[00:00:00] Speaker 00: In Ray Blackwell, Mark S. Stern appearing for appellant, Russell D. Garrett appearing for appellee. [00:00:10] Speaker 01: Thank you. [00:00:12] Speaker 01: Mr. Stern, would you like to reserve any time for reply? [00:00:15] Speaker 02: I think five minutes, Your Honor. [00:00:17] Speaker 02: That seems to be the common thing today. [00:00:19] Speaker 01: It does. [00:00:20] Speaker 01: Well, we'll go ahead and continue that trend and you can may proceed with your argument. [00:00:24] Speaker 02: Yes, Your Honor. [00:00:25] Speaker 02: Thank you. [00:00:27] Speaker 02: We're talking about the meaning of 524 regarding discharge of the debtor. [00:00:33] Speaker 02: One thing is very clear that 524 does not discharge third parties. [00:00:38] Speaker 02: It doesn't discharge the joint toy teaser in this case, the state of Washington, and it doesn't discharge all state insurance company, the insurer. [00:00:48] Speaker 02: One of the problems in this case [00:00:52] Speaker 02: is that Washington has a law that is very similar to the California statutes in both Slally and Unas. [00:01:03] Speaker 02: And what the law says is that you need to have the defendant available to have a judgment entered against them. [00:01:14] Speaker 02: And then you can establish joint and several liability as to third parties. [00:01:22] Speaker 02: That's all we've sought. [00:01:26] Speaker 02: We were certainly willing in our initial pleadings to limit the judgment or award to insurance proceeds, but that was important, but not enough to make a difference. [00:01:42] Speaker 02: The problem is in a case called Anderson versus City of Seattle. [00:01:48] Speaker 02: the Washington Supreme Court addressed this particular issue. [00:01:54] Speaker 02: In Anderson, the plaintiff, Mr. Anderson, sued two parties. [00:02:03] Speaker 02: He sued, I believe, Williams and the city of Seattle. [00:02:07] Speaker 02: Williams filed bankruptcy. [00:02:09] Speaker 02: The normal thing that would make sense is, and what they did is, [00:02:18] Speaker 02: entered an order of dismissing Anderson because he'd filed bankruptcy, there was nothing they could get from him, and then went to trial. [00:02:25] Speaker 02: The court awarded a substantial amount of damages, then the Supreme Court ruled that since you dismissed Williams, you don't get to go have joint and several liabilities, so you can't collect money from the state, you can't collect any money from anywhere else. [00:02:46] Speaker 02: That's what this case is about. [00:02:49] Speaker 03: There are... But counsel, you don't just need to name her as a defendant. [00:02:56] Speaker 03: You need to take a judgment against her for the full amount of the damages so that you can then get the city, I mean, the state of Washington, Mr. Garrett or other defendants that you may decide to name to pay the full amount, even if you never proceed as against her. [00:03:15] Speaker 03: That's correct. [00:03:16] Speaker 03: You need to do what 524A prohibits, which is the entry of a judgment of personal liability for the debtor, right? [00:03:26] Speaker 02: Well, Your Honor, that was addressed in both Slully and Munoz. [00:03:33] Speaker 02: In both cases, the court said, well, we can't modify the discharge injunction, but we can interpret it. [00:03:42] Speaker 02: In both Slally and Yunaz, the court went on to say that if you're only seeking damages from third parties, and that's clearly what we're doing here, the court can interpret the discharge so that you can enter the judgment and collect from third parties. [00:04:05] Speaker 02: Virtually every court that has addressed this issue has come to that conclusion. [00:04:12] Speaker 02: MUNAS came to the conclusion that they didn't do it by an adversary proceeding, but they said, well, you have to have the judgment so you can go collect from the third parties. [00:04:23] Speaker 02: Slally said the same thing. [00:04:25] Speaker 03: I know that... Except Slally said that you could collect for the insurance proceeds. [00:04:34] Speaker 03: It didn't go beyond and say you could take a judgment against them for the purposes of attacking a third party for the full amount of the judgment. [00:04:42] Speaker 02: Actually, I think you did, Your Honor. [00:04:44] Speaker 02: And I will hold on. [00:04:46] Speaker 02: Let me see if I got the language here. [00:04:48] Speaker 02: The immunase, it [00:05:04] Speaker 02: including slowly, it said in the final WCAB judgment is rendered against the debtor and he does not pay within a period of time by state law, then UEF must pay. [00:05:15] Speaker 02: That situation straightforwardly complies with the requirement of 524E. [00:05:20] Speaker 02: Hence, we hold 524E instance to confuse to 524A such that the discharge injunction does not bar completing the WCAB proceeding. [00:05:32] Speaker 02: That's all we're asking for. [00:05:34] Speaker 02: is to complete the proceeding, we will stipulate that we can't get anything other than insurance proceeds. [00:05:43] Speaker 02: We never asked for anything more than insurance proceeds. [00:05:46] Speaker 01: Well, the important thing is that you say you'll stipulate. [00:05:50] Speaker 01: The clear point that you are trying to make is that you will never seek to recover from the debtor on any liability or any judgment that is entered. [00:05:59] Speaker 01: That's correct. [00:06:00] Speaker 01: That is from the collateral, the third source. [00:06:04] Speaker 01: Yes. [00:06:04] Speaker 01: Which will be definitely the insurance. [00:06:06] Speaker 01: And in your view, if appropriate, would be the other non-debtor entities. [00:06:11] Speaker 02: Yes. [00:06:12] Speaker 02: That's what we put in the complaint. [00:06:14] Speaker 02: That's what we put in the summary judgment. [00:06:16] Speaker 02: That's what we were trying to do. [00:06:19] Speaker 03: Doesn't that also have a detrimental effect under a watched in law with regard to the statute on contribution among joint tort feesers? [00:06:27] Speaker 03: that only limits their liability to the amount of their proportionate share. [00:06:33] Speaker 03: And if they pay a greater amount than their proportionate share, that then they have the right of contribution, but they could never see contribution from this debtor because she's discharged the obligation. [00:06:46] Speaker 02: I would concur that they might have a right of contribution, but that's discharged and no one has ever [00:06:54] Speaker 02: intimated that they would seek any right of contribution, it's gone. [00:06:58] Speaker 02: She's discharged. [00:07:02] Speaker 03: That's- But the statute that allows for the joint and several liability to be established through naming her as a defendant would authorize them to proceed, but because of the discharge, you'll get the benefit if we were to grant the relief you want, but they would then be barred [00:07:22] Speaker 03: from ever recovering as against her under the statutes that would authorize them to take such action. [00:07:29] Speaker 01: Certainly. [00:07:30] Speaker 01: That would be the same result as if this happened pre-petition and then the debtor filed. [00:07:36] Speaker 01: That would be the same result, wouldn't it? [00:07:38] Speaker 02: Well, if the debtor had filed and had given us notice and had listed us and set notice to us, we would have filed a motion for relief from stake, and we wouldn't be in Section 524 A, B, C, D, and E. [00:07:52] Speaker 03: Well, potentially, if she'd given you notice, you would have convinced her not to file bankruptcy and entered into some kind of a settlement and authorization agreement with her on the outset. [00:08:03] Speaker 03: And then you would have commenced the litigation against her, but you would have protected her, and you would have gotten a settlement agreement approved by a court. [00:08:10] Speaker 03: And then you would have proceeded to take the judgment against the other defendants. [00:08:15] Speaker 02: Presumably, sir. [00:08:17] Speaker 02: Presumably, Your Honor. [00:08:19] Speaker 02: We didn't have that because they didn't list the plaintiff. [00:08:25] Speaker 02: They didn't list his counsel, even though her insurance company knew who they were and was in correspondence with them. [00:08:31] Speaker 02: They listed the deceased person and sent notice to the deceased person's address, and no one ever saw whatever happened to it. [00:08:39] Speaker 00: Mr. Stern, walk me through what happens in the state court litigation, OK? [00:08:49] Speaker 00: Ms. [00:08:51] Speaker 00: Hidalma Porcel has brought the lawsuit naming Washington State Department of Transportation and Mr. Milton Garrett as defendants. [00:09:02] Speaker 00: If you don't get what you want, the plaintiff still proceeds to trial. [00:09:10] Speaker 00: It's just that, tell me what happens, what can she collect? [00:09:16] Speaker 02: I don't know with respect to Mr. Garrett, Your Honor. [00:09:20] Speaker 02: Let's take the state, then. [00:09:22] Speaker 02: The state gets the state's liable for the entire amount if we get judgment against both of them. [00:09:27] Speaker 00: Right. [00:09:28] Speaker 00: But if you don't get the judgment against both of them and the jury decides that the state is only 50% responsible and the amount of damages is a million dollars, then the plaintiff gets $500,000. [00:09:40] Speaker 00: Is that right? [00:09:41] Speaker 02: If we have several liability, we get the million dollars from the state. [00:09:46] Speaker 00: If Judge Alston's order is affirmed, you still get that? [00:09:53] Speaker 00: No. [00:09:53] Speaker 00: Mr. What if you lose on appeal? [00:09:59] Speaker 03: Well, be clear. [00:10:01] Speaker 03: What he's saying is, assuming that you can't name her and you have to go to trial just as against Mr. Garrett or the state of Washington, damages are a million dollars, but their percentage of liability is less than 100%. [00:10:16] Speaker 03: you recover the percent of liability only. [00:10:19] Speaker 02: That's true. [00:10:20] Speaker 03: If we can't name her. [00:10:23] Speaker 03: But if you can name her, then you get the advantage of having the full amount of the damages determined. [00:10:29] Speaker 03: And then you can collect all of it under watch and lob, under joint and several liability against. [00:10:36] Speaker 02: Yes, but she has to be available to have the judgment entered against her, even limited to whatever insurance proceeds that she has. [00:10:43] Speaker 00: Isn't that a decision? [00:10:45] Speaker 00: that's been made by our state legislature and the Supreme Court. [00:10:49] Speaker 00: Why should the bankruptcy court get into dealing with what happens in tort cases outside of bankruptcy? [00:11:01] Speaker 02: Because bankruptcy has an effect on any number of other aspects of life in practice. [00:11:14] Speaker 02: Bankruptcy court needs to be able to say the discharge doesn't affect liability to the extent that it's only pursuing third parties. [00:11:24] Speaker 02: That's why. [00:11:26] Speaker 03: But you get a judgment against her for the full amount of the damages. [00:11:30] Speaker 02: Right. [00:11:30] Speaker 03: Say you're not going to proceed to collect it. [00:11:34] Speaker 03: Correct. [00:11:35] Speaker 03: But in fact, you have a judgment against her. [00:11:38] Speaker 03: There's nothing to prevent you from. [00:11:40] Speaker 03: proceeding against her at that point, nor any other party who pays more than their proportionate share from seeking recovery against her, except the discharge. [00:11:51] Speaker 02: Well, yes, Your Honor, because what we ask for is a determination that our recovery is limited to [00:11:58] Speaker 03: insurance proceeds we didn't have that ability to get that money today right now because they've offered it and the judge state court has already authorized you to recover that amount if that's limited to the insurance proceeds number two five twenty forty doesn't preclude you from suing Mr. Garrett or any other [00:12:17] Speaker 03: non debtor party for their liability, but that's not good enough because what you want is the ability to leverage them by establishing her proportionate share of liability in that litigation. [00:12:30] Speaker 03: Right. [00:12:30] Speaker 02: I think that's probably true. [00:12:32] Speaker 02: Your honor, we, we [00:12:34] Speaker 02: We never sought to get a judgment against her. [00:12:36] Speaker 02: If we'd known beforehand, we probably would have cut a settlement. [00:12:39] Speaker 02: We would have done something. [00:12:41] Speaker 02: Well, we didn't. [00:12:42] Speaker 02: If we'd asked for relief from stay, we'd be under 362 and not 524. [00:12:46] Speaker 02: Oh, so we wouldn't be here. [00:12:48] Speaker 02: We would have gotten an order. [00:12:52] Speaker 02: And there is something else that I want to say briefly before I come to the end of my time. [00:12:58] Speaker 02: And that is the continued viability of UNAS. [00:13:02] Speaker 02: The Supreme Court in Taggart talked about injunctions in 524 and said that when the legislature adopts a provision with clear legal meaning such as an injunction, it comes with old soil and the court has authority to modify it. [00:13:30] Speaker 02: I know that that's contrary to [00:13:32] Speaker 02: one of the holdings of Yunaz. [00:13:38] Speaker 02: But in Yunaz, they said, oh, you can go take the judgment against her because you're not going to get anything from anyone. [00:13:48] Speaker 02: You're not going to get anything from her. [00:13:49] Speaker 02: So Yunaz has the same result. [00:13:52] Speaker 02: It just reached it in a different manner. [00:13:57] Speaker 01: Would you like to reserve the remainder? [00:13:59] Speaker 02: I'll reserve the remainder. [00:14:01] Speaker 02: Thank you. [00:14:02] Speaker 01: Mr. Garrett. [00:14:07] Speaker 04: Thank you. [00:14:08] Speaker 04: I had to get my microphone on. [00:14:10] Speaker 04: May it please the court. [00:14:12] Speaker 04: My name is Russ Garrett. [00:14:13] Speaker 04: I represent the Appellee Blackwell. [00:14:18] Speaker 04: The Blackwell is the debtor, as the parties have already pointed out. [00:14:22] Speaker 04: There's nothing more important to the debtor [00:14:24] Speaker 04: than a discharge. [00:14:25] Speaker 04: That's exactly why. [00:14:27] Speaker 01: Let me ask you. [00:14:28] Speaker 01: You got your discharge. [00:14:30] Speaker 01: Nobody is suggesting that anybody's coming after the debtor for any monetary. [00:14:34] Speaker 01: So what does the debtor care? [00:14:37] Speaker 04: Several reasons. [00:14:39] Speaker 04: First, and I guess I'll rely, I won't rely, but I'll refer to the three parts in the Zubit test. [00:14:48] Speaker 04: But the first thing is that it actually has an impact on the debtor. [00:14:52] Speaker 04: So it drags the debtor through litigation that she otherwise wouldn't have to go through. [00:14:57] Speaker 04: She'll be dragged through discovery, trial, and travel, not to mention the time away from whatever else she's stood, including work, family, things like that. [00:15:07] Speaker 01: This puts a substantial- Bankruptcy doesn't absolve her from her debt. [00:15:13] Speaker 01: I mean, there is a liability there. [00:15:14] Speaker 01: It's unliquidated and it's been discharged. [00:15:17] Speaker 01: It has been discharged. [00:15:18] Speaker 01: But it's still there. [00:15:19] Speaker 01: I mean, why is that preclusive here? [00:15:23] Speaker 04: Well, I think the injunction under 524 is the preclusive part. [00:15:29] Speaker 00: The injunction wouldn't prevent [00:15:32] Speaker 00: the plaintiff's counsel for subpoenaing her to attend trial as a witness, I mean, she might still have to be there. [00:15:39] Speaker 04: That's correct. [00:15:40] Speaker 04: That is exactly correct. [00:15:42] Speaker 04: And give discovery. [00:15:44] Speaker 04: And give discovery, but not as a party. [00:15:48] Speaker 04: So what's the difference? [00:15:49] Speaker 04: Well, the difference is on the discovery roles and who might have to pay for the transportation and working with those things. [00:15:55] Speaker 04: Those are significant. [00:15:57] Speaker 04: But in this case, the $50,000 policy limits have been tendered over and over. [00:16:05] Speaker 01: Does that make a difference? [00:16:06] Speaker 01: I mean, if the insurance company was not willing to tender it, then it would be OK? [00:16:13] Speaker 04: I'm not sure why they need her. [00:16:14] Speaker 04: That's the other point, is the reliance by the plaintiff in this case, the appellant, is on the Anderson case. [00:16:22] Speaker 04: The Anderson case, [00:16:24] Speaker 04: precludes joint and civil liability if you don't have at least two defendants. [00:16:28] Speaker 04: There are three in this case. [00:16:30] Speaker 04: And as the court already pointed out, one of them is the same last name as mine, but for the record, it's not me, nor anybody I'm affiliated with. [00:16:37] Speaker 04: But it has the state of Washington and Milton Garrett, whoever that person is. [00:16:42] Speaker 04: The plaintiffs in this case have two defendants. [00:16:45] Speaker 04: They meet the requirements of Anderson. [00:16:47] Speaker 04: They don't need the debtor in this case at all, unless they need some discount. [00:16:54] Speaker 04: It would be an empty chair and she would have to comply with discovery. [00:16:57] Speaker 04: As the court points out, she would anyway as a witness. [00:17:01] Speaker 04: It's the hardship that's placed on her. [00:17:03] Speaker 04: And the other part is- They wouldn't get a judgment against her. [00:17:06] Speaker 04: They wouldn't get a judgment. [00:17:07] Speaker 04: It took the words out of my mouth. [00:17:09] Speaker 01: The judgment doesn't mean anything except for the imposition or the potential imposition of joint and several liability. [00:17:18] Speaker 01: But you're saying it's not necessary because there's two already in there. [00:17:22] Speaker 04: That's the first thing. [00:17:23] Speaker 04: There's two already in there. [00:17:24] Speaker 04: And the second thing is, you know, most of us that have been around for quite a while, see what happens after the debtor gets a discharge. [00:17:31] Speaker 04: A judgment entered against the debtor after a discharge, even if the plaintiff in this case is only going to collect. [00:17:38] Speaker 04: the insurance proceeds nevertheless has an impact on the record. [00:17:42] Speaker 04: And Judge Alston pointed that out in his decision. [00:17:45] Speaker 04: He talked about the credit bureaus. [00:17:47] Speaker 04: People are not going to understand, the third parties out there are not going to understand the impact of a post-petition judgment. [00:17:53] Speaker 04: the plaintiff in this case might agree to only accept $50,000. [00:17:57] Speaker 04: They haven't done it yet. [00:17:59] Speaker 01: There's nothing- Do you have a case on discussing that or that, that analysis, applying the SUBA, the SLOLI factors? [00:18:07] Speaker 01: I'm sorry. [00:18:08] Speaker 01: I didn't hear you. [00:18:08] Speaker 01: Do you have a case that addresses this and is presumably dispositive, where there is an agreement that the plaintiff shall be named nominally [00:18:19] Speaker 01: that no election will ever be taken. [00:18:21] Speaker 01: It is only essentially a pass-through. [00:18:24] Speaker 01: And that is denied because of the factors that you are raising, that it will have these unintended consequences and impact on a discharged debtor, though no money will ever be sought from him or her. [00:18:41] Speaker 04: I don't have a case on that. [00:18:43] Speaker 04: The case is only addressed whether the debtor should be a defendant in a case. [00:18:48] Speaker 04: In the case of the Zuba case, which is the Minnesota case, where most of the cases take this three-part test, in that case, the court denied an extension of the discharge or modification. [00:19:04] Speaker 03: And the reason was is because it would be a financial hardship on the debtor. [00:19:08] Speaker 03: And number three is the parties agree modification is limited to establishing liability and does not allow pursuit of a judgment against the discharged debtor. [00:19:18] Speaker 03: And that's what they want here. [00:19:19] Speaker 04: That's correct. [00:19:21] Speaker 04: That's correct. [00:19:22] Speaker 04: And as the court reads the record, we put it all in the record. [00:19:27] Speaker 04: As the court reads the record, you can see the difficulty that the trial court had [00:19:31] Speaker 04: in determining what the plaintiff or the appellant in this case was arguing or alleging every step through the process, right up to the very last day where we had argument on the motions for summary judgment. [00:19:44] Speaker 04: So it's not clear. [00:19:46] Speaker 04: The record is absolutely unclear what these plaintiffs plan to do if they're able to go forward with the judgment and they don't need it. [00:19:56] Speaker 03: Their argument that they could limit the judgment to just the insurance proceeds [00:20:01] Speaker 03: is inconsistent with obtaining a judgment that is for the full amount of the damage? [00:20:06] Speaker 04: It is, just as Judge Alston pointed out in his written decision, and in his oral ruling. [00:20:19] Speaker 04: I will say, I don't know that the court here needs to get to whether the injunction under 524 needs to be modified, because if it does, it goes to the next step, which is that three-part test that was outlined in Munoz by Judge Klein. [00:20:39] Speaker 04: Just going through that three-part test, [00:20:41] Speaker 04: establishes or establishes that the plaintiff in this case has not met the three-part test. [00:20:47] Speaker 04: They've only argued the first part. [00:20:49] Speaker 04: They put in nothing to support the second and third elements. [00:20:53] Speaker 04: They fail on the first, as we've outlined in our briefing, but the second and third, they don't address at all, except to say there are elements that exist. [00:21:03] Speaker 04: This was a motion for summary judgment, cross motions for summary judgment. [00:21:07] Speaker 04: There's no dispute of fact, none. [00:21:10] Speaker 03: I think the court ruled properly. [00:21:12] Speaker 03: Counsel, could you just help me with the two other elements? [00:21:14] Speaker 03: I want to make sure that they're different than the Zuba test. [00:21:19] Speaker 03: Yes. [00:21:24] Speaker 04: Actually, in the Slaw, I think that's how you pronounce it, Slawly case. [00:21:30] Speaker 04: And it's on page 40 of our brief. [00:21:35] Speaker 04: We outlined those factors. [00:21:38] Speaker 04: And that is the debtor is a necessary party in the pending litigation and dismissal of the debtor will result in the moving party not being able to pursue its remedies against the non-debtors. [00:21:48] Speaker 04: We've established that. [00:21:49] Speaker 04: Two, we've established they can get full relief otherwise. [00:21:52] Speaker 04: Two, pursuit of the action with the debtor involved will not impose financial hardship on the debtor that derogates the sweeping effect of the discharge. [00:22:00] Speaker 04: And three, the parties agree. [00:22:03] Speaker 04: that modification is confined to establishing liability for damages that does not allow pursuit of a judgment against the discharged debtor. [00:22:11] Speaker 04: That third factor clearly operates against what the parties here are asking, what the appellate's asking. [00:22:17] Speaker 04: It wants a judgment. [00:22:19] Speaker 04: Notwithstanding the fact that the proceeds have been tendered, it wants a judgment. [00:22:23] Speaker 01: And I think as the court pointed out, how does that work in real life? [00:22:28] Speaker 01: Because everybody is agreeing that there's a discharge that's applicable. [00:22:31] Speaker 01: There is no dispute regarding the non-dischargeability of that, which was Munoz, right? [00:22:39] Speaker 01: there is going to be no recovery from the debtor. [00:22:43] Speaker 01: They have identified the insurance, which would be a third source, a collateral source, and they've identified that as necessary in their mind for establishment of joint civil liability, which would also be not from the debtor. [00:22:58] Speaker 01: So how is that a factor in your favor? [00:23:04] Speaker 04: A post-discharge judgment [00:23:07] Speaker 04: is nevertheless, it nevertheless appears on every record as a post-discharge judgment. [00:23:12] Speaker 01: But you're not collecting it. [00:23:14] Speaker 01: You're narrowly on the third element. [00:23:16] Speaker 01: You're going to the second one, whether it be a hardship, a financial hardship. [00:23:20] Speaker 01: It doesn't appear to be a financial hardship because it's never going to be collected. [00:23:23] Speaker 01: It's a societal hardship, is what you're arguing, because the credit bureau, the taint of having a monetary judgment adjudicating her [00:23:32] Speaker 03: all of that it would be a hardship in your view but whether there would be a recovery from the debtor no there won't be but what i'm what i'm confused about is why 524a1 says you can't get a judgment doesn't say that you can't get a judgment says it voids it no it actually it 524 says a1 a1 says [00:23:57] Speaker 03: avoids a judgment to the extent it is the determination of personal liability with regard to any debt discharged so everyone agrees that that will happen there is no dispute about that and then two says it operates as an injunction against the continuation or commencement of any action employment of process or any act to collect [00:24:19] Speaker 03: recover or offset any such debt as a personal liability of debtor. [00:24:24] Speaker 03: Again, they want to establish it's a personal liability. [00:24:26] Speaker 03: They want to establish that they can, they aren't going to collect, but they are using it as a method of establishing her personal liability. [00:24:35] Speaker 03: I'm going to allow that. [00:24:37] Speaker 04: To add one more thing to add to what Judge Spraker, what you asked for, that is what's the impact of a judgment if they're not going to collect it. [00:24:47] Speaker 04: Debtors who have post-discharge judgments are going to have to deal with the credit bureaus themselves, a huge cost. [00:24:55] Speaker 04: Whenever they apply for credit, whenever they go to do anything to apply for credit, they're going to have to explain this away. [00:25:02] Speaker 04: Bankruptcy is not going to impact that? [00:25:06] Speaker 04: The bankruptcy actually benefits it. [00:25:08] Speaker 04: There was a time when bankruptcy eliminated your impersonal obligation and [00:25:14] Speaker 04: And the creditors would never loan you money again, probably as of about 20 years ago with the other direction. [00:25:21] Speaker 00: But today- With that judgment, you talk about the credit bureaus, but a post-discharge judgment. [00:25:30] Speaker 00: Do title insurance companies pick that up if she ever wants to buy a house or refinance her house? [00:25:35] Speaker 00: It's not just the credit bureaus, but the banks. [00:25:40] Speaker 04: You're correct, Judge Corbett. [00:25:42] Speaker 04: They all pick it up and it all puts a hardship on the debtor to have to try to explain it away. [00:25:48] Speaker 04: Having represented debtors in this and trying to explain away something like that is costly. [00:25:53] Speaker 04: It's time consuming. [00:25:55] Speaker 04: It is an incredible hardship on the debtor, particularly where if you balance what the plaintiff needs, they don't need the debtor in this case. [00:26:04] Speaker 04: They have two other defendants. [00:26:10] Speaker 03: The other point the judge breaker was, it says it voids a judgment obtained at any time. [00:26:16] Speaker 03: So it doesn't have to be a judgment that's obtained before the discharge. [00:26:22] Speaker 03: It precludes you from proceeding post discharge, but certainly voids any judgment even if it was obtained before the discharge was issued. [00:26:31] Speaker 03: allowing them to proceed violates A, getting a judgment at any time, and B, an attempt to collect or recover a personal liability or of a discharge debt. [00:26:45] Speaker 03: I think it covers both A and B. Again, you took the words out of my mouth. [00:26:51] Speaker 04: Thank you. [00:26:52] Speaker 04: I really don't have anything else to add, but I'm happy to answer any questions the court has. [00:27:01] Speaker 01: Any questions, Judge Gann? [00:27:03] Speaker 01: I don't have any other questions for you. [00:27:05] Speaker 01: Thank you very much, Mr. Gann. [00:27:06] Speaker 01: Thank you. [00:27:08] Speaker 01: I think you have roughly a minute and a half or so for reply. [00:27:13] Speaker 02: A minute and a half? [00:27:14] Speaker 02: I thought I had a bunch more because I reserved five and I got done early. [00:27:20] Speaker 02: Well, it didn't get done early. [00:27:23] Speaker 01: That was the 15 minutes. [00:27:24] Speaker 01: We'll see where it takes us and let you. [00:27:29] Speaker ?: OK. [00:27:30] Speaker 01: Can you address Mr. Garrett's point that really given the two other defendants that the naming and including the debtor is superfluous? [00:27:40] Speaker 02: I am told, Your Honor, that naming her is important because she's the one who ran into Ms. [00:27:47] Speaker 02: Porcell's son in Hilton. [00:27:50] Speaker 02: So she is an essential party. [00:27:52] Speaker 02: I don't know what the other parties did or [00:27:58] Speaker 02: or their name, but I don't know how they come into it, but she's an essential party. [00:28:07] Speaker 02: With respect to the problem of the judgment, all they have to do is tell them to call the lawyer, and we will be very happy to tell them this was a tort judgment and insurance paid for it. [00:28:20] Speaker 02: With respect to [00:28:28] Speaker 02: I forget what I was going to say. [00:28:30] Speaker 02: If you have any other questions, I'd be happy to, but we need to establish liability and that's what we need to do. [00:28:40] Speaker 01: Why can't you establish it through the empty chair? [00:28:43] Speaker 02: Because the empty chair doesn't, because of the Supreme Court of Washington is ruling in Anderson. [00:28:52] Speaker 02: We can't establish it through an empty chair because she's not available to have the judgment entered. [00:28:57] Speaker 00: Judge Breaker, if I could be permitted to just ask one more question. [00:29:01] Speaker 00: Maybe Judge Gann has one. [00:29:03] Speaker 00: But again, if Judge Alston's order is affirm, Ms. [00:29:18] Speaker 00: Hidalma is not precluded from suing the state and getting a judgment. [00:29:28] Speaker 00: That's true. [00:29:29] Speaker 00: It just may be that the judgment is going to be, you know, what she can collect against the state is only an amount that's based on the percentage of the state's liability. [00:29:46] Speaker 00: That's true. [00:29:48] Speaker 00: Okay. [00:29:48] Speaker 00: That's true, but it's substantially less. [00:29:50] Speaker 00: Okay, it is substantially less, but isn't that up to the state to decide in drafting these statutes? [00:30:00] Speaker 02: There are many things that we would change if we had the ability to draft statutes. [00:30:08] Speaker 02: This one makes no sense. [00:30:09] Speaker 02: As I say, Anderson was perfectly reasonable, a perfectly reasonable result. [00:30:16] Speaker 00: Not what our support court ruled. [00:30:19] Speaker 00: Isn't the legislature's determination what makes sense here is that, I guess what the statute says is that under these circumstances, the plaintiff [00:30:29] Speaker 00: may only recover against the state the amount that the state is responsible to pay for. [00:30:38] Speaker 00: I'm sorry I ended that question or that comment with a proposition, but you understand what I'm saying. [00:30:43] Speaker 02: I understand. [00:30:45] Speaker 02: And I don't think that the state was thinking about the possibility of a discharge or bankruptcy when this was drafted. [00:30:53] Speaker 02: It hasn't been modified. [00:30:55] Speaker 02: Perhaps that's something for this legislative session. [00:30:58] Speaker 02: But the cases that have addressed it have all said, including Minas, including Slally, that if you need to establish liability and a judgment, [00:31:22] Speaker 02: That's a sufficient basis to rule that the discharge doesn't apply. [00:31:28] Speaker 02: And with respect to our agreement to not pursue Ms. [00:31:34] Speaker 02: Blackwell, that was in the motion. [00:31:36] Speaker 02: It was in the complaint. [00:31:38] Speaker 02: It was judgment to the extent of insurance proceeds or third parties. [00:31:44] Speaker 02: We never asked for anything else. [00:31:46] Speaker 02: We never wanted anything else. [00:31:48] Speaker 02: That was all we ever asked for. [00:31:50] Speaker 02: Thank you, Mr. Chair. [00:31:51] Speaker 00: You did answer my question. [00:31:52] Speaker 00: Thank you. [00:31:53] Speaker 02: Thank you. [00:31:54] Speaker 00: Is there anything else? [00:31:57] Speaker 03: Nothing further. [00:31:58] Speaker 03: Thanks. [00:32:01] Speaker 02: If you want to sum up. [00:32:06] Speaker 02: The cases that have addressed it have said that if you need to collect from a third party or from a third party, the discharge doesn't apply. [00:32:18] Speaker 02: This court has ruled that it is impossible because the statute is set in stone and the injunction is there. [00:32:28] Speaker 02: I'd submit that Munaz as a continued viability in light of Taggart is somewhat in question. [00:32:36] Speaker 02: Judge Posner clearly said in a case cited in Munaz that the court can modify the [00:32:44] Speaker 02: the discharge. [00:32:45] Speaker 02: We don't ask that they modify the discharge. [00:32:48] Speaker 02: We simply seek a decision that the discharge does not apply to the extent that the plaintiff is seeking damages from third parties, insurance, or the state, and to the extent that she's going to have problems with future credit and everything else. [00:33:12] Speaker 02: All she has to do is send her a copy of the order [00:33:15] Speaker 02: That's a problem with many cases, but it's not a basis to rule that we are precluded from establishing third party liability. [00:33:43] Speaker 02: Thank you. [00:33:44] Speaker 01: Thank you both for a very interesting argument. [00:33:46] Speaker 01: The matter will be deemed submitted. [00:33:48] Speaker 01: And again, we'll try to get this out as soon as we can. [00:33:50] Speaker 01: Thank you very much. [00:33:51] Speaker 01: That will conclude the hearing or the oral argument. [00:33:55] Speaker 01: With that, that concludes our calendar for this morning. [00:33:57] Speaker 01: We'll be adjourned. [00:33:58] Speaker 01: Thank you all. [00:34:00] Speaker 01: Off record, please.