[00:00:02] Speaker 02:
all right.

[00:00:32] Speaker 01:
good morning your honors may it please the court my name is ron freshman i represent cameron dish that case that you want to reserve a little time for a bottle few minutes yes your honor want to be a little more precise about that three four minutes i think so let's let's just let's just pay it for housing uh...

[00:01:02] Speaker 01:
Anyway, before the court, essentially, I think the three issues that stand out to me, for me, that's been brought up by the other side, by the respondents, is the alleged prejudice to the respondents.

[00:01:23] Speaker 01:
Also, the second issue that I think is important is the error

[00:01:31] Speaker 01:
regarding perjury, me perjuring myself to the court, as the judge essentially said.

[00:01:41] Speaker 01:
And then the third thing is a ministerial act.

[00:01:44] Speaker 01:
So I'll get into the alleged prejudice.

[00:01:47] Speaker 01:
Essentially, what's before the court is whether the mystery.

[00:01:51] Speaker 04:
Let me interrupt you and hit you with the first thing that strikes me about this case.

[00:01:55] Speaker 04:
Sure.

[00:01:55] Speaker 04:
And that is that you did get the case reopened once.

[00:01:59] Speaker 04:
You did get a chance to file amended schedules.

[00:02:04] Speaker 04:
You explained how you talked to the trustee.

[00:02:06] Speaker 04:
But then you did file a motion to amend schedules a couple weeks after the deadline, right?

[00:02:13] Speaker 01:
I believe that's accurate.

[00:02:16] Speaker 04:
But you're saying you basically are entitled to, and that was three tries altogether to get the case reopened.

[00:02:22] Speaker 04:
You say you're entitled to another chance after that chance.

[00:02:25] Speaker 04:
Why should there be another chance?

[00:02:26] Speaker 04:
Shouldn't there be an end to this at some point?

[00:02:28] Speaker 01:
Uh, understood your honor.

[00:02:30] Speaker 01:
Yes.

[00:02:30] Speaker 01:
The, uh, I, each time that there was an issue, I went back to the trustee and we kind of, you know, had a little tette-a-tette, if you will.

[00:02:42] Speaker 01:
And each time he didn't advise me because he knows better than that.

[00:02:47] Speaker 01:
But what he did do is say, here's how I think it would go each time that that happened.

[00:02:54] Speaker 01:
responded accordingly and I said well I'm gonna let it we should just let it close but What he said was gonna happen was the case would be closed and your client get the claims back, right?

[00:03:06] Speaker 04:
That's utterly wrong.

[00:03:08] Speaker 04:
That's just not the way it works.

[00:03:09] Speaker 03:
I understand now What does a court do with that?

[00:03:11] Speaker 03:
I mean we had a conversation with the trustee.

[00:03:13] Speaker 03:
That's lovely.

[00:03:14] Speaker 04:
I mean If that's what the trustee said that's terrible

[00:03:19] Speaker 04:
call a device, call it whatever you want.

[00:03:21] Speaker 01:
It was encouragement, Your Honor, to do that.

[00:03:25] Speaker 01:
And then there, of course, was the issue that the court said, no, you didn't say that, freshman.

[00:03:32] Speaker 01:
What you did say is the following.

[00:03:34] Speaker 01:
And he essentially brandished me in front of the court, my colleagues, making me look like a liar.

[00:03:40] Speaker 01:
I took the time.

[00:03:42] Speaker 01:
I got the transcript.

[00:03:44] Speaker 01:
I reviewed it.

[00:03:45] Speaker 01:
And I came back to the court, and I said, Your Honor,

[00:03:50] Speaker 01:
You're wrong.

[00:03:52] Speaker 01:
And here's what happened.

[00:03:53] Speaker 04:
The court did not have the grace, the courtesy, or the... I think he did, at the later hearing, grudgingly agree with you, I think.

[00:04:09] Speaker 01:
I think you're right.

[00:04:11] Speaker 01:
Begrudgingly.

[00:04:11] Speaker 04:
That's probably the... I understand your point on that.

[00:04:14] Speaker 04:
I'm trying to maybe take you a step beyond that.

[00:04:20] Speaker 04:
You know, the rule's the rule.

[00:04:22] Speaker 04:
If the asset's not disclosed, it doesn't get abandoned, period.

[00:04:26] Speaker 04:
That's the way it works.

[00:04:27] Speaker 04:
The trustee seems to have told you something different.

[00:04:30] Speaker 04:
But can the trustee change the rule?

[00:04:33] Speaker 01:
No.

[00:04:34] Speaker 01:
No, Your Honor, the trustee can't change the rule.

[00:04:36] Speaker 01:
But my understanding of it was to let it essentially ride.

[00:04:41] Speaker 04:
But nothing— But even after the deadline, you did file the motion to amend the schedules.

[00:04:47] Speaker 01:
And that is before the court.

[00:04:49] Speaker 01:
The amended schedule is there, and the claims are there.

[00:04:52] Speaker 01:
I mean, I think the other thing that's important is that the respondents are not creditors.

[00:04:58] Speaker 01:
Respondents are defendants in a civil matter.

[00:05:02] Speaker 04:
Well, I'm going to ask you about that, too, because you say they're not creditors because the mortgage was foreclosed.

[00:05:07] Speaker 04:
That extinguishes the debt.

[00:05:08] Speaker 04:
Yes.

[00:05:09] Speaker 04:
But you say the foreclosure was improper.

[00:05:11] Speaker 04:
That's true.

[00:05:12] Speaker 04:
So how is there actually a foreclosure?

[00:05:14] Speaker 04:
If the foreclosure was defective and ineffective, how could it simultaneously be effective to destroy the debt?

[00:05:22] Speaker 01:
Because the resulting foreclosure granted possession to a party not entitled to receive it because it was not only not the foreclosing beneficiary, but it was not the beneficial note holder.

[00:05:34] Speaker 04:
But the implication of that is the foreclosure sale was defective.

[00:05:38] Speaker 04:
Yes.

[00:05:38] Speaker 04:
Didn't work.

[00:05:39] Speaker 04:
Correct.

[00:05:39] Speaker 04:
So why should it work to destroy the debt?

[00:05:44] Speaker 01:
Well, as a matter of law, when you have a trustee's deed upon sale and it's recorded, who's going to get the possession?

[00:05:53] Speaker 01:
My client.

[00:05:53] Speaker 04:
Even if a deed of sale is set aside because the foreclosure sale was improper?

[00:05:59] Speaker 01:
It should have been.

[00:06:00] Speaker 01:
It should have been tried, Your Honor.

[00:06:03] Speaker 04:
And if you go back to... I'm just trying to reconcile the consistency in your position.

[00:06:08] Speaker 04:
Yes.

[00:06:09] Speaker 04:
Because I don't see how you can say the foreclosure was no good and also say the foreclosure wiped out the debt.

[00:06:16] Speaker 01:
Because the reality is there was a foreclosure.

[00:06:21] Speaker 01:
That is an actual fact.

[00:06:24] Speaker 01:
What I believe should happen is that it should get remanded.

[00:06:29] Speaker 01:
and be tried, not summary judgment.

[00:06:33] Speaker 04:
OK, well, that's not that part of it.

[00:06:34] Speaker 04:
That's in the state court system.

[00:06:35] Speaker 01:
No, I understand, Your Honor.

[00:06:38] Speaker 01:
But the factual reality is that it was foreclosed.

[00:06:44] Speaker 04:
But if the foreclosure is, if you're successful, the foreclosure set aside, if that happens, isn't that also going to revive the debt?

[00:06:52] Speaker 01:
It's not so much that the foreclosures revive.

[00:06:56] Speaker 01:
Essentially, there would be a trial on the merits.

[00:07:00] Speaker 04:
If you win at that trial.

[00:07:01] Speaker 01:
Well, if we won at that, yeah, but we can't use speculation to guide us here.

[00:07:11] Speaker 04:
Sure, but you can't use speculation to say they're not a creditor.

[00:07:14] Speaker 04:
It's the same speculation.

[00:07:16] Speaker 01:
No, because they admitted they weren't.

[00:07:19] Speaker 01:
There's a fact.

[00:07:20] Speaker 01:
They specifically said, Fannie Mae comes in at the tail end and says, it's me.

[00:07:27] Speaker 01:
I own it.

[00:07:28] Speaker 04:
That's a little different point.

[00:07:30] Speaker 01:
And then Nation Star is the one who foreclosed.

[00:07:34] Speaker 04:
That's a different point.

[00:07:35] Speaker 01:
I understand.

[00:07:36] Speaker 01:
But you were talking facts.

[00:07:37] Speaker 01:
And those are the facts.

[00:07:39] Speaker 01:
I can't change the facts, Ron.

[00:07:41] Speaker 01:
All I can do is say, if my client actually had a trial, the facts might be different.

[00:07:50] Speaker 01:
It also could be found that my client, that that was wrong.

[00:07:55] Speaker 01:
We can't go in speculation.

[00:07:56] Speaker 01:
Right now we have to deal with specific facts.

[00:07:58] Speaker 01:
The fact is foreclosure occurred, because foreclosure occurred.

[00:08:04] Speaker 01:
That's what I'm dealing with.

[00:08:07] Speaker 01:
So anyway, that's where I'm at with that particular argument is that

[00:08:12] Speaker 01:
And then the other thing, Your Honors, is that it's a ministerial act.

[00:08:18] Speaker 01:
My client's claims are going to be hanging out, languishing in Never Neverland, essentially.

[00:08:24] Speaker 04:
They're not really in Never Neverland.

[00:08:25] Speaker 04:
They're in the trustee's hands.

[00:08:28] Speaker 04:
They're not abandoned.

[00:08:30] Speaker 04:
They're property of the estate.

[00:08:34] Speaker 01:
But the trustee has no interest in it.

[00:08:39] Speaker 03:
Well, a lot of things could happen.

[00:08:41] Speaker 03:
You know, we don't know that either.

[00:08:42] Speaker 03:
Talk about speculation.

[00:08:44] Speaker 03:
If the trustee gets those claims, he may pick up the phone and call Nation Star and say, have I got a deal for you?

[00:08:49] Speaker 03:
And then you'll be in that position, which is not enviable.

[00:08:55] Speaker 01:
I'm not sure about what that might be, but I can tell you that they've sat on their thumbs.

[00:09:03] Speaker 01:
They haven't done anything since the foreclosure.

[00:09:05] Speaker 01:
The property's sitting vacant, empty, unattended.

[00:09:10] Speaker 03:
That's not the issue.

[00:09:13] Speaker 01:
But whether it's that issue or not, that's another story.

[00:09:17] Speaker 01:
But essentially, I mean, those are the points, essentially, is that essentially, they are not creditors.

[00:09:25] Speaker 01:
They are defendants in the civil matter.

[00:09:28] Speaker 01:
I don't believe that that, in New York's status of standing to them, any purported prejudice

[00:09:39] Speaker 01:
I don't see any purported prejudice to a non-creditor.

[00:09:45] Speaker 01:
They don't have an interest here.

[00:09:48] Speaker 01:
And I discussed the alleged perjury to me.

[00:09:51] Speaker 01:
But we have provided case law that says a ministerial act such as amending the schedules and having those claims.

[00:10:01] Speaker 01:
And those are all before the court.

[00:10:02] Speaker 01:
And I guess the one thing that's important is the court denied it based on my declaration being perjurious and there were no assets.

[00:10:13] Speaker 01:
before that court was the appellate opinion of June 20th stating that claims were assets of the estate.

[00:10:26] Speaker 01:
Additionally, in the register of actions that in the complaint filed in 2021, there were actual claims against the respondent.

[00:10:35] Speaker 01:
So for the court to basically say, no, you lied freshman, oh, and there are no

[00:10:42] Speaker 01:
assets is absolutely incorrect.

[00:10:47] Speaker 01:
100%.

[00:10:48] Speaker 01:
And I can't square, that's why I'm here.

[00:10:51] Speaker 01:
I can't square that up.

[00:10:53] Speaker 01:
But I appreciate your time and introspect.

[00:10:58] Speaker 01:
Thank you.

[00:11:07] Speaker 00:
Good morning, Your Honors.

[00:11:09] Speaker 00:
May I please the court?

[00:11:10] Speaker 00:
Christine He here with Troutman Pepper on behalf of the parties in interest and appellees here.

[00:11:16] Speaker 00:
Nation Star Mortgage, Fannie Mae, and MERS.

[00:11:20] Speaker 00:
Your Honor, I think I'll just address what I think is completely incorrect.

[00:11:26] Speaker 00:
I'll start with this.

[00:11:26] Speaker 00:
The basis of the court's denial of the motion to reopen.

[00:11:31] Speaker 00:
First, counsel is suggesting that it was based on the alleged perjury.

[00:11:37] Speaker 00:
The court's already noted that in the motion for reconsideration, the court discussed that at length and said that was not the basis for the denial.

[00:11:47] Speaker 00:
Second, the court said that there was no cause to reopen in the order, says there's no evidence of any assets.

[00:11:54] Speaker 00:
The only thing that was in the initial motion was

[00:11:59] Speaker 00:
the declaration from council, but also a list of causes of action.

[00:12:06] Speaker 00:
So that was it.

[00:12:07] Speaker 00:
There was no discussion of the causes of action or whether or not they

[00:12:10] Speaker 00:
there was any merit to them or if they were viable.

[00:12:14] Speaker 00:
Second of all, the appellate opinion that counsel continues to refer to as showing that there was assets, that is not the case at all.

[00:12:22] Speaker 00:
If you read the appellate opinion, it's in the record.

[00:12:27] Speaker 00:
That's from the appellate division of the unlawful detainer action, and that just said there wasn't sufficient evidence to prevail in summary judgment and remanded for trial.

[00:12:39] Speaker 04:
Well, that's an indication there's something there on the plaintiff's side, right, on Mr. Dishman's side.

[00:12:44] Speaker 00:
Well, what the issue was when you looked at it going back into the unlawful detainer court was that the documents weren't authenticated, so they needed another witness.

[00:12:54] Speaker 00:
And so that does show that there wasn't sufficient to prevail on the summary judgment, but that's not showing that.

[00:13:00] Speaker 00:
That's not dispositive.

[00:13:02] Speaker 00:
The court didn't make the ruling that.

[00:13:04] Speaker 04:
It's not dispositive either way.

[00:13:06] Speaker 00:
Correct, correct.

[00:13:07] Speaker 04:
So there's still something hanging out there.

[00:13:12] Speaker 00:
Well, that's certainly the debtor's position.

[00:13:16] Speaker 00:
That would not be our position, obviously.

[00:13:20] Speaker 04:
I know this is not in the record, but it's probably judicially noticeable.

[00:13:25] Speaker 04:
What's happened in the UD case?

[00:13:27] Speaker 00:
Well, there was a couple of appeals.

[00:13:30] Speaker 00:
That first appeal, when it was reversed, then he had already left the property.

[00:13:37] Speaker 00:
So when they went back for trial, the unlawful detainer court had said, well, there's nothing to consider here because you're not seeking damages.

[00:13:44] Speaker 00:
So then there was an attempt to get restitution on an unlawful eviction, cause of action, and then the court denied that, denied restitution.

[00:13:56] Speaker 04:
That's a claim by Mr. De Schmitt, I guess?

[00:13:59] Speaker 00:
Correct, correct.

[00:14:00] Speaker 00:
He wanted the money for being, the allegation is wrongfully kicked out of the house, despite not having paid anything since, okay.

[00:14:09] Speaker 00:
So, but then that went on appeal and then that was recently the court's decision and dismissing the case.

[00:14:18] Speaker 00:
That was affirmed and then I understand that there was a petition for a rehearing and I think that was just denied.

[00:14:24] Speaker 00:
So that's the status of the unlawful detainer.

[00:14:27] Speaker 00:
The civil case is on appeal as well.

[00:14:31] Speaker 04:
So it sounds like, just so I understand, it sounded like in the UD case and that unlawful eviction case, is there a court decision that the foreclosure was correct?

[00:14:43] Speaker 00:
No.

[00:14:45] Speaker 04:
Not one way or the other.

[00:14:45] Speaker 04:
Okay.

[00:14:46] Speaker 00:
Thank you.

[00:14:46] Speaker 00:
No.

[00:14:46] Speaker 00:
He had already in the unlawful detainer action.

[00:14:49] Speaker 04:
So it moved out.

[00:14:49] Speaker 00:
Right.

[00:14:50] Speaker 00:
And so it was no longer an issue in that court.

[00:14:52] Speaker 00:
That would be proper in the civil case, but he never cured the standing defect, and we never had an opportunity.

[00:15:02] Speaker 00:
We've briefed it many, many times.

[00:15:04] Speaker 00:
We've briefed it on behalf of our clients many times, but we've run up against the standing.

[00:15:10] Speaker 00:
He hasn't cured the standing.

[00:15:11] Speaker 00:
We've argued it.

[00:15:13] Speaker 00:
He never, you know, and so that gets to the prejudice.

[00:15:17] Speaker 00:
And, you know, obviously we would have preferred a ruling on the merit in the 2017 case, but we didn't get that.

[00:15:24] Speaker 00:
We didn't get a ruling on the merits in the 2021 case because he still didn't cure the standing defect.

[00:15:30] Speaker 00:
So that's a significant prejudice to these defendants regardless of whether they're creditors and the court

[00:15:37] Speaker 00:
made a brilliant argument that if there is a wrongful foreclosure cause of action, then they are creditors because then their claims would be wiped out.

[00:15:48] Speaker 00:
And I would just say finally that

[00:15:50] Speaker 00:
This is not a situation where this is an innocent debtor and that is here to protect, you know, that we want the bankruptcy court to protect them and give them a fresh start.

[00:16:00] Speaker 00:
This is a debtor who has abused the bankruptcy statutes.

[00:16:04] Speaker 00:
And I think that's important in whether or not, I think the court should consider that and whether or not to continue to reward him for this gamesmanship.

[00:16:14] Speaker 00:
And I would submit on that, Your Honor, unless there are questions.

[00:16:19] Speaker 03:
Thank you very much.

[00:16:21] Speaker 03:
Appreciate it.

[00:16:27] Speaker 01:
Only one issue that I would like to bring up is, which is the less, not an innocent debtor.

[00:16:36] Speaker 01:
My client was seeking a loan modification.

[00:16:41] Speaker 01:
Nation Star lied to my client, clearly stating,

[00:16:49] Speaker 01:
You are not eligible for a hemp.

[00:16:52] Speaker 01:
We don't offer it.

[00:16:57] Speaker 01:
Fannie Mae is a government lender.

[00:17:01] Speaker 01:
They are required if somebody's eligible.

[00:17:05] Speaker 01:
And my client was, in fact, eligible.

[00:17:10] Speaker 01:
But because they lied, they filed

[00:17:14] Speaker 01:
false documents in the public records, they lied to my client, and deprived him of getting a simple loan modification.

[00:17:26] Speaker 01:
That's all I have to say on that.

[00:17:29] Speaker 02:
Okay.

[00:17:29] Speaker 02:
Any questions?

[00:17:30] Speaker 01:
No.

[00:17:31] Speaker 01:
Okay.

[00:17:31] Speaker 02:
Submit and we'll get you a written decision as soon as we can.

[00:17:36] Speaker 02:
Thank you very much.

[00:17:37] Speaker 02:
Thank you.

[00:17:38] Speaker 02:
And we're adjourned.

[00:17:39] Speaker 02:
That concludes the calendar.

[00:17:42] Speaker ?:
I'm going down there.