Download - Cassidy Deposition

DISTRICT COURT

CITY AND COUNTY OF DENVER, COLORADO

-o0o-

FRED J. JOSEPH, Securities Commissioner for the State of Colorado,

Plaintiff, Case No. 2007 CV 5218

VS. Division No. 5

LIFE PARTNERS, INC., a Texas corporation, LIFE PARTNERS HOLDINGS, INC., a Texas corporation, SCOTT PEDEN, SCOTT BEEMER, ERIC COX, LOWRY LYNNE DAVIS, GARY HANSON, TIM HARPER, KENNETH KELLER, MIKE LOWE, LARRY MICKELSON, JOHN ROTH, RALPH SIEBERT, and BRIAN PARDO,

Defendants.

Pages 1 to 57, inclusive.

SEALED AND CONFIDENTIAL

DEPOSITION OF DONALD CASSIDY, M.D.

Friday, November 21, 2008 Reno, Nevada

REPORTED BY: CHRISTINA HERBERT CCR #641 (Nevada) CSR #11883 (California)

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APPEARANCES

FOR PLAINTIFF: OFFICE OF THE ATTORNEY GENERAL, STATE OF COLORADO BY: CHRISTINE STRETESKY, FIRST ASST. A.G.

RUSSELL B, KLEIN, ASST, AO, ONE 1525 Sherman Street, 7th Floor Denver, CO 80203 303.866.5278

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BE IT REMEMBERED that on Friday, November 21, 2008,

commencing at 1:14p.m. of said day, at MOLEZZO REPORTERS.

9460 Double R Boulevard, Suite 103, Reno, Nevada, before me,

CHRISTINA M. HERBERT.. a Certified Shorthand Reporter,

personally appeared DONALD CASSIDY, M.D.

7 7 MS. STRETESKY: Good afternoon. a 9

FOR DEFENDANT LIFE PARTNERS, INC., ET AL: ROBINSON, WATERS & ODORISIO, P.C.

8 MR. MURPHY: May I interject just a moment, please?

BY: OTTO K. HILBERT, II, ATTORNEY AT LAW 9 MS, STRETESKY: Sure. 10 1099 18th Street, 26th Floor 10 MR. MURPHY: I'm Marvin Murphy, and I'm personal

Denver, CO 80202-1926 11 303.297.2600 11 counsel for Dr. Cassidy. I'd like to object on the record 12 12 for the production of certain documents requested under items

FOR DEFENDANTS BEEMER, COX, DAVIS, HANSON, LOWE, SIEBERT: 13 13 four, six and seven of the request attached to the subpoena

THE TENENBAUM LAW FIRM (VIA TELEPHONE) 1 4 duces tecum. The basis for the objection is privileged 14 BY: THOMAS TENENBAUM, ATTORNEY AT LAW

Suite 600, 10475 Park Meadows Drive 15 information, medical records pursuant to Nevada statutes, NRS 15 Lone Tree, CO 80124 16 49, specifically and also under HIPAA.

303.804.3800 16 17 So Dr. Cassidy will not be producing any of the 17 FOR THE WITNESS: 1 8 documents requested under four, six or seven of the request 18 LAW OFFICE OF MARVIN W. MURPHY

BY: MARVIN W. MURPHY, ATTORNEY AT LAW 19 and specifically with regard to the individuals identified on 19 Sierra Lakeside Professional Offices 2 0 Appendix I, pages one through five.

3748 Lakeside Drive, 4102 20 Reno, NV 89509 21 MR. TENENBAUM: Before you do that, reporter, can

775.348.501)0 2 2 you put appearances on the record, if you haven't already 21 -00°- 22 2 3 done so.

23 24 THE REPORTER: Yes. 24

25 MS. STRETESKY: This is Christine Stretesky, first

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INDEX Deposition of DONALD CASSIDY, M.D.

EXAMINATION BY PAGE

Ms. Stretesky 5

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assistant attorney general representing plaintiff, Fred Joseph, securities commissioner of Colorado.

MR. KLEIN: Russell Klein, assistant attorney general on behalf of the commissioner.

MR. HILBERT: Otto Hilbert. You all know me. MR. MURPHY: Marvin Murphy, personal counsel to

6 7 Dr. Don Cassidy.

7 EXHIBITS 8 THE WITNESS: Don Cassidy. 8 EXH. 9 MR TENENBAUM: Tom Tenenbaum.

NO. DESCRIPTION PAGE 10 MR. HILBERT: Dr. Cassidy's here too, Tom. 9 11 MR. TENENBAUM: Great.

10 I Medical Consulting Agreement 22 12 MR. HILBERT: Is there anything else we can do for 11 12 13

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Confidential Case History, 411811* Confidential Case History, Confidential Case History,

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you, Tom? MR. TENENBAUM: I'm glad I was able to catch up

14 -o00- 15 with you guys. How's the weather?

15 16 MR. HILBERT: 70 degrees in here. 16 17 MR. TENENBAUM: Beautiful. 17 18 -000- 18 19 DONALD CASSIDY, M.D., 19 20 called as a witness in the matter herein, 20

21 who, having been first duly sworn, was examined 21 22

22 and testified as follows:

23 23 EXAMINATION

24 24 BY MS. STRETESKY: 25 25 Q Good afternoon, Dr. Cassidy. I'm Christine

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1 Stretesky and I'm the first assistant attorney general with 2 the State of Colorado, and I represent Fred Joseph in the 3 matter of Fred Joseph versus Life Partners Inc., Et al.

4 You've come -- appeared here today under subpoena 5 and you're represented by counsel who has taken notice of the 6 requests for production that were attached to the subpoena 7 and has stated an objection to producing items that were 8 requested under numbers four, six and seven. And if I

9 understand correctly, the basis of that is that these are 10 medical records.

11 MS. STRETESKY: And if you could clarify, counsel, 12 is it your contention that these are medical records in the 13 possession of Dr. Cassidy as he is the physician for the 14 people listed?

15 MR. MURPHY: He need not be the physician for the 16 people. He has been requested to evaluate the medical 17 records of each one of those patients, urn, and the privilege 18 extends to those patients and may be asserted by Dr. Cassidy, 19 That includes any hard copies or electronic form.

20 MS. STRETESKY: Okay. 2 1 BY MS. STRETESKY:

22 Q Dr. Cassidy, I don't know if you have a copy of the 2 3 request in front of you, but let's just go through.

24 Have you brought with you today all communications 2 5 between you and Life Partners, urn, the Life Partners

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1 defendants from January 1, 2004, to the present?

2 MR. MURPHY: Let me clarify one thing: To the 3 extent that that could be interpreted to mean any 4 communication regarding the patients identified on Appendix 5 1.1 believe, and that information includes any medical 6 history or diagnosis or evaluation, then the same objection 7 that we made would apply to number one. 8 BY MS. STRETESKY:

9 Q Have you brought any responsive documents to number 10 one?

11 A I have a contract that I signed outlining my 12 responsibilities.

13 Q Okay. Can 1 please see that contract.

4 A (Witness complies.)

15 MR. KLEIN: Just to clarify, is this copy for us or 16 is this your only copy? 1 don't want to mark it up if it's 17 gonna go back to — I can't remember if we have another copy 18 or not.

19 MR. MURPHY: We can ask the court repotter to have 20 a copy made.

21 MS. STRETESKY: Yes. 22 BY MS. STRETESKY:

23 Q Number two asks that you produce all communications 24 between you and any of the defendants' law firms which would 25 include Mr. Hilbert's law firm, Mr. Tenenbaum's law firm and

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1 Mr. Bath's law firm from May 1 2007, to present.

2 Have you brought anything responsive to that 3 request?

4 A There hasn't been any communications.

5 Q Request number three asks that you produce all 6 communications between you and all the defendants from May 7 1st, 2007, to the present.

8 Have you brought anything responsive to request 9 number three?

10 A Only the contract.

11 MR. MURPHY: And, again, I guess I should 12 interject. To the extent that it could be interpreted 13 paragraph three -- or that the request number three could 14 include any medical records, the same objection applies. The 15 requests are quite broad in that regard. 16 BY M.S. STRETESKY:

17 Q Are you prepared to state that you have had no 18 communications with anybody from either Life Partners 19 Holdings, Inc. or Life Partners, Inc. since May 1, 2007?

20 A There are phone calls but there's no way to bring 21 those.

22 Q Okay. You didn't make notes during those phone 23 calls?

24 A No.

25 Q Request Number five asks you to produce all

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contracts between you and the Life Partners defendants. Is what you've already provided us the only

contract before -- between you and any of the Life Partners defendants?

A It is. Q Are there any addendums that you did not bring

today? A No. Q I guess before we begin with the deposition, have

you ever been deposed? A Yes, I have.

Q Okay. Under what circumstances? A Divorce.

Q I'm just gonna go over some ground rules for you. This is being transcribed by a court reporter. She's not going to be able to accurately reflect your answer if you answer with a nod of your head or an "uh-huh" or "uh-uh." If you could please answer with an actual word and as clearly as you possibly can.

I'm not out to see how long you can sit in that chair so, if you do need a break, please let me know and I'd be happy to accommodate that break. But understand that I will not allow a break while a question is pending and I would ask that you answer the question that's on the table and then we can go ahead and break.

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1 Do you understand?

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Q Sure.

2 A I do. 2

A There is an open complaint that has not been heard

3 Q Are you under any medications that would alter your

3 and that currently is in front of the board of medical 4 ability to answer truthfully today?

4 examiners.

5 A I am not. 5

Q For the State of Nevada?

6 Q Could you describe your educational background?

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A That is correct,

7 A I attended medical school at the University of

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Q And what's the nature of that complaint? 8 Texas Medical Branch in Galveston. I did a straight internal

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A Urn, although we don't know who the plaintiff is, 9 medicine internship at the University of Texas Health Science 9 the complaint was that I ordered an excessive dose of a

10 Center at Houston. I then did an internal medicine residency 10 chemotherapy agent. 11 at the same institution. And then I did a fellowship in

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Q Have you responded to that complaint? 12 medical oncology at M.D. Anderson Hospital and Tumor

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A Yes, I have. 13 Institute, also in Houston. 13

Q It's still being investigated, then, by --

14 Q When did you go through your, um — when were you 14

A Right. 15 at University of Texas, Galveston?

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Q -- the board? When was it that you were made aware

16 A Graduated 1974. 16 of this complaint?

7 Q And when did you do your fellowship in oncology?

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A April of this year.

18 A 1976 through 1978. 18

Q When do you anticipate the board determining --

19 Q Where are you licensed to practice medicine?

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A February of next year.

20 A Texas, Nevada and California, 20

Q Will there be a hearing in front of the board on

21 Q When did you get your license to practice in Texas?

21 that or you're not sure yet?

22 A 1974. 22

A I don't know.

23 Q Is it currently active?

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Q Okay. Are you board-certified in any certain

24 A Yes, it is. 24 areas?

25 Q How about Nevada?

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A Internal medicine and medical oncology.

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1 A The date when I got it?

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Q When did you receive your certifications?

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A Urn, you know, I can't remember. It seems -- I'd be

3 A 1 think '81. I'm not entirely sure. 3 guessing. Early '80s for both of them.

4 Q And you're currently active in Nevada?

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Q Have you been continually practicing as a medical

5 A Yes, I am. 5 doctor since 1974?

6 Q When did you get your Californiamedical license?

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A Yes.

7 A 1978, I'm pretty sure. 7

Q And what type of practice do you have?

8 Q Is that currently active?

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A Internal medical and medical oncology.

9 A Yes, it is. 9

Q Do you see A.I.D.S. patients?

10 Q Have you ever been disciplined by either the State

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A I'm sorry? 11 of Texas, Nevada or California?

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Q Do you see A.I.D.S. patients?

12 A No, I have not. 12

A Occasionally.

13 Q Okay. Have you ever had a complaint against you

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Q What would you say your percentage of your practice

14 filed with the boards of medical examiners for any of those

14 would be seeing A.I.D.S. patients?

1 5 states?

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A Less than 1 percent.

16 A Um, several years ago 1 think a complaint was filed

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Q Have you taken any continuing education courses on

17 by a patient but there was no action taken and it was closed. 7 A.I.D.S.?

18 Q Did you have to respond to the complaint?

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MR. HILBERT: Object to form.

19 A I think 1 produced records. 19

THE WITNESS; Yes, 1 have. I just sat for my

20 Q What was the nature of the complaint?

20 second recertification, so I've taken thousands of hours.

21 A I believe he felt that I let some of his medical

21 BY MS. STRETESKY: 22 records get out without his permission. 22

Q In what areas?

23 Q Do you hold any board certifications?

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A Well, A.I.D.S. and A.I.D.S. malignancies, part of

24 A I'm -- can I add something to the last question, 24 the medical oncologist's ...

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Q What percentage of your practice is seeing

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1 patients?

2 MR. HILBERT: Object to form.

3 THE WITNESS: Well, I'm a sole practitioner. It's 4 what I do. 5 BY MS. STRETESKY:

6 Q Is there a certain percentage of your time 7 professionally that is devoted to making or estimating life 8 expectancies?

9 MR. HILBERT: Object to form. THE WITNESS: Yes. I -- again, I'm estimating

11 here, but probably work four days a week in my practice and 12 three days a week in doing life expectancies. 13 BY MS. STRETESKY:

14 Q No days for rest?

15 A It piles up pretty quickly if you do that.

16 Q How were you introduced to Life Partners?

17 A My partner that I was practicing with at the time, 1 S whose name is Jack Kelly, had known Mr. Pardo in the past. 19 They had had some business dealings and I'm not sure of the 20 details.

21 Dr. Kelly died suddenly. He fell, hit his head and 22 had a failed hemorrhage. When Brian came into town to -- for 23 the funeral, 1 was talking with him and I told him I thought 24 I could do this job, and that's how it started.

25 Q Was Mr. Kelly your partner here in Nevada?

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1 A I have no idea.

2 Q Did you get paid at that time for each and every 3 medical summary you prepared?

4 A No.

5 Q How were you made aware that Life Partners 6 purchased a life insurance policy?

7 A When I received the check from them. Q Would there be a notation on the check or some sort

9 of documentation to show you which policies were purchased?


11 THE WITNESS: I think some of them had some 12 notation and I didn't really pay too much attention. They 13 were just deposited. 14 BY MS. STRETESKY:

15 Q Did you retain copies of that documentation?

16 A Recently we have been, yes.

17 Q Have you brought any with you today?

18 A No. I have not.

19 Q What were you asked to do under that verbal 20 contract?

21 A Review --

22 MR. HILBERT: Object to form. Go ahead.

23 THE WITNESS: Review the medical record and give an 24 expert opinion on the life expectancy of that individual, 25

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A That's correct. Q How long were you partners for? A We had practiced, you know, sharing expenses four

years, I guess, something like that. Q And when did that partnership start? A Again, this is an estimation. 1996.

Q And when did Mr. Kelly excuse me -- Dr. Kelly -- die?

A I think it was at the end of 1999 but, again, I'm not -- it's been some time ago.

Q When did you start working for Life Partners? A Basically within a few days of his death. When 1

spoke to Brian, records began to be delivered within a day o two.

Q In your thinking, that's late 1999? 16

A Late 1999 or late 1998. I'm not sure. 17

Q At that time did you have a contract with Life 18 Partners? 19

A No, I did not. Only verbal. 20

Q And what were the terms of that oral contract? 21

A For each insurance policy that Life Partners 22 purchased, I was to be paid 5500. 23

Q Would Life Partners have already purchased a life 24 insurance policy before sending you the medical information 25 to review?

1 BY MS. STRETESKY:

2 Q Within that oral contract were there numerical 3 amounts of how many you would be expected to do in a given 4 month, let's say?

5 A No.

6 Q It was unlimited?


8 THE WITNESS: There was -- nothing was said. 9 BY MS. STRE I ESKY:

10 Q At that time, when you first started preparing 11 expert opinions on life expectancies for Life Partners, 12 approximately how many did you prepare in a given month?

13 MR. MURPHY: If you recall.

14 THE WITNESS: Fifty to eighty per week initially. 15 BY MS. STRETESKY:

16 Q Did that number go up or down?

17 A It went up. Q How many are you currently preparing within a week?

19 A It varies from a hundred to as high as two hundred.

20 Q How are the medical records transmitted to you?

21 A Two ways, either a computer disk or they are 22 downloaded from Life Partners's website, I guess.

23 Q And is the computer disk sent to you, mailed to 2 4 you?

25 A If that is the way that they're sending it, If

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it's directly downloaded, there's no disk involved. Q And the website is only something you have access

to? A The fellow that understands computers has access to

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I may be paid for four or five and then the next month I could be paid for 20 of them. It was very variable.

Q What was the least amount that you ever got paid for in a month?

5 it. I am not that computer knowledgeable. My office 5 MR. HILBERT: Object to form, 6 manager, I guess I'd say. Are you asking whether I'm the 6 THE WITNESS: I -- I'd be guessing. $2,000. 7 only one that it goes to? 7 BY MS. STRETESKY: 8 Q (Counsel nods.) B Q And what is the most you've gotten paid in a month? 9 A That, I don't know. 9 MR. HILBERT: Object to form.

10 Q But in your office you would say the office manager 10 THE WITNESS: Since the new -- 11 is the one who downloads the records or prints them off for BY MS. STRETESKY: 12 you? 12 Q No. Let's start -- let's first -- prior to the •3 A Yes. 13 retainer. 14 Q And you don't know what safeguards Life Partners 14 A $10,000. 15 ensures so that medical records aren't be sent out on the 15 Q And now how much is the retainer a month? 16 Internet for anyone to view? 16 A $15,000. 17 A I'm not -- 17 Q Okay. And that's -- the retainer is $15,000? 18 MR. HILBERT: Object to form. 18 A (Witness nods.) 19 THE WITNESS: I know nothing about their computer 19 Q And then do you get additional payments -- 20 setup. 20 A (Witness nods.) 21 BY MS. STRETESKY: 21 Q -- on top of that? 22 Q Do you know if you are the only physician who is 22 A Yes. 23 currently preparing life expectancy determinations for Life 23 Q And what's the additional payment? 24 Partners? 24 A The same $500 for each policy that was purchased. 25 A No, 1 do not. 25 Q And, again, how do you know whether or not Life

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1 Q When you get a medical -- strike that. Sorry. 1 Partners has purchased a policy? 2 Is this medical consulting agreement dated the 10th 2 MR. FIILBERT: Object to form. 3 day of February 2008 the first written agreement you've had 3 THE WITNESS: Strictly speaking, I don't. 4 with Life Partners? 4 BY MS. STRETESKY: 5 A Yes, it is. 5 Q It's an honor system, then. 6 Q After so many years what precipitated a written 6 MR. HILBERT: Object to form. 7 aueement? 7 BY MS. STRETESKY: 8 MR. HILBERT: Object to form. 8 Q Would you agree? 9 THE WITNESS: There was a change in the financial 9 MR. MURPHY: Well, that's -- I'm gonna object on

10 -- how I was being paid. 10 the basis that that's asking for somewhat of a moral 1 BY MS. STRETESKY; 11 conclusion.

12 Q What was the change? 12 MR. HILBERT: And speculation. 13 A A retainer was begun that would be paid regardless 13 BY MS. STRETESKY: 14 of how many policies were purchased or not. 14 Q You can go ahead and answer. 15 Q Up until this point in February of 2008 when the 15 A 1 trust Mr, Pardo. 16 payment structure changed, what was the difference between 16 Q Who was your contact person at Life Partners? 17 the amount you reviewed and the amount you got paid for? 17 A Most of the contacts are made by my office manager. 18 MR. MURPHY: Do you understand the question? 18 The occasions that I have had to call in a lady named -- her 19 MR. FIILBERT: Object to form. 19 name is LaDonna. I cannot recall her last name. 20 THE WITNESS: Not -- 20 Q And you're unsure of who your office manager 21 BY MS. STRETESKY: 21 communicates with at Life Partners? 22 Q So you were reviewing policies, and say they gave 22 A I'm sorry? 23 you 50 to review in a week. Would you then the next week get 23 MR. HILBERT: Object to form. 24 paid for 25? 24 BY MS. STRETESKY: 25 A It was very variable. There would be months where 25 Q You're not sure who it is at Life Partners that

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1 your office manager --

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A Usually LaDonna. There's also a Felicia.

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MS. STRETESKY: Could we take about a 10- or 4 15-minute break so we can take a look at the contract?

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MR. MURPHY: Certainly.

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MS. STRETESKY: We'll go off the record for a few 7 minutes.

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(Recess taken.) 9 BY MS. STRETESKY:

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Q Let's go back on the record.

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MS. STRETESKY: I'm having marked the contract as 12 Exhibit I.

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(Deposition Exhibit 1 marked for

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identification.) BY MS. STRETESKY:

16 Q Did you ask for this contract?


18 THE WITNESS: No. 19 BY MS. STRETESKY:

20 Q Life Partners presented it with you or did you 21 discuss it with Life Partners first?


23 THE WITNESS: I never discussed a contract with 24 them. 25

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Q An attorney representing you?

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A I believe it was an associate of my wife.

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Q That was reviewing it for your interest?

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A He looked over the contract.

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Q Okay. Under "Recitals" on the first page there's a 6 paragraph that -- the first "whereas" paragraph -- the only 7 "whereas" paragraph refers to the company, being Life 8 Partners, Inc., engaging you to provide certain life 9 expectancy underwriting services. What does "underwriting 0 services" mean?

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THE WITNESS: I don't know. 13 BY MS. STRETESKY:

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Q If you could turn to the second page, under Section 15 3.3 titled "Delivery of Certain Information to Cassidy," it 16 lists out six different types of information that would be 17 sent to you from Life Partners.

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Who developed that list?

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A I don't know.

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MR. HILBERT: Object to form. 21 BY MS. STRETESKY:

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Q Did you have any input as to what information you 23 would need to be able to make the life expectancy 24 determinations?

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A No.

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1 BY MS. STRETESKY:

2 Q So a contract showed up in the mail one day?


4 THE WITNESS: No. I was contacted by -- I forget 5 who it was in their office -- who said, in view of the amount 6 of the retainer, that they wanted to have a contract in 7 place.

8 BY MS. STRETESKY:

9 Q Did you request that the retainer be put in place?

1 0 A No, I did not.

11 Q Did you negotiate the amount of the retainer?

12 A No, I did not.

3 Q They presented 515,000 to you and you accepted?


15 THE WITNESS: That's correct. 16 BY MS. STRETESKY:

17 Q Do you know who drafted this contract?

18 A No.

19 Q Did your attorney draft the contract?



23 Q Did your attorney review the contract that's 24 Exhibit 1?

25 A I believe an attorney reviewed it.

Q Do you have an opinion as to what type of 2 information you need to make a life expectancy determination?

3 A Yes.

4 Q What's your opinion?

5 A The date of birth, the sex, the medical diagnoses, 6 the medications, the family history, the personal habits.

7 Q With regard to the medical diagnoses, is there a 8 time -- a time frame that the information would be too old 9 for you to know whether or not it was still valid?


11 THE WITNESS: Depends on the diagnosis. 12 BY MS. STRETESKY:

13 Q Say it was diverticulitis. If they had 14 diverticulitis 10 years ago, would that make a difference to 15 you?


17 THE WITNESS: Well, it depends on the clinical 18 situation. 19 BY MS. STRETESKY:

20 Q In the agreement it requires "ail medical records 21 shall be the most current available but at least within the

22 past 12 months." Would you accept medical records that 23 were -- the earliest was older than 12 months?


25 TI IE WITNESS: I review what records are provided to

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1 me.

2 BY MS. STRETESKY:

3 Q Have you ever had an occasion where you had sent an 4 insured's medical records back to Life Partners stating that 5 you couldn't make a life expectancy determination based on 6 the information provided?

7 A Yes.

8 Q How often has that occurred?

9 A Rarely.

0 Q What were those occasions?

11 MR. MURPHY: If you recall.

12 THE WITNESS: Yeah. I -- the only one I recall 13 specifically was a notation in the chart concerning a mass in 14 the lung and a biopsy had been planned and there was no 15 further information concerning the biopsy. 16 BY MS. STRETESKY:

17 Q But you don't recall ever sending them back because 18 the medical records were too old?



22 Q Does Life Partners send with the -- with this 23 information in here a cover letter with this information?

24 A No.

25 Q So could you describe what — what exactly it is

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1 that you get from Life Partners?

2 A I get the medical records of the person involved,

3 Q Is there an expected turnaround time? Once you get 4 the medical records, when are they expecting you to provide a 5 report with the life expectancy?

6 A I don't know. They would like it as soon as is 7 reasonable but I don't know whether that -- what their 8 parameters are.

9 Q When do you like to get them their report with the 10 life expectancy? Do you have an internal time frame?

11 A I try to get them back within two days.

12 Q Are they sent to you where you'd receive medical 13 information trickling in all day long or is it at 5:00 on a 14 given day you receive a package that has -- or a download 15 that has numerous medical records?

16 A Yes. It's either a disk with all of the records 17 for that day or a download all at one time for the records of 18 that day.

2.9 Q Okay. When you provided your life expectancy 20 determination to Life Partners, do you provide it in a range 21 of months?

22 A Yes.

23 Q Do you ever provide a -- not a range but a single 24 number of years or months that you're providing a life 25 expectancy determination?

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1 A No.

2 Q Did you develop the different sets of ranges that 3 the left expectancy determinations usually fall within?

4 A This is my clinical opinion. The -- any 5 development stems from the 34 years of clinical experience.

6 Q Do you have anybody in your office that assists you 7 with making the life expectancy determinations?

8 A No.

9 Q Do you have a medical assistant who reviews the 10 medical records and summarizes them for you?

11 A No.

12 Q Are you the only person in your office that reviews 13 the information that Life Partners sends to you regarding 14 each of the insureds?

15 A Yes.

16 Q Do you use anything other than your clinical -- 34 17 years of clinical experience to make the life expectancy 18 determination?

19 A There are life expectancy tables that -- from 2 0 several sources. I use one from Health and Human Services. 21 They give you a starting point for the person's life 22 expectancy. That's used. And then depending on their 23 medical record is how their life expectancy is generated.

24 Q The Health and Human Services, is that the State of 25 Nevada or the federal?

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1 A Federal,

2 Q And is that -- when you say it's a starting point, 3 does the table reflect age, sex and its generally thought 4 good health, here's what the life expectancy would be?

5 A It reflects age and sex and the health of the 6 entire population.

7 Q Are these also known as actuarial tables?

8 A I'm not sure.

9 Q Have you had any actuarial training?


11 THE WITNESS: No. 12 BY MS, STRETESKY:

13 Q So why don't you walk me through. You get a 14 medical record for an insured. What do you do? Tell me how 15 your review is.

16 A Well, I determine the patient's age and sex and, 17 depending on what their expected from the table life 18 expectancy would be, determine that.

19 For example, let's say it's eight years. Then I 20 begin to look at the medical record. Depending on their 21 diagnoses, if they have un-resectable pancreatic cancer, 22 their life expectancy is going to be six months.

23 If both parents live to 105, their life expectancy 24 is going to be 18 to 20 years. I look at the medications 25 that they're taking. I look at the lifestyle. If they

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1 — titled "Calculation of Life Expectancy," would you say 2 this accurately reflects how you go about making your life 3 expectancy determination?


5 THE WITNESS: I have difficulty defining this 6 paragraph. As I mentioned, I take into consideration all the 7 factors that we talked about. If that's what this paragraph 8 is saying, then it's an accurate ... 9 BY MS. STRETESKY:

10 Q Did you draft this paragraph?

11 A No, I did not.

12 Q Did you assist in drafting it?

13 A No.

14 Q If we move down to 5.11. it says ''Representations 15 and Warranties." There's a handwritten note on the bottom in 16 addition to the last sentence. It looks like something got 17 cut off and it says, "Cassidy shall make all life expectancy 18 prognostications based on his own independent medical 19 judgment and shall not be influenced by any other 20 considerations." What other considerations could there be?

21 A Well, the sentence was not a sentence. That's why 22 that was added.

23 Q Uh-huh.

24 A I suppose any other considerations except the 25 medical record.

1 smoke, that's not good. And after putting all those 2 together, I come to an opinion and give my estimate.

3 Q And I may be making this seem more mathematical 4 than it is, so tell me if I'm wrong.

5 But do you kind of go through a mathematical 6 equation of minus six months for smoking plus 20 years for 7 having good genes? Do you go through that kind of analysis?

8 A It's not that precise. I mean, you have to take 9 everything together, if somebody has longevity in their

10 family but is a heroin addict, that's, you know, going to be 11 against them, so you have to put everything in the picture 12 before you make the determination.

13 Q And your factors for things like being a heroin 14 addict or certain medical ailments, is your amount of life 15 expectancy placed on those particular circumstances based on 16 your 34 years as practicing as a physician?


18 MR. MURPHY: Do you understand?

19 THE WITNESS: I'm not sure. 20 BY MS. STRETESKY:

21 Q Okay. You're starting with a table that gives you 22 sex, age, here's what the life expectancy is. Moving beyond 23 that table, you're factoring in the circumstances of each 24 individual insured. Correct?

25 A That is correct.

Page 31

1 Q Okay. And you're making either additions, month -- 2 in months, additions to the life expectancy on the table or 3 subtracting months or years from the life expectancy that's 4 found on the table based on individual circumstances unique 5 to each insured.

6 A It's not necessarily in that fashion. Again, 7 depending on their medical diagnoses, some diseases have a e fairly well accepted prognosis, and I mentioned one a moment 9 ago, pancreatic cancer.

10 Q Uh-huh.

11 A And that aspect of it is stems from my 12 experience.

13 Q And when you say that some diagnoses have a very 14 well established life expectancy diagnosis, are those found 15 in medical journal articles or --

16 A They're found in textbooks and in journal articles.

17 Q Do you often find yourself reviewing textbooks or 18 medical journal articles when reviewing the medical history 19 of an insured?

20 A If I am not familiar with whatever diagnosis the 21 patient might have.

22 Q How often does that occur, would you say, that 23 you're not familiar with a diagnosis?

24 A Rarely.

25 Q Section 3.4 of the calculation of life expectancy

Page 33

1 Q Do you receive any -- strike that.

2 Have you ever received any information other than 3 the information that is detailed in Section 3.3 with regard 4 to an insured?

5 A All I receive are the medical records.

6 Q And they are medical records from physicians which 7 may include forms filled out by the insured, a health history 8 form, maybe?

9 A Yes.

10 MR. HILBERT: Object to form. 11 BY MS. STRETESKY:

12 Q How much time on average do you take reviewing the 13 medical records for an insured in developing your life 14 expectancy evaluation?


16 THE WITNESS: Extremely variable. The records vary 17 from a few pages to more than a thousand. 18 BY MS. STRETESKY:

19 Q What would be your average, do you think?

20 A I don't know. It's extremely variable.

21 Q Could you turn the page, please, sir.

22 A (Witness complies.)

23 Q Section 6.2 says -- is titled "Reasonable 24 Precautions." What reasonable precautions have you taken to 25 ensure that the documentation, information and materials will

9 (Pages 30 to 33)

not be disclosed to others? 1

A They are under lock and key, They're never viewed 2

by anyone except me. 3

Q And maybe the guy who is downloading them? 4

A Huh? 5

Q And maybe your office manager who is downloading 6

them from the computer for you? 7

A No, he doesn't view them. 8

Q How long do you retain the medical records provided 9

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10 to you from Life Partners?

11 A I would have to ask the office manager.

12 Q Would you retain them for as long as maybe you

13 would retain a patient's record, one of your patients that's

14 coming to see you record?

15 A Again, 1 would have to ask him. I can say that I

16 know they are retained for at least three years but, beyond

17 that, don't know,

18 Q And is that at least three years due to State of

19 Nevada recordkeeping requirements for medical doctors?

20 A No, no particular reason.

21 Q Are you aware of any State of Nevada Board of

22 Medical Examiners requirements for recordkeeping and record

23 retention?

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A Concerning my own patients, yes.

25

Q And what is that length of time that you need to

Page 36

A That is correct.

Q Why did you stop preparing them for the other

company?


THE WITNESS: I am an independent contractor

consultant. I did not stop or start. I was contacted.

BY MS, STRETESKY:

Q How did the other company know to contact you?

A I do not know.

Q Does the name "Beneficial Assurance" -- was that

the other company?

A I do not know.

Q How about "Mutual Benefits"? Does that sound --

A I do not remember the name of the companies.

Q Have you had any specialized training in preparing

life expectancies?


THE WITNESS: Well, what specialized training

exists? I'm sorry. I don't mean to ask you questions, but

only, urn, that of a clinical physician.

BY MS. STRETESKY:

Q Is it your opinion that any clinical physician

would be able to perform similar functions as you are for

Life Partners?

A If he were experienced and in a general field,

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1 retain them?

2 A Five years, I believe.

3 Q Section 8.2 at the bottom of the page talks about

4 release of information and it says, "Should any life

5 expectancy report." Is it your understanding that what you

6 are preparing is the life expectancy report?

7 A I prepare a summary of the medical records that

8 includes my opinion on the patient's life expectancy.

9 Q Have you provided written approval for release of

10 any life expectancy report?

11 A No.

12 Q Have you provided written approval for release of 13 any portion of your medical summary?

14 A No.

15 Q Do you prepare life expectancy determinations for

16 any other company?

17 A I have.

18 Q Which company or companies?

19 A I can't remember. It's been some time.

20 Q How long ago approximately?

21 A Two or three years.

22 MR, HILBERT: Object to form.

23 BY MS. STRETESKY:

24 Q And this was at a time when you were preparing

25 these for Life Partners?

I family practice, internal medicine, a broad field.

Q Do you receive a 1099 from Life Partners?

MR HILBERT: Object to form.

THE WITNESS: Yes.

BY MS. STRETESKY:

Q When you communicate with Life Partners, what do

you provide them in that communication?

A The letter that is a summary of the medical records

and my opinion on the life expectancy of the person that I'm

looking at.

Q I'm gonna show you -- I'm gonna hand you what's

called a confidential case history that is given by Life

Partners to potential investors.

MS. STRETESKY: If we could have this marked as

Exhibit 2, please.

(Deposition Exhibit 2 marked for

identification.)

BY MS. STRETESKY:

Q And as you can see at the bottom, it says "Summary

of Medical History." If you could read that. And while I

don't -- I don't expect you to remember any particular

medical summary that you've provided to Life Partners.

But if you could look at that and let me know if

this is typical of the information you would have provided to

Life Partners in your letter.

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Page 40

1 (Witness reviewing document.)

2 THE WITNESS: It contains some of the information 3 that I would commonly put in my letter, but I did not write 4 this. 5 BY MS. STRETESKY:

6 Q What -- what information is missing that would 7 normally be found within your letter?

8 A Depends on what information was in the medical 9 record.

10 Q What's the typical length of your letters to Life 11 Partners?

12 A One page.

13 Q Can you, looking at this summary of medical 14 history, look at it and with your medical experience be able 15 to think the life expectancy of four to five years is 16 reasonable?


18 THE WITNESS: It -- it is conceivable but this is a 19 -- this is not the complete medical record. 20 BY MS. STRETESKY:

21 Q And so this wouldn't give you enough information to 22 determine whether or not the life expectancy of four to fi ve 23 years was reasonable?

24 A Your determination is an educated guess. A 25 determination of four to five years is possible. I would

1 A No. I'm talking about me.

2 Q Okay. That's what I wanted clarification on.

3 MR. HILBERT: Object to form. 4 BY MS, STRETESKY:

5 Q So you're advising in your letters to Life Partners 6 that you should not be the sole source of a life expectancy 7 determination used by them?

8 A That's what the disclaimer on the letter says, yes.


11 Q Are you aware of any other provider that's also 12 provide life expectancy determinations to Life Partners?

13 A No.

14 Q Do you have --

15 MR. HILBERT: I need four minutes. I've got an 16 emergency call here. Bear with me. Take a break.

17 (Recess taken.) 18 BY MS. STRETESKY:

19 Q Have you ever physically examined any of the 20 insureds?

21 A No.

2 2 Q It's a pure paper review?

23 A That's correct -- well, record review.

2 4 Q I've touched on it a bit. But what if the medical 25 information that you have is five years old? Would you be

Page 39 Page 41

1 able to make a determination based on that old of a record?


3 THE WITNESS: Number one, I've never gotten a 4 record like that. Number two, it would depend on the 5 person's diagnosis. If they had amyotrophic lateral 6 sclerosis, possibly. 7 BY MS. STRETESKY:

8 Q Okay. And in a perfect world how updated would you 9 like the medical records to be?

10 MR. HILBERT: Object to form. THE WITNESS: I'm sorry. Could you repeat the --


13 Q Sure. If it were a perfect world, how updated 14 would you like the medical records or up to date would you 15 like the medical records?


17 THE WITNESS: As up to date as possible. 18 BY MS. STRETESKY:

19 Q Have you ever had an occasion where Life Partners 20 has transmitted medical records and have made statements like 21 we're thinking this one is a four- to five-year life 22 expectancy range?

23 A Never.

24 Q Do you perform any quality control on the life 2 5 expectancy determinations that you do?

1 need to look at the entire record to see if this was an 2 accurate reflection.

3 Q And when you perform your duties for Life Partners, 4 you are using that degree of skill and attention that a 5 reasonable physician would exercise in estimating life 6 expectancy?


8 THE WITNESS: I would think so, yes. 9 BY MS. STRETESKY:

10 Q And are you making these determinations, urn, with a 11 reasonable degree of medical certainty?


13 MR. MURPHY: Objection, Calls for a legal 14 conclusion. You don't have to answer.

15 MS. STRETESKY: Yes, he does. 16 BY MS. STRETESKY:

17 Q Is it your opinion that you're estimating these 18 within any reasonable degree of medical certainty?

19 A There is a disclaimer on all of my letters 2 0 indicating that no single source should be depended upon in 21 making a life expectancy determination. It points out that 22 many other things can have an effect on a person's life 23 expectancy.

24 Q Could you explain that. And by "single source," 25 are you talking about the medical history is not a --

11 (Pages 38 to 41)

A I'm not sure what you mean by "quality control."


4 Q How do you ensure consistency with ranges? And 5 what I mean is how do you ensure that like ages, same sex, 6 similar diagnoses end up with the same or similar life 7 expectancy range?


9 THE WITNESS: The life expectancies are determined 10 on the basis of my clinical experience and the life 11 expectancy table that we start with. 12 BY MS. STRETESKY:

13 Q Do you ever go back and ask Life Partners how 14 you're doing?

15 MR. HILBERT: Object to form,


18 Q Do you know how accurate your life expectancy 19 determinations are or have been?


21 THE WITNESS: No.

22 MS. STRETESKY: This is gonna take me a minute 23 because I don't have my assistant with me -- now 1 do.

24 If 1 can mark, please, this as Exhibit 3. 25

Page 44

1 seemingly have a summary of medical history similar to each 2 other with vastly different life expectancy determinations, 3 you wouldn't be able to explain that --


6 Q just by looking at the medical summary?

7 THE WITNESS: Obviously, the explanation is that 8 the entire record was different between the two patients, 9 BY MS. STRETESKY:

10 Q But you can't tell that on a summary of medical 11 history that Life Partners has provided on the confidential 12 case histories?



16 Q How do you determine how much information you put 17 into your letter providing the medical summary and life 18 expectancy determination to Life Partners?


20 THE WITNESS: As I mentioned before, the age of the 21 patient, their sex, their medical diagnoses, their lifestyle, 22 their family histories. These are taken into consideration 23 along with their current treatment and then my clinical 24 opinion as to how long I think they will live. 25

Page 43 Page 45

1 (Deposition Exhibit 3 marked for

2 identification.) 3 BY MS. STRETESKY:

4 Q If you could read the medical summary found on 5 Exhibit 3.

6 (Witness reviewing document.) 7 BY MS. STRETESKY:

8 Q And then comparing it to the medical summary on 9 Exhibit 2, would you say that, aside from age, that they're

10 medically situated similarly?


12 THE WITNESS: I couldn't possibly say that. It 13 depends on the entire medical record.

14 MR. HILBERT: I hope you got my objections. 15 BY MS. STRETESKY:

16 Q So looking at the summary of medical histories from 17 each, with this being your only information, you as a 18 34-year-old -- not a 34-year-old -- a 34-year physician 19 wouldn't be able to determine or make a judgment as to why 20 one has a life expectancy of four to five years and the other 21 has a life expectancy of, urn, five years plus?



25 Q Okay. And if I were to show you two more that

1 BY MS. STRETESKY:

2 Q And I'm sorry, because I think you answered a 3 question that I wasn't asking.

4 With the information that you give to Life Partners 5 on your one-page letter, how do you determine which diagnoses 6 to include into the letter and which to leave out?

7 A I don't leave out any pertinent diagnosis.

8 Q What would be an impertinent diagnosis that you 9 would leave out?


11 THE WITNESS: A non-melanoma skin cancer 15 years 12 previously. 13 BY MS. STRETESKY:

14 Q Would it be fair to say that impertinent would be 15 something that doesn't bear on their life expectancy?


17 THE WITNESS: That's correct.

18 MS. STRETESKY: Please mark this as Exhibit 4.

19 (Deposition Exhibit 4 marked for

20 identification.) 21 BY MS. STRETESKY:

22 Q And, again, I understand that you've not seen this 2 3 before, nor have you prepared it, but if you could read the 24 summary of medical history with specific attention to the 25 last -- or the second paragraph.

12 (Pages 42 to 45)

Page 48

1 (Witness reviewing document.) 2 BY MS. STRETESKY:

3 Q It states, "L.P.I.'s reviewing physician states

4 that the insured's actuarial life expectancy would be an

5 additional 2.3 years." What does that mean?


7 THE WITNESS: 1 didn't write that. 1 don't know 8 what it means. 9 BY MS. STRETESKY:

10 Q Have you -- do you recall -- have you ever in one 11 of your letters transmitting the medical summary and the life 12 expectancy determination to Life Partners made statements

13 regarding the actuarial life expectancy of an insured?

14 A Yes, I have.


17 Q And what typically do you -- what's the typical 18 statement you make about the actuarial life expectancy?


20 THE VvTFNESS: I subtract their age from the age on

21 the table that would predict their life expectancy. 22 BY MS. STRETESKY:

23 Q And so in the letter to Life Partners you provide 24 them this is what their life expectancy is from the table and 25 here is what my determination is based on their medical

Page 47

1 expectancy of the person -- strike that.

2 In looking at the summary of medical history for 3 ~NI which is Exhibit 4, are any of the diagnoses 4 listed fatal?

A That would depend on other factors that could be 6 present in the medical record.

7 Q Can you give me an example?

8 A Certainly, If her hypertension was 250 over 150,

9 that would be fatal.

10 Q Okay. Would it be classified as hypertension or 11 something --

12 A You could use the word "hypertension" for that.

13 Q Would there be another word you could use?

14 A "Malignant hypertension."

15 Q And would that be more accurately describing the 16 hypertension?

17 A At that level.

18 Q And you would probably in your letters describe it 19 with that amount of accuracy?

20 A If I had a patient who had that type of pressure,

21 that would he a term I would use to describe it.

22 Q Okay. Have you ever turned down or asked for 23 additional records where maybe the primary care physician's 24 records weren't as detailed as maybe what you would be 25 keeping in your practice?

Page 49

1 records?

2 A That's correct.


5 Q But you don't know what Life Partners meant when it 6 said that you stated that the insured's actuarial life 7 expectancy would be an additional 2.3 years?


9 MR. MURPHY: Asked and answered.

10 THE WITNESS: I did not write this. 11 BY MS. STRETESKY:

12 Q Have you ever made a statement like that?

13 A Yes, I have.

14 Q And what did you mean by it when you made that 15 statement?

16 A That my range for the patient's life expectancy in 17 my opinion would be two to four years,


20 Q Do you ever recall making a statement that 21 someone's life expectancy would be an additional 2.3 years?


23 THE WITNESS: I do not recall.


25 Q Okay. Could it be that the actuarial life

1 M.R. HILBERT: Object to form.

2 THE WITNESS: Depends on what the medical record

3 said. As I mentioned before, referring to a mass and a

4 potential biopsy but not giving any information about a 5 subsequent biopsy would be an occasion where I would request 6 further information, 7 BY MS. STRETESKY:

8 Q With insureds who do have HIV and/or full-blown

9 A.1.D.S., how much does the T-cell count account for in your

10 life expectancy determination?

11 A Its hard to quantify that. Certainly a low T-cell

12 count places a person at greater danger of opportunistic

13 infections.

14 The therapy of A.I.D.S. is changing so quickly that 15 its difficult to quantify a particular number and weight it.

16 You have to look at the entire picture. If someone has a

17 high T-cell count but happens to have an unresponsive Kaposi

18 sarcoma, that's bad.

19 Someone with a low T-cell count and no signs of an

20 opportunistic infection, he has a chance to respond well. 21 You have to look at the whole picture.


23 Q How much does the viral load play into the life

expectancy determination?


13 (Pages 46 to 49)

Page 52

1 THE WITNESS: Not as much. You want to see some 2 correlation between the T-cell count recovering and the viral 3 load going down, but it's not always that way. 4 BY MS. STRETESKY:

5 Q So can you fairly quickly move through the medical 6 record of an A.I.D.S. insured or an insured with A.I.D.S., 7 rather than maybe an elderly person who's got a longer list 8 of medical diagnoses?


10 THE WITNESS: It depends on the record. If 11 someone's lifestyle is extremely dangerous, it -- it depends 12 on the record. 13 BY MS. STRETESKY:

/ 4 Q And do you always have information on the insured's 15 lifestyle in the records that you get?

16 A Not always. Q About what percentage of time do you --

18 A I don't know.

19 MS. STRETESKY: Can we take a five-minute break, 20 because I think I'm ready to wrap up?

21 MR. MURPHY: Okay.

22 (Recess taken.) 23 BY MS. STRETESKY:

24 Q You'd mentioned that you can't really quantify how 25 much time you spend on any given file, but are there any

Page 51

BY MS. STRETESKY: Q Would the majority take 30 minutes to review?

MR. HILBERT: Same objection. MR. MURPHY: This is becoming harassing.

BY MS. STRETESKY: Q Did you have an answer? A Same answer.

MS. STRETESKY: I'm done with my questions. MR. HILBERT: I don't have any questions. MR. MURPHY: The only thing I'd like the record to

reflect is as to all the objections that Mr. Hilbert has made, that I join in on behalf of Dr. Cassidy.

MR. HILBERT: Do you want to join in on my objections, Tom? Oh, now he's snoozing. He usually joins my objections too. You can put that in the record and he can take it out if he wants to.

MS. STRETESKY: Now these questions are for counsel on the record. Could you direct me to the HIPAA section that you are relying on that these would not be disclosable?

M.R. MURPHY: I included HIPAA but it's also specifically NRS Section 49.215.

MS. STRETESKY: And is that a copy of the Nevada Revised Statutes?

MR. MURPHY: Uh-huh. MS. STRETESKY: Would you mind if I could just look

Page 53

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1 files that are small enough or records that are small enough 2 that you take five minutes to review?


4 THE WITNESS: If the record were three pages long 5 it would probably take me five minutes. 6 BY MS. STRETESKY:

Q Would that be long enough to make -- would that 8 contain enough information to make a life expectancy 9 determination?


11 THE WITNESS: It could. 2 BY MS. STRETESKY:

13 Q Would you be able to estimate that -- the 14 percentage of files that you receive that would take five

5 minutes long to review?

16 A No.


19 Q Do the majority take five minutes to review?


21 THE WITNESS: They're all different. 22 BY MS. STRETESKY:

23 Q Would the majority take 20 minutes to review?


25 THE WITNESS: They are all different.

at 49.235.

2

MR. MURPHY: Certainly. As to who may claim the 3 privilege?

4

MS. STRETESKY: Yes. For the record, we disagree 5 that Nevada Revised Statute 49.235, who may claim the 6 privilege, extends to Dr. Cassidy in his capacity as a 7 physician merely reviewing medical records for a third party 8 who is not the patient.

9

As sub two says, the person who was the doctor may 10 claim the privilege but only on behalf of the patient. His 11 authority to do so is presumed in the absence of evidence to 12 the contrary.

13

And we would also like the record to reflect that 14 our reading of HIPAA, specifically 45 CFR 164.512(e) allows 15 disclosure of medical records in a judicial proceeding such 16 as this one.

17

MR. MURPHY: You may make the appropriate motion 18 before the court.

19

MS. STRETESKY: Yes.

20

M.R. HILBERT: Are we all done?

21

MS. STRETESKY: I think so.

22

MR. MURPHY: Plead send the transcript to me.

23

MR. HILBERT: And I want a condensed, whatever you 24 call it. Just a condensed.

25

MR. MURPHY: I'll take the condensed version and

14 (Pages SO to 53)

STATE OF NEVADA )

) ss.

COUNTY OF WASHOE )

I, CHRISTINA MARIE HERBERT, a Certified Court Reporter

in and for the State of Nevada, do hereby certify:

That f was personally present for the purpose of acting

as Certified Court Reporter in the matter entitled herein;

that the witness was by me duly sworn;

That said transcript which appears hereinbefore was

taken in verbatim stenotype notes by me and thereafter

transcribed into typewriting as herein appears to the best of

my knowledge, skill, and ability and is a true record

thereof.

Christina Marie Herbert, CCR #641 (NV), CSR #11883, (CA)

-o0o-

Page 56

Page 57

Page 54

1 also send the original to me and I'll proceed with the 1

2 signing. 2

3 MS. STRETESKY: I would prefer a condensed, and can 3

4 you do it electronically?

4

5 THE REPORTER: Yes.

6 MR. TENENBAUM: Thank you. I would like a

6

7 condensed E-Tran transcript and if the reporter could send it

7

8 to ATT at Tlawfirm dot-corn. 8

9 (Whereupon, deposition was concluded at

9

10 2:59 p.m.)

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14 DONALD CASSIDY, M.D. 14

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STA'T'E OF NEVADA )

SS.

COUNTY OF WASHOE

, a notary public

in and for the County of

, State of

. do hereby certify:

That on the day of

2008, before Inc personally appeared the witness whose

deposition appears herein;

That the deposition was read to or by the witness:

That any changes in form or substance desired by the

witness were entered upon the deposition by the witness;

That the witness thereupon signed the deposition under

penalty of perjury,

1 CHANGES/CORRECTIONS/NOTES

2 PAGE LINE

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19 DATED: At:

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21 this day of 22 2008,

23

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25 Notary Public

15 (Pages 54 to 57)

------ -------

MEDICAL CONSULTING AGREEMENT

THIS MEDICAL CONSULTING AGREEMENT (the "Agreement") is made and entered into as of this IOth day of February, 2008, by and between, LIFE PARTNERS, INC. (the "Company") and DR. DONALD CASSIDY, M.D., ("Cassidy").

RECITALS

Whereas, the Company desires to engage Cassidy to provide certain life expectancy underwriting services with respect to certain individuals whose lives are insured under life insurance policies ("insured lives"), subject to the tetuis and conditions of this Agreement.

Therefore, for and in consideration of the mutual benefits and promises herein described, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto agree as follows:

ARTICLE L CONSTRUCTION

SECTION 1.1 Usage of Terms. The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section, subsection and exhibit schedule references contained in this Agreement are references to sections, subsections, exhibits and schedules in or to this Agreement unless otherwise specified; with respect to all terms in this Agreement, the singular includes the plural and the plural the singular; words importing any gender include the other gender; references to "writing" include printing, typing, lithography and other means of reproducing words in a visible form; references to agreements and other contractual instruments include all subsequent amendments, amendments and restatements and supplements thereto or changes therein entered into in accordance with their respective terms and not prohibited by this Agreement; references to Persons include their permitted successors and assigns; references to laws include their amendments and supplements, the rules and regulations thereunder and any successors thereto; and the term "including" means "including without limitation."

ARTICLE II. APPOINTMENT

SECTION 2.1 Appointment. The Company hereby appoints and engages Cassidy as a life expectancy provider with respect to the insured lives specified to Cassidy by the Company for the period commencing on the date hereof until the expiration or termination of this Agreement pursuant to Article VII hereof, subject to the terms and conditions of this Agreement.

ARTICLE III. RIGHTS AND DUTIES OF CASSIDY

SECTION 3.1 Standard of Care. Cassidy shall perform his duties under this agreement with reasonable care, using that degree of skill and attention that a reasonable physician would exercise in estimating the life expectancy of an insured, including compliance with all applicable state and federal regulations.

SECTION 3.2 Errors and Omissions Policy. Cassidy agrees to maintain an errors and omissions insurance policy with coverage no less than $1 million per occurance.

SECTION 3.3 Delivery of Certain Information to Cassidy. Prior to the commencement of any obligation upon Cassidy to provide the services contemplated by this Agreement with respect to any insured life, the Company shall deliver or cause to be delivered to Cassidy all of the following information for each insured with respect to the related life insurance policy: (i) the name, (ii) the sex, (iii) the date of birth, (iv) the attending physician, (v) all medical records available which shall be the most current available but at least within the past twelve (12) months of the date of the request for a life expectancy and minimally three (3) years of records and preferably as many records as are available, provided, however that if Cassidy determines that there are insufficient records to underwrite a life expectancy, Cassidy shall not be obligated to prepare a life expectancy and shall so notify the Company, and (vi) an authorization for protected health information form that has language that would include, or be capable of referring to, life expectancy underwriters or providers and which has been executed and dated by the insured and that has not been revoked by the insured or otherwise expired by law.

SECTION 3.4 Calculation of Life Expectancy. For each insured life, Cassidy will prognosticate the average life expectancy of the respective insured(s) based on standard mortality tables and adjusted based on the medical condition of the insured(s) and the clinical experience and professional medical judgment and opinion of Cassidy. Said opinion and prognostication shall be made independently and without the undue influence of any person or entity. Upon request, Cassidy shall provide the Company with a written report documenting Cassidy's opinion, prognostication and evaluation of an insured.

ARTICLE TV. COMPENSATION

SECTION 4.1 Compensation. (a) As compensation for the medical underwriting services to be rendered by Cassidy hereunder, the Company shall pay to Cassidy a monthly retainer of $15,000 per month. In consideration for said retainer, the Company may present an unlimited number of files for evaluation and life expectancy calculation by Cassidy. As additional consideration, the Company shall pay to Cassidy a fee of $500 per insured within 7 days after the closing of a life settlement transaction.

ARTICLE V. REPRESENTATIONS, WARRANTIES AND COVENANTS

SECTION 5.1 Representations and Warranties of Cassidy. Cassidy, as of the date hereof, hereby represents to the Company that he is a licensed, practicing physician in good standing with the State Medical Board for the State of Nevada. Cassidy shall make all life expectancy prognostications based on his own independent medical judgment and shall not be influenced by any e' 71/E--v.-- e .?7,50 5

ARTICLE VI. CONFIDENTIALITY

SECTION 6.1 General Duty. Cassidy and the Company hereby agree that all documentation, materials and information provided by, or made available by, the Company and by Cassidy for the performance of Cassidy's obligations hereunder shall be used solely for the purposes contemplated by this Agreement and that all such documentation, information and materials shall be deemed proprietary; all information and materials shall be received,

utilized, and maintained in confidence.

SECTION 6.2 Reasonable Precautions. Subject to Section 6.4, the Company and Cassidy shall take such precautions as may reasonably be necessary to protect such documentation, information and materials from disclosure to others or from use by itself or others for any purpose inconsistent with this Agreement.

SECTION 6.3 Dissemination of Certain Information. Cassidy and the Company shall at all times comply with all laws and regulations affecting insureds whose life expectancies are being evaluated including but not limited to laws and regulations regarding the privacy of any insured and the maintenance of all information obtained by the Company and/or Cassidy in the performance of their duties in accordance with applicable laws and regulations concerning the dissemination of such information.

SECTION 6.4 Confidentiality of Reports Any report that the Company receives from Cassidy is intended for the specific use of the Company or individual signing this Agreement ONLY, and may be distributed to persons or entities in connection with the transaction in which the original life expectancy report was requested, but shall not otherwise be distributed to any other party, without the written consent of Cassidy or as may be required by competent regulatory authority or judicial fiat.

ARTICLE VII. TERM; TERMINATION

SECTION 7.1 Term; Termination. This agreement will automatically renew from year to year unless terminated by the Company or Cassidy by delivery of written notice to the other party of a change in any applicable law or regulation that causes it to be illegal for such party to continue performing under this Agreement, (c) terminated by Cassidy or the Company by thirty (30) days written notice thereof to Cassidy or Company, depending upon whoever is the initiating party.

SECTION 7.2 Files and Records Upon Termination. Immediately upon termination by Cassidy or the Company, Cassidy shall destroy all files and records retained by Cassidy in connection with the performance of its duties and obligations under this Agreement, unless otherwise required by law.

ARTICLE VIII. LIMITED LIABILITY

SECTION 8.1 Evaluation Limitation. Evaluations to determine life expectancy are based on the understanding of current available medical records provided at the time of evaluation. Cassidy makes no representation that any individual will expire on or near the time period indicated on our report. The life expectancy of any individual may be impacted positively or negatively by factors that change following the date of the evaluation. Every effort is made to anticipate future favorable or adverse changes in medical conditions, but it is not possible to make representations, guarantees or assurances after the date of any evaluation.

SECTION 8.2 Release Limitation. Should any life expectancy report that is provided to the Company by Cassidy be released to any person or entity, and such release is not approved with the written consent of Cassidy, then Cassidy assumes no liability for the use or content of any such life expectancy report beyond this Agreement or the disclaimer that is on any such life

expectancy reports other than with respect to such parties listed in Section 6.4. Should Cassidy consent in writing to the release of a life expectancy report that the Company received, Cassidy shall have no liability and shall be held harmless for any use for which the approved party uses the life expectancy report.

ARTICLE IX. MISCELLANEOUS

SECTION 9.1 Amendment. This Agreement may be amended from time to time only by the written mutual agreement of the Company and Cassidy.

SECTION 9.2 Governing_Law: Submission to Jurisdiction; Jury Waiver.

(a) Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEVADA, WITHOUT REFERENCE TO ITS CONFLICTS OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

(b) Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, OR (B) IN ANY WAY CONNECTED WITH OR PERTAINING OR RELATED TO OR INCIDENTAL TO ANY DEALINGS OF THE PARTIES TO THIS AGREEMENT OR IN CONNECTION WITH THIS AGREEMENT OR THE EXERCISE OF ANY PARTY'S RIGHTS AND REMEDIES UNDER THIS AGREEMENT OR OTHERWISE, OR THE CONDUCT OR THE RELATIONSHIP OF THE PARTIES HERETO, IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.

SECTION 9,3 Notices. All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by overnight mail using a nationally recognized carrier or by registered mail, return receipt requested, to:

Contact Person: LaDonna Johnson Address 204 Woodhew Dr. City, State, Zip: Waco, TX 76712 Email Address: [email protected] Telephone Number: 254-751-7797

Contact Person: Dr. Donald Cassidy Address: 75 Pringle Way, Suite 711 City, State, Zip: Reno, NV 89502 Email Address: [email protected] Telephone Number: 775-324-7022

or at such other address or facsimile number as shall be designated by either such Person in a written notice to the other.

Notwithstanding the foregoing, notice of breach, service of legal process or other similar communications shall not be given by electronic mail and will not be deemed duly given under this Agreement if delivered by such means. Notices, demands and communications hereunder given by facsimile or electronic mail shall be deemed received upon oral confirmation of receipt by the addressee or upon the sender's receipt of an affirmative confirmation of receipt thereof by the addressee.

SECTION 9.4 Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any reason whatsoever be held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions and terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement.

SECTION 9.5 Assignment. The teuus and provisions of this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective permitted successors and assigns. Neither of the Parties hereto shall assign this Agreement or any of the rights created hereunder without receipt of the prior written consent of the other party. Consent shall not be unreasonably withheld.

SECTION 9.6 Further Assurances. The Company and Cassidy agree to do and perform, from time to time, any and all acts and to execute any and all further instruments required or reasonably requested by the other party hereto more fully to effect the purposes of this Agreement.

SECTION 9.7 No Waiver: Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Company or Cassidy of any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law.

SECTION 9.8 Counterparts. This Agreement may be executed in two or more counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument.

SECTION 9.9 No Petition. Each of Cassidy and the Company, by entering into this Agreement, hereby covenants and agrees that it will not at any time institute against the other party, or solicit or incite any other Person to institute for the purpose of joining in any such

DR. DONALD CASSIDY

Dr. Donald Cassidy,

LIFE PARTNERS, INC.

--R. Scott Peden, President

institution against that party, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law. This Section will survive the termination of this Agreement.

SECTION 9.10 Limited Recourse. The obligations of the Company under this Agreement are solely the obligations of the Company and payable from and recourse only to the assets of the Company. No recourse shall be had for the payment of any amount owing by the Company hereunder, or for the payment by the Company of any fee in respect hereof or any other obligation or claim of or against the Company arising out of or based on this Agreement or against any partner, owner, beneficiary, officer, director, employee or agent of the Company; provided, however, that nothing in this Section shall relieve the Company from any liability which the Company may otherwise have in such capacity for its own gross negligence or willful misconduct. The agreements in this Section shall survive termination of this Agreement.

SECTION 9.11 Third-Party Beneficiaries. This Agreement will inure to the benefit of and be binding upon the parties signatory hereto. Except as otherwise provided in this Agreement, no other Person will have any right or obligation hereunder.

SECTION 9.12 Merger and Integration. Except as specifically stated otherwise herein, this Agreement sets forth the entire understanding of the parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement. This Agreement may not be modified, amended, waived or supplemented except as provided herein.

SECTION 9.13 Headings. The headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof.

SECTION 9.14 No Partnership or Joint Venture. Nothing contained in this Agreement shall be deemed or construed by the parties hereto or by any third person to create the relationship of principal and agent or of partnership or of joint venture.

SECTION 9.15 Information and Data. Nothing contained in this Agreement shall be deemed or construed to limit the Company from utilizing any information or data from this or any other Agreement in furtherance of its underwriting or business processes and to be utilized or assimilated in any other form for the benefit of the Company, as long as any individual personal health information continues to be subject to those protections as provided in this agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers the day and year first above written.

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