[00:00:06] Speaker 01: My apologies, I can just move the, do you want to recall it or? [00:00:13] Speaker 00: Yeah, probably. [00:00:14] Speaker 00: Okay. [00:00:14] Speaker 00: Inray Amadeus Therapy, Gerald Shelley, Council for Appellant NAI Horizon, Carmen Chanal-Horn, Council for Appellee Amadeus Therapy, Inc. [00:00:26] Speaker 05: All right. [00:00:27] Speaker 05: Mr. Shelley, would you like to reserve any time for rebuttal? [00:00:31] Speaker 04: I would, Your Honor. [00:00:32] Speaker 04: I would like to reserve three minutes for rebuttal. [00:00:34] Speaker 05: All right, please begin. [00:00:36] Speaker 04: But as a courtesy to my opposing counsel, I'd also like to indicate that there is a motion to dismiss this appeal for mootness that's pending. [00:00:47] Speaker 04: And when we emailed yesterday with the clerk, the clerk advised us to prepare to be prepared to argue it if necessary. [00:00:56] Speaker 04: So I'm simply asking the court, maybe that's a matter being handled by your clerks and you're simply expecting argument on appeal. [00:01:03] Speaker 04: Or if you are expecting argument on the motion to dismiss remoteness, then I ought to defer to Ms. [00:01:08] Speaker 04: Chanel whose motion it is. [00:01:11] Speaker 05: No, you may just proceed and deal with that in your argument, Mr. Shelley. [00:01:16] Speaker 05: And that's going to be part of our decision process. [00:01:19] Speaker 05: We'll handle the motion to dismiss in our decision. [00:01:25] Speaker 04: OK. [00:01:25] Speaker 04: I will do so. [00:01:26] Speaker 04: I'll address that. [00:01:27] Speaker 04: I'll begin, and I'll address that very briefly. [00:01:29] Speaker 04: In terms of the motion to dismiss, [00:01:31] Speaker 04: for mootness. [00:01:34] Speaker 04: Your Honors are well aware that the Ninth Circuit's standard for that is whether or not the appellate court can afford relief to the appellant. [00:01:43] Speaker 04: And in this instance, we have a claim at the Bankruptcy Court for which about $105,000 was reserved. [00:01:56] Speaker 04: that the plan has been confirmed below and 105,000 has been paid out to special counsel and to bankruptcy counsel. [00:02:05] Speaker 04: And in each instance where distributions were made, we objected indicating that there was an appeal pending and we have language in each of the distribution orders which indicate the reservation of rights. [00:02:21] Speaker 04: I would simply point out that the relief we're looking for is the ability to have counsel disgorge those dollars that were paid, but were paid with the specific reservation that if the appeal is reversed, that those distributions are subject to being revisited. [00:02:43] Speaker 04: I'd also simply note that the cases that movement has cited are all 363 related cases [00:02:52] Speaker 04: where sales were approved and no stay was obtained pending appeal. [00:02:56] Speaker 04: And so the sales were consummated. [00:02:58] Speaker 04: This, in my mind, is an entirely different matter and setting and fact pattern. [00:03:03] Speaker 04: And I think that there is ample relief that can be accorded to us in the event that there's a reversal. [00:03:10] Speaker 04: That said, unless there are any questions, I'll move on to the subject of the appeal. [00:03:18] Speaker 04: Your Honors, this is an appeal [00:03:21] Speaker 04: under Bankruptcy Rule 9024 as adopts Federal Rule of Civil Procedure 60D3. [00:03:34] Speaker 04: And I bet we don't see this type of motion very often. [00:03:41] Speaker 04: It's the first time in a lengthy career I have made a motion that alleges fraud on the court. [00:03:47] Speaker 04: But what we have here is a situation where [00:03:50] Speaker 04: And the story's most easily told, I think, if you go to appellant's reply brief, in particular the appendices. [00:04:02] Speaker 04: And I'd like to start first with appendix one, which is the minute entry that sets forth, that takes this matter to a trial. [00:04:12] Speaker 04: And you'll see that this is dated October 26th, [00:04:17] Speaker 04: And we're asking for a one-day trial in February. [00:04:22] Speaker 05: Mr. Shelley, let me interrupt you. [00:04:24] Speaker 05: Go ahead. [00:04:24] Speaker 05: Because we're really just reviewing the 60D ruling here. [00:04:30] Speaker 05: We're not looking at the trial, right? [00:04:33] Speaker 04: Well, what I'm trying to weave into here is the problem that we have is we have a doctored letter that is given to the court as evidence. [00:04:43] Speaker 04: of illness in the absence of any response to a 2004 order that requested all medical records related to the alleged illness. [00:04:53] Speaker 04: That happened and the motion was reconsidered and it also was taken up on appeal to the district court. [00:05:02] Speaker 04: And I think in both of those instances, the finding was no, the judge had the ability, based on the record, to find that there was sufficient evidence [00:05:12] Speaker 04: whether it was by preponderance or by clear and convincing to find that the principle of the debtor, Bridget O'Brien, was in fact ill and her illness was the reason why the deed should never have been delivered. [00:05:29] Speaker 04: Now the reason we're here under Rule 60 is because a little more than a year after the ruling, the doctor whose [00:05:40] Speaker 04: whose doctored letter was presented to the court, came forward and signed a declaration. [00:05:46] Speaker 04: And the declaration is appendix number four. [00:05:50] Speaker 04: And in that document, the declaration, the doctor makes it very clear, I'm not an MD. [00:05:57] Speaker 04: And the doctored letter that was provided to the court said I was an MD. [00:06:02] Speaker 04: Number two, I never made a diagnosis of cancer. [00:06:05] Speaker 04: Number three, [00:06:07] Speaker 04: I treated certain things, but what I treated were based upon what I heard from the patient. [00:06:13] Speaker 04: There's zero corroboration with any other medical doctor. [00:06:19] Speaker 04: So our argument here is we ask on a timely basis under Rule 2004 to have all medical records related to the alleged illness turned over. [00:06:33] Speaker 04: And on the deadline for response to 2004, the only thing we got was the inauthentic doctor screenshot letter that is appendix three. [00:06:46] Speaker 04: Well, based on that and the principal's testimony of her journey of illness, bankruptcy court Judge Martin was able to find, and I don't think unreasonably so, but was able to find that there's enough [00:07:03] Speaker 04: evidence here to suggest that she was ill at the time that the deed was drawn up, and that the party that recorded the deed should never have reported it. [00:07:14] Speaker 04: And accordingly, pursuant to the law that we all learned in Property 101, a deed is not complete until it's delivered. [00:07:25] Speaker 04: We had argued that the deed was physically delivered and was recorded [00:07:32] Speaker 04: And the case law makes it clear when the deed is recorded, the party attacking the deed has to overcome the presumption by clear and convincing evidence. [00:07:51] Speaker 04: And we went back to Judge Martin after we got the second, the declaration from Dr. Wooten and said, wait a minute, we clearly have a doctor, [00:08:02] Speaker 04: letter in the first place, an inauthentic letter. [00:08:07] Speaker 03: Is it really inauthentic, counsel? [00:08:08] Speaker 03: Let's dive into that a little bit. [00:08:11] Speaker 03: Because you keep saying it's inauthentic and it's fraud. [00:08:15] Speaker 03: As explained, it's a letter. [00:08:17] Speaker 03: The letter was the letter. [00:08:19] Speaker 03: It sounds like you have asked for an inference that there was a diagnosis that this natural, you know, naturopathic doctor actually diagnosed [00:08:32] Speaker 03: There's a fair reading, it seems from the record, that that is not exactly what that letter said, nor is it what the second letter says, right? [00:08:43] Speaker 03: That she was told by the debtor as a patient that she had cancer and was being treated for that, and then the doctor provided services within her realm based upon that information. [00:08:58] Speaker 03: That is wholly different, especially on appeal, isn't it? [00:09:01] Speaker 03: than saying, it seems like you are asking the back of the court to make the inference that the first letter said that Dr. Wooten diagnosed the cancer, and it is error not to. [00:09:17] Speaker 03: Is that really your argument? [00:09:19] Speaker 04: No, it's not the argument. [00:09:21] Speaker 04: Because Judge Martin ruled that based on the testimony of the debtor's principal, that [00:09:28] Speaker 04: she found there was sufficient evidence to find that the illness, in fact, existed. [00:09:32] Speaker 03: And why is that insufficient? [00:09:34] Speaker 03: I'm sorry, Judge Barrett. [00:09:35] Speaker 06: I was going to say, if that's what they found, the letter doesn't matter. [00:09:38] Speaker 06: The judge was basing the conclusion on the debtor's testimony. [00:09:43] Speaker 06: And also, I just want to point out this bit about the second doctor being an NMD instead of an MD. [00:09:52] Speaker 06: It was made clear at the trial, wasn't it, counsel, that [00:09:55] Speaker 06: the second doctor was a naturopath. [00:09:57] Speaker 06: Nobody, everybody knew that. [00:10:00] Speaker 04: I think we argued that. [00:10:02] Speaker 04: I think we let the judge know that we found. [00:10:05] Speaker 04: So the first letter is actually a screenshot that that Ms. [00:10:09] Speaker 04: O'Brien testified she put together. [00:10:12] Speaker 04: Um, and so this is the, this is, that's why I called this letter inauthentic. [00:10:18] Speaker 04: It wasn't. [00:10:19] Speaker 06: The second piece. [00:10:21] Speaker 06: The second letter comes out and doesn't say, I want to refute or I want to change. [00:10:26] Speaker 06: I want to clarify. [00:10:27] Speaker 06: Doesn't it start with, I want to clarify? [00:10:30] Speaker 04: I don't know if it starts that way, but that was the intention. [00:10:36] Speaker 04: At this point, Dr. Wooten, same doctor as in the letter, call it letter number one, came forward and said, look, [00:10:48] Speaker 04: I want to make sure that there's not a misunderstanding here, and I'm happy to put together a declaration. [00:10:53] Speaker 04: So this declaration followed that. [00:10:56] Speaker 04: As I read this declaration, it says, I'm not an MD. [00:11:01] Speaker 04: I didn't prepare that first letter. [00:11:03] Speaker 04: I did treat her, and I treated her based on what she told me her illness was. [00:11:10] Speaker 04: The point I'm trying to make with both of these letters is they're a little fishy. [00:11:16] Speaker 04: And in light of having ignored the 2004 order entirely. [00:11:22] Speaker 05: All right. [00:11:22] Speaker 05: Mr. Shelley. [00:11:22] Speaker 04: I'm sorry. [00:11:24] Speaker 05: Mr. Shelley, does Fishy count for fraud on the court? [00:11:30] Speaker 04: It would if this court follows my simple request for a remand with instructions to ask Ms. [00:11:43] Speaker 04: O'Brien, give her [00:11:45] Speaker 04: 30 days, 60 days, 90 days, give her six months to respond to the 2004 order. [00:11:51] Speaker 04: And if she comes forward, as I indicated in our brief, if she comes forward with authentic medical records corroborating her illness, then this case is over. [00:12:05] Speaker 04: We don't have anything more to argue. [00:12:08] Speaker 04: What I'm trying to say is the real grab-a-man of this case [00:12:13] Speaker 04: is not so much the doctor's first letter or the declaration, it's the failure to wholly respond to the 2004 order. [00:12:24] Speaker 04: And it seems to me that- But shouldn't that have been addressed before trial? [00:12:28] Speaker 04: It was addressed, but the trial came on so quickly under the circumstances that are set forth in our brief. [00:12:36] Speaker 04: We asked for a hearing in February, [00:12:38] Speaker 04: They asked for a hearing in December because opposing counsel had just run for superintendent of schools and was afraid he was going to take office in January. [00:12:47] Speaker 04: So the whole thing was truncated. [00:12:49] Speaker 04: I argued at the time a trial that the 2004 order was not complied with. [00:12:54] Speaker 04: I argued in our post-file briefs. [00:12:58] Speaker 06: I don't want to interrupt you, but clarify something for me. [00:13:02] Speaker 06: If there was something done wrong at trial that the other party did not respond to the 2004 examination and so forth, isn't that an issue that should have been appealed within the 14 days? [00:13:17] Speaker 04: It is an issue that was appealed within the 14 days, and it went to the district court [00:13:22] Speaker 04: And the district court found that, based on the failure to provide a transcript and based on the record, that there was sufficient evidence for the judge to rule the way that she did. [00:13:32] Speaker 06: And the district court order wasn't appealed. [00:13:35] Speaker 06: That was not appealed. [00:13:36] Speaker 04: That's correct. [00:13:37] Speaker 06: So the district court ruled on the 2004 issues, because those were the issues at trial. [00:13:42] Speaker 06: Those are not before us today. [00:13:45] Speaker 06: Today, it's the fraud on the court subsequent motion. [00:13:50] Speaker 04: Well, I'm out of time, but I'll conclude this and then come back. [00:13:54] Speaker 04: What we're arguing here is that using the first letter is curious. [00:14:03] Speaker 04: OK, fishy may not be the standard, but it's deficient. [00:14:06] Speaker 04: The declaration makes it clear that there's a problem here. [00:14:10] Speaker 04: And that, in light of the wholesale failure to respond with not even a single piece of corroborated medical evidence, [00:14:20] Speaker 04: seems to me that that's a basis under 60D3 to come back and say, wait a minute, we better take a good look at this. [00:14:31] Speaker 04: If she says she was ill, there's some questions about that based on the letters and based on the failure to respond to the 2004 order. [00:14:40] Speaker 04: Let's give her time to respond to it. [00:14:41] Speaker 04: And as I said, we'll drop this appeal as soon as we see authentic medical records showing that she's ill. [00:14:48] Speaker 04: I didn't presume that that was the case. [00:14:50] Speaker 04: You know, you take people at their word and something as delicate as the alleged illness here is not something that you go into and say, prove it, and then how do you prove a negative anyway, particularly in the absence of the documents that were requested? [00:15:07] Speaker 04: I'll step back and reserve the rest of my time, but that's our argument, that it really is the problem with the letter from the doctor, the declaration, in combination [00:15:19] Speaker 04: with the failure to respond to the 2004 order. [00:15:22] Speaker 04: And all of that was raised and argued. [00:15:26] Speaker 05: All right. [00:15:26] Speaker 05: You have about a minute left, so we'll let you reserve the rest. [00:15:29] Speaker 04: We think you should remand with instructions to give Ms. [00:15:32] Speaker 04: O'Brien whatever time she needs to come up with the corroborating medical evidence. [00:15:38] Speaker 05: All right. [00:15:38] Speaker 05: Thank you. [00:15:39] Speaker 05: Thank you. [00:15:41] Speaker 05: All right. [00:15:48] Speaker 05: We can't hear you. [00:15:49] Speaker 02: Okay, here we go. [00:15:51] Speaker 02: May it please the Court, Your Honor, Council. [00:15:54] Speaker 02: The appellant argues that the state doesn't apply to our case. [00:16:01] Speaker 02: However, the appellant cites no cases [00:16:04] Speaker 02: holding that in the absence of a sale, the usual rule of obtaining a stay does not apply. [00:16:10] Speaker 02: They have no authority for that. [00:16:13] Speaker 02: And our position is that they should obtain a stay. [00:16:17] Speaker 05: So you're arguing the motion to dismiss right now. [00:16:21] Speaker 02: Yes, because Pelham argued it in his oral argument. [00:16:28] Speaker 02: So I would like to bring up the points very quickly. [00:16:33] Speaker 05: Go ahead. [00:16:34] Speaker 02: Yes, so the motion to dismiss should be granted because NAI, the appellant failed to follow the law by not seeking to stay pending this appeal. [00:16:45] Speaker 05: Is that an absolute requirement? [00:16:50] Speaker 02: Yes, the cases holding this are cited on page two and three of our motion to dismiss. [00:16:55] Speaker 02: And very quickly, in matter of tooling, this circuit court held that when an appellant fails to obtain a stay of a bankruptcy court's order, permitting the sale of assets and the assets are sold while the appeal is pending, the appeal becomes moot. [00:17:11] Speaker 02: In research, also cited at page two and three of our motion to dismiss, [00:17:18] Speaker 02: The court there, the circuit held that in conclusion because the services failed to obtain a state pending appeal, their appeal to the district court, the bankruptcy court's order was moot. [00:17:31] Speaker 05: Isn't it only moot if we can't grant effective relief and if money can be disgorged, can't we grant effective relief? [00:17:40] Speaker 02: I don't think so, Your Honor. [00:17:41] Speaker 02: I think that the rules are very clear that the appellant should have obtained a stay [00:17:46] Speaker 02: pending this appeal. [00:17:47] Speaker 02: I mean, there are so many cases stating that at page two and three of our motion to dismiss. [00:17:53] Speaker 02: So because the appellant failed to follow the circuit court's rulings to obtain a stay, the appeal should be dismissed. [00:18:01] Speaker 02: They haven't cited any authority contradicting that whatsoever in their response to our motion to dismiss. [00:18:09] Speaker 05: All right. [00:18:09] Speaker 05: Why don't you move on and address the substance of the appeal? [00:18:13] Speaker 02: Sure, Your Honor. [00:18:17] Speaker 02: Okay, so the only argument set forth in Appellant's reply brief pertaining to the affidavit of Dr. Wooten is that appeal, I mean that motion, that Rule 60B motion was denied. [00:18:39] Speaker 02: That ruling on the Rule 60B motion states that nothing in the Wooten declaration indicates that there had been fraud at the original trial before that judge. [00:18:53] Speaker 02: The bankruptcy judge states at page 27 of her ruling, that's appendix four, that indeed it was made clear at trial that Dr. Wooten is a neuropathic doctor who treated Ms. [00:19:04] Speaker 02: O'Brien with neuropathic treatments that Ms. [00:19:06] Speaker 02: O'Brien sought out in addition to the traditional [00:19:09] Speaker 02: treatments she received from the other doctors. [00:19:13] Speaker 02: Because appellant didn't order a transcript, they cannot contradict the two orders that we're talking about. [00:19:20] Speaker 02: The two orders are attached as appendix three and four to our answering brief. [00:19:27] Speaker 02: A review of the original letter that the trial court heard shows that nowhere in that letter does Dr. Wooten say that she gave traditional cancer treatments to Ms. [00:19:38] Speaker 02: O'Brien. [00:19:39] Speaker 02: All the references to traditional treatment are stated in the third person indicating that she, Dr. Wooten is reciting history, not indicating what she did. [00:19:48] Speaker 02: She only gave neuropathic holistic treatment [00:19:51] Speaker 02: that she describes at the end of her letter. [00:19:54] Speaker 02: And there was a reference to MD that was described at trial as an autocorrect that was originally not typed as an MD. [00:20:03] Speaker 02: And the order, the trial order, February 14, 2023, appendix three, page seven to our answering brief specifically [00:20:17] Speaker 02: specifically holds that that was not intentional, it was not fraud. [00:20:24] Speaker 02: Timing, with respect to timing, this proceeding, the bankruptcy, opened on November 4th, 2021. [00:20:31] Speaker 02: Appellant waited a full year before asking for discovery of medical records, one year. [00:20:36] Speaker 02: Their own appendix shows that they did not obtain an order for production until November 7, 2022, a year later, one full year later. [00:20:47] Speaker 02: Your honors, we really asked the court to take judicial notice of the record on this case, including the bankruptcy judge's initial decision, the trial court judge initial decision at page seven, where she recites that Ms. [00:21:01] Speaker 02: O'Brien testified she attempted to respond to NAI's production request by contacting Mayo Clinic where she has been treated two years prior, but was informed that they were extremely backed up and could not timely provide her records, which stated two years prior. [00:21:17] Speaker 02: The bankruptcy judge, the trial judge, found that the failure to provide those records was justified and was not deliberate. [00:21:25] Speaker 02: So in other words, the trial court ruled that the failure for Ms. [00:21:29] Speaker 02: O'Brien, the appellee, to produce records was excused because she made attempts to do so. [00:21:35] Speaker 02: That is in her trial order. [00:21:38] Speaker 02: That's at appendix four, page seven, paragraph one. [00:21:46] Speaker 02: And also, in that order, it's interesting, Your Honors, because in that order, the judge says, NAI provided no information as to how this discovery issue played out. [00:22:02] Speaker 02: In other words, what do these letters have to do with the proof of claim? [00:22:07] Speaker 02: Nothing. [00:22:07] Speaker 02: It's irrelevant. [00:22:09] Speaker 02: So because they cannot provide transcripts of the trial, appellant cannot [00:22:14] Speaker 02: cannot now object to those findings. [00:22:16] Speaker 02: They can only look at the tri-orders. [00:22:19] Speaker 05: Well, I don't think they're not objecting to the finding. [00:22:22] Speaker 05: They're saying that there's fraud in the court based on the new Wooten Declaration, which they say is inconsistent with the original screen-shotted letter. [00:22:39] Speaker 05: You know, we don't really need a trial transcript to address that issue, do we? [00:22:43] Speaker 02: But no, but the order denying the Rule 60B motion goes into that and states in there, it's appendix four, page seven, paragraphs one and two, you know, this new letter doesn't have any kind of indication of fraud. [00:23:06] Speaker 02: Also, Your Honor, I mean, [00:23:08] Speaker 02: They've had years to do this. [00:23:11] Speaker 02: They could have brought up that second letter at trial, perhaps produced it before they appealed to the Fed. [00:23:20] Speaker 05: Well, I guess their statement is they got the second letter later, not at the time of trial. [00:23:28] Speaker 05: I guess if they'd had it at trial, they would have brought it forward. [00:23:31] Speaker 05: But they didn't have it at the time of trial, did they? [00:23:38] Speaker 02: No, but he could. [00:23:40] Speaker 02: No, but I'm just going to. [00:23:42] Speaker 02: I'm going to go on your honor if I may. [00:23:47] Speaker 02: So. [00:23:47] Speaker 02: They're arguing they're arguing fraud on the court, but and they're appealing the decision that that Judge Martin says there is no fraud on the court and I just don't see. [00:24:01] Speaker 02: What argument they have in their? [00:24:04] Speaker 02: Opening brief or in their reply brief that shows [00:24:08] Speaker 02: that that letter indicates fraud on the court. [00:24:12] Speaker 02: There's nothing there. [00:24:13] Speaker 02: So because they didn't provide the transcripts at the trial, appellant cannot object to the findings of both the trial court order, which is appendix four to our answering brief, or to the, excuse me, the trial court order is appendix three to our answering brief. [00:24:36] Speaker 02: That's February 14, 2023. [00:24:38] Speaker 02: Nor can they object to the ruling by Judge Martin and on Appellant's Rule 60 motion denying that motion dated March 26, 2024. [00:24:50] Speaker 02: I don't see anywhere in their briefs where they can show that that letter is fraud on the court. [00:25:00] Speaker 02: Thank you, Your Honor. [00:25:01] Speaker 05: All right. [00:25:02] Speaker 05: Thank you. [00:25:03] Speaker 05: Any questions? [00:25:04] Speaker 05: All right. [00:25:06] Speaker 05: Mr. Shelley, you have a minute. [00:25:10] Speaker 05: than at nine seconds. [00:25:12] Speaker 04: Thank you. [00:25:12] Speaker 04: I'll be as brief as I can. [00:25:15] Speaker 04: The job of the courts of appeal, one of the jobs of courts of appeal is to keep the system as absolutely clean as possible. [00:25:24] Speaker 04: We're also taught about alpha errors versus beta errors or the greater error or the lesser error. [00:25:31] Speaker 04: At 30,000 feet, the remedy we're asking for is really simple. [00:25:36] Speaker 04: You tell us that you went through years of medical [00:25:40] Speaker 04: procedures to cure this cancer. [00:25:46] Speaker 04: And you haven't given us a single authentic legal document to prove that. [00:25:54] Speaker 04: That in combination with this odd, this is curious to have a screenshot that is clearly put together by the participant and then a declaration that later says, well, there's some truth to that, but there's some problems with that. [00:26:11] Speaker 04: That's enough, we think, to remand this case for a very simple 30, 60, 90, 120 days. [00:26:21] Speaker 04: Please comply with the 2004. [00:26:23] Speaker 04: Otherwise, what happens to the sanctity of a 2004 order? [00:26:28] Speaker 04: I think there's no teeth to it. [00:26:31] Speaker 04: That's what we're asking for here. [00:26:32] Speaker 04: Thank you for listening. [00:26:35] Speaker 05: All right, thank you both for your arguments. [00:26:38] Speaker 05: This matter will be submitted. [00:26:39] Speaker 05: Madam Clerk, please call the next case.