Hans C. Sherrer - Page 10




                                        -10-                                          
          petitioner's bidding procedures and costs supplied by petitioner            
          to Mr. Sager.                                                               
               In his testimony, Mr. Sager referred to two sets of                    
          documents that he used in the preparation of his report.  The               
          first set was 36 pages of photocopies of various money orders               
          (and a few receipts) assertedly representing expenses paid by               
          petitioner in cash.  The second set was seven 1-page "bid                   
          sheets," assertedly representing petitioner's estimates of cost             
          and profit for seven plumbing jobs.                                         
               The parties agreed that these documents were hearsay.                  
          Accordingly, we admitted them only for the purpose of learning              
          about the basis for Mr. Sager's testimony and report; we did not            
          admit them as proof of the matters asserted therein.                        
               B.  Copies of Money Orders and Receipts                                
               At trial, it became clear that Mr. Sager relied on the                 
          copies of money orders and receipts only to a limited extent in             
          preparing his report.  Mr. Sager testified that when he reviewed            
          petitioner's money orders and receipts, he did not try to justify           
          any of them as an actual business expense.  He further said that            
          he could not tell which of the money orders represented business            
          expenses and which personal expenses.  As petitioner's counsel              
          stated and Mr. Sager confirmed, the copies of money orders were             
          offered solely to show that when petitioner told Mr. Sager that             
          petitioner paid expenses in cash, Mr. Sager "saw things that                
          looked in that nature".                                                     




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