
2 up an online account and log in to?
3 A. I'm not familiar with this
4 document. I have never seen it. But I
5 mean it's obviously a Terminix document.
6 Q. Are you aware of the fact that
7 your employer maintains, has in recent
8 years, a customer portal where customers
9 can set up an online account with
10 Terminix and go in there and manage how
11 they pay for their services and review
12 their service tickets and schedule
13 appointments and things like that?
14 A. Yes, I've heard there is a portal.
15 Q. And if you will, this print date
16 on this is dated September 26, 2017. On
17 the last page of it it indicates that
18 there are downloadable tickets, two of
19 them for November 28, 2012, one of them
20 for subterranean termite control
21 initiation and the second one at the top
22 of the page for scrape and treat. Do you
23 see that?

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1 A. Yes.
2 Q. Would this cause you to believe,
3 as a 24-year Terminix veteran, that as of
4 September 27th, 2017, that the company had
5 a downloadable ticket that explained what
6 they did to treat this house on November
7 28, 2012?
8 MS. COX: Objection. He's
9 already testified that he's never seen
10 this document before in his life, Your
11 Honor. We would object to him
12 interpreting what any part of it means in
13 terms of what's downloadable on some
14 system that he's not familiar with as he's
15 already testified.
17 would you please repeat your question, and
18 I'm not ignoring your --
19 MS. COX: No, I understand.
20 ARBITRATOR: -- objection.
21 Q. (By Mr. Campbell) I'll back up.
22 You are familiar with the fact that the
23 company has a customer portal where

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1 customers can log in and look at their
2 service tickets, manage their payments,
3 and schedule appointments; correct?
4 A. Yes.
5 Q. Are you a Terminix customer
6 yourself?
7 A. No, I'm not.
8 Q. If their customer portal says that
9 there's a downloadable ticket available
10 for a scrape and treatment service on the
11 day the termite service was initiated
12 would that indicate to you as a Terminix
13 veteran that as of the date that was
14 printed by the customer that Terminix did
15 have a ticket showing what they did to
16 scrape and treat at the property?
17 MS. COX: Same objection,
18 Your Honor, just because he's familiar
19 that customers can have an online portal
20 does not mean he knows what documents
21 might be available. No foundation has
22 been laid that he would know what
23 documents would be available 2012, years

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1 later so I think there's no foundation for
2 these questions.
3 ARBITRATOR: That is
4 sustained, but I am going to allow
5 Mr. Campbell to ask him if he understands
6 what a term of scrape and treat might mean
7 in the industry and in Terminix in
8 particular.
9 MS. COX: Sure, thank you,
10 Your Honor.
11 A. As far as the meaning of the
12 scrape and treat, I'm familiar with scrape
13 and treat meaning, at least in the areas
14 that I've worked in, we're scraping maybe
15 some floor joist for fungus and we're
16 treating the fungus. In Alabama, I'm not
17 sure if it means the same thing.
18 Q. (By Mr. Campbell) Areas of the
19 country that you've worked is the same
20 southeastern division that includes
21 Alabama; correct?
22 A. Alabama I don't think was in our
23 region when I was in the branch.

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1 Q. Has it become the practice of
2 Terminix in the last six to nine months
3 that when a customer makes a claim for
4 termite damage that y'all take their
5 information out of the customer portal so
6 they can't look at their tickets?
7 A. I'm not aware of that or why
8 anything like that would be done.
9 Q. In terms of the company's
10 practices for responding to claims of
11 termite infestation by existing termite
12 customers, is it, to your knowledge, the
13 company's practice to go out to the
14 customer's house and inspect the area
15 identified as concerned to the customer
16 and leave the inspection of the rest of
17 the house to the normal annual inspection
18 process?
19 MS. COX: I would object
20 here again. I don't think he's laid the
21 foundation that this witness has the
22 knowledge to testify about that in
23 Alabama, as to the practices of this

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1 branch.
2 ARBITRATOR: Where did you
3 first work with Terminix?
4 THE WITNESS: In Memphis and
5 we covered north Mississippi out of the
6 branch I worked out of.
7 ARBITRATOR: Did you ever
8 work in South Alabama as a technician?
9 THE WITNESS: No.
10 ARBITRATOR: Do you in your
11 present position as national claims
12 manager have knowledge of what the
13 procedures were in this part of the
14 country in 2017?
15 THE WITNESS: No, Your
16 Honor. That's usually a technical portion
17 of it on the operation side.
18 Q. (By Mr. Campbell) Did you testify
19 what the normal post-infestation scope of
20 inspection was at an arbitration
21 proceeding 20 miles from here in Fairhope,
22 Alabama on October the 8th of 2018?
23 A. You would have to refresh my

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1 memory -- I mean I've been down here
2 before, yes.
3 Q. Howard Smith versus Terminix by
4 arbitrator was Sam Irby, the current
5 president of the Alabama Bar Association.
6 A. I think it was by video
7 conference, yes.
8 Q. And as of then, did you know what
9 the company's post-infestation
10 inspection practice was and testify as to
11 it?
12 A. Are you asking me what a typical
13 termite inspection, like when somebody
14 reports damage?
15 Q. Yes, sir.
16 A. What a manager does when they go
17 inspect?
18 Q. Right.
19 A. Typically the area of damage is
20 inspected and there's other areas that are
21 inspected. I'm talking as a rule now.
22 I'm not saying this is how the policy goes
23 everywhere, but typically the manager

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1 will inspect other areas until we're sure
2 we don't see any other damage.
3 Q. Your office publishes a manual
4 internal to the company on how to handle
5 claims; correct?
6 A. Yes.
7 Q. So to be clear, those areas that
8 aren't suspected as having termite damage
9 wouldn't be inspected as part of the claim
10 evaluation process; correct?
11 A. It could be. If I was doing the
12 inspection, I would inspect the rest of
13 the house.
14 Q. In your arbitration testimony,
15 Volume III on October 9, 2018, at page 536
16 line 14 through 37; excuse me, pages 536
17 line 14 through 537 line 4, this was your
18 testimony. Question, so just to be clear,
19 those areas that aren't suspected as
20 having termite damage wouldn't be
21 inspected as part of the claim evaluation
22 process; correct? Answer, by Mr. Skolnik,
23 we would inspect any visible areas in the

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1 area of damage that's identified and
2 determine if the damage extended beyond
3 where we knew it existed. Question, and
4 identifying potential termite infestation
5 in damage areas would then be allowed to
6 the normal annual inspection process;
7 correct? Yes. Question, and that normal
8 annual inspection process would not
9 include looking under the insulation and
10 the crawl space; right? Answer, not
11 typically, not typically. That was your
12 testimony three months ago.
13 A. Okay. Is that also when we were
14 discussing and you were questioning what a
15 contractor would be responsible for
16 reporting if they found damage?
17 Q. What Terminix's agent who's
18 arranging for and making the necessary
19 repairs on a property, yes, sir.
20 A. Okay. Yeah.
21 Q. So to be clear about this, at this
22 house that two retirees, who thought there
23 was termite damage in the back bedrooms

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1 and bathroom areas and they didn't have
2 any reason to think there was damage on
3 the front wall of their house, Terminix
4 wouldn't have its contractor go inspect
5 the front wall of the house; correct?
6 A. The contractor would start work
7 here and if the damage spread, then the
8 contractor would follow the damage until
9 it ended, which I believe was done in this
10 case.
11 Q. But if there was a gap in damage
12 between the back part of the house and the
13 front part of the house, your contractor
14 that's out investigating the damage claim
15 for you is not going to go inspect walls
16 that haven't been pointed out to him as
17 potentially damaged; correct?
18 A. We're not going to go, you know,
19 tearing walls open, if there's no reason
20 to. I believe I've testified to that
21 before too.
22 Q. Okay. The inspection of those
23 other areas that aren't suspect and found

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1 by the contractor to be connected with
2 ongoing termite damage are left for
3 inspection in the normal annual inspection
4 process as you understand the claims
5 process; correct?
6 A. Yes.
7 Q. And so if damage to the back of
8 the house wasn't known by the contractor
9 to be connected to the front of the house,
10 Terminix would rely on its annual renewal
11 inspectors to find mud tunnels on the
12 front wall?
13 A. If the contractor is working over
14 here and they have totally identified and
15 eliminated all the damage in this area and
16 it has gone no further, then there is no
17 reason to inspect the rest of the house as
18 far as doing any destructive testing.
19 Q. And that holds true even if the
20 company sold the termite prevention bond
21 and the customer file indicated that not
22 one drop of chemical was documented as
23 having been used; correct?

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1 A. I'm not understanding your
2 question.
3 Q. That practice of not inspecting
4 the entire structure carefully during the
5 claims investigation process would be
6 followed even where the customer file
7 shows that the house was never treated to
8 begin with by the company and left
9 unprotected for years?
10 A. We're going to follow the normal
11 routine visible inspection when we go out
12 on a yearly inspection.
13 Q. Sir, I'm talking about the claims
14 process now.
15 A. Okay.
16 Q. I apologize for not being clear.
17 As part of the claims process that's
18 described in manuals published by your
19 office, your employees and your
20 contractor, if you hire one, are not going
21 to conduct a careful inspection of the
22 entire property but only those areas
23 suspected by the customer and found by the

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1 contractor when he starts there to be
2 connected to that area, except in the
3 normal inspection, annual inspection
4 process; correct?
5 A. We're going to inspect the areas
6 that we identify as being termite damage
7 when we're at the house.
8 Q. Can you, sir, as a trained termite
9 man, identify any entomologically sound
10 reason for that practice?
11 MS. COX: We would object
12 based on him asking him to testify on any
13 entomologically sound principles. He's
14 not established any foundation that this
15 is an appropriate witness for that.
16 ARBITRATOR: I'm going to
17 sustain that, but, Mr. Campbell, if you
18 can lay a foundation then.
19 Q. (By Mr. Campbell) You're a bug man
20 who ran a termite department for years
21 for, the largest termite company in the
22 world; correct?
23 A. Correct.

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1 Q. Now, can you think of any
2 entomologically sound reason for not
3 conducting a careful inspection of an
4 entire structure that is known to be
5 infested with termites when your own file
6 shows that not a drop of chemical was
7 applied to prevent termites to that
8 structure for years?
9 MS. COX: You're talking
10 about the contractors doing an inspection?
11 I don't understand the question.
12 A. You're going to have to define a
13 careful inspection for me. Are you
14 talking about a visual inspection or are
15 you talking about having our contractor
16 go in and start demolishing every wall
17 in the house?
18 Q. (By Mr. Campbell) I'm talking
19 about a competent trained Terminix
20 inspector who understands termite habits
21 and biology and has been through the
22 Aspire training and has been equipped with
23 all the tools that are described in your

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1 training materials, including probing and
2 sounding tools, hard hats, coveralls,
3 dental mirrors, thermal imaging cameras,
4 and getting on their hands and knees and
5 probing and sounding the entire structure
6 carefully to look for damage in wood
7 that's not visible to the naked eye and to
8 look for telltale signs of termite
9 infestation like small specks of dirt that
10 are in places where you wouldn't normally
11 expect to find them. That kind of
12 inspection.
13 A. Well, termite damage generally, as
14 it extends out, it's all connected. So
15 rarely have I been involved in a case
16 where you have damage in just multiple
17 areas of the house. So generally when we
18 go out and we do a termite inspection we
19 identify the areas of damage that we
20 visibly see. The contractor is assigned
21 to do the repairs. The repair estimate is
22 approved. Once tear-out begins, if the
23 damage spreads then we would follow up

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1 with where the damage is being found.
2 ARBITRATOR: I think the
3 question, and correct me if I'm wrong, is
4 talking about an inspection where the
5 house has never been treated at all but
6 has been under contract for that
7 treatment.
8 THE WITNESS: We would still
9 do the typical inspection that we normally
10 would do.
11 ARBITRATOR: But initially
12 would you not -- if the initial treatment
13 is, in fact, performed, a very thorough
14 inspection would have been done before the
15 treatment; is that correct?
16 THE WITNESS: Yes.
17 ARBITRATOR: Okay. And if
18 the records show, as this -- as in this
19 case, that the initial treatment
20 apparently was not done at all, would the
21 inspector not study that file before going
22 out when there is a claim made or a
23 request to come look at damage that they

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1 are seeing and an attempt made at that
2 point for the Terminix inspector, not the
3 contractor, but the Terminix inspector
4 himself, to make a very thorough
5 inspection to see if there's any other
6 damage other than what the client has
7 called about? I know that's a long
8 question, but answer it if you can.
9 THE WITNESS: Your Honor,
10 I'm not trying to be evasive, but I really
11 think that, you know, ultimately it is
12 left up to the licensed manager in that
13 office to determine, based on what he or
14 she knows, what inspection do have I to
15 make out there. I think that ultimately
16 it's, you know, it's just like a doctor
17 that's in surgery, and there's an issue
18 with maybe the shoulder, do they go look
19 in the leg or some place else when there's
20 absolutely nothing that indicates they
21 should.
22 ARBITRATOR: But the doctor
23 doesn't have a contract to have been

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1 looking at -- I'll withdraw that.
2 Certainly in this case, there is a
3 contract, is there not?
4 THE WITNESS: Yes.
5 ARBITRATOR: Okay.
6 MS. COX: Judge, if I may
7 interject. I'm not sure if there's a
8 disconnect between you of asking about
9 sort of annual inspections and what should
10 be done versus the claims process, which
11 is --
12 MR. BELL: She was asking
13 about the claims process I think.
14 MS. COX: That's what I'm
15 not sure about.
16 ARBITRATOR: Well, yes, when
17 there is a claim made or a request from
18 the customer to have the company come out
19 and look at what they suspect as termite
20 damage, would the inspector, before they
21 come, review the file, see that perhaps as
22 in this case as it appears that no initial
23 treatment was done, would they then do a

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1 thorough inspection as part of the claims
2 process?
3 MS. COX: I understand,
4 thank you.
5 THE WITNESS: The manager is
6 asked to review the file before they go
7 out.
8 ARBITRATOR: And that would
9 be the branch manager or the service
10 manager?
11 THE WITNESS: Either one,
12 either one would handle a claim out of the
13 branch.
15 Thank you. Mr. Campbell.
16 Q. (By Mr. Campbell) To follow up,
17 Mr. Skolnik, you were involved in
18 the John and Danielle Siegel claim --
19 claims, plural?
20 A. I don't recall.
21 Q. Do you remember that claim on Dog
22 River in Mobile, Alabama by a doctor and
23 his wife where they had three recurring

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1 damage claims to the front wall of their
2 house, and during none of those
3 inspections did the claims investigator
4 open the garage door that was three feet
5 away, walk eight feet in and see whether
6 there was a massive termite tunnel coming
7 up a cold joint?
8 A. Mr. Campbell, I can't speak
9 to that claim. I don't really have any
10 knowledge of it. I know it was a lawsuit.
11 Q. Were you involved in the Johnny
12 Eaton claim where there was an area of
13 damage to the back garage, utility rooms,
14 kitchen and then termite damage located
15 30 feet away on the front of the house?
16 A. I don't recall Eaton.
17 Q. Do you recall Edward Ladd's case
18 --
19 MS. COX: Objection, Your
20 Honor. Just a moment, Objection on the
21 same grounds that we discussed yesterday,
22 it's inappropriate to be asking the
23 witness just about random other customers

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1 and Tom's characterizing them for the
2 court here when there's been no evidence
3 necessarily presented of these others.
4 Tom was allowed to go in with Mr. Bello to
5 a certain number of other customers and
6 discuss those, and so if he wants to ask
7 about those, then we would say that might
8 make sense, but this is not an appropriate
9 area of questioning for this witness.
11 However, this witness is the claims
12 manager for the whole country, and I'm
13 going to allow him to answer a few
14 questions, perhaps particularly the ones
15 that you brought up yesterday with
16 Mr. Bello, as to whether or not he recalls
17 anything about those claims.
18 MS. COX: Sure, and we would
19 just -- I guess I'll just state my
20 objection. I understand your ruling, but
21 based on relevance of his ability to
22 somehow remember these claims from other
23 cases or other times.

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1 MR. BELL: He ought to start
2 with the foundation to see if he has
3 knowledge before he makes a speech about
4 what the case was about. That's the part
5 that makes it inappropriate.
6 ARBITRATOR: All right,
7 Mr. Campbell, if you can do that. If you
8 can ask him if he has knowledge of
9 particular claims, you may ask him that
10 before going into his questions -- or your
11 questions about the nature of those
12 claims.
13 Q. (By Mr. Campbell) Do you have
14 knowledge of the Edward Ladd case in
15 Mobile, Alabama?
16 A. No, I've heard about it, but I was
17 not involved with it.
18 Q. You have knowledge of the Bobby
19 Sellew claim in Warrior, Alabama; correct?
20 A. What's the last name?
21 Q. Sellew.
22 A. No.
23 Q. You have knowledge of the

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1 Christine Britt claim on Dog River in
2 Mobile, Alabama; correct?
3 A. That name is familiar. I may be
4 involved with that to a very small extent.
5 Q. You have knowledge that at that
6 house there were areas of disconnected
7 termite damage found in that structure;
8 correct?
9 A. I didn't really get into the
10 details of that claim before it turned
11 into a lawsuit.
12 Q. You have knowledge of the
13 Cortopassi versus Terminix claim that was
14 tried in Birmingham, Alabama; correct?
15 A. No.
16 ARBITRATOR: Let me ask you
17 one question, and I apologize to
18 Mr. Campbell for interrupting.
19 You have said in previous
20 testimony this morning that you were more
21 likely, if I'm stating this correctly, to
22 make more detailed notes if you were
23 dealing with an attorney. Now, did you

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1 not say thereafter, that if an attorney
2 was involved it went to legal and you
3 didn't have anything else to do with it?
4 THE WITNESS: No, that's
5 only if it went to a lawsuit. There's a
6 lot of cases as these that Mr. Campbell
7 has been naming off that never came across
8 my desk. So there's claims that come
9 through that I have never put my eyes on
10 and never had any reason to review it.
11 Sometimes we have customers that have a
12 claim and they just, they don't want to
13 deal with it, so they call their attorney
14 to deal with it. And I mean, sometimes I
15 see it. Unless we get a letter of
16 representation I don't see it.
17 ARBITRATOR: All right, but
18 if it goes as far as a lawsuit, do you
19 then have some -- are you more likely to
20 have connection with a claim if it
21 actually results in litigation?
22 THE WITNESS: No, Your
23 Honor. Now, once it goes to litigation

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1 and the attorneys handle it, at the most I
2 will get is, you know, an email from
3 either one of the attorneys or one of the
4 paralegals in the litigation department
5 asking if I have any records on it.
6 ARBITRATOR: You may
7 proceed, Mr. Campbell.
8 Q. (By Mr. Campbell) You have
9 knowledge of the Cortopassi claim in
10 Midtown Mobile; correct?
11 A. No, sir.
12 Q. You have knowledge of the Carol
13 Dorsey, Carolyn and Robert Dorsey claim,
14 in Midtown Mobile; correct?
15 A. No, sir.
16 Q. You have knowledge of the Chris
17 Kaleefy claim in Daphne, Alabama; right?
18 A. I was involved -- no, not Kaleefy.
19 I was thinking of Simpsiridis or -- I
20 can't remember how you pronounce it.
21 Q. Chris Kaleefy, where your
22 office approved a $67,000 initial payment
23 of a claim?

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1 A. That's possible, but I may have
2 not have been involved in any discussions
3 with it.
4 Q. You don't recall that in that
5 house there was damage found that was
6 disconnected on all four walls of his
7 house?
8 MS. COX: Your Honor,
9 objection. We're still making speeches
10 about --
11 ARBITRATOR: Sustained.
12 MR. CAMPBELL: I'm trying to
13 refresh his recollection.
14 A. No, sir, I don't recall anything
15 about that claim.
16 Q. You were involved in the
17 Simpsiridis case on Ono Island?
18 A. I was somewhat involved with that
19 one.
20 Q. Disconnected termite damage in
21 that house?
22 A. I know there was some extensive
23 damage found on I believe it was the first

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1 floor.
2 Q. What you're saying is that in your
3 experience as the claim manager in last 21
4 years, just to make sure what we've been
5 covering, you have never, ever in that
6 career seen a house where what y'all have
7 discovered is it's infested and damaged
8 with termites in one area and then it's
9 infested and damaged with termites in
10 another?
11 A. I don't think I said never, ever.
12 I said it's very rare. And I don't recall
13 in that last case if the damage was
14 contained in one large area downstairs or
15 if it was in different locations.
16 Q. And relative to attorneys, I'm not
17 asking you for what any communications
18 were, but did you or did you not consult
19 with the company's lawyers before deciding
20 to offer cash to my clients instead of
22 repairs or replacement?
23 MS. COX: Your Honor, we

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1 would object to that. There's been
2 testimony already that there was a
3 meeting, and this feels an awful lot about
4 him implying what legal advice may or may
5 not have been.
6 ARBITRATOR: I'll sustain
7 that.
8 Q. (By Mr. Campbell) I'm not asking
9 you whether you got any legal advice, but
10 whether the lawyers were consulted prior
11 to --
12 MS. COX: He's just
13 restating the exact question you just
14 sustained, Your Honor.
16 sustained, Mr. Campbell, and I think he's
17 already testified that the CEO, the CFO,
18 and I believe legal were all involved in
19 this claim.
20 MR. CAMPBELL: Let me make
21 one point. In opening statement in this
22 case, a theme of it -- there were three
23 basic themes in the opening statement.

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1 One of them is that there
2 was never an intent by anybody to do
3 anybody harm. That the opposite of that
4 is they acted with good faith. So their
5 defense in this case is that even if they
6 made bad decisions, did things they
7 weren't supposed to, it was based on good
8 faith rather than bad faith. Sometimes.
9 I haven't heard any evidence of what their
10 good faith is yet, but they haven't put on
11 their case yet. Sometimes what people say
12 is the lawyers told me it was okay or we
13 consulted with the lawyers before we did
14 this, so, therefore the implication being
15 that they were acting in good faith
16 because they made the decision after
17 consulting with lawyers.
18 If their position is that
19 that is going to be no part of their
20 argument, that they're not going to claim
21 that reliance on legal advice was evidence
22 of their good faith, then I don't need to
23 go into it. But if they're going to rely

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1 on that in any way whatsoever, then while
2 the witness is here I ought to get to ask
3 him about it.
4 MR. BELL: Let me speak to
5 that just so there's no misunderstandings.
6 What he's talking about is in a life
7 insurance or a home insurance case, a true
8 insurance contract, if a claim is denied,
9 which wasn't in this case, but if a claim
10 is denied and then the insurance company
11 says I relied on advice of counsel, that
12 is a defense to a bad faith claim.
13 There are four cases in
14 Alabama directly on point, Stewart versus
15 State Farm, Preis vs. Lexington, I've got
16 the cites here, Caitlin Syndicate
17 vs. Ramuji, and Peninsular Life Insurance
18 Company vs. Blackmon. Alabama case law
19 has consistently held that there is no bad
20 faith tort that applies to anything other
21 than an insurance contract.
22 Alabama has expressly, as
23 has virtually every state in America, has

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1 rejected the idea that bad faith applies
2 to anything other than insurance
3 expressly. There are policies about why
4 you would never do that, so he's talking
5 about defenses to a bad faith case when
6 it's not recognized under Alabama law a
7 bad faith tort that would apply to
8 Terminix. It doesn't apply. In fact,
9 it's expressly not allowed. So he's
10 talking about -- he's trying to create a
11 bad faith context tort which is not --
12 it's expressly not allowed under Alabama
13 law. The tort of bad faith refusal to pay
14 a claim has heretofore been applied only
15 to those situations where there's an
16 insurer/insured relationship.
17 The tort of bad faith
18 refusal to pay is only in the
19 insured/insurance carrier context. And so
20 the problem with even going down this road
21 is it is expressly contradicted by Alabama
22 law, expressly contradicted by Alabama
23 law.

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1 But all of that being said,
2 I will tell you we are not going to
3 present a defense in this case that there
4 was lawyer advice. This man will talk
5 about all of that. But That was important
6 to me to point that out because this is a
7 slippery slope. We're talking about a
8 tort that's not even recognized.
9 ARBITRATOR: All right. I'm
10 going to sustain that. I would like to
11 ask for those cites when we break for
12 lunch.
13 MR. BELL: Yes, ma'am.
14 ARBITRATOR: I think that
15 whether or not in a corporation there is
16 the best advice gotten from all persons
17 who are really at the top who make money
18 decisions, it's almost common sense that
19 you're going to get advice from everybody
20 you need to get advice from and we don't
21 need to say that an attorney is involved
22 with that.
23 MR. BELL: Thank you.

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1 ARBITRATOR: Mr. Campbell.
2 MR. CAMPBELL: Can I just
3 say that that's -- that he's built a straw
4 man argument. And I just want to make
5 sure that you're aware of that. He has
6 completely built a straw man argument.
7 The claims that we have in this case are
8 fraud. First of all, he's wrong. The
9 Alabama Supreme Court has recognized that
10 a service warranty can sustain a bad faith
11 claim. In an extended warranty situation
12 for an automobile, the Supreme Court has
13 recognized that a bad faith claim can be
14 stated. We're not stating that claim in
15 this case. What we're claiming here is
16 fraud, and what their defense is to our
17 fraud allegation is that we can't succeed
18 on intentional fraud because they lacked
19 the mens rea to injure someone.
20 That's why I asked the questions of this
21 witness about what was in your head.
22 Mr. Bell says we need to establish what
23 was in their head. Well, what was in your

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1 head, if not malice, what was in your
2 head? If not intent, what was in your
3 head? And you heard that evidence. But
4 the point is, to that claim they could
5 raise a basis that they relied upon legal
6 advice so that their conduct was not
7 intentionally wrongful or malicious or
8 reckless, and what I was trying to do is
9 to, in addressing that make sure that
10 they're not in any way going to rely on
11 that. And they've stipulated that they
12 aren't, so.
13 ARBITRATOR: All right. And
14 I would ask for the citations from both of
15 you before the close of the hearing so
16 that I can be quite aware of those. I
17 understand your position. I also
18 understand the exceptions or the whole
19 different line of proof that is necessary
20 for fraud, and I will consider all points.
21 You may continue,
22 Mr. Campbell.
23 Q. (By Mr. Campbell) You are aware,

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1 Mr. Skolnik, that the company has a policy
2 in place where the home office has
3 instructed their branches not -- on annual
4 inspections -- not to apply termiticide
5 unless they find an active infestation,
6 that the barrier that was in place has
7 been dug up, or there's been an alteration
8 to the structure; correct?
9 A. I'm not aware of any directive
10 being put out by the corporate office. I
11 am aware that most of your termiticide
12 labels indicate that.
13 Q. Again, from your testimony
14 October 9, 2018, in Howard Smith versus
15 Terminix, pages 334 line 21 through 337
16 line 9, question by Mr. Campbell, let me
17 ask you if you would in these books that
18 are in front of you and the arbitrator and
19 everybody else turn to the book that is
20 marked number Roman numeral eight. Would
21 you turn to Volume VIII tab number 12.
22 Do you recognize this as being a Terminix
23 technical bulletin that would go out to

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1 branches either on paper or electronically
2 on a periodic basis that would describe to
3 you some of the company policies,
4 practices, and procedures for doing that
5 work? Answer, yes. And if you would turn
6 to what's been marked on the bottom
7 right-hand corner with Bates label number
8 TMX148, the last page of that bulletin
9 before the attendant sheet, let me ask you
10 this, the attendant sheet here when
11 technical bulletins come out from the home
12 office was part of the responsibility of
13 the branch manager to train your staff on
14 whatever the home office is sending a
15 bulletin out on? Answer, yes, sir.
16 Question, and would y'all record
17 their attendance in some way on a paper
18 sheet or electronically that they attended
19 that meeting? Yes. Question, and on the
20 last page, TMX148 here, relating to annual
21 inspections, did the home office restrict
22 the ability of branches to perform
23 re-treatments to properties except in

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1 situations listed in this annual
2 inspection checklist. Mr. Richards
3 objected. The arbitrator,
4 did they say that again. By Mr. Campbell,
5 did the home office in a service bulletin
6 restrict the branches from doing a
7 re-treatment without either an active
8 infestation or disruption of the treated
9 zone? Well, I don't know that I asked if
10 we could do it and I was told that we
11 couldn't. If I were the branch manager
12 reading this I would read this to say that
13 you couldn't do that.
14 Your claim manual that you have
15 published, I want to go into that. That
16 claim manual does not require an
17 evaluation of the initial treatment to
18 see if it was nonexistent or incomplete
19 and the replacement of that liquid termite
20 treatment if those circumstances are found
21 to exist; correct?
22 A. Do you have a copy of that? I
23 believe it's been revised a couple of

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1 times of which one you're speaking about.
2 MR. BELL: Judge, I'm going
3 to run to the rest room, but please don't
4 stop. I just didn't take my break when
5 you did. I'll be right back.
6 MR. CAMPBELL: It's
7 Exhibit 33 in those books.
8 ARBITRATOR: Did you say 33
9 or 34, Mr. Campbell?
10 MR. CAMPBELL: That's the
11 wrong manual.
12 ARBITRATOR: Okay.
13 MR. FALLS: It's 158.
14 Q. (By Mr. Campbell) Do you need the
15 question again?
16 A. Yes, sir.
17 Q. The question was in the termite
18 damage claim manual that now has been
19 provided to you as Exhibit Number 158, did
20 you write in that manual that these things
21 have to be done when there is a termite
22 damage claim, must an evaluation be done
23 of the initial treatment to determine if

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1 it is incomplete or nonexistent, and if
2 so, that that treatment be provided to
3 bring the service up to standard?
4 A. Which page is that on?
5 Q. I'm asking you if that is in the
6 manual that you wrote as a requirement of
7 the termite damage claims process?
8 A. To be honest with you,
9 Mr. Campbell, I don't have this manual
10 memorized.
11 Q. I can't point it to you --
12 A. Okay.
13 Q. -- because I don't think it's in
14 there, which is the point of my question.
15 A. Yeah, I didn't author this. My
16 previous claims director did.
17 Q. Do you have any reason to believe
18 that that requirement is in the claims
19 manual?
20 A. I'm not sure. Like I said, if you
21 could point me to it, I would be happy
22 to look at and it give my
23 opinion on it.

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1 MR. CAMPBELL: We'll offer
2 the claim manual.
3 (Plaintiff's Exhibit No. 158 was
4 marked and offered.)
5 Q. One thing you do require in the
6 claims manual, this gets to a point Judge
7 Benedict asked you about, The claims
8 manual does require making use of the
9 contract and the file documentation to
10 determine whether or not the company is
11 liable to pay the claim; correct?
12 A. I believe I answered that it
13 suggested a manager look at the file
14 before they go out to the property, yes.
15 Q. And was the determination made
16 here that the company was liable to
17 arrange for and make repairs or replace at
18 my client's home?
19 A. Yes.
20 Q. And was a determination made that
21 the company had never treated this house
22 from 2012 through some point in 2016 when
23 active infestation was discovered and that

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1 that was the cause of the termite
2 infestation?
3 A. I believe there was some
4 discussion on that, yes, sir.
5 Q. And was it determined within the
6 company that that's what happened?
7 A. Yes.
8 Q. Was any excuse or reason for why
9 that happened ever determined?
10 A. I think there was some information
11 given, you know, we're always looking to
12 see what causes issues and I think there
13 was some information provided that showed
14 we could have done things a little bit
15 different at this house.
16 ARBITRATOR: Excuse me, I
17 didn't hear the last bit of your answer.
18 THE WITNESS: I said I think
19 there was some information provided that's
20 documented that shows that there was some
21 things that we could have done different
22 on the house.
23 ARBITRATOR: That you did

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1 differently on the house?
2 MR. BELL: No, that we could
3 have done differently.
4 ARBITRATOR: That you could
5 have done differently, thank you.
6 Q. (By Mr. Campbell) Was the
7 determination made that through the 2000s
8 and 2010s that it was the company's
9 practice to perform incomplete termite
10 treatments in Alabama as testified to in
11 hearings before Judge Benedict by your
12 former regional manager, Terry Henson,
13 whose name was on that claim approval
14 form?
15 A. I'm not familiar with that.
16 Q. Did anybody, to your knowledge, or
17 you, ever inform my client, Ms. Fitzgerald
18 and Ms. McLaurin, that the reason their
19 home was infested with termites is because
20 the company had failed to do their initial
21 termite treatment?
22 A. I don't know if anybody had that
23 discussion with them or not.

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1 ARBITRATOR: I sorry, I'm
2 having trouble hearing you over the air
3 conditioner.
4 MS. COX: Try to speak up a
5 little bit.
6 ARBITRATOR: Would you mind
7 repeating that?
8 THE WITNESS: Sure. I'm not
9 aware that any discussion was made. It
10 could have been made. I didn't have one
11 with the customers, so I'm not sure if the
12 local office did or not.
13 ARBITRATOR: About whether
14 or not the initial treatment was ever
15 done?
16 THE WITNESS: Correct.
18 Thank you.
19 MR. CAMPBELL: We offer
20 Exhibit Number 90 and 91, the testimony as
21 Terry Henson as well as 105, 106, 107, 108
22 and 109, the testimony of Terry Henson,
23 and Exhibits 155 through 157 and 161, and

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1 Exhibit Number 167 and 168.
2 (Plaintiff's Exhibit Nos. 90, 91,
3 105-109, 155-157, 161, 167, 168
4 were marked and offered.)
5 MS. COX: We would offer
6 objections for the reasons we've stated
7 before about excerpts of testimony or
8 testimony from other actions, and we would
9 preserve and reserve all of objections,
10 we'll take a look at those and reserve all
11 objections if we could. Thank you.
12 MR. CAMPBELL: We offer
13 Exhibit 236, the testimony of Terry Henson
14 regarding the scope of the re-treatment.
15 (Plaintiff's Exhibit No. 236
16 marked and offered.)
17 MS. COX: Same objection.
18 ARBITRATOR: Your objection
19 is noted, thank you.
20 Q. (By Mr. Campbell) Whether it's in
21 the manual or not, Mr. Skolnik, do you as
22 the national damage manager of termite
23 damage claims have a practice of seeing an

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1 evaluation of the initial treatment and
2 whether it was non-existent of complete
3 and requiring some documentation by you at
4 the home office that any deficiencies have
5 been corrected during the claims process?
6 A. No.
7 Q. Why not?
8 A. That's not part of what I do. My
9 job is to try and get a claim settled and
10 resolved in the best way that would make
11 the customer happy.
12 Q. I know sometimes in trials we
13 testify and we're nervous and something
14 doesn't occur to us when a question is
15 asked, but when we go on and we're
16 answering other questions a better answer
17 occurs to us.
18 After having had the opportunity
19 to go through this questioning here, has
20 anything else occurred to you to explain
21 why the terms of the contract would allow
22 the company to make a cash offer rather
23 than following through with arranging for

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1 and making the necessary repairs or
2 replacement to this property?
3 A. Well, once again, you know, I was
4 trying to figure out a best way and fair
5 way to get it resolved with Ms. Fitzgerald
6 and Ms. McLaurin. I think we were dealing
7 with Ms. Fitzgerald. I know at one time I
8 believe they had a contractor that they
9 had chose come in and look at it and turns
10 out that contractor couldn't do the work
11 so our contractor re-engaged. So there
12 are occasions where a customer prefers to
13 use their contractor and we'll discuss, we
14 will review their estimate and discuss the
15 cash settlement at that time.
16 Q. Did you know when that decision
17 was made that these were retired women in
18 their 70s with no experience managing
19 large scale construction projects?
20 A. Mr. Campbell, when I'm dealing
21 with a customer, age isn't factored in. I
22 think that would be total discrimination
23 if I factored in somebody's age. It

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1 doesn't matter to me what the person's
2 gender is, color. I treat everybody in
3 the same respectable fashion.
4 Q. And you considered making the
5 decision to stop honoring the company's
6 pledge to arrange for and make the
7 necessary repairs or replacement to be
8 respectful treatment of Ms. McLaurin and
9 Ms. Fitzgerald?
10 A. Again, I was trying to determine
11 the best method to handle the case to get
12 it resolved as quickly as we could. If
13 that wasn't acceptable, then I was open to
14 any other possibilities that they had.
15 Q. Explain to us how you could make
16 that determination without knowing what
17 the replacement cost of the house was.
18 A. Again, I went with information I
19 had at the time. If I could have handled
20 it different, I would have. If there was
21 some other way I could have approached it,
22 I would have but at the time with the
23 information I had, that was the best

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1 resources that I could refer to.
2 Q. Along this area of the coastal
3 region, how many contractors does Terminix
4 use to make repairs that would be
5 competent to give an estimate for the
6 replacement cost of this home?
7 A. We probably have, I would say,
8 four to six in our network. Not all of
9 them -- some of them work in Gulf Shores
10 and some of them work in Mobile only.
11 Q. And how many of those four to six
12 contractors were consulted and asked to
13 give an estimate for the replacement cost
14 for this house?
15 A. I didn't ask any of them to.
16 Q. List every good reason for not
17 doing that.
18 A. I don't have one. I mean, you
19 know, the way I looked at it if I'm
20 offering somebody what I have found to be
21 the value of the house, then it was my
22 opinion at the time that that was a fair
23 offer.

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1 ARBITRATOR: Let me ask a
2 question here. Is it your understanding
3 or your belief that the tax assessment on
4 say your property is actually the market
5 value or is it less than that?
6 THE WITNESS: Well, where I
7 live in Tennessee there have been years
8 where we've been happy with the assessment
9 that they've come back at and listed on
10 houses. There's been some years where we
11 haven't been happy.
12 ARBITRATOR: I didn't ask
13 you whether or not you were happy with it.
14 I think any homeowner would be happy if it
15 were assessed lower than one thought it
16 was worth because that means you would pay
17 lower taxes.
18 THE WITNESS: Uh-huh
19 (affirmative).
20 ARBITRATOR: What I'm asking
21 you is whether or not you think the tax
22 assessment done by the county in which the
23 property is located is representative of

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1 the fair market value at the time the tax
2 assessor makes that assessment?
3 THE WITNESS: I really don't
4 know, Your Honor. That's the honest
5 truth. I really don't know. You know, at
6 the time I guess there could have been
7 some comparisons made to Zillow, you know,
8 maybe gone onto Zillow to get what the
9 value of the house was in their opinion,
10 but I wasn't aware of that site at the
11 time.
13 Mr. Campbell.
14 MR. CAMPBELL: Nothing
15 further.
16 CROSS-EXAMINATION
17 BY MS. COX:
18 Q. All right, Mr. Skolnik, I have a
19 few. Did Terminix ever deny a claim that
20 Ms. McLaurin and Ms. Fitzgerald made in
21 this case?
22 A. Never.
23 Q. Did Terminix ever deny any

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1 contractor's request for approval to do
2 additional work on this house?
3 A. No.
4 Q. Let's -- I want to make sure we
5 fully understand sort of the narrative of
6 your involvement, because there were some
7 questions but I want to make sure Judge
8 Benedict understands sort of when you got
9 involved and how that came to be. So can
10 you just tell me in your words what's the
11 first thing you remember happening with
12 regard to this claim and your involvement
13 with it?
14 A. I got a call from I want to say it
15 was Ken, that the contractor had advised
16 him that more damage was found than I
17 guess the building inspector felt like it
18 perhaps met the 50 percent rule that they
19 had, to where the house had to be -- the
20 rest of the house had to be brought up to
21 code.
22 Q. Okay. So what is your
23 understanding of that 50 percent rule?

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1 What was it at the time I guess is what I
2 should be asking. What do you mean by
3 that?
4 A. As far as the amount of damage to
5 the home, was basically over 50 percent.
6 That's -- that was my understanding of it.
7 MS. COX: Don, would you
8 mind pulling up DX1-441 for me please?
9 MR. STUMP: What DX number?
10 I'm sorry.
11 MS. COX: DX1-441.
12 MR. STUMP: I don't have
13 that.
14 MS. COX: DX1, dash, 441.
15 How about TMX106? There we go. And would
16 you mind just zooming in where it has
17 Mr. Skolnik's name, please, so we can have
18 a closer look at it.
19 Q. Just to sort of make sure we
20 understand the timeline of your
21 involvement, Mr. Campbell asked you some
22 questions about this particular entry
23 where you were approving a supplement for

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1 the contractor, is that right, for
2 $43,650?
3 A. Correct.
4 Q. And What's the date on this,
5 Mr. Skolnik?
6 A. July 18, 2017.
7 Q. And looking at that date, does
8 that give you any estimate of when you
9 first became substantively involved in
10 assisting with this claim?
11 A. That was pretty much the first
12 time I had view of it.
13 Q. Okay. So I think you said a
14 minute ago, but I was kind of looking for
15 a document, as I was listening, but I
16 think you said that you understood that
17 the 50 percent related to the amount
18 of damage in the home; is that right?
19 A. Correct.
20 Q. Were you ever thinking that the
21 50 percent related to the value of the
22 home?
23 A. No.

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1 Q. And I mean, do you know that
2 Dauphin Island building ordinance as we
3 sit here today?
4 A. No, I don't.
5 Q. So what information were you going
6 on in trying to help make a determination
7 about what to do next after that happened?
8 A. I was going on, relying on
9 information the contractor provided and
10 conversations he had with the building
11 department.
12 Q. Several questions were asked of
13 you on direct examination about why you or
14 why Terminix quote/unquote stopped work on
15 this house. Did you ever tell anybody to
16 stop work on Ms. McLaurin and
17 Ms. Fitzgerald's home?
18 A. No, I never told anybody to stop
19 work.
20 Q. Did anyone at Terminix to your
21 knowledge tell anybody to stop work?
22 A. No.
23 Q. Do you have an understanding of

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1 why work was stopped on this home at some
2 point?
3 A. I believe it was being held up by
4 the building department because there was
5 a question, you know, were they going to
6 issue a permit to proceed further after
7 the additional damage was found.
8 Q. Was that an unusual situation for
9 Terminix to find itself in?
10 A. Pretty unusual, yes.
11 Q. After you first became of this
12 situation in mid July 2017, just tell us
13 what you remember happening next in the
14 claims process.
15 A. Well, I think an engineer was
16 brought out to really determine the scope
17 of work, kind of as a second set of eyes
18 for the contractor.
19 Q. Who made the decision to bring the
20 engineer out, if you know?
21 A. Not real positive. I believe the
22 branch was involved, and had conversations
23 with the contractor and I may have been

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1 involved in one or two conversations. I
2 don't recall.
3 Q. So either you or somebody at the
4 branch, but someone at Terminix made the
5 decision to bring a contractor?
6 A. (Nods head affirmatively.)
7 Q. Or to bring an engineer I should
8 say. And what was the purpose of that?
9 A. Just to get a full scope and
10 professional analysis of what was going on
11 at the house.
12 Q. And what did you learn as a result
13 of that engineer, that process?
14 A. That the damage pretty much would
15 require, you know, the entire house be
16 brought up to code.
17 Q. Okay. Did anyone at any point
18 ever tell you that the home needed to be
19 torn down?
20 A. No.
21 Q. In terms of the claim process,
22 what would happen -- what did happen next
23 in this one? Did you make any efforts to

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1 gather other information or to find out
2 any other details about the home or the
3 claim?
4 A. Well, I looked at, you know, some
5 photos of the house. I never actually
6 went to the house. And just really took
7 the information from, you know the
8 engineer that came out and what the
9 contractor was providing and just looked
10 at that information.
11 Q. Was there any process in place at
12 the time in which the company tried to
13 look at why are we here, what's the cause?
14 A. Well, I provided a root cause
15 analysis of it that was gathered from the
16 local office, just from information that
17 was given to me, because our CEO at the
18 time asked for that information.
19 Q. Why would he want that
20 information? Why was that process in
21 place?
22 A. Well, it would certainly answer
23 any questions on a claim that required his

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1 approval, and it was there for him to look
2 at the situation, maybe some deficiencies
3 that were there, what possibly caused the
4 claim, and maybe help determine what we
5 could do better in the future.
6 MS. COX: Don, would you
7 mind taking a look please at TMX110? And
8 will you pull up that 7/18/2017, at the
9 top please?
10 Q. We've looked at these notes
11 before, Mr. Skolnik. What do you
12 recognize this particular note to be?
13 A. This was basically the root cause
14 that I mentioned a few seconds ago that I
15 gathered from the service manager, Robert
16 Steele, and typed the note on the claim so
17 those above me, if they had any questions,
18 could refer to it on, you know, what the
19 local office felt like was the result of
20 what caused the claim.
21 Q. Fair to say that you learned in
22 that process that there were definitely
23 questions about whether there had been an

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1 initial treatment or whether there was
2 Documentation for it?
3 A. Correct.
4 Q. And also, you know, fair too say
5 there were other questions that Robert
6 raised related to what potential issues
7 there may have been?
8 A. Right.
9 Q. Did you make any effort to hide
10 that information or bury it or do anything
11 with it to keep it from anybody?
12 A. No.
13 Q. Instead, did you put it right here
14 in these claim notes and make sure that
15 your CEO or anybody else who needed to see
16 it could see it?
17 A. Yes.
18 Q. And is that a good company
19 practice for Terminix to take a look at
20 the cause of problems like this and try to
21 correct them if possible?
22 A. I think so.
23 Q. Mr. Campbell asked you some

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1 questions about whether it's part of the
2 claims process to determine liability.
3 What was your ultimate determination on
4 whether or not Terminix needed to take
5 care of these customers who were making a
6 claim?
7 A. Well, I mean this is certainly
8 some information that weighed in on it,
9 you know, that when I had discussions with
10 our legal department and others that you
11 know, was brought up.
12 Q. And ultimately did you reach the
13 determination that the claim should be
14 paid?
15 A. I made recommendations of
16 settlement.
17 Q. Let's talk a little bit about how
18 we got to that recommendation of
19 settlement. And you've explained this a
20 little bit, but I just want to hear you
21 talk through it rather than answering
22 questions. Just explain to me and to the
23 arbitrator just so we're all clear, how it

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1 is that you got to the ultimate number
2 that you recommended for settling the
3 claim that ultimately ended up on
4 Mr. Stroh's letter to Ms. McLaurin and
5 Ms. Fitzgerald?
6 A. Well, as I testified earlier,
7 there was a little bit of
8 miscommunication, you know, I found out
9 later on between what the local office
10 managers were calling an appraiser and
11 what I was calling an appraiser. I was
12 really referring to a property appraiser.
13 I wanted to get the value of the home.
14 And the information I was getting back
15 was, look, we don't have anybody that's
16 willing to come out and look at it because
17 there's been litigation mentioned and they
18 don't want to get involved in that. So at
19 that point, I mean the only thing I knew
20 to do was to go to the county's website.
21 Q. At that point had anyone
22 submitted to you any sort of appraisal or
23 even just a customer's opinion of the

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1 value of the home or anything like that
2 prior to that point?
3 A. No.
4 Q. Are you qualified yourself to
5 determine what the valuation of a home
6 on Dauphin Island would be sitting from
7 Memphis?
8 A. No, absolutely not.
9 Q. Why in your mind was that a
10 reasonable -- well, was that a reasonable
11 number in your mind to talk to the
12 customers about and to offer to the
13 customers?
14 A. Well, you know, in my mind I
15 figured, okay, this is, this is a
16 reasonable number based on what the actual
17 county that the home is located in has it
18 valued at. So it's a starting point.
19 Let's start here, and if the customer
20 feels like no, this isn't accurate, come
21 back to me and let's talk about it. Give
22 me some information why you think it's not
23 accurate, and we'll look at that.

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1 Q. On direct examination,
2 Mr. Campbell asked you some questions
3 about your own knowledge of property tax
4 assessor numbers, and you sort of said
5 that you've seen them before where you're
6 happy with them versus not happy with
7 them. Could you just elaborate on what
8 you meant by that a little bit please?
9 A. Well, where I live, I mean there's
10 certainly been years where, you know,
11 everybody in the area that I live in was
12 happy with what the assessor's price was.
13 Q. And what do you mean by they were
14 happy with it?
15 A. Well, They were happy with the
16 value of the placed on the home. There's
17 been some times where it's been severely,
18 you know, overpriced, way more than
19 anybody would ever get for the house, and
20 then there's times where it's been a
21 little bit low, but normally pretty much
22 everybody is pretty happy with what the
23 value that they set on the house.

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1 Q. And did you have any reason to
2 suggest or did you have any information
3 one way or the other, you know, whether or
4 not that was the case on Dauphin Island
5 for that property tax assessor in that
6 area?
7 A. No.
8 Q. There's been some questions
9 related to the letter that ultimately was
10 sent to Ms. Fitzgerald and Ms. McLaurin
11 offering the $72,700. With hindsight,
12 with all we know now today, where we are
13 today, do you wish that letter had been
14 more clear that you were open to hearing
15 back from Ms. Fitzgerald and Ms. McLaurin?
16 A. In looking at it today, yeah, I
17 probably would have put something in there
18 that said, you know, please respond if you
19 have a different opinion or have some
20 other number involved but, you know, I
21 just kind of looked at it like I'm not
22 putting in here that this is the only and
23 final offer we're going to make to you or,

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1 you know, Terminix is not willing to
2 discuss this with you any further. There
3 was nothing like that ever put in the
4 letter.
5 Q. Did you know that when you sent
6 that letter in November of 2017, I'm a
7 sorry, Mr. Stroh sent it, were you aware
8 at time that Ms. McLaurin and
9 Ms. Fitzgerald were represented by counsel
10 already?
11 A. No, I had not received any letter
12 of representation or anything to that
13 effect.
14 Q. Do you know whether Terminix ever
15 heard back from Ms. McLaurin and
16 Ms. Fitzgerald in response to that letter?
17 A. To my knowledge, no.
18 Q. Do you know whether counsel for
19 Ms. McLaurin and Ms. Fitzgerald ever
20 reached out to Terminix or made a
21 counteroffer or responded in any way to
22 that letter?
23 A. Not that I'm aware of.

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1 Q. Did anyone, counsel or otherwise,
2 ever send you an objection to the
3 numbers that you had put or a different
4 number or some sort of appraisal or
5 anything whatsoever suggesting a different
6 number than the number you had offered in
7 the letter?
8 A. No.
9 Q. A number of questions have been
10 asked about whether or not you reviewed
11 the actual customer file or treatment
12 records. I believe you said that in this
13 particular case you did not; is that
14 right?
16 Q. Why not? Could you just elaborate
17 on that a little bit as to why that was
18 not necessary to your decision and your
19 actions in this case?
20 A. Well, basically I felt like, you
21 know, I had, I had the information, enough
22 information that I needed to make a
23 recommendation for settlement once it got

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1 to this point. Everything had been
2 running along fairly smooth I would say,
3 you know, until the additional damage was
4 found, and then it came time to just look
5 At it further and, based on the
6 information I had, that's why we made the
7 decision we made.
8 Q. Am I understanding you right that
9 you sort of knew without looking at the
10 file that you were going to try to pay for
11 the house; is that right?
12 A. Yes.
13 Q. Am I understanding you right?
14 A. Right.
15 Q. Is that why you didn't take a look
16 that technical records and the
17 specifications and that sort of thing, at
18 least in part?
19 A. It is. And, you know, technical
20 records isn't really something I get into
21 in general. You know, we have other folks
22 that analyze that and give opinions if
23 necessary, so.

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1 Q. You've never applied chemical or
2 treated in the state of Alabama and
3 probably aren't familiar with the Alabama
4 regs; is that right?
6 Q. Now, Mr. Campbell asked you some
7 questions about the contract in this case
8 and the language repair or replace. Do
9 you remember those questions?
10 A. Yes.
11 Q. And I just want to make sure we
12 all understand your testimony. When
13 Terminix offered to pay Ms. Fitzgerald and
14 Ms. McLaurin $72,700, was that an effort
15 to do anything other than repair or
16 replace or pay for the repair and the
17 replacement of the home?
18 A. No.
19 Q. Okay. Is that something that
20 happens fairly often in your line of work
21 is that you do reach cash settlements
22 rather than actually undertake the repairs
23 or replacement? And when I say you I mean

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1 Terminix in this instance.
2 A. Yes.
3 Q. Does Terminix often have
4 situations where under the contract they
5 offer money rather than offer to do the
6 work themselves?
7 A. On occasion we do. Many times
8 customers have contractors that have done
9 work on their home for years and they're
10 the only people that they trust working on
11 their home, and, you know, we make
12 arrangements to cash settle with those
13 customers. We're not going to twist their
14 arm and demand that they use our
15 contractor if they don't want to.
16 Q. And I understand your testimony
17 before that you're saying you don't know
18 that Ms. McLaurin or Ms. Fitzgerald ever
19 necessarily made that request, but that's
20 not an uncommon request to be made in
21 your line of work; is that right?
23 Q. Did you ever hear back from

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1 Ms. McLaurin or Ms. Fitzgerald or their
2 counsel saying no, we don't want the
3 money, instead we want you to come out
4 here and repair or replace this house?
5 Did you ever hear anything like that?
6 A. No.
7 Q. After you sent the letter for
8 72,700 -- and I keep saying you. I'm
9 sorry about that. I've just been -- we've
10 been sitting here a long time.
11 After the letter was sent offering the
12 $72,700 to Ms. McLaurin and
13 Ms. Fitzgerald, if they had responded or
14 if their counsel had responded with some
15 documentation of some higher or different
16 value of the house or replacement value of
17 the house, what would you have done?
18 A. I would have taken it to those
19 that I needed to and had a discussion, and
20 most likely if everything, you know,
21 checked out, if it was a licensed
22 appraiser or, you know, they had
23 information from a contractor that said

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1 well, X needs to be done, well in that
2 case I probably would have asked for, you
3 know, either another contractor or
4 independent adjuster to look at it and
5 confirm it. If everything checked out,
6 then the chances are very good that I
7 would have made recommendation to settle
8 for that amount.
9 Q. And that didn't happen here?
10 A. Didn't happen.
11 Q. Mr. Skolnik, you said a few
12 moments ago on -- it may have been hours
13 ago at this point, but on direct
14 examination you said you view your job to
15 call it down the middle?
16 A. Correct.
17 Q. You're not pulling for the
18 company, you're not pulling on one side or
19 the other, you're trying to call it down
20 the middle. Can you just elaborate on
21 that a little bit and explain to Judge
22 Benedict what you view your role to be in
23 the claim process?

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1 A. Well, Your Honor, I have to be
2 neutral. There has to be somebody, you
3 know, in each company that's kind of
4 neutral that's going to look at both
5 sides. I don't care what industry it's
6 in. And as a claims manager, you know, I
7 deal with evidence all the time, and I
8 deal with various opinions, and I have to
9 look at all that. And I just try and be
10 down the middle and not take sides. Yeah,
11 Terminix pays me a check every couple of
12 weeks, but in order for me to be
13 successful, you know, I have to make sure
14 the customer is happy also, because I'm
15 not going to get a paycheck if we don't
16 have customers. So I do whatever I can to
17 make sure that when I go home at the end
18 of the day I've done everything I can to
19 not only, you know, satisfy the customer,
20 make sure they were treated right, but
21 also that, you know, the terms and
22 conditions of our contract was followed
23 too.

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1 Now, sometimes if I find reason to
2 believe that maybe there was something
3 that we should have done that we didn't do
4 just right, then I'm always going to side
5 with that customer and recommend
6 settlement. That's basically what I do,
7 you know, I've got to have compassion in
8 my job. I can't be cold to anything
9 because I do deal with a lot of sensitive
10 situations a lot of times. So, it's --
11 and I've been very successful in doing
12 what I do, and you know, I've received
13 some compliments and, you know, that's
14 always good to hear because a claims
15 manager usually -- sometimes that's rare,
16 but I try not to be that person at the
17 insurance department when, you know,
18 they're denying your claim based on black
19 and white issues. I try to not be black
20 and white when I'm dealing with something.
21 There's always other sides to the story
22 and other things that weigh in. I may not
23 get it right all the time but I do my

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1 best.
2 Q. Mr. Skolnik, when you got involved
3 in this claim it had already been going on
4 for a period of a few months before you
5 ever -- it was on your radar; is that
6 right?
7 A. Right.
8 Q. You came in in July, and I think
9 the damage had been discovered and the
10 problem had been discovered the prior
11 December, so it had been going on for some
12 time. And then it took a few more months
13 to sort of ultimately get to where it
14 ended up.
15 With hindsight, do you have any
16 thoughts about whether that process played
17 out perfectly as it should have?
18 A. In hindsight, no, I think things
19 could have moved along maybe a little bit
20 smoother than they did, and perhaps, you
21 know, we could have resolved it a lot
22 sooner and moved towards trying to resolve
23 it a lot sooner than we did.

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1 Q. Did you ever have any intention to
2 cause Ms. McLaurin and Ms. Fitzgerald any
3 stress or any anxiety or any problems at
4 all as you were going through this
5 process?
6 A. Never. And, you know,
7 Mr. Campbell keeps referring to their age,
8 and at no time during this was their age
9 ever revealed to me. I had no idea if
10 they were 25-year-old women or senior
11 citizens. I had no idea. That's not
12 important to me as I testified earlier.
13 Q. Yes, sir. Several questions have
14 been asked and maybe I'm the only one
15 that's been a little bit confused because
16 everybody else seems clear, but several
17 questions have been asked about the
18 process of once there is a damage claim of
19 sort of what happens next in the
20 inspection process.
21 And let me just ask you
22 straight up, do you expect all the
23 contractors that are working on behalf of

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1 Terminix to go out and find the damage and
2 repair all of the damage?
3 A. Yes, when they're on a home if
4 they're working in an area and they
5 continue to find damage, they're obligated
6 to tell Terminix that there's additional
7 damage and bring that to our attention so
8 we can move towards getting it looked at
9 and their estimate submitted and approved.
10 Q. Do you expect your contractors to
11 do a thorough job in looking for that
12 damage and trying to fix all of it and
13 trying to do what needs to be done to take
14 care of these customers?
15 A. Absolutely.
16 Q. Did you expect that of R&J in this
17 case?
18 A. Yes.
19 Q. Was there ever any directive for
20 them to limit their scope of looking or to
21 only look at a little bit or anything like
22 that?
23 A. Never. I think it was pretty

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1 obvious that as they kept finding more
2 damage they submitted a supplement and
3 then we all know what happened after the
4 first supplement was submitted.
5 Q. Right. Right. And, again, was
6 there ever any directive by you or anyone
7 else at Terminix to tell them to stop or
8 stop looking or keep it quiet?
9 A. No.
10 Q. Mr. Campbell's asked some
11 questions about why Terminix didn't repair
12 and I think we've made this clear, but
13 just to be clear, to your understanding
14 was Terminix able to go back out and
15 continue working on this home after the
16 building inspector got involved?
17 A. Not at that point because there
18 were questions that had to be answered,
19 and I think the building inspector may
20 have even enlisted some help assessing it.
21 I don't recall, but I think that was
22 mentioned.
23 Q. That was not a decision you made

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1 that, hey, let's pull out, let's get out
2 of here, we're not going to do any more
3 work?
4 A. (Witness shakes head negatively.)
5 MR. BELL: Did he answer?
6 He shook his head.
7 MS. COX: I think he said
8 no.
9 ARBITRATOR: I didn't hear
10 him answer. There may have been one.
11 A. No. No.
12 Q. (By Ms. Cox) I was looking at you
13 so I understood you, but I needed to make
14 sure everybody else did.
15 Thanks, Mike.
16 And the arbitrator asked a few
17 questions, but I just want to make sure we
18 understand. She asked about when you're
19 involved related to counsel. So can you
20 just explain, again, I may have been the
21 only one who was confused, but can you
22 help me make sure we're clear on the
23 situations you would be involved in with

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1 counsel that are not in litigation?
2 A. Okay. Yeah, for whatever reason a
3 customer retains counsel to assist them
4 with their claim, that's when I get
5 involved. Usually the attorney will send
6 the local office a letter of
7 representation or they'll send it to the
8 corporate office and it usually goes to
9 the legal department. Well, if it's not
10 in litigation and involves a termite claim
11 usually those letters are always referred
12 to me. And that's when I really take
13 things out of the branch's hands and start
14 communicating with the attorney to make
15 arrangements for either the inspection or,
16 you know, what do we need to do next,
17 you know, what's your position and how do
18 we need to handle this.
19 Q. So there are cases where instead
20 of just the customer going through the
21 claim process they may have an attorney
22 help them go through that claim, the
23 traditional claim process; is that right?

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1 A. Right. There have been occasions,
2 you know, there's some customers that
3 they're very busy and sometimes well to
4 do, so, you know, they have attorneys on
5 retainer and they just pay them to conduct
6 all their business for them, and sometimes
7 we don't even get a call from the
8 customer. We just get a letter from an
9 attorney.
10 Q. And that's the next kind of part
11 that I wanted to go to. So you have the
12 situation I guess there's several things
13 that can happen. The customer can just go
14 through the claims process themselves with
15 no counsel involved; right?
16 A. Which happens 99.9 percent of the
17 time.
18 Q. 99.9 percent of the time and if it
19 gets elevated to a certain level, you may
20 see it or you may not?
21 A. Right.
22 Q. And then there are cases where a
23 customer goes through the claims process

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1 with counsel, and you may be involved in
2 that depending on the type of claim?
3 A. Right.
4 Q. And then there are separate
5 situations where there's never a claim
6 process initiated; right? The customer
7 just hires counsel before initiating the
8 claim process with Terminix?
9 A. Correct.
10 Q. And are you those the situations
11 that you are not typically involved in.
12 Those would go straight to the legal
13 department?
14 A. If it involves a lawsuit, right.
15 Q. Okay. And that's what I just
16 wanted to make sure we were clear. I was
17 a little confused about that.
18 And that's a good point by Mike.
19 I was talking instead of listening. Did
20 you say -- am I understanding you right to
21 say that there are 99.9 percent of the
22 claims you deal with are dealt with you or
23 Terminix and the customers and not having

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1 to involve counsel?
2 A. Correct. I mean we have claims
3 daily that go through that never come
4 across my desk. They run smooth. It's
5 just on those very rare occasions where I
6 have to get involved. And I'm just
7 throwing 99.9 percent out there. I don't
8 have anything to back that up. I'm just
9 saying --
10 Q. The vast majority?
11 A. -- most claims go very smoothly.
12 Q. Is there anything else,
13 Mr. Skolnik, that you think we need to
14 make sure Judge Benedict understands about
15 the claims process and about your role in
16 this particular case before I wrap up with
17 you?
18 A. I mean nothing that hasn't already
19 been said. You know, I was just basically
20 working to get it resolved and doing
21 everything I could to do that, and the
22 number may not have been, you know, where
23 it should have been. At the time I

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1 thought it was some place, you know, that
2 we could start at having a discussion, and
3 unfortunately, you know, it got to this
4 point.
5 MS. COX: Thank you,
6 Mr. Skolnik, that's all I have for now.
7 ARBITRATOR: Anything
8 further, Mr. Campbell?
10 REDIRECT-EXAMINATION
11 BY MR. CAMPBELL:
12 Q. You've testified on
13 cross-examination by the company's lawyer
14 by my count four times that you did
15 everything that you could and that you
16 tried to do your best, or words to that
17 effect. Do you really feel that way?
18 A. Yes, sir, I do.
19 Q. Did you ever call Ms. Fitzgerald
20 or Ms. McLaurin and say I'm trying to
21 figure out what your house is worth, what
22 did you pay for it?
23 A. No, sir, I didn't. The local

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1 office had a line of communication open
2 with them and, you know, I felt like if it
3 required my involvement directly with
4 Ms. Fitzgerald or Ms. McLaurin, I would
5 have been asked to get involved.
6 Q. Did you ask Mr. Stroh or
7 Mr. Steele, the two local managers doing
8 the foot work on the claim, to share with
9 you that my clients had paid $213,000 for
10 the house four years prior to you making
11 the $70,000 offer?
12 A. No, sir. I mean I felt like they
13 had an opportunity to come back and tell
14 me that or their attorney whoever that was
15 at the time.
16 Q. You testified on direct
17 examination you had no reason to believe
18 they were represented by any lawyers at
19 the time this was going on. Do you have
20 some reason that you've thought about now
21 that makes you think that you did have
22 that information or the local people did?
23 A. No. I think that's just

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1 speculation. You know, a lot of times
2 when, you know, communication kind of
3 ceases, that it's kind of an indicator
4 that possibly they're speaking with an
5 attorney.
6 Q. Explain every single reason that
7 you did not ask one of the two gentlemen
8 collecting facts for you to ask the
9 homeowners how much they paid for the
10 house?
11 A. I neglected to do so.
12 Q. Why when you called the city of
13 Mobile didn't you ask to speak with the
14 probate judge's office --
15 A. I didn't call Mobile.
16 Q. -- to see how much they paid for
17 it or the person you had called to find
18 out what the probate records show they
19 paid for it instead of what the tax
20 assessor says it was worth?
21 A. I obtained the information online.
22 I never called anybody.
23 Q. You know that probate records are

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1 public records; right?
2 A. I'll take your word for it.
3 Q. I'm not asking you to take my word
4 for it. You know that there are ways to
5 find out how much people paid for
6 property. Go to the courthouse, call a
7 real estate agent and get them to look it
8 up on the MLS system, figure out where
9 that information is on the online
10 services?
11 A. Okay.
12 Q. You knew that those resources were
13 available to you in 2017; correct?
14 A. Mr. Campbell, my apologies. I
15 didn't think of it at the time. I have
16 testified there could have been things
17 that were handled differently. I wish
18 they would have been so it wouldn't have
19 been -- ended up here, so if there was
20 something I neglected to do, you have my
21 apologies.
22 Q. Let's talk about something else
23 that may or may not be in that category.

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1 Did you or did you have anybody else at
2 Terminix ask my clients if they were
3 interested in foregoing what was pledged
4 in the contract and whether they were
5 interested as an alternative to a cash
6 settlement that would allow them to manage
7 the construction project?
8 A. No, I think that was pretty much,
9 you know, discussed in the letter.
10 Q. What is every good reason that
11 you're aware of then for not making that
12 inquiry before you sent -- before the
13 settlement offer was made for cash?
14 A. That was just something that was
15 an option, and we sent the letter and,
16 again, your clients had every opportunity
17 to come back to us and say we don't agree
18 with that, here's why, here's what we
19 want, here's why.
20 Q. What signal did you intend to send
21 to these two ladies by stopping the
22 contractors and making them a cash
23 offer --

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1 A. At the time I felt like that offer
2 was fair based on the records that I had
3 pulled.
4 Q. What was the signal that you
5 intended to send them?
6 A. I would like to settle this matter
7 with you.
8 Q. For cash rather than the company
9 fulfilling its contractual commitment?
10 A. For, again, nobody denied their
11 claim. We were trying to get it settled.
12 Q. You said you're trying to be down
13 the middle. Could you explain to Judge
14 Benedict how telling the customer you're
15 not going to perform the contract but
16 you're only going to pay cash is playing
17 it down the middle?
18 A. I would say if we weren't going to
19 be down the middle, then, somebody would
20 have came back at some point and said
21 we're not approving any of these repairs,
22 and as all the evidence suggests, we never
23 at any time denied any of the repairs or

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1 any part of the claim.
2 Q. At the same time you didn't reject
3 a repair estimate by the contractor, you
4 never got a contractor to give you an
5 estimate for replacing the house either;
6 correct?
7 A. No, we didn't.
8 Q. And that was not an accident, was
9 it? That wasn't something that you forgot
10 to do or that never entered your mind? Do
11 you have a conscious appreciation for the
12 fact that that period of time that you
13 could have asked one of your retained four
14 to six contractors to provide that
15 estimate?
16 A. I never thought of that,
17 Mr. Campbell to be honest with you.
18 Q. Is part of playing it down the
19 middle for you to know that the termite
20 damage resulted from never performing the
21 termite prevention service in the first
22 place and keeping your customer without
23 that knowledge? Is that what you consider

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1 fairly playing it down the middle?
2 A. If I was advised that there was a
3 treatment issue, then that would certainly
4 be something that would weigh into any
5 settlement discussion or decision on what
6 was going to be repaired.
7 Q. Now, the contractors that y'all
8 rely upon to find the termite damage,
9 let's find out if the following is the
10 gospel truth. To the best of your
11 knowledge, Terminix doesn't train its
12 contractors anymore on termite habits and
13 biology in order to do an inspection for
14 termites; correct?
15 A. Well, I think that contractors
16 that we have here they -- I know a few of
17 them used to work for us years ago
18 when it was the Allied franchise for
19 Terminix so they are ex-employees, they
20 know what termite damage is.
21 Q. The contractor that was assigned
22 to this job, was he a former bug man?
23 A. He formerly worked for Terminix.

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1 Q. Let's look at page 175 of the
2 document compilation in the green book in
3 front of you.
4 MS. COX: Will you say the
5 number again please?
6 Q. (By Mr. Campbell) Page 173 is the
7 first page.
8 A. Is it the Holon Engineering and
9 Construction document?
10 Q. Excuse me, what was your comment
11 again?
12 A. Is it the Holon Engineering and
13 Construction document?
14 Q. Yes, sir.
15 A. Okay.
16 Q. You received this report?
17 A. I think I did read it when it
18 initially came in, yes.
19 Q. This is July 24, 2017; correct?
20 A. Correct.
21 Q. So you knew that the engineer that
22 was sent to the property had said that in
23 order to do an adequate evaluation that

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1 he needed to take more wall coverings off.
2 What I want to ask you, sir, is why
3 you never allowed him to do that?
4 A. I never told anybody they couldn't
5 do it. This is pretty much when we
6 started looking at what the value of the
7 house was.
8 Q. Why was the Holon Engineering firm
9 not allowed to take off the wall covering
10 in an unoccupied house to determine what
11 they needed to determine to state the
12 opinion for Terminix that they had been
13 asked to provide?
14 A. Well, I think at this point if
15 you're looking at paying, you know, the
16 customer, settling with the customer what
17 we felt like was the proper value of the
18 house, then, you know, there wouldn't be a
19 need to do that. If we're going to buy
20 the house from you in essence.
21 Q. Sir, this letter was sent 13 days
22 prior to the CEO approving the second
23 supplement in August of 2017.

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1 A. Okay, well, what I'm saying is
2 this would have weighed into the decision
3 when we ultimately wanted to pay them for
4 the house.
5 Q. What's the explanation for why
6 they were not allowed to take off the
7 additional wall covering to complete the
8 evaluation that Terminix asked them to
9 make?
10 A. Well, I'm not sure they were
11 denied taking that off. Is there some
12 document that shows they were denied doing
13 what they had to do? I mean was it done
14 after they came back and said 50 percent
15 of the house is damaged? It's saying here
16 on the third page, you know, 50 percent of
17 the house was damaged, so I'm guessing
18 that's -- once a contractor got into that
19 then we're like, you know, is it going to
20 be better to, you know, offer the customer
21 the cost of the house. That's what my
22 take on it is.
23 Q. The recommendation in the letter

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1 is that we recommend that all of the
2 inaccessible areas at the time of the
3 inspection of the residence be exposed
4 and inspected for termite damage. Tell
5 Judge Benedict what was done by Terminix
6 to the best of your knowledgeable relative
7 to either following that recommendation or
8 rejecting the recommendation of the
9 engineer that your company hired?
10 A. Well, I was not in any involvement
11 directing the contractor not to open
12 anything up and I can't verify that it
13 wasn't opened. So Mr. Cowart would be
14 probably the best person to answer if he
15 opened the wall up or he didn't open the
16 wall up based on this recommendation.
17 Q. What discussions did you have with
18 your service managers or Mr. Holon or
19 anybody else about what was going to be
20 done about following up on the engineer's
21 recommendations?
22 A. I didn't have any discussion.
23 Q. Who was responsible for doing

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1 that? I'm probably going to ask them
2 questions later. Who was responsible for
3 doing that so we can direct our questions
4 to them?
5 A. I'm sure this was some discussions
6 that would have been made with either the
7 contractor or the engineer, maybe the both
8 of those. I really don't know who would
9 have been involved in that discussion.
10 Q. Who was in charge of making sure
11 that the recommendation was evaluated and
12 followed through with?
13 A. I don't know the answer to that.
14 Q. How could you make the decision
15 whether to honor the pledge in the
16 contract versus offering a -- offering a
17 cash settlement if you can answer that
18 question and you were trying to play it
19 down the middle and do everything that you
20 could do?
21 A. Mr. Campbell, I don't know. I've
22 answered that question 20 times today, and
23 I don't know how else I can answer that.

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1 At the time I thought it was an honest
2 offer. Could I have done things different
3 in determining that number, probably so.
4 But at the time I felt like it was the
5 best method I was using.
6 Q. While we're on the topic of doing
7 things differently, what I heard in your
8 cross-examination testimony was that a
9 reason that you presented the root cause
10 analysis to the president of the company
11 in a conversation that you couldn't
12 remember on direct examination was that
13 you wanted to provide him information
14 because the president of the company was
15 interested in seeing what the company
16 could do better in the future?
17 MS. COX: Objection, Your
18 Honor just to the extent it
19 mischaracterizes his testimony about. We
20 were looking at a note, not a
21 conversation. I would object on the
22 grounds.
23 ARBITRATOR: I think there

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1 was testimony about that, was there not?
2 MR. CAMPBELL: Yes.
3 MR. BELL: About the note.
4 MS. COX: What I asked him
5 about on cross-examination was the note,
6 which was a written note that he wrote
7 unquestionably, and the questioning
8 earlier was on whether they had a
9 conversation and what all it entailed and
10 that sort of thing.
11 ARBITRATOR: Perhaps I
12 missed it --
13 MS. COX: Okay. Maybe I
14 just misunderstood the question, I'm not
15 sure, but it seemed like he was conflating
16 the two topics.
18 would you --
19 Q. (By Mr. Campbell) Did you or did
20 you not have a conversation with the CEO
21 of Terminix International relating to your
22 root cause analysis?
23 A. I had a conversation with the CEO

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1 on recommendations that we settle the
2 claim. I said the note was on the claims
3 website in the event -- this was after
4 when we made the offer to hopefully buy
5 the house or purchase the house, okay.
6 The root cause was placed on there for the
7 first supplement that was submitted when
8 it went to his authority level. So then
9 after further damage was found then that's
10 when I would have a conversation with the
11 CEO and recommend settlement.
12 ARBITRATOR: Excuse me just
13 a second. Didn't you testify earlier this
14 morning on direct that you had pursued and
15 written your opinion about the cause and
16 effect, or the root cause I think was your
17 term at the request of the CEO?
18 THE WITNESS: Well, they --
19 that particular CEO requested that we put
20 a root cause on there in case they had any
21 questions. So that's what we always did.
22 If there was ever a claim anywhere that
23 required the CEO's approval I would obtain

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1 from the local manager information on what
2 they felt caused the claim and I would
3 just type that out in the claims website
4 so the CEO had that note available to read
5 when they went to approve the claim.
6 Q. (By Mr. Campbell) And what you're
7 saying is based on your communications or
8 conversation with the CEO, the reason for
9 that was to allow the CEO to determine
10 what could be done better in the future;
11 correct?
12 A. If he so chose to do so.
13 Q. And you communicated with them
14 about that in response to his instructions
15 to you as a subordinate?
16 A. I didn't ask him if he felt like
17 anything could be done differently. That
18 information was there and he could use it
19 as he wished.
20 Q. Let me ask you about information
21 about doing things better in the future
22 and the CEO's interest in the that topic,
23 okay?

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1 A. Okay.
2 Q. Did you discuss with the CEO that
3 recommendations for remedial programs had
4 been made by the Mobile branch manager,
5 Tom Hodges, another independent analysis
6 and recommendation by the Baldwin County
7 branch manager Steve Barnett, the region
8 manager for Alabama, Terry Henson --
9 MS. COX: Your Honor, we
10 would object for him to lay some
11 foundation on this. He's making a speech
12 and asking yes or no at the end. We would
13 ask for some foundation to be laid as to
14 whether he had any knowledge of what Mr.
15 Campbell's --
16 MR. CAMPBELL: Well, I could
17 cover them all. I suspect that the answer
18 no, so I'm trying to get through this more
19 quickly. His answer may be some of those
20 I talked to him about.
21 ARBITRATOR: I'm going to
22 allow the question.
23 A. Are you asking me if I ever had

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1 conversation with CEO about --
2 Q. (By Mr. Campbell) I'll let you
3 know what the question is when I finish
4 it, if I'm not interrupted this time,
5 okay?
6 A. Sounds good.
7 Q. Did you have any discussions with
8 the CEO about doing things better, about
9 independent investigations and analysis
10 that resulted in recommending remedial
11 programs for South Alabama presented by
12 any of the following: Steve Barnett,
13 the branch manager of Baldwin County; Tom
14 Hodges the branch manager of Mobile
15 County; Tony Henson -- Terry Henson, the
16 region manager of Alabama; or Jeff Storck,
17 who was then the director of the service
18 at the headquarters building in Memphis
19 and now is southeastern division vice
20 president?
21 A. I did not have any conversations
22 with the CEO about that.
23 Q. Did you have any communications

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1 whatsoever with him about that?
2 A. No.
3 Q. Did you know that he had not
4 implemented any of those four remedial
5 programs?
6 A. No.
7 Q. Have you read any of those
8 analyses or recommendations by any of
9 those four gentlemen?
10 A. I think I furnished some claims
11 data to somebody early on that were
12 working on that, and that's basically all
13 the involvement I had.
14 Q. Did you ever see their analysis of
15 that data or what their recommendations
16 were or have any involvement in making
17 comments about any of that?
18 A. No.
20 further.
21 ARBITRATOR: Ms. Cox?
22 MS. COX: Just a few please.
23 ARBITRATOR: Thank you for

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1 your appearance.
2 MS. COX: Oh, no, I do have
3 a few.
4 ARBITRATOR: Okay.
5 RECROSS-EXAMINATION
6 BY MS. COX:
7 Q. I'm sorry, I need to speak up.
8 Mr. Skolnik, Mr. Campbell asked you some
9 questions about the Holon Engineering
10 report. Who hired Holon Engineering to
11 conduct an analysis of this home?
12 A. I want to say it was the
13 contractor. We ultimately paid for it.
14 Q. So that was done at the direction
15 of Terminix or those working for Terminix?
16 A. Right.
17 Q. And what was the purpose of --
18 just to be sure we're all clear -- what
19 was the purpose of Terminix trying to get
20 that engineer involved and find out the
21 information that he subsequently reported?
22 A. Just to be sure that we had all
23 the information.

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1 Q. And was the result of that that
2 you determined that Terminix ought to pay
3 for the house?
4 A. Yes.
5 Q. Can you comply with this contract
6 by offering to pay for repair or
7 replacement of the home?
8 A. Yes.
9 Q. Does Terminix do that every single
10 day?
11 A. No.
12 Q. Is that something that does happen
13 fairly regularly?
14 A. Not regularly, no.
15 Q. But it is something that does
16 comply with the contract to offer to pay
17 rather than to actually do repairs or
18 replacement yourselves?
19 A. If the customer is happy with that
20 and in agreement with it, then you know
21 sometimes that's what they want to do.
22 Q. But there's nothing in the
23 contract that prevents you from being able

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1 to pay cash versus actually specifically
2 performing the repairs?
3 A. No.
4 Q. Is that done in the industry
5 fairly regularly, just as Terminix does it
6 on occasion as the others in the industry
7 --
8 MR. CAMPBELL: I object to
9 that. There's no foundation for what the
10 other industry members' contracts provide
11 for.
12 ARBITRATOR: I sustain.
13 Q. (By Ms. Cox) Do you know whether
14 others in the industry make similar offers
15 of cash settlement rather than repairing
16 or replacing?
17 MR. CAMPBELL: I object.
18 that's irrelevant. It Depends on what the
19 terms of what their repair guarantee are.
21 sustained.
22 Q. (By Ms. Cox) Let me just move on.
23 Let me just move on. Was this a unique

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1 situation given the builder inspector and
2 the 50 percent issue?
3 A. It was very unique.
4 Q. Is it something that you come
5 across very often, something like this,
6 where you have a building inspector throw
7 a wrench in things, to use my words?
8 A. No, not often at all.
9 Q. Did making a cash settlement offer
10 give these customers the ability to make a
11 decision themselves about whether they
12 wanted to repair, rebuild, what they
13 wanted to do?
14 A. It did.
15 Q. And just to be clear, when I say
16 that a wrench was thrown in, I'm not
17 intending to be critical of anybody, but
18 there were roadblocks along the way in
19 this process; is that right?
20 A. Correct.
21 Q. And same kind of question. When
22 you have been asked and questioned by
23 Mr. Campbell and you said that the

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1 customers could have come back to you with
2 a different number, you're not critical of
3 them for not doing that, are you?
4 A. Absolutely not.
5 Q. But it's just a simple fact that
6 that didn't happen and there was no
7 negotiation; is that right?
8 A. That's true.
9 Q. Our position in this case on
10 behalf of Terminix is that we're going to
11 ask the Judge, we've told the Judge this,
12 we've told Ms. Fitzgerald and Ms. McLaurin
13 this, we're going to ask the Judge to give
14 this family some money and to take care of
15 their house. Are you supportive of that
16 position in this case?
17 A. Absolutely.
18 MS. COX: That's all I have.
19 Thank you.
20 ARBITRATOR: Mr. Campbell.
21 FURTHER DIRECT EXAMINATION
22 BY MR. CAMPBELL:
23 Q. I apologize having to ask you

(205) 326-4444
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1 another question. I'm going to ask you
2 you the same question I did before, and I
3 suspect now you've got an answer based on
4 that cross-examination. What are the
5 terms in this contract that you believe
6 exist, I want you to read them to us, that
7 allow Terminix to make a cash offer rather
8 than, quote, arranging for and making the
9 necessary repairs or replacement with a
10 contractor of Terminix's choosing, closed
11 quote?
12 A. I'm not aware of any language that
13 supports making a cash offer.
14 Q. So what was the basis of your
15 answer to Ms. Cox's question when you
16 answered yes when the question was that
17 this contract allows you to make a cash
18 offer in lieu of arranging for and making
19 the necessary repairs?
20 A. There's nothing in the contract
21 that does not allow me to do that.
22 Q. And tell us what words of the
23 letter that you more likely than not wrote

(205) 326-4444
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1 for Mr. Stroh that you believe should
2 cause one to think that that is an offer
3 to negotiate a settlement rather than a
4 determination that the company is no
5 longer going to be willing to honor the
6 terms of the agreement?
7 A. I think that was an opportunity to
8 have a discussion and hopefully come to a
9 settlement.
10 Q. I'm asking you, sir, to identify
11 for Judge Benedict the words or phrases in
12 that letter that you think could fairly
13 convey that impression to its recipient?
14 A. Well, if I was a recipient and I
15 received a letter making an offer to me
16 for any amount and I wasn't happy with it,
17 then, I would be in touch with who was
18 making me the offer and say I don't agree
19 with this.
20 ARBITRATOR: Mr. Skolnik, I
21 don't think you answered his question.
22 We're not asking what you would have done.
23 I believe the question was what in the

(205) 326-4444
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1 contract.
2 MS. COX: Or in the letter.
3 ARBITRATOR: Excuse me, in
4 the letter from Mr. Stroh made that --
5 that would make it obvious to someone who
6 is not in the business of settling claims
7 or who's not in the business of dealing
8 with this in a routine manner.
9 THE WITNESS: I can't think
10 of anything in there that they could have
11 referred to other than, you know, the back
12 where the terms and conditions, the back
13 of the contract, the terms and conditions
14 discusses you know, disagreements or
15 arbitration clauses, things like that.
16 ARBITRATOR: But there's
17 nothing in the letter specifically --
18 THE WITNESS: No, nothing in
19 the letter.
20 ARBITRATOR: -- that says,
21 you know if you're not pleased, be back in
22 touch with ur, nothing to that nature?
23 THE WITNESS: Right. And

(205) 326-4444
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1 Your Honor, like I said earlier, that
2 letter could have been rephrased
3 different, you know, in retrospect. But,
4 you know, I just felt like doing what I do
5 daily and what Mr. Stroh and Mr. Steele do
6 daily, if customers are unhappy about
7 something, they voice their opinion pretty
8 quick and we just -- we received
9 absolutely no response.
11 Mr. Campbell.
12 Q. (By Mr. Campbell) And I want to be
13 clear to cover something because in the
14 opening statement there was a
15 representation that Terminix was going to
16 call as a witness everybody involved in
17 this decision so Judge Benedict would hear
18 from them. But Marty Wick, the CEO, is
19 not on the witness list, so I want to make
20 sure I cover this just in case --
21 MR. BELL: Judge, I'm going
22 to object to him characterizing opening
23 statements. He's welcome to ask a

(205) 326-4444
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1 question, but he can't characterize or in
2 my opinion mischaracterize what I said in
3 opening statement about that, and that's
4 not fair to this witness for him to
5 characterize that and ask him to comment
6 on his representation of what I said in
7 opening.
8 Q. (By Mr. Campbell) Here's my
9 question --
10 ARBITRATOR: Sustained.
11 Q. (By Mr. Campbell) -- did Marty
12 Wick, the CEO of Terminix International,
13 provide you with any basis as to why he
14 thought it was okay to pull off the job
15 making repairs and replacements under the
16 terms of the contract and offer cash
17 instead?
18 A. No.
19 Q. Based on your interaction with him
20 on any claim that had similar language in
21 the contract, has he shared any
22 information with you about what the basis
23 of his belief was that the company could

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1 offer cash instead of arranging for and
2 making the necessary repairs or
3 replacement?
4 A. No, he didn't.
5 Q. And as a human being, with your
6 experience, with you, do you recognize in
7 all honesty, a fundamental difference
8 between an agreement to arrange for and
9 make the necessary repairs and offering
10 cash to somebody for them to arrange for
11 and make the necessary repairs?
12 A. That's an option that I put out
13 there, and to be honest with you, I was
14 comfortable in doing that. At the end of
15 the day, like I explained to the Judge,
16 you know, I have to be comfortable when I
17 go home that I have done everything that I
18 can do to resolve a claim and in my
19 opinion I did everything at the time that
20 I felt like I could do to resolve the
21 claim.
22 Q. At present, in the Mobile and
23 Baldwin County area, has your claims

(205) 326-4444
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1 department adopted a policy of going to
2 customers with substantial damage claims
3 and doing exactly what you did here,
4 instead of agreeing to arrange for and
5 make necessary repairs, using an insurance
6 claims adjusting firm to make cash offers
7 in exchange for releases instead?
8 A. There may have been some.
9 Q. Hasn't the company had a basic
10 change in its philosophy of claims
11 handling under your supervision in the
12 last six months, where instead of
14 repairs under these guarantees that
15 instead, y'all are going out and making
16 cash offers in lieu of undertaking that
17 commitment?
18 A. I wouldn't call it a new
19 philosophy. I would say each case is a
20 case by case that we analyze and deal
21 with.
22 Q. That very thing is now being done
23 maybe not in every situation, but as a

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1 routine matter under these protection
2 plans; correct?
3 A. No, I wouldn't say it's a routine
4 matter.
5 Q. It's been done at least ten times
6 in the last two months in Mobile and
7 Baldwin County, hasn't it, sir?
8 A. I don't know.
10 further.
11 ARBITRATOR: I have just a
12 couple of questions. Do you know when, or
13 is there any documentation you're aware of
14 that would indicate when the work on the
15 repair of Ms. Fitzgerald's home was
16 stopped.
17 THE WITNESS: I'm not aware
18 of any particular document. The
19 contractor may have it in his records, you
20 know, the last day he may have worked out
21 there.
22 ARBITRATOR: Do you have any
23 personal knowledge?

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1 THE WITNESS: No, I don't
2 have any personal knowledge.
3 ARBITRATOR: Do you know
4 whether the work was stopped before or
5 after the letter to Ms. Fitzgerald signed
6 by Ken Stroh was sent?
7 THE WITNESS: I would be
8 guessing, but I would say that it was
9 stopped prior to the letter being sent.
10 ARBITRATOR: Thank you.
11 Anything further for either one of you?
12 MS. COX: I may just have a
13 quick one and we can have Mr. Stroh or
14 others testify about that timing, we'll be
15 sure to put that on the list to make sure
16 we clear that up for you since they were
17 involved on the ground.
18 FURTHER RECROSS-EXAMINATION
19 BY MS. COX:
20 Q. Mr. Skolnik, is this particular
21 claim a lesson learned for you about
22 communication and about the approach that
23 could be taken in a case like this?

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1 A. Definitely.
2 Q. How so?
3 A. Just know all the resources that
4 are out there and utilize them as best I
5 can.
6 Q. And if either Ms. Fitzgerald or
7 Ms. McLaurin or their counsel had reached
8 out to you and said we don't want to
9 settle for cash, we want you all to help
10 us take care of our problem in response to
11 that offer, would you have taken steps to
12 try to help them and to try to resolve the
13 problem?
14 A. Yes.
15 MS. COX: Thank you.
16 Nothing further.
18 further.
19 ARBITRATOR: You are
20 excused. Thank you very much for your
21 participation.
22 MR. CAMPBELL: I know it's
23 late. Our next witness is the architect

(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

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M&F V Terminix Fraud Trial - Testimony - Skolnik, Richard

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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